From Briefing.com: 4:31 pm Closing Market Summary: Nasdaq Advances to New All-Time High (:WRAPX) :For the first time since June 8, the tech-heavy Nasdaq (+0.5%) advanced to a new record high on Tuesday as tech stocks continued their bullish run. The S&P 500 (+0.1%) also finished at a new record high while the Dow and the small-cap Russell 2000 underperformed, dropping 0.3% apiece. The three major averages settled the session at their best marks of the day.
Only five of the S&P 500's eleven sectors settled in positive territory, but, luckily for the broader market, one of those groups was the top-weighted technology space (+0.5%). Mega-cap names like Facebook (FB 162.86, +3.13) and Alphabet (GOOGL 986.95, +10.99) paced the sector's advance, adding 2.0% and 1.1%, respectively, with FB notching a new all-time high.
Today's win marks the eighth in a row for the technology sector, which has fully recovered from last month's swoon. For the year, the tech space trades comfortably ahead of its peers with a year-to-date gain of 22.1%. For comparison, the S&P 500 holds a year-to-date gain of 9.9% and the health care sector, which hovers in second place on the 2017 leaderboard, is up 15.9% on the year.
Meanwhile, the consumer discretionary sector (+0.4%) also put together a relatively solid performance, leaning on Amazon (AMZN 1024.38, +14.34) to overcome losses from most components. AMZN shares advanced 1.4% to a new all-time high. Netflix (NFLX 183.60, +21.90) was a top performer, surging 13.5%, after reporting a much larger than expected increase in subscribers and providing upbeat guidance. The lightly-weighted utilities group (+0.3%) was the only other sector to settle ahead of the broader market.
The influential health care group (+0.1%) eked out a narrow victory, thanks in part to the solid performances of Johnson & Johnson (JNJ 134.46, +2.31) and UnitedHealth (UNH 186.85, +0.50). The two companies advanced 1.8% and 0.3%, respectively, after reporting better than expected earnings and issuing upbeat guidance.
On a related note, Senate Majority Leader Mitch McConnell decided to pave a new direction for the upper chamber on Monday evening, trimming aspirations to repeal and replace the Affordable Care Act in favor of a straight repeal with no immediate replacement. However, three centrist-Republican Senators publicly opposed the idea on Tuesday, sending Republican leaders back to the drawing board.
Back on Wall Street, earnings played a role in the heavily-weighted financial sector's underperformance as Goldman Sachs (GS 223.31, -5.95) and Bank of America (BAC 23.90, -0.12) beat earnings and revenue estimates, but failed to live up to the bullish five-week run that financials enjoyed ahead of earnings season. The financial sector ended the day lower by 0.3%.
Like financials, the energy sector (-0.5%) also had a rough showing, despite a positive performance from crude oil, which climbed 0.8% to $46.40/bbl. The commodity benefited from reports that Saudi Arabia is considering a reduction in its crude exports, in addition to a weakening U.S. Dollar; the U.S. Dollar Index (94.42, -0.50) dropped 0.5% to settle at an 11-month low.
As for the remaining laggards, the telecom services group (-1.0%) was the weakest performer while the industrials (-0.3%), materials (-0.4%), and real estate (-0.1%) spaces settled with more moderate losses.
Reviewing Tuesday's economic data, which included June Export/Import Prices and the July NAHB Housing Market Index:
Import prices excluding oil rose 0.1% in June after finishing flat in May. Export prices excluding agriculture were unchanged in June (0.0%) after declining 0.4% in May (from -0.6%).
The key takeaway from the report is that it doesn't change the market's understanding -- or the Fed's -- that inflation readings remain low.
The NAHB Housing Market Index for July declined to 64 (Briefing.com consensus 67) from a revised reading of 66 in June (from 67).On Wednesday, investors will receive the weekly MBA Mortgage Applications Index and June Housing Starts (Briefing.com consensus 1160K) at 7:00 ET and 8:30 ET, respectively.
Nasdaq Composite +17.9% YTDS&P 500 +9.9% YTDDow Jones Industrial Average +9.2% YTDRussell 2000 +5.2% YTD
Tech Stocks from Briefing.com
After a slow start on Tuesday which saw all three major US indices being choked lower, action eventually picked up and buyers stepped in across the board. The benchmark S&P 500 ended just above flat lines when all settled, up 1.47 points (+0.06%) to 2460.61. The tech-heavy Nasdaq Composite ended higher, perhaps aided by Netflix's (NFLX 183.60, +21.90 +13.54%) strong results from last night, up 29.87 points (+0.47%) to 6344.31. The Dow Jones Industrial Average was dragged lower by commodities, which finished modestly higher ahead of tomorrow's inventory data yet still saw the overall index shed 54.99 points (-0.25%) to 21574.73.
The Technology (XLK 57.13, +0.26 +0.46%) space was the best performer in the S&P today. Component PayPal (PYPL 58.96, +1.38 +2.40%) was one of the better performing names in the space today after come favorable sell side commentary and the confirmation of a partnership extension with Visa (V 97.58, +0.75 +0.77%). Following tech's strong Tuesday, the Consumer Discretionary XLY +0.45% space edged out others, followed by XLU +0.29%, XLV +0.18%, XLP +0.02%, XLRE -0.12%, XLF -0.16%, XLI -0.23%, XLB -0.42%, XLE -0.47%, IYZ -0.98%.
In the S&P 500 Information Technology (986.79, +5.27 +0.54%) space, trading climbed higher as the session progressed. Component Activision Blizzard (ATVI 61.33, +0.83 +1.37%) performed swimmingly today after a premarket initiation of the stock at a Buy at Needham. Other names in the space which outperformed today included FSLR +3.04%, FB +1.96%, TSS +1.70%, LRCX +1.51%, GOOG +1.26%, GOOGL +1.13%, NVDA +1.04%, AMAT +1.02%, ADBE +1.02%, V +0.77%, EA +0.77%.
Other notable news items among sector components:
GoDaddy (GDDY 43.70, +0.89 +2.08%) to sell PlusServer business to funds advised by BC Partners, for an enterprise value of 397 million.
Rocket Fuel (FUEL 2.70, +0.01 +0.37%) to be acquired by Sizmek for $2.60 per share in cash; pre-announced Q2 earnings.
Microsoft (MSFT 73.30, -0.05 -0.07%) and Baidu (BIDU 189.51, +1.28 +0.68%) announced plans to partner in order to take the technical development and adoption of autonomous driving worldwide; financial details not disclosed.
Digital Ally (DGLY 3.60, flat) was awarded a 'significant' new patent by the USPTO.
FireEye's (FEYE 15.62, +0.12 +0.77%) FireEye Government Email Threat Prevention Service, which was granted an Authorization to Operate (ATO) from the U.S. Department of the Interior (DOI), has received a Federal Risk and Authorization Management Program Authorization.
CalAmp (CAMP 19.04, -0.26 -1.35%) named Kurtis Binder as CFO effective today.
Benefitfocus (BNFT 35.30, flat) appointed Jonathon Dussault as CFO.
Toshiba (TOSBF 2.42, +0.32 +15.24%) provided an update on Western Digital (WDC 94.27, -0.30 -0.32%) preliminary injunctive relief.
PayPal (PYPL) and Visa (V) confirmed the extension of their strategic partnership to Europe, enables PayPal in Europe to issue Visa accounts.
In reaction to quarterly results:
Netflix (NFLX) reported worse than expected Q2 EPS of $0.15 on in-line revenues of $2.79 billion. The company also reported net adds for the quarter of 5.20 million vs guidance of 3.20 million. NFLX also gave some strong Q3 guidance, forecasting EPS of $0.32 on revenues of $2.969 billion, both ahead of market expectations.
Ericsson (ERIC 6.06, -1.21 -16.69%) reported worse than expected Q2 earnings of SEK0.17 on worse than expected revenues of SEK49.9 billion.
Analyst actions:
NFLX was upgraded to Buy from Neutral at Rosenblatt,
XLNX was upgraded to Equal Weight from Underweight at Barclays,
SEDG was upgraded to Outperform from Perform at Oppenheimer;
CRUS and AMD were downgraded to Underweight from Equal Weight at Barclays,
ADP was downgraded to Equal Weight from Overweight at Barclays,
IPGP was downgraded to Hold from Buy at Canaccord Genuity,
EXLS was downgraded to Neutral from Buy at Citigroup;
ATVI and EA were initiated with Buy ratings at Needham,
ZG was initiated with a Sector Weight at KeyBanc Capital Mkts,
TWOU was initiated with a Buy at Citigroup,
INFN was initiated with a Buy at Craig Hallum,
BCE was initiated with a Hold at Argus,
ITI was initiated with a Buy at Dougherty,
NCR was initiated with a Buy at Compass Point
Expect quarterly results tonight/tomorrow morning from: ADTN, IBM/ASML, DBD
4:10 pm IBM beats by $0.23, reports revs in-line; reaffirms FY17 EPS guidance (IBM) :
Reports Q2 (Jun) earnings of $2.97 per share, excluding non-recurring items, $0.23 better than the Capital IQ Consensus of $2.74; revenues fell 4.7% year/year to $19.29 bln vs the $19.45 bln Capital IQ Consensus.
Segment Results for Second Quarter
Cognitive Solutions (includes solutions software and transaction processing software)- revenues of $4.6 billion, down 2.5 percent (down 1.4 percent adjusting for currency).
Global Business Services (includes consulting, global process services and application management)- revenues of $4.1 billion, down 3.7 percent (down 1.7 percent adjusting for currency). Strategic imperatives grew 8 percent led by the cloud and mobile practices.
Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software)- revenues of $8.4 billion, down 5.1 percent (down 3.6 percent adjusting for currency). Strategic imperatives, driven by hybrid cloud services, grew 20 percent.
Systems (includes systems hardware and operating systems software)- revenues of $1.7 billion, down 10.4 percent (down 9.6 percent adjusting for currency).
Global Financing (includes financing and used equipment sales)- revenues of $415 million, down 2.2 percent (down 1.7 percent adjusting for currency).
Co reaffirms guidance for FY17, sees EPS of 'at least' $13.80, excluding non-recurring items, vs. $13.68 Capital IQ Consensus Estimate.
4:10 pm Exponent beats by $0.10, beats on revs (EXPO) :
Reports Q2 (Jun) earnings of $0.51 per share, $0.10 better than the Capital IQ Consensus of $0.41; revenues rose 14.7% year/year to $84.1 mln vs the $79.3 mln Capital IQ Consensus
Co raises its 2017 expectations to reflect Exponent's strong performance in the first half of the year and its expectations for near-term market trends
Co expects 2017 revenues before reimbursements to grow in the mid- to high-single digits, up from the low to mid-single digits
Expects EBITDA margin to grow between 40 and 80 basis points vs. prior guidance, which called for EBITDA margins to decline 25 to 75 basis points
