From Briefing.com: 4:15 pm : The stock market ended a relatively quiet session on a slightly higher note as an above-consensus reading of the New Home Sales Report for July and better-than-expected earnings results from the retail sub-group bolstered the broader market. The Nasdaq Composite finished higher by 0.3%, narrowly missing a new all-time closing high (previous: 5262.02). The S&P 500 settled behind the tech-heavy index, adding 0.2%. Equity indices jumped at the start of the session as a strong performance from European bourses and a better-than-expected quarterly report from Best Buy (BBY 39.23, +6.43) bolstered the broader market. The benchmark index tested resistance near the 2193/210 area, but was unable to clear that price level despite a stronger-than-expected reading of new home sales for July.
The report showed that new home sales increased 12.4% month-over-month to a seasonally adjusted rate of 654,000 (Briefing.com consensus 580,000). The report added to recent upbeat housing data, but may have also elicited some fears regarding a sooner-than-expected rate hike.
The S&P 500 (+0.2%) found support at the 2185/2188 price level as eight sectors finished in positive territory. The consumer discretionary (+0.5%) and materials (+0.8%) sectors ended atop the leaderboard while technology (+0.4%) and energy (+0.4%) followed. Conversely, countercyclical consumer staples (-0.1%) and utilities (-0.5%) ended in the red.
Retail names outperformed in the consumer discretionary sector (+0.5%), evidenced by the 1.0% gain in the SPDR S&P Retail ETF (XRT 46.16, +0.46). The group drafted higher following positive quarterly results and guidance from Best Buy (BBY 39.23, +6.43). Separately, Toll Brothers (TOL 31.91, +2.58) rallied 8.8% after beating revenue estimates for the quarter and narrowing its full-year guidance. The homebuilder also benefited from the positive New Home Sales Report. The broader iShares Dow Jones US Home Construction ETF (ITB 29.49, +0.75) settled higher by 2.6%.
The commodity-sensitive energy space (+0.4%) gained alongside crude oil futures. The energy component shrugged off opening hour weakness after reports indicated that Iran could be more willing to participate in potential OPEC actions to stabilize the oil market. The news was probably taken with a grain of salt, but still led to a good deal of short covering. WTI crude ended its day higher by 1.5% ($48.15/bbl; +$0.73).
The technology sector (+0.4%) displayed relative strength as software companies and networking names outperformed. Dow component Cisco Systems (CSCO 30.98, +0.35) rebounded 1.1% after sliding 1.1% last week. The PHLX Semiconductor Index (+0.5%) finished slightly ahead of the broader sector as Applied Materials (AMAT 29.95, +0.90) outperformed. The stock is up 8.2% since the company reported better-than-expected bottom-line results and upbeat fourth-quarter guidance on August 18.
Treasuries ended on a flat note with yields relatively unchanged throughout the complex. The yield on the 10-yr note finished flat at 1.54%.
Today's participation was below the recent average as fewer than 716 million shares changed hands at the NYSE floor.
Today's economic data was limited to the New Home Sales Report for July:
New home sales increased 12.4% month-over-month in July to a seasonally adjusted annual rate of 654,000, which was well above the Briefing.com consensus estimate of 580,000 and up 31.3% from the same period a year ago
July 2016 marked the strongest pace of new home sales since October 2007
For more details on this economic release, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the weekly MBA Mortgage Index and the FHFA Housing Price Index for June, which will be released at 7:00 ET and 9:00 ET, respectively. The day's data will be capped off with the Existing Home Sales Report for July (Briefing.com consensus 5.54 million), crossing the wires at 10:00 ET.
Russell 2000 +10.0% YTD
S&P 500 +7.0% YTD
Dow Jones +6.5% YTD
Nasdaq Composite +5.1% YTD
DJ30 +17.88 NASDAQ +15.47 SP500 +4.26 NASDAQ Adv/Vol/Dec 1852/1.429 bln/986 NYSE Adv/Vol/Dec 2019/715.9 mln/940
3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, +0.5% around the 86.07 level
Crude oil reversed initial -1% morning losses to close near 4-week highs
October crude oil futures rose $0.73 (+1.5%) to $48.15/barrel
Headlines that Iran is willing to negotiate with other OPEC members to stabilize oil prices is a contributing factor to today's continuation rally
Other contributing factors affecting the price of oil include:
Reports that Iraq is increasing oil exports by around 150K barrels per day (+5%) as a pipeline dispute is being resolved
Increased exports out of China
The next OPEC meeting will take place in Algeria from Sept 26-28
Cautious analyst comments yesterday out of Barclays downplaying the 25% rally during the first several weeks of Aug
Short-covering, which was a factor behind the gains earlier this month, may be getting exhausted following the 20%+ increase
Friday's rig count data which showed that the total U.S. rig count was up 10 to 491 rigs following last week's increase of 17 rigs
200-300K barrels of oil are expected to come back online in Libya near-term
"Shoulder season" has begun as refineries undergo seasonal maintenance between Aug & Oct, demand is expected to drop
Production in Nigeria is expected to increase following a ceasefire, as militants appear willing to negotiate with the government
Natural gas extended yesterday's rally ahead of Thursday's inventory number
September natural gas closed $0.08 higher (+3.0%) at $2.76/MMBtu
In precious metals, gold & silver inched higher as the dollar traded nearly unchanged
December gold ended today's session up $2.60 (+0.2%) to $1346.00/oz
September silver closed today's session $0.07 higher (+0.4%) at $18.92/oz
Base metal copper added onto the previous session's losses in afternoon pit trading
September copper closed $0.02 lower (-0.9%) at $2.12/lb
The stock market traded on a higher note today as investors respond to a better-than-expected reading of the New Home Sales Report for July and strong performances from European bourses.
European markets led to the upside overnight as participants weighed mixed PMI readings from the eurozone. Overall, Manufacturing PMI readings came in slightly below-consensus while Services PMI readings came in slightly ahead of estimates. The combination demonstrated limited disruption from the Brexit vote in June.
Additionally, stronger-than-expected quarterly results from electronic retailer Best Buy (BBY 39.23, +6.43 +19.60%) have also helped underpin today's action. The company reported top- and bottom-line earnings beats and increased its full-year profit guidance.
The major averages notched session highs shortly after the release of the New Home Sales Report for July. The report showed that new home sales increased 12.4% month-over-month, rising to a seasonally adjusted rate of 654,000. The broader market pulled back slightly since the release, but the major averages continued to hold the bulk of today's advance through to the close.
Stocks rebounded off yesterday's weakness, but jogged lower off morning highs. The three major US indices all eventually closed in positive territory led by the Nasdaq Composite, which quietly made a new all-time high, and ended up 15.48 points (+0.30%) to 5260.08. The S&P 500 added 4.26 points (+0.20%) to 2186.90, and the Dow Jones Industrial Average was higher by 17.88 points (+0.10%) to 18547.30.
The majority of S&P sectors finished in the green today, and one of the leaders was the Technology (XLK 47.20, +0.18 +0.38%) sector which ended just under highs. Component Accenture (ACN 115.48, +1.72 +1.51%) was modestly higher today following news out that the company acquired Redcore, an Australian-based consulting company. Other sector as measured by the S&P closed Tuesday XLB +0.86%, XLE +0.70%, XLY +0.50%, IYZ +0.31%, XLF +0.12%, XLV +0.09%, XLI +0.08%, XLP -0.20%, XLU -0.44%.
In the S&P 500 Information Technology (785.76, +2.87 +0.37%) sector, trading pushed higher as the bell rang and the sector never looked back. Component Microsoft (MSFT 57.89, +0.22 +0.38%) was slightly higher today after news was out that LinkedIn (LNKD 191.82, +0.05 +0.03%) shareholders approved the acquisition by MSFT. Other names in the space which displayed relative strength included AMAT +3.10%, CSRA +2.52%, SWKS +1.60%, ACN +1.51%, HPQ +1.39%, ATVI +1.30%, CA +1.29%.
Other notable news items among sector components:
LinkedIn (LNKD) confirmed shareholders approved acquisition by Microsoft (MSFT).
Micron (MU 16.18, -0.014 -0.06%) executive Brian Shirley entered into a prearranged trading plan for the sale of up to 162,257 shares of stock beginning in October.
Accenture (ACN) to acquire Redcore, a privately held Australia-based consulting company. Financial terms of the deal were not disclosed.
EDGE3 Technologies announced a new IP licensing agreement with Microsoft (MSFT). This relationship encompasses a broad range of technologies focused on gestural and movement tracking using time-of-flight (TOF) camera sensors, with use cases spanning automotive-based gesture tracking, virtual reality (VR) gaming, and augmented reality (AR).
Microsoft (MSFT) and Lenovo (LVNGY) announced a deepening of their strategic relationship. Lenovo will load Microsoft's productivity apps - including Microsoft Office, OneDrive and Skype - on select Lenovo devices that use the Android operating system. Lenovo expects to ship millions of these Android-based devices worldwide over the next several years. This expanded collaboration between Microsoft and Lenovo also includes a patent cross-licensing agreement that covers Lenovo and Motorola devices.
Western Digital (WDC 46.50, +0.36 +0.78%) announced that Ovation Data Services, Inc. has selected the joint HGST Active Archive System and Versity Storage Manager solution to build a private storage cloud for media and entertainment and oil and gas industries as these organizations require fast and frequent access to their current and historical file-based data assets.
IBM (IBM 160.26, +0.25 +0.16%) announced new, cost-conscious, enterprise class, all-flash storage designed to provide small, midsized organizations and global enterprises with primary storage for cloud or cognitive applications and workloads. New models include the IBM Storwize V7000F and IBM Storwize 5030F; the new solutions will be available worldwide from IBM and through IBM Business Partners beginning early September. Pricing begins at $19,000.
Integrated Device (IDTI 20.19, +0.07 +0.35%) announced a new high-performance computing solution for telecommunications "edge" networks that combines its RapidIO technology with IBM's (IBM) POWER8-based servers.
Elsewhere in the tech space:
AT&T (T 40.85, -0.06 -0.15%) was awarded a 5-year contract by the U.S. Department of Labor's Wage and Hour Division. AT&T will serve as its primary mobility provider.
CommerceHub (CHUBA 12.24, -1.26 -9.33%) to expand its existing partnership with Walmart (WMT 71.97, -0.73 -1.00%), integrating directly with Walmart's online third-party marketplace.
RADA Electronic Industries (RADA 0.60, +0.03 +5.63%) announced its selection by an Asian military force of its Multi-Mission Hemispheric Radar (MHR) based RPS-42 aerial surveillance radar systems. The order is of a significant size to RADA and strategically important. The order is expected to be received during the third quarter of 2016 and delivered by mid-2017. The order is expected to contribute a few million dollars to RADA's revenues in both 2016 and 2017.
Tableau Software (DATA 62.22, +7.35 +13.40%) appointed Adam Selipsky as president and CEO effective September 16. Christian Chabot, Tableau's co-founder and current CEO, will continue to serve as chairman of Tableau's board of directors. Selipsky currently serves as Vice President of Marketing, Sales and Support for Amazon Web Services (AMZN 762.45, +2.97 +0.39%).
Xtera Communications (XCOM 0.35, -0.34 -49.48%) received a notice of termination of the Master Manufacturing Agreement between the company and NSG Technology, Inc. (FXCNY 7.17, flat), dated as of January 1, 2013, pursuant to the default and termination provisions contained therein. The company uses
Foxconn, an independent contract manufacturer, to manufacture and assemble its products. In the Notice, Foxconn cited that it was terminating the Agreement due to Xtera's non-payment of the outstanding accounts receivable, as well as unpaid material and inventory liabilities, in each case under the Agreement.
magicJack VocalTec's (CALL 6.33, +0.03 +0.48%) Directors received a letter from Kanen Wealth Management detailing their requests for the company to begin a $50 million stock buyback program in addition to adding two new board members.
In reaction to quarterly results:
Hanwha Q CELLS (HQCL 13.71, +0.22 +1.63%) reported better than expected Q2 EPS of $0.92 on worse than expected revenues which rose 88.8% compared to a year ago to $638 million. The company also reaffirmed FY16 total module shipments of 4,800 to 5,000 MW on $180 million in CapEx.
Trina Solar (TSL 10.54, +0.02 +0.19%) reported better than expected Q2 EPS and revenues of $0.42 and $961.6 million, respectively. For Q3, the company expects to ship 1.55 to 1.65 GW of PV modules. For FY16, TSL sees shipments of 6.30 to 6.55 GW.
NQ Mobile (NQ 4.33, -0.17 -3.78%) reported better than expected Q2 earnings of $0.08 per ADS. The company also reported revenues which fell 18.0% compared to a year ago but beat market expectations at $83.7 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: INTU, NMBL/SOL
Analyst actions:
SQ was upgraded to Buy from Hold at Stifel,
MDRX was upgraded to Outperform from Mkt Perform at Leerink Partners;
TLND was initiated with a Neutral at JP Morgan, Citigroup and Goldman,
UNXL was initiated with a Speculative Buy at The Benchmark Company
