From Briefing.com: 4:21 pm ON Semiconductor confirms FTC clearance of its pending acquisition of Fairchild Semiconductor (FCS), discloses transaction with Littelfuse (LFUS) (ON) : The co announced that the FTC has accepted a proposed consent order for public comment and has terminated the Hart-Scott-Rodino waiting period applicable to ON Semiconductor's proposed acquisition of Fairchild Semiconductor (FCS). Under the proposed consent order and in order to satisfy the FTC's remaining concerns, prior to the closing of the acquisition of Fairchild, the FTC required that ON Semiconductor dispose of its planar insulated gate bipolar transistor business, which business generated less than $25 million in revenue during fiscal year 2015.
In satisfaction of this requirement, ON Semiconductor announced that it has entered into a definitive agreement with respect to the divestiture of the Ignition IGBT business to Littelfuse (LFUS) and has also entered into a separate definitive agreement with Littelfuse to sell its transient voltage suppression diode and switching thyristor product lines, for a combined $104 million in cash. No manufacturing assets will be transferred by ON Semiconductor in connection with the divestiture of the Ignition IGBT business or the sale of the TVS and thyristor businesses, and both asset sales are expected to close on August 29, 2016.
4:16 pm Brocade beats by $0.05, beats on revs; guides OctQ EPS in-line, revs in-line (BRCD) :
Reports Q3 (Jul) earnings of $0.21 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.16 but at the high end of prior guidance of $0.19-0.21; revenues rose 7.0% year/year to $590.7 mln vs the $573.3 mln Capital IQ Consensus.Note: These results include approximately two months of financial results from Ruckus Wireless, which was acquired on May 27, 2016.Co issues in-line guidance for Q4 (Oct) in an 8-K filing, sees EPS of $0.21-0.23, excluding non-recurring items, vs. $0.23 Capital IQ Consensus Estimate; sees Q4 revs of $630-650 mln vs. $640.9 mln Capital IQ Consensus Estimate.Co expects SAN product revenue in Q4 (Oct) to be up +1-4% sequentially as co expects a seasonal improvement although not as strong as co typically experiences.SAN product revenue of $282 mln in Q3 (Jul) was down 9% YoY. The decline was primarily the result of lower Fibre Channel director sales, which decreased 23%, partially offset by fixed-configuration switch sales which increased 3%. Sequentially, SAN product revenue decreased 5%.
"Against the backdrop of a mixed macro environment, we posted solid results, with total revenue at the high end of our outlook range...During Q3, we also continued the momentum of new product innovations across our portfolio, building a solid foundation for business growth and expansion of our addressable markets.
4:15 pm : The stock market ended a choppy session on a modestly lower note as investors maintained a cautious posture ahead of tomorrow's speech from Federal Reserve Chair Janet Yellen. The Dow Jones Industrial Average (-0.2%) finished behind the S&P 500 (-0.1%) and the Nasdaq Composite (-0.1%).
The benchmark index traversed a narrow ten-point trading range as equity indices continued to languish below recently-established record highs. The Thursday affair was hallmarked by thin trading conditions, a hodgepodge of earning results, and deviating sector leadership from the heavily-weighted technology (+0.1%), financial (+0.3%), consumer discretionary (-0.4%), and health care (-0.8%) sectors.
Equities began the session on a lower note as global markets tilted to the downside. European bourses underperformed following a weaker-than-expected reading of Germany's IFO Business Climate survey for August. However, relatively light volume and the potential market-moving nature of Chair Yellen's Friday remarks also likely contributed to increased volatility in overseas markets.
The major U.S. indices stumbled at the start of the session as disappointing quarterly results and/or guidance from the likes of Dollar Tree (DLTR 85.50, -9.43), Dollar General (DG 75.61, -16.18), and Signet Jewelers (SIG 83.44, -12.06) weighed on investor sentiment. Early morning Fed speak may have also dampened risk appetite after a few officials talked up the potential of a rate hike in the near term.
The S&P 500 (-0.1%) briefly fell to the 2170/2171 price level before reversing back towards its flat line. However, the broader market was unable to maintain its footing near those levels and slipped back towards its low in the final hour. The benchmark index finished in the bottom of today's trading range, but five sectors still ended in the green. The telecom services (+0.4%) and materials (+0.5%) sectors settled in front of the pack while consumer staples (-0.4%), consumer discretionary (-0.4%) and health care (-0.8%) underperformed.
The countercyclical health care sector (-0.8%) ended its day at the bottom of the leaderboard as biotechnology underperformed. In the group, Mylan Labs (MYL 42.85, -0.30) finished lower by 0.7% as participants weighed fresh criticisms of the drug maker. Mylan surrendered a 4.5% gain as recently-announced initiatives to lower the cost of its EpiPen device were deemed insufficient. Separately, St. Jude Medical (STJ 77.82, -4.06) declined 5.0% after Muddy Waters Capital issued bearish commentary on the name and disclosed a short position in the stock. The firm cited potential cyber security vulnerabilities for its negative view on St. Jude.
Retail names underperformed in the consumer discretionary space (-0.3%) as disappointing results and guidance from Dollar Tree (DLTR 85.50, -9.43), Dollar General (DG 75.61, -16.18), and Signet Jewelers (SIG 83.44, -12.06) overshadowed positive reports from Tiffany & Co (TIF 73.28, +4.41) and Guess? (GES 18.20, +3.30). The broader SPDR S&P Retail ETF (XRT 45.36, -0.26) ended lower by 0.6%, extending its week-to-date loss to 1.3%.
In the technology space (+0.1%), the high-beta chipmakers outperformed, evidenced by the 0.4% gain in the PHLX Semiconductor Index. In the group, Micron (MU 16.20, +0.69) jumped 4.5% after Nomura increased its price target on the stock to $20 from $16. In the broader sector, Salesforce.com (CRM 80.16, +2.34) gained 3.0% amid takeover rumors. The broader sector gained 0.1%, extending is month-to-date advance to 1.8%.
Treasuries ended on a lower note as yields rose through the curve. The yield on the benchmark 10-yr note finished higher by one basis point (1.58%) while the yield on the 2-yr note finished at 0.79% (+2 bps).
Today's participation was below the recent average as fewer than 697 million shares changed hands at the NYSE floor.
Today's economic data included weekly initial claims and Durable Goods Orders for July:
Initial jobless claims for the week ending August 20 slipped to 261,000 (Briefing.com consensus 265,000) from the prior week's unrevised reading of 262,000.
Continuing claims for the week ending August 13 were 2.145 million, down 30,000 from the prior week's unrevised reading.
Durable goods orders increased 4.4% in July (Briefing.com consensus +3.5%) on the back of a 10.5% increase in transportation equipment orders, which was fueled by an 89.9% increase in nondefense aircraft and parts orders.
Orders for the manufacturing sector have picked up again after declining in both May and June.
Excluding transportation, orders were up 1.5% (Briefing.com consensus +0.4%), paced by gains in nearly all categories.
For further details on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the second estimate of Q2 GDP (Briefing.com consensus 1.1%) and July International Trade in Goods, which will each cross the wires at 8:30 ET. Separately, the final reading of the University of Michigan Consumer Sentiment Survey for August (Briefing.com consensus 90.6) will be released at 9:45 ET.
Russell 2000 +9.0% YTD
S&P 500 +6.3% YTD
Dow Jones +5.9% YTD
Nasdaq Composite +4.1% YTD
DJ30 -33.07 NASDAQ -5.49 SP500 -2.97 NASDAQ Adv/Vol/Dec 1489/1.380 bln/1322 NYSE Adv/Vol/Dec 1651/696.3 mln/1305
3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, are trading nearly flat, -0.02% around the 85.05 level
Crude oil reversed initial losses despite comments from the Saudi minister regarding lack of meaningful production freeze talks
October crude oil futures rose $0.57 (+1.2%) to $47.33/barrel
Natural gas closed near session highs after EIA data showed a smaller-than-expected build compared to Consensus
September natural gas closed $0.05 higher (+1.8%) at $2.85/MMBtu
EIA highlights:
Working gas in storage was 3,350 Bcf as of Friday, Aug 19, 2016, according to EIA estimates.
Natural gas inventory showed a build of +11 bcf vs expectations for inventory to be a build of approximately +18 bcf.
Stocks were 275 Bcf higher than last year at this time and 350 Bcf above the five-year average of 3,000 Bcf.
At 3,350 Bcf, total working gas is above the five-year historical range.
In precious metals, gold ended around 4-week lows as the dollar index traded nearly flat
December gold ended today's session down $5.40 (-0.4%) to $1324.50/oz
The stock market trades on a flat note at midday as investors continue to favor a cautious approach ahead of tomorrow's remarks from Federal Reserve Chair Janet Yellen.
The major averages began the day on a lower note as a downturn in global markets and some weaker-than-expected earnings results kept a lid on equities. European markets paced the retreat overnight as a lackluster reading of Germany's IFO Business Climate survey for August pressured regional bourses. On the home front, disappointing quarterly reports from the likes of Dollar Tree (DLTR 85.50, -9.43 -9.93%), Dollar General (DG 75.48, -16.31 -17.77%), and Signet Jewelers (SIG 83.44, -12.01 -12.58%) helped limit early buying interest in retail sub-group and the broader market.
Market data today included the initial jobless claims reading for the week ending August 20 which slipped to 261,000 from the prior week's unrevised reading of 262,000. Continuing claims for the week ending August 13 were 2.145 million, down 30,000 from the prior week's unrevised reading. Additionally, durable goods orders increased 4.4% in July on the back of a 10.5% increase in transportation equipment orders, which was fueled by an 89.9% increase in nondefense aircraft and parts orders.
The broader market has struggled to maintain traction above its flat line amid light volume and ahead of potentially market-moving remarks from Ms. Yellen.
After yesterday's losses, trading on Thursday also ended in the red. Leading the way lower, the Dow Jones Industrial Average shed 33.07 points (-0.18%) to 18448.41. The energy component was weaker despite gains in crude oil; to that end, October crude oil futures rose $0.57 (+1.2%) to $47.33/barrel. The S&P 500 lost 2.97 points (-0.14%) to 2172.47, and the Nasdaq Composite was down by 5.49 points (-0.11%) to 5212.20.
Technology (XLK 47.03, +0.10 +0.21%) rebounded off yesterday's weakness, posting gains today with the sector barely escaping the draw of flat lines in the final moments of trading. Component HP (HPQ) was modestly lower today following its latest quarterly report and guidance. Other sectors as measured by the S&P closed the session IYZ +0.50%, XLB +0.49%, XLF +0.21%, XLU +0.06%, XLI -0.02%, XLE -0.27%, XLY -0.33%, XLP -0.38%, XLV -0.84%.
In the S&P 500 Information Technology (782.52, +0.97 +0.12%) sector, trading was in the red for certain points of the morning but action turned higher an hour and a half into the day and held onto those gains into the close. Component Micron (MU 16.20, +0.69 +4.45%) was strong today following a target raise at Nomura. Other names in the space which outperformed included CRM +3.01%, WDC +2.27%, STX +1.49%, GPN +1.47%, SWKS +1.42%, QRVO +1.10%, ADS +1.08%, AKAM +1.07%, ADSK +0.84%, LRCX +0.81%, VRSN +0.79%, ATVI +0.79%, CSCO +0.74%.
Other notable news items among sector components:
In addition to reporting quarterly results, HP Inc. (HPQ) displayed the world's only PCs with integrated privacy screens. HP Sure View, a new option on the HP EliteBook 1040 and HP EliteBook 840, helps protect against visual hacking with the press of a single button.
Facebook's (FB 123.89, +0.41 +0.33%) WhatsApp updated its privacy policy as part of its plan to test ways for people to communicate with businesses in the months ahead, signaling the company may be ready to start looking at monetizing the messaging service
According to Bloomberg, Apple (AAPL 107.57, -0.46 -0.43%) is developing a video sharing and editing application to compete with Snapchat/Facebook, among other social networking features for iOS.
IBM (IBM 158.63, -0.42 -0.26%) announced the opening of a new IBM Cloud Data Center in Korea, in collaboration with SK Holdings C&C.
Elsewhere in the tech space:
Marin Software's (MRIN 2.49, -0.11 -4.23%) Board decided to reappoint Founder/Chairman Christopher Lien as CEO and David Yovanno has stepped down from Board and CEO position.
Proofpoint (PFPT 76.50, +0.76 +1.00%) acquired Return Path's email fraud protection business unit for about $18 million.
xG Technology (XGTI 0.43, -0.12 -22.34%) filed for about 833.3K share common stock offering by selling shareholders.
Wins Finance (WINS 25.56, +0.63 +2.53%) received a letter of resignation from Amy He pursuant to which Ms. He resigned as CFO. Ms. He indicated that her resignation was not the result of any disagreement with the company on any matter relating to the company's operations, polices or practices.
KongZhong (KZ 6.55, +0.14 +2.18%) received a revised non-binding proposal letter, dated August 25, 2016, from Mr. Leilei Wang, chairman and CEO, and IDG-Accel China Growth Fund II L.P., who, together with certain other parties, formed a buyer group to acquire all of the outstanding ordinary shares not owned by them or their affiliates for $7.18 in cash per American depositary share, or about $0.1795 per ordinary share.
Amazon (AMZN 759.22, +1.97 +0.26%) announced a car research platform, Amazon Vehicles, designed for customers to get the information they need when shopping for vehicles, parts, and accessories.
In reaction to quarterly results:
HP (HPQ) reported better than expected Q3 EPS and revenues of $0.48 and $11.89 billion, respectively. For Q4, HPQ sees EPS worse than market expectations at $0.34-0.37.
Workday (WDAY 85.33, +5.68 +7.13%) reported a worse than expected Q2 loss per share of $0.04 on better than expected revenues of $377.7 million. For Q3, WDAY guided revenues worse than market expectations at $398-400 million. The company sees subscription revenues in the range of $331-333 million.
Tech Data (TECD 73.28, -7.02 -8.74%) reported worse than expected Q2 EPS and revenues of $1.42 and $6.35 billion, respectively. For Q3, TECD sees worse than expected EPS and revenues of $1.20-1.30 and $6.25-6.45 billion, respectively.
Companies scheduled to report quarterly results tonight: ADSK, EPAY, BRCD, UEPS, PSTG, QADA, SPLK, ZAYO
Analyst actions:
NFLX was upgraded to Outperform from Mkt Perform at William Blair,
BATS was upgraded to Mkt Perform from Underperform at Raymond James;
HPQ was downgraded to Hold from Buy at Maxim Group,
S was downgraded to Underperform from Neutral at Buckingham Research,
DATA was downgraded to Sector Perform from Outperform at RBC Captial Mkts,
WDAY was downgraded to Equal Weight from Overweight at First Analysis Sec,
INFN was downgraded to Sell from Neutral at Citigroup,
MRIN was downgraded to Hold from Buy at Stifel;
CREE was initiated with a Buy at Roth Capital,
EFII was initiated with a Buy at Stifel,
TWLO was initiated with a Hold at Argus
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