From Briefing.com: 4:20 pm : The major averages snapped their two-day losing streak with the Nasdaq Composite leading today's charge. The tech-heavy index rose 0.6%, while the S&P 500 advanced 0.5% with nine sectors posting gains.
Equity indices displayed opening strength, but the early advance was a bit shaky as the Russell 2000 (+0.1%) had a tough time keeping pace with the broader market. The small-cap index underperformed throughout the session, while the other key indices powered to new highs after the Federal Reserve released the minutes from the June FOMC meeting.
Most notably, the minutes revealed the belief among officials that investors have displayed too much complacency with regard to risk. Furthermore, the minutes indicated that the committee has discussed its exit strategy tools with the general expectation of a final $15 billion taper taking place in October if the current outlook holds up.
The subsequent rally in equities could likely be attributed to participants being encouraged by the relatively consistent language in the minutes. However, it was a bit striking to see a concurrent spike in Treasuries and gold futures.
The 10-yr note hovered on its session low ahead of the release, but reclaimed its entire loss in short order. As a result, the benchmark yield ended at 2.55% after being near 2.60% when the minutes crossed the wires. One could argue that this spike was also related to the consistent language in the minutes with participants viewing the status quo at the Fed as a sign that the central bank could fall behind on its growth forecast.
Elsewhere, gold futures spiked to $1329.00/ozt to register a solid 1.0% gain, suggesting some participants believe the Fed could be underestimating inflationary pressures given the apparent lack of urgency to move off the zero bound.
The consumer discretionary sector (+1.2%) spent the entire session in the lead thanks to support from restaurants and retail names. Interestingly, the retail sector appeared unaffected by cautious comments made by the CEO of The Container Store (TCS 24.80, -2.27). The specialty retailer tumbled 8.9% following its earnings miss while the CEO said the retail industry as a whole was in a 'funk.'
Unlike the discretionary sector, other top-weighted groups settled on a mixed note with respect to the broader market. Health care (+0.4%) and technology (+0.5%) ended essentially in line with the S&P 500, while financials (+0.3%) and industrials (+0.2%) were limited to slim gains.
The modest uptick among industrials masked the relative strength of transport stocks. The Dow Jones Transportation Average rose 0.5% with 16 components settling higher. Matson (MATX 28.99, +1.64) was a standout, surging 6.0% after BB&T upgraded the stock to 'Buy' from 'Hold.' Airlines also displayed broad strength following positive monthly data from American Airlines (AAL 41.98, +1.73).
On the downside, the utilities sector (-0.2%) was the lone decliner following two days of relative strength.
Participation was below average with 557 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which rose 1.9% to follow last week's downtick of 0.2%.
Tomorrow, weekly initial claims will be reported at 8:30 ET (Briefing.com consensus 311K), while the Wholesale Inventories report for May will cross the wires at 10:00 ET (consensus 0.5%).
S&P 500 +6.7% YTD
Nasdaq Composite +5.8% YTD
Dow Jones Industrial Average +2.5% YTD
Russell 2000 +0.8% YTD
DJ30 +78.99 NASDAQ +27.57 SP500 +9.12 NASDAQ Adv/Vol/Dec 1516/1.62 bln/1209 NYSE Adv/Vol/Dec 1755/557.1 mln/1274 3:35 pm :
Precious metals traded higher ahead of today's release of the latest FOMC minutes from the June meeting at 14:00 ET.
Aug gold traded as high as $1327.90 per ounce and settled with a 0.6% gain at $1324.40 per ounce.
Sep silver pulled back from a session high of $21.22 per ounce set in early morning action. It brushed a session low of $21.04 per ounce and settled with a 0.2% gain at $21.07 per ounce.
Both gold and silver popped to their respective HoD of $1333.40 per ounce and $21.28 per ounce in recent electronic trade and are currently trading slightly below those levels.
Aug crude oil trended lower in negative territory today as inventory data and reports that the El Sharara oil field in Libya was restarted put pressure on prices.
Although crude oil inventories for the week ending July 4 fell by 2.37 mln barrels when consensus called for a draw of 1.7-2.2 mln barrels, gasoline inventories grew 0.579 mln barrels (a draw of 0.2-0.4 mln barrels was anticipated). The energy component pulled back from its session high of $102.91 per barrel set at pit trade open and traded as low as $102.00 per barrel. Unable to find buying support, it settled with a 1.1% loss at $102.24 per barrel.
Aug natural gas rose to a session high of $4.23 per MMBtu but slipped back into negative territory in afternoon action. It settled 0.7% lower at $4.17 per MMBtu, just above its session low of $4.16 per MMBtu.
12:42 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
AA (15.59 +4.98%): Beat quarterly EPS by $0.06 ($0.18 ex items vs $0.12 estimate), revs fell 0.2% yoy to $5.84 bln vs $5.65 bln estimate; target raised to $17 from $15 at Stifel; target raised to $18.50 from $15 at JP Morgan
AMX (21.75 +4.87%): Co confirmed that it has resolved to to reduce its national market share in the Mexican telecommunications market under fifty percent in order to cease being a preponderant economic agent, under the terms of the Constitution of the United Mexican States and its implementing legislation
AAL (41.65 +3.45%): Reported June total revenue passenger miles of 19.9 bln, up 1% from prior year; co sees Q2 consolidated passenger revenue per available seat mile +5.5-6.5% (raised from +4-6%)
Large Cap Losers
GRMN (57.11 -5.81%): Downgraded to Undperform from Sector Perform at Pacific Crest
MU (32.38 -2.26%): Hearing mentioned cautiously at tier 1 firm on speculation that competitor Samsung (SSNLF) is increase its production of DRAM
POT (36.45 -2.23%): Downgraded to Neutral from Overweight at JP Morgan
Mid Cap Gainers
BFR (13.32 +5.80%): Strength in Argetinian stocks: BMA, TEO also lower
BBRY (11.44 +4.59%): Mentioned positively in blog articles; continued upward momentum following slight decline seen yesterday
SIG (112.1 +3.02%): Resumed with an Overweight at JP Morgan
Mid Cap Losers
HCSG (28.32 -6.10%): Missed quarterly EPS by $0.02 ($0.20 vs $0.22 estimate), revs rose 16.7% yoy to $319.3 mln vs $321.99 mln estimate
SLXP (131.21 -4.41%): To combine with Cosmo Technologies; upon completion of the merger, shareholders of Salix are expected to own slightly less than 80% of the ordinary shares of the company
MSM (89.53 -4.12%): Reported Q3 EPS of $1.06 ex items (in-line), revs rose 13.1% yoy to $720.5 mln vs $728.51 mln estimate and $720-732 mln guidance; sees Q4 EPS of $0.98-1.02 ex items vs $1.06 estimate, revs of $718-730 mln vs $729.16 mln estimate
11:54 am Relative sector weakness (:TECHX) : Sectors underperforming the S&P in recent trade include: Housing XHB, Bank KBE, Reg Bank KRE, Finance XLF.
11:49 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (75) outpacing new lows (34) (:SCANX) : Stocks that traded to 52 week highs: AA, AAME, AEM, AGII, AGX, ALB, AN, AWH, AWRE, AZC, BFR, BLL, BMA, BMO, CAM, CCK, CENX, CL, CMP, CNBKA, CODE, COO, CTAS, CXO, DDS, DMLP, EDN, ENTG, ESS, FCX, FNV, FSM, GA, GGAL, GILD, GOLD, GPRE, HBM, HOT, HT, KALU, KMX, LABL, LRCX, LSG, LTS, MATX, MERC, MITSY, NEP, NOV, NTT, PAAS, PAM, PES, PFG, PPC, PRE, RAI, RE, RY, SCOK, SHLM, SJR, ST, SUSP, SYA, TAHO, TARO, TEO, TRP, WLDN, WRI, WYN, YPF
Stocks that traded to 52 week lows: AEGR, ARO, AXTI, BEBE, BECN, BTN, CCH, CMCT, CNHI, ESI, GIMO, GKNT, HIVE, ISNS, KITE, LL, MCP, MELA, MKTX, NAUH, NNA, OIBR, OIBR.C, PBPB, PRKR, PT, RXII, SGNL, SIMG, TCCO, TCS, TROV, VGGL, XXIA
ETFs that traded to 52 week highs: EPU, PALL
ETFs that traded to 52 week lows: JJG
8:42 am Gapping down (:SCANX) : Gapping down
In reaction to disappointing earnings/guidance: GIMO -31.5%, TCS -14.3%, SIMG -10%, MSM -3.6%, BOBE -1.2%, IMOS -0.9%
MRVL -2.7% (downgraded to Underperform from Perform at Oppenheimer),
,BRCM +1% (upgraded to Outperform from Perform at Oppenheimer),
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