From Briefing.com: 4:16 pm Closing Market Summary: Stocks Eke Out Slim Gain On Tuesday (:WRAPX) : Uncertainty put a force field around the stock market on Tuesday, deterring the bulls and the bears from exerting much influence on the major averages. The Dow (+0.2%) and the Nasdaq (+0.2%) settled roughly in line with the S&P 500 (+0.1%), which held to a ten-point range throughout the day's "action".
Tuesday's uneasiness was based in a number of factors, including the upcoming meeting between President Trump and Chinese President Xi Jinping, Fed officials shifting the focus from rate hikes to the central bank's balance sheet, the resurgence of health care reform (and what it will mean for tax reform), discrepancy between 'hard' and 'soft' economic data, the French presidential election, and heightened tensions with North Korea, among others.
With those unanswered questions looming in the background, sector movement was subdued; nine of eleven settled within 0.3% of their respective flat lines.
The energy sector (+0.7%) ventured a little ways from its unchanged mark, lured into green territory by crude oil's positive performance. The energy component increased 1.5% to finish pit trade at $50.99/bbl, which marks the commodity's highest level in nearly a month.
Like energy, the industrials (+0.2%), consumer staples (+0.3%), and technology (+0.2%) sectors finished ahead of the broader market. Caterpillar (CAT 94.13, +1.86) was the industrial group's top performer, climbing 2.0%, after the company's stock was added to the 'Conviction Buy List' at Goldman. As for technology, Apple (AAPL 144.77, +1.07) and Microsoft (MSFT 65.73, +0.18) propped up largest sector by weight with respective gains of 0.7% and 0.3%.
On the downside, the financials (-0.2%) and consumer discretionary (-0.1%) spaces settled below their flat lines with the latter suffering amid weakness in retailers after it was reported that the White House is considering a value-added tax. The SPDR S&P Retail ETF (XRT 41.22, -0.38) closed lower by 0.9%.
In the Treasury market, U.S. sovereign debt finished Tuesday with a modest loss. The benchmark 10-yr yield closed three basis points higher at 2.35%.
On the data front, investors received February Trade Balance and February Factory Orders:
The February trade balance showed a deficit of $43.6 billion while the Briefing.com consensus expected the deficit to hit $44.7 billion. The previous month's deficit was revised to $48.2 billion from $48.5 billion. The narrowing deficit should help some with first quarter GDP forecasts, yet the key takeaway from this report is that imports were down as much as they were in February, which speaks to some softening demand from U.S. consumers. The Factory Orders Report for February showed an increase of 1.0% while the Briefing.com consensus expected an increase of 0.9%. The January reading was revised to 1.5% (from 1.2%). The key takeaway from the report is that overall business spending was soft in February, evidenced by the 0.1% decline in nondefense capital goods orders excluding aircraft (the proxy for business spending).Tomorrow, investors will see a slew of economic reports, including the weekly MBA Mortgage Index at 7:00 ET, March ADP Employment Change (Briefing.com consensus 175,000) at 8:15 ET, March ISM Services (Briefing.com consensus 57.0) at 10:00 ET, and the FOMC Minutes from the March 14-15 meeting at 14:00 ET.
Nasdaq Composite +9.6% YTD
S&P 500 +5.4% YTD
Dow Jones Industrial Average +4.7% YTD
Russell 2000 +0.7% YTD
5:01 pm ON Semiconductor to change existing accounting estimates related to distributor revenue and allowances; revenue recognition will occur at the time the company ships products to distributors (ON) :
Effective January 1, 2017, the Company will recognize revenue at the time the Company ships products to distributors with appropriate provisions for future price adjustments and returns.
For the first quarter of 2017, the Company will provide the quantitative impact to its financial results associated with the transition to the "sell-in" method. As a result of the transition to the "sell-in" method, the
Company expects to recognize significant one-time adjustments to various line items in its consolidated statement of operations for the quarter ended March 31, 2017, including the reported amounts of revenue, gross margin, operating margin, income before income taxes, net income and net income per share. Except for these one-time adjustments, the Company does not expect the transition to the "sell-in" method to have any material impact to the Company's results for the quarter ended March 31, 2017.
Beginning Tuesday in the red, the broader market slowly ticked higher as the session progressed, ultimately ending above breakeven. The Dow Jones Industrial Average was the best performer, adding 39.03 points (+0.19%) to 20689.24. The Nasdaq Composite gained 3.93 points (+0.07%) to 5898.61, while the S&P 500 was up 1.32 points today (+0.06%) to 2360.16.
On the data front, the February trade balance showed a deficit of $43.6 billion while the previous month's deficit was revised to $48.2 billion from $48.5 billion. Additionally, the Factory Orders Report for February showed an increase of 1.0% while the January reading was revised to 1.5% (from 1.2%).
Trading closed with the Technology (XLK 53.30, +0.04 +0.08%) space just peaking its head above flat lines. Component NVIDIA (NVDA 100.78, -7.60 -7.01%) was hit hard on a premarket downgrade to an Underweight rating at Pacific Crest. Performing the best out of the 11 S&P sectors, the US Telecom IYZ +2.92% space more than doubled up the gains of the next best sector -- XLE +0.73%, XLB +0.36%, XLU +0.31%, XLP +0.29%, XLI +0.26%, XLV -0.05%, XLF -0.13%, XLY -0.16%, XLRE -0.28%.
In the S&P 500 Information Technology (904.82, -0.07 -0.01%) space, trading barely tucked under last night's close despite a modestly higher broader market. Components GPN -1.24% FFIV -1.13% NTAP -1.10% RHT -1.01% ATVI -0.99% CSRA -0.85% PAYX -0.65% held the sector at bay.
Other notable news items among sector components:
General Comm (GNCMA 33.39, +12.83 +62.40%) to be acquired by Liberty Interactive (QVCA, QVCB, LVNTA, LCNTB) for about $32.50 per share in stock
Mercury (MRCY 37.79, +0.78 +2.11%) acquired Delta Microwave for $40.5 million in cash.
Blackbaud (BLKB 76.83, +0.91 +1.20%) acquired AcademicWorks. Financial terms were not disclosed.
DXC Technology (DXC 69.54, +1.59 +2.34%) announced a dividend policy, and a $2 billion repurchase authorization.
VMware (VMW 92.23, +0.56 +0.61%) announced that OVH intends to acquire the VMware's vCloud Air business. Financial details were not disclosed, and the transaction is expected to close in Q2. VMW also reaffirmed Q1 and FY18 guidance.
Yelp (YELP 32.85, +0.22 +0.67%) acquired Turnstyle Analytics for about $20 million.
Analyst actions:
SWKS and CRUS were upgraded to Overweight from Sector Weight at Pacific Crest,
TTMI was upgraded to Overweight from Neutral at JP Morgan,
PSTG was upgraded to Positive from Neutral at Susquehanna,
TLND was upgraded to Buy from Neutral at Citigroup;
GOOGL was downgraded to Market Perform from Outperform at BMO Capital,
NVDA was downgraded to Underweight from Sector Weight at Pacific Crest;
PSDO was initiated at Goldman, Barclays, JP Morgan, Citigroup, Wells Fargo, Credit Suisse, and RBC Capital Mkts,
SNAP was initiated with a Neutral at BTIG Research,
MTCH was initiated with an Overweight at Piper Jaffray,
DXC was initiated with an Outperform at RBC Capital Mkts,
VSAT and PLXS were initiated with a Neutral at JP Morgan,
JNPR and CTXS were initiated with a Buy at Berenberg,
CSCO, HPE and VMW were initiated with a Hold at Berenberg,
IBM was initiated with a Sell at Berenberg,
QTNA was initiated with a Buy at The Benchmark Company,
NFLX was initiated with a Neutral at Rosenblatt
