From Briefing.com: 4:29 pm Closing Market Summary: Equities Finish Monday Mixed (:WRAPX) :Equities opened the week with a mixed performance; the Nasdaq (+0.4%) finished at another record close, its fourth in the last five sessions, while the S&P 500 (-0.1%) and the Dow (-0.3%) settled with modest losses. Monday's action was fairly range-bound with the benchmark index staying true to a seven-point range from start to finish.
Investors understandably lacked conviction on Monday ahead of several notable events on this week's calendar, including:
a Senate vote on health-care reform, which President Trump says will take place on Tuesdaythe Fed's latest policy directive, which will cross the wires at 14:00 ET on Wednesday the advance estimate for second-quarter GDP, which will be released at 8:30 ET on Fridayand a slew of influential earnings reports that will be delivered throughout the week The cautious sentiment was present in pre-market action on Monday morning, leaving the major averages modestly lower at the opening bell. Nine of eleven sectors finished in negative territory with the two advancers being the top-weighted technology (+0.3%) and financials (+0.3%) groups.
Financials exhibited relative strength throughout the session while tech stocks took awhile to come around. In the end, the positive performances of mega-cap tech names like Apple (AAPL 152.09, +1.82), Facebook (FB 166.00, +1.57), and Alphabet (GOOGL 998.31, +4.47) were enough to push the tech sector to victory. Chipmakers underperformed, leaving the PHLX Semiconductor Index lower by 0.4%.
As for the declining sectors, they finished with losses ranging between 0.1% and 1.0%. The telecom services (-1.0%) and utilities (-0.9%) groups were the weakest performers while the remaining laggards finished with losses of no more than 0.4%.
The consumer discretionary sector (-0.4%) underperformed following a negative reaction on the earnings front. Hasbro (HAS 105.00, -10.95) dropped 9.4% after concerns surrounding economic conditions overseas overshadowed the company's better than expected earnings. Similarly, Stanley Black & Decker (SWK 143.70, -3.09) slipped 2.1% despite beating top and bottom line estimates.
In addition, Hibbett Sports (HIBB 13.10, -6.60) plunged 33.5% after the company issued a profit warning, saying that it expects comparable-store sales to drop around 10.0% in the second quarter. Peer Dick's Sporting Goods (DKS 35.12, -2.04) also sold off following the announcement, dropping 5.5%.
Crude oil jumped 1.3% to $46.36/bbl on Monday following news that Saudi Arabia will limit its oil exports to 6.6 million barrels per day (bpd) in August, nearly one million bpd below the level it produced a year ago. In addition, Nigeria, which was originally exempt from the OPEC-led production cut agreement, has pledged to limit its exports to 1.8 million barrels per day.
However, the energy sector, which typically moves in tandem with crude oil, lost 0.3%. Halliburton (HAL 42.51, -1.87) weighed on the sector, dropping 4.2%, after saying that North American customers are 'tapping the brakes'. However, the company did beat top and bottom line estimates.
In the bond market, U.S. Treasuries settled the day with modest losses. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, climbed one basis point to 2.25%.
Reviewing Monday's economic data, which was limited to June Existing Home Sales:
Existing home sales for June decreased 1.8% from May to an annualized rate of 5.52 million units while the Briefing.com consensus expected a reading of 5.58 million. The prior month's reading was left unrevised at 5.62 million.
The key takeaway from the report is that neither the availability nor the affordability of homes is high, which is keeping sales activity from being all that it could be otherwise.
On Tuesday, investors will receive the May FHFA Housing Price Index (Briefing.com consensus 0.7%) at 9:00 ET, the May S&P 500 Case-Shiller Home Price Index (Briefing.com consensus 5.7%) at 9:00 ET, and the Conference Board's Consumer Confidence Index for July at 10:00 ET.
In addition, several notable companies will report earnings on Tuesday morning, including 3M (MMM 210.00, -1.16), McDonald's (MCD 151.85, -2.07), United Technologies (UTX 123.13, -0.36), DuPont (DD 84.35, -0.19), and Caterpillar (CAT 108.18, +1.59), among many others.
Nasdaq Composite +19.1% YTD
S&P 500 +10.3% YTD
Dow Jones Industrial Average +8.9% YTD
Russell 2000 +6.0% YTD
Tech Stocks from Briefing.com
After a slide into the weekend, the broader market bounced back on Monday. Given that, only the Nasdaq Composite ended higher, yet all three major US indices finished off lows. The Nasdaq Composite ended the day up 23.05 points (+0.36%) to 6410.81. The Dow Jones Industrial Average, by contrast, was the worst performing average, losing 66.90 points today (-0.31%) to 21513.17. The S&P 500 shed about 2.63 points (-0.11%) to 2469.91.
The lone piece of economic data today, the existing home sales reading for June decreased 1.8% from May to an annualized rate of 5.52 million units while the prior month's reading was left unrevised at 5.62 million.
The Technology (XLK 57.61, +0.14 +0.24%) space was the only S&P sector in the green today, along with the Financial space. Component Xerox (XRX 30.56, +1.11 +3.77%) was the best performer on an overall tepid session as the stock got a premarket upgrade at Barclays to an Equal Weight rating. As mentioned, the Financial space XLF +0.40% led all others higher today, followed by XLRE -0.06%, XLV -0.06%, XLB -0.09%, XLE -0.18%, XLI -0.22%, XLP -0.27%, XLY -0.34%, XLU -0.94%, IYZ -1.47%.
As a subsector of Tech, the Social Media (SOCL 30.41, +0.33 +1.10%) space had a mini-breakout today as shares of components YY +4.59% RENN +4.23% WB +3.75% NTRI +3.38% TCEHY +2.06% SINA +2.03% P +1.80% MTCH +1.41% NTES +1.40% YNDX +1.37% LN +1.29%all surged today. The main reason for the outperformance could be pegged on Alphabet's (GOOG 980.34, +7.42 +0.76%) quarterly print which is scheduled for tonight after the close.
In the S&P 500 Information Technology (994.48, +2.51 +0.25%) space, trading came back off Friday's modest losses, making fresh all-time highs. Component Seagate Tech (STX 39.76, +0.18 +0.45%) was another name which stood out today, edging higher ahead of tomorrow morning's quarterly results. Other names in the space which outperformed today included ADS +1.53%, EA +1.36%, TSS +1.35%, AAPL +1.21%, GPN +1.09%, INTU +1.05%, VRSN +1.02%, ADSK +0.97%, FB +0.95%.
Other notable news items among sector components:
Applied Materials (AMAT 46.78, 0.03 -0.06%) announced that Dan Durn will join the company as senior vice president on August 7, 2017 and assume the role of CFO, on August 24. Durn disclosed his departure from NXP Semi (NXPI 109.55, -0.31 -0.28%) today as well.
Motorola Solutions (MSI 90.67, +0.15 +0.17%) filed new patent infringement complaints with the Regional Court of Mannheim in Germany against Hytera Communications.
WebMD Health (WBMD 66.10, +10.91 +19.77%) confirmed agreement to be acquired by KKR (KKR 19.30, -0.08 -0.41%) for $66.50 per share in cash.
Analyst actions:
XRX was upgraded to Equal Weight from Underweight at Barclays;
NPTN was downgraded to Outperform from Strong Buy at Raymond James;
WIX and MSCC were initiated with Overweight ratings at KeyBanc Capital Mkts
Expect quarterly earnings tonight/tomorrow morning from the following companies: GOOG, CDNS, LOGI, RMBS, SANM/AXE, CVLT, CTG, STX
4:09 pm Sanmina reports EPS in-line, misses on revs; guides Q4 EPS in-line, revs below consensus (SANM) :
Reports Q3 (Jun) earnings of $0.74 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.74; revenues rose 2.5% year/year to $1.71 bln vs the $1.74 bln Capital IQ Consensus.
Non-GAAP operating income in the third quarter was $71.4 million or 4.2 percent of revenue, compared to $61.9 million or 3.7 percent of revenue in the third quarter fiscal 2016.
Co issues guidance for Q4, sees EPS of $0.73-0.79, excluding non-recurring items, vs. $0.79 Capital IQ Consensus Estimate; sees Q4 revs of $1.725-1.775 bln vs. $1.78 bln Capital IQ Consensus Estimate.
4:09 pm Cadence Design beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs in-line; raises bottom end of FY17 EPS/rev guidance (CDNS) :
Reports Q2 (Jun) earnings of $0.34 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.32; revenues rose 5.7% year/year to $479 mln vs the $476.21 mln Capital IQ Consensus.
Co issues in-line guidance for Q3, sees EPS of $0.33-0.35, excluding non-recurring items, vs. $0.35 Capital IQ Consensus Estimate; sees Q3 revs of $475-485 mln vs. $481.52 mln Capital IQ Consensus Estimate.
Co issues narrows guidance for FY17, sees EPS of $1.36-1.42 from $1.32-1.42, excluding non-recurring items, vs. $1.38 Capital IQ Consensus Estimate; sees FY17 revs of $1.91-1.95 bln from $1.90-1.95 vs. $1.93 bln Capital IQ Consensus Estimate.
"Our excellent financial results for the second quarter were highlighted with revenue near the high end of our guidance range and operating margin, EPS and operating cash flow all exceeding expectations."4:09 pm Alphabet beats by $0.58, beats on revs (GOOG) :
Reports Q2 (Jun) earnings of $5.01 per share, $0.58 better than the Capital IQ Consensus of $4.43; revenues rose 21.0% year/year to $26.01 bln vs the $25.61 bln Capital IQ Consensus.
Operating Margin 16% compared to 28% in prior year; Recall this year includes the $2.7 bln fee paid to the EU.
Google Properties revenue $18.42 bln, +19.6% y/y.
Google Network Members properties revenue $4.24 bln, +13% y/y
Other Bets Revenue- $248 mln, +34% y/y; Other Bets operating loss was ($772 mln), compared to street expectations of ($970 mln)
Total TAC as a percentage of revenue was 22% compared to 21% in prior year period.
Aggregate Clicks Paid: 52%; Q1 +44%; Q4 +36%, Q3 +33%; Q2 +29%.
Paid Click on Google Properties +61%
Paid Clicks on Google Network Member +9%
Aggregate cost per click: -23%; Q1 -19%; Q4 -15%, Q3 -11%; Q2 -7%,
CPC on Google Properties -26%
CPC on Google Network Members properties -11%
On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposes a 2.42 billion (approximately $2.74 billion) fine, which we accrued in the second quarter of 2017. The fine is included in "accrued expense and other current liabilities" on our Consolidated Balance Sheet.
4:09 pm Rambus beats by $0.01, beats on revs; guides Q3 EPS in-line, revs in-line (RMBS) :
Reports Q2 (Jun) adj. earnings of $0.14 per share, $0.01 better than the Capital IQ Consensus of $0.13; revenues rose 23.8% year/year to $94.7 mln vs the $93 mln Capital IQ Consensu; execution in Security Division and Lighting Division offset the anticipated seasonality of our business. As a result of our execution on acquisitions, revenue for Memory and Interface Division was up 24% year over year and revenue for the Security Division was up 42% year over year.
Co issues in-line guidance for Q3, sees EPS of $0.14-0.20, excluding non-recurring items, vs. $0.16 Capital IQ Consensus Estimate; sees Q3 revs of $96-102 mln vs. $98.06 mln Capital IQ Consensus Estimate.
"We continue to build upon our positive start to the year with strength in our patent and technology licensing programs, as well as ongoing validation from our partners and customers that our technologies are solving the critical problems facing the data center and mobile edge markets," said Dr. Ron Black, chief executive officer of Rambus. "We are excited by the momentum in our Security Division, signing agreements with Cybertrust and Synopsys on our CryptoManager Infrastructure and introducing our in-field CryptoManager IoT Device Management service for easy and broad adoption of our provisioning solutions."
