From Briefing.com: 4:10 pm : The stock market ended the midweek session on an upbeat note with the Nasdaq Composite providing leadership. The tech-heavy index advanced 0.8%, while the S&P 500 added 0.4% with seven sectors posting gains.
Equities were driven into the red shortly after the open due to notable weakness in the energy sector. The growth-sensitive group was down in excess of 1.0% during the first hour of action, but narrowed its loss to 0.3% by the close. For its part, crude oil fell 1.1% to $91.71/bbl, ending the pit session at its lowest level since early January.
While the continued weakness in crude prices weighed on the sector, which is now down 4.1% for the month, the persistence of dollar strength also contributed negatively to earnings prospects of multinational companies like Chevron (CVX 124.28, -0.90) and ExxonMobil (XOM 96.81, -0.58). The Dollar Index (84.22, -0.06) climbed to its best level in 14 months before slipping in the early afternoon. The greenback retreated against the British pound after latest poll results from Scotland indicated majority support for staying in the UK (weekend YouGov poll gave a slight edge to the pro-independence movement). The pound/dollar pair climbed to 1.6210 after trading at 1.6070 in the early morning.
Despite the early weakness in the energy sector, equity indices were able to climb off their lows with help from top-weighted financials (+0.4%), health care (+0.7%), and technology (+0.8%). The three groups began the day ahead of the broader market and their strength pulled dip-buyers into the fray.
The technology sector finished in the lead with Apple (AAPL 101.00, +3.01) fueling the strength. The top-weighted sector component jumped 3.1%, while social media names also did some heavy lifting. Twitter (TWTR 52.91, +2.30) rallied 4.5% following an upgrade at UBS, while Facebook (FB 77.43, +0.76) and Yelp (YELP 82.64, +1.76) gained 1.0% and 2.2%, respectively.
Elsewhere, health care received significant support from biotechnology as the iShares Nasdaq Biotechnology ETF (IBB 274.41, +4.93) jumped 1.8%, which factored into the strong showing for the Nasdaq Composite.
Also of note, the industrial sector (+0.1%) was pushed into the green during afternoon action by the relative strength of defense contractors. The PHLX Defense Index added 0.7%, while transport stocks could not keep up with the broader market. The Dow Jones Transportation Average added 0.1%.
Treasuries slumped overnight and spent the duration of the session near their lows. The 10-yr note shed eight ticks to send its yield higher by three basis points to 2.54%.
Participation was a bit light with fewer than 600 million shares changing hands at the NYSE floor.
Economic data was limited to just two data points:
The weekly MBA Mortgage Index fell 7.2% to follow last week's uptick of 0.2%
Wholesale inventories increased 0.1% in July following a downwardly revised 0.2% (from 0.3%) increase in June
The Briefing.com consensus expected an increase of 0.5%
Overall, wholesale sales increased 0.7% in July after increasing by 0.4% in June
Tomorrow, weekly initial claims (Briefing.com consensus 300K) will be released at 8:30 ET, while the Treasury Budget for August (expected deficit of $129 billion) will cross the wires at 14:00 ET.
Nasdaq Composite +9.8% YTD
S&P 500 +8.0% YTD
Dow Jones Industrial Average +3.0% YTD
Russell 2000 +0.1% YTD
DJ30 +54.84 NASDAQ +34.24 SP500 +7.25 NASDAQ Adv/Vol/Dec 1706/1.68 bln/1072 NYSE Adv/Vol/Dec 1627/594.4 mln/1417 3:35 pm :
Dec gold fell for a third consecutive session despite touching a session high of $1253.80 per ounce in morning floor trade. The yellow metal retreated into negative territory in afternoon action and settled with a 0.3% loss at $1245.30 per ounce.
Dec silver pulled back towards the unchanged line after brushing a session high of $19.08 per ounce in morning action. It touched a session low of $18.90 per ounce and settled with a 0.1% gain at $18.93 per ounce.
Oct crude oil traded in negative territory on weaker-than-anticipated inventory data. The EIA reported that for the week ending Sep 5, crude oil inventories had a draw of 0.972 mln barrels when expectations called for a draw of 1.1-1.5 mln barrels.
The energy component pulled back from a session high of $92.53 per barrel and dipped as low as $91.22 per barrel. Unable to gain momentum, it settled at $91.71 per barrel, or 1.1% lower.
Oct natural gas also traded lower in a tight range between $3.94 and $3.97 per MMBtu. It eventually settled with a 0.5% loss at $3.96 per MMBtu.
4:12 pm JDS Uniphase reaffirms Q1 guidance in its release (JDSU) :
4:11 pm JDS Uniphase (Stock halted) to Separate into Two Industry-Leading Public Companies (JDSU) :
Two independent and publicly traded companies expected to enhance value by offering shareholders clear investment opportunities in distinct growth markets.An optical components and commercial lasers company.A network and service enablement company focused on the industry's transition to software-defined networks (SDN.V) and the need for increased network, service and application visibility. Expected combined expense reduction of approximately $50 million. Expected to be completed through a tax-free spinoff structure with separate corporate brand identities for each business to be announced at a later date. Expect to complete transaction by the third calendar quarter of 2015JDSU shareholders will receive a pro rata distribution of shares in the stand-alone CCOP company via a tax-free spinoff. During the periods preceding the separation, JDSU expects to incur significant one-time charges related to the separation and to achieving the expense savings referenced in the highlights. Cash expenditures to obtain the cost savings are expected to be between $75 and $100 million.Reaffirms Q1 Guidance
For the fiscal first quarter of 2015 ending September 27, 2014, the Company is reaffirming guidance of non-GAAP net revenue of $405 to $425 million and non-GAAP earnings per share of $0.08 to $0.12.
12:54 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
TWTR (52.44 +3.62%): Upgraded to Buy from Neutral at UBS, target raised to $65 from $50
AAPL (100.12 +2.17%): Bloomberg reporting that co will receive fees from banks for Apple Pay; target raised to $116 from $110 at Barclays
LUV (33.51 +1.82%): Target raised to $55 from $30 at Stifel, added to Stifel Select Buy list
Large Cap Losers
VLO (50.94 -3.32%): Weakness in large cap oil and gas stocks: PBR, PSX, ECA also lowerAVB (150.8 -3.23%): Announced offering of 4.5 mln shares of common stock
EBAY (51.08 -3.13%): Downgraded to Neutral from Overweight at Piper Jaffray, target lowered to $55 from $63
Mid Cap Gainers
NPSP (31.08 +20.61%): Briefing documents posted ahead of the FDA's Endocrinologic and Metabolic Drugs Advisory Committee review of Natpara for the treatment of Hypoparathyroidism seen as favorable with regards to the safety of the drug
PANW (97.85 +9.60%): Reported Q4 EPS of $0.11 (in-line), revs rose 58.5% yoy to $178.2 mln vs $161.26 mln estimate; billings +65% to $232.9 mln; sees Q1 EPS of $0.12 ex items vs $0.12 esitmate, revs of $178-182 mln vs $173.43 mln estimate; target raised at multiple research firms
SLCA (69.16 +7.21%): Increased FY14 adjusted EBITDA guidance range to $230-240 mln from $215-225 mln
Mid Cap Losers
AU (13.05 -15.75%): Co announced that, having evaluated several options to unlock further value in the business, the Board and management has decided to explore the possibility of restructuring the co into simpler and more focused entities
GTAT (12.91 -13.55%): Weakness following Apple presentation which revealed that sapphire screens will not be used in the new iPhone; downgraded to Neutral from Buy at Goldman, target lowered to $14 from $20; downgraded to Neutral from Overweight at Piper Jaffray, target $16; target lowered to $13 from $16 at Canaccord Genuity; downgraded to Sell at DoughertyJ
MEI (24.9 -6.21%): Weakness in Chinese internet related stocks: WUBA, ATHM also lower 12:39 pm
Riverbed Technology: Elliott responds to Riverbed announcement; 'Riverbed's Board has decided to ignore the wishes of shareholders on every count' (RVBD) : Elliott Management Corporation issued a public statement regarding Riverbed Technology (RVBD):
The larger message behind this vote was clear: It was a resounding rejection of Riverbed's refusal to engage with interested buyers and its decision to entrench by adopting a poison pill.Going against every modern principle of shareholder engagement and good corporate governance, Riverbed's Board has decided to ignore the wishes of shareholders on every count.Above all, the Board continues to ignore serious acquisition interest even after the company publicly admitted that it will miss its "10% growth plan" by a wide margin.As one of the company's largest shareholders, we intend to remain fully engaged, and we will continue to work toward a value-maximizing outcome.
11:59 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (100) outpacing new highs (48) (:SCANX) : Stocks that traded to 52 week highs: ADM, ARPI, ATVI, BLX, CARO, CMCSA, CMRX, CONE, CTLT, CVGW, CVTI, EARS, ENB, ENSV, EPD, EW, GMLP, INVE, IRF, IT, JACK, KINS, LE, LRCX, MARA, MATW, MDVN, MEP, MFRM, MO, NFBK, NTCT, OILT, OTIV, PANW, PIP, PRXL, QTS, RGS, SAIC, SXL, TCP, TEP, TFSL, TMH, TSQ, VC, XPO
Stocks that traded to 52 week lows: AGCO, ALXA, AMCC, AMPE, ANTH, AOI, ARCO, AREX, ARNA, ARTW, AVL, AWX, AXU, AXX, BAXS, BGC, BTU, CACQ, CIK, CLD, CRCM, CREE, CRS, CYTX, DLA, DRQ, DSCI, DWCH, DXLG, ECT, EDAP, EMXX, EPE, ERA, EXEL, EXXI, FI, FMC, FRM, FST, FVE, GES, GGB, GOMO, GTE, GTLS, HGG, HIBB, HLF, I, IMMR, IMRS, ISSC, IVC, KEG, KIPS, KOSS, KZ, LDR, LTRE, MAT, MCD, MDR, MDWD, MGCD, MILL, MM, MRC, NCMI, NUS, OMN, ONE, PERI, PGN, PHMD, PRGX, QRM, RCPI, RDC, REE, RIG, RIGL, RLOC, RNDY, RNF, SWHC, SZMK, TECU, THRX, TRGT, TWI, UAN, UBNK, VBIV, VCRA, VNET, VNOM, VVUS, WH, XUE
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: JJA, JJG, RJA, SGG
8:31 am S&P futures vs fair value: +0.50. Nasdaq futures vs fair value: +0.20. (:WRAPX) : U.S. equity futures remain near the middle of their overnight ranges, while markets in Europe are currently flirting with modest losses. Yesterday, shares of Apple (AAPL 97.55, -0.44) settled lower by 0.4% following an underwhelming product reveal. This morning, the stock is indicated to open lower by 0.5% with a Pacific Crest downgrade to 'Sector Perform' contributing to the weakness.
On a related note, GT Advanced Technologies (GTAT 13.87, -1.07) holds a pre-market loss of 7.3% following downgrades from Goldman Sachs and Piper Jaffray. Speculation prior to yesterday's event suggested GTAT sapphire screens would be used in the iPhone, but the Apple Watch was the only product announced to feature those screens.
7:04 am Microsemi to acquire Centellax -- terms not disclosed (MSCC) : Co announced it has signed an agreement to acquire Santa Rosa, Calif.-based Centellax, a supplier of high-speed analog and RF semiconductor products for the optical communications and Ethernet datacom markets. The terms of the transaction were not disclosed. The closing of the transaction is subject to customary closing conditions.
The transaction is not expected to have a material effect on Microsemi's revenues or expenses. Further, Microsemi reaffirms its revenue guidance for its fourth quarter of fiscal 2014.
The love for Apple (AAPL 101.00, +3.01) and the information technology sector that suddenly disappeared on Tuesday was found on Wednesday as there was a whole lot of rebound price action.
It was all pretty customary really. Apple and the broader market were broadsided on Tuesday, ostensibly on rate hike concerns and a prototypical sell-the-news response to Apple's new product announcements. True to form, the sell-off was quickly followed with a buy-the-dip inclination that pushed the S&P information technology sector to a higher closing level than was seen on Monday. In other words, the sector wasted little time making up Tuesday's losses.
The telltale sign on Wednesday that rate hike concerns were overplayed as a causal factor for Tuesday's selling was that the broader market traded higher despite long-term rates also pushing higher.
Apple, which gained 3.1%, and the information technology sector, which gained 0.8%, were the main engines behind the advance. There wasn't any shortage of opinion as to what Apple's new product announcements mean for the company. Pacific Crest Securities, for one, seemed disappointed as it downgraded Apple to Sector Perform from Outperform. Cowen, Oppenheimer, Barclays, and Deutsche Bank, on the other hand, said good things about the new product releases. Clearly, their views won out on Wednesday.
The spoils didn't belong just to Apple, though. 52 of the sector's 66 components ended Wednesday with a gain.
Alliance Data Systems (ADS 259.21, +13.57) led all comers with a 5.5% gain after falling 4.2% on Tuesday. The company announced the introduction of a GameStop branded private label credit card program.
Other notable movers included Akamai Technologies (AKAM 62.05, +0.88), which was mentioned in a Bloomberg article as a possible takeover target for Alibaba.com, Facebook (FB 77.43, +0.76), whose market cap eclipsed $200 billion, Microsoft (MSFT 46.84, +0.08), which logged its fifth consecutive gain following speculation it is interested in acquiring the maker of Minecraft for roughly $2.5 billion, Salesforce.com (CRM 60.70, +1.04), which signed an agreement to establish a new European data center in France, and Visa (V 216.88, +2.60) and Mastercard (MA 76.65, +0.58), which continued to feed off the introduction of the Apple Pay service.
Stocks like IBM (IBM 191.54, +1.99), Juniper Networks (JNPR 23.74, +0.39), and F5 Networks (FFIV 125.19, +2.16) also went along for the sector's rebound ride. Volume in each of those stocks, though, was comfortably below their respective three-month daily averages.
Google (GOOG 583.10, +2.09) was another heavyweight lending support. The company confirmed that it has acquired Lift Labs, which provides tremor-canceling devices for Parkinson's sufferers, and made a $145 million investment in SunEdison's (SUNE 21.00, +0.16) and TerraForm Power's (TERP 31.72, -0.11) largest solar plant in North America.
One stock in the sector that needs some sunshine is eBay (EBAY 51.10, -1.63). After dropping 2.8% on Tuesday, eBay declined another 3.1% on Wednesday as investors continued to worry about the competitive threat to PayPal presented by the Apple Pay service. Piper Jaffray downgraded eBay to Neutral from Overweight.
Outside of the S&P information technology sector, network security company Palo Alto Networks (PANW 98.75, +9.47) garnered a lot of acclaim from the analyst community after reporting its fourth quarter earnings results and issuing reassuring first quarter guidance. Industry peer FireEye (FEYE 34.85, +1.34) drafted off the report and on some active buying of September 35.50 calls.
Entertainment software maker Activision (ATVI 23.81, +0.08) ticked higher on its announcement that it sold more than $500 million of Destiny on day one, making it the biggest new video game franchise launch in history. Take-Two (TTWO 23.54, +0.32) and Electronic Arts (EA 37.81, +0.36) benefited from the news.
Separately, Twitter (TWTR 52.91, +2.30) continued to run, bolstered by a UBS upgrade to Buy from Neutral. The stock is up 73% from the low it reached on May 23.
Only need four characters to sum up that move: Wow!
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