From Briefing.com: Market participants returned from the holiday weekend, armed with the understanding that Greece had balked at the suggestion of extending its bailout program, that the ceasefire in Ukraine had been violated, and that Japan's fourth quarter GDP was weaker than expected. Notwithstanding the negative connotation of those headlines, the stock market stood its ground and walked through Tuesday's session with a sense of calm and resignation that worst-case scenarios won't be allowed to unfold.
The latter mentality took a heavy toll on the U.S. Treasury market, which suffered some sizable losses across the curve as safe-haven trades were liquidated.
A mid-day report that Greece is poised to accept a six-month extension of its bailout program compounded the selling in the Treasury market and underpinned the stock market, along with a positive reversal in oil prices, for the remainder of the day.
A burst of buying interest in the closing minutes enabled the S&P 500 to gain 0.2% and top 2100.00 for the first time ever on a closing basis (2100.34).
The S&P 500 information technology sector was flat on Tuesday, weighed down by the likes of Google (GOOG 542.18, -6.15, -1.2%), Microsoft (MSFT 43.54, -0.29, -0.8%), Oracle (ORCL 43.80, -0.09, -0.3%), Seagate Technology (STX 61.10, -0.68, -1.2%), and Yahoo (YHOO 43.53, -0.89, -2.0%). Apple (AAPL 127.83, +0.75, +0.6%), however, provided some offsetting support.
The newsflow out of the sector was fairly limited, and included the following:
Accenture (ACN 89.30, -0.49, -0.6%): Was chosen by Pacific Specialty Insurance Company to deliver its Accenture Duck Creek Suite through a Software as a Service model, replacing its legacy-based property and casualty insurance system.
Alliance Data (ADS 284.23, -2.38, -0.8%): Monthly update on its Private Label segment showed average receivables for January totaled $10.9 bln, up 32% year-over-year; delinquency rate of 4.2% versus 4.3% in 2014.
Apple (AAPL 127.83, +0.75, +0.6%): Barron's profiles positive view on Apple based on upcoming Apple Watch product. Separately, AppleInsider article says Apple has won a patent that would allow an iPhone to serve as a display for a virtual reality headset.
Facebook (FB 75.51, -0.14, -0.3%): Announced new product ads feature that helps businesses promote multiple products or their entire catalog on devices used by their customers.
Google (GOOG 542.18, -6.41, -1.2%): Disclosed that under the terms of the newly adopted Rule 10b5-1 trading plans, and as a part of a two-year diversification plan, Larry Page and Sergey Brin each intends to sell approximately 2 million shares of each Class B common stock (converted into Class A common stock) and non-voting Class C capital stock. If Larry and Sergey complete all the planned sales under these newly adopted Rule 10b5-1 stock trading plans, they would continue to collectively own approximately 40.6 million shares of Class B common stock, which would represent approximately 11.9% of Google's outstanding Class A and Class B common stock, taken together, and approximately 52.0% of the voting power of Google's outstanding voting stock.
IBM (IBM 160.75, +0.56, +0.2%): Announced an innovative public-private partnership, along with CenturyLink (CTL 39.23, -0.23, -0.6%) and the State of Louisiana, which will create high-value, high-tech jobs in Louisiana and fuel the talent demands of the digital economy. Separately, IBM unveiled IBM Spectrum Storage, a new storage software portfolio designed to address data storage inefficiencies by changing the economics of storage with a layer of intelligent software. To accelerate the development of next-generation storage software, IBM also announced plans to invest more than $1 billion in its storage software portfolio over the next five years.Elsewhere in the technology space:
Agilent Technologies (A 40.52, +0.37, +0.9%): Dako, an Agilent Technologies company and ONO Pharmaceutical announced a new partnership to develop a potential diagnostic test specifically for use with Opdivo in the treatment of non-small cell lung cancer. This test is being investigated for its diagnostic utility to determine which patients are most likely to respond to Opdivo.
Alibaba (BABA 86.85, -2.20, -2.5%): Company stated, "Alibaba Group has received correspondence from the U.S. Securities and Exchange Commission asking for background facts and other information related to our interaction with one of our Chinese regulators, the SAIC, and related matters. We are cooperating with the SEC's request. Although Alibaba Group has no obligation to disclose the receipt of the SEC correspondence, we have chosen to proactively disclose the request because we value being open with our investors and feel that disclosure could help avoid false rumors or speculation. The SEC letter states it should in no way be construed as Alibaba Group having done anything wrong or there having been any violation of securities law. We are committed to maintaining an open, transparent and cooperative relationship with all regulatory agencies and look forward to a constructive dialogue.
Amazon.com (AMZN 375.27, -6.56, -1.7%): Press reports indicated that Amazon.com's drone plans may be limited by government regulation. Also, according to reports, Amazon.com has started one hour delivery in NYC's Manhattan region.
Arrow Electronics (ARW 62.12, +0.14, +0.2%): Acquired United Technical Publishing, a digital provider of product information to the global electronics components industry; terms not disclosed.
Blackberry (BBRY 10.36, +0.27, +2.7%): AT&T (T 34.71, +0.05, +0.1%) announced that the BlackBerry Passport and BlackBerry Classic will be available at att.com and in AT&T retail stores on Feb. 20.
Sonus Networks (SONS 18.10, +0.41, +2.3%): Company and Numonix announced that they are collaborating to increase customer service levels, maximize agent productivity, support compliance regulations and reduce contact center costs by enabling security, enhancing reliability and integrating call recording.
Analyst Action:
Blackberry (BBRY 10.36, +0.27, +2.7%): target raised to $10 from $9 at Cowen; maintain Market Perform
FireEye (FEYE 43.84, +1.58, +3.7%): target raised to $49 from $44 at BofA/Merrill
FreeScale Semi (FSL 36.30, -1.23, -3.3%): Downgraded to Sector Perform from Outperform at RBC Capital Markets
Micron (MU 32.32, +0.47, +1.5%): upgraded to Outperform from Neutral at Macquarie... RBC Capital Markets raises its target to $44 from $42... target raised to $45 from $42 at Jefferies; Buy
4:32 pm Photronics beats by $0.01, reports revs in-line (PLAB) : Reports Q1 (Jan) earnings of $0.07 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.06 and at the high end of prior guidance of $0.02-0.07; revenues rose 21.6% year/year to $123.51 mln vs the $123.37 mln consensus.
4:15 pm : The stock market kicked off an abbreviated trading week with a sleepy Tuesday session that had the S&P 500 (+0.2%) locked in an eleven-point range while the tech-heavy Nasdaq (+0.1%) spent the bulk of the day near its flat line.
Broadly speaking, the market appeared to be little concerned with weekend developments overseas, making the price action more closely correlated with the gyrations in the oil market. The benchmark index returned to its session high just above the 2,100 mark during the final minutes of the day; however, that move was not correlated to anything in particular.
A ceasefire between Ukraine and Russia-backed rebels went into effect over the weekend, but the agreement only reduced fighting in the eastern part of the country. Most importantly, the truce failed to stop the assault on an important rail hub in Debaltseve, with rebel leaders claiming control of the area, according to the Associated Press.
Russia's President Vladimir Putin, who met Hungary's Prime Minister Viktor Orban today, said the fate of Debaltseve could have been foreseen while the UN Security Council called for an immediate ceasefire.
Meanwhile in Brussels, yesterday's Eurogroup meeting with Greece provided little reason for optimism for a swift solution. The atmosphere at the negotiating table may have gotten a bit frostier today after Eurogroup officials struck down a proposal that was brought forth by France's Pierre Moscovici, and had the support of Greek Finance Minister Yanis Varoufakis.
This morning's torrent of quotes from the Eurogroup was followed by more thunder from Greek Prime Minister Alexis Tsipras, who was interviewed in Germany's Stern, and reiterated "The old austerity program is dead."
Despite Mr. Tsipras' comments, an afternoon report, attributed to unnamed sources, claimed that Greece will ask for an extension to the program that has been proclaimed dead. That report made the rounds in the early afternoon and helped nudge the S&P 500 to the 2,100 level.
Five sectors posted gains with health care (+0.7%) spending the entire session in the lead. The influential group was underpinned by biotechnology with the iShares Nasdaq Biotechnology ETF (IBB 326.82, +3.36) adding 1.0%.
The relative strength of the health care sector helped the benchmark index resist early weakness among cyclical sectors. Energy (+0.3%) was among the weakest performers in the early going, but the growth-sensitive sector perked up when crude oil erased its early morning loss. The energy component rallied 1.7% to $53.54/bbl after trading below the $52.00/bbl level this morning.
Elsewhere among cyclical sectors, financials (+0.3%) outperformed while the discretionary sector (-0.2%) was pressured by Amazon.com (AMZN 375.27, -6.56), which lost 1.7%. Automakers also struggled with Ford (F 16.11, -0.19) and General Motors (GM 37.24, -0.38) down 1.2% and 1.0%, respectively.
While the stock market maintained a narrow range, the same could not be said for Treasuries. The 10-yr note spent the day in a steady slide, sending the benchmark yield higher by 13 basis points to 2.15%. The selling may have occurred in anticipation of tomorrow's FOMC minutes from the January meeting that are likely to keep participants on guard for a potential rate hike.
Light participation was a theme last week and not much changed today with just 763 million shares changing hands at the NYSE floor.
Economic data was limited to the Empire Manufacturing Survey and NAHB Housing Market Index:
The Empire Manufacturing Survey for February registered a reading of 7.8, which was below the prior month's reading of 9.9 while the Briefing.com consensus expected an improvement to 9.0
The NAHB Housing Market Index for February slipped to 56 from 57 while the Briefing.com consensus expected an uptick to 58
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while January Housing Starts (Briefing.com consensus 1.07 million), Building Permits (consensus 1.065 million), PPI (consensus -0.4%), and core PPI (expected 0.1%) will all be reported at 8:30 ET. The January Industrial Production (consensus 0.4%) and Capacity Utilization (expected 79.9%) reports will be released at 9:15 ET while the FOMC minutes from the January meeting will cross the wires at 14:00 ET.
DJ30 +28.23 NASDAQ +5.43 SP500 +3.35 NASDAQ Adv/Vol/Dec 1626/1.62 bln/1286 NYSE Adv/Vol/Dec 1352/763.4 mln/1782 3:55 pm :
Gold and Silver ended the day down, both sank in early trading and never recovered, Apr Gold ended the day $18.50 lower at $1208.50/oz, and Mar Silver ended the day down $0.91 to $16.37/oz
Mar Copper closed $0.02 lower at $2.58/lb
March Crude Oil futures closed the day up $0.87/barrel to $53.54/barrel
Mar Natural Gas closed down $0.04 to $2.76/MMBtu
4:12 pm Agilent reports EPS in-line, revs in-line; guides Q2 EPS in-line, revs in-line; guides FY15 EPS in-line, revs in-line (A) : Reports Q1 (Jan) earnings of $0.41 per share, in-line with the Capital IQ Consensus Estimate of $0.41; revenues rose 1.8% year/year to $1.03 bln vs the $1.03 bln consensus.
Co issues in-line guidance for Q2, sees EPS of $0.37-0.41 vs. $0.39 Capital IQ Consensus Estimate; sees Q2 revs of $0.985-1.005 bln vs. $1 bln Capital IQ Consensus Estimate. Co issues in-line guidance for FY15, sees EPS of $1.67-1.73 vs. $1.73 Capital IQ Consensus Estimate; sees FY15 revs of $4.06-4.12 bln vs. $4.12 bln Capital IQ Consensus Estimate.
4:11 pm Analog Devices beats by $0.02, beats on revs; guides Q2 above consensus; raises quarterly dividend 8% to $0.40/share (ADI) : Reports Q1 (Jan) non-GAAP earnings of $0.63 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.61; revenues rose 22.9% year/year to $772 mln vs the $760.5 mln consensus.
Co issues upside guidance for Q2, sees EPS of $0.70-0.74, excluding non-recurring items, vs. $0.70 Capital IQ Consensus Estimate; sees Q2 revs of $810-830 mln vs. $806.72 mln Capital IQ Consensus Estimate.
ADI announced that its Board of Directors has approved an 8% increase in its quarterly cash dividend, from $0.37 to $0.40 per outstanding share of common stock. The quarterly dividend that was declared by the Board of Directors will be paid on March 10, 2015 to all shareholders of record at the close of business on February 27, 2015.
4:03 pm Anadigics beats by $0.01, reports revs in-line; guides Q1 revs below consensus (ANAD) : Reports Q4 (Dec) loss of $0.05 per share, $0.01 better than the Capital IQ Consensus Estimate of ($0.06); revenues fell 42.4% year/year to $20.9 mln vs the $20.77 mln consensus. Co issues downside guidance for Q1, sees Q1 revs down 10-13% q/q (of approx $18.1-18.8 mln) vs. $19.00 mln Capital IQ Consensus Estimate.
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
VIPS (24.8 +13.76%): Beat Q4 consensus estimates by $0.02, beat on revs; guided Q1 revs above consensus.
WM (53.82 +4.93%): Beat Q4 consensus EPS estimates by $0.08, missed on revs; guided FY15 EPS in-line; Board increased div to $0.385/share from prior of $0.375/share; authorized a share repurchase program of up to $1 bln.
CP (193.41 +3.81%): Announced that a tentative four-year agreement has been reached with Unifor; separately announce with that the Teamsters Canada Rail Conference agreed to enter into binding arbitration; also Conatus Capital discloses new ~0.5 mln stake in the name.
Large Cap Losers
CAG (33.87 -2.76%): Unfavorable mention on Friday's Mad Money.
FSL (36.47 -2.82%): Downgraded to Sector Perform at RBC Capital Mkts on risk/reward.
M (63.15 -1.82%): Initiated with an Underweight at Barclays, tgt $55.
Mid Cap Gainers
FEYE (44.27 +4.76%): Price target raised to $49 from $44 at BofA/Merrill; firm has Buy rating on the name.
YUM (75.3 +0.82%): initiated with a Market Perform at Cowen.
CBI (40.52 +4.73%): Heavy call activity in the name following a new ~2.9 mln share position in the name at Greenlight Capital.
Mid Cap Losers
HLX (16.15 -15.36%): Reported Q4 (Dec) earnings of $0.08 per share, $0.12 worse than the Capital IQ Consensus Estimate of $0.20; revenues fell 8.6% year/year to $207.2 mln vs the $223.93 mln consensus.
GFI (4.43 -8.28%): Downgraded to Sector Underperform from Sector Perform at Scotia Capital.
DDD (30.72 -6.37%): Cautious view profiled in Barron's over the weekend.
11:44 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (195) outpacing new lows (36) (:SCANX) : Stocks that traded to 52 week highs: AAPL, ABC, ACT, ADT, AFG, AGN, AHS, AKAM, AMP, ANAC, ANSS, ANW, APD, ARRY, ASMB, ASPX, ASX, AVGO, BA, BAM, BBP, BC, BCC, BDC, BFR, BLK, BMA, BMRN, BRCD, BRLI, BZM, CBPO, CCF, CCI, CDI, CDW, CEMP, CFG, CFO, CGI, CHD, CHH, CNC, COLM, COTY, CPHD, CPPL, CPRT, CPSH, CRIS, CRUS, CSWC, CTB, CTCT, CTRN, CTRX, CTSH, CXW, CYBR, DIS, DLPH, DNB, DOOR, DRAD, EBIX, EBS, EFX, EGRX, EIGI, ENDP, ESP, ESPR, EWBC, FDP, FDS, FHN, FIS, FLEX, FLWS, FNF, FNRG, FONE, FRME, FTR, FV, GGAL, GHC, GTIM, HASI, HII, HRL, HSII, HUBS, HXL, ICLR, INGN, INT, INTL, IPG, IPXL, ISSI, ITCI, ITG, JKHY, JLL, KAR, KEYS, KR, LABL, LBTYA, LBTYK, LCI, LII, MANH, MANT, MAR, MCK, MDT, MFLX, MIDD, MKL, MNK, MPC, MSCC, MSTR, MTSN, NEU, NEWT, NHC, NSP, NVAX, NWL, NXST, OMAM, ONNN, OTEX, PANW, PFPT, PINC, PKG, PNFP, POOL, PSCD, PSCH, PSCT, PTLA, PVTB, QLGC, QLYS, QQQ, QQXT, RAX, RCKY, RLH, ROG, RVSB, SAIC, SEE, SEMI, SERV, SGU, SHW, SPR, STLY, SWK, TEL, THOR, TQQQ, TRK, TRV, TTMI, TXT, TY, TYL, UEIC, UNFI, USAK, USTR, UTHR, UTX, VDSI, VMC, VONG, VRSN, VTWG, VTWO, WAL, WBS, WM, WSO, WU, WYN, XON, ZBRA, ZIOP
Stocks that traded to 52 week lows: AVGR, AVNU, AXP, CLTX, CNXR, COCO, ELON, FIVE, GLF, GRAM, GRVY, HLX, ICA, ISHG, JOEZ, KOOL, LBIX, MGH, MPV, MTGE, NRP, NSPR, ONTX, PANL, PRXI, RGSE, RL, SCON, SDPI, SHAK, SNC, SPKE, SQQQ, TSI, TTF, XRA
ETFs that traded to 52 week highs: IHI, ITA, IWM, MDY, PPA, PPH, PSK, QQQ, UWM, XBI, XLK, XLY
ETFs that traded to 52 week lows: PPLT
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