From Briefing.com: 4:49 pm Intersil stockholders approved the merger agreement with Renesas Electronics (RNECF); transaction is expected to close during the first half of 2017 (ISIL) : The merger remains subject to the satisfaction of certain other conditions, including antitrust approval by the China government and approval by CFIUS.
4:10 pm Broadcom beats by $0.09, reports revs in-line; guides Q1 revs above consensus; doubles quarterly dividend to $1.02/share (AVGO) :
Reports Q4 (Oct) earnings of $3.47 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $3.38; revenues rose 123.7% year/year to $4.15 bln vs the $4.12 bln Capital IQ Consensus.
Gross margin 60.8% vs. 59.5-61.5% guidance
Raised non-GAAP rev to $4.10-4.175 bln from $4.025-4.175 on Nov 2 when it announced $5.5 bln cash acquisition of Brocade (BRCD).
Co issues upside guidance for Q1, sees Q1 revs of $4.00-4.15 bln, excluding non-recurring items, vs. $3.96 bln Capital IQ Consensus Estimate.
4:03 pm Finisar beats by $0.12, beats on revs; guides Q3 EPS above consensus, revs above consensus (FNSR) :
Reports Q2 (Oct) earnings of $0.58 per share, excluding non-recurring items, $0.12 better than the Capital IQ Consensus of $0.46; revenues rose 15.2% year/year to $369.9 mln vs the $364.29 mln Capital IQ Consensus. Non-GAAP gross margin improved to 37.2% compared to 33.1% in the first quarter.
"This growth was primarily driven by strong demand for 100G transceivers. In addition, customer demand for wavelength selective switch and ROADM line card products was strong. Our gross margins improved significantly due to a favorable product mix and leverage achieved from our vertical integration with larger volumes. The combination of revenues being at the higher end of our guidance range with higher gross margins resulted in earnings per fully diluted share above our guidance range,"
Co issues upside guidance for Q3, sees EPS of $0.58-0.64, excluding non-recurring items, vs. $0.48
Capital IQ Consensus Estimate; sees Q3 revs of $378-398 mln vs. $377.62 mln Capital IQ Consensus Estimate. Co sees Q3 non-GAAP gross margin of ~37% to 38%, non-GAAP operating margin of ~18.5% to 19.5%.
4:10 pm : The stock market secured its fifth consecutive advance with the S&P 500 rising 0.2% to extend this week's advance to 2.5%. True to this week's form, small caps outperformed, sending the Russell 2000 higher by 1.6%. The domestically-oriented index will enter Friday with a 5.5% gain for the week.
Equity indices spent the early action near their flat lines as participants digested the latest policy statement from the European Central Bank. The ECB made no changes to its interest rate corridor, but announced that its asset purchase program will be extended until December. The news of an extension overshadowed the revelation that the pace of purchases will slow to EUR60 billion from EUR80 billion, starting in March.
The euro jumped against the dollar immediately after the announcement, but reversed off its high (1.0875), sliding nearly 300 pips to a new session low (1.0603). The decline was accelerated by comments from ECB President Mario Draghi, who said that the central bank will buy assets that have a lower yield than the current deposit rate. The weakness in the euro lifted the U.S. Dollar Index (101.08, +0.85) into the neighborhood of this year's high.
A modest wave of selling developed during the last two hours of action, but eight out of eleven sectors still ended the day with gains.
A handful of cyclical sectors struggled at the start, but the notable resilience that has been observed as of late made its appearance known once again. Top-weighted sectors like technology (+0.4%) and financials (+0.9%) climbed into the afternoon, which helped push the S&P 500 to a fresh intraday record high.
The financial sector (+0.9%) continued its torrid stretch, extending this week's gain to 4.7%, which puts the group well ahead of its peers. Today's advance took place on the back of steepening in the yield curve, which pushed up the 2s10s spread to 130 basis points-just one basis point below this year's high.
Growth-sensitive sectors like energy (+0.5%) and materials (+0.7%) outperformed throughout the day, but the energy sector could not catch up to crude oil, which spiked 2.0% to $50.85/bbl despite dollar strength.
The consumer discretionary space (+0.1%) spent the day behind the broader market as losses in select retailers and casino names offset strength on the apparel side. TailoredBrands (TLRD 26.44, +7.51) and Lululemon (LULU 68.84, +9.00) were among the standouts thanks to above-consensus earnings and upbeat guidance. The two soared 39.7% and 15.0%, respectively.
Also on the earnings front, Costco (COST 157.59, +3.74) jumped 2.4% after its quarterly report showed an increase in membership fees. However, the broader consumer staples sector (-0.5%) underperformed throughout the day.
The remaining countercyclical sectors flashed losses at the start, but health care (+0.2%), utilities (+0.3%), and real estate (+0.5%) recovered by the close.
Longer-dated Treasuries retreated while the front of the curve held unchanged, leaving the 2-yr yield at 1.10% while the 10-yr yield rose five basis points to 2.40%.
Today's participation was just above average as more than 960 million shares changed hands at the NYSE floor.
Economic data was limited to weekly initial claims, which decreased by 10,000 to 258,000 (Briefing.com consensus 255,000), marking the 92nd straight week they have been below 300,000. Continuing claims for the week ending November 26 dropped by 79,000 to 2.005 million.
Tomorrow's economic data will be limited to the 10:00 ET release of the preliminary reading of Michigan Sentiment Index for December (Briefing.com consensus 94.3) and October Wholesale Inventories (Briefing.com consensus -0.4%).
Russell 2000 +22.6% YTD
Dow Jones Industrial Average +12.6% YTD
S&P 500 +9.9% YTD
Nasdaq Composite +8.2% YTD
DJ30 +65.19 NASDAQ +23.59 SP500 +4.84 NASDAQ Adv/Vol/Dec 2165/2.06 bln/1001 NYSE Adv/Vol/Dec 1869/962.6 mln/1120 3:30 pm :
Crude oil snapped its 3-day loss streak ahead of this weekend's meeting between OPEC & non-OPEC producers
Jan 2017 crude oil futures rose $1.01 (+2.0%) to $50.85/barrel
Baker Hughes will release rig count data tomorrow at 1 pm ET.
The Dec 10th non-OPEC producer meeting is scheduled to take place in Vienna, Austria.
Natural gas traded near its 2-year high after the release of EIA data showed a draw in-line with Consensus
Jan 2017 natural gas closed $0.08 higher (+2.2%) at $3.69/MMBtu
EIA highlights:
Working gas in storage was 3,953 Bcf as of Friday, Dec 2, 2016, according to EIA estimates.
Natural gas inventory showed a draw of -42 bcf vs expectations for inventory to be a draw of approximately -43 bcf.
Stocks were 51 Bcf higher than last year at this time and 254 Bcf above the five-year average of 3,699 Bcf.
At 3,953 Bcf, total working gas is above the five-year historical range.
In precious metals, gold was nearing a 9-month low & silver dropped to its lowest level of the session on notable dollar index strength
Feb 2017 gold ended today's session down $5.10 (-0.4%) to $1172.50/oz
Mar 2017 silver closed today's session $0.18 lower (-1.0%) at $17.10/oz
The dollar index rallied back near last month's 15-year high, was +0.9% around the 101.08 level, pressured precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.1% around the 87.57 level
Base metal copper closed lower for the third consecutive session, after hitting a 17-month high on Monday
Mar 2017 copper closed $0.01 lower (-0.4%) at $2.63/lb
When Thursday came to a close, the markets were in the green again. Although participation dwindled at the end, the market peaked near midday as all three major US indices notched new all-time highs around the noon hour. Leading the pack when the bell rang, the Nasdaq Composite added 23.59 points (+0.44%) today to end 5417.36. The Dow Jones Industrial Average was up 65.19 points (+0.33%) to 19614.81, and the S&P 500 gained 4.84 points (+0.22%) to 2246.19.
Economic data was limited to weekly initial claims, which decreased by 10,000 to 258,000, marking the 92nd straight week they have been below 300,000. Continuing claims for the week ending November 26 dropped by 79,000 to 2.005 million.
Equity indices spent the early action near their flat lines as participants digested the latest policy statement from the European Central Bank. The ECB made no changes to its interest rate corridor, but announced that its asset purchase program will be extended until December. The news of an extension overshadowed the revelation that the pace of purchases will slow to EUR60 billion from EUR80 billion, starting in March.
The euro jumped against the dollar immediately after the announcement, but reversed off its high (1.0875), sliding nearly 300 pips to a new session low (1.0603). The decline was accelerated by comments from ECB President Mario Draghi, who said that the central bank will buy assets that have a lower yield than the current deposit rate. The weakness in the euro lifted the U.S. Dollar Index (101.08, +0.85) into the neighborhood of this year's high.
A modest wave of selling developed during the last two hours of action, but eight out of eleven sectors still ended the day with gains.
Also posting higher action today, the Technology (XLK 48.30, +0.12 +0.25%) space although action drifted away from highs as the session came to a close. Component Juniper Networks (JNPR 26.88, +0.91 +3.28%) was one of the better performing names today on the back of a premarket upgrade to Buy from Neutral at Nomura. Other sectors as measured by the S&P closed the day XLFS +2.19%, XLF +0.94%, XLB +0.66%, XLE +0.54%, XLRE +0.52%, IYZ +0.51%, XLV +0.19%, XLU +0.17%, XLY +0.00%, XLP -0.39%, XLI -0.56% as Financials led higher and Industrials and Consumer Staples lagged.
In the S&P 500 Information Technology (808.51, +2.86 +0.35%) sector, trading was in the green for most of the day and ultimately closed with a modest advance. Component Corning (GLW 24.88, +0.30 +1.22%) turned in a decent session after the company disclosed last night that the Board authorized a new $$ billion share repurchase program. Other names in the space which finished higher today included TDC +3.08%, SWKS +2.82%, ADS +2.73%, YHOO +2.20%, CSRA +1.81%, VRSN +1.81%, EBAY +1.76%, ADSK +1.74%, ADI +1.29%, GPN +1.28%, AVGO +1.28%, FFIV +1.18%.
Other notable news items among tech stocks:
Qualcomm (QCOM 68.55, +0.21 +0.31%) announced that they are collaborating with Microsoft (MSFT 61.01, -0.36 -0.59%) to enable Windows 10 on mobile computing devices powered by next-generation QualcommSnapdragon processors.
Microsoft (MSFT) completed its acquisition of LinkedIn (LNKD 195.96, flat).
Corning's (GLW) Board authorized a new $4 billion share repurchase program.
FORM Holdings (FORM 11.45, +0.30 +2.69%) entered into a confidential settlement and patent assignment agreement with Nokia (NOK 4.58, -0.12 -2.55%).
Samsung (SSNLF 1250.00, flat) Canada announced update on return and exchange of Note7 Devices. The company has secured close to 90% of the devices that were brought into the Canadian market.
In addition to reporting quarterly results, Comtech Telecom's (CMTL 10.55, -2.20 -17.25%) Board completed its previously announced assessment of capital needs and lowered the quarterly dividend to $0.10 per share from $0.30 per share.
Tyler Tech (TYL 145.54, -2.19 -1.48%) provided an update on Odyssey court case management implementation. The company seeks to correct 'inaccurate' news media coverage including 'false claims of wrongful incarceration due to Tyler's software.'
Nuance Communications (NUAN 15.57, +0.19 +1.24%) intends to offer $500 million senior notes due 2026.
Majesco Entertainment (COOL 5.17, +2.01 +63.61%) signed a merger agreement with PolarityTE. The company will issue preferred stock and also entered into a $2.25 million stock purchase agreement at $3.00 per share.
In reaction to quarterly results:
Science Applications (SAIC 85.91, +3.79 +4.62%) reported better than expected Q3 EPS of $0.91 on worse than expected revenues of $1.11 billion.
Ciena (CIEN 24.87, +3.27, +15.14%) reported worse than expected Q4 EPS of $0.44 on in-line revenues of $716.2 million. For Q1, the company sees revenues in-line at $615-645 million. Management guided FY17 revenue growth of mid-single digits.
Verint Systems (VRNT 34.45, -3.85 -10.05%) reported worse than expected Q3 EPS and revenues of $0.59 and $260.03 million, respectively. For FY17, VRNT lowered EPS and revenue guidance to $2.50 from $2.85 and about $1.075 billion, plus or minus 2% from $1.11 billion, plus or minus 2%.
Methode Electronics (MEI 42.55, +3.55 +9.10%) reported better than expected Q2 EPS of $0.66 on in-line revenues of $209.3 million. For FY17, the company sees EPS and revenue guidance of $2.30-2.45 and $820-845 million, respectively.
Comtech Telecom (CMTL) reported a better than expected Q1 loss per share of $0.11 on worse than expected revenues of $135.8 million. For Q2, CMTL sees revenues similar to Q1 levels, worse than market expectations. For FY17, the company guided EPS and revenues in-line at about $0.30 and about $600 million, respectively.
Companies scheduled to report quarterly results tonight: AVGO, FNSR, XTLY
Analyst actions:
WDC was upgraded to Buy from Hold at Cross Research,
AMD was upgraded to Buy from Underperform at BofA/Merrill,
ADSK was upgraded to Neutral from Sell at Rosenblatt,
JNPR was upgraded to Buy from Neutral at Nomura,
VIAV was upgraded to Buy from Hold at Craig Hallum;
FIT was downgraded to Hold from Buy at Deutsche Bank;
PCLN was initiated with a Buy at CLSA,
EXPE was initiated with an Outperform at CLSA,
TRIP was initiated with an Underperform at CLSA,
LOGM was initiated with a Neutral at Robert W. Baird,
CGNX was initiated with a Buy at Deutsche Bank,
ETFC and AMTD were initiated with a Mkt Perform at Keefe Bruyette,
CREE was initiated with a Mkt Outperform at JMP Securities,
ACIA was initiated with an Equal Weight at Morgan Stanley
