From Briefing.com: 4:52 pm Veeco Instruments reports prelim Q4 results with upside adj EPS guidance and in-line revs; announces public offering of $200 mln of convertible senior notes due 2023 (VECO) :
Co sees Q4 (Dec) EPS of $0.04-0.10, prior guidance ($0.07) -0.07 vs $0.01 Capital IQ Consensus Estimate; revs of $91-95 mln, prior $85-100 mln vs. $93.42 mln Capital IQ Consensus Estimate.
In addition to the preliminary financial information set forth below, Veeco currently expects to record bookings of ~$125 million for the fourth quarter. A preliminary estimate for cash, cash equivalents and short-term investments is ~$344 million as of December 31, 2016 as compared to $337 million at the end of the third quarter of 2016.
4:17 pm MagnaChip Semi reports prelim Q4 sales at high end of guidance / above consensus; announces proposed $65 mln private offering of exchangeable senior notes and stock repurchase (MX) :
Co issues upside guidance for Q4 (Dec), sees Q4 (Dec) revs of ~$180 mln (guided for $174-180 mln) vs. $177.00 mln two analyst estimate. Adjusted EBITDA now is estimated to be higher in the fourth quarter of 2016 as compared to the prior third quarter, based on preliminary financial results for the fourth quarter of 2016.
The preliminary results benefited primarily from a richer-than-expected product mix and a larger-than-expected increase in foundry revenue. Gross profit margin in both the Foundry Services Group and the Standard Products Group improved sequentially in the fourth quarter of 2016, and gross profit margin for the AMOLED product line continued to exceed the corporate average in the fourth quarter of 2016.
Co also announced the proposed offering by MagnaChip Semiconductor S.A. of $65 mln aggregate principal amount of Exchangeable Senior Notes due 2021. MagnaChip plans to use the net proceeds from the offering of the Notes (i) for its anticipated cost reduction program to be implemented during the first half of 2017 (~$30-40 mln), (ii) for capital expenditures (~$15-20 mln), (iii) to repurchase common stock as part of its stock repurchase program (up to $10 mln) and (iv) for general corporate purposes.
The Board of Directors of the Company also authorized a stock repurchase program.
4:25 pm : The major averages ended Tuesday's session on a mixed note. The Nasdaq (+0.4%) finished out front, followed by the S&P 500 (unch) and the Dow (-0.2%).
Today's session got off to a flat start after some retailers and restaurants issued disappointing guidance. The cautions comments were shrugged off swiftly, as buyers pushed Chipotle Mexican Grill (CMG 414.48, +19.42), Papa Murphy's (FRSH 4.54, +0.29), and Express (EXPR 10.78, +0.47) higher despite their negative guidance. The three names added between 4.6% and 6.8%, while the SPDR S&P 500 Retail ETF (XRT 44.33, +0.51) added 1.2%. Consumer discretionary (+0.4%) finished in line with financials (+0.4%) and just ahead of health care (+0.3%) atop the leaderboard. However, strength in those sectors could not prevent the S&P 500 from reversing off its high in the afternoon. The index returned to its flat line after a brief appearance above Friday's record close.
Health care marked its session high alongside the broader market around noon, but maintained that level while the rest of the market faced an afternoon retreat. The health care sector had some help from biotechnology, evidenced by the 0.8% increase in the iShares Nasdaq Biotechnology ETF (IBB 286.48, +2.18).
Industrials (+0.3%) also outperformed, aided by an uptick in in airlines after Alaska Air (ALK 92.00, +4.53) reported better-than-expected December traffic data. The sector also received a boost from automakers, with General Motors (GM 37.35, +1.34) adding 3.7% in reaction to upside guidance for 2017.
Materials (+0.1%), telecom services (+0.1%), and the top-weighted technology (-0.1%) sector finished the trading day flat. The tech space ended with a slight loss even though strength in chipmakers sent the PHLX Semiconductor Index higher by 0.5%. The sector couldn't overcome lackluster performances from top components like IBM (IBM 165.52, -2.13) and Oracle (ORCL 38.66, -0.37). The two names finished lower by 1.3% and 1.0%, respectively.
Energy (-1.0%) was the only other cyclical sector to finish in negative territory. The space couldn't overcome crude oil's 2.2% retreat as the commodity finished its trading day at $50.82/bbl. Real estate was the only sector to finish below the energy sector, with a loss of 1.2%. Consumer staples (-0.6%) finished slightly better, while the utilities sector (-0.3%) ended closer to its flat line.
The Treasury market remained relatively flat throughout today's session. The 2-yr yield closed unchanged at 1.19%, while the 10-yr yield finished up one basis point at 2.38%.
Today's trading volume finished above the 50-day moving average as 1.17 billion shares changed hands at the NYSE floor.
Reviewing today's economic data:
November Wholesale Inventories increased 1.0%, which was above the Briefing.com consensus of 0.9%. The prior month's reading was revised to -0.1% from -0.4%.
November Job Openings and Labor Turnover Survey showed that job openings decreased to 5.198 million from a revised 5.451 million (from 5.534 million) in October. For more on these economic releases, be sure to visit Briefing.com's economic calendar
Tomorrow's lone economic report is the MBA Mortgage Applications Index, which will be released at 7:00 ET.
Russell 2000 +1.0% YTD
Dow Jones Industrial Average +0.5% YTD
S&P 500 +1.3% YTD
Nasdaq Composite +3.1% YTD
DJ30 -31.85 NASDAQ +20.00 SP500 0.00 NASDAQ Vol 1.63 bln NYSE Adv/Vol/Dec 1867/1.17 bln/1057 3:30 pm :
Crude oil extended yesterday's notable decline as Friday's data showed the US oil rig count increased for the 10th consecutive week, & following the release of EIA's monthly oil market report
Feb 2017 crude oil futures fell $1.12 (-2.2%) to $50.82/barrel
Contributing factors affecting the price of oil include:
In today's EIA short term oil market report, Brent crude oil prices were forecast to average $53/b in 2017 and $56/b in 2018. West Texas Intermediate (WTI) crude oil prices are forecast to average $1/b less than Brent in both 2017 and 2018.
EIA also stated that U.S. crude oil production averaged an estimated 8.9 mln barrels/day in 2016 and is forecast to avg 9.0 mln barrels/day in 2017 and 9.3 mln barrels/day in 2018.
Last Friday, U.S. energy companies increased oil rigs for a 10th week in a row to 529 rigs, extending a recovery in activity into an 8th month.
Yesterday, Russian energy minister stated that output had fallen by 100k barrels/day in the first week of the month.
In Iraq (OPEC's second-biggest producer) oil exports from the southern Basra ports reached a record high of 3.51 mln barrels/day in Dec.
Saudi Arabia said last week that it is lowering its production in Jan by 486k barrels/day. This takes output down to 10.058 mln barrels/day.
Kuwait's OPEC delegate said that Qatar, Kuwait, and Oman were also complying with the cuts. Kuwait's Nawal Al-Fezaia said that those countries already told customers that cuts were imminent. Kuwait plans to lower output from 2.89 mb/d in Dec to 2.7 mb/d by the end of Jan.
Natural gas erased all of yesterday's losses ahead of Thursday's EIA data
Feb 2017 natural gas closed $0.19 higher (+6.1%) at $3.29/MMBtu
Weekly EIA natural gas inventory data will be released at 10:30 am ET on Thursday
In precious metals, gold ended near a 6-week high hit earlier in the session
Feb 2017 gold ended today's session up $1.60 (+0.1%) to $1186.40/oz
Mar 2017 silver closed today's session $0.16 higher (+1.0%) at $16.84/oz
The dollar index was up about 0.08% around the 102.01 level
Commodities, as measured by the Bloomberg Commodity Index, were +0.6% around the 86.85 level
Base metal copper closed at session highs in afternoon pit trading
Mar 2017 copper closed $0.07 higher (+2.8%) at $2.61/lb
After a soft close to Tuesday's action, the stock market began today's affair in the red. Opening losses would not hold, however, as the market gradually drifted higher into the afternoon. Back and forth action ultimately ended with the markets split at the bell as a sell-off after midday trimmed leads. The leader today was the Nasdaq Composite which added 20 points (+0.36%) to 5551.82. The S&P 500 was mostly flat at the close to 2268.90, and the Dow Jones Industrial Average lost 31.85 points (-0.16%) to 19855.53. By comparison FANG stocks FB -0.44%, AMZN -0.13%, NFLX -0.81%, GOOG -0.23% ended lower as Tech big pressured with the broader market.
Today's economic data included the November Wholesale Inventories reading which was up 1.0%. The prior month's reading was revised to -0.1% from -0.4%. Also, the November Job Openings and Labor Turnover Survey showed that job openings decreased to 5.198 million from a revised 5.451 million (from 5.534 million) in October.
Action in the Technology (XLK49.40, +0.01 +0.02%) space mirrored that of the broader market today as action hovered around flat lines. Component Yahoo! (YHOO 42.30, +0.96 +2.32%) was one of the better performing names today after announcing a reduction in Board members following the sale to Verizon (VZ 52.76, +0.08 +0.15%). Other sectors as measured by the S&P closed Wednesday IYZ +0.76%, XLI +0.42%, XLY +0.36%, XLV +0.35%, XLF +0.26%, XLB +0.06%, XLU -0.31%, XLP -0.50%, XLE -0.95%, XLRE -1.25%.
In the S&P 500 Information Technology (828.59, -0.62 -0.07%) space, trading was back and forth today, ultimately ending in the red. Component Xerox (XRX 7.03, +0.06 +0.86%) was among the names in the red today after being upgraded premarket to Buy at Goldman. Other names in the space which closed QRVO +3.73%, SWKS +2.19%, AVGO +2.03%, ATVI +1.80%, HPE +1.73%, AMAT +1.07%, MCHP +0.67%, CSCO +0.66%.
Other notable news items among sector components:
Yahoo! (YHOO) will reduce number of Board members following the sale to Verizon (VZ) - five directors including Marissa Mayer intend to resign. The company name will change to Altaba.
WNS (WNS 27.29, +0.38 +1.41%) to acquire Denali Sourcing Services for $40 million in cash. The company expects the deal to be accretive to fiscal 2017 earnings.
Cognex (CGNX 65.71, +1.74 +2.72%) announced they acquired Chiaro Technologies & Webscan. Financial terms of the deal were not disclosed.
Rocket Fuel (FUEL 2.02, flat) is further organizing its operations to accelerate its ongoing transformation. The company will eliminate 11% of the employee base.
Axcelis Tech (ACLS 14.90, +0.20 +1.36%) announced shipments in 4Q16 of the Purion XE high energy implanter to multiple customers in the Asia Pacific Region. The company guided Q4 revenues on the high end of its guidance, and EPS above guidance.
Coupa Software (COUP 24.80, +0.89 +3.72%) acquired Spend360 International. Financial terms of the deal were not disclosed.
Analyst actions:
XRX, ETFC, VOD were upgraded to Buy from Neutral at Goldman,
BIDU was upgraded to Buy from Hold at Stifel,
TWLO was upgraded to Buy from Hold at Canaccord Genuity,
CUDA was upgraded to Neutral from Underperform at DA Davidson,
NTDOY was upgraded to Outperform from Neutral at Macquarie;
FDS was downgraded to Underweight from Equal Weight at Barclays,
TMUS was downgraded to Neutral from Buy at MoffettNathanson,
YNDX was downgraded to Hold from Buy at VTB Capital,
HIMX was downgraded to Hold from Buy at Craig Hallum;
TRVG was initiated at Deutsche Bank, Goldman, Cowen, BofA/Merrill, Citigroup and others,
LPTH was initiated with a Buy at Dougherty,
EXPE was initiated with a Sell at Citigroup,
PCLN was initiated with a Buy at Citigroup,
TRIP was initiated with a Neutral at Citigroup,
PYPL was initiated with a Buy at Berenberg,
QTWO, WNS, ICFI, GDOT, SYNT were initiated with Buy ratings at Loop Capital,
PYPL, UIS, CACI, CTSH were initiated with Hold ratings at Loop Capital
