From Briefing.com: 4:32 pm Closing Market Summary: Tech Bounces Back on Tuesday (:WRAPX) :
Investors pushed the S&P 500 (+0.5%) and the Dow (+0.4%) to new record highs on Tuesday, breaking the stock market's two-session losing streak. And while the Nasdaq didn't post a new record close, it did outperform its peers with a gain of 0.7%.
The top-weighted technology (+0.9%) and financials (+0.4%) sectors led the stock market into positive territory at Tuesday's opening bell, but the tech group soon faded as several of its most influential components retraced their opening gains. Luckily, the financial sector teamed up with the consumer discretionary (+0.6%) and materials (+1.3%) groups during this time to help mitigate technology's influence on the broader market.
Eventually, the technology sector regained its footing to finish with the materials and consumer discretionary groups at the top of the day's leaderboard. However, the financial sector couldn't maintain its early strength, settling in line with the broader market. The major averages never touched negative territory, even during technology's period of weakness, and eventually closed near their best levels of the day.
Within the technology space, mega-cap tech names like Apple (AAPL 146.59, +1.17), Microsoft (MSFT 70.65, +0.87), Facebook (FB 150.68, +2.24), and Alphabet (GOOGL 970.50, +8.69) settled with gains between 0.8% and 1.5% while chipmakers pushed the PHLX Semiconductor Index higher by 0.6%. The technology sector's overall solid performance was an encouraging sign for the broader market, especially after the drubbing the sector took over the last two sessions.
There were pockets of weakness within the consumer discretionary sector, but Amazon's (AMZN 980.79, +15.88) big advance of 1.7% did more than enough to outweigh their bearish influence. McDonald's (MCD 149.82, +1.35) also put together a solid performance, adding 0.9%, after the company's target price was raised to $175 from $165 at Bank of America/Merrill Lynch.
Like many of its cyclical peers, the energy sector (+0.7%) also finished ahead of the broader market, thanks in part to crude oil's positive performance. The commodity held a loss of around 1.0% early in the morning session, but jumped into positive territory amid headlines that Kazakhstan's oil production is expected to decline this summer. WTI crude finished 0.7% higher at $46.43/bbl.
On the countercyclical side, the health care (+0.1%), consumer staples (unch), and utilities (+0.2%) groups finished just a tick above their flat lines while the telecom services sector (-1.0%) ended the day solidly lower as both Verizon (VZ 46.46, -0.73) and AT&T (T 38.68, -0.39) weighed. The wireless giants finished with losses of 1.6% and 1.0%, respectively.
Elsewhere, the CBOE Volatility Index (VIX 10.44, -1.02, -8.9%), sometimes referred to as the 'investor fear gauge', slipped nearly one point on Tuesday after jumping to a three-week high in Monday's session. However, despite the day's risk-on tone, the 10-yr Treasury note ticked up on Tuesday with its yield slipping one basis point to 2.21%.
On the data front, investors received only one economic report--May PPI--on Tuesday:
May producer prices came in at 0.0%, which is in line with the Briefing.com consensus. Core producer prices rose 0.3% while the Briefing.com consensus expected an increase of 0.2%.
The key takeaway from the report is that it supports the Fed's inclination to favor a policy tightening bias.
Tomorrow, investors will receive a slew of economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, May Retail Sales (Briefing.com consensus 0.1%) and May CPI (Briefing.com consensus 0.0%) at 8:30 ET, April Business Inventories (Briefing.com consensus -0.1%) at 10:00 ET, and the FOMC Rate Decision at 14:00 ET.
Nasdaq Composite +15.6% YTD
S&P 500 +9.0% YTD
Dow Jones Industrial Average +7.9% YTD
Russell 2000 +5.1% YTD
Tech Stocks from Briefing.com
The stock market closed Tuesday broadly higher as technology rebounded from its multi-day sector rotation slump. The Nasdaq Composite (+44.90 pts) outpaced the other indices, gaining 0.73%, while the Dow Jones Industrial Average (+92.80 pts) rose 0.44%, and the S&P 500 (+10.96 pts) climbed 0.45%.
The S&P Technology Sector (+0.85%) was the second best performing industry, only behind Materials (+1.31%). Conversely, Telecoms (-1.03%) were today's biggest decliner.
Looking inside the Technology Select Sector SPDR (XLK 56.09, +0.40), Western Digital (WDC 90.05, +3.41) was the top performer after being initiated with a Buy at Aegis Capital and a price target of $130. CenturyLink (CTL 27.24, +0.64) & Visa (V 95.08, +1.58) also enjoyed relative strength in today's session. On the contrary, Yahoo (YHOO 52.00, -1.12) was the worst-performing component after the company completed the sale of its operating business to Verizon (VZ 46.46, -0.73) for $4.48 bln. As a results of the sale, Yahoo will change its name to Altaba and register as a non-diversified, closed-end management investment company.
Top Sector Developments
Notable Earnings
Science Applications International (SAIC 74.52, -6.92) slipped 8.5% after reporting mixed Q1 results as revenues were shy of analyst estimates and the company detailed that margins came in below expectations.
Notable News
Cognizant (CTSH 66.43, +0.14) announced it had entered into a definitive agreement to purchase Health Care Service Corporation's subsidiary TMG Health; terms of the transaction were not disclosed.
Fiserv (FISV 74.52, -6.92) announced a recommended cash offer to acquire Monitise plc, a specialist in financial services technology focused on accelerating the digital transformation of banks and financial institutions, for approximately 70 million.
Synaptics Incorporated (SYNA 54.14, -4.65) announced that it has signed a definitive agreement to acquire Conexant Systems for approximately $300 mln in cash and 726,666 shares of Synaptics' common stock. The company also disclosed that it would acquire the Multimedia Solutions Business of Marvell
Technology Group (MRVL 17.74, +0.29) for approximately $95 mln. The company further detailed that it expected its fiscal Q4 revenues to be slightly below the mid-point of its prior guidance.
Kerrisdale Capital issued a new short report on shares of ViaSat (VSAT 69.52, -2.11).
Notable Analyst Actions
Electronics For Imaging (EFII 48.90, +0.77) initiated with a Buy at Aegis Capital; tgt $58
Guidewire Software (GWRE 67.50, +1.19) upgraded to Overweight from Neutral at Piper Jaffray
Seagate Tech (STX 42.03, +0.49) initiated with a Buy at Aegis Capital; tgt $50
Tableau Software (DATA 62.15, +1.93) upgraded to Buy from Neutral at Goldman
Veeco Instruments (VECO 31.70, +1.90) upgraded to Overweight from Neutral at JP Morgan
