From Briefing.com: 4:10 pm : The stock market ended the Tuesday session on a modestly higher note with participants gearing up for the latest policy directive from the FOMC, which will be released on Wednesday afternoon.
Small- and mid-cap stocks led the way with the Russell 2000 and S&P Mid Cap 400 climbing 0.7% and 0.8%, respectively. Meanwhile, the S&P 500 added 0.2% with five sectors posting gains.
Overall, cyclical groups did the bulk of the grunt work as five of six growth-sensitive sectors advanced. Financials (+0.9%) seized the lead at the start of the session and never looked back. Top-weighted components like Bank of America (BAC 15.59, +0.31) and Morgan Stanley (MS 32.50, +0.79) posted respective gains of 2.0% and 2.5%, while the entire sector extended its June advance to 1.9%.
Financials notwithstanding, gains in other areas were much more subdued as the second-best sector of the day-consumer discretionary-added just 0.3%. Retailers contributed to the strength with the SPDR S&P Retail ETF (XRT 86.28, +0.74) climbing 0.9%, while shares of Netflix (NFLX 443.65, +13.39) jumped 3.1% amid reports indicating lawmakers are finalizing a proposal that would ban internet fast lanes.
Also of note, the technology sector (+0.2%) contributed to the outperformance of the Nasdaq Composite (+0.4%), but it is worth mentioning that the bulk of the strength came from high-beta chipmakers. The PHLX Semiconductor Index jumped 0.7% as 25 of its 30 components finished in the green.
Although most growth-oriented sectors posted gains, that was not the case with the energy space (-0.2%). The sector trimmed its loss into the close, but could not turn positive as its top-weighted listing-ExxonMobil (XOM 102.42, -0.50) weighed. Shares of ExxonMobil fell 0.5%, while crude oil slumped into the pit close, diving 0.6% to $106.28/bbl.
Meanwhile, the other commodity-related sector, materials (+0.2%), received support from steelmakers and miners. The Market Vectors Steel ETF (SLX 46.55, +0.41) rose 0.9% and Market Vectors Gold Miners ETF (GDX 24.12, +0.14) added 0.6% even as gold futures retreated.
The yellow metal slipped 0.3% to $1271.80/ozt, but still ended above its pre-CPI levels. Gold traded at $1265 ahead of the report and fell to $1260 immediately after, before spending the remainder of the day in a slow climb.
On the fixed income side, Treasuries fell to lows following this morning's data and continued their retreat into the close. The 10-yr yield rose five basis points to 2.65%.
Participation was well below average with less than 600 million shares changing hands at the NYSE.
Economic data was limited to May housing starts/building permits and CPI:
Housing starts fell 6.5% in May to 1.001 million from a downwardly revised 1.071 million (from 1.072 million) in April. The Briefing.com consensus expected housing starts to fall to 1.028 million. Multifamily construction fell 7.6% to 376,000. There is still room for more declines over the next few months. The bigger concern was the trend in single-family construction. That type of construction is normally stable, but these starts fell 5.9% in May to 625,000. That was the lowest level since 589,000 single-family homes were started in February. Hopefully, this was just a one-month blip but it warrants closer evaluation.
Consumer prices increased 0.4% in May, up from a 0.3% increase in April. That was the largest increase since February 2013. The Briefing.com consensus expected the CPI to increase 0.2%.
Contrary to the trends in the PPI, both food and energy prices contributed positively to overall consumer price growth in May.
Food prices increases accelerated in May. After increasing by 0.4% for each of the last three months, prices rose 0.5% in May. That was the largest increase since August 2011. Food at home prices rose 0.7%, the biggest increase since July 2011.
Energy prices increased 0.9% in May on a 2.3% increase in electricity costs and a 0.7% increase in gasoline costs. Some of this gain was due to seasonal credits that temporarily lowered electricity prices in California in April and returned to normal in May.
Excluding food and energy, core CPI increased 0.3% in May after increasing 0.2% in both March and April. That was the largest increase in core prices since August 2011. The consensus expected these prices to increase 0.2%.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while Q1 Current Account Balance (Briefing.com consensus -$97.80 billion) will cross the wires at 8:30 ET. Lastly, the FOMC will release its latest policy directive at 14:00 ET.
S&P 500 +5.1% YTD
Nasdaq Composite +3.9% YTD
Dow Jones Industrial Average +1.4% YTD
Russell 2000 +1.0% YTD
DJ30 +27.48 NASDAQ +16.13 SP500 +4.21 NASDAQ Adv/Vol/Dec 1924/1.68 bln/846 NYSE Adv/Vol/Dec 1908/585.6 mln/1138 3:35 pm :
Crude oil sold off this afternoon and finished the day near its low for the day. July crude closed $0.60 lower at $106.28/barrel
Gold consolidated in afternoon trade following its morning rally and finished the day $3.50 lower at $1271.80/oz
Silver, on the other hand, continued to inch higher and ended today's session one penny higher at $19.73/oz.
Natural gas hit a new HoD of $4.74 early in afternoon trade. It has since pulled back and finished one cent higher at $4.71/MMBtu
Copper fell as low as $3.04.lb this morning and finished one cent higher at $3.06/lb
5:04 pm AES announces it reached an agreement to sell majority of its solar business for up to $207 mln and expects to receive ~$50 mln in proceeds from previously announced Google investment in Mount Signal (AES) : Co announced that it has entered into a definitive agreement with SunEdison (SUNE) to sell its 50% stake in 336 MW of solar photovoltaic (PV.V) projects owned by Silver Ridge Power, LLC (Silver Ridge), a joint venture between AES and Riverstone Holdings LLC. Under the agreement, AES will sell its interest in solar PV projects in operation and under development in Europe, India and the United States for an equity purchase price of $165 million.
SunEdison also has an option to acquire AES' 50% ownership in 130 MW of solar PV projects in Italy for an additional $42 million by August 2015. This agreement does not include the sale of AES' 50% stake in the remaining 55 MW of solar PV projects in Puerto Rico and Spain.
In addition, as announced in October 2013, AES will receive approximately $50 million in proceeds from Google's tax equity investment in Silver Ridge's 266 MW Mount Signal project in California, which achieved commercial operation in April 2014.
These transactions were assumed in the Company's 2014 guidance and are expected to be modestly accretive in 2015 and beyond.
5:02 pm SunEdison and Riverstone to partner in Silver Ridge Power joint venture (SUNE) : Co has reached a definitive agreement to acquire a 50% ownership stake in Silver Ridge Power from a subsidiary of The AES Corporation (AES).
Through its ownership in the SRP joint venture, SunEdison will own 50% of (i) 336 MW (megawatt) of solar power plant operating projects and (ii) a 40% interest in the Tenaska Imperial Solar Energy Center West 183 MW solar power facility to be completed in 2016. SRP's assets include the currently operating 266 MW Mt. Signal solar project in California. The acquisition is expected to close in late June 2014, subject to customary closing conditions and receipt of regulatory approvals. Following the acquisition, the remaining 50% of SRP will continue to be held by an affiliate of Riverstone Holdings LLC. After closing, Riverstone and SunEdison expect the joint venture to contribute the Mt. Signal project to SunEdison's yieldco subsidiary. In addition, following completion of the Tenaska Imperial Solar Energy Center West project, and subject to customary closing conditions and receipt of regulatory approvals, SunEdison expects to acquire Riverstone's share of SRP's interest in Tenaska Imperial Solar Energy Center West and to contribute a total of a 40% interest in Tenaska Imperial Solar Energy Center West to SunEdison's yieldco subsidiary in 2016.
4:22 pm Adobe Systems beats by $0.07, beats on revs; Creative Cloud subscriptions above guidance (ADBE) : Reports Q2 (May) earnings of $0.37 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus Estimate of $0.30; revenues rose 5.7% year/year to $1.07 bln vs the $1.03 bln consensus.
Adobe exited Q2 with 2 million 308 thousand paid Creative Cloud subscriptions, an increase of 464K QoQ vs. guidance for the same QoQ increase as Q1 (405K).Creative Annualized Recurring Revenue grew to $1.20 billion, and total Digital Media ARR grew to $1.38 billion. Adobe Marketing Cloud quarterly revenue was $283 million, representing 23 percent year-over-year growth. 53 percent of Adobe's Q2 revenue was from recurring sources such as Creative Cloud and Adobe Marketing Cloud. The co repurchased ~2.6 million shares during the quarter, returning approximately $166 million of cash to stockholders.1:06 pm Notable movers of interest (:SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
SCHW (27.26 +5.33%): Strength in brokerage firms as Senate hearing on high frequency trading takes place: AMTD also higherTSLA (234.79 +4.53%): Continued strength following NY Governor Cuomo signing of legislation that allows Tesla to maintain its five currently licensed retail locations in New York StateVRX (120.76 +2.56%): Co held conference call to discuss potential acquisition of Allergan (AGN), believes AGN shareholders will vote in favor of the deal
Large Cap Losers ACMP (63.87 -4.05%): Downgraded to Neutral from Buy at Ladenburg Thalmann; target raised to $77 from $64 at WunderlichBSX (12.54 -2.94%): Co's CFO presented at the Wells Fargo Securities Healthcare Conference, said co will remain opportunistic with M&A and conduct share buybacksURI (102.35 -2.67%): Downgraded to Neutral from Buy at Longbow Mid Cap Gainers SCTY (64.72 +17.93%): To acquire Silveo, a solar technology and manufacturing company, for $200 mln upfront with earn-outs of up to $150 mlnMCRS (66.57 +15.35%): Seeing reports that Oracle (ORCL) may acquire the company in deal worth near $5 bln
ATHN (135.84 +6.02%): Initiated with a Buy at Stifel, target $155
Mid Cap Losers PE (22.65 -4.11%): Initiated with a Neutral at Goldman, JP Morgan, Global Hunter Securities (target $26), and Macquarie; initiated with an Outperform / Overweight at Wells Fargo, Raymond James, Credit SuisseWSTC (26.58 -3.94%): Downgraded to Equal-Weight from Overweight at Morgan Stanley; announced offering of $1 bln of senior notes due 2022QIWI (40.42 -2.88%): Priced offering of ~7.97 mln of Class B shares represented by ADSs at $40 per share
11:50 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (157) outpacing new lows (21) (:SCANX) : Stocks that traded to 52 week highs: ACMP, AGII, AGRX, AGTC, ALLE, AMKR, ANET, AP, ATML, ATVI, BIG, BPT, BPZ, CBSO, CDW, CHRW, CIO, CJES, CLDT, CLS, CMCM, CODE, CRT, CRZO, CSCD, CSTM, DAN, DLX, DOM, DPS, DRII, DVN, EA, ECF, EGN, ENL, ENR, ENV, ENZ, EQIX, ERF, ESTE, EXAS, FAF, FANG, FCS, FFG, FORM, FTK, FTNT, FUBC, GB, GIGA, GLNG, GLOP, GRC, GTIV, GWPH, HALL, HBI, HCC, HK, HOLX, HRB, HRTG, HSH, IDSA, IDTI, INT, IRF, ISIL, ITMN, ITT, JOE, KEX, LAZ, LGCY, LPL, LRCX, MEAS, MED, MEMP, MET, MGLN, MMYT, MPWR, MSCC, MSFT, MTRN, MTRX, MU, MVG, NFX, NGL, NJR, NRG, NWE, NYLD, OVTI, PAC, PANW, PAY, PNY, PTX, REDF, RFMD, RGC, RH, RMBS, RSG, RSPP, RTK, RUK, SBR, SD, SEMG, SGBK, SIG, SIMO, SIRO, SJT, SKM, SMCI, SMP, SN, SNDK, SPN, SPWR, STFC, STRP, SUNE, SUPN, SUSS, SYA, SYNA, THS, TKR, TQNT, TRGP, TRNX, TROX, TRW, TUES, TYC, UBIC, UHS, VAL, VDSI, WCN, WIN, WLB, WLFC, WR, WSBF, WWAV, XEC, Z
Stocks that traded to 52 week lows: ASPN, CHCI, DB, DCIX, DGSE, GRIF, HOV, IPCM, ISNS, LAYN, MEA, NILE, PGEM, PNRA, QKLS, QRM, RSH, SLRC, SYNC, UNTK, VRTA
ETFs that traded to 52 week highs: BNO, EWT, OIH, SMH, SOXX, XES, XOP
ETFs that traded to 52 week lows: none
11:44 am Solar sector continues to outperform in midday trade boosted by SCTY news and YGE earnings (TAN) : Solar names trading higher: DSTI +17.5%, SCTY +11.7% (Silevo news, see prior comments from conference call coverage), RGSE +8.4% (Sunetric deployed a 198.8 kilowatt photovoltaic system with automated curtailment and smart-grid controls at a popular beachfront resort on the island of Kauai in Hawaii.), YGE +8.2% (reported earnings), HSOL +7.5%, CSIQ +7.2%, SOL +7.1%, ASTI +6.6% (rallying on news that India is considering more tax incentives for solar households), JASO +6%, TSL +5.2%, DQ +5.2%, CSUN +5%, JKS +4.5%, SUNE +3.4%, SPWR +2.8%, FSLR +2.5%, TAN +2.5%, STPFQ +0.5%, EMKR +0.3%
11:17 am Violin Memory: Tata Technologies enters into strategic partnership with Violin Memory (VMEM) : Co announced that it has entered into a strategic reseller partnership with Tata Technologies. Tata Technologies will integrate and configure high-speed flash array solutions into their global product lifecycle management customer base looking to enhance the performance of their business critical applications.
Tata Technologies will be featuring Violin All Flash Array solutions at PLM World in Orlando, FL. June 16-19, Booth #7 and will be hosting a series of workshops on what users should and should not expect from this rapidly expanding high performance computing solution.
9:01 am SolarCity to acquire Silevo, solar technology and manufacturing company (SCTY) : SolarCity has signed a definitive agreement to acquire Silevo, a solar technology and manufacturing company whose modules have achieved a unique combination of high energy output and low cost. Mr. Musk and Messrs. Rive will host a conference call to discuss the proposed acquisition today at 10am ET.
EMCORE (EMKR) announced the introduction of the new Genesis XD multimedia matrix switch for small-to-large Enterprise connectivity applications.
8:05 am Cisco Systems announces intent to acquire Tail-f Systems; Cisco will pay ~$175 mln in cash and retention-based incentives in exchange for all shares of Tail-f (CSCO) : Co announced its intent to acquire privately held Tail-f Systems, a leader in multi-vendor network service orchestration solutions for traditional and virtualized networks. Tail-f's products help service providers and enterprise IT organizations easily and cost-effectively implement applications, network services and solutions across networking devices. Headquartered in Stockholm, Sweden, Tail-f's technology also helps reduce the time-to-market for network equipment vendors building equipment for agile, software-programmable networks.
Under the terms of the agreement, Cisco will pay ~$175 mln in cash and retention-based incentives in exchange for all shares of Tail-f. The acquisition of Tail-f is expected to be complete in the fourth quarter of fiscal year 2014.
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