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From Briefing.com: Outside of the news that Verizon (VZ 49.62, -0.18, -0.4%) is going to acquire AOL (AOL 50.52, +7.93, +18.6%) for $4.4 billion, there wasn't a lot of corporate news to drive the information technology sector on Tuesday. Similar to Monday, though, there was a lot of action in the bond market to drive both the sector and the broader market.

The yield on the 10-yr Treasury note hit 2.36% in overnight action, moving higher in conjunction with sovereign bond yields in Europe. At that point, though, buyers emerged and helped drive the yield all the way back to 2.24%.

The improvement there helped calm an anxious equity market, which took a noticeable dip at the start of trading but then started to pare its losses with the drop in market rates and a test of its 50-day simple moving average.

The Dow, Nasdaq, and S&P 500 all closed with modest losses, yet that was a moral victory of sorts for the bulls considering they were down as many as 180, 62, and 20 points, respectively, soon after the opening bell.

The S&P 500 information technology sector was down as much as 1.4% in the early going but finished with a loss of 0.5%. Weakness in the semiconductor space and a lackluster showing from Apple (AAPL 125.87, -0.46, -0.3%) weighed on matters.

The Philadelphia Semiconductor Index dropped 0.9%, pressured by losses in the likes of Intel (INTC 32.20, -0.49, -1.3%), Micron (MU 26.86, -0.89, -3.1%), SanDisk (SNDK 66.69, -1.08, -1.5%), and Lam Research (LRCX 76.82, -1.29, -1.5%). Despite the weakness on Tuesday, the SOX Index is still up 1.4% this month.

Notable news items from sector components included the following:

Cognizant Technology Solutions (CTSH 62.14, -0.54, -0.9%): Announced that Purdue Pharma has selected Cognizant to optimize its core IT platform

IBM (IBM 170.58, -0.57, -0.3%): Announced that the New Zealand Ministry of Health has adopted its government cloud service offering

Seagate Technology (STX 56.17, -0.59, -1.1%): Increased the size of its previously announced offering and prices $700 mln of 4.875% senior notes due 2027; offering was previously $400 mln
Elsewhere in the technology space:

Alibaba (BABA 86.77, +0.05, +0.1%): Cainiao, the logistics affiliate of Alibaba Group Holding Limited, announced the availability of a delivery service in five Chinese cities, including Beijing, Shanghai, Guangzhou, Hangzhou and Tianjin, that will deliver products to consumers within three hours after they place their orders. The logistics service will initially cover healthcare products ordered from Tmall.com but will be gradually expanded to cover other product categories. By the end of 2015, Cainiao plans to expand this service to 14 other major cities including Shenzhen, Nanjing, Chongqing, Wuxi, Qingdao, Shenyang and Xi'an, bringing the total number of cities covered by this innovative service to 19.

AOL (AOL 50.52, +7.93, +18.6%): To be acquired by Verizon (VZ 49.62, -0.18, -0.3%) for $50 per share, or ~$4.4 bln. The transaction will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon upon completion. Verizon expects to fund the transaction from cash on hand and commercial paper. Verizon also continues to expect to return to pre-Vodafone transaction credit ratings in the 2018-2019 timeframe.

GoDaddy (GDDY): After Tuesday's close, reported Q1 (Mar) GAAP loss of $0.34 per share, slightly ahead of analysts' average expectation. Revenues rose 17.5% year/year to $376.3 mln, which was ahead of estimates. Total Bookings of $498.7 million, up 13.7% year over year. Adjusted EBITDA of $93.9 million, up 17.8% year over year. For Q2, sees revenues of $390-395 mln and EBITDA $75-78 mln. For FY15, sees revenues of $1.595-1.605 bln and EBITDA $322-327 mln.

NETGEAR, Inc. (NTGR 30.68, -0.30, -0.7%): Announced that AT&T (T 33.66, +0.17, +0.7%) will bring the NETGEAR AirCard 779S Mobile Hotspot to market under the brand name, AT&T Unite Express for GoPhone.

Yelp (YELP 48.83, +0.21, +0.4%): At conference says it won't comment on rumors or speculation in regards to question about last week's story it has hired bankers to explore a sale.

YY (YY 63.28, -5.69, -8.6%): After Monday's close, reported Q1 (Mar) earnings of $0.70 per share, excluding non-recurring items, which was worse than analysts' average expectation. Revenues rose 72.6% year/year to $185.56 mln, which was ahead of estimates. Company sees Q2 revenues of RMB 1.27-1.29 bln, which is shy of analysts' average expectation.

Analyst Action:

Avago Technologies (AVGO 122.95, +0.14, +0.1%): reinstated with an Overweight at Barclays; $145 target

Cisco Systems (CSCO 29.23, +0.02, +0.2%): target raised to $33 from $31 at RBC Capital Markets

Juniper Networks (JNPR 27.05, -0.04, -0.1%): upgraded to Buy from Neutral at Bank of America/Merrill Lynch

Micron (MU 26.86, -0.89, -3.1%): Drexel Hamilton downgraded to Hold from Buy

Netease.com (NTES 127.75, -1.14, -0.8%): target raised to $146 from $125 at T.H. Capital

Qorvo (QRVO 74.69, +0.13, +0.5%): target raised to $80 from $70 at Barclays

4:35 pm Zillow beats by $0.17, misses on revs; reaffirms FY15 guidance -- halted, trade will resume at 17:00 (Z) : Reports Q1 (Mar) earnings of $0.05 per share, excluding non-recurring items, $0.17 better than the Capital IQ Consensus of ($0.12); revenues rose 92.3% year/year to $127.3 mln vs the $135.17 mln consensus.


Marketplace Revenue of $108.9 million, including Real Estate Revenue of $93.3 million, Mortgages Revenue of $9.6 million and Trulia's Market Leader Revenue of $6.1 million. Display Revenue of $18.3 million.Co reaffirms guidance for FY15, sees FY15 revs of $690 mln vs. $678.01 mln Capital IQ Consensus,m which includes Market Leader's expected revenue of $40 million. The company expects pro forma Adjusted EBITDA to be in the range of $80 million to $85 million.
In March 2015, nearly 140 million unique users visited Zillow Group consumer brands Zillow, Trulia, StreetEasy and HotPads. Trulia integration on track for completion by year-end.4:08 pm Exar reports EPS in-line, misses on revs; guides Q1 EPS in-line, revs below consensus; co announces review of strategic alternatives (EXAR) : Reports Q4 (Mar) earnings of $0.11 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.11; revenues rose 56.7% year/year to $43.86 mln vs the $45.88 mln consensus.

Co issues mixed guidance for Q1, sees EPS of $0.10-0.12, excluding non-recurring items, vs. $0.12 Capital IQ Consensus Estimate; sees Q1 revs of $40-43 mln vs. $48.22 mln Capital IQ Consensus Estimate.

Co also announced that its Board of Directors has unanimously decided to undertake a comprehensive review of strategic alternatives to enhance value for stockholders. Exar intends to conduct a thorough review and evaluation of strategic alternatives.

4:10 pm : The stock market ended the Tuesday session on a modestly lower note, which masked an early drop that had the S&P 500 (-0.3%) down as much as 20 points at the start.

Equity indices endured a shaky open after the overnight session featured more selling in European and U.S. bond markets; however, that pressure abated shortly before the opening bell with the U.S. 10-yr note marking its low at 8:00 ET. At that time, the benchmark yield marked a session high at 2.36% and began its daylong retreat that ended at 2.26% (-3 bps). The ensuing rally in Treasuries fostered a rebound in equities with the S&P 500 returning above its 50-day moving average (2,089) after sliding beneath that level at the start.

The S&P 500 ended the day not far below its flat line, but only two sectors finished the day with gains. The energy space (+0.4%) outperformed throughout the day thanks to a 2.5% gain in crude oil ($60.59/bbl), which was underpinned by a 0.5% decline in the Dollar Index (94.55, -0.46).

Elsewhere, the industrial sector (-0.1%) settled just below its flat line even though high-beta transport stocks lagged notably. The Dow Jones Transportation Average fell 1.2% with all 20 components registering losses while the largest sector member-General Electric (GE 27.03, +0.11)-gained 0.4%.

Meanwhile, the remaining cyclical sectors posted losses. The materials space (-1.0%) spent the day behind other groups while technology (-0.5%) and financials (-0.4%) prevented the broader market from turning positive. Similar to transport stocks, high-beta chipmakers displayed relative weakness throughout the day with the PHLX Semiconductor Index falling 0.9%.

As for large cap tech names, Microsoft (MSFT 47.35, -0.02) and Cisco Systems (CSCO 29.23, +0.02) outperformed while Google (GOOGL 538.73, -7.05) and Facebook (FB 77.46, -0.55) lagged. Also of note, Yelp (YELP 48.83, +0.21) settled lower by 0.4% after the Wall Street Journal contrasted the potential acquisition of the company with Verizon's (VZ 49.62, -0.18) purchase of AOL (AOL 50.52, +7.93) for $50/share or $4.40 billion. Recall that Yelp spiked 23.0% on Thursday after the Wall Street Journal reported the social media company is looking into a potential sale.

Similar to technology, the influential health care sector (-0.5%) presented a headwind throughout the day. The sector finished among the laggards even as the biotech group settled near the broader market with the iShares Nasdaq Biotechnology ETF (IBB 351.79, -0.50) reclaiming its 50-day moving average (349.96).

Today's participation was a bit light with fewer than 700 million shares changing hands at the NYSE floor.

Economic data was limited to the Treasury Budget and JOLTS:


The Treasury budget showed a surplus of $157.00 billion in April 2015, up from a surplus of $106.90 billion in April 2014 and roughly in-line with the Briefing.com consensus estimate that called for a surplus of $155.00 billion
The Treasury data are not seasonally adjusted, so the April surplus cannot be compared to the $52.90 billion deficit recorded in March
The Job Openings and Labor Turnover Survey for March showed that job openings decreased to 4.994 million from a revised rate of 5.144 million (from 5.133 million)

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while April Retail Sales (Briefing.com consensus 0.2%) and April Import/Export Prices will be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of the Business Inventories report for March (consensus 0.2%).

Nasdaq Composite +5.1% YTD
Russell 2000 +2.4% YTD
S&P 500 +2.0% YTD
Dow Jones Industrial Average +1.4% YTD

DJ30 -36.94 NASDAQ -17.38 SP500 -6.21 NASDAQ Adv/Vol/Dec 1221/1.58 bln/1707 NYSE Adv/Vol/Dec 1371/691.9 mln/1688 3:35 pm :

Following OPEC's monthly report and ahead of the weekly EIA storage report, WTI crude oil closed ended the day $1.49/barrel (or +2.5%) to $60.73/barrel
Corn and ultimately closed near the unchanged line following today's USDA WASDE report. Corn gained one cent to $3.61/bu, while wheat futures lost one cent to $4.81/bu
June natural gas rallied 3.6% today to $2.90/MMBtu
Metals gained today as well
June gold rose $9.80 to $1192.70/oz, while July silver gained $0.25 to $16.55/oz.

1:06 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

PLL (117.94 +18.76%): Reports out that the company is near a potential sale, with Thermo Fisher (TMO) and Danaher (DHR) mentioned as possible suitors.
EW (131.28 +3.31%): Upgraded to Overweight from Neutral at JP Morgan.
HUM (171.52 +2.94%): Outperforming follow chatter the name may be targeted by Aetna (AET).

Large Cap Losers

VIPS (25.95 -5.01%): Under pressure following cautious blog mention.
GPS (38.42 -3.63%): Reported April same store sales -12% vs -7.0% Retail Metrics consensus with downside Q1 EPS guidance and prelim sales; Downgraded at FBR Capital.

Mid Cap Gainers

AOL (50.54 +18.67%): To be acquired by Verizon (VZ) for $50 per share in a $4.4 bln deal.
RARE (74.22 +10.41%): Price target raised to $78 from $68 at Canaccord Genuity; co reported Q1 results which showed a larger than expected loss.
CDK (53.4 +3.53%): Elliott Associates disclosed 7.6% active stake in 13D filing.

Mid Cap Losers

JOBS (29.96 -14.15%): Reported revenues increased 4.8% y/y to $73.9 mln; EPS of $0.39, ex items, compared to prior year of approx $0.36
RAX (46 -13.42%): Beat Q1 consensus EPS estimates by $0.01, reported revs in-line; sees Q2 revs +1.5-2.5%; Downgraded at Morgan Stanley and Credit Argicole.
LDOS (39.24 -8.49%): Beat Q1 consensus EPS estimates by $0.07, beat on revs; reaffirmed FY16 EPS guidance, revs guidance, which are below consensus estimates.

12:21 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (120) outpacing new highs (59) (:SCANX) : Stocks that traded to 52 week highs: ACLS, AET, AFH, AHS, ALDW, AOL, AXS, BLUE, CATY, CDK, CNO, CORI, CSRE, ELNK, EMJ, FFNM, GDDY, HILL, INTG, IPAR, IPHI, IRMD, JNPR, KALU, KTWO, LOAN, LYG, MMAC, MOH, MTSL, NCOM, NHTC, NICE, NOAH, NVEE, PAHC, PAYC, PFSW, PINC, PLL, PNFP, PRE, PVTB, QCRH, QLIK, QTWO, RARE, RELY, RGEN, SAL, SBNY, SIGM, SIVB, SUM, TDS, TFX, VRTU, WIX, ZIXI

Stocks that traded to 52 week lows: AEZS, AJX, AKAO, AMBR, APEI, ARG, ASCMA, ASEI, AVP, BDSI, BKH, BMR, BOI, BPTH, BREW, BSM, CBAY, CBLI, CDZI, CEL, CIM, CKP, CLTX, CNP, CNS, CRCM, CRD.B, CSAL, CVSL, DTF, DX, EDE, EE, EGL, EGP, EMMS, ENZ, ESI, ESIO, FBRC, FPT, FREE, FTK, FXEN, GBL, GLRE, GRC, GRVY, GTY, HCP, HOV, HTR, IDN, INPH, IO, IPDN, ISDR, ISH, KEM, LMIA, LPL, LPSN, LUNA, MDU, MDW, MIN, MNKD, MNTX, MTZ, MZF, NBD, NCS, NDLS, NMRX, NNVC, NOR, NPF, NSPR, NYRT, OFG, OHGI, ONTY, ORN, PCH, PCN, PKOH, PNF, PSB, QRHC, RFP, ROVI, RSO, RST, SBY, SGI, SHLO, SJT, SMCP, SNH, SNI, SPKE, SRT, STRI, TDC, TRCO, TROX, TTF, UACL, UFPT, VCLT, VPCO, VPG, VPV, VRTS, VSAR, WIN, WLKP, WPG, XPL, XRX

ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: LQD