From Briefing.com: 4:30 pm Closing Market Summary: Stocks Tick Down on Friday (:WRAPX) :
The major averages rode a late-afternoon rally to fresh session highs, but, unfortunately, it just wasn't quite enough to get them into the green. The Nasdaq (unch) finished just a tick below its flat line, breaking its ten-session winning streak. The S&P 500 (unch) settled in line with the Nasdaq while the Dow (-0.2%) and the Russell 2000 (-0.5%) underperformed. For the week, the S&P 500 ended higher by 0.5%.
Five of eleven sectors settled Friday's session in negative territory, but losses were modest for the most part. The energy sector registered the widest decline, dropping 0.9%, after reports of increased OPEC oil production sent crude oil into negative territory. The energy component lost 2.7%, finishing at a price of $45.64/bbl.
Like energy, the industrial sector settled below the broader market, slipping 0.2%, with its largest component by market cap--General Electric (GE 25.91, -0.78)--leading the retreat. GE shares tumbled 2.9%, to their worst level since October 2015, after disappointing organic revenue growth for the company's industrial segment overshadowed better than expected top and bottom lines.
Microsoft (MSFT 73.79, -0.43) also declined after beating top and bottom line estimates, losing 0.6%. However, the company did enjoy a ten-day rally in front of the release, suggesting that its upbeat earnings report was priced in ahead of time. Conversely, Visa (V 99.60, +1.49) climbed 1.5%, to a new all-time high, after reporting above-consensus earnings and revenues, in addition to raising its guidance for the fiscal year.
The top-weighted technology sector (-0.1%), which houses both Microsoft and Visa, managed to settle roughly in line with the broader market. However, in addition to MSFT's slide, the tech space had to overcome a negative performance from chipmakers in order to do so; the PHLX Semiconductor Index dropped 0.8% amid broad weakness.
Conversely, biotech stocks rallied on Friday, pushing the iShares Nasdaq Biotechnology ETF (IBB 324.88, +1.96) higher by 0.6%. However, the health care sector wasn't able to finish ahead of the broader market, ending the day lower by 0.1%.
The influential financial space (unch) outperformed for much of the day, but eventually slipped back into the middle of the sector standings. Capital One (COF 87.94, +6.93) was the sector's top-performing component, jumping 8.6%, after the company reported better than expected earnings.
Countercyclical sectors like utilities (+0.8%), consumer staples (+0.3%), and telecom services (unch) settled near the top of the leaderboard. The rate-sensitive utilities group benefited from a rally in the Treasury market that left the 10-yr yield (2.23%) and the 2-yr yield (1.34%) lower by two basis points apiece.
Meanwhile, on the cyclical side, the consumer discretionary (+0.1%), real estate (+0.2%), and materials (unch) groups also outperformed. Netflix (NFLX 188.54, +4.94) led consumer discretionary's advance, jumping 2.7%, to end the week higher by 17.0%. The company surged 13.5% on Tuesday after reporting a much larger than expected increase in subscribers.
In the currency market, the U.S. Dollar Index (93.74, -0.34) slipped another 0.4% on Friday to end the week with a loss of 1.3%. Both the euro (1.1667) and the yen (111.06) climbed against the greenback, adding 0.3% and 0.8%, respectively.
Investors did not receive any notable economic data on Friday.
On Monday, market participants will receive just one piece of economic data--June Existing Home Sales. The report will be released at 10:00 ET.
Nasdaq Composite +18.7% YTD
S&P 500 +10.4% YTD
Dow Jones Industrial Average +9.2% YTD
Russell 2000 +5.8% YTD
Week In Review: Record Highs
Equities kept chugging along this week, underpinned by a generally solid batch of earnings reports and the notion that monetary policy will remain accommodative for the foreseeable future. The S&P 500 ended the week higher for the third-consecutive time, adding 0.5%, but the real star was the Nasdaq, which climbed 1.2% and settled at a new record high for three sessions in a row. The Dow lagged this week, finishing with a small loss of 0.3%.
The stock market kicked off the week with a rather uneventful performance on Monday that left the major averages little changed. However, activity picked up on Tuesday as the Nasdaq climbed to a new record high for the first time since June 8. Netflix (NFLX) headlined the earnings front, surging 13.5%, after adding a surprisingly-large number of new subscribers in the second quarter.
Buyers were in the driver's seat during the midweek session, pushing the Nasdaq, the S&P 500, the Dow, and the small-cap Russell 2000 to new all-time highs. Each of the S&P 500's 11 sectors finished in the green with the energy group setting the pace following an upbeat EIA crude inventory report. Conversely, financials and transports struggled once again, shrugging off some relatively upbeat earnings reports.
However, it's important to note that the S&P 500's financial sector and the Dow Jones Transportation Average both had bullish, multi-week runs ahead of earnings season, making it difficult for their components to advance on upbeat results alone.
On Thursday, monetary policy was the focal point as investors digested the latest policy decisions from the European Central Bank and the Bank of Japan. Both central banks decided to leave interest rates unchanged and sounded dovish about future accommodation. However, the euro rallied against the U.S. dollar nonetheless as ECB President Mario Draghi failed to dispel the notion that the ECB might soon announce a tapering of its asset purchase program.
The Nasdaq eked out another record close, extending its winning streak to ten sessions in a row, while the S&P 500 and the Dow finished just shy of their unchanged marks. The telecom services sector was the top-performing group--which has been a rarity this year--following an upbeat earnings report from T-Mobile US (TMUS). However, ironically, TMUS shares finished solidly lower.
Equity indices ended the week with small losses on Friday. General Electric (GE) weighed on the industrial sector, dropping 2.9%, after reporting disappointing organic revenue growth for its industrial segment. Microsoft (MSFT) also faced selling pressure as its better than expected earnings and revenues failed to fully justify its preceding ten-day rally. Energy was the worst-performing sector following news of increased OPEC production, which sent crude oil on a 2.7% plunge.
The fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 52.0%, up slightly from last week's 50.6%. The Fed will release its latest policy statement on Wednesday afternoon at 14:00 ET.
Tech Stocks from Briefing.com
Perhaps the biggest surprise on the street today, at least in the tech world, was Microsoft (MSFT 73.79, -0.43 -0.58%). Shares slipped despite an earnings beat as broader tech weakness today was perhaps the culprit for the losses. Not to mention, MSFT has enjoyed some pretty substantial gains month-to-date, up 6.4%.
In the broader market, action was decidedly negative today as the recent win streak in the S&P and Nasdaq ran dry on Friday. That being said, losses were modest as the Dow Jones Industrial Average (today's worst performer) lost only 31.71 points (-0.15%) to 21580.07. The S&P 500 was down less than a points today (-0.04%) to 2472.54, while the Nasdaq Composite also posted a tempered decline, down 2.25 points (-0.04%) to 6387.75.
The Technology (XLK 57.47, -0.07 -0.12%) space opened lower today and steadily climbed into the close, and modest losses. Component eBay (EBAY 36.61, -0.57 -1.53%) was one of the weaker names today after a mostly in-line earnings report precipitated modest losses after yesterday's all-time highs. Performing the best on Friday, the Utility XLU +0.72% space was followed by IYZ +0.69%, XLRE +0.19%, XLP +0.16%, XLY +0.07%, XLF +0.00%, XLB -0.04%, XLV -0.12%, XLI -0.19%, XLE -0.99%.
In the S&P 500 Information Technology (991.97, -0.74 -0.07%) space, trading snapped the recent win streak. Component Visa (V 99.60, +1.49 +1.52%) was the best performing names today as an earnings beat and guidance raise pushed the stock higher in the face of broader weakness. Other names in the space which xxx.
Other notable news items among sector components:
eBay (EBAY) in addition to reporting quarterly results, announced the addition of $3 billion to its buyback program.
Nuance Communications (NUAN 17.20, +0.35 +2.08%) expected June global malware incident to have impact on Q3/Q4 financial results; sees Q3 revenues and EPS below consensus.
Arista Networks (ANET 152.92, -3.88 -2.47%) confirmed that the International Trade Commission has denied Arista's motions to suspend the limited exclusion order and cease and desist order issued in connection with Investigation No. 337-TA-945 against Cisco (CSCO 31.84, -0.02 -0.06%).
Jabil's (JBL 30.74, +0.09 +0.29%) Board authorized a $450 million share repurchase program, represents the second portion of the previously announced two-year capital return framework.
Sphere 3D (ANY 4.59, +0.23 +5.28%) filed for 2,176,797 common share offering by holders.
In reaction to quarterly results:
Microsoft (MSFT) reported better than expected Q4 EPS and revenues of $0.75 and $24.7 billion, respectively.
Visa (V) reported better than expected Q3 EPS and revenues of $0.86 and $4.57 billion, respectively. For FY17, the company raised its outlook; now sees annual net revenue growth of about 20% on a nominal dollar basis, including about 2.0 ppts of negative foreign currency impact (Prior guidance was for High end of 16% to 18% range on a nominal dollar basis, including 2.0 to 2.5 ppts of negative foreign currency impact).
eBay (EBAY) reported in-line Q2 EPS and revenues of $0.45 and $2.33 billion, respectively. For Q3, the company sees EPS and revenues of $0.46-0.48 and $2.35-2.39 billion, respectively. For FY17, EBAY reaffirmed EPS guidance of $1.98-2.03 and revenue guidance of $9.3-9.5 billion.
Analyst actions:
DXC was upgraded to Overweight from Sector Weight at KeyBanc Capital Mkts,
JNPR was upgraded to Outperform from Mkt Perform at Raymond James,
VIAV was upgraded to Buy from Neutral at B. Riley & Co.;
ADP and PAYX were downgraded to Mkt Perform from Outperform at William Blair,
ADS was downgraded to Equal Weight from Overweight at Barclays,
CHKP was downgraded to Neutral from Overweight at Piper Jaffray,
HIMX was downgraded to Sell from Neutral at Rosenblatt,
EGOV was downgraded to Neutral from Buy at Sidoti;
PFPT was initiated with a Buy at Needham,
CARS was initiated with a Hold at Craig Hallum,
SPSC was initiated with an Outperform at Oppenheimer
