Sector Investing

[ReturntoSender]

From Briefing.com: 4:10 pm : The stock market began the new trading week on a modestly higher note with small caps coming out on top. The Russell 2000 advanced 1.1%, while the S&P 500 added 0.4% with seven sectors posting gains. The underperformance of blue chip listings was apparent within the Dow Jones Industrial Average (+0.1%), which spent the entire session near its flat line.

Generally speaking, the first session of the week was largely uneventful with no economic data or noteworthy earnings influencing the sentiment. However, M&A activity was in focus early, even though it did not lift the underlying stocks. Some recent came to fruition as AT&T (T 36.38, -0.36) agreed to acquire DirecTV (DTV 84.65, -1.53) for $95 per share, which represents a 10.2% premium to Friday's closing price. However, shares of DirecTV did not rally amid concerns about potential regulatory hurdles.

Elsewhere, AstraZeneca (AZN 70.64, -9.64) plunged 12.0% after rejecting Pfizer's (PFE 29.28, +0.16) latest acquisition offer. Even though AstraZeneca lagged, the broader health care sector (+0.6%) was able to overcome that weakness thanks to the relative strength of biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 231.50, +3.20) gained 1.4% after starting the session right above its 200-day moving average, which has been an area of congestion for more than a month.

Also of note, the solid performance from the biotech group underpinned the Nasdaq Composite (+0.9%), which also received noteworthy support from the technology sector (+0.8%).

The top-weighted S&P 500 sector settled in the lead thanks to broad-based gains. Large cap listings like Apple (AAPL 604.59, +7.08), Google (GOOG 528.86, +8.23), and Oracle (ORCL 42.16, +0.47) advanced between 1.1% and 1.6%, while chipmakers also rallied. The PHLX Semiconductor Index finished higher by 1.1%.

Overall, cyclical sectors were responsible for the bulk of today's rally, while only one countercyclical group-health care-finished in the green. The other three-consumer staples, telecom services, and utilities-posted losses between 0.3% and 1.6%.

The utilities sector finished the session at the bottom of the leaderboard, which widened its May loss to 4.4%. Despite the sharp month-to-date decline, the rate-sensitive sector remains higher by 8.6% for the year.

Treasuries spent the entire session in a steady retreat from their overnight highs. As a result, the benchmark 10-yr yield climbed two basis points to 2.54%.

Participation was well below average with just 573 million shares changing hands at the NYSE, which represented the second lowest total of the year.

There is no economic data of note on tomorrow's schedule.

S&P 500 +2.0% YTD
Dow Jones Industrial Average -0.4% YTD
Nasdaq Composite -1.2% YTD
Russell 2000 -4.0% YTD

DJ30 +20.55 NASDAQ +35.23 SP500 +7.22 NASDAQ Adv/Vol/Dec 1874/1.48 bln/826 NYSE Adv/Vol/Dec 1980/572.9 mln/1068

3:30 pm :

June gold trended lower after pulling back from a session high of $1305.70 per ounce set in early morning pit trade. It dipped as low as $1293.00 per ounce and settled at $1294.10 per ounce, or 0.1% higher.
July silver also gave up its early morning losses as it pulled back from its session high of $19.68 per ounce. Unable to regain momentum, it closed with a 0.1% gain at $19.34 per ounce, just above its session low of $19.33 per ounce.
June crude oil extended Friday's gains as the dollar index traded lower. The energy component rose to a session high of $103.09 per barrel in morning action and brushed a session low of $102.49 per barrel. It eventually settled with a 0.6% gain at $102.65 per barrel.
June natural gas also traded higher, rising to a session high of $4.52 per MMBtu by late morning floor trade. It pulled back slightly in afternoon action and settled with a 1.4% gain at $4.47 per MMBtu.

4:45 pm Photronics misses by $0.02, beats on revs (PLAB) : Reports Q2 (Apr) earnings of $0.02 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.04; revenues fell 1.7% year/year to $104.88 mln vs the $103.31 mln consensus.

Quarterly High-end IC photomask sales of $17.2 million, up 4% sequentially
Quarterly High-end FPD photomask sales of $20.6 million, up 32% sequentially

Large Cap Gainers

RYAAY (54.54 +6.98%): Reported FY14 EPS of EUR 0.37 vs EUR 0.37 estimate, revs rose 3% yoy to EUR 5.04 bln vs EUR 5.02 bln estimate; co expects FY15 traffic to grow by 4% to over 84.6 mln as load factors increase 2% to 85%
JCI (46.65 +4.19%): Co and Yanfeng Automotive Trim Systems Co, a wholly owned subsidiary of Huayu Automotive Systems Co, the component group of Shanghai Automotive Industry Corp, announced the signing of a definitive agreement to form a global automotive interiors joint venture
NVDA (18.53 +3.17%): Upgraded to Outperform from Sector Perform at RBC Capital Markets

Large Cap Losers

AZN (71.1 -11.43%): Rejected final acquisition proposal from Pfizer (PFE); Pfizer said it will not make a hostile offer directly to AstraZeneca shareholders and will only proceed with an offer with the recommendation of the board of directors of AstraZeneca
AMX (19.78 -3.18%): AT&T (T) to divest interest in AMX to facilitate the regulatory approval process for its acquisition of DirecTV in Latin America
CPB (43.75 -3.05%): Beat quarterly EPS by $0.03 ($0.62 ex items vs $0.59 estimate), revs rose 0.4% yoy to $1.97 bln vs $2 bln estimate; sees FY14 EPS at low end of previously provided range of $2.53-2.58 vs $2.53 estimate, lowered FY13 adjusted sales growth guidance to +3% from +4-5%

Mid Cap Gainers

ITMN (39.33 +14.62%): Reported that results from the Phase 3 ASCEND study evaluating pirfenidone in patients with idiopathic pulmonary fibrosis were presented at the International Conference of the American Thoracic Society; In ASCEND, pirfenidone significantly reduced decline in lung function as measured by change in percent predicted forced vital capacity (:FVC) from Baseline to Week 52 (rank ANCOVA p
FEYE (29.6 +6.13%): Strength in cyber security companies: DATA also higher; block of over 82 mln shares to become eligible for sale on May 21, 2014 upon the expiration of lock-up agreements
MNKD (7.41 +5.56%): Mentioned positively in blog article

Mid Cap Losers

ATK (129.76 -4.22%): Downgraded to Neutral from Buy at Moness Crespi & Hardt; downgraded to Neutral from Buy at Goldman
FBR (9.56 -4.11%): Hearing downgraded to Neutral from Buy at Goldman
CLF (16.51 -2.08%): WSJ reporting that India iron ore output may decline due to court ordered shut down of mines

11:29 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (62) outpacing new lows (47) (:SCANX) : Stocks that traded to 52 week highs: AAPL, AMKR, BAM, BLL, BP, BTI, CALM, CBG, CMP, CNMD, CXDC, DOM, EQS, ETE, FBMI, GST, HDB, HNT, IBA, IBN, IFN, ITMN, LUV, LYB, MBWM, MNK, MPLX, MSL, NGG, NGLS, NJR, ODFL, OILT, ORAN, PAH, PSXP, QCOR, QTS, RDI, RRMS, SAFM, SAIA, SBGL, SHG, SMP, SQBG, SSLT, SWC, THRM, TRGP, TRN, TTM, TWTC, UDR, UL, UN, UNP, VMI, WES, WMB, Z, ZEN

Stocks that traded to 52 week lows: ACTS, ADAT, AIT, AMCO, AMRN, ANR, BEBE, CCCR, CGA, CGG, CRIS, DARA, DCIX, EMXX, EVAR, FBR, FHCO, FPI, HOTR, HTBI, IKAN, LAND, LGL, MBII, MELA, NIHD, NL, NVTL, ONTX, PAYC, PMFG, QRM, QUNR, RARE, SFBS, SIGA, SPWH, SRNE, SUTR, TCCO, TECU, TLYS, TRGT, TRUE, VHI, VVUS, WLT

ETFs that traded to 52 week highs: EGPT, IYT, PIN, SHY, USCI, XLK

ETFs that traded to 52 week lows: VXX, VXZ

TriQuint Semiconductor (TQNT) revealed that a leading chipset provider has selected its two new high-performance 5GHz WLAN front-end modules for the industry's fastest commercially available 4x4 MU-MIMO 802.11ac chipset

8:04 am Vitesse Semi licenses Gigabit Ethernet IP Cores to Freescale (FSL) (VTSS) : CO announced that Freescale Semiconductor is using Vitesse's VSC9953-01 SparX Gigabit Ethernet switch IP core in Freescale's 28nm QorIQ T1040 quad-core and T1020 dual-core communications processors, now sampling to customers. Targeted applications include gateway routers and industrial automation, as well as unified threat management (:UTM) and network attached storage (:NAS) networking. Together, Freescale's processor family and Vitesse's complementary portfolio of Ethernet switches, PHYs and software deliver carrier-grade Ethernet functionality for diverse mixed control and data plane applications.

GSI Technology (GSIT) and MoSys (MOSY) announced a dual-sourcing product and technology partnership. The partnership includes alternate sourcing of the GSI SigmaQuad IVe SRAM family and the MoSys Bandwidth Engine 2 and 3 families of ICs.

Autodesk (ADSK) reported first quarter earnings of $0.32 per share, which is higher than expected, while revenues rose 3.9% year/year to $592.5 million which is higher than expected. The company issued guidance for the second quarter with EPS of $0.25-0.30, which is line with estimates and revenues of $595-610 million which is higher than expected. The company issued guidance for the fiscal year 2015 with revenues of $2.36-2.41 billion which is line with estimates. "Our year is off to an encouraging start. We had solid first quarter results and made meaningful progress on our business model transition with the addition of over 89,000 subscriptions. Continued strength in our suites and Architecture, Engineering and Construction (AEC) business segment, strong demand in Asia Pacific (APAC), and solid performance in our Manufacturing business drove financial results above our expectations. While we experienced strong growth in our cloud and desktop subscriptions (rental), strong growth in maintenance subscriptions was the primary driver behind the increase in total subscriptions, as expected..."

Applied Materials (AMAT) reported second quarter earnings of $0.28 per share, excluding non-recurring items, which is line with estimates, while revenues rose 19.3% year/year to $2.35 billion which is in line with estimates. Applied generated orders of $2.63 billion, up 15% from the prior quarter led by increases in Display and Silicon Systems. Net sales of $2.35 billion were up 7% sequentially led by growth in Silicon Systems. Non-GAAP adjusted gross margin increased 170 basis points from the prior quarter to 44.2%. The company issued guidance for the third quarter with EPS of $0.25-0.29 which is in line with estimates and revenues of (5)-0% QoQ to approximately $2.24-2.35 vs. $2.31 billion which is line with estimates. Backlog grew 12% sequentially to $2.74 billion including positive adjustments of $23 million, primarily related to EES re-bookings. Backlog composition by segment was: SSG 53%; AGS 24%; Display 17%; and EES 6%.