From Briefing.com: The stock market started Thursday in rally mode, continued the day in rally mode, and finished the day in rally mode. The end result is that the S&P 500 closed at a new all-time high.
The impetus for the rally effort was an indirect one as some weaker-than-expected producer price index data once again reinforced the notion that the Federal Reserve will most likely not be raising the fed funds rate anytime soon. That thinking sparked some buying interest in the Treasury market that sent yields lower at both the front end and back end of the Treasury curve.
The S&P 500 information technology sector (+1.7%) was the clear winner in Thursday's session, which featured nice-sized gains in many of the large-cap components, including Apple (AAPL 128.95, +2.94, +2.3%) and Facebook (FB 81.37, +2.93, +3.7%). Altogether 61 of the sector's 66 components ended the day with a gain.
Notable news items from sector components included the following:
Apple (AAPL 128.95, +2.94, +2.3%): According to Fortune, it was told by sources that Apple's home automation platform, HomeKit, is likely to launch in early fall. There had been speculation HomeKit would arrive in early summer.
Applied Materials (AMAT 19.86, -0.07, -0.4%): After Thursday's close, reported Q2 (Apr) earnings of $0.29 per share, excluding non-recurring items, slightly ahead of analysts' average expectation. Revenues rose 3.8% year/year to $2.44 bln. For Q3, sees EPS of $0.31-0.35, excluding non-recurring items, and revenues +2-6% quarter-over-quarter to ~$2.49-2.59 bln. The guidance ranges are in-line with analysts' average expectations.
Avago Technologies (AVGO 126.94, +3.81, +3.1%): According to people familiar with the matter, Reuters reported that the company has reached out to Xilinx (XLNX 44.99, +1.26, +2.9%), Maxim Integrated Products (MXIM 34.10, +1.58, +4.9%), and Renesas Electronics Corp to gauge potential takeover interest. It was noted, however, that such discussions have not reached an advanced stage.
Computer Sciences (CSC 67.28, +2.77, +4.3%): Reuters, citing people familiar with the matter, said Computer Sciences is planning to break into two companies, separating its government business from its commercial information technology division.
Fidelity National Information Services (FIS 64.55, +0.69, +1.1%): Disclosed that effective May 8, 2015, Peter J.S. Smith resigned from his position as Chief Accounting Officer to pursue other employment opportunities. In connection with his resignation, Mr. Smith has agreed to provide services to the Company on a transitional basis.
Jabil Circuit (JBL 24.24, +0.68, +2.9%): Announced it has secured approval from the Penang State government in Malaysia to purchase 20 acres of land at the Batu Kawan Industrial Park to support expansion plans.The new site will focus on manufacturing products for the Enterprise, Industrial, Medical and Aerospace sectors.
Lam Research (LRCX 78.25, +1.01, +1.3%): Announced its Kiyo F Series conductor etch system is enabling the transition of 3D NAND and advanced DRAM into volume production
Symantec (SYMC 25.90, +0.58, +2.3%): After Thursday's close, reported Q4 (Mar) earnings of $0.43 per share, excluding non-recurring items, slightly below analysts' average expectation. Non-GAAP revenues fell 6.2% year/year to $1.55 bln. For Q1, sees EPS of $0.41-0.44, excluding non-recurring items, and revenues of $1.50-1.54. The high end of both guidance ranges is below analysts' average expectation. For FY16 sees EPS of $1.80-1.90, excluding non-recurring items, and revenues of $6.21-6.35 bln.
Elsewhere in the technology space:
Alibaba (BABA 88.40, +0.87, +1.0%): Acquired a minority stake in the logistics provider Shanghai YTO Express; financial terms not disclosed
CyberArk (CYBR 61.50, +0.20, +0.3%): Announced that Vodafone (VOD 36.93, +0.03, +0.1%) has implemented CyberArk to protect and manage its privileged accounts, identities and applications
FireEye (FEYE 42.39, -1.07, -2.5%): Cisco (CSCO 29.05, -0.30, -1.0%) downplayed acquisition rumors on its earnings conference call, with CEO John Chambers saying he "wouldn't bet on" the acquisition rumor (i.e. CSCO-for-FEYE) that circulated Wednesday. Separately, re/code reported that sources it spoke to familiar with FireEye's management said the company isn't willing to entertain takeover offers before it reaches $1 billion in annual revenue
Integrated Silicon (ISSI 20.14, +1.40, +7.5%): Cypress Semiconductor (CY 13.14, +0.49, +3.9%) sent letter to the Board of Integrated Silicon Solution offering to acquire 100% of its outstanding shares of common stock for $19.75 per share in cash. In the letter it was noted that the board of directors of Cypress has approved this proposal and that the proposal is superior to the $19.25 per share sale price ISSI agreed to in the Agreement and Plan of Merger entered into with the "Consortium" on March 12, 2015
Netease.com (NTES 140.83, +10.83, +8.3%): Reported Q1 (Mar) earnings of $1.55 per share, which was ahead of analysts' average expectation. Revenues rose 55.5% year/year to $590.46 mln, also ahead of estimates. In February 2014, the Company announced that its board of directors approved a new share repurchase program of up to US$100 million of the Company's outstanding ADSs for a period not to exceed 12 months. This program expired on February 16, 2015, and no ADSs were repurchased under it.
PMC-Sierra (PMCS 8.58, +0.21, +2.5%): Company agreed to purchase 5,500,348 shares of PMC common stock from Relational at a price of $8.16075 per share, for a total purchase price of approximately $44,886,965. The purchase of the shares is expected to be completed on May 14, 2015. Pursuant to the Stock Repurchase Agreement, the Company has agreed to repurchase the shares of common stock at a 2.5% discount to the last closing price per share of the Company's common stock on May 13, 2015, the date the agreement was entered into.
Analyst Action:
BlackBerry (BBRY 10.32, +0.06, +0.6%): target raised to $11 from $10 at Cowen
Cisco Systems (CSCO 29.05, -0.30, -1.0%): downgraded to Neutral at Sterne Agee CRT...Cisco Systems target raised to $32 from $30 at MKM Partners
EZchip (EZCH 14.79, -0.05, -0.3%): target lowered to $15 from $20 at Chardan Capital Markets
Intuit (INTU 103.82, +1.58, +1.6%): target raised to $100 from $85 at Deutsche Bank
Linear Tech (LLTC 47.11, +1.05, +2.3%): upgraded to Neutral from Underweight at JP Morgan
Teradyne (TER 20.72, +0.30, +1.5%): downgraded to Hold from Buy at Craig Hallum
YY (YY 64.87, -1.50, -2.3%): downgraded to Neutral from Overweight at JP Morgan
4:10 pm : The major averages registered solid gains on Thursday with the S&P 500 climbing 1.1%. The benchmark index settled at a fresh record high of 2121.10 while the Nasdaq Composite (+1.4%) outperformed.
Equity indices spiked out of the gate and spent the rest of the day in a slow drift higher with all ten sectors taking part in the advance. The top-weighted technology sector (+1.7%) followed yesterday's outperformance with another strong showing that kept the group in the lead throughout the session. Large cap names like Apple (AAPL 128.95 +2.94), Google (GOOGL 549.20, +9.71), Microsoft (MSFT 48.72, +1.09), and Facebook (FB 81.37, +2.93) gained between 1.8% and 3.7%, which helped overshadow a 1.0% decline in the shares of Cisco Systems (CSCO 29.05, -0.30) after the company reported a one-cent beat and issued in-line guidance. It is worth noting that Cisco's report triggered a Sterne Agee CRT downgrade to 'Neutral.'
Meanwhile, high-beta chipmakers could not keep pace with the sector, but the PHLX Semiconductor Index still gained 1.2%, ending ahead of the broader market. However, another high-beta group, biotechnology, contributed to the strength in the Nasdaq. To that point, iShares Nasdaq Biotechnology ETF (IBB 355.59, +4.74) gained 1.4% and climbed above its 50-day moving average (350.53) after struggling with that level since the end of April. In turn, the health care sector (+1.4%) settled among the leaders.
Similar to health care, the countercyclical consumer staples sector (+1.5%) also settled ahead of the S&P 500. Avon Products (AVP 7.07, +0.40) was a notable mover within the group after it was reported that PTG Capital offered $18.75 per share of AVP; however, Avon responded to the report, saying no such offer has been received and that it was unable to verify the existence of PTG Capital. Shares of AVP briefly rallied to their 50-day moving average (8.09), before narrowing their gain to 6.0% by the close.
Overall, five sectors added 1.0% or more while consumer discretionary (+0.4%) and energy (+0.1%) represented the only two laggards of note.
The discretionary sector was weighed down by apparel retailers after Kohl's (KSS 64.62, -9.89) delivered an uninspiring report. The stock fell 13.3% after disappointing comparable store sales and below-consensus revenue overshadowed a bottom-line beat.
Elsewhere, the energy sector lagged amid a pullback in crude oil. WTI crude settled lower by 1.0% at $59.88/bbl. even as the Dollar Index (93.40, -0.21) slipped 0.2%, registering its third consecutive decline.
Today's advance in equities was accompanied by a rallying Treasury market with the 10-yr yield falling five basis points to 2.23%.
Once again, participation was relatively light with roughly 700 million shares changing hands at the NYSE floor.
Economic data included Initial Claims and PPI:
The initial claims level declined to 264,000 for the week ending May 9 from an unrevised 265,000 while the Briefing.com consensus expected an increase to 275,000
That was the third consecutive week that the initial claims level remained below 270,000
The four-week moving average dropped to 271,750 from 279,500, which is the lowest level since April 22, 2000
The continuing claims level remained at 2.229 mln for the week ending May 2 after a slight upward revision (from 2.228 mln) for the week ending April 25
After the first increase since October 2014, producer prices resumed their downward trajectory in April with the PPI declining 0.4% in April after increasing 0.2% in March while the Briefing.com consensus expected an increase of 0.2%
Food prices declined 0.9% in April after declining 0.8% in March. These prices haven't increased on a month-to-month basis since November 2014.
Excluding food and energy, core PPI declined 0.2% in April after increasing 0.2% in March while the consensus expected an increase of 0.1%
Tomorrow, the Empire Manufacturing Index for May (Briefing.com consensus 4.5) will be released at 8:30 ET while April Industrial Production (consensus 0.1%) and Capacity Utilization (expected 78.4%) will both be reported at 9:15 ET. The day's data will be topped off with the 10:00 ET release of the preliminary reading of the Michigan Sentiment Index for May (expected 96.0).
Nasdaq Composite +6.7% YTD
Russell 2000 +3.5% YTD
S&P 500 +3.0% YTD
Dow Jones Industrial Average +2.4% YTD
DJ30 +191.75 NASDAQ +69.10 SP500 +22.62 NASDAQ Adv/Vol/Dec 2026/1.61 bln/876 NYSE Adv/Vol/Dec 2350/696.7 mln/753 3:35 pm :
The dollar index slid off of today's low, which gave a little support to precious metals late in the day
June gold ended $7.10 higher to $1225.00/oz, while July silver rose $0.26 to $17.49/oz
WTI oil remained in the red all day, ultimately closing $0.58 lower at $59.88/barrel.
Nat gas held gains after surged higher following the weekly storage data
June nat gas rose $0.07, closing at $3.00/MMBtu today
4:08 pm Applied Materials beats by $0.01, beats on revs; guides Q3 in-line (AMAT) : Reports Q2 (Apr) earnings of $0.29 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.28; revenues rose 3.8% year/year to $2.44 bln vs the $2.4 bln consensus.
Silicon Systems Group (SSG) orders were $1.70 billion, up 19 percent, with increases in foundry, flash and DRAM more than offsetting a decline in logic/other. SSG new order composition was: foundry 36 percent; DRAM 31 percent; flash 21 percent; and logic/other 12%.Co issues in-line guidance for Q3, sees EPS of $0.31-0.35, excluding non-recurring items, vs. $0.33 Capital IQ Consensus; sees Q3 revs of +2-6% QoQ to ~$2.49-2.59 bln vs. $2.51 bln Capital IQ Consensus Estimate.
1:21 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (167) outpacing new lows (63) (:SCANX) : Stocks that traded to 52 week highs: ACIW, ACLS, AET, AHS, AKAM, AME, ANCX, ANSS, ANTM, AOS, ASB, ATVI, AVOL, AVY, AXTA, BANC, BF.A, BKCC, BOH, BPMC, BTO, BX, CALM, CATY, CDK, CFG, CIVI, CLVS, CMT, COLB, CORI, CRTO, CSCD, CSRE, CTRP, CVG, CYNI, CYRN, EBF, EBIX, EGRW, ELNK, ERI, EWBC, EXR, FDEF, FDS, FFA, FFKT, FISV, FIX, FRC, GAME, GIL, GPN, GS, GSL, GT, HASI, HCKT, HON, HSII, HUBS, HW, ICE, ICUI, IEUS, IFV, IMN, IMPV, INBK, INFA, ING, INTG, INTU, IPHI, IR, IRMD, ISBC, ISSI, JBL, JCTCF, JNPR, JPM, KALU, KEY, KMPH, KTWO, KWEB, LBY, LOGI, LTM, LYG, MCK, MDLZ, MKC, MMAC, MMI, MTG, NDAQ, NEM, NHTC, NICE, NOAH, NTES, NYCB, OBAS, OPK, OZRK, PAYC, PBH, PBHC, PERY, PFSW, PLAB, PLXS, PNFP, POWR, PRMW, PVTB, QABA, QLIK, QTWO, RARE, RBA, RELY, RGEN, RHT, ROCK, ROP, RTIX, SABR, SBCF, SBCP, SBNY, SEV, SHLX, SIVB, SKX, SLM, SLTC, SNA, SNPS, SNX, SPNS, SSB, SSFN, SWK, SYT, TDG, TFX, THRM, TNP, TRR, TXT, UEC, USAT, USCR, VMC, WBS, WIBC, WMS, WNS, WPPGY, WTFC, WX, ZBRA
Stocks that traded to 52 week lows: ALXA, AMPE, AUDC, AVP, BDR, BKH, BSM, CEL, CIM, CLTX, DCTH, DEST, DSCI, EMMS, FREE, FTR, GBL, GFY, HH, HOG, HTCH, I, IDN, INPH, IPDN, JMT, KNDI, KORS, KSU, LF, LOV, MCF, MDW, MPEL, MZF, NBB, NBD, NDLS, NEOT, NSPR, NTX, NUM, NUO, NYRT, PLPC, PTNR, RCMT, RCPI, RFP, RGSE, RSO, RST, SHLO, SNI, SPEX, STRI, TGEN, TRGT, TRIV, VALU, VDTH, VPG, WIN
ETFs that traded to 52 week highs: CROP, CUT, EWK, EWN, IGV, IYG, KBE, KRE, MOO
ETFs that traded to 52 week lows: VXX
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