From Briefing.com: 4:10 pm : The stock market began the last week of July on a quiet note with the S&P 500 ending less than a point above its flat line. Like the benchmark index, the Dow Jones Industrial Average (+0.1%) also posted a slim gain, while the Russell 2000 (-0.5%) and Nasdaq Composite (-0.1%) lagged throughout the session.
The major averages were awakened from their weekend slumber with an opening retreat that pressured the S&P 500 below its 20-day moving average (1975). Even though the index dipped early, only two sectors-consumer staples (-0.5%) and industrials (-0.5%)-displayed noteworthy weakness that persisted into the close.
Meanwhile, most of the remaining sectors kept pace with the broader market and climbed to highs as the afternoon wore on. The consumer discretionary sector (+0.2%) was an early laggard, but ended among the leaders with help from the likes of Netflix (NFLX 424.66, +2.80) and Priceline.com (PCLN 1239.29, +11.51). Furthermore, the sector drew strength from the retail industry, where Family Dollar (FDO 75.74, +15.08) agreed to be acquired by Dollar Tree (DLTR 54.87, +0.65) for $74.50/share, representing a 22.8% premium to Friday's closing price.
M&A activity was also the focus in another influential sector-technology (+0.2%)-with Zillow (Z 160.32, +1.46) acquiring Trulia (TRLA 65.04, +8.69) for $3.50 billion in stock, which represents roughly a 25.3% premium to Friday's closing price.
Elsewhere among tech shares, the largest sector component-Apple (AAPL 99.02, +1.35)-rallied 1.4%, but high-beta chipmakers were not nearly as fortunate. The PHLX Semiconductor Index shed 0.1% after being down as much as 1.3% during the opening hour of action.
Similar to chipmakers, biotech stocks struggled throughout the session, and while their underperformance weighed on the Nasdaq Composite, it had little impact on the health care sector. The iShares Nasdaq Biotechnology ETF (IBB 251.91, -2.15) lost 0.9%, while the health care sector tacked on 0.1%.
Like health care, countercyclical telecom services (+0.5%) and utilities (+1.5%) also finished in the green. Notably, the utilities sector climbed throughout the session to extend its year-to-date advance to 13.3%.
On the fixed income side, the 10-yr note made a brief appearance in the green when equities were on their lows, before sliding to a fresh low ahead of the close. The benchmark note shed four ticks with its yield climbing two basis points to 2.48%.
Participation was below average with less than 580 million shares changing hands at the NYSE.
Economic data was limited to the Pending Home Sales report for June:
Pending home sales fell 1.1% in June, which was worse than the 0.8% decrease forecast by the Briefing.com consensus
The May reading was revised down to 6.0% from 6.1%
Tomorrow, the Case-Shiller 20-City Index for May (Briefing.com consensus 10.0%) will be released at 9:00 ET, while July Consumer Confidence (consensus 85.6) will cross the wires at 10:00 ET. On the earnings front, BP (BP 50.64, -0.28), Honda Motor (HMC 35.18, +0.19), Pfizer (PFE 30.10, -0.09), and UPS (UPS 102.66, -0.91) will report their results ahead of the opening bell.
S&P 500 +7.1% YTD
Nasdaq Composite +6.4% YTD
Dow Jones Industrial Average +2.5% YTD
Russell 2000 -2.1% YTD
DJ30 +22.02 NASDAQ -4.65 SP500 +0.57 NASDAQ Adv/Vol/Dec 999/1.66 bln/1755 NYSE Adv/Vol/Dec 1323/576.4 mln/1720 3:30 pm :
Aug gold chopped around near the unchanged level today in a tight range between $1301.80 per ounce and $1305.80 per ounce. Unable to gain momentum, it settled just 20 cents higher at $1303.20 per ounce.
Sep silver slipped into negative territory in afternoon action after trading as high as $20.73 per ounce earlier in the session. It touched a session low of $20.55 per ounce and settled with a 0.3% loss at $20.57 per ounce.
Sep crude oil came off its session low of $100.82 per barrel in morning action and trended higher to a session high of $102.12 per barrel. However, it lost momentum heading into the close and settled with a 0.4% loss at $101.68 per barrel.
Aug natural gas rose to a session high of $3.85 per MMBtu but reversed into the red in late morning floor trade. It brushed a session low of $3.73 per MMBtu and eventually settled at $3.75 per MMBtu, or 0.8% lower.
The performance of the Philadelphia Semiconductor Index ("SOX) was a microcosm of the broader market on Monday. It was down sharply early, declining as much as 1.3%, and then it rebounded to end the session down just 0.1%.
Can anything be gleaned from that showing? Perhaps.
The SOX Index declined 4.2% last week, taking out its 50-day moving average in the process. At today's low then, it was down over 5.0% since July 18. Unlike last week, though, there wasn't any specific piece of bad news driving the early retreat. It was just follow-through selling, so there may have been an opportunistic, buy-the-dip trade at work on Monday.
It's hard to say for sure, but what can be said for sure is that the SOX Index and the S&P 500 had a pretty symbiotic relationship on Monday.
Overall, there wasn't a lot of news driving the technology sector. Some stocks simply benefited from added demand while others languished from soft demand, but with heavyweights like Apple (AAPL 99.02, +1.35), IBM (IBM 195.78, +1.38), EMC Corp. (EMC 29.67, +0.47), Oracle (ORCL 40.55, +0.22), Texas Instruments (TXN 47.35, +0.53), Priceline (PCLN 1239.29, +11.51), and Google (GOOG 590.60, +1.58) all finishing on the plus side, the S&P 500 technology sector (+0.2%) was spared a negative finish.
Apple was in the news making two smaller acquisitions -- BookLamp and Swell -- and spending approximately $45 mln for both companies. That's less than pocket change for a company with $165 bln in cash, and it is money that won't soon be missed considering Apple's market cap went up by roughly eight billion dollars on Monday.
Blackberry (BBRY 9.95, -0.32), which has seen its market cap shrink to $5.2 bln thanks in part to Apple's iPhone success, noted for the record that it doesn't have any takeover offers at the moment. That admission earned CEO John Chen some candor points, but it also led to the stock's underperformance.
Chinese Internet stocks remained in the news following earnings reports from Sohu.com (SOHU 57.81, +0.41) and Changyou.com (CYOU 24.26, +0.31). Both companies easily outpaced analysts' earnings expectations, yet they didn't generate the same halo trading effect on the group that Baidu (BIDU 225.80, -0.70) did following its results last Friday.
The broader market found a measure of support in some M&A activity on Monday. One deal included Zillow (Z 160.32, +1.46) making a $3.5 bln stock offer for Trulia (TRLA 65.04, +8.69). This deal was rumored to be in the works last week.
Both stocks moved up on heavier-than-average volume, yet that busy trading activity was very much the exception on Monday. Volume was light as a lot of traders sat on their hands in anticipation of more earnings results later in the week, the Q2 GDP report and FOMC directive on Wednesday, and the employment report for July on Friday. Geopolitical matters also worked to keep investors sidelined.
Come Tuesday, the earnings spotlight in the technology sector will shine on Corning (GLW 22.05, +0.03), which reports before the open, and Twitter (TWTR 37.93, -0.23), which reports after the close.
Twitter has an enviable task of living up to high growth expectations -- a task made all the more difficult by Facebook (FB 74.92, -0.27), which put up some robust results last week. As a reminder, Twitter fell as much as 31% in the six trading sessions following its last earnings report on April 29 when it failed to live up to growth expectations. At its closing price on Monday, shares of TWTR were up 28% from the May 7 low.
6:11 pm Silicon Motion beats by $0.05, beats on revs; guides Q3 revs above consensus; guides FY14 revs above consensus (SIMO) : Reports Q2 (Jun) earnings of $0.41 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of $0.36; revenues rose 19.0% year/year to $69.41 mln vs the $65.28 mln consensus.
Gross margin increased to 52.2% from 48.6% in prior quarterCo issues upside guidance for Q3, sees Q3 revs of +15-20% sequentially (~$79.8-83.3 mln) vs. $71.65 mln Capital IQ Consensus Estimate. Sees non-GAAP gross margin of 50-52%
Co issues upside guidance for FY14, sees FY14 revs of +22-27% (~$274.9-286.1 mln, raised from prior guidance of +5-15%) vs. $262.85 mln Capital IQ Consensus Estimate. Sees non-GAAP gross margin of 49.5-51.5%
4:45 pm Silicon Image appoints Raymond Cook as Chief Financial Officer, effective July 28, 2014 (SIMG) : Co announced the appointment of Raymond Cook as Chief Financial Officer effective July 28, 2014. Mr. Cook joins Silicon Image from STEC (recently acquired by HGST, a wholly owned subsidiary of Western Digital) where he served as Executive Vice President and Chief Financial Officer for the last five years.
4:10 pm Luminex beats by $0.10, reports revs in-line; reaffirms FY14 revenue guidance (LMNX) : Reports Q2 (Jun) earnings of $0.20 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus Estimate of $0.10; revenues rose 2.4% year/year to $55.6 mln vs the $55.64 mln consensus.
Co issues Reaffirms guidance for FY14, sees FY14 revs of $225-240 mln vs. $231.08 mln Capital IQ Consensus Estimate.
4:08 pm Peregrine Semi beats by $0.01, beats on revs; guides Q3 revs inline (PSMI) : Reports Q2 (Jun) loss of $0.12 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of ($0.13); revenues fell 10.1% year/year to $47.1 mln vs the $44.15 mln consensus.
Gross margin on a non-GAAP basis for the second quarter of 2014 was 39.0% of revenue, compared to 40.0% of revenue for the same period in 2013. "We reported better than expected revenue this quarter driven by strong growth of LTE smartphones in many global markets," said James Cable, Chairman and Chief Executive Officer. "In our High Performance Analog business, we are also enjoying strong design win growth and momentum in our sales channel."Co issues inline guidance for Q3, sees Q3 revs of $40-43 mln vs. $42.35 mln Capital IQ Consensus Estimate; sees 3Q GAAP gross margin in range of 39-41%.
4:07 pm Integrated Device beats by $0.01, beats on revs (IDTI) : Reports Q1 (Jun) earnings of $0.17 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.16; revenues rose 6.5% year/year to $126.3 mln vs the $124.98 mln consensus. "Looking ahead we are confident in our ability to continue executing on our growth strategy with all key areas of our business contributing to that growth."
4:05 pm Integrated Device announces that an IDT wireless power receiver was incorporated on LG's latest flagship G3 smartphone (IDTI) : Co announced that an IDT wireless power receiver was incorporated on LG's latest flagship G3 smartphone. The two companies worked together closely to integrate the IDTP9025A chip, which delivers a compact size and simplified application circuit.
The LG G3 smartphone is winning rave reviews globally for its state-of-the-art feature set in a compact form.
3:11 pm Apple: AAPL, now +1.4%, pushes to a new 52-wk high print now @ 99.10 as shares edge closer to the widely followed $100.00 handle (AAPL) :
12:09 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
TSN (41.38 +4.67%): Missed quarterly EPS by $0.03 ($0.75 vs $0.78 estimate), revs rose 10.9% yoy to $9.68 bln vs $9.48 bln estimate; sees FY15 EPS growth of at least 10% on revs of ~$38 bln
UHS (108.45 +4.05%): Target raised to $131 from $95 at RBC Capital Markets; contineud strength following reporting of strong earnings and upside guidance after the close on July 24
DLTR (56.15 +3.56%): To acquire Family Dollar (FDO) in a cash and stock transaction; expected to be accretive to cash EPS within the first year post-closing, excluding one-time costs to achieve synergies
Large Cap Losers
CMI (145.04 -3.40%): Beat quarterly EPS by $0.04 ($2.43 vs $2.39 estimate), revs rose 6.9% yoy to $4.84 bln vs $4.82 bln estimate; sees FY14 revs +8-11% (raised from +6-10%) or ~$18.7-19.2 bln vs $18.89 bln estimate
RBS (11.96 -3.39%): Seeing reports that Morgan Stanley has advised the company to sell a majority stake in its Irish unit, Ulster Bank
MNST (64.79 -3.31%): Downgraded to Neutral from Buy at UBS, target lowered to $73 from $80
Mid Cap Gainers
FDO (74.46 +22.75%): To be acquired by Dollar Tree (DLTR) in a cash and stock transaction;
FDO shareholders to receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares
TRLA (63 +11.80%): To be acquired by Zillow (Z) for ~$3.5 bln in stock; Trulia shareholders to receive 0.444 shares of class A common stock of Zillow for each share of Trulia
FSLR (66.11 +3.22%): Announced the signing of an agreement with XSOL Co, a distributor and integrator of solar systems in Japan, to supply cadmium telluride thin film modules in Japan
Mid Cap Losers
AWI (50.96 -7.96%): Missed quarterly EPS by $0.06 ($0.60 ex items vs $0.66 estimate), revs rose 0.5% yoy to $710 mln vs $727.12 mln estimate; sees Q3 revs of $740-780 mln vs $760.10 mln estimate; sees FY14 EPS of $2.15-2.40 (lwered from $2.55-2.80) vs $2.60 estimate, revs of $2.7-2.8 bln (lowered from $2.8-2.9 bln) vs $2.81 bln estimate
CMP (87.28 -7.76%): Missed quarterly EPS by $0.14 ($0.13 ex items vs $0.27 estimate), revs rose 7.4% yoy to $186.6 mln vs $196.94 mln estimate; operating earnings $13.4 mln vs $14.7 mln in prior year
RSPP (31.13 -4.16%): Sees Q2 net income of $7.8-8.3 mln and adjusted EBITDAX of $51.0-53.7 mln Cypress Semiconductor (CY) announced that Raytrix GmbH has selected Cypress's EZ-USB CX3 USB 3.0 camera controller for its new 3-D camera.
FSLR +2.8% (co and and XSOL establish supply agreement in Japan)
JNPR +2.1% (upgraded to Outperform from Mkt Perform at Bernstein)
8:04 am SunPower closes agreement for up to $44.5 million in non-recourse debt to finance residential solar lease program (SPWR) : Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) and SunPower Corp. (SPWR) announced an agreement under which HASI is expected to provide up to $44.5 million in non-recourse debt to help finance SunPower's residential solar lease program. The transaction allows SunPower to leverage existing lease assets and expand its program while increasing its cash position and strengthening its balance sheet. This is the second transaction announced by the two companies this year. In early April, Hannon Armstrong and SunPower announced a $42 million non-recourse debt financing.
Cisco Systems (CSCO 25.75, -0.22): -0.9% after being downgraded to Sector Perform from Outperform at Pacific Crest.
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