From Briefing.com: 4:47 pm SunEdison responds to TerraForm Power (TERP) and TerraForm Global (GLBL) press release from yesterday (SUNEQ) : SunEdison states, " While SunEdison disagrees with many of the statements, claims and allegations made by the Yieldcos in their press releases, SunEdison confirms that settlement discussions with the Yieldcos have commenced, and adds that such settlement discussions relate both to alleged claims asserted by the Yieldcos against SunEdison, as well as meaningful claims that the SunEdison estate is reviewing and may assert against the Yieldcos. Like any similar situation with any other creditor in their Chapter 11 cases, SunEdison will actively pursue the dismissal or settlement of proofs of claims in the bankruptcy cases -- although no date has been established yet in the bankruptcy cases for objecting to proofs of claims. In addition, as the Yieldcos disclosed in their press releases, SunEdison and the Yieldcos are engaged in a collaborative sale process to sell either SunEdison's ownership interests and other rights in the Yieldcos or the entirety of the equity in the Yieldcos."
4:10 pm : The stock market began the week on a modestly lower note as the major averages pulled back following last Friday's relief rally. Factors impacting today's trade included weakness in European financial names, an uptick in interest rates, and relative weakness from the heavily-weighted technology (-0.4%) and financial (-0.4%) sectors. The S&P 500 (-0.3%) settled in-line with the Dow Jones Industrial Average (-0.3%) and slightly behind the Nasdaq Composite (-0.2%).
Equity indices began the day under pressure as a mixed performance from European bourses weighed on the broader market. Shares of Deutsche Bank (DB 12.98, -0.11) continued to be in focus after the German lender failed to confirm whether or not it had reached a revised settlement with the U.S. Department of Justice. Recall that the stock rallied 14.0% on Friday after AFP reported that the bank was close to reducing its fine to $5.4 billion from $14 billion.
UK Prime Minister Theresa May also contributed to early selling interest after she confirmed that the UK will invoke Article 50 of the Lisbon Treaty by the end of March 2017. The decision resuscitated fears regarding the terms and/or restrictions the UK will face in accessing the common market. Sterling declined 1.0% against the dollar in response, finishing the day near the 1.2850 price level. The UK's FTSE (+1.2%) outperformed amid strength from exporters.
The ISM Manufacturing Index for September spurred a downturn in the Treasury market as the better-than-expected economic data boosted rate hike odds. The September ISM Index rose to 51.5 (Briefing.com consensus 50.4) after registering at 49.4 in August. The data led to some early positioning in the fed funds futures market, but the implied probability of a rate hike at the December meeting finished at 62.1%, rising from the prior session's reading of 61.7%.
The benchmark index finished in the middle of today's trading range, bouncing off support near its 20-day simple moving average (2155.81) in the final hour. Eight sectors settled in the red with financials (-0.4%), consumer staples (-0.6%), utilities (-1.4%), and real estate (-1.8%) acting as the largest laggards.
In the financial sector (-0.4%), Wells Fargo (WFC 43.83, -0.45) underperformed after U.S. Presidential candidate Hillary Clinton argued that the lender bullied employees into committing fraud. Mrs. Clinton also contended that the Consumer Financial Protection Bureau should be afforded new powers in order to deal with "bad corporate actors." The banking name tumbled 12.8% in September after it was reported that two million credit and deposit accounts were opened illegally.
Health care providers underperformed in the health care space (-0.2%) as Cigna (CI 128.01, -2.31) and Anthem (ANTM 122.90, -2.41) declined by 1.8% and 1.9%, respectively. The names continued to show weakness after last week's speculation that a judge who is presiding over their merger hearing may break the hearing up into two separate phases. Separately, biotechnology erased an early loss as the iShares Nasdaq Biotechnology ETF (IBB 290.00, +0.54) finished ahead of the broader market.
In the consumer discretionary space (-0.1%), auto names ended on a mixed note after reporting auto and truck sales for September. General Motors (GM 32.04, +0.27) ended higher by 0.9% after reporting a smaller-than-expected decline in monthly U.S. sales. Meanwhile, Toyota Motor (TM 115.26, -0.80) declined by 0.7% even though the company reported that U.S. sales rose 1.5% year-over-year while a decline was expected.
Treasuries finished near their worst levels as yields rose through the curve. The yield on the 2-yr note increased three basis points (0.90%) while the yield on the benchmark 10-yr note rose two basis points (1.62%).
Today's participation was below the recent average as fewer than 800 million shares changed hands on the NYSE floor.
Today's economic data was limited to August Construction Spending and the September ISM Index:
The ISM Manufacturing Index for September checked in at 51.5 (Briefing.com consensus 50.4). The September reading was better than expected and up from 49.4 in August.
The dividing line between expansion and contraction for this measure of national manufacturing activity is 50.0.
Total construction spending declined 0.7% in August (Briefing.com consensus +0.2%) following a downwardly revised 0.3% decline (from 0.0%) for July.
On a year-over-year basis, total construction spending is down 0.3%.
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
There is no economic data of note scheduled to be released tomorrow.
Russell 2000: +9.6% YTD
Nasdaq: +5.9% YTD
S&P 500: +5.7% YTD
Dow Jones: +4.8% YTD
DJ30 -54.30 NASDAQ -11.13 SP500 -7.07 NASDAQ Adv/Vol/Dec 1177/1.461 bln/1663 NYSE Adv/Vol/Dec 1243/798.0 mln/1725
3:30 pm :
The dollar index was +0.2% around the 95.69 level, weighing on precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.3% around the 85.60 level
Crude oil reversed its initial morning losses, ending higher for the fourth consecutive session & breaking out to fresh 1-month highs on the heels of last week's unexpected OPEC production cut
November crude oil futures rose $0.70 (+1.5%) to $48.81/barrel
The next OPEC meeting will take place in Vienna, Austria on November 30
Weekly EIA petroleum storage data will be released Wed at 10:30 am ET
Monthly IEA data will be released Oct 11
Baker Hughes rig count data will be released Friday at 1 pm ET
API data will be released tomorrow after the bell
Reminder: Last week in Algiers on the sidelines of the International Energy Forum, OPEC unexpectedly announced they would reduce output to 32.5 mln barrels/day, compared to July's production levels of around 33.1 mln barrels/day.
Natural gas ended nearly unchanged ahead of Thursday's inventory data
November natural gas closed $0.01 higher (+0.3%) at $2.92/MMBtu
In precious metals, gold's decline was outpaced by the drop in silver; the gold:silver ratio increased
December gold ended today's session down $4.30 (-0.3%) to $1312.70/oz
December silver closed today's session $0.40 lower (-2.1%) at $18.83/oz
The gold:silver ratio was at ~69.7, compared to Friday's pit trading closing ratio of ~68.5
Base metal copper erased all of Friday's gains in afternoon pit trading
December copper closed $0.02 lower (-0.9%) at $2.19/lb
Equity indices slipped at the start of the session as developments in Europe continued to weigh on risk appetite here at home. Deutsche Bank (DB 12.98, -0.11 -0.84%) remains in focus as the German lender has yet to confirm last week's report that it is close to reaching an agreement to settle claims related to the mortgage-backed securities (MBS) crisis. AFP reported last week that the bank's MBS settlement with the Department of Justice could be reduced to $5.4 billion from $14 billion. Meanwhile, Brexit fears resurfaced after UK Prime Minister Theresa May confirmed that the country will invoke Article 50 of the Lisbon Treaty by the end of March 2017.
The ISM Manufacturing Index for September signaled that manufacturing moved back to expansionary territory, registering at 51.5. Recall that a reading of 50.0 marks the dividing line between expansion and contraction. The positive economic data has also spurred some selling interest in Treasuries as participants adjust their rate hike expectations ahead of this Friday's Employment Situation Report for September. Other data today included the total construction spending reading, which showed a 0.7% decline in August following a downwardly revised 0.3% decline (from 0.0%) for July.
To that end, the broader market began the fourth quarter with modest losses across the board, retreating off Friday's strength as the three major US indices closed the day near their respective midpoints of the daily trading range. The declines were led by the S&P 500 which lost 7.07 points (-0.33%) today to end 2161.20. The Dow Jones Industrial Average shed 54.30 points (-0.30%) to 18253.85, and the Nasdaq Composite was down 11.13 points (-0.21%) to 5300.87. Helping the Nasdaq stay out of too much trouble today, Nasdaq 100 components like TSLA +4.7%, NFLX +4.1%, AAL +3.0%, FOXA +2.1% and BMRN +2.0% all staged healthy sessions with the backdrop of a soft session in the broader market.
As sectors go, Technology (XLK 47.64, -0.14 -0.29%) ended Monday about the middle of the daily range as the space never recovered from opening losses. Component Cognizant Tech (CTSH 50.40, +2.69 +5.64%) was the best performer today following the acquisition of Akastor's (AKKVY 0.71, flat) Frontica IT business for NOK1.025 billion. Other sectors as measured by the S&P closed out the day XLRE -1.92%, XLU -1.37%, XLP -0.62%, XLF -0.47%, XLFS -0.39%, XLE -0.08%, XLB -0.08%, XLV -0.08%, XLY -0.06%, IYZ -0.06%, XLI +0.09%.
In the S&P 500 Information Technology (798.63, -3.09 -0.39%) sector, the fourth quarter began with modest losses despite starting the session near flat lines. Component Teradata (TDC 29.44, -1.56 -5.03%) was the worst performing name in the sector as UBS downgraded the stock to a Sell rating in the premarket. Other names in the space which displayed weakness included QRVO -2.85%, FSLR -2.33%, QCOM -2.03%, ADSK -1.59%, AVGO -1.42%, MSI -1.35%, NTAP -1.28%, CTXS -1.24%, TEL -1.23%, CRM -1.14%, ACN -1.07%.
Other notable news items among sector components:
Twitter (TWTR 24.00, +0.95 +4.12%) was higher today in reaction to a Bloomberg report out Friday evening suggesting Alphabet's (GOOGL 800.38, -3.68 -0.46%) Google hired adviser to consider a bid for the company.
According to a Bloomberg report, NXP Semi (NXPI 102.76, +0.75 +0.74%) hired bankers which would suggest the pursuit of a sale amid interest from Qualcomm (QCOM 67.11, -1.39 -2.03%) and others.
VirnetX Holding (VHC 4.10, +1.04 +33.99%) received a $302.4 million verdict against Apple (AAPL 112.52, -0.53 -0.47%) for infringing on 4 patents.
Microsoft (MSFT 57.42, -0.18 -0.31%) confirmed lower pricing for Azure effective October 1. General Purpose Instances: Prices of Dv2 series VMs will be reduced by up to 15%. Also lowering prices of our A1 and A2 Basic VMs by up to 50%. Compute Optimized Instances: Prices of F series will be reduced up to 11%. Av2 series: In November 2016, will introduce new A series virtual machines (Av2), with prices up to 36% lower than the A series Standard VM prices available today.
F5 Networks' (FFIV 124.38, -0.26 -0.21%) CTO Karl Triebes, who previously announced plans to resign, will continue his employment to provide consulting services to the company through a separation date of January 1, 2017.
IBM (IBM 157.61, -1.24 -0.78%) announced a five-year partnership with Majesco, a global provider of core insurance software, consulting and services for insurance business transformation, to jointly offer a new cognitive, cloud-based platform to help insurance carriers worldwide create new services on IBM Cloud.
Facebook (FB 128.77, +0.50 +0.39%) unveiled its new 'Marketplace' to connect buyers and sellers.
FLIR Systems (FLIR 31.59, +0.17 +0.54%) reached a definitive asset purchase agreement to acquire the business of Point Grey Research, Inc. for about $253 million in cash. The transaction is expected to be completed in the fourth quarter of 2016, and the company anticipates the business and related transaction costs will be about $0.01 dilutive to its 2016 EPS and accretive for 2017.
Amazon's (AMZN 836.74 -0.57 -0.07%) live streaming video platform Twitch launched Twitch Prime.
TE Connectivity (TEL 63.59, -0.79 -1.23%) appointed current President Terrence Curtin as the successor of Tom Lynch as CEO effective March 9, 2017.
Cognizant Tech (CTSH) acquired Akastor's (AKKVY) Frontica IT business for NOK1.025 billion.
Following the separation of Xerox (XRX 10.12, -0.01 -0.10%) into two companies, Conduent Incorporated, the new business process services company, will trade on the New York Stock Exchange (NYSE) under the symbol CNDT. Xerox will continue to trade on the NYSE as XRX.
Rambus Inc. (RMBS 12.43, -0.07 -0.56%) signed a license agreement with Xilinx (XLNX 53.93, -0.41 -0.75%). In addition, the two companies will evaluate potential collaboration on the use of Rambus' CryptoManager platform, and Rambus will also explore the use of Xilinx FPGAs in the Rambus Smart Data Acceleration (SDA) research program. Specific terms of the agreement are confidential.
The Western Union Company (WU 20.61, -0.21 -1.01%) announced the launch of its mobile platform in Canada for domestic and cross-border money transfers, available for iOS and Android.
Elsewhere in the tech space:
First Data (FDC 13.29, +0.13 +0.99%) to sell all its Australian retail ATM and managed services ATM portfolio for about $55 mln to DirectCash Payments.
Kulicke & Soffa (KLIC 12.96, +0.03 +0.23%) named Fusen Chen President and CEO effective October 31, 2016.
Plantronics (PLT 51.58, -0.38 -0.73%) named Joe Burton as CEO, effective Oct 2.
Shopify (SHOP 43.03, +0.11 +0.26%) acquired privately held Boltmade. Financial terms were not disclosed.
Marvell (MRVL 13.02, -0.25 -1.88%) announced the appointment of Dave Caron as corporate controller & Chief Accounting Officer effective today.
TriNet Group's (TNET 21.85, +0.22 +1.02%) Vice President and CFO Bill Porter plans to retire.
Plexus (PLXS 46.76, -0.02 -0.04%) promoted Steve Frisch to COO.
Analyst actions:
LOGM was upgraded to Overweight from Underweight at Barclays,
NTES was upgraded to Outperform from Underperform at CLSA;
ORAN was downgraded to Hold from Buy at HSBC,
CTXS and TDC were downgraded to Sell from Hold at UBS,
IMPV was downgraded to Neutral from Buy at BTIG Research,
NTGR was downgraded to Hold from Buy at BWS Financial,
CAMP was downgraded to Hold from Buy at Aegis Capital;
OCLR was initiated with a Buy at Jefferies,
GDDY was initiated with a Buy at Summit Redstone,
ALRM was initiated with a Buy at Roth Capital,
VSM was initiated with an Outperform at Credit Suisse, an Equal Weight at Morgan Stanley and a Buy at Seaport Global Securities
