From Briefing.com: 4:10 pm : The stock market began the last week of October on a cautious note. The S&P 500 slipped below its 100-day moving average (1962) and settled lower by 0.2% while the Dow Jones Industrial Average (+0.1%) outperformed throughout the session.
Equity indices faced selling pressure at the start, but the source of the early weakness was isolated to the two commodity-linked sectors that spent the entire session at the bottom of the leaderboard.
The energy sector (-2.0%) suffered from a Goldman Sachs downgrade of several major industry players, which stemmed from expectations that crude oil would trade between $70-$80/bbl. On that note, the energy component fell below the $80/bbl level in the morning, but narrowed its decline to just 0.1% by the pit close ($80.94/bbl). The rebound was assisted by a modest downtick in the Dollar Index (85.53, -0.20), which slipped 0.2%.
Elsewhere, the materials sector (-2.1%) endured broad pressure. Miners lagged with the Market Vectors Gold Miners ETF (GDX 20.11, -0.36) falling 1.8%, while steelmakers faced more aggressive selling. The Market Vectors Steel ETF (SLX 41.99, -1.15) lost 2.7% with Cliffs Natural Resources (CLF 9.22, -0.41) sliding 4.3% ahead of its earnings report.
Interestingly, the two cyclical sectors-and the telecom services space (+1.0%)-were the only groups that didn't settle in the neighborhood of their flat lines. Meanwhile, the remaining seven sectors ended with gains or losses of no more than 0.3%.
Generally speaking, countercyclical sectors held up well with the utilities sector (-0.2%) having the worst showing among the defensively-oriented groups. The rate-sensitive sector ended in-line with the market while the heavily-weighted health care space (+0.1%) registered a slim gain. The advance took place despite weakness in Allergan (AGN 182.33, -1.88) and Merck (MRK 56.45, -1.16), both of which reported earnings this morning. Allergan lost 1.0% despite reporting a bottom-line beat and upbeat Q4 earnings guidance while Merck slumped 2.0% after beating earnings estimates on a 4.3% year-over-year decline in revenue.
Treasuries climbed to highs shortly after the start of the session and spent the day near their best levels of the session. The 10-yr yield ticked down two basis points to 2.26%.
Participation was a bit below recent averages with 741 million shares changing hands at the NYSE floor. The relatively light volume was likely a function of some participants sticking to the sidelines ahead of Wednesday's release of the latest FOMC policy directive.
Economic data was limited to Pending Home Sales for September, which rose 0.3%. This was worse than the 0.5% increase forecast by the Briefing.com consensus, but ahead of last month's unrevised decrease of 1.0%.
Tomorrow, the Durable Orders report for September (Briefing.com consensus 0.6%) will be released at 8:30 ET while the Case-Shiller 20-city Index for August (consensus 5.5%) will cross the wires at 9:00 ET. The day's data will be topped off with the 10:00 ET release of the October Consumer Confidence report (expected 87.2).
Nasdaq Composite +7.4% YTD
S&P 500 +6.1% YTD
Dow Jones Industrial Average +1.5% YTD
Russell 2000 -3.9% YTD
DJ30 +12.53 NASDAQ +2.22 SP500 -2.95 NASDAQ Adv/Vol/Dec 1261/1.45 bln/1470 NYSE Adv/Vol/Dec 1319/741.3 mln/1757 3:35 pm :
Oil prices dropped notably in early trading with U.S. prices falling below $80/barrel.
Crude traded lower overnight, reaching a low of 79.44, before recovering and trending higher for the rest of the session, closing near where it opened Sunday afternoon.
Dec crude ended 7 cents lower at $80.94/barrel
Nov nat gas dropped 1.8% to $3.56/MMBtu
Gold has been trading in a tight range since GLOBEX trading opened on Sunday, for the most part staying between 1228 and 1231.
The precious metal briefly traded at 1227.1 but quickly bounced back into its trading range.
Dec gold ended 0.2% lower at $1229.30/oz, while Dec silver rose 3 cents to $17.19/oz
Dec copper fell 2 cents to $3.06/lb
6:32 pm Cree increases stock repurchase program to $550 mln; Board authorizes increase on working capital line of credit facility, up to a maximum of $500 mln (CREE) : Co's Board approved an increase in the amount of the Company's stock repurchase program. Pursuant to the program, the Company is now authorized to repurchase shares of its common stock having an aggregate purchase price not exceeding $550 million for all purchases for fiscal 2015. During fiscal 2015 through today, the Company has repurchased 2.65 million shares of its common stock under the program at an average price of $36.54 per share with an aggregate value of $97 million.
Additionally, the board of directors of Cree, Inc. authorized the Company to secure an increase on its working capital line of credit facility, up to a maximum $500 million. The working capital line of credit will provide the Company flexibility to fund strategic opportunities and its general business needs.
4:15 pm PMC-Sierra beats by $0.01, beats on revs (PMCS) : Reports Q3 (Sep) earnings of $0.11 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.10; revenues rose 5.1% year/year to $135.5 mln vs the $133.68 mln consensus.
"Our Storage business performed exceedingly well this past quarter with double-digit growth across all of its product lines. PMC remains well-positioned for continued growth into FY2015, as we expect to see increasing demand for our 12Gb/s SAS I/O controllers and expanders, advanced DIGI OTN processors, Flashtec NVMe controllers and our new RF Remote Radio Head products."
4:12 pm Amkor misses by $0.04, misses on revs; guides Q4 EPS below consensus, revs below consensus (AMKR) : Reports Q3 (Sep) earnings of $0.20 per share, $0.04 worse than the Capital IQ Consensus Estimate of $0.24; revenues rose 5.8% year/year to $812.8 mln vs the $840.17 mln consensus.
Co issues downside guidance for Q4, sees EPS of $0.07-0.17 vs. $0.25 Capital IQ Consensus Estimate; sees Q4 revs of $755-805 mln vs. $853.04 mln Capital IQ Consensus Estimate.
4:10 pm Sanmina beats by $0.07, beats on revs; guides Q1 EPS above consensus, revs above consensus (SANM) : Reports Q4 (Sep) earnings of $0.61 per share, $0.07 better than the Capital IQ Consensus Estimate of $0.54; revenues rose 11.9% year/year to $1.69 bln vs the $1.63 bln consensus.
Non-GAAP operating income in the fourth quarter was $71.3 million or 4.2% of revenue, compared to $55.7 million or 3.7% of revenue for the same period a year ago.
Guidance: Co issues upside guidance for Q1, sees EPS of $0.55-$0.60 vs. $0.49 Capital IQ Consensus Estimate; sees Q1 revs of $1.65-$1.70 bln vs. $1.58 bln Capital IQ Consensus Estimate.
4:07 pm Integrated Device beats by $0.02, beats on revs (IDTI) : Reports Q2 (Sep) earnings of $0.20 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.18; revenues rose 10.5% year/year to $137.09 mln vs the $133.81 mln consensus.
4:07 pm Intevac beats by $0.06, beats on revs (IVAC) : Reports Q3 (Sep) loss of $0.15 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of ($0.21); revenues fell 22.8% year/year to $14.76 mln vs the $14.25 mln consensus.
4:04 pm Anadigics reports EPS in-line, revs in-line; guides Q4 revs in-line (ANAD) : Reports Q3 (Sep) adj loss of $0.07 per share, in-line with the Capital IQ Consensus Estimate of ($0.07); revenues fell 48.9% year/year to $18.9 mln vs the $18.79 mln consensus.
Co issues in-line guidance for Q4, sees Q4 revs of +8-12% to ~$20.3-21.13 mln vs. $20.81 mln Capital IQ Consensus Estimate. Guidance: Non-GAAP gross margin is expected to improve sequentially by approximately 200 basis points. Operating expenses are expected to be approximately flat sequentially
4:03 pm Monolithic Power reports EPS in-line, revs in-line; guides Q4 revs in-line (MPWR) : Reports Q3 (Sep) earnings of $0.46 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.46; revenues rose 14.5% year/year to $78.3 mln vs the $77.74 mln consensus.
Co issues in-line guidance for Q4, sees Q4 revs of $72-76 mln vs. $74.48 mln Capital IQ Consensus Estimate.
Sees Q4 Non-GAAP gross margin between 54.4% and 55.4%
12:40 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
WPZ (51.83 +3.66%): Announced updated terms in plan to merge with Access Midstream Partners (ACMP); ~ $50 bln total transaction value.
MU (32.15 +3.51%): Announced a $1 bln stock buyback.
UPS (101.9 +1.3%): Target raised to $113 at Oppenheimer.
Large Cap Losers
PBR (11.06 -14.46%): Brazilian stock under heavy pressure following re-election of President Rousseff (UGP & BBD also lower).
NBG (2.73 -6.19%): Lower following news that the company failed the ECBs static balance sheet stress test.
HAL (52.14 -6.53%): Removed from Conviction Buy list at Goldman.
Mid Cap Gainers
HTLD (24.73 +3%): Target raised to $29 from $27 at RBC Capital Mkts.
W (25.77 +2.42%): Round of positive analyst ratings follow expiration of quiet period; Initiated with Outperform at Wells Fargo, Piper Jaffray, Cowen, others.
PAY (35.42 +2.94%): Positively mentioned Friday's Mad Money and in in Barron's this weekend.
Mid Cap Losers
PE (14.99 -13.37%): Downgraded to Sell from Neutral at Goldman.
PTEN (22.4 -8.38%): Downgraded to Neutral from Buy at Goldman; tgt lowered to $103 from $153; removed from Conviction Buy list.
PDS (8.16 -7.8%): Reported Q3 earnings of CAD$0.18 per share, in-line with the Capital IQ Consensus of CAD$0.18; revenues of CAD$584.6 mln vs the CAD$590.58 mln consensus.
12:08 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (115) outpacing new highs (106) (:SCANX) : Stocks that traded to 52 week highs: AAC, AAP, ABBV, ABC, ADP, AEP, AGIO, ALK, ALL, ALXN, AMGN, AWK, BBW, BCR, BEE, BRX, CAH, CB, CBPO, CELG, CEMI, CHD, CHH, CHKP, CHRW, CHSP, CMS, CRAI, CRL, CSX, CVS, DIN, DOC, DTE, DUK, ED, EDE, EIX, EPAM, ETR, FAF, FISV, FRGI, FRT, GD, GHC, GTS, HA, HCN, HD, HNH, HNI, HRTG, HTA, HUBS, IBCA, IDA, IMDZ, INFU, ITC, JACK, KIM, KMX, KRC, LCI, LEG, LOW, MAC, MACK, MCK, MCO, MMM, MO, MSON, MTX, NKE, NU, ORLY, PG, PNW, PSA, RDI, REG, REGN, RGLS, RLJ, RNA, ROP, ROX, SO, SPG, STRP, STRT, SWX, SYF, TCO, TE, THG, TRV, UHT, UNH, WM, WOOF, WRB, YHOO, ZAYO
Stocks that traded to 52 week lows: ACY, ADHD, ADNC, AFMD, AG, AKBA, AMRN, AMZG, ANV, AREX, AU, AXPW, BBCN, BBG, BBGI, BIND, BPZ, BTU, CACH, CBD, CBNJ, CBR, CDE, CGG, CJES, CORI, CRK, CRR, CTG, CVLT, CZZ, DEST, DRRX, DVR, DWSN, EC, ECR, ENZY, EPRS, ERIC, FNFG, FWM, GFA, GIG, GLF, GPRC, GRC, GSS, GYRO, GZT, HLSS, HMY, ICD, IMI, INTL, JONE, KEG, KOSS, LAS, LF, LND, LOJN, LPG, MCGC, MFLX, MG, MIND, MUX, NCQ, NDRO, OCLS, OCN, OPB, PDII, PE, PED, PHMD, PMBC, PTIE, QNST, REMY, RESI, REXX, ROYL, SAND, SBS, SEAC, SENEA, SFY, SMT, SN, SSRI, SUNS, SUSQ, SWN, TAOM, TAT, TDW, TG, TGA, TGE, THR, TLM, TLR, TRC, TRMR, TSU, TWI, UBSH, UGP, VALE, VIV, VOLC, XNET, XNY
ETFs that traded to 52 week highs: IBB, ICF, IHI, XLP, XLU, XLV
ETFs that traded to 52 week lows: DJP, OIL, REMX, USCI, USO
8:05 am Tower Semicon signs definitive agreement to re-finance its bank debt with a $111 mln term loan maturing 2018 (TSEM) : Co announces it re-financed its existing bank debt, replacing the present loans previously scheduled to be repaid during the coming two years, with a $111 mln term loan maturing by Oct 2018.
This substantially reduces the principal payments for 2015 and 2016 from $101 mln to $24 mln.
The schedule of the $111 mln loans is $10 mln principal payment during 2014 and 2015, $14 mln during 2016, $56 mln during 2017 and $21 mln during 2018.Monday had its share of events, yet the overall trading action was fairly uneventful.
The ECB released its bank stress test results, revealing a EUR 25 billion shortfall at 25 participant banks; Dilma Rousseff won her presidential re-election bid in Brazil, which sent stocks sliding there; a juvenile in New York was reportedly being tested for Ebola; and pending home sales for September were said to be up a weaker than expected 0.3% .
Armed with that information, the major indices in the U.S. traded in a guarded fashion that saw the Dow and Nasdaq eke out small gains and the S&P 500 and Russell 2000 post slight losses.
One factor overhanging everything, though, was the recognition that the FOMC will begin a two-day meeting on Tuesday and will be issuing a new policy directive on Wednesday. Naturally, there wasn't a lot of strong conviction ahead of that important event.
Still, with the S&P 500 gaining 4.1% last week, it will be regarded as a moral victory by some bulls that the market didn't bow to selling efforts on Monday.
The S&P 500 information technology sector (+0.04%) was a microcosm of the broader action. It ended the day with a microscopic gain as there wasn't a whole lot of movement from most of its components. That is, most gains and losses were less than 1.0%.
Only ten of the sector's 66 components moved more than 1.0%.
The biggest gainer was Micron (MU 32.30, +1.24), which jumped 4% after the company announced a new $1 billion buyback program. The biggest loser was First Solar (FSLR 54.27, -2.17), which dropped 3.8% after the latest short interest report showed 12.3% of the company's float was sold short as of October 15.
Some of the other big movers in between included Yahoo (YHOO 44.70, +1.20), which remained hot after reporting earnings last week, and Juniper Networks (JNPR 19.72, +0.72), which jumped on some bargain-hunting interest following sizable losses of late that pushed the stock down more than 35% from its January high.
The corporate newsflow was pretty limited on Monday, which is something that also helped explain the lack of continuity in the overall trading activity.
Hewlett-Packard (HPQ 35.30, +0.37) jumped on speculation that it is seeking a buyer for its networking business in China, KLA-Tencor (KLAC 75.06, -0.84) slipped 1.1% despite being upgraded to Neutral from Negative at Susquehanna, and Seagate Technology (STX 58.73, +0.37) added 0.6% after reporting better than expected fiscal first quarter results and issuing reassuring guidance for the December quarter.
Seagate's good news helped drive up shares of Western Digital (WDC 92.65, +0.97), which was another 1.0%+ mover along with Xerox (XRX 12.81, +0.27), Symantec (SYMC 24.25, +0.27), and Electronic Arts (EA 36.88, +0.53).
Separately, Alibaba Group (BABA 97.79, +2.03) was a big gainer after Jefferies initiated coverage of the stock with a Buy rating and $118 price target.
Postscript: After the close, Twitter (TWTR 48.56, -1.39), which dropped 2.8% during regular trading, reported in-line third quarter earnings of $0.01 per share on a 115% jump in revenue to $361 million.
Twitter said its fourth quarter revenue is expected to be between $440 million and $450 million. The midpoint of that range is 83% higher than the same period a year ago and is slightly below analysts' average expectations.
Shares of TWTR were trading down 9% in after-hours action.
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