From Briefing.com: Major indices began the week on a positive note after an initial sell-off spurred by the disappointing job report released on Friday while cash markets were closed. Only 126,000 payrolls were added compared to the 250,000 consensus estimate. The report immediately weighed on futures, which traded in an abbreviated session on Friday, and may have sparked today's rally as fears of a June rate hike may be subsiding in the wake of lackluster economic data.
Nevertheless, stocks were able to rebound, with the major indices performing as follows: S&P 500 +0.66%, Dow Jones Industrial Average +0.66%, Nasdaq Composite +0.62%, and the Russell 2000 +0.39%.
The S&P Information Technology Sector Index outperformed the broader market on Monday as it gained 1% on the day. Top performers in the sector were Sandisk (SNDK 67.25, +2.68, +4.2%), Microsoft (MSFT 41.55, +1.26, +3.1%), NVIDIA (NVDA 21.67, +0.61, +2.9%), and Micron Technology (MU 27.43, +0.71, +2.6%). Meanwhile, Altera Corp (ALTR 41.21, -1.89, -4.4%), Western Union (WU 20.24, -0.67, -3.2%), F5 Networks (FFIV 111.74, -1.97, -1.7%), and Motorola (MSI 61.48, -1.03, -1.7%) weighed on the sector as its worst performers.
Notable news items from sector components included the following:
Google (GOOGL 543.95, +2.64, +0.5%): ChowNow announced a new partnership with Google that brings Google Wallet to thousands of independent restaurants across the United States. As of today all ChowNow restaurant clients' ordering apps have been updated to include Google Wallet at no additional cost, and all new restaurant clients will receive it as a standard feature.
Akamai Tech (AKAM 70.92, +0.08, +0.1%): Announced it has acquired Octoshape in a cash transaction. Octoshape's services are designed to help optimize the quality of video streams for over-the-top content and to enable Internet Protocol television solutions. The acquisition is not material to Akamai's financials, and the terms of the deal were not disclosed.
Apple (AAPL 127.35, +2.03, +1.6%): TechNewsDaily reports that the new iMAc could have an 8k screen.
NVIDIA (NVDA 21.67, +0.61, +2.9%): Announced the judge presiding over our patent case against Samsung (SSNLF) and Qualcomm (QCOM 67.76, -0.21, -0.3%) in the U.S. International Trade Commission has returned a pretrial claim construction ruling that favors NVIDIA's preferred construction on nearly all of the claims that were disputed.
Elsewhere in the technology space:
Dish Network (DISH 71.15, +0.19, +0.3%): Sling TV, a subsidiary of DISH Network Corporation (DISH), announced that DishWorld is now "Sling International." The move officially marries the largest provider of streamed international channels in the U.S. with Sling TV, the recently-launched provider of live, over-the-top domestic TV service. Sling International provides global programming from nearly 200 channels in 18 languages to U.S. households, starting at $15 per month.
TrueCar (TRUE 16.08, +0.37, +2.4%): TrueCar's Certified Dealer network totaled a best ever 10,680 franchise and independent dealer partners at the end of the quarter, up 38 percent from a year ago. Active franchise dealers increased by 607, the most for a single quarter, while the number of active independent dealers grew by 233. There were a total of 9,108 active franchise dealers as of March 31, while independent dealers totaled 1,572. Both figures are also record highs for TrueCar.
Cheetah Mobile (CMCM 21.29, +1.20, +6%): Announced it has signed a commercial agreement with Nanigans, Inc. Pursuant to the commercial agreement between Cheetah Mobile and Nanigans, Cheetah Mobile will be the exclusive partner of Nanigans in the Greater China region to manage campaigns for advertisers using Nanigans advertising automation software. In addition, Nanigans will be the exclusive third-party advertising automation software provider used by Cheetah Mobile for advertising spend in certain social and mobile apps, until the end of the term of the commercial agreement.
Comtech Telecom (CMTL 30.34, +0.12, +0.4%) Announced it was awarded $19.8 mln in orders to support the U.S. Army's blue force tracking program
DealerTrack (TRAK 38.02, +0.23, +0.6%) Announced it and Digital Air Strike have entered into channel and product agreements to help dealer clients drive lead response and generation opportunities.
Analyst Action:
Harris Corp (HRS 80.71, +2.01, +2.6%): upgraded to Equal Weight from Underweight at Barclays; price target raised to $88 from $76
VMWare (VMW 83.40, +3.04, +3.8%): upgraded to Buy from Neutral at Nomura
ADTRAN (ADTN 19.11, +0.29, +1.5%): upgraded to Hold from Underperform at Jeffries; price target raised to $17.75 from $16.25
Microsoft (MSFT 41.55, +1.26, +3.1%): upgraded to Outperform from Market Perform at Wells Fargo
Zillow (Z 97.17, -3.70, -3.7%): downgraded to Equal-Weight from Overweight at Barclays; price target lowered to $105 from $140
SAP AG (SAP 73.33, +0.57, +0.8%): downgraded to Underperform from Market Perform at Wells Fargo
Western Union (WU 20.24, -0.67, -3.2%): downgraded to Neutral from Positive at Susquehanna
Qualcomm (QCOM 67.76, -0.21, -0.3%): downgraded to Market Perform from Outperform at FBR Capital; price target lowered to $72 from $80
Integrated Device (IDTI 20.05, +0.30, +1.5%): initiated with a Buy at Topeka Capital; price target set at $24
Nova Measuring (NVMI 11.74, unchgd): price target raised to $15 from $13 at Needham; Buy
4:10 pm : The major averages began the week on an upbeat note after shaking off their opening losses that were brought on by a disappointing jobs report for March. The S&P 500 spiked 0.7% while the Nasdaq Composite (+0.6%) followed not far behind.
The Nonfarm Payrolls report for March was released on Friday and it disappointed on all fronts. Only 126,000 payrolls were added while the Briefing.com consensus expected a reading of 250,000. Since the cash market was closed on Friday, the news weighed on the futures market, sending futures on the S&P 500 down 20 points.
Index futures were able to cut their losses in half by today's opening bell and the S&P 500 erased a ten-point deficit just 15 minutes into the session. The index spent the rest of the day in a steady climb with all ten sectors logging gains. Once again, the market interpreted bad news as good, rallying on the belief that the disappointing jobs report will cause the Federal Reserve to postpone its first rate hike.
Three sectors posted gains of 1.0% or more with energy (+1.8%) spending the bulk of the session in the lead. The growth-sensitive sector trimmed its 2015 decline to 1.3% with significant help from crude oil, which surged 6.1% to $52.11/bbl. This morning, Saudi Arabia announced it will hike its prices for oil exports to Asia for the second consecutive month.
Interestingly, crude oil held its ground during afternoon action even as the Dollar Index (97.03, +0.48) erased roughly half of its decline from Friday. Meanwhile, Treasuries retraced their entire spike from Friday, sending the 10-yr yield higher by seven basis points to 1.90%.
Elsewhere, the top-weighted technology sector (+1.0%) began among the laggards, but finished ahead of most other groups. Large cap names did some heavy lifting with Microsoft (MSFT 41.54, +1.26) jumping 3.1% after Wells Fargo upgraded the stock to 'Outperform' from 'Market Perform.' Meanwhile, chipmakers underperformed with the PHLX Semiconductor Index adding 0.5%.
Also of note, the industrial sector (+0.8%) outperformed even as transport stocks struggled. The Dow Jones Transportation Average lost 0.4% with airlines pacing the decline amid today's increase in oil prices.
Over on the countercyclical side, consumer staples (+0.8%) and utilities (+1.3%) outperformed while telecom services (+0.4%) and health care (+0.1%) lagged. Biotechnology kept the health care sector under pressure with iShares Nasdaq Biotechnology ETF (IBB 338.85, -0.85) shedding 0.3%.
Today's participation was ahead of recent averages with more than 885 million shares changed hands at the NYSE floor.
Economic data was limited to Nonfarm Payrolls and ISM Services:
Nonfarm payrolls increased by only 126,000 in March to follow a downwardly revised 264,000 (from 295,000) in February. The Briefing.com Consensus expected an increase of 250,000
That was the first time jobs growth did not exceed 200,000 since February 2014, and it was the smallest increase since 109,000 jobs were added in December 2013
Private payrolls increased by 129,000 jobs, down from a downwardly revised 264,000 (from 288,000) in February while the consensus expected the addition of 245,000 jobs.
Average hourly earnings increased by a solid 0.3% after increasing by only 0.1% in February, but those gains were offset a significant cut in the number of hours workers. The average workweek fell to 34.5 hours in March from 34.6 in February
Altogether, aggregate earnings increased by only 0.1% in March, down from a 0.3% increase in February, which is not sufficient to support consumption growth
The ISM Non-Manufacturing Index declined to 56.5 in March from 56.9 in February while the Briefing.com consensus expected no change
Tomorrow, the Job Openings and Labor Turnover Survey for February will be released at 10:00 ET while the February Consumer Credit report will cross the wires at 15:00 ET (consensus $12.50 billion).
Nasdaq Composite +3.8% YTD
Russell 2000 +4.7% YTD
S&P 500 +1.1% YTD
Dow Jones Industrial Average +0.3% YTD
4:16 pm MagnaChip Semi announces Notice of Noncompliance with NYSE continued listing standards (MX) : Co announced that, as expected, on April 1, 2015, the Company received a letter from the NYSE indicating that the Company is not in compliance with the NYSE's continued listing requirements under the timely filing criteria outlined in Section 802.01E of the NYSE Listed Company Manual as a result of its failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2014
4:04 pm Cohu announces termination of rights agreement (COHU) : Co announced that its Board of Directors approved an amendment to accelerate the expiration date of the Company's rights agreement from November 9, 2016 to April 6, 2015, effectively terminating the Company's stockholders rights plan as of this date. Stockholders are not required to take any action as a result of this expiration.
12:41 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
TSLA (205.42 +7.55%): Preannounced Q1 deliveries +55% y/y to 10.03k vs. ~9.5K guidance.
VTR (77.02 +5.18%): Announced it will acquire privately-owned Ardent Medical Services for $1.75 bln in cash; expected to be immediately accretive; also announced a plan to spin off its post-acute/skilled nursing facility portfolio.
VMW (83.84 +4.33%): Upgraded to Buy from Neutral at Nomura.
Large Cap Losers
ALTR (41.35 -4.06%): Under pressure as expectations for a reported acquisition by Intel (INTC) fade.
LUV (41.1 -4.11%): Airlines lower as WTI crude oil futures jump 5.2% to $51.70/bbl (AAL, UAL, DAL also lower).
MTB (124.24 -2.33%): Announced it was informed by the Federal Reserve late Friday that it will not be in a position to complete its review of M&T's proposed merger with Hudson City Bancorp (HCBK) in time to complete the Merger before the termination date of April 30, 2015.
Mid Cap Gainers
TRQ (3.48 +7.41%): Reports out that Rio Tinto (RIO) has reached agreement with Mongolia over building of Turquoise Hill's Oyu Tolgoi mine.
BRKR (19.98 +5.94%): Announced it received 510(k) clearance from the FDA for library and methods expansion for the MALDI Biotyper CA System; upgraded to Outperform from Mkt Perform at Leerink Partners; tgt raised to $24 from $21.
IMAX (35.98 +5.06%): Upgraded to Buy from Hold at Canaccord Genuity; tgt to $38 from $35.
Mid Cap Losers
GCI (35.94 -3.88%): Downgraded to Mkt Perform from Outperform at FBR Capital.
Z (98.25 -2.59%): Downgraded to Equal Weight from Overweight at Barclays.
CNX (28.51 -1.99%): Downgraded to Hold from Buy at Deutsche Bank.
11:53 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (173) outpacing new lows (34) (:SCANX) : Stocks that traded to 52 week highs: ABG, ACH, ACN, ADXS, AFAM, ALEX, ALLE, ALR, ALV, ARAY, ASR, ATRA, ATRO, AXL, AZO, BAM, BDC, BEP, BFIN, BGCP, BIO, BIP, BLKB, BLMT, BONA, CAF, CAG, CAJ, CBM, CCK, CDXS, CEA, CFI, CGNX, CHA, CHMT, CI, CLX, CMT, CTB, CW, CWST, CYAN, DEG, DEI, DHI, DHIL, DLPH, DOOR, DST, DVCR, DYAX, ELGX, ELLI, EPAM, ESLT, EVHC, EXPE, FCE.B, FLO, FMD, FRP, FSBW, FSRV, GAME, GIII, GIL, GILT, GIS, HAS, HBIO, HELE, HMN, HNI, HOLX, HPI, HPP, HRC, HRS, HW, ICLN, IMAX, IMH, IMKTA, INS, INUV, IPKW, JFC, KAI, KMG, KSS, KVHI, LAD, LB, LEA, LEN, LEN.B, LEVY, LFC, LII, LNCE, LO, LTM, LUX, LVNTA, MASI, MIG, MLI, MMS, MSCI, MTH, MTN, MTS, MUA, NAT, NCFT, NORD, NVO, NWHM, NWL, NXST, OMAB, PAG, PETS, PF, PRFT, PRTO, QUNR, QURE, RDI, RDY, RLGT, RMD, RWC, SABR, SHEN, SHI, SIX, SKOR, SMMT, SNA, SNE, SOR, SPF, SPNS, SPTN, SRLP, SSP, ST, STON, STRZA, STZ, SVU, SXT, SYUT, TA, TAYD, TGT, TNP, TOL, TRI, TRIL, TTC, TXT, UFI, USCR, VLTC, VRNT, WSR, WWAV, XLS, XRM, ZNH
Stocks that traded to 52 week lows: AI, AMDA, APOL, AXPW, BELFA, CCM, CEQP, DCTH, EAC, ELLO, EOX, ESMC, EVRY, FSAM, GNI, GRMN, HPQ, IKAN, IMUC, ISDR, JST, KCAP, KORS, MFV, MIND, MXPT, OHRP, OSN, RESN, SFE, SYPR, UPIP, VTNR, ZHNE
ETFs that traded to 52 week highs: FXI, GXC, HAO, ITB
ETFs that traded to 52 week lows: EGPT, VNM
9:05 am Taiwan Semi certifies Synopsys (SNPS) design tools for 16-nm Finfet plus production and for 10-nm early design starts (TSM) :
SNPS announced that TSM has concluded 16-nanometer FinFET Plus v1.0 certification and reached the first milestone of 10-nanometer certification based on the most current DRM and SPICE model on a comprehensive list of Synopsys' custom and digital design tools.
This certification enables mutual customers to deploy tools in Synopsys' Galaxy Design Platform for 16-nm production designs and 10-nm early engagements.
8:00 am Veeco Instruments announces that KaiStar Lighting has ordered multiple TurboDisc EPIK700 MOCVD systems to ramp production of LEDs (VECO) : Co announces that China-based KaiStar Lighting has ordered multiple TurboDisc EPIK700 Gallium Nitride (GaN) MOCVD systems. KaiStar will use the EPIK700 systems to ramp production of LEDs for the general lighting market. Co says "We expect that 2015 will be the crossover year in which shipments of LEDs for general lighting will surpass shipments of LEDs for backlighting, with the Epistar companies being a significant driver of that trend."
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