From Briefing.com: 4:15 pm : The stock market ended the Wednesday session on a lower note with the Dow Jones Industrial Average (-0.6%) and Russell 2000 (-0.5%) leading the slide. The S&P 500 lost 0.4% with nine sectors in the red.
Equity indices spent the duration of the session in the red, while the Nasdaq (-0.1%) made a momentary appearance in the green. The tech-heavy index outperformed thanks to relative strength among chipmakers. However, the Nasdaq slumped back towards its low into the close as dip buyers were reluctant to step in and lift the overall market.
Today's retreat should not be all that surprising, considering the S&P 500 entered the session with a 4.2% gain since May 20. Meanwhile, the Russell 2000 began the day with an even more impressive 6.8% advance in that same timeframe.
With the major averages overextended on a short-term basis, the market was ready to take a step back at the sound of the first concerning headline and today's comments from the World Bank did the trick.
Specifically, the World Bank cut its 2014 global growth outlook to 2.8% from 3.2%, while also revising projections for several major economies. For instance, the growth forecast for the U.S. was lowered to 2.1% from 2.8%, while China's GDP expectations were taken down to 7.6% from 7.7%.
Fittingly, with growth concerns at the forefront, cyclical sectors like financials (-0.7%), industrials (-0.8%), and materials (-0.6%) saw noteworthy losses.
Most notably, industrials could not keep up with the broader market as defense contractors and transports weighed. Dow component Boeing (BA 134.10, -3.15) fell 2.3% after being downgraded to 'Sector Perform' at RBC Capital Markets. The stock pressured the PHLX Defense Index, which lost 1.1%.
Transports, meanwhile, underperformed for the second day in a row. All five airline stocks that make up the transportation average lost between 1.3% and 5.2% with United Continental (UAL 45.26, -2.50) posting the largest decline after Deutsche Lufthansa slashed its guidance.
Elsewhere, the financial sector suffered from widespread losses, but Bank of America (BAC 15.59, -0.33) underperformed its peers with a 2.1% decline in reaction to reports the bank's settlement negotiations with the Justice Department have hit a snag.
Also of note, the technology sector (-0.3%) ended just ahead of the broader market, but chipmakers displayed strength, which underpinned the Nasdaq. Micron (MU 30.99, +1.48) jumped 5.0% after receiving an upgrade from Bank of America/Merrill Lynch, while the broader PHLX Semiconductor Index rose 0.5%.
The Nasdaq also received an intraday boost from biotechnology, but the iShares Nasdaq Biotechnology ETF (IBB 249.03, -0.27) slumped into the close, ending little changed.
Similar to biotechnology, the health care sector (-0.1%) settled near its flat line, while other countercyclical sectors posted losses. The utilities sector was particularly weak (-1.3%) after Exelon (EXC 35.75, -1.41) announced a secondary share offering.
Treasuries climbed in the morning, but surrendered the bulk of their gains during the afternoon. The 10-yr yield slipped one basis point to 2.63%.
Participation remained well below average and today's 520 million shares represented the lowest NYSE floor volume of the year.
Economic data was limited to two reports. The weekly MBA Mortgage Index surged 10.3% to follow last week's 3.1% decline and the Treasury Budget for May showed a deficit of $130.00 billion, which followed the prior deficit of $138.70 billion.
Tomorrow, weekly initial claims (Briefing.com consensus 315K), May Retail Sales (consensus 0.7%), and May Import/Export Prices will be released at 8:30 ET, while the Business Inventories report for April (expected 0.4%) will cross the wires at 10:00 ET.
S&P 500 +5.2% YTD
Nasdaq Composite +3.7% YTD
Dow Jones Industrial Average +1.6% YTD
Russell 2000 +0.3% YTD
DJ30 -102.04 NASDAQ -6.06 SP500 -6.90 NASDAQ Adv/Vol/Dec 1056/1.65 bln/1648 NYSE Adv/Vol/Dec 1150/520.2 mln/1898
3:35 pm :
The dollar index remained in the red today, which helped provide price support is some commodities today
Crude oil futures finished the day flat with July crude ending at $104.39/barrel (up one cent)
Natural gas ended the day near its LoD, closing two cents lower at $4.51/MMBtu
Gold and silver consolidated after a morning sell-off. By the end of the day silver was unchanged at $19.23/oz and gold rose $1 to $1261.10/oz
Copper was in the red almost all day, ending one cent lower at $3.04/lb
4:35 pm Trina Solar announced that it closed the offering of 8,800,000 American Depositary Shares, each representing 50 ordinary shares of the Company, par value of US$0.00001 per share, at US$11.00 per ADS (TSL) :
TSL received aggregate net proceeds of approximately US$92.9 million after deducting discounts and commissions but before offering expenses from the ADS Offering.
Trina Solar has also granted the underwriters in the ADS Offering a 30-day option to purchase up to an additional 1,320,000 ADSs in connection with the ADS Offering to cover over-allotments.
The Company also closed the concurrent offering of US$150 million in aggregate principal amount of convertible senior notes due 2019 on June 11, 2014.
Trina Solar received aggregate net proceeds of approximately US$146.3 million after deducting discounts and commissions but before offering expenses from the Note Offering. Trina Solar used approximately US$52.3 million of the net proceeds from the Notes Offering to pay the aggregate premium of zero-strike call options that Trina Solar entered into with one or more of the initial purchasers.
Deutsche Bank Securities Inc., Barclays Capital Inc., J.P. Morgan Securities LLC and Goldman Sachs (Asia) L.L.C. acted as joint book-running managers for the ADS Offering.
4:05 pm SunPower announced that it has closed the previously announced private offering of $400 million aggregate principal amount of its 0.875 percent senior convertible debentures due 2021 (SPWR) :
Total Energies Nouvelles Activites USA, a subsidiary of Total S.A. that owns approximately 60 percent of SunPower's outstanding common stock, purchased $250 million aggregate principal amount of the debentures included in this offering.
SunPower intends to use the net proceeds from the offering for general corporate purposes, including, but not limited to, retirement of existing indebtedness, pursuing its HoldCo strategy, capital expenditures and working capital.
The debentures will pay interest semi-annually on June 1 and December 1 of each year, beginning on December 1, 2014, at a rate of 0.875 percent per annum, and will mature on June 1, 2021, unless earlier converted, redeemed or repurchased. The debentures will be convertible into shares of SunPower's common stock at any time based on an initial conversion rate of 20.5071 shares of SunPower's common stock per $1,000 principal amount of debentures (which is equivalent to an initial conversion price of approximately $48.76 per share of SunPower's common stock), representing a conversion premium of approximately 42.5 percent over the closing sale price of $34.22 per share of SunPower's common stock on The NASDAQ Global Select Market on June 5, 2014.
4:02 pm Vitesse announced that it is offering to sell shares of its common stock in an underwritten public offering; Needham & Company is acting as the sole bookrunning manager of the offering (VTSS) : Co announced that it is offering to sell shares of its common stock in an underwritten public offering. Needham & Company is acting as the sole bookrunning manager of the offering. Craig-Hallum Capital Group, The Benchmark Company, and Northland Securities, are acting as co-managers.
The offering is expected to price on or about Thursday, June 12, 2014. Vitesse intends to use the net proceeds from the offering for working capital and general corporate purposes.
On the upside, chipmakers are seeing broad strength, which has helped the Nasdaq return to its flat line. Micron (MU 31.39, +1.90) is higher by 6.4% after receiving an upgrade from Bank of America/Merrill Lynch, while the broader PHLX Semiconductor Index trades up 0.9%.
Large Cap Gainers
MU (31.14 +5.54%): Upgraded to Buy from Underperform at BofA/Merrill; target raised to $50 from $30 at Credit Suisse
INFY (54.54 +4.28%): Strength ahead of co's Annual General Meeting scheduled for June 14, 2014, Economic Times reporting that investors are expecting a "major announcement"
APC (106.95 +2.92%): Seeing rumors that Exxon Mobile (XOM) may make seek to acquire the company
Large Cap Losers
UAL (46.13 -3.41%): Weakness in major airline companies following weak guidance from Deutsche Lufthansa: DAL also lower
ORAN (16.51 -2.99%): Reuters reporting that French mobile company Bouygues Telecom is no longer in talks with Orange as a potential acquirer
HLT (22.85 -2.45%): Filed for 90 mln share common stock offering by selling shareholders
Mid Cap Gainers
SYNA (83.43 +25.42%): Sees Q4 revs of $300-310 mln (raised from $275-295) vs $285.95 mln estimate; sees FY14 revs of $933-943 mln vs $918.5 mln estimate; target raised to $86 from $83 at Stifel; target raised to $90 from $80 at Craig Hallum
ULTA (97.34 +14.1%): Beat quarterly EPS by $0.03 ($0.77 vs $0.74 estimate), revs rose 22.5% yoy to $713.8 mln vs $699.74 mln estimate; comparable store sales increased 8.7% vs +5-7% guidance; sees Q2 EPS of $0.78-0.83 vs $0.82 estimate, revs of $706-717 mln vs $703.20 mln estimate; reaffirmed FY15 guidance
GTAT (17.12 +4.77%): Strength attributed to positive newsletter
Mid Cap Losers
UNFI (63.24 -7.67%): Reported Q4 EPS of $0.73 (in-line), revs rose 13.8% yoy to $1.78 bln vs $1.78 bln estimate; sees FY14 EPS of $2.47-2.50, revs of $6.73-6.77 bln vs $6.75 bln estimate
STAY (22.81 -3.84%): Announced offering of 21 mln paired shares by selling stockholders; each paired share consists of a share of common stock and a share of Class B common stock of ESH Hospitality, which are attached and trade together as paird shares
HXL (41.88 -3.3%): Hearing cautious mention from Tier 1 firm following Airbus (EADSY) order cancellation
12:27 pm NVIDIA pushes back toward its early high at 19.40, its multi-year high from April is slightly above at 19.46 (NVDA) :
12:11 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (112) outpacing new lows (14) (:SCANX) : Stocks that traded to 52 week highs: AET, AGRX, AGTC, ALDR, AMKR, APC, ARX, ATML, ATVI, BCEI, BDSI, BFR, BMA, BNS, BTE, CAVM, CBPO, CI, CIG, CLR, CMCM, CODE, COP, CPG, CPK, CRZO, CUZ, CXO, DCM, DOM, DPS, DVN, DYN, EA, EPE, FCNCA, FFNM, FFNW, FORM, GB, GLNG, GMK, GTIM, HDS, HES, HNNA, HRB, HRTG, HSP, IDTI, IMO, IRF, JD, JNJ, KANG, KLIC, LOAN, LPL, LPNT, MCHP, MEAS, MHFI, MLM, MMI, MMYT, MNDO, MO, MOH, MPWR, MRO, MSCC, MSL, MTR, MTRX, MU, NTCT, NVGS, NVSL, OMER, ORCL, OVTI, PAHC, PPG, PPS, QADA, REIS, RFMD, RMBS, RRMS, RVSB, SAIC, SANM, SJT, STFC, SU, SWC, SWHC, SWKS, SYNA, TAP, TEDU, TI, TI.A, TLLP, TQNT, TSU, TTGT, UNTY, VIPS, VSH, VTL, WLL
Stocks that traded to 52 week lows: ARCP, CLF, COOL, CPSL, DCIX, FRSH, GLPI, ISNS, KOSS, MGT, MIXT, SC, TBBK, VII
ETFs that traded to 52 week highs: EWC, NIB, PALL, SMH, SOXX
ETFs that traded to 52 week lows: none
RMBS +7.2%, (also signs comprehensive license agreement with Qualcomm (QCOM))
,MU +2.7% (upgraded to Buy from Underperform at BofA/Merrill),MRVL +1.1% (upgraded to Buy from Neutral at Nomura),AMZN +1% (added to Conviction Buy list at Goldman),SNDK +1% (upgraded to Buy from Underperform at BofA/Merrill),
8:01 am Vishay Intertechnology announces acquisition of Holy Stone Polytech Co., Ltd., a Tantalum Capacitor company for ~$21 mln (VSH) : Co announced the acquisition of Holy Stone Polytech, a Japanese manufacturer of tantalum capacitors, from Holy Stone Enterprise. The purchase price was ~$21 mln subject to customary post-closing adjustments.
