From Briefing.com: 4:15 pm : The stock market ended a relatively quiet session on a flat note after the S&P 500 (-0.2%) spent the day inside a meager 12-point trading range. The Dow Jones Industrial Average (-0.3%) settled slightly behind both the Nasdaq Composite (-0.2%) and the benchmark index.
Equity indices began the day on a choppy note as top-weighted Apple (AAPL 106.00, -0.82) demonstrated early weakness. The tech giant underperformed in the wake of a tax ruling from the European Commission, which ordered Apple to pay up to EUR13 billion in back taxes to Ireland after it was found that Apple received an undue tax benefit. However, both the Irish government and Apple have announced that they will appeal the decision.
The major averages backpedaled through the afternoon as strengthening in the U.S. Dollar Index (96.07, +0.49, +0.51%) and a downturn in crude oil weighed on the broader market. Crude oil erased an early gain after reports indicated that Iran's Deputy Minister of Industry stated that the country could increase oil production to four million barrels per day by the end of the year. The reports fueled some uncertainty regarding the potential success of supply limiting measures that could be announced after next month's OPEC meeting. WTI crude ended the day lower by 1.3% ($46.34/bbl; -$0.62).
The S&P 500 (-0.2%) settled off its session low, but was unable to reclaim its 20-day simple moving average (2179.16). Nine sectors ended in negative territory with consumer staples (-0.6%), consumer discretionary (-0.6%), and utilities (-1.0%) rounding out the leaderboard. On the flipside, the heavyweight financial sector (+0.8%) finished with the only gain.
Retail names underperformed in the consumer discretionary sector (-0.6%), evidenced by the 1.6% loss in the SPDR S&P Retail ETF (XRT 44.50, -0.73). The group moved lower following disappointing quarterly results from G-III Apparel (GIII 33.14, -8.63) and Abercrombie & Fitch (ANF 18.29, -4.66). The retailer ETF has declined 1.3% month-to-date, which compares to a loss of 1.2% in the broader sector.
The heavyweight health care sector (-0.4%) ended behind the broader market as pharmaceutical names underperformed. Bristol-Myers (BMY 57.24, -1.52) fell 2.5%, extending its August loss to 23.5%. The name tumbled at the beginning of the month after announcing that its lung-cancer treatment, Opdivo, failed to meet its primary endpoints. Conversely, the iShares Nasdaq Biotechnology ETF (IBB 283.29, -0.58) ended slightly ahead of the broader sector.
In the technology (-0.2%) sector, large cap names underperformed as Alphabet (GOOG 769.09, -3.06), Facebook (FB 125.84, -0.70), and Apple (AAPL 106.00, -0.82) lost between 0.4% and 0.8%. Separately, the PHLX Semiconductor Index (-0.2%) finished in-line with the broader market while Cypress Semiconductor (CY 11.75, +0.62) outperformed. The stock jumped 5.6% on M&A rumors.
The economically-sensitive financial sector (+0.8%) outperformed as Dow components JPMorgan Chase (JPM 67.50, +0.55) and Goldman Sachs (GS 169.37, +3.15) topped the price-weighted index. Conversely, rate-sensitive real estate investment trusts underperformed. Public Storage (PSA 223.77, -1.97) and Realty Income (O 65.44, -0.73) ended lower by 0.9% and 1.1%, respectively.
On the M&A front, Agrium (AGU 95.76, +6.28) and Potash (POT 18.00, +1.95) announced that they have entered into discussions regarding a potential merger. The two posted respective gains of 7.0% and 12.2% while peer Mosaic (MOS 30.45, +2.50) climbed 8.9%.
Treasuries ended on a mixed note with the short end of the curve demonstrating relative strength. The yield on the 30-yr bond ended higher by two basis points (2.23%) while the yield on the 2-yr note settled lower by one basis point (0.79%). The benchmark 10-yr yield rose one basis point to 1.57%.
Today's participation was below the recent average as fewer than 737 million shares changed hands on the NYSE floor.
Today's economic data included the Case-Shiller 20-city Index for June and Consumer Confidence for August:
The Case-Shiller 20-city Home Price Index for June fell to 5.1%, which was in-line with the Briefing.com consensus of 5.1%. This followed the previous month's revised reading of 5.3%, which fell from 5.2%.
The Conference Board's Consumer Confidence Index for August checked in at 101.1 (Briefing.com consensus 97.0) versus a downwardly revised 96.7 (from 97.3) for July.
Consumers are feeling more upbeat than they were the month before about business and employment conditions, as well as personal income prospects.
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the weekly MBA Mortgage Index and the ADP Employment Change Report for August (Briefing.com consensus 170k), which will be released at 7:00 ET and 8:15 ET, respectively. The day's data will be capped off with Chicago PMI for August (Briefing.com consensus 54.5) and Pending Home Sales for July (Briefing.com consensus 0.7%), crossing the wires at 9:45 ET and 10:00 ET, respectively.
Russell 2000 +9.6% YTD
S&P 500 +6.5% YTD
Dow Jones +5.9% YTD
Nasdaq Composite +4.3% YTD
DJ30 -48.69 NASDAQ -9.34 SP500 -4.26 NASDAQ Adv/Vol/Dec 1501/1.430 bln/1343 NYSE Adv/Vol/Dec 1442/736.0 mln/1501
3:30 pm :
The dollar index was up +0.5% around the 96.08 level, weighing on commodities overall
Commodities, as measured by the Bloomberg Commodity Index, -1.0% around the 83.66 level
Crude oil saw increased volatility, initially rallied & reversed gains in the early afternoon to close near session lows
October crude oil futures fell $0.62 (-1.3%) to $46.34/barrel
EIA data will be released tomorrow at 10:30 am ET
API data will be released today at 4:30 pm ET
Factors affecting the price of oil include:
Iran supply headlines appear to be the catalyst behind the reversal, as there were some headlines indicating Iran's Deputy Minister of Industry suggested Iran is looking to increase production to 4 mln barrels per day by the end of the year.
Iran currently produces around 3.85 mln barrels per day, so this isn't a huge jump, but it does go against recent indications that they could participate in a potential supply freeze at the September OPEC meeting.
Oil had been trading higher earlier this morning amid weather concerns, with oil and gas companies in the Gulf of Mexico shutting down production that consisted of ~168k barrels/day of oil and 190 mln cubic ft/day of natural gas as a precaution against an expected tropical storm.
Additionally, there were reports of ISIS setting fire to a number of wells in Northern Iraq, potentially curtailing some supply and adding support to oil this morning.
Natural gas ended near session lows ahead of Thursday's inventory number
October natural gas closed $0.06 lower (-2.1%) at $2.83/MMBtu
In precious metals, gold & silver declined as the dollar index surged to session highs
December gold ended today's session down $10.90 (-0.8%) to $1316.10/oz
December silver closed today's session $0.10 lower (-0.5%) at $18.67/oz
Base metal copper snapped its 3-day loss streak, closed modestly higher for the day
December copper closed $0.01 higher (+0.5%) at $2.08/lb
The major averages began the day on a choppy note as a downturn in top-weighted Apple (AAPL 106.00, -0.82 -0.77%) pressured the broader market. The technology heavyweight slipped after the European Commission concluded that Ireland afforded an undue tax benefit to Apple. The European Commission ordered Apple to pay up to EUR 13 billion in back taxes to Ireland, but the Irish government and Apple have since announced that they will appeal the decision.
Also, the Fed Vice Chair Stanley Fischer spoke earlier this morning, stating that the pace of interest rate normalization will depend on the quality of incoming economic data. Mr. Fischer's statements echoed previous remarks, but have nonetheless improved the odds for a rate hike ahead of Friday's release of the Employment Situation Report for August. The report is expected to show that 180,000 nonfarm payrolls were added. The fed funds futures market estimates the implied probability of a rate hike at the September meeting at 24.0%, rising from 21.0% in the prior session.
Additionally, crude oil has also been in focus amid reports that Iran's Deputy Minister of Industry suggested the country could increase its production to four million barrels per day by the end of the year. The report may have cast some doubt on the likelihood of supply limiting measures that could be announced after next month's OPEC meeting. Oil went green to red today, pressured at the close with October crude oil futures down $0.62 (-1.3%) to $46.34/barrel.
Further, market data out today included the Case-Shiller 20-city Home Price Index for June which fell to 5.1%, following the previous month's revised reading of 5.3% (from 5.2%). Also, the Conference Board's Consumer Confidence Index for August checked in at 101.1 versus a downwardly revised 96.7 (from 97.3) for July.
The broader market was pressured from the get-go, ending modestly off lows though. Leading the decline, the Dow Jones Industrial Average shed 48.69 points (-0.26%) to 18454.30. The S&P 500 was down 4.26 points (-0.20%) to 2176.12, and the Nasdaq Composite lost 9.34 points (-0.18%) to 5222.99.
Among the worst performing sectors today, Technology (XLK 47.07, -0.16 -0.34%) finished near the middle of the daily range but was pressured all day. Component Visa (V 81.17, +0.30 +0.37%) announced a partnership with Uber to provide Uber Local Offers which would give customers discounts when paying with their Visa card on file with Uber at local merchants. Other sectors as measured by the S&P closed XLU -1.05%, XLP -0.59%, XLY -0.55%, XLE -0.34%, XLV -0.34%, XLI -0.27%, XLB -0.24%, IYZ -0.12%, XLF +0.90%, XLFS +0.91% with only Financials escaping with gains.
In the S&P 500 Information Technology (784.06, -1.86 -0.24%) sector, trading began the day in the green but fell within the first hour below flat lines, and sellers held on for the remainder of the day. Components LRCX -1.44%, FLIR -1.25%, HPE -1.19%, MU -1.01%, RHT -0.99%, TXN -0.96% ended lower today.
Other notable news items among sector components:
Apple (AAPL): The EU confirmed Ireland granted undue tax benefits of up to EUR 13 billion to AAPL.
According to CNBC, Alphabet's (GOOG 769.09, -3.06 -0.40%) Google is favored to win PayPal's (PYPL 37.00, -0.29 -0.78%) cloud business.
Skyworks (SWKS 74.20, -1.02 -1.36%) appointed Kris Sennesael as CFO.
Boehringer Ingelheim Pharmaceuticals and Qualcomm (QCOM 62.94, -0.04 -0.06%) through its subsidiary, Qualcomm Life, Inc., announced a new collaboration to develop a connectivity solution for the RESPIMAT inhaler, the platform inhaler for the Boehringer Ingelheim family of respiratory therapies, to help improve COPD treatment outcomes.
Uber and Visa (V) announced Uber Local Offers, a new way for riders to earn discounted rides by simply using the same Visa credit card on file with Uber at their favorite local merchants.
Ericsson (ERIC 7.31, -0.02 -0.27%) and Cisco (CSCO 31.54, -0.04 -0.13%) announced an agreement to supply and install IP networks for C&W Communications, which operates the retail brand Flow, in three Caribbean markets. The plans include an upgrade to the IP backbone network in the Bahamas to improve performance and support an increase of traffic, and a new business-to-business IP/MPLS network in Jamaica and Barbados.
Elsewhere in the tech space:
In addition to reporting quarterly results, ScanSource (SCSC 35.49, -7.22 -16.90%) announced a $120 million three-year authorization to repurchase shares of common stock.
Natl Instruments (NATI 28.06, -0.18 -0.64%) elected Alex Davern to serve as CEO and President effective January 1, 2017.
Sequans Communications (SQNS 1.79, -0.02 -1.21%) announced an agreement to deliver Sequans' LTE Cat 1 technology and products to T-Mobile's (TMUS 46.10, -0.63 -1.35%) machine-to-machine (M2M) and IoT customers.
Communications Systems (JCS 5.63, -0.09 -1.57%) named Mark Fandrich as CFO effective August 29, 2016.
Flex (FLEX 13.29, +0.20 +1.53%) received approval to purchase up to 20% of its outstanding shares. Additionally, the Board authorized management to purchase shares in an aggregate amount of up to $500 million.
Aspen Tech (AZPN 45.97, +0.46 +1.01%) announced a $100 million accelerated share repurchase program.
Square (SQ 12.07, +0.06 +0.50%) named former SolarCity (SCTY 20.69, -0.77 -3.59%) VP, Ajmere Dale, as Chief Accounting Officer.
Imperva (IMPV 45.56, -1.08 -2.32%) announced that the Imperva SecureSphere Web Application Firewall and SecureSphere Database Firewall have been selected for inclusion in the Department of Homeland Security Continuous Diagnostics and Mitigation Tools/Continuous Monitoring as a Service Blanket Purchase Agreement.
In reaction to quarterly results:
ScanSource (SCSC) reported worse than expected Q4 EPS of $0.51 on in-line revenues which rose 3.6% compared to a year ago to $887.5 million. For Q1, the company sees EPS and revenues worse than expected at $0.60-0.68 and $875-925 million, respectively.
Companies scheduled to report quarterly results tonight: PANW, VEEV
Analyst actions:
VMW was upgraded to Buy from Neutral at SunTrust,
FTNT and CUDA were upgraded to Overweight from Sector Weight at Pacific Crest,
TECD was upgraded to Neutral from Underperform at BofA/Merrill;
ADSK was downgraded to Sell from Neutral at Rosenblatt,
MANT was downgraded to Underperform from Market Perform at Wells Fargo,
IMPV was downgraded to Sector Weight from Overweight at Pacific Crest;
EBAY was initiated with a Long-Term Buy at Hilliard Lyons,
IPHI was initiated with an Overweight at JP Morgan
4:20 pm FEI shareholders approve acquisition by Thermo Fisher Scientific (TMO), transaction expected to be completed by end of 2016 (FEIC) :
