From Briefing.com: 4:15 pm : The stock market enjoyed its fourth consecutive day of gains with the S&P 500 rising 1.3% to a fresh record high. The benchmark index settled ahead of the Nasdaq Composite (+1.1%), which lagged since the start. Equity indices started the day near their flat lines, which masked gains in just about every sector. In turn, those early gains were masked by the underperfomance of the health care space (-0.8%), which was down more than 2.0% at the start.
The initial weakness in health care developed after President-elect Donald Trump told TIME Magazine that he wants to lower drug prices. This sent the iShares Nasdaq Biotechnology ETF (IBB 266.28, -8.06) lower by 2.9%. Recall that the Clinton campaign took aim at high drug prices, which contributed to an 11.3% October dive in the biotech ETF. With today's retreat, the ETF is back near the middle of its range from October.
The opening slide in biotechnology placed the Nasdaq below its flat line, but the index recovered as biotechnology climbed off its low and the top-weighted technology sector (+1.9%) surged into third place on the sector leaderboard. High-beta chipmakers had an even better showing than the sector as the PHLX Semiconductor Index jumped 2.2%. Micron (MU 20.45, +1.39) was a standout, soaring 7.3%, after Western Digital (WDC 69.15, +5.30), who acquired Micron's competitor SanDisk, raised its guidance, citing a favorable market environment. Seagate (STX 40.27, +1.12) climbed 2.9% following Western Digital's guidance, but it is worth noting that Western Digital sells consumer solid-state drives after the acquisition of SanDisk while Seagate remains focused on the mechanical hard drive market.
Similar to technology, four of the remaining five cyclical sectors posted gains while energy (+0.7%) lagged, but still ended in the green even though crude oil fell 2.3% to $49.77/bbl. The energy component slumped into the close after the government's inventory report confirmed last night's bearish reading from the American Petroleum Institute. In addition to showing an inventory build, today's EIA report revealed large increases in gasoline and distillate inventories.
Two countercyclical sectors-telecom services (+2.4%) and real estate (+2.2%)-settled atop the leaderboard thanks to daylong demand for Treasuries, which resulted in a five-basis point downtick in the 10-yr yield (2.34%).
The U.S. Dollar Index (100.18, -0.31) shed 0.3%, returning to its Monday low. The euro gained 0.4%, climbing to 1.0764 against the greenback ahead of tomorrow's policy announcement from the European Central Bank. Judging by the action in European and U.S. equities leading up to the meeting, participants are not worried about ECB President Mario Draghi hinting at reducing asset purchases. Instead, the market is positioned for the central bank to extend or maintain its current purchase program, which is set to end early next year.
Today's participation was above average as more than a billion shares changed hands at the NYSE floor.
Economic data included JOLTS, Consumer Credit, and MBA Mortgage Index:
The October Job Openings and Labor Turnover Survey showed that job openings decreased to 5.534 million from a revised 5.631 million (from 5.486 million) in September
The Consumer Credit report for October showed an increase of $16.0 billion while the Briefing.com consensus expected growth of $18.7 billion
September credit growth was revised up to $21.8 billion from $19.3 billion
The weekly MBA Mortgage Index declined 0.7% after falling 9.4% one week ago
Tomorrow's economic data will be limited to weekly initial claims (Briefing.com consensus 255K), which will be released at 8:30 ET.
Russell 2000 +20.6% YTD
Dow Jones Industrial Average +12.2% YTD
S&P 500 +9.7% YTD
Nasdaq Composite +7.7% YTD
DJ30 +297.84 NASDAQ +60.76 SP500 +29.12 NASDAQ Adv/Vol/Dec 1875/1.93 bln/1033 NYSE Adv/Vol/Dec 2293/1.02 bln/683 3:30 pm :
Crude oil ended near its lowest level of the session, extended yesterday's losses after EIA reported notable builds in gasoline & distillate inventories
Jan 2017 crude oil futures fell $1.11 (-2.2%) to $49.84/barrel
EIA highlights:
Crude oil inventories had a draw of -2.389 mln barrels (consensus called for a draw of -1.032 mln barrels)
Gasoline inventories had a build of +3.425 mln barrels (consensus called for a build of +1.948 mln barrels)
Distillate inventories had a build of +2.501 mln barrels
Natural gas futures erased yesterday's losses and closed near a 2-year high ahead of tomorrow's inventory number
Jan 2017 natural gas closed $0.02 lower (-0.6%) at $3.61/MMBtu
Weekly EIA natural gas inventory data will be released tomorrow at 10:30 am ET.
In precious metals, gold snapped its 2-session loss streak & silver closed near a session high on notable dollar weakness
Feb 2017 gold ended today's session up $7.60 (+0.7%) to $1177.60/oz
Mar 2017 silver closed today's session $0.48 higher (+2.9%) at $17.28/oz
The dollar index was -0.3% around the 100.18 level, provided support to precious metals
Commodities, as measured by the Bloomberg Commodity Index, were -0.6% around the 87.47 level
Base metal copper retreated from Monday's 17-month high, extended yesterday's losses
Mar 2017 copper closed $0.04 lower (-1.5%) at $2.64/lb
The broader market ended Wednesday at or near highs. Action was led higher in all three indices for back-to-back session by the Dow Jones Industrial Average which gained 297.84 points (+1.55%) when all was said and done to end 19549.62. The S&P 500 was up 29.12 points (+1.32%) to 2241.35, and the Nasdaq Composite added 60.76 points (+1.14%) to 5393.76.
The initial weakness in health care developed after President-elect Donald Trump told TIME Magazine that he wants to lower drug prices. This sent the iShares Nasdaq Biotechnology ETF (IBB 266.28, -8.06) lower by 2.9%. Recall that the Clinton campaign took aim at high drug prices, which contributed to an 11.3% October dive in the biotech ETF. With today's retreat, the ETF is back near the middle of its range from October.
Similar to technology, four of the remaining five cyclical sectors posted gains while energy (+0.7%) lagged, but still ended in the green even though crude oil fell 2.3% to $49.77/bbl. The energy component slumped into the close after the government's inventory report confirmed last night's bearish reading from the American Petroleum Institute. In addition to showing an inventory build, today's EIA report revealed large increases in gasoline and distillate inventories.
The U.S. Dollar Index (100.18, -0.31) shed 0.3%, returning to its Monday low. The euro gained 0.4%, climbing to 1.0764 against the greenback ahead of tomorrow's policy announcement from the European Central Bank. Judging by the action in European and U.S. equities leading up to the meeting, participants are not worried about ECB President Mario Draghi hinting at reducing asset purchases. Instead, the market is positioned for the central bank to extend or maintain its current purchase program, which is set to end early next year.
Also, market data today included the October Job Openings and Labor Turnover Survey reading which showed that job openings decreased to 5.534 million from a revised 5.631 million (from 5.486 million) in September. Further, the Consumer Credit report for October showed an increase of $16.0 billion, and the weekly MBA Mortgage Index declined 0.7% after falling 9.4% one week ago.
For its part, the Technology (XLK 48.18, +0.90 +1.90%) sector jogged higher with the broader market. Component Western Digital (WDC 69.15, +5.30 +8.30%) put in a strong day after updating its guidance for Q2 following a deal with Samsung (SSNLF 1250.00, flat). Other sectors as measured by the S&P closed the session IYZ +2.84%, XLFS +2.19%, XLRE +2.09%, XLI +1.84%, XLY +1.84%, XLF +1.58%, XLB +1.43%, XLP +1.36%, XLU +1.30%, XLE +0.81%, XLV -0.86% with only Healthcare lagging below flat lines.
In the S&P 500 Information Technology (805.65, +14.99 +1.90%) sector, trading returned to above the $800-level following a strong day in the tech sector and the broader market. Component Micron (MU 20.44, +1.38 +7.27%) was higher today, possibly lifted by association with the WDC news, and after getting a premarket 'Buy' initiation at Citigroup with an intraday upgrade to 'Buy' coming out of Standpoint Research. Other names in the space which were stronger today included ADSK +5.27%, FSLR +4.80%, HPQ +3.53%, LRCX +3.40%, CTSH +3.25%, MA +3.19%, JNPR +3.04%, HPE +3.01%, STX +2.86%, V +2.85%, AMAT +2.85%.
Other notable news items among tech stocks:
MasterCard (MA 105.25, +3.25 +3.19%) increased its quarterly dividend to $0.22 per share from $0.19 and approved a $4 billion share repurchase program.
Fidelity Nat'l Info (FIS 75.62, +0.11 +0.15%) to sell its SunGard Public Sector and Education businesses to Vista Equity Partners for $850 million.
Western Digital (WDC) renewed its patent cross-license agreement with Samsung (SSNLF). Financial terms of the renewed agreement were not disclosed. The company also updated its Q2 outlook -- Enabled by continued strong acceptance from customers and favorable mix of its broad product portfolio, solid execution in a favorable market environment, and including the contribution of incremental intellectual property revenue from the new cross license agreement with SSNLF that was separately announced today, the company expects its Q2 revenue to be about $4.75 billion compared to its earlier forecast of approximately flat with first quarter revenue of $4.7 billion. WDC increased its forecasted Q2 non-GAAP EPS range to $2.10 to $2.15 from its earlier forecast range of $1.85 to $1.95. Non-GAAP gross margin is expected to be about 36%, versus the earlier forecast of about 35%.
According to a Bloomberg article, Apple (AAPL 111.03, +1.08 +0.98%) is in talks with certain movie studios to potentially offer early-access to new film releases.
SunPower (SPWR 7.95, +0.99 +14.22%) announced a restructuring program. The company guided 2017 in line with expectations on a non-GAAP basis.
Diodes (DIOD 24.63, +0.29 +1.19%) announced a production delay, and sees Q4 sales of $222 -238 million including about $10 million related to the impact (prior $232-248 million).
Fitbit (FIT 7.97, -0.01 -0.13%) acquired assets from Pebble. Financial terms of the deal were not disclosed.
Fitbit (FIT) and Medtronic (MDT 72.22, +0.11 +0.15%) partnered to integrate health and activity data into new CGM 'solution' for type 2 diabetes management. Financial terms of the deal were not disclosed.
Immersion (IMMR 10.75, +0.12 +1.13%) renewed its license agreement with LG Electronics (LGEAF). The three-year extension provides a worldwide license for LG to use its TouchSense technology and Basic Haptics patents in its smartphones, tablets and fitness bands.
IntraLinks Holdings (IL 13.18, +0.06 +0.46%) shareholder, Vitalogy Capital Partners, opposes the proposed sale to Synchronoss Tech (SNCR 41.27, -1.32 -3.10%) for $13 per share.
The Western Union Company (WU 22.13, +0.50 +2.31%) announced it is enhancing its existing relationship with Viber, a mobile messaging app.
Vivendi (VIVHY 19.28, +0.14 +0.73%) announced they have exceeded a 25% stake in Ubisoft (UBSFY 6.70, +0.13 +2.13%).
Tesla Motors (TSLA 193.15, +7.30 +3.93%) confirmed NEMA 14-30, 10-30, 6-50 adapter recalls. The company stated the adapter is used by relatively few customers.
Intel (INTC 35.50, +0.78 +2.25%) Security announced the new integration of the True Key extension with Windows Hello to deliver a seamless multi-factor sign in experience on Microsoft Edge.
Teradyne (TER 25.52, +0.55 +2.20%) priced a private offering of $400 million of 1.25% senior convertible notes due 2023.
T-Mobile US (TMUS 58.39, +2.40 +4.29%) announced the customer beta version of DIGITS, a new connected phone offering that will allow users to integrate multiple T-Mobile numbers into a single device. Users can combine home, work and personal data all onto a single device.
In reaction to quarterly results:
HealthEquity (HQY 41.49, +0.69 +1.69%) reported Q3 GAAP EPS of $0.10 on revenues which grew 42% compared to last year to $43.4 million. For FY16, the company sees EPS of $0.38-0.42 and revenues of $174-178 million, unchanged from prior levels.
Emcore (EMKR 8.45, +2.00 +31.01%) reported better than expected Q4 EPS and revenues of $0.10 and $25.6 million, respectively. For Q1, the company sees revenues ahead of market expectations at $28-30 million.
Sigma Designs (SIGM 5.60, -2.15 -27.74%) reported better than expected Q3 EPS of $0.09 and worse than expected revenues of $62.7 million.
SeaChange (SEAC 2.63, -0.17 -6.07%) reported a better than expected Q3 loss per share of $0.13 on worse than expected revenues of $20 million. For Q4, the company guided EPS and revenues below market views at ($0.10)-($0.05) and $22-24 million, respectively.
Stocks scheduled to report quarterly results tonight/tomorrow morning: CMTL, VRNT/CIEN, MEI, SAIC, YGE
Analyst actions:
MU was upgraded to Buy from Hold at Standpoint Research,
JNPR was upgraded to Outperform from Neutral at Credit Suisse;
AAPL was downgraded to Mixed from Positive at OTR Global,
WDAY was downgraded to Market Perform from Outperform at Northland Capital,
SIGM was downgraded to Hold from Buy at Needham and to Hold from Buy at Lake Street,
IDCC was downgraded to Neutral from Buy at Sidoti,
IL was downgraded to Hold from Buy at Stifel and to Hold from Buy at Craig Hallum,
JBL was downgraded to Neutral from Buy at B. Riley & Co.,
NTAP was downgraded to Underperform from Neutral at Credit Suisse;
MU was initiated with a Buy at Citigroup,
CLGX was initiated with a Sell at Deutsche Bank,
TST was initiated with a Buy at Lake Street
