Sector Investing

[ReturntoSender]

From Briefing.com: Fed Chair Janet Yellen appeared before the Senate Banking Committee on Tuesday to provide her semiannual testimony on the economy and monetary policy. Her remarks were interpreted in a dovish light by the capital markets. Both the Treasury market and the stock market advanced during, and after, her testimony, while the U.S. Dollar Index sagged.

The S&P 500 (+0.3%) advanced to another new closing high while the Nasdaq (+0.1%) scored its tenth straight winning session.

Interestingly, the vast majority of S&P 500 information technology sector (+0.2%) components closed Tuesday with a gain, yet Apple (AAPL 132.17, -0.83, -0.6%) did not and that made a weighty difference for the sector.

Notable news items from the sector included the following:

Altera (ALTR 36.81, +0.90, +2.5%): Said it has strengthened its leadership position in SoC FPGA products by shipping its second-generation SoC family. Arria 10 SoCs are the industry's only programmable devices that combine ARM processors with a 20 nm FPGA fabric.

Computer Sciences (CSC 70.84, -0.90, -1.3%): Jana Partners discloses 5.9% active stake in 13D filing. The filing states, "The Reporting Person has had and may continue to have discussions with members of the Issuer's board of directors and management team regarding potential strategic alternatives and the Issuer's capitalization and capital allocation. The Reporting Person may also seek to discuss other topics with the Issuer including board composition. The Reporting Person may also have discussions with shareholders and other parties relating to all such matters." Separately, Amey awarded CSC a seven-year next-generation IT agreement valued at $87 million. Also, following Monday's speculation that Computer Sciences could be an M&A target, Reuters reported that prior talks with Cap Gemini and Carlyle Group 'fizzled.'

First Solar, Inc. (FSLR 54.75, +5.06, +10.3%): Along with SunPower Corp. (SPWR 32.80, +5.00, +18.0%) announced that they are in advanced negotiations to form a joint YieldCo vehicle (the YieldCo) to which they each expect to contribute a portfolio of selected solar generation assets from their existing portfolio of assets. Upon the execution of a master formation agreement, the parties intend to file a registration statement with the Securities and Exchange Commission (the SEC) for an initial public offering of limited partner interests in the YieldCo (the IPO). Formation of the YieldCo and completion of the IPO are subject to, among other things, the execution of definitive documentation, each party's board approval and regulatory approval. There is no assurance that the YieldCo will be formed or that the IPO will be consummated or that any other transaction will occur.

Google (GOOG 536.09, +4.18, +0.8%): NY Post reported that Google has partnered with several wireless carriers such as AT&T, Verizon, and T-Mobile to include Google Wallet app on Android smartphones in order to compete with Apple Pay

Intuit (INTU 97.38, +1.04, +1.1%): Company strongly refuted criticism concerning the way it screens for fraudulent tax returns and questions about its integrity. Intuit said, "Allegations by two former employees are flat out wrong, and are based on their complete misunderstanding of the facts and total mischaracterization of our business... Any suggestion that Intuit or any of its leaders made decisions to sacrifice customer security for financial gain is untrue and without merit."

Juniper Networks (JNPR 24.45, +0.32, +1.3%): Appointed two new independent directors, Jim Dolce and Rahul Merchant, to its board of directors, effective March 1, 2015. Juniper also announced a new agreement with Elliott Management, whereby Elliott has agreed to support Juniper's director nominees at its upcoming Annual Meeting of Stockholders, and reaffirmed its commitment to execution, delivering profitable growth and long-term shareholder value.

Micron (MU 30.77, -0.63, -2.0%): KoreaTimes, citing two people familiar with the matter, reported that Samsung Electronics has agreed to supply DRAM chips to Apple and LG Electronics for their new range of smartphones. The article also noted that Micron may see increased orders in the global semiconductor industry.

Visa (V 272.47, -0.54, -0.2%): Visa Europe announced launch of mobile payment tokenisation service, saying it has developed the service to meet an increasing demand from consumers to use their latest smartphones and wearable devices for payments. The tokenisation service protects customer data, substituting the payment account information found on a plastic card with a series of numbers that can be used to authorize payment without exposing actual account details. When consumers use their mobile device to make a contactless payment in a store, a token is submitted, rather than their account details. The new service will be available for financial institutions from mid-April 2015.

Xilinx (XLNX 42.48, +1.19, +2.9%): Along with Xylon announced new industry leading automated multi-camera image stitching IP for 2D/3D surround view systems. The Automotive logiADAK 3.0 Advanced Driver Assistance Development Kit with logiOWL IP enables on-target, full vehicle level multi-camera calibration in seconds for Tier One automotive electronics suppliers and OEM automakers.
In industry news, IDC reported that Google's Android and Apple iOS accounted for 96.3% of all smartphone shipments, up slightly from 95.6% in 4Q13 and from 93.8% in CY13. In terms of year-over-year shipment growth, Android outpaced the overall smartphone market for CY14 (32.0% vs 27.7%, respectively) while iOS beat the market in 4Q14 (46.1% vs 29.2%, respectively). Android pushed past the one billion unit mark in 2014, a significant milestone by itself but also because total Android volumes in 2014 bested total smartphone volumes in 2013. IOS saw its market share for 2014 decline slightly even as volumes reached a new record and grew at nearly the same pace as the overall smartphone market. Elsewhere in the technology space:

Advanced Micro Devices (AMD 3.11, +0.05, +1.6%): Revealed at the prestigious International Solid State Circuits Conference that the upcoming A-Series Accelerated Processing Unit, codenamed "Carrizo," for notebooks and low-power desktops will deliver a wealth of new, advanced power management technologies while achieving substantial performance through new "Excavator" x86 CPU cores and a new generation of AMD Radeon GPU cores.

ARM Holdings (ARMH 52.91, +0.53, +1.0%): Has expanded its technical training portfolio to include live courses that can be remotely-delivered in any location. The courses will provide a flexible and fast-response training service for companies and individuals, allowing them to take full advantage of ARM technology features.

Arrow Electronics (ARW 62.93, +0.45, +0.7%): Announced the pricing of two series of the company's senior unsecured notes in an aggregate principal amount of $700 mln. Net proceeds from this offering are expected to be used to repay the company's outstanding 3.375% notes due November 1, 2015 at or before maturity and for other general corporate purposes, which may include acquisitions or the repayment of other indebtedness including amounts outstanding under the company's revolving credit facility or securitization program.

Cray (CRAY 31.79, -0.23, -0.7%): Global supercomputer leader announced that Stalprodukt S.A., a leading global steel processor, purchased a Cray XC30 supercomputer for structural analysis modeling used in the testing of steel designs. This continues Cray's worldwide expansion and is the first Cray XC supercomputer in Poland.

Integrated Device (IDTI 21.07, +0.47, +2.3%): Introduced a high-speed multiplexer that expands the existing portfolio of DDR4 products targeting the nascent NVDIMM ecosystem; also announced it was selected by Micron Technology as its preferred supplier for NVDIMM multiplexers

Lattice Semiconductor (LSCC 6.51, +0.11, +1.7%): Announced three new, freely-downloadable reference designs that enable designers working in consumer, industrial and other sectors to quickly implement the cable detect and power delivery functions required to unlock the new capabilities of Type-C including 100W power, 20Gbps bandwidth, reversibility and flexibility. NXP Semiconductors N.V. (NXPI 85.91, +1.41, +1.7%): Announced two new microcontroller families, LPC18Sxx and LPC43Sxx, to help embedded developers secure application code and data messages in connected applications against threats such as theft and cloning.

Priceline (PCLN 1219.79, +12.21, +1.0%): Announced proposed public offering of senior notes. Company plans to use the net proceeds from the offering of the notes for general corporate purposes, which may include share repurchases, repayment of debt and acquisitions, among other uses.

Progress Software (PRGS 27.39, +0.18, +0.7%): Announced that its Rollbase rapid application development platform is now certified "Helion Ready" and will be available to deploy on HP's distribution of OpenStack.

Unisys (UIS 22.92, -0.16, -0.7%): Filed mixed securities shelf offering for an undisclosed amount

Analyst Action:

FBR raised price targets on five cybersecurity stocks:
Check Point Software (CHKP 82.84, +0.45, +0.6%): target raised to $93 from $85
FireEye (FEYE 43.97, +0.62, +1.4%): target raised to $53 from $45
Fortinet (FTNT 33.72, +0.40, +1.2%): target raised to $39 from $36
Palo Alto Networks (PANW 138.61, +0.41, +0.3%): target raised to $160 from $121
Proofpoint (PFPT 56.55, -0.07, -0.1%) target raised to $67 from $60

Computer Sciences (CSC 70.84, -0.90, -1.3%): downgraded to Hold from Buy at Stifel

First Solar (FSLR 54.70, +5.06, +10.2%): upgraded to Buy from Hold at Deutsche Bank; target to $68 from $60

Sprint (S 4.63, -0.04, -0.9%): downgraded to Sell from Neutral at BTIG Research

Vodafone PLC (VOD 34.81, -1.17, -3.3%): downgraded to Underperform from Neutral at Bank of America/Merrill Lynch

4:10 pm : The major averages endured another quiet session on Tuesday before a late afternoon rally sent the S&P 500 (+0.3%) to a new record high. The price-weighted Dow (+0.5%) outperformed while the Nasdaq Composite (+0.1%) and Russell 2000 (+0.1%) struggled to keep up. Once again, trading volume was well below average with only about 700 million shares changing hands at the NYSE floor.

Equity indices spent the bulk of the day near their flat lines, seeing little reaction to Fed Chair Janet Yellen's testimony on monetary policy before the Senate Banking Committee.

While the minutes from the latest Fed policy meeting revealed a slight hawkish tilt, that tone was offset by today's comments from Chair Yellen, who reiterated the Fed's intent to remain patient before raising rates, due to weak wage growth and low inflation. In addition, Ms. Yellen indicated the Fed will change its forward guidance prior to hiking rates, and that change to the outlook will clear the way for a potential hike in any particular meeting that follows.

Although the testimony had little impact on equities, Treasuries spiked with the 10-yr yield sliding eight basis points to 1.98% as bond traders showed little concern for a rate hike in the near term. On a related note, the Dollar Index (94.44, -0.13) ended lower by 0.1% after showing strength in the early going.

Nine sectors finished the day in positive territory with rate-sensitive telecom services (+0.6%) and utilities (+0.6%) pacing the advance. The financial sector (+0.5%) also finished among the leaders, thanks in large part to shares of JPMorgan Chase (JPM 60.82, +1.47), which surged 2.5% after the company's CFO hinted at a dividend increase during the company's Investor Day.

Elsewhere among cyclical sectors, the consumer discretionary space (+0.4%) received support from homebuilders after Toll Brothers (TOL 38.49, +1.39) reported better than expected results and boosted its delivery guidance. Toll Brothers spiked 3.8% while the iShares Dow Jones US Home Construction ETF (ITB 28.15, +0.65) rose 2.4%. Also of note, Dow component Home Depot (HD 116.75, +4.47) surged 4.0% after better than expected results and a 26.0% boost to its annualized dividend ($2.36/share) overshadowed below-consensus guidance.

Meanwhile, the top-weighted technology sector (+0.2%) struggled in the early going, but was able to end not far behind the broader market. Apple (AAPL 132.17, -0.83) spent some time on each side of its flat line before ultimately settling lower by 0.6%. Chipmakers, however, displayed broad strength with the PHLX Semiconductor Index jumping 1.3%.

However, not all high-beta groups displayed comparable strength. To that point, biotechnology lagged with the iShares Nasdaq Biotechnology ETF (IBB 335.15, -2.85) ending lower by 0.8%. Biotech's underperformance kept the health care sector (-0.1%) under pressure, but the countercyclical group settled just below its flat line.

Economic data was limited to Consumer Confidence and the Case-Shiller 20-City Index:


The Conference Board's Consumer Confidence Index declined to 96.4 in February from an upwardly revised 103.8 (from 102.9) while the Briefing.com consensus expected a decline to 99.6
The Case-Shiller 20-city Home Price Index for December rose 4.5% against a 4.3% increase expected by the Briefing.com consensus. This followed the previous month's increase of 4.3%

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while New Home Sales for January (Briefing.com consensus 471K) will be reported at 10:00 ET.

Nasdaq Composite +4.9% YTD
S&P 500 +2.8% YTD
Russell 2000 +2.4% YTD
Dow Jones Industrial Average +2.2% YTD

DJ30 +92.35 NASDAQ +7.15 SP500 +5.82 NASDAQ Adv/Vol/Dec 1609/1.71 bln/1190 NYSE Adv/Vol/Dec 1917/699.8 mln/1176 3:40 pm :

Oil prices slid lower in afternoon trading and hit a new pit trading low heading into the close
Apr crude oil lost $0.30 today to $49.26/barrel
Nat gas was trending higher and rose as high as $2.97/MMBtu.
By the end of today's session, Apr nat gas closed $0.01 higher at $2.89/MMBtu, and fell into the red in electronic trade
Gold and silver went on to climb higher after floor trading closed
Apr gold ended the session $3.50 lower to $1197.30/oz, while Mar silver fell $0.08 to $16.19/oz.

4:10 pm First Solar beats by $1.14, misses on revs; guides Q1 EPS below consensus, revs below consensus (FSLR) : Reports Q4 (Dec) earnings of $1.89 per share, $1.14 better than the Capital IQ Consensus Estimate of $0.75; revenues rose 31.3% year/year to $1.01 bln vs the $1.27 bln consensus.


2014 full year bookings of 2.5GWdc; 2015 year-to-date bookings of 311MWdc,Co issues downside guidance for Q1, sees EPS of ($0.35) to ($0.25), excluding non-recurring items, vs. $0.86 Capital IQ Consensus Estimate; sees Q1 revs of $550-650 mln vs. $924.47 mln Capital IQ Consensus Estimate.
Financial guidance for revenue, earnings, and operating cash flow for the first quarter is lower relative to results in prior periods primarily due to the completion of the Desert Sunlight and Topaz projects and the retention of projects on balance sheet in relation to the announced plan to pursue a joint YieldCo vehicle with SunPower. This is also expected to weigh on financial results in future quarters over the near-term. However, the Company believes this strategy will generate significant value for shareholders over the long-term.

12:50 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

BHP (52.37 +5.69%): Reported H1 EPS of $1.00 vs $0.92 Capital IQ consensus; revs declined 12% YoY to $29.9 bln vs 30.9 bln consensus; upgraded to Outperform from Neutral at Macquarie.
AGU (113.24 +3.04%): Reported Q4 EPS $0.46 vs $0.60 Capital IQ consensus; revs of $2.71 bln vs $2.96 bln consensus; Issued upside FY15 EPS guidance.
HD (116.06 +3.37%): Beat Q4 consensus EPS estimates by $0.11, beat on revs; guided FY16 EPS below consensus, revs in-line; raised dividend 26% to $0.59/share.

Large Cap Losers

MPEL (25.2 -7.05%): Casino names under pressure following reports officials are looking into restricting Chinese tourists into Macau to ease overcrowding (LVS & WYNN also lower).
ALKS (69.12 -6.14%): Beat Q4 consensus EPS estimates by $0.07, beat on revs; guided FY15 revs below consensus; announced topline results from a phase 1 clinical study of ALKS 7106 for the treatment of pain; ALKS 7106 did not meet the company's pre-specified criteria for advancing into phase 2 clinical trials.
M (61.82 -3.65%): Beat Q4 consensus EPS estimates by $0.04, reported revs in-line; guided FY16 EPS / sales below consensus, comps in-line.

Mid Cap Gainers

SPWR (32.41 +16.58%): Beat Q4 consensus EPS estimates by $0.01, reported revs in-line; guided Q1 below consensus; announced it plans to partner with First Solar (FSLR) to form a joint YieldCo vehicle.
SHOO (36.19 +7.07%): Beat Q4 consensus EPS estimates by $0.18, reported revs in-line; guided FY15 EPS in-line, revs above consensus.
CBRL (142.1 +5.85%): Beat Q2 consensus EPS estimates by $0.31, beat on revs; guided Q3 EPS in-line; raised FY15 guidance.

Mid Cap Losers

WOR (26.51 -13.42%): Announced its outlook has changed since it was discussed in December's fiscal year 2015 second quarter earnings call; expects weaker third quarter results; downgraded to Neutral at Credit Suisse.
DO (30.62 -8.92%): Disclosed a contract termination in its annual 10K filing; price target lowered at Cowen.
TRAK (41.06 -8.1%): Reported Q4 EPS in-line, beat on revs; guided FY15 EPS below consensus; Price target lowered at Barclays.

11:42 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (254) outpacing new lows (36) (:SCANX) : Stocks that traded to 52 week highs: AAC, AAPL, ABC, ABM, ACAD, ADI, ADT, AEO, AET, AFG, AGU, AMG, AMSG, AMWD, ANCX, ANTM, AOS, APRI, ASMI, ASPX, AVG, AVGO, AYR, AZO, BDC, BDX, BERY, BKMU, BMS, BUD, BX, CACC, CAH, CAPN, CATO, CDW, CERN, CERU, CF, CFN, CFO, CGI, CHKP, CI, CNC, CNMD, COL, COT, COTY, COWN, CRUS, CSCO, CSF, CSGS, CTAS, CTRX, DD, DDS, DEA, DEPO, DGRS, DHI, DIN, DK, DLX, DM, DOOR, DOX, DPZ, DRAD, DRI, DW, DXGE, DYAX, EIG, ENV, EOS, EPAM, ESLT, ESRX, ETFC, EXLS, EXPD, FBHS, FCCO, FDP, FDS, FLEX, FLWS, FORM, FTCS, FUN, FWV, G, GB, GFF, GGAL, GIB, GIII, GPX, GRX, GTT, HAE, HAIN, HASI, HBAN, HBI, HCC, HD, HLS, HNT, HOLX, HSII, HUM, HXL, HZNP, IART, ICLR, IGT, INTL, IPG, ISIL, JAH, JBHT, JBL, JBT, JEQ, JLL, JW.A, KKD, KONA, KSS, LABL, LBTYA, LBTYK, LBY, LEA, LEN, LEN.B, LMCA, LMCK, LMT, LO, LOW, LTM, LVNTA, MA, MASI, MCK, MD, MDCA, MIK, MLI, MLR, MMI, MNRO, MNST, MOS, MPWR, MSCC, MTSN, MTT, NCLH, NDAQ, NEP, NEU, NSAM, NTRS, NVR, NYV, OCUL, ONCE, ONEQ, ONNN, OTTR, PAHC, PAM, PLKI, PLL, PRFZ, PRXL, PSCD, PSCI, PSCT, PUK, PVTB, QLGC, QQQ, QSR, RAI, RECN, RGA, RGC, RHI, RJET, RLGY, RMCF, ROST, SBUX, SCI, SEMI, SF, SGU, SHOO, SHW, SIGI, SKX, SKYW, SNA, SPLP, ST, STZ, SWK, SWKS, TCON, TDG, TECH, TEL, TERP, TM, TMO, TQQQ, TREX, TRR, TSCO, TXRH, TXT, TY, UHAL, UNFI, UNH, V, VAL, VONE, VONG, VOYA, VRSN, VRX, VTWG, VTWO, VUSE, WAB, WAL, WBC, WBS, WERN, WMS, WOOD, WPPGY, WSTC, XPO, Y, ZBRA, ZSPH

Stocks that traded to 52 week lows: ARR, AXPW, CCSC, CIB, CLTX, CTG, DAKT, EGAN, ETAK, GOL, GSOL, I, INVT, IVAN, JASN, KZ, LAS, MDVX, MGH, MNI, MX, ORM, PDLI, QIHU, RELV, ROYL, SCHN, SCON, SPDC, SQQQ, SVBL, TGD, TST, TSU, VBLT, WILN

ETFs that traded to 52 week highs: DIA, EWJ, IHF, ITB, IWF, IWM, IYK, MDY, MOO, OEF, QQQ, RTH, SMH, UWM, VTI, XHB, XLB, XLK, XLY

ETFs that traded to 52 week lows: PPLT, SGG, SMN
8:10 am SunPower beats by $0.01, reports revs in-line; guides Q1 below consensus, withdraws 2015 guidance until impact of YieldCo vehicle finalized (SPWR) : Reports Q4 (Dec) earnings of $0.26 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.25; revenues fell 19.6% year/year to $609.7 mln vs the $606.07 mln consensus.

Co issues downside guidance for Q1, sees EPS of $0.05-0.15 vs. $0.21 Capital IQ Consensus Estimate; sees Q1 revs of $410-460 mln vs. $560.16 mln Capital IQ Consensus Estimate. SunPower believes that its underlying business fundamentals for 2015 remain strong. However, as a result of company's announcement on February 23, 2015 of its intention to form a joint YieldCo vehicle with First Solar, the company is withdrawing its previously disclosed fiscal year 2015 guidance until such time the company can finalize the impact of the proposed YieldCo vehicle on its expected financial performance. Xilinx (XLNX) and Xylon announced new industry leading automated multi-camera image stitching IP for 2D/3D surround view systems. The Automotive logiADAK 3.0 Advanced Driver Assistance Development Kit with logiOWL IP enables on-target, full vehicle level multi-camera calibration in seconds for Tier One automotive electronics suppliers and OEM automakers.

6:38 am Integrated Device introduces a high-speed multiplexer that expands the existing portfolio of DDR4 products targeting the nascent NVDIMM ecosystem; also announced it was selected by Micron Technology (MU) as its preferred supplier for NVDIMM multiplexers (IDTI) :