From Briefing.com: 4:15 pm : Equity indices finished Thursday's session lower amid a cautious tone on all fronts. The Dow led the retreat with a loss of 0.3%, while the benchmark S&P 500 index (-0.2%) registered a slimmer loss.
The risk-off trade began with heavy selling pressure that pushed the stock market into negative territory at the opening bell. The U.S. dollar followed suit, while the Treasury market benefited from the defensive posturing. The stock market did eventually tick up, but ended the day after trending sideways at its eventual closing level all afternoon. Since President-elect Donald Trump was short on detail regarding his policy proposals at yesterday's news conference, the downside bias may have had something to do with misgivings about the actual policies living up to the pre-inauguration hype.
Financials led today's retreat, closing lower by 0.7%. The sector also sits in the red for the week (-0.7%), but will have an opportunity to change that tomorrow as a batch of banks will be reporting their quarterly results before the opening bell, including JPMorgan Chase (JPM 86.24, -0.84), Wells Fargo (WFC 54.50, -0.30), and Bank of America (BAC 22.92, -0.15). The three names surrendered between 0.6% and 1.0% on Thursday.
The technology sector (-0.3%) fared only slightly better, thanks in part to tumbling chipmakers who dragged the PHLX Semiconductor Index down 0.9%. The four remaining cyclical sectors also finished in the red with energy sliding 0.5% despite crude oil's positive performance. The commodity finished its trading day higher for the second session in a row, up 1.4% at $53.03/bbl.
On the countercyclical side, four out of five sectors finished in the green, including health care (+0.1%). The space received a boost from the biotech industry, evidenced by the 0.4% increase in the iShares Nasdaq Biotechnology ETF (IBB 279.04, +1.19). Biotechnology's gain came after the ETF tumbled 3.0% yesterday after Mr. Trump expressed a desire to bring back pharmaceutical operations to the United States and voiced support for competitive drug price bidding. Telecom services (+0.6%) finished at the top of leaderboard, while real estate (+0.4%), and utilities (+0.1%) also finished in positive territory.
In corporate news, Fiat Chrysler (FCAU 9.95, -1.14) ended lower by 10.3% after the Environmental Protection Agency accused the automaker of violating the Clean Air Act by installing and failing to disclose "engine management software in light-duty model year 2014, 2015, and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0 liter diesel engines sold in the United States." The accusations are reminiscent of the 2015 Volkswagen case, which resulted in a $4.3 billion settlement with US regulators.
U.S. Treasuries traded with gains for most of today's session but declined following the $12 bln 30-year Treasury auction and closed well off their intraday highs. The 10-yr yield finished lower by two basis points at 2.36%.
Economic data included Import/Export Prices, Initial Claims, and Treasury Budget:
Import prices excluding oil declined 0.2% in December after ticking down 0.1% in November. Export prices excluding agriculture increased 0.4% in December after declining 0.1% in November (revised from +0.2%).
The Import/Export Price Index report for December fit within the scope of the reflation trade that has been driving the stock market.
The latest weekly initial jobless claims count totaled 247,000 while the Briefing.com consensus expected a reading of 255,000. Today's tally was above the revised prior week count of 237,000 (from 235,000). As for continuing claims, they declined to 2.087 million from the revised count of 2.116 million (from 2.112 million).
The latest initial claims report won't diminish any confidence in the state of the labor market, which continues to be solid. Initial jobless claims held below 300,000 for the 97th straight week -- the longest streak since 1970.
The Treasury Budget for December showed a deficit of $27.5 billion versus a deficit of $14.4 billion for December 2015.
The Treasury Budget data is not seasonally adjusted, so the December deficit cannot be compared to the $136.7 billion deficit registered in November.
Tomorrow's economic data will include December PPI and Retail Sales at 8:30 am ET while November Business Inventories and the Michigan Sentiment Index will cross the wires at 10:00 am ET.
Russell 2000 +0.3% YTD
Dow Jones Industrial Average +0.7% YTD
S&P 500 +1.4% YTD
Nasdaq Composite +3.1% YTD
DJ30 -63.28 NASDAQ -16.16 SP500 -4.88 NASDAQ Adv/Vol/Dec 978/1.67 bln/2041 NYSE Adv/Vol/Dec 1147/917.0 mln/1765
3:35 pm :
The dollar index closed down 0.3% at 101.4
Oil futures closed above the $53 level
Feb Crude Oil futures rose $0.74 (1.4%) to $53.03/barrel
Natural gas prices have been strong as well
Feb Natural Gas closed $0.17 higher (5.3%) at $3.39/MMBtu
Gold traded lower this afternoon while silver closed flat
Feb gold ended today's session up $2.70 (+0.2%) to $1199.6/oz
Mar silver closed today's session flat at $16.83/oz
Copper however, closed unusually strong
Mar copper closed $0.06 higher (+2.3%) at $2.67/lb
After a weak Tuesday session, the markets began Wednesday flat but picked up into the close and ultimately the broader market ended higher. Leading the action to the upside today, the Dow Jones Industrial Average gained 98.75 points (+0.50%) to 19954.28. The S&P 500 was up 6.42 points (+0.28%) to 2275.32, and the Nasdaq Composite added 11.83 points (+0.21%) to 5563.65.
The biggest driver of the market has been President-elect Trump's news conference, which ended not long ago. Most sectors remain near their flat lines as investors digest the news conference, which was short on detail regarding planned infrastructure spending.
After trading flat for the majority of the morning and afternoon, the Technology (XLK 49.63, +0.23 +0.47%) sector took off into the close as the sector ended near highs. Component First Solar (FSLR 35.00, +1.61 +4.82%) was the best performer today on no specific news. Other sectors as measured by the S&P closed XLE +1.08%, XLU +1.04%, XLB +0.81%, XLF +0.64%, XLI +0.52%, XLY +0.20%, XLP +0.19%, IYZ -0.31%, XLRE -0.55%, XLV -1.01% with Healthcare leading the losses following some cautious commentary from President-elect Trump today about the space.
In the S&P 500 Information Technology (834.03, +5.44 +0.66%) space, trading closed at highs as the broader market pushed the sector into positive territory. Component Juniper Networks (JNPR 27.85, -0.545 -1.94%) was one of the names which resisted the broader market push up as the name was downgraded premarket to a Sell rating at Deutsche Bank. Other names in the space which closed higher with the space included MCHP +2.51%, CRM +2.42%, ATVI +2.14%, VRSN +2.08%, CSRA +2.00%, HPQ +1.70%, SWKS +1.42%, FB +1.40%, MU +1.38%, TEL +1.36%, SYMC +1.35%.
Other notable news items among sector components:
Belden's (BDC 77.51, +0.14 +0.18%) PPC Broadband and Corning's (GLW 24.67, +0.18 +0.73%) Corning Optical Communications RF LLC announced a collaboration in the broadband connectivity field. The deal encompasses a range of connectivity inventions, and creates broader availability of connectivity solutions for system operators worldwide. The agreement also resolves pending patent infringement and related proceedings between the companies involving Corning's EFC series of coaxial cable connectors. The specific terms of the agreement are confidential.
Workday (WDAY 81.71, +7.36 +9.90%) confirmed that Wal-Mart (WMT 68.53, +0.30 +0.44%) has purchased a subscription to Workday Human Capital Management, Recruiting, Learning and Planning. The company also stated that it would not be updating guidance at this time.
Ericsson (ERIC 5.88, flat) and Cisco (CSCO 30.15, -0.23 -0.76%) are extending their strategic partnership to include a new Wi-Fi solution offering, named Evolved Wi-Fi Networks.
Syngenta (SYT 82.62, +1.12 +1.37%) has collaborated with Accenture (ACN 116.12, +1.06 +0.92%) to design and implement a new digital logistics operating model across all modes of transportation, including sea and air freight globally and road freight in North America and Europe.
IBM Watson Health (IBM 167.75, +2.23 +1.35%) has signed a research initiative with the FDA aimed at defining a secure, efficient and scalable exchange of health data using blockchain technology.
Upland Software (UPLD 10.00, +0.70 +7.53%) acquired Omtool for $19.2 million (net of cash acquired), and expects total revenue and Adjusted EBITDA for the quarter ended December 31, 2016 to be at the upper end of previously-announced guidance ranges.
Kornit Digital (KRNT 16.80, +2.85 +20.43%) to deliver a 'large' number of textile production systems to
Amazon (AMZN 799.02, +3.12 +0.39%) in support of its Merch by Amazon program. KRNT also will grant Amazon warrants to acquire over a five-year period up to 2,932,176 of its common shares at $13.03 per share.
Synopsys (SNPS 60.91, +0.22 +0.36%) acquired Forcheck. Financial terms of the deal were not disclosed.
NICE (NICE 67.88, -1.38 -1.99%) expects Q4 and FY16 rev/EPS to be at or above the mid-point of prior guidance, authorizes new & expanded $150 mln share repurchase program, eliminates dividend starting 1Q17, & commences $225 mln private offering of exchangeable senior notes due 2024.
MagnaChip Semi (MX 6.70, +0.35 +5.51%) reported prelim Q4 sales at high end of guidance / above consensus; announces proposed $65 mln private offering of exchangeable senior notes and stock repurchase.
Glu Mobile (GLUU 2.17, -0.07 -3.13%) disclosed its commitment to the previously disclosed restructuring plan. The company will eliminate about 107 positions.
Novanta (NOVT 22.90, +1.90 +9.05%) has acquired about 35% of the outstanding shares (increases ownership to 76%) of Laser Quantum for 25.5 million in cash.
General Comm (GNCMA 19.99, -0.18 -0.89%) acquired Northpoint Consulting. Financial terms of the deal were not disclosed.
Analyst actions:
VMW was upgraded to Mixed from Negative at OTR Global,
PAYX was upgraded to Mkt Perform from Underperform at Bernstein;
T was downgraded to Hold from Buy at Deutsche Bank,
JNPR was downgraded to Sell from Hold at Deutsche Bank,
HIMX was downgraded to Neutral from Buy at Roth Capital,
IL was downgraded to Neutral from Buy at B. Riley & Co.;
MSFT, ORCL, SAP, CHKP, PANW, RHT, ADSK, AKAM, SPLK, PFPT, ZEN, BOX and HDP were initiated with Outperform ratings at Wells Fargo,
ADBE, VMW, CTXS, WDAY, NOW, DATA and QLYS were initiated with Market Perform ratings at Wells Fargo,
TDC and CA were initiated with Underperform ratings at Wells Fargo,
BIDU and NTES were initiated with Underperform ratings at Bernstein,
GRUB was initiated with an Outperform at Credit Suisse,
NTNX was initiated with a Sector Perform at FBN Securities
7:41 am SemiLEDs reports 1Q17 net loss of $0.17/share vs $0.94 net loss last year on revs of $2.7 mln, +43% Y/Y (no estimates); expects Q2 revs to be about $2.1 mln +/- 10% (LEDS)
5:12 am Taiwan Semi beats by NT$0.14, beats on revs; guides Q1 revs below consensus (TSM) :
Reports Q4 (Dec) earnings of NT$3.86 per share, NT$0.14 better than the Capital IQ Consensus of NT$3.72; revenues rose 28.8% year/year to NT$262.23 bln vs the NT$258.26 bln Capital IQ Consensus.
Gross margin for the quarter was 52.3%, operating margin was 41.9%, and net profit margin was 38.2%.
Shipments of 16/20-nanometer accounted for 33% of wafer revenues, and 28-nanometer process technology accounted for 24% of total wafer revenues. Advanced technologies, defined as 28-nanometer and more advanced technologies, accounted for 57% of total wafer revenues.
Co issues downside guidance for Q1, sees Q1 revs of NT$2.36-2.39 trln vs. NT$2.44 trln Capital IQ Consensus Estimate.
Gross profit margin is expected to be between 51.5% and 53.5%
The management also expects 2017 capital expenditures to be about $10 billion.
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