From Briefing.com: There are consolidation days and then there are consolidation days. Wednesday was more of the latter, which is to say the broader market looked to be stuck in concrete for most of the session. When it was all said and done, the S&P 500 gave back just over a point and declined less than 0.1%.
The Russell 2000 was the winning standout with a 0.6% gain and was followed by the Nasdaq, which jumped 0.3%.
Apple (AAPL 11.25, +1.55), which has a 9.3% weight in the Nasdaq Composite and a 3.6% weight in the S&P 500, was instrumental as a support factor. It moved up 1.4% on no news of note, although we suspect investors were drawn to the stock for its relative strength and its standing as a company that is least likely to report any news in the near term that would qualify as a material disappointment.
The best-performing stock in the sector, however, was Yahoo (YHOO 50.60, +1.55), which jumped 3.2%. That gain was fueled by the company's announcement that it will pay $640 million in cash to acquire BrightRoll, a leading programmatic video advertising platform. BrightRoll is expected to have net revenues in excess of $100 million and offers Yahoo an enhanced ability to compete against the likes of Google (GOOG 547.31, -2.98) and its YouTube property given BrightRoll's ability to attract advertisers and publishers.
It didn't hurt Yahoo either that Alibaba (BABA 118.20, +3.66) recouped most of what it lost on Tuesday.
Another stock rebounding from a weak showing on Wednesday was Juniper Networks (JNPR 20.87, +0.59). It tacked on 2.9% on some bargain hunting activity.
Other winning standouts in the sector included Avago Technologies (AVGO 87.05, +0.89), Computer Sciences Corp. (CSC 61.25, +1.05), EMC Corp. (EMC 29.43, +0.41), Jabil Circuit (JBL 21.35, +0.32), Qualcomm (QCOM 70.29, +0.65), Teradata (TDC 44.58, +0.87), and Visa (V 251.95, +2.70).
None of those stocks were driven by any news of note. Separately, Topeka Capital Markets initiated coverage of Visa and MasterCard (MA 84.35, -0.24) with Hold ratings.
Hold was an operative word on Wednesday as many stocks inside the S&P 500 information technology sector (+0.2%) behaved as if they were in a holding pattern.
There was more action found outside the sector in names like Alibaba, as mentioned above, and Twitter (TWTR 42.54, +2.95), which increased 7.5% following its first ever Analyst Day and declaration that it believes it is growing at a faster pace than IDC data indicate.
Cree (CREE 34.88, +0.96) was another name attracting bargain hunting interest following a sharp decline of late.
Postscript: After the close, Cisco (CSCO 25.11, -0.04) reported a fiscal first quarter profit of $0.54 per share that was slightly ahead of expectations on a 1.3% increase in revenue. Separately, it announced that CFO, Frank Calderoni, recently informed the company of his decision to step down, effective January 1, 2015. Kelly A. Cramer, Sr. VP of Business Technology and Operations Finance, has been named as Calderoni's replacement.
On its conference call, Cisco said it sees second quarter non-GAAP EPS of $0.50 to $0.52 (up 6-11%) and revenue growth of 4-7%. Those guidance ranges are below analysts' current expectations.
Shares of CSCO were down 1.0% in after-hours trading as of this writing.
4:20 pm Brooks Automation beats by $0.01, beats on revs; guides Q1 EPS below consensus, revs above consensus (BRKS) : Reports Q4 (Sep) earnings of $0.07 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.06; revenues rose 10.7% year/year to $122.5 mln vs the $117.74 mln consensus.
Co issues guidance for Q1, sees EPS of $0.05-0.07, excluding non-recurring items, vs. $0.08 Capital IQ Consensus Estimate; sees Q1 revs of $125-130 mln vs. $124.85 mln Capital IQ Consensus Estimate.CEO said, "We achieved sequential growth across all business segments during the fourth quarter, as well as year-over-year growth across all segments for the fiscal year. Growth came with higher margins as we continued to focus on higher value-added products and solutions."
4:15 pm Cisco Systems beats by $0.01, reports revs in-line; Sr. VP Kelly Kramer apointed CFO after Calderoni steps down (CSCO) : Reports Q1 (Oct) earnings of $0.54 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.53; revenues rose 1.3% year/year to $12.24 bln vs the $12.16 bln consensus.
"We are still in a tough environment, but seeing encouraging trends as cities, businesses, governments and schools are becoming more digitized."
Frank Calderoni recently notified Cisco of his decision to step down as executive vice president and chief financial officer of Cisco, effective January 1, 2015. Cisco plans to appoint Kelly A. Kramer to succeed Mr. Calderoni. She is currently senior vice president, Business Technology and Operations Finance of Cisco. Cisco repurchased ~41 million shares of common stock under the stock repurchase program at an average price of $24.58 per share for an aggregate purchase price of $1.0 billion during the first quarter of fiscal 2015.
4:15 pm Closing Market Summary: Energy and Financials Prevent S&P 500 From Posting Gains (:WRAPX) : The stock market ended the midweek session on a mixed note. The Nasdaq (+0.3%) and Russell 2000 (+0.5%) registered modest gains while the S&P 500 (-0.1%) settled just below its flat line.
Equity indices began the day in negative territory, but the broad weakness was not brought upon by macroeconomic developments. Instead, the benchmark index took a step back after soaring 12.0% off its mid-October low. However, the index could not be held down for long, charging back to its unchanged level before noon ET.
Heavily-weighted financials (-0.3%) and energy (-0.9%) were largely responsible for the opening weakness as the pair accounts for nearly 30.0% of the entire market. The energy sector continued retreating throughout the day while crude oil fell 1.0% to $77.11/bbl. For its part, the financial sector was able to cut its loss in half, but the group kept the benchmark index under pressure into the afternoon. Large banks were the source of the weakness after Bank of America (BAC 17.28, -0.04), Citigroup (C 53.42, -0.39), JPMorgan Chase (JPM 60.56, -0.81), Royal Bank of Scotland (RBS 11.82, -0.22), HSBC (HSBC 50.22, -0.35), and UBS (UBS 17.38, +0.05) were hit with a collective fine of $4.30 billion that was imposed by regulators from the U.S., U.K., and Switzerland. The fine marks the first action taken in a currency-rigging probe that began last year.
The daylong weakness in the two groups prevented the S&P 500 turning positive, but the benchmark index did not go down without a fight. The top-weighted sector-technology-registered a modest gain of 0.2% with help from Apple (AAPL 111.25, +1.55), while consumer discretionary (+0.5%) and industrials (+0.1%) also settled in the green.
Discretionary shares were underpinned by apparel names after Fossil (FOSL 112.48, +8.73) and Macy's (M 61.57, +2.98) reported better than expected results. However, both lowered their guidance and Fossil announced a $1 billion buyback. Retail names in general had a strong showing with the SPDR S&P Retail ETF (XRT 91.54, +1.67), which contains a selection of staple stocks, spiking 1.9%.
Elsewhere, the industrial sector rallied behind transport stocks. The Dow Jones Transportation Average added 0.4% with shipper Matson (MATX 35.21, +5.98) surging 20.5% after agreeing to acquire Horizon Lines (HRZL 0.65, +0.28) for $0.72 per share and the repayment of debt.
Treasuries notched their highs shortly before the start of the session, but retreated throughout the day. The 10-yr yield ended unchanged at 2.36%.
Participation was in-line with long-term averages but below recent trends with 702 million shares changing hands at the NYSE floor.
Economic data was limited to Wholesale Inventories and the MBA Mortgage Index:
Wholesale inventories increased 0.3% in September after increasing a downwardly revised 0.6% (from 0.7%) in August, while the Briefing.com consensus expected an uptick of 0.2% The BEA assumed that wholesale inventories declined 0.1% in the advance estimate for Q3 GDP, but inventory growth greatly exceeded the estimate, which should result in a positive revision to third quarter growth The weekly MBA Mortgage Index slipped 0.9% to follow last week's decline of 2.6% Tomorrow, weekly Initial Claims (Briefing.com consensus 280K) will be released at 8:30 ET while the Job Openings and Labor Turnover Survey will be reported at 10:00 ET. The day's data will be topped off with the 14:00 ET release of the Treasury Budget for October.
Nasdaq Composite +11.9% YTD S&P 500 +10.3% YTD Dow Jones Industrial Average +6.3% YTD Russell 2000 +1.9% YTD
4:09 pm MagnaChip Semi announces completion of audit committee's investigation; update on restatement process; Files to delay form 10-Q (MX) : Subject to management's completion of the restated financial statements and related disclosures for the restatement periods as well as the reviews and audit to be conducted by Samil PwC, the Company currently anticipates filing its 2013 Form 10-K by Jan 30, 2015, with the quarterly reports on Form 10-Q for the first three quarters of 2014 to be filed as soon as practicable thereafter. However, because of the nature and amount of work that needs to be completed to file the 2013 Form 10-K, the Company cannot be certain how much time will ultimately be required to complete the restatement process and accordingly there remains a substantial risk that additional time will be required.
Co also filed to delay the filing of its Form 10-Q.
1:04 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
JD (27.37 +6.04%): Announced it sees record orders during 2014 Singles Day sales event, saw over 14 mln orders on November 11, increase of over 120% y/y.
M (61.18 +4.42%): Reported Q3 earnings of $0.61 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.50; revenues fell 1.3% year/year to $6.2 bln vs the $6.33 bln consensus; Q3 same store sales of -0.7% vs ~1.4% estimate; reaffirmed margin expectations.
YHOO (50.35 +2.65%): Announced a definitive agreement to acquire BrightRoll, a leading programmatic video advertising platform for ~$640 mln in cash; also there were reports that some investors want Yahoo & AOL (AOL) to merge.
Large Cap Losers
SJM (100.42 -4.11%): Guided OctQ and FY15 EPS and revenue below consensus on weaker coffee sales; Heard downgraded to Neutral at Northcoast following guidance cut.
E (40.21 -3.15%): Downgraded to Hold at Deutsche Bank.
CNHI (7.89 -2.77%): Heard initiated with an Underperform at Macquarie; tgt $7.
Mid Cap Gainers
FOSL (112.41 +8.35%): Reported Q3 results that beat consensus estimates by $0.14, beat on revs; guided Q4 EPS below consensus, revs below consensus; guided FY14 EPS in-line; Announced $1 bln share buyback; also announced that they have renewed their global licensing agreement with Michael Kors (KORS) through 2024.
AEO (13.49 +7.83%): Raised Q3 EPS guidance above consensus; Q3 comps -5%; Positive commentary out from Janney, Topeka.
PE (17.67 +7.48%): Beat Q3 consensus estimates by $0.03, reported revs in-line; guided 2H14 daily production above 1H14; Initiated with a Overweight at Johnson Rice.
Mid Cap Losers
RICE (26.75 -5.44%): Reported Q3 loss of $0.11 per share, $0.07 worse than the Capital IQ Consensus Estimate of ($0.04); revenues rose 234.1% year/year to $79.12 mln vs the $80.3 mln consensus.
JBLU (12.41 -4.13%): Downgraded to Neutral from Overweight at JP Morgan.
FANG (64.72 -4.12%): Announced pricing of secondary common stock offering of 2 mln shares by selling shareholders.
12:02 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (131) outpacing new lows (80) (:SCANX) : Stocks that traded to 52 week highs: AAPL, AAT, ADP, AGIO, AMWD, ANIP, ARIS, ASML, ATHL, ATNI, BANF, BC, BIDU, BIN, BMI, BRK.A, BSET, BUSE, CACC, CAH, CATO, CDK, CEA, CHDN, CHE, CHFN, CHKP, CLC, CNC, CORE, CSH, CSL, CSX, CVTI, DHR, DHX, DRI, DTSI, DYAX, ENR, ENV, EROS, FBMS, FDS, FFG, FIZZ, FTD, FTNT, GK, GPI, HAWK, HBNK, HCSG, HI, HNT, HSP, HVB, IBN, IDCC, IDXX, IFN, INCY, INGN, IP, IQNT, IRM, KAR, KFRC, KNX, LABL, LB, LBTYA, LBY, LNDC, LOGM, LOW, MATX, MHG, MKSI, MMS, MNRK, MOH, MUSA, NAVI, NCLH, NKE, NSC, ODP, OMER, PAHC, PDCO, PERY, PG, PII, PRGS, PRI, PRK, PTX, QLYS, QTM, RDI, RDY, RGS, RHI, ROG, SAM, SBCF, SERV, SHLX, SPLP, SSNC, STZ, SUSQ, SWIR, SXT, TOF, TREE, TXRH, UBSI, USLM, UVE, VAC, VFC, VTAE, VVC, WAL, WERN, WMS, WSBC, WU, YHOO
Stocks that traded to 52 week lows: ACUR, AIXG, AMSC, ANGI, ARO, AXX, BPZ, CACH, CALL, CANF, CCSC, CEL, CERE, CGEN, CHOP, CPAH, CRNT, CYTX, DISCA, DISCK, DRD, EPAX, EPRS, ESSX, EVGN, EZCH, FMD, GRAM, GRVY, GSV, HCAP, HIIQ, HLF, HMG, IFMI, INVN, KOP, KTOS, LAND, LND, LPTN, MELA, MGI, MZOR, NAVB, NBG, NCTY, NKA, NMM, NSLP, NYMX, OXGN, PAL, PED, PHMD, PTNR, REN, RESI, RFIL, RNO, ROIA, ROIAK, RYN, SDLP, SEAS, SFUN, SFY, STAA, STAY, SWSH, THRX, TRUP, TS, UCP, USEG, W, WGA, WSTL, WTSL, XIN
ETFs that traded to 52 week highs: QQQ, RTH, XLK, XRT
ETFs that traded to 52 week lows: FXB
8:32 am Solar Power announced that its subsidiary, SPI Solar Power, has entered into a framework agreement to acquire Guodian Nailuen Tumed Left Banner PV Electricity for $101.3 mln (SOPW) : Co announces its subsidiary, SPI Solar Power, has entered into a framework agreement to acquire Guodian Nailuen Tumed Left Banner PV Electricity. Guodian Nailuen, a PV project company, operates 65 megawatts of existing PV projects in Tumed Left Banner County, Nailuen, Inner Mongolia, which were connected to the grid in 2013. The aggregate purchase price to acquire Guodian Nailuen is $101.3 mln, of which US$65.2 mln is in the form of lease financing.
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