From Briefing.com: 4:12 pm Closing Market Summary: Investors Wrangled Financials to Push Stocks Higher on Wednesday (:WRAPX) : Wednesday's session was full of ambiguity as investors digested the stock market's Tuesday defeat, which was the steepest decline since October. Stocks ultimately put together a decent performance, but the win didn't feel secure until the closing bell as the financial sector (-0.2%) acted in a seesaw fashion that weighed on the sentiment of the broader market. The S&P 500 (+0.2%) and the Nasdaq (+0.5%) settled with modest gains while the Dow finished flat. Meanwhile, the small-cap Russell 2000 (-0.1%) underperformed.
As they have throughout the post-election rally, most sectors looked to the financial sector for leadership on Wednesday. This resulted in the market moving in tandem with the financial group, but unlike yesterday, the top-weighted technology sector (+0.8%) watered down financials' impact. The tech group propped up the broader market at times with gains from top components like Apple (AAPL 141.42, +1.58), Microsoft (MSFT 65.03, +0.82), and Facebook (FB 139.59, +1.08). Chipmakers also contributed to the cause, pushing the PHLX Semiconductor Index 1.1% higher along the way.
The technology group's bullish sentiment was persistent; at times, the sector was one of few to trade in the green. However, the persistence paid off in the final stretch as all but the financials (-0.2%), telecom services (-1.0%), consumer staples (-0.1%), and energy (-0.1%) sectors joined the technology group in positive territory.
The energy sector very narrowly missed positive territory despite spending much of the trading day with a solid loss. Crude oil influenced the sector's struggle, slipping in response to a bearish EIA inventory report. However, the commodity was able to largely shake off the bigger than expected build (+5.0 million vs +2.8 million consensus) to close 0.5% lower at $48.05/bbl.
In corporate news, Nike (NKE 53.92, -4.09) reported upbeat earnings per share, but investors were disappointed in the company's lackluster worldwide futures orders. Conversely, future guidance is what saved FedEx (FDX 195.92, +4.08) from suffering the consequences of its earnings miss. The companies' respective sectors--consumer discretionary and industrials-- finished with modest gains of 0.1% and 0.4%, respectively.
In the Treasury market, U.S. sovereign debt capitalized on investors' cautious attitude to post its fourth consecutive advance. The benchmark 10-yr yield settled two basis points lower at 2.40%.
On the data front, investors received a handful of economic reports, including February Existing Home Sales, January FHFA Housing Price Index, and the weekly MBA Mortgage Applications Index:
Existing home sales for February decreased 3.7% from January to an annualized rate of 5.48 million units while the Briefing.com consensus expected a reading of 5.54 million.
The key takeaway from the report is that limited supply and weakening affordability conditions are preventing more robust selling activity in the market for existing homes.
The FHFA Housing Price Index for January was unchanged, which followed an unrevised increase of 0.4% in December.
The weekly MBA Mortgage Applications Index decreased 2.7% to follow last week's 3.1% uptick.
On Thursday, investors will receive Initial Claims (Briefing.com consensus 239,000) at 8:30 ET and February Existing Home Sales (Briefing.com consensus 560,000) at 10:00 ET.
Nasdaq Composite +8.2% YTD
S&P 500 +4.9% YTD
Dow Jones Industrial Average +4.6% YTD
Russell 2000 -0.9% YTD
Following a tough Tuesday, the broader market took small steps toward reclaiming yesterday's losses. In the end, the Dow Jones Industrial Average was still lower despite ticking off daily lows; the index lost 6.71 points today (-0.03%) to 20661.30. The Nasdaq Composite, by contrast, was the best performer adding 27.82 points (+0.48%) to 5821.64, while the S&P 500 finished somewhere in the middle of those two up 4.43 points (+0.19%) to 2348.45.
Among market data today, the existing home sales reading for February was down 3.7% from January to an annualized rate of 5.48 million units. Also, the FHFA Housing Price Index for January was unchanged, which followed an unrevised increase of 0.4% in December and the weekly MBA Mortgage Applications Index decreased 2.7% to follow last week's 3.1% uptick.
The Technology (XLK 52.94, +0.33 +0.63%) space began to climb out of yesterday's losses as action today took the space to just shy of the 53 level. Component Frontier Communications (FTR 2.11, -0.25 -10.59%) got crushed today after a premarket downgrade of the stock to a 'Sell' rating at Goldman. The best performing S&P sector today was the Tech space, followed by XLU +0.48%, XLI +0.36%, XLB +0.29%, XLRE +0.23%, XLY +0.12%, XLV +0.03%, XLE -0.14%, XLP -0.20%, XLF -0.21%, IYZ -1.91%.
In the S&P 500 Information Technology (899.07, +7.10 +0.80%) space, trading closed out Wednesday just under highs of the session as a rebound from yesterday's weakness led to modest gains today. Component Corning (GLW 27.35, +0.48 +1.79%) was a strong name in the space today after showcasing its single-mode fiber interface connector suitable for co-packaging with a 12.8 Tb/s switch chip in collaboration with Kaiam Corp. Other names in the space which finished higher today included WDC +2.34%, SYMC +2.20%, MU +2.12%, NVDA +2.04%, MCHP +1.60%, CTSH +1.59%, QRVO +1.53%, RHT +1.53%.
Other notable news items among sector components:
Orange (ORAN 15.96, +0.12 +0.76%) to become exclusive broadcaster of Time Warner's (TWX 96.85, -0.62 -0.64%) HBO programs in France.
Microsemi (MSCC 51.28, +0.42 +0.83%) to close its manufacturing facility in China; no material impact on earnings expected.
Kaiam Corp. and Corning (GLW) are showcasing an optical engine and single-mode fiber interface connector suitable for co-packaging with a 12.8 Tb/s switch chip at the 2017 Optical Fiber Communications Conference & Exhibition in the Los Angeles Convention Center this week.
According to Reuters, Facebook's (FB 139.59, +1.08 +0.78%) Instagram has reached more than 1 million monthly active advertisers.
GoDaddy (GDDY 36.68, +0.15 +0.41%) acquired Sucuri. Financial details of the deal were not disclosed.
In reaction to quarterly results:
HealthEquity (HQY 43.83, +0.20 +0.46%) reported better than expected Q4 EPS and revenues of $0.07 and $46.83 million, respectively. HQY also guided FY18 EPS below market expectations at $0.50-0.55 on in-line revenue expectations of $220-225 million.
Atento (ATTO 8.40, +0.35 +4.35%) reported worse than expected Q4 EPS and revenues of $0.19 and $442 million, respectively. For FY17, the company sees in-line revenue growth of 1-5%, which equates to about $1.78-1.85 billion.
Companies scheduled to report quarterly results tomorrow morning: ACN, HQCL
Analyst actions:
FTR was downgraded to Sell from Neutral at Goldman,
CAMP was downgraded to Neutral from Buy at Sidoti;
SNAP was initiated with a Buy at Drexel Hamilton,
APH and TEL were initiated with Outperform ratings at Cowen
