From Briefing.com: The Technology Sector performed in-line with the broader market on Wednesday, closing 0.53% lower, slightly better than the S&P 500, which fell 0.58%.
The lone gaining industry group in the sector, Electronic Equipment, Instruments & Components, rose 0.15%, led by LG Display (LPL 16.65 +0.47), Corning (GLW 23.25 +0.10), Orbotech (ORBK 15.53 +0.33), and Keysight Technologies (KEYS 34.83 +0.24).
IT Services, on the other hand, led the sector lower, falling 0.85%. Large caps that led the group lower include Wipro (WIT 11.23 -0.26), Alliance Data Systems (ADS 281.37 -6.18), Visa (V 255.56 -5.22), and Fleetcor (FLT 139.79 -2.07).
In other news, BlackBerry (BBRY 12.60 +2.89) shares flew 29.7% higher near the end of the day following Reuters report suggesting Samsung (SSNLF) considering BBRY acquisition. The expected price range for the buyout is between $13.35-15.49/share. This is an interesting though, as Samsung has tried for years to relieve itself of Android dependency. BBRY's operating system runs on Linux, as does Android, which would allow them to continue running Google applications. One thing worth noting though, neither company has confirmed the acquisition rumor.
Elsewhere, Best Buy (BBY 39.91 +0.81) is set to report holiday sales Thursday morning. Last year the stock fell 30% after this report as an intense promotional environment led to a 0.9% domestic comp decline and a profit warning. BBY has guided its fourth quarter revenue near flat. The company also guided for an improvement in gross margin and an approximate 50 bps year/year expansion in operating margin. BBY appears to be in a much better this position this year, helped by a strong product cycle (mostly Apple (AAPL109.80 -0.49), but GoPro (GPRO 52.34 +2.47) and 4K TVs also creating year/year tailwind).
Also in news today, Needham hosted Micron (MU 30.05 -0.79) VP of Investor Relations, Kipp Bedard at their 17th Annual Growth Conference and were able to discern more information in the wake of yesterday's SanDisk negative pre-announcement. Micron believes the NAND market saw pricing pressure over the last few months caused by Samsung, specifically in client SSDs with an attempt to shift capacity away from its mobile handsets to PCs. NAND pricing over the last four weeks has stabilized, however, and demand trends remain strong. For 2015, on the DRAM side, mobile is expected to be a large driver of DRAM consumption as more phones utilize 4Gb, and NAND growth is expected to be driven by growth in embedded and eMCP. Micron is also making progress toward TLC and 3D NAND, with the former expecting shipments this spring and the latter in 2H15.
On to analyst related actions, TrueCar (TRUE 19.61 -1.49) downgraded to Market Perform from Outperform at Cowen.
Red Hat (RHT 66.38 -1.06) was downgraded to Sell from Neutral at Goldman.
Cirrus Logic (CRUS 24.26 +0.32) was upgraded to Sector Perform from Underperform at Pacific Crest.
Xilinx (XLNX 41.37 -0.48) was downgraded to Neutral from Overweight at JP Morgan.
5:31 pm BlackBerry announces it has not engaged in discussions with Samsung (SSNLF) with respect to any possible offer to purchase BlackBerry (BBRY) : The co notes it is aware of certain press reports published today with respect to a possible offer by Samsung (SSNLF) to purchase BlackBerry.
The co notes it has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. BlackBerry's policy is not to comment on rumors or speculation, and accordingly it does not intend to comment further.
4:31 pm Semtech announces it has completed the acquisition of assets of EnVerv, Inc; expects the acquisition to be neutral to its FY16 results; terms not disclosed (SMTC) :
"PLC technology is highly complementary to our current wireless LoRa solutions and expands Semtech's available market beyond the industrial wireless segment into the industrial PLC market and the residential gateway market. We believe that the Smart Home and the Smart Grid are still in their early stages of global development, and having both PLC and wireless technologies positions us well to take advantage of both segments"
4:25 pm Adobe Systems announces program to repurchase $2.0 billion of stock by end of FY2017 (ADBE) : Co announce its Board of Directors has approved a new stock repurchase program granting the co authority to repurchase up to $2.0 billion in common stock through the end of fiscal 2017. The proposed stock repurchase program approved by Adobe's Board of Directors is substantially similar to the company's previous program authorizing the repurchase of up to $2.0 billion in common stock through fiscal 2015, which authority has been exhausted.
4:15 pm Closing Market Summary: Stocks Retreat Amid Persistent Growth Concerns (:WRAPX) : The major averages endured their fourth consecutive decline with the S&P 500 (-0.6%) making an intraday appearance below its 100-day moving average (2,007). The tech-heavy Nasdaq outperformed, but still lost 0.5%.
Equities faced selling pressure from the start after the overnight session failed to alleviate the growth concerns that contributed to the recent weakness. Instead, the concerns grew larger, starting with the World Bank's reduced growth outlook for 2015 (to 3.0% from 3.4%) and 2016 (to 3.3% from 3.5%).
The lowered outlook pressured commodities, and especially copper, which remained under pressure throughout the day, ending lower by 4.9% at $2.51/lb after hitting a low near the $2.45/lb level. Crude oil, however, traded in the red during morning action, but rocketed into the pit close, which helped the broader market climb off its intraday low. As for crude, the energy component spiked 5.7% to $48.55/bbl.
The rebound in crude helped the energy sector (+0.1%) finish in the green, but other cyclical groups did not fare as well. Notably, the financial sector (-1.4%) ended at the bottom of the leaderboard, which was largely due to a 3.5% decline in JPMorgan Chase (JPM 56.81, -2.03) after the industry giant reported below-consensus earnings and revenue. For its part, Wells Fargo (WFC 51.25, -0.60) delivered an in-line report, but still lost 1.2%.
Financials inched away from their lows during afternoon action, but could not catch up to the broader market, which was also the case with the consumer discretionary sector (-1.2%). The fourth-largest sector by weight retreated following the disappointing December Retail Sales report (-0.9%; Briefing.com consensus 0.1%) while homebuilders lagged early, but ended just ahead of the broader market with the iShares Dow Jones US Home Construction ETF (ITB 25.90, -0.09) falling 0.4%.
Elsewhere among cyclical sectors, technology (-0.5%) finished just ahead of the broader market while chipmakers kept pace with the S&P 500. Shares of BlackBerry (BBRY 12.60, +2.88) spiked almost 30.0% in afternoon action after Reuters reported the company has been approached by Samsung about a potential takeover.
Unlike cyclical sectors, the four defensively-oriented groups spent the day ahead of the broader market. Health care (-0.1%) settled just below its flat line while the iShares Nasdaq Biotechnology ETF (IBB 315.57, +0.60) added 0.2%. The utilities sector (+0.9%) was the lone advancer on the countercyclical side, extending its January advance to 1.4%.
Treasuries jumped following this morning's data before surrendering a portion of their gains. The 10-yr yield fell six basis points to 1.84%. Also of note, the 30-yr yield ended at 2.45% (-3 bps), which represented the lowest close on record.
Today's participation was ahead of average with more than 900 million shares changing hands at the NYSE floor.
Economic data included Retail Sales, Import/Export Prices, Business Inventories, and the MBA Mortgage Index:
Retail sales fell 0.9% in December after increasing a downwardly revised 0.4% (from 0.7%) in November, while the Briefing.com consensus expected an increase of 0.1%. The sharp pullback in sales was a direct result of poor income growth. The December employment report showed a contraction in the average hourly wage, which resulted in flat aggregate income growth after accounting for payrolls gains Without income growth, the only way for sales to improve was for consumers to dip into their savings. Households have been very reluctant to do so, which meant retail sales were poised for a pullback in December Excluding motor vehicles, sales declined 1.0% after increasing a downward revised 0.1% (from 0.5%) in November The consensus expected these sales to increase 0.1% Export prices, excluding agriculture, decreased 1.2% in December after decreasing 1.2% in the prior reading Excluding oil, import prices ticked down 0.1%, which followed last month's 0.3% decline Business Inventories rose 0.2% in November, while the Briefing.com consensus expected an increase of 0.3% The prior month's reading was left unrevised at +0.2% The weekly MBA Mortgage Index saw its biggest spike since November 2008, surging 49.1% to follow the previous 11.1% spike Tomorrow, weekly Initial Claims (Briefing.com consensus 290K), December PPI (consensus -0.4%), and January Empire Manufacturing Survey (expected 6.5) will be released at 8:30 ET while the Philadelphia Fed Survey for January (consensus 19.0) will cross at 10:00 ET.
Russell 2000 -2.4% YTD S&P 500 -2.3% YTD Dow Jones Industrial Average -2.2% YTD Nasdaq Composite -2.0% YTD
12:57 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
MNST (117.71 +4.07%): Upgraded to Outperform from Market Perform at Cowen, tgt to $130 from $106.
MHK (163.43 +2.07%): Announced the purchase of IVC Group for ~$1.2 bln through a combination of cash and equity; expected to be accretive to EPS in the first twelve months; price target raised to $178 at RBC Capital Mkts.
LLTC (45.9 +1.62%): Reported Q2 (Dec) earnings of $0.51 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.49; revenues rose 5.4% year/year to $352.58 mln vs the $354.55 mln consensus.; sees Q3 revs +4% to +7% sequentially (~$366.7-377.3 mln) vs $364.32 mln Capital IQ Consensus Estimate.
Large Cap Losers
FCX (18.42 -12.48%): Copper miners under heavy pressure today as the futures price of Copper drops 6% establishing a new multi-year low (SCCO also lower).
TSLA (190.87 -6.55%): Down following comments from Elon Musk that China Q4 sales were down significantly.
VIAB (68.14 -6.18%): Downgraded to Sell from Buy at Citigroup.
Mid Cap Gainers
XON (37.29 +31.44%): The co and ZIOPHARM Oncology (ZIOP) announced a broad exclusive licensing agreement with The University of Texas MD Anderson Cancer Center.
GME (36.73 +12.08%): Reported global sales for the holiday period were $2.94 billion, a 6.7% decline compared to the 2013; reaffirmed Q4 guidance.
FCE.A (24.16 +8.78%): Announced its Board of Directors approved a plan for the company to pursue conversion to REIT status.
Mid Cap Losers
DDD (29.36 -4.92%): Heard cautious mention at sell-side shop.
FL (52.14 -5.91%): Downgraded to Sell from Neutral at Goldman.
ERJ (33.08 -4.67%): Announced that Free Cash Flow guidance for 2014 has been revised from positive low double digits (as disclosed on February 26, 2014) to negative Free Cash Flow of ~$400 mln.
11:55 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (315) outpacing new highs (124) (:SCANX) : Stocks that traded to 52 week highs: AAT, ACC, AEC, AKR, ANTM, APU, AVB, AVID, AVIV, AXL, AYN, BAM, BBN, BFK, BLE, BNDX, BNY, BSE, BTT, CBST, CCA, CNS, CRY, CUBE, CUTR, DCT, DDR, DEG, DFT, DMB, DRE, EBIX, EBS, ELS, EMI, ENX, EQR, ESS, EVM, EXR, FARM, FCE.A, FCE.B, FMB, GNCMA, HCN, HCP, HCT, HIW, HME, HNP, IDXX, IMH, INAP, IQI, KIM, KIRK, KITE, KTF, KTF, MAC, MCA, MFT, MHK, MIY, MJI, MPA, MPW, MVF, MYM, NAC, NAN, NBIX, NBO, NEV, NKX, NMZ, NNP, NPSP, NQM, NQP, NSP, NVCN, NVX, NXZ, NZH, O, OHI, PMF, PMO, PTSI, PYN, QURE, RFI, RIF, RIT, RKT, RPAI, RQI, RSE, SBRA, SKT, SNFCA, SPG, STAG, SURG, TA, TDG, UBA, UBP, UDR, UHT, UIHC, USAK, VBLT, VCV, VGIT, VGLT, VKI, VKQ, VTR, WSO, XENT, ZIOP
Stocks that traded to 52 week lows: AAMC, AAOI, ABB, ACI, ACM, AEGN, AIT, AIXG, AKO.B, AKS, ALJ, AM, AMFW, AMID, AMRS, ANR, AR, ARR, ASNA, ASTI, ATI, ATLS, AVP, AWAY, BAK, BALT, BBCN, BBEP, BBL, BCH, BCOR, BGC, BHP, BKU, BNS, BOKF, BONT, BOOM, BSPM, BTU, BWA, CAAS, CAM, CAS, CAT, CBLI, CCJ, CCSC, CEL, CG, CHOP, CIR, CLB, CLD, CMA, CMC, CNNX, CNQ, CNSI, CNTF, CRC, CRK, CROX, CRR, CRS, CS, CSUN, CU, CVCY, CVI, CVRR, CYCC, DBD, DISCA, DISCK, DNN, DPM, DRAM, DWCH, DXPE, ELON, EMN, EOX, EPAY, EQT, EVEP, EVRY, EXH, EXP, FCEL, FCX, FELP, FFHL, FFIN, FIVE, FLR, FMSA, FSC, FSIC, FTEK, FTI, FTK, GBCI, GDP, GE, GHL, GKNT, GLNG, GNBC, GPRK, GRAM, GTLS, GWR, GYRO, HBHC, HBM, HEES, HELI, HERO, HFC, HHC, HIE, HK, HLX, HMNY, HSBC, HSC, HSOL, HSON, HWCC, IBKC, IBTX, ICLD, IGLD, IMO, INBK, IOC, IRR, ITT, JEC, JGBB, JGH, JMI, JOE, JONE, KBIO, KCAP, KEX, KLXI, KMT, KOP, KORS, KRO, LAS, LEI, LF, LGCY, LGIH, LOJN, LOV, LRE, LUB, MAT, MCEP, MCP, MDLY, MEP, MGI, MIND, MMLP, MN, MNI, MRC, MT, MTRX, MTSL, NADL, NES, NFX, NGLS, NOV, NR, NRIM, NSLP, NUE, NWPX, OCLS, OCN, OIBR, OIBR.C, OII, OIS, ONP, OPB, ORIG, PANL, PB, PBA, PCM, PDS, PER, PERI, PES, PFMT, PHD, PKD, PKO, POPE, PRIM, PSIX, PSTR, PSX, PTNR, PWE, PZN, RAS, REE, REN, RES, REXX, RGP, RICE, RIG, RLOG, ROYL, RS, RSO, RVM, RYAM, RYI, SB, SBLK, SBS, SCCO, SD, SDPI, SDRL, SEMG, SGM, SHLO, SINA, SLB, SMFG, SODA, SPP, SRF, SRPT, SRV, SSE, SSL, SSN, SSYS, STAA, STN, SVBI, SXC, SZC, TAPR, TC, TCBI, TCK, TCRD, TD, TEX, TGB, TGEN, TISA, TIVO, TK, TMST, TOO, TPRE, TRC, TRCO, TRGP, TRIV, TRMB, TRMK, TRN, TRQ, TS, TX, UCP, UG, UMBF, UNT, UPI, USAP, UTEK, UUUU, VMI, VTTI, WB, WCC, WGO, WIRE, WLKP, WLT, WMC, WMGI, WNR, WNRL, WOR, WPCS, WPZ, WTW, X, XEC, XIN, XONE, YDLE, YUMA, ZEUS, ZION, ZU
ETFs that traded to 52 week highs: FLAT, HYD, ICF, IEF, TLH, TLT
ETFs that traded to 52 week lows: DBB, EPU, EWC, EWO, IXC, JJC, KOL, OIH, PBW, SLX, TBT, URA, USCI, XES, XLE, XME, XOP
8:32 am Smith Micro Software sees Q4 and FY15 revs above consensus (SMSI) :
Co issues upside guidance for Q4 (Dec), sees Q4 (Dec) revs of $10.4-10.6 mln vs. $10.11 mln Capital IQ Consensus Estimate. Non-GAAP operating profit for the fiscal 2014 fourth quarter is expected to be in the range of $600-700KCo issues upside guidance for FY15 (Dec), sees FY15 (Dec) revs of $45-49 mln vs. $42.97 mln Capital IQ Consensus Estimate; expects to be non-GAAP profitable for the fiscal year 2015 (Capital IQ consensus $0.01)
4:04 am LM Ericsson takes legal action to ensure fair licensing agreement with Apple (AAPL) for mobile technology (ERIC) : Ericsson (ERIC) has today filed a complaint in the United States District Court for the Eastern District of Texas requesting a ruling on Ericsson's proposed global licensing fees with Apple (AAPL). During the past two years of negotiations, the companies have not been able to reach an agreement on licensing of Ericsson's patents that enable Apple's mobile devices to connect with the world and power many of their applications. Ericsson filed the suit in order to receive an independent assessment on whether Ericsson's global licensing offer complies with Ericsson's FRAND commitment.
The license agreement has expired and no new agreement has been reached, despite approximately two years of negotiations, resulting in Apple being without a license to Ericsson's technology On January 12, 2015, Apple filed a lawsuit asking the United States District Court for the Northern District of California to find that it does not infringe a small subset of Ericsson's patents In response Ericsson filed a complaint in the United States District Court for the Eastern District of Texas requesting the court to determine if its global licensing offer for Ericsson's standard essential patent portfolios to Apple is fair, reasonable, and non-discriminatoryEricsson invests more than $5 billion in Research & Development per year resulting in one of the industry's most comprehensive patent portfolios
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