From Briefing.com: It was a mixed day of trading action on Tuesday with the major indices showing little change from where they began the day. The Dow Jones Industrial eked out another record closing high, gaining just over a point, while the S&P 500 and Nasdaq Composite suffered small losses.
The performance followed on the heels of a report that showed housing starts hitting their highest levels in April since November 2007. That news weighed on Treasury prices, which pushed up yields. The 10-yr note for its part slipped 11 ticks, raising its yield to 2.28%.
A solid showing from the financial (+0.6%) and health care (+0.5%) sectors lent support to the broader market while the information technology sector (-0.3%) underperformed.
Notable news items from sector components included the following:
Accenture (ACN 97.18, -0.28, -0.3%): The United Nations High Commissioner for Refugees announced it is working with Accenture to deliver a biometric technology system for registering and verifying the identities of displaced persons around the world. Under the terms of the three-year contract, UNHCR will deploy Accenture's Biometric Identity Management System (BIMS) across UNHCR global operations.
Apple (AAPL 130.07, -0.12, -0.1%): The Wall Street Journal, citing people familiar with the matter, reported that Apple shelved its Ultra HDTV plans more than a year ago. The report came just a day after Carl Icahn pointed to the TV as one of the reasons why he thinks Apple could be worth $240 per share. Separately, Apple announced it has updated the 15-inch MacBook Pro with Retina display to include the new Force Touch trackpad, faster flash storage, longer battery life and faster discrete graphics. It also introduced a new $1,999 configuration of the 27-inch iMac with Retina 5K display, and lowered the price of the top-end iMac with Retina 5K display to $2,299.
Applied Materials (AMAT 19.97, -0.22, -1.1%): Announced its Applied Endura Cirrus HTX PVD system with breakthrough technology for patterning copper interconnects at 10nm and beyond.
Autodesk (ADSK 57.52, -0.88, -1.5%): After Tuesday's close, reported Q1 (Apr) earnings of $0.30 per share, excluding non-recurring items, which was ahead of analysts' average expectation. Revenues rose 9.1% year/year to $646.5 mln, also ahead of estimates. For Q2, sees EPS of $0.14-0.19, excluding non-recurring items, vs. $0.32 Capital IQ Consensus and revenues of ~$600-620 mln vs. $650.15 mln. The high end of those estimate ranges is below analysts' average expectations. For FY16, lowers EPS to ~$0.95-1.10, excluding non-recurring items, from $1.05-1.20 and revenues to +2-4% to ~$2.56-2.61 bln (from +3-5%).
Computer Sciences (CSC 67.66, -0.61, -0.9%): After Tuesday's close, reported Q4 (Mar) earnings of $1.26 per share, excluding non-recurring items, which was ahead of analysts' average expectation. Revenues fell 12.6% year/year to $2.91 bln. For FY16, sees EPS of $4.75-5.05, excluding non-recurring items. The midpoint is above analysts' average expectation. Company also announced that the Board of Directors has unanimously approved a plan to separate the company into two publicly traded, pure-play leaders: One to serve commercial and government clients globally, and the other to serve public sector clients in the U.S. Concurrent with the separation, CSC intends to pay a special cash dividend to shareholders of $10.50 per share at closing, which is expected by October 2015.
Hewlett-Packard (HPQ 33.40, +0.15, +0.5%): Reuters reported that HP plans to sell a 51% stake in its China H3C computing unit to Tsinghua Unigroup, citing a spokesman for Tsinghua. An HP spokeswoman in Singapore, the article said, could not immediately comment on the deal.
IBM (IBM 173.48, +0.42, +0.2%): Announced two new investments in WayBlazer and Sellpoints, designed to advance online travel and shopping apps powered by Watson. The financial terms of IBM's investments were not disclosed. The company also announced that United Business Group has chosen the IBM Cloud to transition its business into toward managed service offerings.
Lam Research (LRCX 80.74, +1.28, +1.6%): increases quarterly dividend to $0.30/share from $0.18/share
Microsoft (MSFT 47.50, -0.51, -1.1%): MVP Windows consumer apps Michael Gillett tweets 'Right now we're building Microsoft Edge for Windows 10, we'll see in the future if it makes sense for other platforms'
SanDisk (SNDK 67.26, -0.24, -0.4%): At JP Morgan conference says 15nm technology continues to ramp as expected and yields are strong; supply bit growth for FY15 will be in the range of 35-40% as planned; sees revenue bit growth 'well below 30%'.' Adds that second half revenue growth will be 'strong' and that enterprise revenue is expected to decline quarter-over-quarter in Q2; sees flattish enterprise revenues in the second half when compared to Q2.
Yahoo! (YHOO 40.98, -3.38, -7.6%): At J.P. Morgan TMT Conference, says some of the declines in legacy items had been larger than the company expected but believes it has stabilized. Separately, Bloomberg reported that the IRS is considering changes to its rules concerning spinoffs, which left investors concerned that a potential rule change could get in the way of the company's efforts to follow through on a tax-free spinoff of its Alibaba shares.
Elsewhere in the technology space:
Alcatel-Lucent (ALU 3.76, -0.01, -0.3%): Has signed a memorandum of understanding with South Korean telecommunications provider, KT, under which the companies will collaborate to test technologies for the eventual introduction of 5G mobile networks and infrastructure capable of meeting the huge connectivity demands expected in the future.
Cypress Semiconductor (CY 13.66, +0.27, +2.0%): Cypress Semi sent letter to the CFO of Integrated
Silicon Solutions (ISSI 20.34, +0.06, +0.3%) 'conveying disappointment with the (ISSI) position regarding the terms of an Acceptable Confidentiality Agreement.'
Priceline (PCLN 1213.08, -3.76, -0.3%): Booking.com, an operating business of The Priceline Group, announced it will waive enforcement of its existing wide parity provisions with German accommodations with immediate effect and will amend its standard terms and other agreements with German accommodations by 1 July 2015 to be consistent with the binding commitments given to the French, Italian and Swedish National Competition Authorities. Separately, a Director sold 3K shares at $1194.40 worth ~$3.6 mln.
Ruckus Wireless (RKUS 10.95, -0.22, -2.0%): Announced the introduction of its new SmartZone software platform, a carrier-grade solution developed for and deployed by service providers around the globe, now extended to demanding enterprise customers.
Take-Two (TTWO 28.62, +4.42, +18.3%): After Monday's close, reported Q4 (Mar) earnings of $0.49 per share, well ahead of analysts' average expectation. Revenues rose 83.4% year/year to $427.7 mln, which was below estimates. For Q1, sees EPS of $0.25-0.35 and revenues of $325-350 mln. The high end of both ranges is ahead of analysts' average expectation. For FY16, sees EPS of $0.75-1.00 and revenues of $1.3-1.4 bln.
Twitter (TWTR 37.50, +0.22, +0.6%): Official Google blog posts that company is bringing tweets to Google Search on mobile devices.
Unisys Corporation (UIS 20.93, -0.13, -0.6%): Announced that TravelSky has signed a new contract with Unisys, to provide expanded processing power for TravelSky's reservation and distribution systems in China.
Analyst Action:
Akamai Technologies (AKAM 77.30, -0.64, -0.8%): downgraded to Perform from Outperform at Oppenheimer... target raised to $88 from $79 at UBS; Buy
Intuit (INTU 103.22, +0.88, +0.9%): target raised to $120 from $105 at RBC Capital Markets
MasterCard (MA 93.80, +0.72, +0.8%): upgraded to Overweight from Sector Weight at Pacific Crest
Netease.com (NTES 140.34, -0.98, -0.7%): upgraded to Buy from Neutral at Citigroup
Priceline (PCLN 1213.08, -3.76, -0.3%): initiated with a Neutral at Guggenheim
Take-Two (TTWO 28.62, +4.42, +18.3%): upgraded to Buy from Neutral at Sterne Agee CRT Xilinx upgraded to Overweight from Sector Weight at Pacific Crest
(Disclosure; Briefing.com has a business relationship with Microsoft and Yahoo!)
4:05 pm Analog Devices beats by $0.01, reports revs in-line; mid-point of JulQ EPS guidance below consensus, revs in-line (ADI) : Reports Q2 (Apr) earnings of $0.73 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.72; revenues rose 18.2% year/year to $821.0 mln vs the $819.8 mln consensus. Co issues in-line guidance for Q3 (Jul), sees EPS of $0.71-0.77, excluding non-recurring items, vs. $0.77 Capital IQ Consensus Estimate; sees Q3 revs of $825-865 mln vs. $845.3 mln Capital IQ Consensus Estimate.
"We had a very successful second quarter driven by the quality of our innovation, the diversity of our business, and our strong execution...Looking ahead, our book to bill ratio was positive in the second quarter and we are seeing stable order rates across all our end markets. As a result, we are planning for sequential growth in the third quarter and for revenue to be in the range of $825 million to $865 million."
4:10 pm : The major averages ended the Tuesday session on an unchanged note after spending the entire day near their flat lines. The S&P 500 settled lower by 0.1% while the Dow Jones Industrial Average (+0.1%) outperformed slightly, edging up to another record closing high.
Overall, the Tuesday session was a snoozer that saw the benchmark index bounce inside a five-point range that was expanded to nine points by the close. The index was able to set a fresh intraday record high at 2,133.02 during the afternoon, but returned near its session low by the close.
For the second day in a row, heavily-weighted health care (+0.5%) and financials (+0.7%) outperformed throughout the day and kept the benchmark index from dipping too far below its flat line. The health care sector outperformed even as biotechnology struggled to keep pace with the iShares Nasdaq Biotechnology ETF (IBB 360.60, +0.30) adding 0.1%.
Elsewhere, the financial sector continued its recent outperformance amid increasing Treasury yields that are expected to boost net interest margins for banks. Thanks to today's gain, the sector is now up 3.4% in May versus a 2.0% gain for the S&P 500.
Treasury yields rose once again today, but not before an overnight rally in global bonds that followed remarks from European Central Bank executive member Benoit Coeure who said the ECB plans to frontload its asset purchases in hopes of avoiding thin liquidity conditions in July and August. The remarks boosted global bonds and weighed on the euro, sending the single currency lower by 1.5% against the dollar to 1.1150. Furthermore, the timing of the comments from Mr. Coeure was viewed as controversial because the original speech was delivered on Monday evening, London time, when the ECB member appeared before a private group of hedge fund investors; however, the speech was not released to the public until this morning. In response, the European Central Bank blamed the delay on an "internal procedural error."
Despite rallying overnight, U.S. Treasuries surrendered their gains in the morning after the April Housing Starts report beat expectations (1.135 mln; Briefing.com consensus 1.019 mln). True to recent form, the better than expected data point was seen as a potential headwind to the market considering a strong showing from the housing sector is likely to be used as an argument in favor of the Fed hiking rates sooner rather than later. That being said, homebuilder stocks outperformed with iShares Dow Jones US Home Construction ETF (ITB 27.30, +0.19) climbing 0.7%. Meanwhile, the broader consumer discretionary sector settled just below its flat line.
Also of note, another cyclical sector-energy-lost 1.2%, and settled behind the remaining nine groups as crude oil weighed. WTI crude ended lower by 3.6% at $58.08 and surrendered its May gain with the 1.1% increase in the Dollar Index (95.29, +1.07) adding to the pressure.
Today's participation represented an improvement from yesterday as more than 720 million shares changed hands at the NYSE floor.
Economic data was limited to Housing Starts and Building Permits:
Housing starts increased 20.2% in April to 1.135 mln from an upwardly revised 944,000 (from 926,000) in March while the Briefing.com consensus expected an increase to 1.019 mln
After the subpar first quarter, when housing starts plummeted to some of their worst levels since the middle of last year, construction levels rebounded significantly in April.
This was the first time starts reached 1.135 mln since November 2007 and it was the first time starts increased by at least 20.2% in a month since a 20.9% increase in February 1991.
Single-family starts increased 16.7% in April to 733,000 from 628,000 in March. That was the most single-family homes started since January 2008 when 773,000 were started.
Building permits rose to a seasonally adjusted annualized rate of 1.143 mln in April from a revised 1.038 mln for March (from 1.039 mln) while the Briefing.com consensus expected a reading of 1.065 mln
Tomorrow, the Weekly MBA Mortgage Index will be reported at 7:00 ET while the FOMC minutes from the April 29 meeting will be released at 14:00 ET.
Nasdaq Composite +7.1% YTD
Russell 2000 +4.4% YTD
S&P 500 +3.4% YTD
Dow Jones Industrial Average +2.8% YTD
DJ30 +13.51 NASDAQ -8.41 SP500 -1.38 NASDAQ Adv/Vol/Dec 1214/1.61 bln/1617 NYSE Adv/Vol/Dec 1236/722.2 mln/1836 3:35 pm :
Strength in the dollar index continued to pressure commodities all day
WTI oil, natural gas, gold and copper futures all ended the day near today's lows
July crude oil closed up pit trading -2.4% at $57.99/barrel
June natural gas lost 2% to $2.95/MMBtu
June gold fell $20.70 today to $1206.90/oz, while July silver fell $0.65 to $17.08/oz
July copper fell $0.06 to $2.84/lb
11:44 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (215) outpacing new lows (88) (:SCANX) : Stocks that traded to 52 week highs: AAWW, ABT, ACGL, ACIW, ACLS, ACN, AEIS, AET, AHS, ALV, AMAG, AMBA, AMCN, AMSG, ANSS, ANTM, AOS, APOG, ASB, ASML, AWH, AXTA, BBNK, BF.A, BHB, BIO, BK, BKCC, BLBD, BLKB, BLMT, BLOX, BOH, BONA, BRCM, BRKL, BTO, BX, CALM, CATY, CBF, CCK, CFG, CFO, CIEN, CMCM, CNMD, COL, CRTO, CRUS, CSGP, CYNI, CYNO, CYT, DATA, DGRW, DHIL, DLPH, DOOR, DSKX, DST, DXJS, EBIX, EGI, EGRX, ELNK, ERI, ETFC, EWBC, EXL, FCCO, FCS, FDS, FFA, FFKT, FHN, FNB, FOMX, FRC, FTNT, FULT, GPN, GS, GTT, HALO, HASI, HBAN, HCA, HMST, HOLX, HUBS, ICCC, IDCC, IDTI, IMAX, IMN, INBK, IPHI, ISBC, ISCA, IVC, JBL, JBLU, JNPR, JPM, KEN, KEY, KRNT, KWEB, LAMR, LBY, LDRH, LEG, LII, LPX, MAS, MASI, MCGC, MCK, MCO, MFG, MFLX, MHK, MIW, MKC, MKC.V, MKL, MMC, MMI, MOH, MSCI, NCLH, NDAQ, NFLX, NHF, NHTC, NI, NICE, NOAH, NPTN, NRZ, NTRS, NYCB, OCR, OLED, OPK, ORBK, OZRK, PANW, PBCT, PF, PFSW, PLAB, PLXS, PN, PNFP, PNRA, PPO, PRTO, PVTB, PZZA, QABA, RARE, RE, REGN, RGEN, RTRX, SBCF, SBNY, SC, SCHW, SCI, SCOR, SEE, SEIC, SEV, SHW, SIRO, SJM, SKX, SNE, SNPS, SNV, SPNS, SPR, SSB, SSFN, STI, SUM, SUSQ, SWKS, SYNA, TACO, TECH, THOR, TNP, TRQ, TSE, TSS, TTMI, TW, UHS, VAC, VNTV, WAL, WAT, WBS, WFC, WIBC, WIX, WNS, WPPGY, WTFC, XPO, ZSPH
Stocks that traded to 52 week lows: ACI, AEZS, ALXA, AMBR, AMIC, AMPE, ANCI, ANR, AP, APOL, ARCI, BANX, BJZ, BSM, BTU, CDI, CECO, CEQP, CHCI, CHEK, CIM, CLDN, CLTX, CPST, CPTA, CSAL, CTL, DEST, DSCO, DTF, EOX, EVJ, FGEN, FHCO, FREE, FSAM, FTEK, GMCR, GV, HGG, HGT, HIIQ, I, IGT, IHC, LTRE, MCF, MHI, MHR, MIN, MUH, MZF, NDLS, NEOT, NM, NMRX, NMY, NRP, NUM, NXJ, OPXA, ORN, PCN, PQ, QUMU, RCMT, RMGN, RST, SD, SGNL, SHLO, SKBI, SPDC, STB, TESS, TRIV, TROX, TSU, UNXL, VPCO, VRS, WBK, WHLR, WILN, WIN, WTW, YGE, YUMA
ETFs that traded to 52 week highs: DIA, IAI, IHF, IYF, IYG, KBE, KRE, MDY, OEF, PPH, UYG, XLK
ETFs that traded to 52 week lows: VXX, VXZ
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