From Briefing.com: The Stock Market opened March strong, bolstered by a cluster of M&A activity and news over the weekend that the People's Bank of China cut its key lending rate 25 basis points to 5.35%. However, after a healthy opening rally, major indices traded within a range, unable to decisively move higher or lower until a closing rally in the last hour of trading.
It's worth noting, the Philadelphia SOX Index soared 2.8% today behind the NXP Semiconductor (NXPI 99.56, +14.67, +17.3%), Freescale Semiconductor (FSL 40.36, +4.25, +11.8%) merger, but Atmel Corp (ATML 8.86, +0.52, +6.2%) and Skyworks Solutions (SWKS 91.13, +3.38, 3.9%) also outperformed.
The S&P 500 Information Technology Sector (+0.97%) notably outperformed the broader market today, lead by Linear Technology (LLTC 49.55, +1.39, +2.8%), Western Union (WU 20.04, +0.52, +2.7%), Visa (V 278.29, +6.98, +2.6%), Lam Research (LRCX 84.48, +2.02, +2.5%), and Intel Corp (INTC 34.06, +0.81, +2.4%)
Notable news items from the sector included the following:
Samsung (SSNLF): introduced collaborations with both Visa (V 278.29, +6.98, +2.6%) and Mastercard (MA 92.02, +1.89, +2.1%) to support consumer payments with the new Samsung Galaxy S6. Eligible consumers in the U.S. will be able to make secure Visa payments with Samsung Pay, Samsung's new payment service scheduled to launch this summer. Samsung Pay is supported by Visa Token Service technology which is designed to enable secure payments with a broad range of connected devices. Samsung Pay will enable MasterCard cardholders to use their Samsung Galaxy S6 for everyday in-store purchases.
Akamai Tech (AKAM 71.13, +1.62, +2.3%): has acquired Xerocole, a provider of recursive DNS functionality. Terms of the transaction were not disclosed. The acquisition is expected to allow Akamai to expand its DNS product portfolio beyond the Company's existing Authoritative DNS products to more completely meet the needs of customers and network partners.
Aruba Networks (ARUN 24.65, -0.16, -0.6%): agreed to be acquired by Hewlett-Packard (HPQ 34.92, +0.08, +0.2%) for $24.67 per share in cash. The equity value of the transaction is approximately $3.0 billion, and net of cash and debt approximately $2.7 billion. Both companies' boards of directors have approved the deal. HPQ expects the acquisition to be accretive toearnings in the first full year following close.
Visa (V): is working with Pizza Hut and Accenture (ACN 91.18, +1.15, +1.3%) to develop a proof-of-concept connected car to test mobile and online purchases on the go. The connected car is expected to feature Visa Checkout, Visa's online payment service, cellular connectivity, Bluetooth Low Energy, as well as Beacon technology deployed at Pizza Hut restaurants to alert staff when the customer has arrived and is ready to pick up the order. The integration of these technologies is being managed by Accenture.
EBAY (EBAY 58.38, +0.47, +0.8%): Paypal to acquire Paydiant for $280 million. Paydient is a payments startup that licenses a technology platform used by big retail chains to create their own branded mobile wallet apps. Multiple sources said PayPal will pay around $280 million Elsewhere in the technology space:
Cimpress (CMPR 85.29, +1.79, +2.1%): entered into a definitive agreement to acquire Exagroup SAS. Under the terms of the agreement, Cimpress will acquire 70% of the shares of Exagroup for a purchase price of ~ 91.5 million with an option to acquire the remaining 30% of the shares in 2019 for a price between 39 million and 47 million, subject to the achievement of financial performance targets for calendar year 2017. Cimpress expects this transaction to be accretive to its fiscal 2015 revenue, but dilutive to GAAP EPS due to transaction costs as well as anticipated interest expense and expected amortization expense for acquisition-related intangible assets. The transaction is expected to be slightly dilutive in fiscal 2015 to operating cash flow, free cash flow, as well as non-GAAP EPS, which excludes amortization expense for acquisition-related intangible assets, due to transaction costs and anticipated interest expense.
Stratasys (SSYS 62.90, +0.84, +1.4%): reported Q4 (Dec) earnings of $0.48 per share, excluding non-recurring items, $0.01 better than estimates. Revenues rose 40.0% year/year to $217.1 million vs the $215.86 million consensus. SSYS lowered FY14 guidance and guided FY15 below consensus on February 2. The company reaffirmed that lowered guidance for FY15, noting it sees EPS of $2.07-2.24, excluding non-recurring items, versus the $2.12 consensus, and FY15 revenues of $940-960 million vs. $950.12 million consensus.
Arrow Electronics (ARW 62.98, +1.02, +1.7%): announced it has signed a definitive agreement to acquire immixGroup, a value-added distributor supporting over 800 value-added resellers, solution providers, service providers, and other public sector channel partners with specialized resources to accelerate their government sales.
NXP Semiconductor (NXPI): and Freescale Semiconductor (FSL) announced that they have entered into a definitive agreement under which NXP will merge with Freescale in a transaction which values the combined enterprise at just over $40 billion. Under the terms of the agreement, Freescale shareholders will receive $6.25 in cash and 0.3521 of an NXP ordinary share for each Freescale common share held at the close of the transaction. The purchase price implies a total equity value for Freescale of ~$11.8 billion and a total enterprise value of approximately $16.7 billion including Freescale's net debt. The transaction is expected to be accretive to NXP non-GAAP earnings and non-GAAP free cash flow. NXP anticipates achieving cost savings of $200 million in the first full year after closing the transaction, with a clear path to $500 million of annual cost synergies.
Analyst Action:
Google (GOOG 571.34, +12.94, +2.3%): upgraded to Buy from Neutral at BofA/Merrill
Jack Henry (JKHY 87.05, +1.55, +2.4%): upgraded to Ouptperform from Perform at Oppenheimer; target $75
Aruba Networks (ARUN 24.65, -0.16, -0.6%): downgraded to Neutral from Buy at Sun TrustYY (YY 53.24, +0.55, +1%) downgraded to Neutral from Outperform at Credit Suisse
IBM (IBM 160.48, -1.46, -0.9%): downgraded to Underweight from Neutral at Atlantic Equities
Apple (AAPL 129.09, +0.53, +0.5%): price target raised to $160 from $133 at Morgan Stanley; Overweight
InterXion (INXN 31.10, -0.77, -2.4%): downgraded to Hold from Buy at Stifel
Salesforce.com (CRM 68.46, -0.92, -1.3%): downgraded to Hold from Buy at Argus
Cognizant Tech (CTSH 62.92, +0.44, +0.7%): price target raised to $70 from $66 at Barclays; Overweight
Cirrus Logic (CRUS 31.40, +1.29, +4.3%): price target raised to $35 from $32 at Barclays; Overweight
Ciena (CIEN 20.98, +0.06, +0.3%): price target raised to $24 from $21 at Wedbush; Neutral
Mavenir Systems (MVNR 16.82, +2.25, +15.4%): price target raised to $17 from $16 atNeedham; Buy
Elli Mae (ELLI 53.57, +0.75, +1.4%): price target raised to $60 from $55 at Oppenheimer; Outperform
NXP Semiconductor (NXPI 99.56, +14.67, +17.3%): price target raised to $100 from $95 at FBR Capital; Outperform
Paylocity (PCTY 29.44, -0.45, -1.5%): price target raised to $35 from $32 at Northland Capital; Outperform
4:20 pm : The first trading day of March was a good day for the stock market and a lousy day for the Treasury market. The former rallied, featuring a return above 5,000 for the Nasdaq Composite and new record closes for both the Dow Jones Industrial Average and S&P 500. The latter, meanwhile, languished and perhaps breathed some added life into the stock market on rebalancing efforts.
To be fair, both the stock and bond markets had reason to advance today. The People's Bank of China cut its key lending rate by 25 basis points to 5.35% and each piece of economic data out of the U.S. today fell short of consensus estimates.
Personal income rose 0.3% in January (Briefing.com consensus +0.4%) while personal spending declined 0.2% (Briefing.com consensus -0.1%).
Core PCE prices increased just 0.1% (Briefing.com consensus +0.2%) and are up just 1.3% year-over-year (total PCE prices are up only 0.2% year-over-year, well below the Fed's 2.0% inflation target).
The February ISM Index slid to a 13-month low of 52.9 (Briefing.com consensus 53.0) from 53.5
Construction spending declined 1.1% in January (Briefing.com consensus +0.2%) after an upwardly revised 0.8% increase (from +0.4%) in December
The Treasury market basically turned a blind eye to the weakish data and sold off, having a fit that continued all day long and persisted after the cash settlement. The yield on the benchmark 10-yr note jumped eight basis points to 2.08%, which was its high yield for the cash session, but touched 2.09% in late trading.
While the rout in the Treasury market was unfolding, a rally in the stock market was playing out, suggesting perhaps that a rotational move out of Treasuries and into stocks was helping to support things. Whatever the case might have been, there was some seemingly equal and opposite action in stocks and Treasuries today.
The stock market didn't necessarily need that rotational trade to do well. It had identifiable catalysts in the rate cut out of China, the association that the first trading day of a new month often sees new inflows, and a spate of M&A activity that was highlighted by NXP Semiconductor's (NXPI 99.59, +14.69) $11.8 billion cash-and-stock offer to acquire Freescale Semiconductor (FSL 40.36, +4.25). Other notable deals included Hewlett-Packard (HPQ 34.92, +0.08) buying Aruba Networks (ARUN 24.61, -0.20) for $2.7 billion in cash, as previously rumored, and Cardinal Health (CAH 89.52, +1.53) acquiring Cordis from Johnson & Johnson (JNJ 103.22, +0.71) for $1.9 billion in cash.
Elsewhere, oil prices had a roller-coaster ride, trading below $49.00/bbl early, moving back above $51.00/bbl later, and then ultimately settling pit trading down $0.17 at $49.59/bbl.
The energy sector (-0.7%) was stuck in a rut all day, even when oil prices came storming back from early losses. The only other sector that fared worse on Monday was the utilities sector, which dropped 2.0%, clipped by the jump in long-term rates.
On the flip side, there was quality leadership in Monday's market from those sectors one would expect to see leading a charge to new highs. The consumer discretionary sector (+1.2%) led all gainers followed by the information technology (+1.0%), health care (+0.9%), financial (+0.8%), and industrials (+0.8%) sectors.
The CBOE Volatility Index ("the VIX") fell 3.2% to 12.92, ending at its lowest level since early December. The VIX Index has plunged 34% over the last month as the broader market has rallied to higher highs.
NYSE volume totaled 740 mln shares versus the 50-day average of 813 mln shares.
DJ30 +155.93 NASDAQ +44.57 SP500 +12.89 NASDAQ Adv/Vol/Dec 1870/1.78 bln/982 NYSE Adv/Vol/Dec 1868/740 mln/1225 3:30 pm :
The dollar index continued to hold modest gains today, which helped add some selling pressure on commodities today, including precious metals (gold and silver) and oil futures
Apr crude oil futures started the morning off higher and rose as high as $51.04/barrel. However, these gains could not hold as bearish factors such as oversupply/storage capacity concerns continue to weigh on prices.
Apr crude oil ended today's session $0.21 lower at $49.58/barrel. Meanwhile, Apr natural gas lost $0.03 to $2.70/MMBtu
May copper futures remained near the unchanged line today , ultimately finished floor trading $0.01 lower at $2.70/lb
Apr gold and May silver continued to inch lower in afternoon trading, leaving gold $5.10 lower on the day to $1208.00/oz and May silver $0.14 lower at $16.45/oz
1:05 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
NXPI (98.6 +16.14%): Announced it will merge with Freescale Semiconductor (FSL) in a $40 bln deal; Price target raised to $100 at FBR Capital.
PBA (33.33 +4.47%): Upgraded to Outperform from Market Perform at BMO Capital.
JAZZ (176.28 +3.64%): The co disclosed the FDA's approval of the risk evaluation and mitigation strategy for Xyrem.
Large Cap Losers
PEG (41.02 -2.47%): Utilities sector weak as yields jump (ES, ETR, XEL also lower).
CRM (68 -1.99%): Downgraded to Hold from Buy at Argus.
Mid Cap Gainers
BBRY (11.09 +2.54%): Announced continued progress with Samsung Electronics (SSNLF) in their partnership with the planned integration of Samsung KNOX with two new BlackBerry enterprise services
GRUB (42.99 +2.33%): Updated guidance following acquisition of Restaurants On The Run; Raises FY15 rev to $343-358 mln from $335-350 mln, consensus $348.4 mln.
CAR (61.85 +2.03%): Announced it will acquire Maggiore Group, Italy's fourth-largest vehicle rental business for ~$170 mln; acquisition is expected to add approximately $160 mln of annual revenue and $30 mln of Adjusted EBITDA.
Mid Cap Losers
PCRX (96.19 -16.19%): Received a complete response letter from the FDA for sNDA seeking approval of EXPAREL.
NAVI (19.15 -10.51%): Disclosed in its 10k filing the expiration of an ED asset recovery contract and also an NY DFS subpoena; downgraded at Compass Point and Barclays.
BID (42.11 -4.19%): Reported Q4 (Dec) earnings of $1.12 per share, $0.16 worse than the Capital IQ Consensus Estimate of $1.28; revenues rose 3.5% year/year to $351.2 mln vs the $338.11 mln consensus.
11:37 am Major averages edges to fractional new session highs, small-/mid-caps are lagging -- Dow +125, S&P +96., Nasdaq Comp +36 (:TECHX) :
11:36 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (239) outpacing new lows (54) (:SCANX) : Stocks that traded to 52 week highs: AB, ABCD, ABM, ACAD, ADI, ADP, ADPT, AFAM, AGN, AHH, ALR, AMC, AMSG, AMWD, AOS, ARES, ARI, ARMH, ATLS, ATRO, AVG, AVGO, AWH, AXTA, BHLB, BIIB, BKD, BLJ, BLMN, BOBE, BOOT, BPOP, BR, BSQR, BSX, BURL, BX, CAH, CAVM, CBM, CEVA, CGNX, CHE, CHEV, CHFN, CHMT, CHTR, CI, CIVI, CMCSA, CMCSK, CODE, COLM, COMM, COTY, COWN, CPIX, CRI, CRUS, CSCO, CSII, CSTE, CTAS, CVS, CW, DCM, DENN, DG, DGII, DIS, DRI, DRII, DXGE, EFX, EL, ENDP, ESE, FCAU, FCB, FCHI, FDP, FICO, FIX, FLWS, FMS, FNFV, FORM, FRC, FSFG, FSL, FSS, FUN, FV, G, GK, GLOB, GMK, GRP.U, HAR, HBI, HDB, HOLX, HPI, HPS, HTLF, HXL, IART, ICUI, IFEU, IG, IGT, IMH, INAP, INCY, INTL, INTU, ISIL, ISLE, ISSI, JCI, JEQ, JTP, JYNT, KEYS, KMG, KOPN, LBRDK, LBY, LEG, LFUS, LH, LOGM, LULU, LUX, MAG, MCHP, MCRL, MDVN, MGLN, MHK, MLR, MO, MODN, MPWR, MSCC, NCLH, NICE, NSAT, NTWK, NVDA, NXPI, NYCB, OCUL, OMAM, OMC, ONEQ, ONFC, ONNN, PAM, PINC, PMCS, PNFP, PRFZ, PSCD, PSCH, PSCI, PSCT, PSEM, PSF, PTLA, QQEW, QQQ, QQXT, QTEC, RAI, RGEN, RHP, RIOM, ROST, RVSB, SAAS, SBAC, SCHL, SCI, SCS, SEMI, SERV, SIRI, SMTC, SONC, SOXX, STBZ, STWD, SWKS, SXT, TCON, TEL, TGS, THOR, TNET, TQQQ, TREE, TSRO, TW, TXN, TYL, UA, UHS, UNFI, UNTD, UVE, V, VGR, VICR, VMC, VONG, VOYA, VTWG, VTWO, WBA, WBB, WBS, WCIC, WMS, WNC, WOOF, WSO, WSO.B, WST, WU, WWAV, WWW, WYN, XBKS, XENT, XL, ZAGG, ZIOP, ZTS
Stocks that traded to 52 week lows: AKO.A, ATNM, ATNY, AXU, BIOS, BPTH, BPZ, CAE, CHK, CIB, CNP, CUI, CVSL, CWEI, EGAN, EGF, ESV, ETAK, FENG, FIVE, GIFI, GLOW, GNI, GOL, HERO, HLX, I, ISH, KOP, LL, MCF, MNI, MSM, NRG, NUTR, OESX, OGE, PERF, PGN, PRXI, PSMT, QIHU, ROYL, SCHN, SEED, SPRO, SQQQ, TDW, UG, WBAI, WILN, WTW, ZINC, ZSAN
ETFs that traded to 52 week highs: DIA, IGN, IHF, ITA, IWF, IWM, IYH, IYK, PSK, QQQ, RTH, SMH, SOXX, UUP, UWM, XLK, XLV, XLY, XRT
ETFs that traded to 52 week lows: EPU, JO, SGG
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