4:13 pm Closing Market Summary: Growth Concerns Pressure Cyclical Sectors (:WRAPX) : The major averages ended the Tuesday session on a mixed note. The Dow Jones Industrial Average (+0.1%) spent the bulk of the day near its flat line while the S&P 500 settled lower by 0.3%.
Stocks were pressured from the start, but the early weakness could be traced back to Europe where the European Commission lowered its GDP forecast for the region. The commission now expects 2014 GDP to grow at 0.8% (prior 1.2%) while the forecast for 2015 was lowered to 1.1% from 1.7%.
Also in Europe, a report from Reuters has revealed a potential power struggle at the European Central Bank. According to the report, ECB board members have been unhappy with President Mario Draghi effectively making some policy decisions on his own. Furthermore, the report claimed that up to ten out of 24 ECB members are not in favor of a sovereign QE program.
In all likelihood, the news of strong opposition to quantitative easing is why the euro climbed following the report. The single currency advanced to 1.2550 against the greenback, which contributed to a 0.4% decline in the Dollar Index (87.05, -0.25).
The downtick in the dollar did little to prevent crude oil from falling in response to the lowered growth outlook for the eurozone and lower export prices from Saudi Arabia. The energy component fell 2.0% to $77.13/bbl. For its part, the energy sector (-1.9%) spent the entire session at the bottom of the leaderboard.
The significant weakness in energy kept the market under pressure while other cyclical groups were mixed. Financials (+0.1%), industrials (+0.1%), and technology (unch) displayed relative strength while consumer discretionary (-1.3%) and materials (-1.0%) lagged.
Notably, the discretionary sector suffered from weakness among apparel names after Michael Kors (KORS 71.42, -6.57) issued disappointing comparable store sales guidance, which masked better than expected results. The stock tumbled 8.4%. Foot Locker (FL 53.63, -2.54) also weighed, falling 4.5% after announcing CEO Ken Hicks will be replaced by Richard Johnson. Homebuilders also pressured the sector with the iShares Dow Jones US Home Construction ETF (ITB 23.92, -0.26) ending lower by 1.1%.
Elsewhere, the industrial sector ended ahead of other cyclical groups thanks to gains among transport stocks. The Dow Jones Transportation Average added 0.4% with airlines leading the way after Delta Air Lines (DAL 42.32, +1.71) reported strong October metrics. However, the sector could not pull away from its flat line as growth concerns weighed on machinery stocks like Caterpillar (CAT 98.61, -1.61) and Joy Global (JOY 52.00, -0.31).
On the upside, the consumer staples sector (+0.5%) ended in the lead with help from upbeat earnings reported by Archer-Daniels Midland (ADM 49.54, +2.29). The health care sector (+0.1%) also finished in the green while telecom services (-0.2%) and utilities (-0.6%) registered losses.
Treasuries held intraday gains, but the 10-yr note returned to unchanged by the end of the session (2.33%). The long bond, meanwhile, ended in the green to lower its yield two basis points to 3.05%.
Participation was ahead of average with roughly 810 million shares changing hands at the NYSE floor.
Economic data was limited to the trade deficit and factory orders:
The September trade deficit widened to $43.00 billion from a downwardly revised $40.00 billion (from $40.10 billion) while the Briefing.com consensus expected the deficit to come in at $40.20 billion
According to the advance estimate of Q3 2014 GDP, the BEA assumed that the trade deficit narrowed to roughly $38 billion in September. The upward surprise should result in a downward revision to third quarter GDP in the second estimate
The goods deficit increased by $2.40 billion in September to $62.70 billion while the services surplus fell to $19.60 billion from $20.20 billion
Manufacturing orders declined 0.6% in September after falling an upwardly revised 10.0% (from -10.1%), while the Briefing.com consensus expected a decline of 0.5% Durable orders fell 1.1% in September after declining 18.3% in August. That was a slightly stronger result than the 1.3% decline reported in the advance durable goods report Much of the decline in durable goods demand resulted from a 14.7% decline in aircraft orders. Excluding transportation, durable goods orders slipped 0.1% in SeptemberTomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the October ADP Employment Change report (Briefing.com consensus 220K) will cross the wires at 8:15 ET. The day's data will be topped off with the 10:00 ET release of the ISM Services Index for October (consensus 58.0).
Nasdaq Composite +10.7% YTD S&P 500 +8.9% YTD Dow Jones Industrial Average +4.9% YTD Russell 2000 +0.1% YTD
4:14 pm Coherent beats by $0.03, misses on revs (COHR) : Reports Q4 (Sep) earnings of $0.96 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.93; revenues fell 3.7% year/year to $205.3 mln vs the $209.44 mln consensus.
4:06 pm Teradyne acquires Avionics Interface technologies; no terms disclosed (TER) : The co announced that it has acquired substantially all of the assets of Avionics Interface Technologies, LLC, a leading provider of equipment for testing state-of-the-art avionics data buses. The Avionics Interface Technologies business will be operated as an independent division within Teradyne's Defense and Aerospace business unit, and will continue to provide exceptional products to existing and new customers.
3:02 pm Index Changes Reminder: Level 3 Communications (LVLT) set to join the S&P 500; Jabil Circuit (JBL) to join the S&P MidCap 400 (:INDXCH) : Level 3 Communications (LVLT) will replace Jabil Circuit (JBL) in the S&P 500, and Jabil Circuit will replace TW Telecom (TWTC) in the S&P MidCap 400 after the close of trading today. Level 3 Communications is acquiring TW Telecom in a deal expected to be completed soon pending final conditions.
12:32 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
ADM (49.53 +4.81%): Reported Q1 earnings of $0.81 per share, $0.08 better than the Capital IQ Consensus Estimate of $0.73; revenues fell 15.3% year/year to $18.12 bln vs the $20.89 bln consensus.
DAL (42.24 +4.01%): Reported PRASM for the month of October increased 3.0% y/y.
MSI (66.82 +3.31%): Beat consensus estimate by $0.21, beat on revs; guided Q4 EPS below consensus; increased buyback by $5 bln.
Large Cap Losers
S (5.18 -16.53%): Reported Q3 loss of $0.19 per share, which may not be comparable to the Capital IQ Consensus Estimate of ($0.06); revenues rose 9.5% year/year to $8.49 bln vs the $8.63 bln consensus.
PCLN (1087.06 -9.3%): Beat Q3 consensus estimates by $1.07, reported revs in-line; guided Q4 EPS below consensus, revs below consensus.
DISCA (32.6 -8.61%): Beat Q3 consensus estimates by $0.05, missed on revs; lowered FY14 rev guidance; Tgt lowered at Topeka Capital Mkts.
Mid Cap Gainers
ODP (5.88 +15.98%): Reported Q3 earnings of $0.10 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.09; revenues rose 55.4% year/year to $4.07 bln vs the $4.06 bln consensus.
BLMN (20.42 +9.61%): Reported Q3 earnings of $0.10 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.08; revenues rose 10.1% year/year to $1.07 bln vs the $1.04 bln consensus.
LDOS (38.3 +4.53%): Upgraded to Outperform from Mkt Perform at Cowen; tgt raised to $50 from $38.
Mid Cap Losers
HLF (44.87 -19.73%): Missed Q3 consensus estimates by $0.06, missed on revs; guided Q4 EPS below consensus, revs below consensus; guided FY15 EPS below consensus.
CIE (9.73 -14.5%): Reported Q3 loss of $0.35 per share, $0.17 worse than the Capital IQ Consensus Estimate of ($0.18).
EXH (34.72 -10.79%): Reported Q3 earnings of $0.25 per share, $0.03 worse than the Capital IQ Consensus Estimate of $0.28; revenues fell 6.7% year/year to $723.8 mln vs the $758.84 mln consensus.
11:59 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (222) outpacing new lows (121) (:SCANX) : Stocks that traded to 52 week highs: AAVL, ABC, ADP, AEP, AGU, AIRT, AIV, AKR, ALGT, ALK, ALL, AMBA, ANIP, ARC, ARE, ATO, AVA, AVB, AVNR, AWR, BABA, BBW, BCC, BDX, BELFB, BJRI, BR, BSET, BXP, CACI, CAH, CALX, CB, CBOE, CBPO, CERN, CHD, CHFN, CHSP, CI, CLX, CME, CMS, COKE, CONE, COR, COST, CTB, CVA, CWT, CXW, DAL, DDR, DENN, DHX, DIS, DOC, DPS, DPZ, DRE, DRH, DTE, DUK, EDR, EIX, ELLI, ELS, ENFC, EPAM, ESBF, ESS, EXR, FDS, FISV, FNF, FR, FRT, GD, GEO, GGP, GHC, GPC, GPN, GTS, HA, HAWK, HBNK, HBOS, HCN, HCP, HDB, HE, HIG, HPP, HPY, HRL, HRTG, HT, HUBS, IBN, IDCC, IFN, INFY, INTU, IP, IQNT, IRDM, ITC, JBHT, JLL, KIM, KMB, KR, KRC, KW, KWR, LB, LEG, LHO, LMT, LRCX, LSTR, LTC, LUV, MAC, MCY, MERC, MMC, MMI, MMM, MNR, MNRK, MO, MPLX, MRGE, MSFT, NHI, NI, NJR, NLS, NNI, NNN, NOC, NWE, O, ODFL, ODP, OMAB, PAM, PAYX, PCG, PFSW, PG, PLKI, PLOW, PNW, POR, PSA, PULB, QLYS, RAI, RCPT, REG, REXR, RFMD, RJET, ROL, ROX, RTN, SAFT, SANM, SAVE, SCG, SCS, SCSS, SHO, SHW, SLG, SLM, SONC, SPG, SPNC, SRE, SSNC, STE, SWX, SXT, SYKE, TE, TEG, TFX, THG, TNET, TQNT, TRNO, TTGT, TXN, TXRH, UAL, UBA, UCFC, UDR, UPS, USNA, UTL, UUU, UVE, VIPS, VNO, VRNT, VVC, WERN, WGL, WLP, WRI, WSTC, XEL, XRAY, Y, YHOO, ZAYO, ZTS
Stocks that traded to 52 week lows: AKBA, AKO.B, AMZG, ANV, ARES, AREX, ATW, AXPW, AXR, BAS, BBG, BRDR, BTE, BVSN, BXE, CAB, CCG, CCSC, CEF, CEL, CGG, CHLN, CJES, CLRX, COH, CRK, CVEO, CYRN, DAEG, DCTH, DISCA, DISCK, DNR, DRNA, DWSN, EC, EGI, EGO, ENRJ, EOPN, EOX, EPAX, ERF, EXE, FCX, FRAN, GDP, GLMD, GLRI, GTE, GTU, GVP, HGG, IIJI, IMRS, KEG, KOSS, LF, LIQT, LPG, MGI, MR, MSB, NCT, NDRO, NKA, NOA, NSLP, NSPR, OAS, OPB, P, PBT, PDS, PED, PGH, PGN, PHMD, PME, PTNR, PWE, PZG, QEPM, RCAP, REN, RESI, RGR, RIG, RMTI, S, SALE, SARA, SC, SD, SDLP, SDRL, SGNL, SGY, SM, SN, SSE, STAA, STO, TAS, TCK, TGA, TGB, THLD, THRX, TLM, TPLM, TRCH, TS, UNT, VALE, VIEW, VOC, WF, WTI, YUMA, ZA
ETFs that traded to 52 week highs: ICF, IYK, IYR, IYT, KIE, PPA, URE, VNQ, XLK, XLP, XLU
ETFs that traded to 52 week lows: BNO, DBC, FXC, FXS, GSG, OIL, UGA, UHN, USO
11:31 am Intel and INRIX collaborate on smart cities platforms and applications powered by Big Data; Intel's global investment organization, Intel Capital, is investing $10 mln in INRIX (INTC) : Co announced a strategic collaboration with Intel Corporation focused on developing next generation smart cities analytics platforms and applications. As part of their collaboration, Intel's global investment organization, Intel Capital, is investing $10 million in INRIX.
In addition to working together on projects like San Jose, Intel has licensed INRIX data and analytics services to power Intel's next generation Enterprise LBS (location-based services) platform. In turn, INRIX is licensing and making available its APIs to Intel's ecosystem of partners and developers via its Mashery API management service.
9:21 am Ingram Micro and BlackBerry (BBRY) announce distribution agreement in Canada to serve unlocked smartphone market (IM) : Ingram Micro Mobility, a business unit of Ingram Micro Canada and subsidiary of Ingram Micro, is providing unlocked BlackBerry (BBRY) 10 smartphones throughout Canada as part of a new agreement between the two companies.
The agreement equips BlackBerry with broader distribution of its products and services throughout Canada by leveraging Ingram Micro Mobility's supply chain expertise, extensive infrastructure and unique channel reach to value-added resellers, system integrators, mobile carriers, retailers and other service providers.
9:06 am QuickLogic announced its ArcticLink III BX display bridge solution platform has been chosen by Samsung Electronics (SSNLF) to enable display bridging in the NX1 Compact System Camera (QUIK) : The ArcticLink III BX platform, with its 15 silicon variants, was specifically architected to offer system designers a solution to bridge mismatched display standards. The platform features very low power consumption in a small 4.5 x 4.5mm package, making it easy for OEMs to integrate into their existing designs.
9:05 am Ingram Micro and Kyocera announce strategic distribution relationship for mobile phones in Latin America (IM) : The co and Kyocera Communications Inc. announced a new agreement in which Ingram Micro Mobility will be the distributor of Kyocera mobile phones in the Latin America region. The new Kyocera DuraForce, 4G LTE global-ready Android smartphone will be the first Kyocera product to enter the Latin America region via this relationship. Kyocera will leverage Ingram Micro's extensive infrastructure and unique channel capabilities in Latin America, reaching 25,000 value-added resellers, system integrators and service providers.
8:05 am Axcelis Tech wins multiple system, revenue order for 'Purion H' from chipmaker in Asia Pacific for DRAM manufacturing (ACLS) :
7:14 am Motorola Solutions beats by $0.21, beats on revs; guides Q4 EPS below consensus; increases buyback by $5 bln (MSI) : Reports Q3 (Sep) earnings of $0.62 per share, excluding non-recurring items, $0.21 better than the Capital IQ Consensus Estimate of $0.41; revenues fell 5.3% year/year to $1.44 bln vs the $1.39 bln consensus.
Co issues downside guidance for Q4, sees EPS of $1.13-1.19 vs. $1.21 Capital IQ Consensus Estimate; sees revs down 1-3% yr/yr.
Today, the company also announced that its board of directors has approved a $5 billion increase to the share repurchase program following receipt of $3.45 billion from the sale of its Enterprise business, raising the total authorization since July 2011 to $12 billion.
