Sector Investing

[ReturntoSender]

From Briefing.com: 4:15 pm : The major averages posted modest gains of Thursday after the Federal Open Market Committee announced another $10 billion taper, which was widely expected. The S&P 500 climbed to a new record closing high at 1956.98, adding 0.8% with all ten sectors posting gains.

Equity indices spent the first half of the session near their flat lines as market participants held pat ahead of the afternoon statement from the Fed. The $10 billion reduction lowered the size of monthly asset purchases to $35 billion, while the remainder of the policy statement struck a familiar tone.

The Fed reiterated its commitment to the current level of interest rates, saying rates are likely to remain low for a considerable time after quantitative easing ends. Furthermore, the FOMC released its economic projections, but those were not too different from the prior forecast either. According to the projections, the Fed expects the jobless rate to be between 6.0% and 6.1% at the end of the year after calling for a rate between 6.1% and 6.3% in its last set of projections.

During the press conference, Fed Chair Yellen justified the taper by saying the economy is on track to meet its objectives and that the GDP contraction observed in the first quarter was an aberration. Ms. Yellen also noted that inflation remains below the 2.0% objective, which could lead to broader risks.

The utilities sector (+2.2%) finished in the lead after spending the entire session atop the leaderboard. Thanks to the solid gain, the sector extended its June advance to 2.7%, while also pushing its year-to-date gain to 14.1%.

Elsewhere among countercyclical sectors, telecom services (+0.5%) lagged, while consumer staples (+1.2%) and health care (+0.8%) finished ahead of the broader market.

Meanwhile, the six cyclical sectors ended mixed when compared to the S&P 500. Yesterday's leading group-financials-advanced 0.7%, but could not keep up with the broader market. That was also the case with technology (+0.5%) and industrials (+0.5%).

It is worth mentioning that the industrial sector was held back by defense contractors (PHLX Defense Index +0.2%), while transports rallied broadly after FedEx (FDX 148.95, +8.64) reported better than expected results. The stock surged 6.2%, which also gave a boost to UPS (UPS 102.79, +1.18). For its part, the Dow Jones Transportation Average jumped 1.5%.

Also of note, the weakest sector of the year-consumer discretionary (+0.8%)-trimmed its 2014 loss to 0.5%. Shares of Amazon.com (AMZN 334.38, +8.76) played a part in today's outperformance, rallying 2.7% after the company unveiled a smartphone, which will be available in five weeks.

The afternoon rally to new highs saw some participants lift their hedges, which sent the CBOE Volatility Index (VIX 10.60, -1.46) to a new low for the year.

Treasuries, meanwhile, held slim gains into the afternoon and climbed to new highs after the FOMC statement crossed the wires. The 10-yr note added half a point, lowering its yield to 2.59%.

Participation remained on the light side with just over 610 million shares changing hands at the NYSE.

Economic data was limited to the weekly MBA Mortgage Index and Current Account data for Q1:

The MBA Mortgage index fell 9.2% to follow last week's 10.3% increase.
The current account deficit for the first quarter totaled $111.20 billion while the Briefing.com consensus expected the deficit to hit $97.80 billion. The fourth quarter deficit was revised to $87.30 billion from $81.10 billion.

Tomorrow, weekly initial claims (Briefing.com consensus 313K) will be released at 8:30 ET, while the June Philadelphia Fed survey (consensus 13.4) and May Leading Indicators (consensus 0.5%) will cross the wires at 10:00 ET.

S&P 500 +5.9% YTD
Nasdaq Composite +4.5% YTD
Dow Jones Industrial Average +2.0% YTD
Russell 2000 +1.8% YTD

DJ30 +98.13 NASDAQ +25.60 SP500 +14.99 NASDAQ Adv/Vol/Dec 1748/1.73 bln/1078 NYSE Adv/Vol/Dec 2244/613.9 mln/814 3:30 pm :

Aug gold dipped to a session low of $1269.00 per ounce moments before equity markets opened but recovered into positive territory in afternoon action. The yellow metal settled 60 cents higher at $1272.40 per ounce ahead of the latest policy statement from the FOMC.
Gold is currently trading 0.1% higher in electronic trade following the Fed's announcement that it will taper its asset purchases by $10 bln to a total of $35 bln and it would keep rates at low levels, as widely expected.
July silver trended higher in choppy fashion as it came off its session low of $19.70 per ounce in morning action. It eventually settled with a 0.2% gain at $19.77 per ounce.
July crude oil touched a session high of $106.85 per barrel shortly after floor trade opened but slipped into negative territory following weaker-than-anticipated inventory data that showed a draw of 0.579 mln barrels when a draw of 0.7-0.8 mln barrels was anticipated.
The energy component brushed a session low of $105.72 per barrel and settled with a 0.3% loss at $105.99 per barrel.
July natural gas trended lower after pulling back from a session high of $4.76 per MMBtu set in early morning pit trade. Unable to regain momentum, it settled 1.1% lower at $4.66 per MMBtu.

5:05 pm Cisco Systems and GOWEX announce global strategic relationship to boost smart Wi-Fi connectivity solutions for cities (CSCO) : GOWEX and Cisco announced that the two companies will promote a comprehensive smart Wi-Fi connectivity solution for cities and their citizens. GOWEX will become a Cisco Smart+Connected Communities (S+CC) global strategic partner. This strategic relationship will further the efforts of new Smart Cities projects in the major world regions in the coming years. In addition, it will allow for faster development on a combined smart Wi-Fi connectivity solution, to generate significant business opportunities.

4:07 pm Jabil Circuit beats by $0.02, beats on revs; guides Q4 EPS in-line, revs in-line; reaffirms FY15 EPS guidance (JBL) : Reports Q3 (May) loss of $0.06 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of ($0.08); revenues fell 9.8% year/year to $3.79 bln vs the $3.6 bln consensus.

Co issues in-line guidance for Q4, sees EPS of ($0.10)-0.10 vs. $0.02 Capital IQ Consensus Estimate; sees Q4 revs of $3.7-3.9 bln vs. $3.79 bln Capital IQ Consensus Estimate.

Co reaffirms guidance for FY15, sees EPS of $1.65-1.95 vs. $1.74 Capital IQ Consensus Estimate.

1:04 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

ADBE (72.42 +7.23%): Beat quarterly EPS by $0.07 ($0.37 ex items vs $0.30 estimate), revs rose 5.7% yoy to $1.07 bln vs $1.03 bln estimate; sees Q3 EPS of $0.22-0.28 vs $0.27 estimate, revs of $0.975-1.025 bln vs $1.02 bln estimate; target raised to $85 from $80 at UBSAPD (129.72 +6.68%): Confirmed that Seifi Ghasemi has been named its new chairman, president and chief executive officer, effective July 1FDX (147.28 +4.97%): Beat quarterly EPS by $0.10 ($2.46 vs $2.36 estimate), revs rose 3.5% yoy to $11.8 bln vs $11.64 bln estimate; sees FY15 EPS of $8.50-9.00 vs $8.73 estimate

Large Cap Losers CAG (30.24 -7.95%): Sees Q4 EPS of $0.55 vs $0.62 estimate, citing a 7% quarterly volume decline for the Consumer Foods segment; downgraded at KeyBancCOH (39.27 -3.78%): Hearing mentioned cautiously at UBS ahead of analyst day scheduled for June 19, 2014ACMP (60.19 -3.14%): Continued weakness following recent analyst downgrades

Mid Cap Gainers NMBL (29.88 +7.17%): Upgraded to Overweight from Equal-Weight at Morgan StanleySCTY (67.6 +4.76%): Seeing reports that co plans to build a New York state solar plant; target raised to $80 from $65 at ROTH CapitalGLNG (56.54 +3.95%): Target raised to $59 from $52 at Evercore; unusual option activity in the stock discussed on CNBC

Mid Cap Losers
NGL (42.73 -6.44%): Priced public offerin gof 8 mln common units representing limited partner interests at $43.85 per common unit
ATU (34.73 -4.32%): Reported Q3 EPS of $0.63 ex items (in-line), revs rose 9.9% yoy to $378.2 mln vs $376.81 mln estimate; sees Q4 EPS of $0.48-0.53 vs $0.61 estimate, revs of $350-360 mln vs $373.39 mln estimate
ALR (35.25 -3.16%): Co announced that it has elected not to proceed at this time with its previously announced plans to pursue an initial public offering in the United Kingdom of the ordinary shares of BBI Diagnostics

12:12 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (137) outpacing new lows (21) (:SCANX) : Stocks that traded to 52 week highs: ADBE, AGTC, AMKR, AMTX, AOSL, APA, APD, ARPI, ASX, ATVI, AXDX, BANF, BCEI, BDSI, BP, CBSO, CDW, CENT, CENX, CHRW, CHSP, CIFC, CIG, CLS, CMCM, CMRE, CNC, CNSL, COP, CORE, CRT, CRZO, CSTM, CSX, CTRP, CVX, DPS, DRII, DVN, EA, ECA, ENR, ERF, ETR, FANG, FDX, FORM, GA, GB, GBR, GLNG, GLOP, GMLP, GPK, GST, GTIV, GWR, HCLP, HITT, HRTG, IFF, IIN, ITMN, KANG, KFS, KTWO, LAD, LHO, LO, MEMP, MET, MGLN, MJN, MKL, MKTAY, MMC, MMYT, MPLX, MU, MVG, NFX, NJR, NOK, NRG, NVGS, NWE, OPEN, OSUR, PCG, PCYG, PGH, PTEN, PTR, RAI, REX, RGC, RH, RNR, RSG, RSPP, RTK, SABR, SBR, SD, SEMG, SIAL, SIG, SKM, SMCI, SMLP, SN, SNDK, SNP, SPN, SRE, SYA, SYRG, TAX, TEDU, TGLS, THG, TPLM, TUES, TWTC, UBIC, UIHC, VLP, VYFC, WBKC, WGP, WLFC, WLK, WLL, WR, WRB, WSBF, WWAV

Stocks that traded to 52 week lows: ASPN, AXTI, CCCR, CLRX, COOL, DCIX, DGSE, GLPI, GRVY, LODE, MEA, NILE, PGEM, PNRA, RSH, SGA, SPHS, TRVN, VHI, VRTB, XNY

ETFs that traded to 52 week highs: BNO, DIG, DVY, EWC, IEO, IGE, IXC, IYE, OIH, SOXX, UGA, XLE, XOP

ETFs that traded to 52 week lows: none

9:08 am Nokia to repurchase own shares in line with its capital structure optimization program (NOK) : Co has resolved to commence repurchases of shares under the authorization given by the Nokia Annual General Meeting held on June 17, 2014. The Board resolved to repurchase a maximum of 370 million Nokia shares, however up to an equivalent of EUR 1.25 billion. The repurchases will commence earliest after publication of Nokia's second quarter 2014 results, which are scheduled for publication on July 24, 2014.

Analyst comments: ISIL -3% (downgraded to Hold from Buy at Needham), SPWR -1.7% (downgraded to Neutral from Overweight at JP Morgan), AA -0.6% (Stifel lowers Q2 estimates on lower aluminum prices), GNC -0.5% (downgraded to Neutral from Overweight at JP Morgan).

EMCORE (EMKR) has entered into a new long-term supply agreement with Space Systems/Loral to manufacture and deliver high-efficiency, multi-junction solar cells for SSL's satellite programs.