From Briefing.com: Only the Utilities and Energy Sectors underperformed the Technology Sector on Tuesday. The S&P Technology Sector Index fell 0.70% versus the S&P 500, which only fell 0.49%. All industry groups in the space ended the day lower, with Technology Hardware, Storage & Peripherals leading decliners, closing down 1.1%. With the entire sector ending lower, it may be a good time to take note of those stocks that were able to buck the trend and show strength in the headwinds of a weak broader market. Yahoo (YHOO 51.22 +0.69), Computer Sciences Corp (CSC 64.44 +0.46), Juniper Networks (JNPR 22.67 +0.08), and Ebay (EBAY 57.22 +0.19) were all able to close in the green.
While the news wire was fairly thin today, there were several analyst actions with commentary worth noting:
Xerox (XRX 14.01 -0.13): Argus reiterated its Hold rating for XRX on Tuesday, noting that Xerox has agreed to sell its information technology outsourcing business to Atos for $1.05 billion. The disposition of this business, in which Xerox has been a second-tier player, should enable the company's services business to focus on core competencies, including business process outsourcing and document outsourcing. As a result of the planned sale, Xerox has reduced its non-GAAP EPS guidance for both 2014 and 2015. Meanwhile, the stock has already experienced its big move from deep-value territory, which prompted Argus' mid- 2010 upgrade, to something approaching fair value, which prompted Argus' mid-2014 downgrade.
Yelp (YELP 54.24 +1.23): MKM Partners announced that it is maintaining its Buy rating for YELP. In support of this decision, MKM noted that current valuation implies revenue growth deceleration from 60-90% over the past 4- years to 15% in the next 4-years and that EBITDA margin will level in the mid-30% range. MKM sees a very different path for the business in this time frame. While the stock is pinned under confusion with Local Business Account disclosures, MKM encourages investors to take a deeper look into the composition of revenue growth and the margin profile of this business. MKM sees very meaningful stock price appreciation over the next several yrs. It also noted that the company is a misunderstood stock and still one of the best long term growth stories in the sector.
Fireye (FEYE 32.41 -0.59): The cyber security company maintained its Buy rating at Topeka Capital, which mentioned that while the security peer group has risen on average 53% YTD, FEYE is among only a few security stocks that are down YTD and being down 24% puts the company in the #1 slot among the under-performers. Firm believes FEYE will play catchup in 2015 based on: 1) Its position in the Advanced Persistent Threat mkt; 2) An expansion of its Total Addressable Market via entry into Endpoint Protection and; 3) Heightened awareness following several highly publicized breaches about the importance of Incidence Response. Additionally, Topeka noted that the #1 needle mover for the company's stock price is for it to exhibit operating margin expansion through Op-Ex discipline. FEYE ranks #1 in terms of potential price appreciation among firm's security universe.
Akamai Technologies (AKAM 64.07 +0.28): DA Davidson announced that it maintains AKAM at a Buy, raising its price target to $86 from $72. Firm views the company's tech as significantly differentiated in the market, both on the CDN side of the business and on the security and performance side. AKAM's ability to deploy capabilities at the edge of the network is one such differentiator. DA Davidson believes AKAM's strong balance sheet and solid cash flow generation also offer it a competitive advantage in the market. DA Davidson continues to anticipate strong top and bottom line growth throughout 2015 and beyond.
Synnex (SNX 78.10 +0.54): Brean Capital maintained its buy rating on the stock, while raising its price target to $90 from $85. Brean Capital believes the company is no longer just cyclical, also noting that it believes SNX's overall mix continues to shift favorably with the integration of the recently acquired IBM (IBM 160.05 -0.46) BPO business, legacy Concentrix business, and growing traction with the company's Hyve offering -- all of which favorably impact margin and revenue growth. Brean Capital views the anticipated Windows Server refresh cycle along with a stable PC environment as boding favorably for co over the course of 2015, which it believes will help the company manage EPS expectations and deliver on them accordingly. In fact, firm noted that unlike other IT Distributors, SNX does not have any European exposure, and as such, does not include any European-associated macro risk.
4:09 pm Closing Market Summary: Stocks Retreat Amid Light Volume (:WRAPX) : The stock market ended the Tuesday session on a broadly lower note. The Nasdaq Composite (-0.6%) was the weakest performer among the major averages while the S&P 500 (-0.5%) ended a bit ahead of the tech-heavy index.
Equities began the day in negative territory and remained below their flat lines until the close. However, participation was very limited with just 525 million shares changing hands at the NYSE floor. The light activity was also reflected by narrow trading ranges with the S&P 500 bounded between 2,080 and 2,084 for most of the session.
Overall, cyclical sectors were responsible for the bulk of the weakness as three of six growth-sensitive groups settled in-line with or behind the broader market while the utilities sector (-2.1%) was the only laggard on the countercyclical side.
The utilities sector spent the entire session at the bottom of the leaderboard to narrow its 2014 gain to 26.6%. Despite today's retreat, the rate-sensitive group remains on track to finish the year ahead of the other nine sectors while health care, which has spiked 24.5% in 2014, is all but sure to finish the year in the second place.
Similar to utilities, the energy sector (-0.6%) slumped out of the gate amid early weakness in crude oil, which endured a volatile session. The energy component faced selling pressure overnight, but was able to climb into the green this morning, ending higher by 0.8% at $54.10/bbl. Today's uptick in the price of crude could not prevent oil services provider Civeo (CVEO 3.92, -4.35) from slashing its guidance for next year, which caused the stock to plunge 52.6%.
Elsewhere, other influential sectors like industrials (-0.5%) and technology (-0.7%) kept the market under pressure while consumer discretionary (-0.4%), financials (-0.1%), and health care (-0.4%) displayed relative strength.
For the most part, the health care sector withstood weakness in the biotech group that pressured the iShares Nasdaq Biotechnology ETF (IBB 304.62, -3.39) lower by 1.1%. This in turn contributed to the underperformance of the Nasdaq Composite.
Treasuries notched their highs shortly after the opening bell before retreating throughout the day. The 10-yr yield slipped one basis point to 2.19%.
Economic data was limited to Consumer Confidence and Case-Shiller 20-City Index:
The Conference Board's Consumer Confidence Index increased to 92.6 in December from an upwardly revised 91.0 (from 88.7) while the Briefing.com consensus expected an increase to 94.4
Over the last month, gasoline prices dropped to their lowest point in more than five years, equity markets have reached historic highs, and the employment situation improved notably, but the December reading came in below the 94.1 that was recorded in October
The Case-Shiller 20-city Home Price Index for October rose 4.5% against a 4.4% increase expected by the Briefing.com consensus
The prior month's reading was revised down to 4.8% from 4.9%
Tomorrow, weekly MBA Mortgage Index will be released at 7:00 ET while Initial Claims will be reported at 8:30 ET (Briefing.com consensus 290K). The Chicago PMI report for December (consensus 60.0) will cross the wires at 9:45 ET while the Pending Home Sales report for November (expected 0.8%) will be released at 10:00 ET.
Nasdaq Composite +14.4% YTD
S&P 500 +12.6% YTD
Dow Jones Industrial Average +8.5% YTD
Russell 2000 +4.1% YTD12:56 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
GG (18.82 +5.85%): Gold companies strong as the precious metal jumps $22 on the day to $1203.9 (ABX also higher).
HSP (62.9 +1.06%): Received FDA approval for Dyloject Injection, a proprietary nonsteroidal anti-inflammatory drug analgesic.
AKAM (64.23 +0.69%): Price target raised to $86 from $72, maintain Buy at DA Davidson
Large Cap Losers
SWN (27.45 -6.05%): Announced a company update and guidance for 2015: Sees FY15 production of 970-980 Bcfe, increased 2015 CapEx to $2.6 bln from $2.4 bln in 2014.
Mid Cap Gainers
ARCP (9.03 +6.49%): Corvex disclosed a 7.1% stake in 13D - notes they have had discussions to explore additions to the Board.
YELP (54.5 +2.8%): Bullish commentary from MKM Partners, firm maintains their Buy rating on the company.
MIC (70.48 +1.78%): Announced that it has completed the acquisition of an additional stake in Idaho Wind Partners; Management further expressed confidence in outlook saying they expect FCF for 2014 and 2015 to be above previous guidance.
Mid Cap Losers
GSAT (2.73 -7.46%): Additional cautious blog out this morning leading to today's decline.
CXW (37.35 -1.24%): Announced that the Federal Bureau of Prisons elected not to renew its contract at CCA's owned and operated 2,016-bed Northeast Ohio Correctional Center.
11:45 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (194) outpacing new lows (76) (:SCANX) : Stocks that traded to 52 week highs: AAL, AAVL, ACC, ACOR, AEL, AEPI, ALGT, ALK, ALV, AMED, AVIV, AXL, AYN, AYR, BC, BERY, BFS, BJRI, BKD, BKE, BLT, BMI, BNDX, BRKL, BSET, CAKE, CASY, CATO, CBL, CBRL, CCL, CDR, CFI, CFNL, CHCO, CHFN, CHRS, CHSP, CJJD, CMCSA, CMCSK, CMPR, COTY, CPF, CRI, CSBK, CSG, CTB, CTCT, CTWS, CUK, DCT, DDR, DDS, DIN, DLTR, DMF, DOOR, DRI, DRII, DY, EBTC, ELS, EQY, ESSA, EWBC, FCH, FFBC, FFNW, FR, FRME, FWRD, GGP, GIII, GK, HA, HAIN, HI, HMHC, HMN, HNI, HPP, HPT, HR, HRG, HSP, HTA, HVB, HW, IART, IDT, IFNA, IIM, INDB, INGN, INN, INTL, IPG, ISBC, JACK, JAH, JBLU, JBSS, KNL, KNX, KR, KRG, LAWS, LBY, LDL, LEG, LKFN, LNBB, LNCE, LOW, LTM, M, MAC, MCRL, MIG, MIK, MMV, MRGE, MTOR, MUSA, NATH, NBB, NBTB, NDRM, NHI, NJR, NSAM, OHI, OLP, OMER, OSBC, OTTR, OUTR, PEI, PF, PKOH, PLAY, PLD, PNFP, POOL, PSCD, PTRY, PVTB, QLGC, QTNT, RCII, REG, RFMD, RIT, RL, RLJ, ROL, RPAI, RPT, RYAAY, SAFT, SBCF, SCHL, SCX, SIGM, SIX, SKT, SNV, SSNC, SSS, STL, SVU, SWX, SYBT, TQNT, TROW, TTPH, TWC, TXRH, UBA, UBNK, UBP, UBSI, UCFC, USAK, VAC, VNO, WAL, WDFC, WHR, WSBF, WSM, XENE, ZUMZ
Stocks that traded to 52 week lows: AMRS, ASTI, AWF, BLIN, BSDM, CAPN, CBRX, CCIH, CEL, CHKR, CLSN, CLWT, CVEO, CVRR, DCM, DSWL, ELTK, ESEA, EVGN, FRD, FTSM, GF, GLOW, GNI, HELI, HSOL, ICD, IDN, IMNP, INVT, LIQD, LMRK, LOOK, LRE, LUB, MGIC, MGN, MIN, MSN, MY, NAME, NBG, NCTY, NDRO, ONTX, ORMP, PBMD, PBT, PKO, PKX, PLX, PT, PTNR, RCON, SDR, SHIP, SPP, SRF, SWN, SWZ, TGC, TLP, UAMY, UPL, UQM, VOC, VRNG, VRTA, VVUS, WBAI, WHZ, WPCS, XGTI, XXII, YUMA, ZU
ETFs that traded to 52 week highs: RTH, VNQ, XLI, XRT
ETFs that traded to 52 week lows: BNO, DJP, GREK, GSG, UGA, USCI
9:03 am Viasystems: TTM Technologies (TTMI) announces receipt of all foreign approvals to acquire Viasystems; expect the acquisition to close in the first half of 2015 (VIAS) :
6:03 am Chipmos Technology subsidiaries approve merger agreement (IMOS) :
Co announced that the required greater than 50% of shareholders of both IMOS and ThaiLin Semiconductor have voted in person or by proxy to approve the proposed merger of the two ChipMOS' subsidiaries. The respective special general meetings were held on December 30, 2014.
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