From Briefing.com: 4:30 pm Closing Market Summary: Stocks Settle Monday Mixed (:WRAPX) :The stock market ended July's last trading session on a mixed note; the Dow climbed 0.3%, to another record high, while the S&P 500 and the Nasdaq settled lower by 0.1% and 0.4%, respectively. The major averages drifted within a fairly narrow range from start to finish. For the month, the S&P 500 added 1.9%.
Monday's action resembled a sector rotation trade as the four advancing sectors--financials (+0.6%), energy (+0.2%), utilities (+0.4%), and telecom services (+0.4%)--have struggled to keep pace with the broader market throughout the year. On the flip side, the strongest sector in 2017--information technology (-0.5%)--settled near the bottom of the leaderboard.
The heavily-weighted financial sector benefited from broad strength with just about all of its components finishing in positive territory. Meanwhile, the energy group leaned on Dow components Exxon Mobil (XOM 80.04, +0.44) and Chevron (CVX 109.19, +1.07), which advanced 0.6% and 1.0%, respectively.
On a related note, crude oil settled in positive territory for the sixth session in a row thanks to a sharp afternoon rally. The commodity went from a loss of 0.8% to a gain of 1.0% in about an hour, eventually settling higher by 0.9% at a price of $50.20/bbl. Today's advance left crude oil higher by 9.0% for the month of July, its best month since April 2016.
The technology and materials spaces were the weakest sectors on Tuesday, dropping 0.5% and 0.8%, respectively. Mega-cap tech names like Facebook (FB 169.25, -3.20) and Alphabet (GOOGL 945.50, -12.83) weighed on the technology group, losing 1.9% and 1.3%, respectively. Chipmakers also underperformed, sending the PHLX Semiconductor Index lower by 0.7%.
Today's tech retreat precedes tomorrow's main event--the release of Apple's (AAPL 148.73, -0.77) latest earnings report. Apple, which is the largest S&P 500 component by market cap, will deliver its quarterly results following Tuesday's closing bell. Entering Tuesday's session, AAPL shares hold a huge year-to-date gain of 28.4%.
As for the remaining sectors--consumer discretionary (-0.1%), industrials (-0.1%), health care (-0.1%), consumer staples (-0.1%), and real estate (-0.1%)--losses were very modest.
In M&A news, Discovery Communications (DISCA 24.60, -2.20) plunged 8.2% after agreeing to acquire Scripps Networks (SNI 87.41, +0.50) for $14.6 billion, or $90 per share, in cash and stock.
On a separate note, reports indicate that SoftBank (SFTBY 40.15, -1.37)--the parent company of Sprint (S 7.98, -0.24)--is still interested in acquiring Charter Communications (CHTR 391.91, +21.65) despite Charter saying that it is not interested in acquiring Sprint.
In the bond market, U.S. Treasuries settled Monday's session relatively flat with the benchmark 10-yr yield finishing unchanged at 2.29%. The 2-yr yield climbed one basis point to 1.36%.
On the political front, the White House announced that Anthony Scaramucci will be leaving his role as White House Communications Director, giving newly appointed Chief of Staff John Kelly the ability to build his own team. The equity market had a muted reaction to the news.
Reviewing Monday's economic data, which was limited to July Chicago PMI and June Pending Home Sales:
Chicago PMI for July decreased to 58.9 from 65.7 in June while the Briefing.com consensus expected a reading of 60.0.
The key takeaway from the report is that the headline dip reflects some normal slowing after a remarkably strong month in June. All five barometer components declined in July, with new orders and production setting the pace.
Pending Home Sales for June rose 1.5% (Briefing.com consensus +1.1%). Today's reading follows a revised 0.7% decrease in May (from -0.8%).On Tuesday, investors will receive several economic reports, including June Personal Income (Briefing.com consensus 0.3%) and Personal Spending (Briefing.com consensus 0.1%) at 8:30 ET, June Construction Spending (Briefing.com consensus 0.5%) at 10:00 ET, and the July ISM Index (Briefing.com consensus 56.2) also at 10:00 ET.
In addition, July auto and truck sales will be released throughout the day.
Nasdaq Composite +17.9% YTD
S&P 500 +10.3% YTD
Dow Jones Industrial Average +10.8% YTD
Russell 2000 +5.0% YTD
6:08 pm Silicon Motion misses by $0.01, reports revs in-line with guidance and consensus; issues downside Q3 /FY17 guidance; announces new $200 mln share repurchase program and management to purchase shares (SIMO) :
Reports Q2 (Jun) earnings of $0.71 per ADS, excluding items, $0.01 worse than the Capital IQ Consensus of $0.72; revenues fell 5.7% year/year to $132.7 mln vs the $132.92 mln Capital IQ Consensus.
Business Outlook: "We are now seeing material amounts of new 64L 3D NAND flash coming to market, with most still being directed towards the enterprise SSD market, which we believe will benefit our SSD solutions business," said Wallace Kou, President and CEO of Silicon Motion. "Since NAND availability remains very tight, NAND pricing continues to be high, which will temporarily affect our SSD solutions and overall gross margins. Separately, based on what we are seeing from our customers' rolling forecasts, we anticipate that our client SSD controller sales will rebound meaningfully in the fourth quarter. We believe our business will improve as NAND supply improvements accelerate over the next few quarters."
Co sees Q3 revs of $122-129 mln vs. $145.62 mln Capital IQ Consensus Estimate, non GAAP op margin 19-21% and gross margin 45-47%
Co lowers FY17 revs to $512-528 mln vs. $558.87 mln Capital IQ Consensus Estimate, non GAAP op margin 22-24%, gross margin 47.5-49%
Board of Directors has authorized a new program for the Company to repurchase up to $200 million of its ADS over a 12 month period. Separately, Silicon Motion executive officers have notified the Company that they intend to purchase $2.5 million of its ADSs. The Company's CEO, CFO and several other executive officers have notified us of their intention to acquire within the next 6 months a total of up to $2.5 million of the Company's ADSs, subject to compliance with relevant securities laws and regulations and company policies.
4:11 pm Amkor beats by $0.02, reports revs in-line; guides Q3 EPS below consensus, revs below two analyst estimate (AMKR) :
Reports Q2 (Jun) earnings of $0.14 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.12; revenues rose 7.9% year/year to $989 mln vs the $996.1 mln two analyst estimate.
Co issues downside guidance for Q3, sees EPS of $0.10-0.27 vs. $0.32 Capital IQ Consensus Estimate; sees Q3 revs of $1.04-1.12 bln vs. $1.16 bln two analyst estimate, driven by the launch of flagship mobile devices. Sees Q3 gross margin of 17% to 20%.
4:08 pm Integrated Device beats by $0.01, reports revs in-line (IDTI) :
Reports Q1 (Jun) earnings of $0.33 per share, $0.01 better than the two analyst estimate of $0.32; revenues rose 2.4% year/year to $196.71 mln vs the $195.1 mln Capital IQ Consensus.
Gross profit for the fiscal first quarter of 2018 was $120.7 million, or 61.4 percent, compared with gross profit of $106.1 million, or 60.4 percent last quarter, and $117.9 million, or 61.3 percent, reported in the same period one year ago.
R&D expense for the fiscal first quarter of 2018 was $40.3 million, compared with R&D expense of $31.0 million last quarter, and $37.7 million in the same period one year ago.
4:07 pm Intevac beats by $0.05, beats on revs (IVAC) :
Reports Q2 (Jun) earnings of $0.05 per share, $0.05 better than the Capital IQ Consensus of ($0.00); revenues rose 108.1% year/year to $31 mln vs the $28.76 mln Capital IQ Consensus.
Order backlog totaled $68.9 million on July 1, 2017, compared to $73.0 million on April 1, 2017 and $75.3 million on July 2, 2016. Backlog at July 1, 2017 included five 200 Lean HDD systems and twelve ENERGi solar ion implant systems. Backlog at April 1, 2017 included three 200 Lean HDD systems, one pilot INTEVAC MATRIX solar system and fourteen ENERGi solar ion implant systems. Backlog at July 2, 2016 included four 200 Lean HDD systems, three INTEVAC VERTEX systems for display cover panels, two INTEVAC MATRIX solar systems, and three ENERGi solar ion implant systems.
4:07 pm Advanced Energy beats by $0.15, beats on revs; guides Q3 EPS above consensus, revs above consensus (AEIS) :
Reports Q2 (Jun) earnings of $1.22 per share, $0.15 better than the Capital IQ Consensus of $1.07; revenues rose 39.7% year/year to $165.95 mln vs the $155.72 mln Capital IQ Consensus.
Co issues upside guidance for Q3, sees EPS of $1.10-1.20, excluding non-recurring items, vs. $0.99 Capital IQ Consensus Estimate; sees Q3 revs of $160-170 mln vs. $151.82 mln Capital IQ Consensus Estimate.
4:06 pm Harmonic reports EPS in-line, beats on revs; guides Q3 EPS and revs below consensus, guides FY17 EPS & revs below consensus (HLIT) :
Reports Q2 (Jun) loss of $0.20 per share, in-line with the Capital IQ Consensus of ($0.20); revenues fell 24.9% year/year to $82.3 mln vs the $80.88 mln Capital IQ Consensus.
Bookings for 2Q17 were $91.1 million, compared with $82.1 million for 1Q17 and $117.3 million for 2Q16.
Co issues downside guidance for Q3, sees revenue of $80-$90 million vs. $92.8 mln Capital IQ Consensus, gross margin of 48-49%, and loss per share of ($0.11)-($0.03) vs. $0.02 consensus.
Co issues downside guidance for FY17, sees revs of $336-$356 mln vs. $379.9 mln Capital IQ Consensus, gross margin of 51-51.5%, and loss per share of ($0.50)-($0.33) vs. ($0.04) Capital IQ Consensus.
Co states, "During 2Q17, with respect to our OTT SaaS business, TCV grew 90% sequentially to 8% of total bookings, reducing near-term revenue and profitability but establishing a trajectory for stronger financial performance mid- to long-term. Additionally, recent material CableOS bookings and field deployment success bolster our confidence in the growth outlook for our Cable Edge segment."
Tech Stocks from Briefing.com
Bucking the broader push lower today, the Dow Jones Industrial Average seemingly defied gravity as the index flew to all-time highs on the wings of a blue-chip bellwether which in-turn made all-time highs today. Dow component Boeing (BA 242.46, +0.93 +0.39%) has been on quite the run lately, skying to all-time highs in each of its last five trading sessions, and the final trading day of July was no different.
To that end, the Dow was up nicely today, adding 60.81 points (+0.28%) to 21891.12. The tech-heavy Nasdaq Composite led the three major averages lower again today as big name tech continues its bearish decline; the index fell 26.55 points (-0.42%) to 6348.12. The S&P 500 finished 1.80 points lower (-0.07%) to 2470.30.
The Technology (XLK 57.16, -0.28 -0.49%) space was dragged lower as large cap Nasdaq 100 names TSLA -3.5%, REGN -3.4%, AMZN -3.2% and AMAT -2.1% held the space lower. Component Micron (MU 28.10, -1.18 -4.03%) turned lower today on broader semi (SMH 86.84, -0.51 -0.59%) weakness. In what turned out to be a session of lower lows, the Materials XLB -0.76% space led the decline among S&P sectors, followed by IYZ -0.22%, XLRE -0.15%, XLI -0.13%, XLP -0.07%, XLV -0.06%, XLY -0.03%, XLE +0.23%, XLU +0.34%, XLF +0.64%.
In the S&P 500 Information Technology (980.40, -5.27 -0.53%) space, trading fell into the close ultimately finishing near lows. Component Facebook (FB 169.25, -3.20 -1.86%) was pressured today as the stock was downgraded to a Sell rating at Pivotal Research. Other names in the space which outperformed today included AMAT -2.08%, KLAC -1.88%, TEL -1.83%, AVGO -1.48%, GOOGL -1.34%, LRCX -1.32%, VRSN -1.30%, EA -1.28%, GOOG -1.17%, NVDA -1.14%.
Other notable news items among sector components:
Snap (SNAP 13.67, -0.13 -0.98%) shares were weaker today as the company's first post-IPO lock-up period expired.
AT&T (T 39.00, flat) made executive appointments to prepare for Time Warner (TWX 102.47, -0.26 -0.25%) merger close.
Sprint (S 7.97, -0.25 -3.04%) and Charter (CHTR 391.91, +21.65 +5.85%) might be in merger talks, according to WSJ.
Later, a Charter (CHTR) spokesperson said the company is not interested in Sprint (S), but Softbank (SFTBY 40.15, -1.37 -3.30%) might still be interested in CHTR acquisition, according to Reuters.
United States Defense Information Systems Agency extended its contract with ViaSat (VSAT 66.09, -0.50 -0.75%) to continue to provide senior leaders and their support staff with in-flight broadband and connectivity services on senior leader aircraft.
Altaba's (AABA 58.40, -0.80 -1.35%) Board authorized the repurchase of up to $5 billion of its common stock.
Analyst actions:
BIDU was upgraded at Macquarie and Nomura,
ADP was upgraded to In-Line from Underperform at Evercore ISI,
GIMO was upgraded to Buy from Neutral at Dougherty,
GPRO was upgraded to Equal Weight from Underweight at Morgan Stanley;
FB was downgraded to Sell from Hold at Pivotal Research,
SNAP was downgraded to Mixed from Positive at OTR Global,
SHOR was downgraded to Hold from Buy at Lake Street,
ECHO was downgraded to Neutral from Outperform at Credit Suisse;
CRTO was initiated with an Overweight at KeyBanc Capital Mkts,
CCOI was initiated with a Sell at Off Wall Street
Expect quarterly results tonight/tomorrow morning from the following companies: AEIS, AABA, AMKR, BLKB, CGNX, ELVT, FICO, HLIT, INST, IDTI, IVAC, P, ROG, SBAC, SIMO, TNET/ALLT, CDK, EIGI, HRS, IPGP, QSII, SQNS, SHOP, S, VSM, XRX, YRD
