Earnings season always brings a new dynamic to the stock market, and Friday showed the impact that a particular trend in earnings can have on the overall market's behavior. Relatively favorable results from the financial sector helped lift major market benchmarks substantially in the early parts of the session, but traders seemed reluctant to hold on to stock positions entering the weekend, and so the market's gains moderated.
By the close, the Dow finished higher by just less than 40 points, and the S&P 500 and Nasdaq Composite rose by less than a point each. Still, there were individual stocks that performed much better, and among the biggest gainers were Salesforce.com (CRM 0.50%), Fiesta Restaurant Group (FRGI 0.83%), and Terex (TEX -1.77%).
Salesforce won't pull the trigger on Twitter
Salesforce.com rose 5% after the customer relationship-management specialist confirmed that it would not seek to make a bid to buy out ailing social-media company Twitter (TWTR). Salesforce CEO Marc Benioff reportedly said that buying Twitter wasn't the right strategic move for the CRM company, and that relieved some Salesforce investors who had worried that a purchase of the microblogging specialist would only result in overpaying for a business with questionable future prospects.
Twitter stock fell again on the news, and with other potential buyers apparently bowing out, it's unclear what will happen with the social-media stock. Salesforce, however, has plenty of potential going forward, and today's gains reflect a sigh of relief at the idea that it will avoid getting hung up in Twitter's pains.
Should buyers have a Fiesta?
Fiesta Restaurant Group rose 6% in the wake of reports saying that the company expects to put itself up for sale. The New York Post said that the owner of the Taco Cabana and Pollo Tropical restaurant concepts is looking to allow potential bidders to do due diligence by revealing sensitive financial information, with private equity companies reportedly being among the potential buyers for Fiesta.
With the recent retirement announcement from its CEO and a decision not to spin off the Taco Cabana chain into a separate entity, Fiesta has left investors uncertain for a while. Going private might be the best solution both for the company itself and for its shareholders to maximize the value of their stock.
Terex gets a glowing review
Finally, Terex picked up 5%. The crane maker earned an upgrade from analyst company Merrill Lynch on Friday, which moved its rating on Terex up from underperform all the way to buy. Terex sold off non-core parts of its business related to port solutions and materials handling to Finnish peer Konecranes in a $1.3 billion deal, and analysts believe that the continuing crane business has plenty of upside.
In addition, the equity stake that Terex received from Konecranes as part of its asset sale could also produce profits, and that combination could be even more powerful in pushing Terex's prospects up even further in the future.