Sector Investing

[ReturntoSender]

From Briefing.com: Equity markets edged slightly higher ahead of Good Friday, although volume was relatively light. Tomorrow, cash equity markets are closed, but futures will trade in an abbreviated session, which could prove significant with the release of the March employment report expected at 8:30 ET.

All major indices finished in the green today, The S&P 500 rose 0.35%, Dow Jones Industrial Average +0.37%, Russell 2000 +0.32%, and the lagging NASDAQ Composite gained 0.14%.

Considering the underperformance of the heavily technology weighted NASDAQ Composite, it is little surprise that the S&P Technology Sector lagged the broader market, falling 0.06%. In fact, it was the only sector to post declines on the day. Motorola (MSI 62.51, -4.16, -6.2%), Qualcomm (QCOM 67.97, -1.46, -2.1%), Micron Technology (MU 26.73, -0.41, -1.5%), and Google (GOOGL 541.31, -8.18, -1.5%) lead the sector lower. On the other hand Autodesk (ADSK 59.82, +1.08, +1.8%), Western Union (WU 20.91, +0.35, +1.7%), Altera (ALTR 43.10, +0.69, +1.6%), and Seagate Technology (STX 52.45, +0.66, +1.3%).

Notable news items from sector components included the following:

F5 Networks (FFIV 113.71, -0.60, -0.5%): Announced its new Security Operations Center facility located at the company's headquarters in Seattle. The SOC supports customers using the Silverline cloud-based application services platform by providing 24/7 access to highly specialized F5 security experts who monitor global layer 4-7 attack activities in real time.

Alliance Data Systems Corporation (ADS 293.68, -0.90, -0.3%): Announced its Card Services business has signed an extension to the long-term agreement to continue providing private label credit card services for multi-channel retailer Talbots, Inc.

IBM (IBM 160.45, +1.27, +0.8%): Announced the availability of IBM Verse, an innovative new social messaging solution that incorporates built-in analytics to give people a new way to connect, communicate and find the right people and information fast. Additionally, IBM and China Telecom (CHA 66.99, +1.26, +1.9%) announced a partnership to accelerate mobile enterprise adoption for Chinese organizations

Accenture (ACN 94.18, +0.62, +0.7%): Announced it has expanded its Accelerated R&D Services by selecting Medidata Solutions' (MDSO 47.31, -1.23, -2.5%) cloud-based electronic data capture and management system, Medidata Rave to complement its cloud-based solution.

Motorola Solutions (MSI 62.51, -4.16, -6.2%) dropping in recent trade following headlines that company did not find any buyersElsewhere in the technology space:

FXCM (FXCM 2.15, +0.02, +0.9%): Announced it has repaid an additional $54 mln outstanding under credit agreement with Leucadia (LUK 22.48, +0.18, +0.8%); avoids contingent financing fee of $30 mln. The payment was funded in part with proceeds from the sale of FXCM Japan and the co has now repaid $66 million under the credit agreement. FXCM anticipates making an additional repayment of approximately $12 million towards the credit facility in the coming weeks.

Check Point Software (CHKP 82.49, +0.62, +0.8%): Announced its intention to acquire Lacoon Mobile Security; terms not disclosed. Lacoon is leading the industry in providing a solution to secure the entire mobile device, with the best advanced threat catch-rate for enterprise-grade mobile security platforms.

TiVo (TIVO 10.89, +0.24, +2.3%): Virgin Media announced confirmation of agreement extension with Tivo, extending for a further three years the existing five-year partnership with Virgin Media in the UK. As part of the new agreement, Virgin Media has committed to the development of next-generation solutions from TIVO. Further details of pricing and availability will be announced in due course.

Analyst Action:

Infinera (INFN 18.90, -0.43, -2.2%): downgraded to Neutral from Buy at Goldman

iDreamSky Technology (DSKY 7.28, +0.40, +5.8%): initiated Buy at RosenBlatt; price target $11

Mettler-Toledo (MTD 321.47, -3.62, -1.1%): initiated Equal-Weight at Morgan Stanley

Cinedigm Digital Cinema (CIDM 1.56, -0.02, -1.3%): initiated Neutral at Macquarie

Micron (MU 26.73, -0.41, -1.5%): price target lowered to $30 from $36 at Morgan Stanley; Equal Weight... price target raised to $47 from $43 at Stifel; Buy... price target lowered to $50 from $60 at Needham; Strong Buy... price target lowered to $30 from $33 at Topeka Capital; Hold

Sigma Designs (SIGM 7.92, -0.32, -3.9%): price target raised to $10 from $8 at Needham; BuySandisk (SNDK 64.57, -0.57, -0.9%): price target lowered to $86 from $102 at Argus; Buy

WNS (WNS 23.96, +0.01, +0.04%): price target raised to $31 from $29 at Maxim Group; Buy

Facebook (FB 81.56, -0.11, -0.13%): price target raised to $97 from $91 at Citigroup; Buy

Skyworks (SWKS 96.51, -0.33, -0.3%): price target raised to $110 from $92 at Brean Capital

Qorvo (QRVO 77.79, -1.01, -1.3%): price target raised to $95 from $85 at Brean Capital4:15 pm : The major averages eked out modest gains on Thursday after spending the day inside narrow ranges. The S&P 500 gained 0.4% while the Nasdaq Composite (+0.1%) underperformed. The market ended the abbreviated week on a mixed note with the S&P 500 adding 0.3% while the Nasdaq shed 0.1% for the week.

Today's session was very quiet with the S&P 500 bouncing between its 100- (2,060) and 50-day moving averages (2,073). The index settled in the top half of its trading range, but it is worth noting that many participants chose to forego the session, evidenced by light trading volume. To that point, fewer than 700 million shares changed hands at the NYSE floor.

Still, nine of ten sectors registered gains with telecom services (+0.9%) spending the day ahead of its peers. Meanwhile, the remaining three countercyclical groups posted slimmer gains. Notably, the health care sector (+0.2%) registered a modest gain despite intraday weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 339.70, -0.38) shed 0.1%.

The relative weakness in biotechnology kept the Nasdaq Composite behind the S&P 500 while high-beta chipmakers also lagged. Micron (MU 26.72, -0.41) lost 1.5% after reporting a bottom-line beat and issuing below-consensus revenue guidance while the broader PHLX Semiconductor Index slipped 0.3%.

Conversely, chipmakers also pressured the technology sector (-0.1%), which was the only group ending in the red. The modest loss was not entirely due to weakness among microchip names as several large cap components like Google (GOOGL 541.31, -8.18), Microsoft (MSFT 40.29, -0.43), and Qualcomm (QCOM 67.97, -1.46) dropped between 1.1% and 2.1%.

Elsewhere among cyclical groups, the energy sector (+0.2%) settled just above its flat line while crude oil endured a volatile session before ending lower by 1.8% at $49.10/bbl. On a related note, leaders from six countries and Iran agreed on a general framework for a deal that will require Iran to reduce its uranium stockpiles in exchange for the removal of sanctions that are currently in place. The deadline for the final agreement has been pushed back to June 30.

Also of note, the consumer discretionary sector (+0.9%) finished ahead of other cyclical groups thanks to broad strength. Homebuilders rallied with the iShares Dow Jones US Home Construction ETF (ITB 28.61, +0.48) climbing 1.7% while media names like CBS (CBS 61.16, +1.54), Comcast (CMCSA 57.94, +0.88), and Time Warner (TWX 85.00, +2.20) also posted solid gains.

Treasuries spent the day in a steady slide from their early morning highs, sending the 10-yr yield higher by five basis points to 1.91%.

Economic data included ISM Index, Construction Spending, ADP Employment, and MBA Mortgage Index:


The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 189K in March while the Briefing.com consensus expected an increase of 225K
The February reading was revised up to 214,000 from 212,000
The ISM Manufacturing Index declined to 51.5 in March from 52.9 in February while the Briefing.com consensus expected a decrease to 52.5
Nearly all of the regional manufacturing surveys pointed toward a sharp deceleration in the national manufacturing index so the drop in the ISM Index shouldn't have been much of a surprise
Production levels actually improved, albeit by a very small margin, as the related index increased to 53.8 in March from 53.7 in February
Construction spending declined 0.1% in February after declining a downwardly revised 1.7% (from -1.1%) in January while the Briefing.com consensus expected a decline of 0.3%
The unseasonably harsh winter weather conditions, which were blamed for a significant downturn in new housing starts, had little to no effect on overall construction levels
Total private construction increased 0.2% in February after declining 1.1% in January
The weekly MBA Mortgage Index rose 4.6% to follow last week's 9.5% spike

Tomorrow, the Nonfarm Payrolls report for March (Briefing.com consensus 250K) will be released at 8:30 ET even though the stock market will be closed.

Nasdaq Composite +3.2% YTD
Russell 2000 +4.1% YTD
S&P 500 +0.4% YTD
Dow Jones Industrial Average -0.3% YTD

Week in Review: Technical Levels in Focus

The major averages rallied throughout the Monday session with the Dow Jones Industrial Average (+1.5%) ending in the lead while the S&P 500 (+1.2%) and Nasdaq (1.2%) followed not far behind. The key indices began the week on an upbeat note, aided by overnight news indicating China has loosened its lending requirements for purchases of second homes. In addition, Friday's dovish remarks from Fed Chair Janet Yellen, who said the Fed will move cautiously when raising rates, provided another measure of support. All ten sectors ended the day with solid gains while the S&P 500 surged above its 50-day moving average (2,070). Overall, cyclical sectors had the best showing, but countercyclical groups held their own. Health care and telecom services ended at the bottom of the leaderboard, but both groups still gained close to 1.0% apiece.

The stock market extended its March decline on Tuesday, but was able to end the first quarter in the green. The S&P 500 (-0.9%) lost 1.7% for the month, but added 0.4% during the first quarter. The tech-heavy Nasdaq (-0.9%) outperformed, losing 1.3% in March to narrow its Q1 gain to 3.5%. For its part, the Dow Jones Industrial Average (-1.1%) lost 2.0% in March and shed 0.3% in Q1. Equity indices started the day amid broad pressure while the Dollar Index (98.31, +0.33) added to yesterday's gain. The S&P 500 tried climbing off its opening low, but daylong weakness among heavily-weighted sectors like health care (-1.5%), industrials (-1.0%), and energy (-0.9%) prevented the index from turning positive. On the flip side, the consumer discretionary sector (-0.5%) held a modest gain into the afternoon, but slipped into the red during the final hour. Still, the discretionary sector ended ahead of its peers with homebuilders contributing to the relative strength after DR Horton (DHI) was upgraded to 'Positive' from 'Neutral' at Susquehanna. Shares of DHI gained 1.7% while the iShares Dow Jones US Home Construction ETF (ITB) surrendered its gain ahead of the close. As for the broader market, the S&P 500 slipped back below its 50-day moving average (2,071).

The major averages kicked off April with a retreat that sent the S&P 500 lower by 0.4%. The benchmark index settled in-line with the Dow Jones Industrial Average and the Nasdaq Composite, with the latter catching up during the final hour. Equity indices spent the entire day in the red and could not rally following upbeat economic data from overseas. Strangely, S&P 500 futures tumbled nearly 20 points overnight after China reported its first expansionary Manufacturing PMI (50.1; expected 49.7) in three months. Similar to China, most Manufacturing PMI readings from Europe also surpassed estimates with the region-wide reading rising to 52.2 (expected 51.9). Interestingly, S&P 500 futures rallied off their overnight lows, but could not climb above the spot where the overnight selling commenced. Once the cash session began, the S&P 500 quickly returned into the neighborhood of its overnight low and settled on its 100-day moving average (2,060).
DJ30 +65.06 NASDAQ +6.71 SP500 +7.27 NASDAQ Adv/Vol/Dec 1723/1.46 bln/1124 NYSE Adv/Vol/Dec 1945/699.8 mln/1107 3:45 pm :

WTI crude futures rise following agreement of initial framework with Iran
WTI crude oil futures have been climbing since and are now -1.1% at $49.52/barrel, well off its LoD of $48.11/barrel
May crude finished floor trading at $49.10/barrel, down $0.91/barrel
May nat gas rallied $0.11 to $2.71/MMBtu
June gold fell $7.50 to $1201/oz today, while May silver lost $0.34 to $16.72/oz

5:48 pm This week's biggest % gainers/losers (:SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

Healthcare:DYAX (27.05 +63.54%),ASPX (100.55 +41.8%),CTRX (59.26 +22.64%),EGRX (48.47 +22.15%),HZNP (25.97 +19.07%),ADXS (15.65 +19.01%),ATRA (43.18 +17.98%),BCRX (9.76 +17.59%),CBM (40.61 +16.26%),CNCE (15.57 +15.93%),LBIO (12.94 +15.54%),RCPT (169.31 +14.84%)

Consumer Discretionary:MOV (31.53 +27.91%),JCP (9.13 +19.66%),SQBG (12.01 +16.38%)

Energy:CAK (0.65 +24.76%),PBR (6.76 +18.6%),PBR.A (6.8 +17.65%),FMSA (7.76 +15.48%),MDR (4.18 +15.15%)

This week's top 20 % losers

Healthcare:CTSO (7.71 -46.08%),BDSI (10.03 -27.79%),OVAS (35.06 -19.35%),CLDN (17.73 -15.93%),ZIOP (9.96 -12.98%),RPTP (10.48 -12.45%),PRQR (20.51 -11.97%),DRNA (21.29 -11.22%),KITE (53.95 -9.75%),FPRX (20.4 -9.45%)

Materials:AGI (5.68 -10.55%)

Industrials:UTIW (9.65 -22.86%),ALGT (161.9 -15.87%),DRYS (0.75 -9.63%)

Consumer Discretionary:WWE (13.73 -16.89%)

Information Technology:CARB (12.25 -14.34%),TRUE (15.71 -11.64%)

Energy:RIGP (11.8 -13.87%)

Telecommunication Services:PTNR (2.56 -12.63%),TKC (11.47 -10.95%)

3:35 pm Earnings Preview for the week of April 6 - 10 (:SUMRX) : Of the companies reporting earnings for the week of April 6 - 10 some of the bigger names include:

Monday: After Hours - SHLM

Tuesday: Pre Market - GBX, SCHN, ISCA
After Hours - PLAY, TISI

Wednesday: Pre Market - RAD, FDO, RPM, MSM, GPN, OMN
After Hours - AA, BBBY, PIR, DDC, APOG, MG, RECN, WDFC

Thursday: Pre Market - WBA, STZ, SYRG
After Hours - PSMT, RT, ANGO

12:56 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

KMX (74.79 +9.36%): Reported Q4 adj. EPS $0.65 (ex-$0.02 capitalized interest expense gain) vs. $0.60 Capital IQ consensus; rev +14% to $3.51 bln vs. $3.50 bln consensus.
RAI (73.05 +3.87%): Reports out speculating Reynolds deal with Lorillard (LO) will receive FTC approval.
CHU (16.7 +3.09%): Upgraded to Buy from Hold at Deutsche Bank.
Large Cap Losers

SHPG (228.57 -1.82%): Under pressure after Hayman Capital, through the entity "Coalition For Affordable Drugs", filed a petition for Inter Parties Review on a patent controlled by Shire.
DAL (42.4 -1.99%): Reported March PRASM was flat and mainline completion factor was 99.3% vs 99.8% year ago; Projected March quarter fuel price per gallon $2.90-2.95.

Mid Cap Gainers

GNW (7.83 +6.75%): Reports out that Genworth is looking into possible sale of its GLAIC Life unit.
RAD (8.88 +3.58%): Reported March same store sales +4.3% vs +4.1% Retail Metrics consensus.
DKS (58.64 +3.27%): Upgraded to Positive from Neutral at Susquehanna.

Mid Cap Losers

NUVA (43.06 -5.57%): Downgraded to Underperform from Neutral at BofA/Merrill.
ANET (66.66 -4.25%): Announced CFO Kelyn Brannon will leave the company for personal reasons.

12:06 pm Relative sector weakness (:TECHX) : Sectors that have underperformed the S&P in recent trade include: Industrial XLI, Semi SMH, Health XLV, Rail, Materials XLB, Retail XRT.

12:03 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (184) outpacing new lows (46) (:SCANX) : Stocks that traded to 52 week highs: AB, ABCB, ABG, ADXS, AGO, AHL, ALG, AN, ANSS, ARAY, ASR, ATNI, ATRA, AZO, BEP, BFIN, BGCP, BHLB, BHV, BIO, BKMU, BLKB, BONA, BR, BRKL, CAG, CAJ, CAMB, CATY, CBG, CBM, CBPO, CBPX, CBZ, CCL, CEA, CEB, CFI, CHA, CHDN, CI, CMPR, CMT, CSF, CSGS, CTB, CUBI, CW, CWST, DAX, DHI, DKS, DLX, DST, EFSC, EIG, ELGX, ENTG, ESLT, ESSA, EURN, EXPE, FCBC, FCHI, FDP, FDS, FFG, FICO, FLO, FMD, FRP, FRPH, FRPT, FSRV, GCI, GFF, GIII, GILT, GNCMA, HBOS, HCKT, HDS, HIFR, HMN, HNI, HRC, HSII, HTBK, IBKR, ICLN, ICUI, IIVI, IMH, IMKTA, INAP, INS, JBT, JFC, JHP, JKHY, JLL, KAI, KFY, KMG, KMX, KRFT, KSS, KVHI, LAMR, LEA, LEN, LEN.B, LHCG, LMNS, LNCE, LNDC, LO, MAN, MASI, MCBK, MCO, MCS, MERC, MGLN, MHLD, MLI, MMS, MOH, MRKT, MSCI, NHF, NORD, NVO, OFIX, OSBC, OSIS, PBH, PFBC, PNK, PRFT, QUNR, RAD, RALY, RDI, REV, RLGT, RNST, ROL, ROLL, RTRX, SHEN, SHI, SHOO, SIGM, SMMT, SPNS, SPOK, SPR, SPTN, SRLP, SSB, STRZA, SUBK, SUNE, SXT, SYBT, SYKE, TERP, THFF, TIK, TNP, TOL, TREX, TRI, TRIL, UAM, UCFC, USAT, USCR, VG, WFD, WU, XRM, ZNH

Stocks that traded to 52 week lows: AMDA, ARCW, BOSC, DCTH, DPW, EBIO, ELTK, ETAK, EVRY, FENG, FNJN, FREE, FULL, GLRI, GRAM, GRMN, HEAR, ICON, IEC, IRG, ISDR, KCAP, KLAC, LINC, LPTN, MIND, MOMO, MVO, MXPT, NVTA, OCRX, OHRP, OPXA, PHII, RLJE, RXII, SINA, SKIS, TAOM, UACL, USEG, VALE, VALE.P, WRN, WTW, XPL

ETFs that traded to 52 week highs: FXI, GXC, HAO

ETFs that traded to 52 week lows: EGPT, FXA