From Briefing.com: It wasn't a good start to the shortened week for the stock market. Each of the major indices fell at least 1.0% as buyers proved to be a reluctant bunch.
That reluctance started early and it continued for most of Tuesday's session, which saw the S&P 500 flirt with testing support at its 50-day simple moving average (2096). The fact that the S&P 500 didn't pierce that level was perhaps the lone bright spot in Tuesday's action, which saw all ten sectors lose ground and all 30 Dow components end with a loss.
The catalysts for Tuesday's weakness were debatable, yet proximate causes included the following:
Some angst that the better than expected Durable Orders and New Home Sales reports for April fell in the realm of encouraging a rate hike from the Federal Reserve before the end of the year
A surge in the dollar, which weighed heavily on commodities and related stocks (the U.S.
Dollar Index rose 1.3% to 97.29)
Crude prices -2.7% to $58.04/bbl
Greek officials firing a barb that the country could possibly miss its debt payment to the IMF next week
The continued underperformance of the Dow Jones Transportation Average (-1.6%), which is deemed to have leading indicator status; and
The absence of any leadership
The worst-performing areas on the day were among the most economically-sensitive sectors, including energy (-1.6%), materials (-1.2%), and industrials (-1.1%). The information technology sector (-1.4%), meanwhile, was another key drag on things with losses in Apple (AAPL 129.63, -2.91) factoring prominently in its underperformance.
Notable news items from sector components included the following:\
Apple (AAPL 129.62, -2.92, -2.2%): A Nikkei Asian Review article reported that Apple is considering a JPY 200 bln ($1.62 billion) bond sale
EMC (EMC 26.29, -0.55, -2.1%): Company announced it has entered into a definitive agreement to acquire privately-held Virtustream. EMC Federation service provider partners will receive access to Virtustream's xStream cloud management software platform and be enabled to adopt and deliver their own branded services based upon it. The all-cash transaction is expected to close in the third quarter of 2015. Deal is valued at approximately $1.2 billion, and has been approved by the boards of directors of both EMC and Virtustream and the requisite Virtustream stockholders. The transaction is expected to have no material impact to EMC financial results in 2015 and is expected to be additive to revenues and accretive to EPS in 2016.
Hewlett-Packard (HPQ 33.38, -1.38, -4.0%): Announced it would acquire ConteXtream, a provider of OpenDaylight-based, carrier-grade SDN fabric for network functions virtualization; terms were not disclosed.
Qualcomm (QCOM 69.36, -0.15, -0.2%): Company and Daimler announced a strategic collaboration focused on pioneering innovation in the connected car. In the first phase of the collaboration, the companies will focus on transforming future vehicles with mobile technologies that enhance in-car experiences and vehicle performance such as 3G/4G connectivity, wireless charging technology for in-vehicle use and implementation of the Qualcomm Halo Wireless Electric Vehicle Charging technology. Separately, Qualcomm Technologies, a subsidiary of Qualcomm, announced that NTT DOCOMO is the first operator to adopt and implement the Qualcomm Snapdragon Sense ID biometrics platform.
SanDisk (SNDK 66.39, -0.69, -1.0%): Introduced the new SanDisk Z400s SSD, a cost effective solid-state drive designed to replace hard-disk drives in computing platforms and embedded applications.
In industry news, IDC said global smartphone growth is expected to slow to 11.3% in 2015 as market penetration increases in top markets. According to a new mobile phone forecast from the International Data Corporation Worldwide Quarterly Mobile Phone Tracker, smartphone shipments are expected to grow 11.3% in 2015, which is down from 27.6% in 2014. This is on par with IDC's previous smartphone forecast of 11.8% growth in 2015. IDC expects 2015 to bring two notable milestones. First, IDC projects this to be the first year in which China's smartphone growth, forecast to be 2.5% in 2015, will be slower than the worldwide market.
Elsewhere in the technology space:
Alcatel-Lucent (ALU 3.77, -0.07, -1.8%): Announced selection by the Beijing and Nanning Railway Bureaus, to upgrade communication networks for several rail lines in China
Amazon.com (AMZN 425.47, -2.16, -0.5%): The Wall Street Journal reported that Amazon.com plans to compete with Etsy (ETSY 17.09, -0.08, -0.5%) in the handmade marketplace.
FireEye (FEYE 45.16, +0.09, +0.2%): After Tuesday's close, company announced its intention to offer, subject to market conditions and other factors, $300.0 million aggregate principal amount of convertible senior notes due 2035 and $300.0 million aggregate principal amount of convertible senior notes due 2035 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. FireEye expects to use a portion of the net proceeds of the offering of the notes to pay the cost of the prepaid forward stock purchase transactions and to use the remaining proceeds of the offering for general corporate purposes, including capital expenditures, investments, working capital and potential acquisitions and strategic transactions. FireEye said it has no commitments with respect to any such acquisitions or investments at this time.
Microchip Technology Inc. (MCHP 47.76, -0.64, -1.3%): Announced that the Volvo Car Group has migrated from MOST25 to the MOST150 standard in its all-new Volvo XC90 model, using Microchip's OS81110 Intelligent Network Interface Controllers
Priceline (PCLN 1195.78, -12.72, -1.1%): Announced an additional $250 mln investment in Ctrip.com International (CTRP 81.99, -2.64, -3.1%). The investment will be made via a convertible bond and Ctrip has granted permission to The Priceline Group to increase its ownership in Ctrip through the acquisition of Ctrip's American depositary shares in the open market so that The Priceline Group may hold up to 15% of Ctrip's outstanding shares. Immediately following issuance of the new $250 million bond and assuming conversion of the two bonds, The Priceline Group will own securities representing approximately 10.5% of Ctrip's outstanding shares.
Qihoo 360 Tech. (QIHU 54.71, -0.55, -1.0%): The company announced it has entered into an agreement with Coolpad Group Limited to increase its ownership stake in the COOLPAD E-COMMERCE INC., the joint venture established by with Coolpad in April 2015, to 49.5% by purchasing 4.5% shares in the JV from Cooldpad in the total consideration of $45 million.
QLogic (QLGC 15.34, +0.04, +0.3%): Announced an expanded distribution agreement with Arrow OEM Computing Solutions under which Arrow will offer QLogic's complete portfolio of 10Gb Ethernet, Fibre Channel, and converged networking solutions throughout Europe, the Middle East and Africa.
Qualys (QLYS 39.75, +0.39, +1.0%): Announced a technology partnership agreement with NopSec to provide enhanced prioritization and remediation, to more efficiently protect networks from fast evolving threats and ensure compliance
Twitter (TWTR 36.51, -0.09, -0.3%): Re Code, citing multiple sources familiar with the situation, reports that Twitter has been in discussions to purchase FlipBoard in an all-stock deal that values FlipBoard at more than $1 billion, but that the talks seem to be stalled right now
Analyst Action:
Apple (AAPL 129.62, -2.92, -2.2%): target raised to $140 from $135 at Cowen
Ciena (CIEN 23.16, -0.08, -0.3%): target raised to $28 from $21 at RBC Capital Markets
eBay (EBAY 58.72, -1.00, -1.7%): upgraded to Buy from Hold at Axiom Capital; target raised to $70 from $60
First Solar (FSLR 51.06, -4.01, -7.3%): downgraded to Underperform from Sector Perform at RBC Capital Markets
4:20 pm : It wasn't a good start to the shortened week for the stock market. Each of the major indices fell at least 1.0% as buyers proved to be a reluctant bunch.
That reluctance started early and it continued for most of Tuesday's session, which saw the S&P 500 flirt with testing support at its 50-day simple moving average (2096). The fact that the S&P 500 didn't pierce that level was perhaps the lone bright spot in Tuesday's action, which saw all ten sectors lose ground and all 30 Dow components end with a loss.
The catalysts for Tuesday's weakness were debatable, yet proximate causes included the following:
Some angst that the better than expected Durable Orders and New Home Sales reports for April fell in the realm of encouraging a rate hike from the Federal Reserve before the end of the year
A surge in the dollar, which weighed heavily on commodities and related stocks (the U.S. Dollar Index rose 1.3% to 97.29)
Crude prices -2.7% to $58.04/bbl
Greek officials firing a barb that the country could possibly miss its debt payment to the IMF next week
The continued underperformance of the Dow Jones Transportation Average (-1.6%), which is deemed to have leading indicator status; and
The absence of any leadership
The stock market managed to finish off its worst levels of the day as buying support came in just under 2100 on the S&P 500.
The worst-performing areas on the day were among the most economically-sensitive sectors, including energy (-1.6%), materials (-1.2%), and industrials (-1.1%). The information technology sector (-1.4%), meanwhile, was another key drag on things with losses in Apple (AAPL 129.63, -2.91) factoring prominently in its underperformance.
Pockets of relative strength were found among the market's more defensive-oriented groups like telecom services (-0.4%), consumer staples (-0.7%), and utilities (-0.7%), although the consumer discretionary sector (-0.6%) was one cyclical sector that held up reasonably well.
Separately, Charter Communications (CHTR 179.78, +4.45) and Time Warner Telecom (TWC 183.60, +12.42) bucked the broader trend after it was announced that Charter will acquire Time Warner Telecom in a cash-and-stock deal valued at approximately $78.7 billion, including debt.
The stock market's weak showing and the rumblings about Greece contributed to a significant pickup in the CBOE Volatility Index (VIX 14.07, +1.94), which jumped 16%. The latter hit its lows for the year last week, offering participants the opportunity to add some downside protection at relatively cheap prices. Additionally, the 10-yr Treasury yield dropped eight basis points to 2.13% on some safe-haven positioning.
Given the scope of Tuesday's losses, it was no surprise to see decliners beat advancers at the NYSE and Nasdaq by a significant margin. In turn, trading volume increased with 792 million shares changing hands at the NYSE. That was comfortably ahead of last Tuesday when 739 million shares were traded, marking the heaviest trading session in the prior week.
A look at today's economic data:
The Conference Board's Consumer Confidence Index increased to 95.4 in May from a downwardly revised 94.3 (from 95.2) in April. The Briefing.com Consensus expected the index to decrease to 94.0.
New home sales increased 6.8% in April to 517,000 from an upwardly revised 484,000 (from 481,000) in March. The Briefing.com Consensus expected new home sales to increase to 510,000.
Sales topped 500,000 for the third time in the first four months of 2015. Trends are significantly stronger than they were at this time in 2014, when an average of only 421,000 homes were sold each month.
Sales growth was the strongest in the Midwest (+36.8%), which offset declines in both the Northeast (-5.6%) and West (-2.3%).
Supply problems continue to plague the sector. During normal periods of buying and selling, supply usually runs at about 6 months' at the current sales pace. Lackluster construction growth during the recovery has pushed the supply rate down to 4.8 months.
The median new home sales price increased 8.3% y/y to $297,300.
Durable goods orders declined 0.5% in April after increasing an upwardly revised 5.1% (from 4.4%) in March. The Briefing.com Consensus expected durable goods orders to decrease 0.6%. A steep decline in defense (-12.8%) and nondefense (-4.0%) aircraft orders made up the bulk of the April decline.
Excluding transportation, durable goods orders increased 0.5% in April after increasing an upwardly revised 0.6% (from 0.4%) in March. The consensus expected these orders to increase 0.3%.
Orders of nondefense capital goods excluding aircraft increased 1.0% in April after increasing 1.5% in March. Shipments -- which factor into second quarter GDP calculations -- increased 0.8% in April after increasing 1.0% in March. That is the first time shipments of business capital have increased for two consecutive months since July and August 2014.
DJ30 -190.48 NASDAQ -56.61 SP500 -21.86 NASDAQ Adv/Vol/Dec 688/1.60 bln/2225 NYSE Adv/Vol/Dec 663/792 mln/2440
3:15 pm :
The dollar has extended its morning rally well into afternoon trading, which put selling pressure on oil, precious metals and copper going into the close
A set of positive mid-morning housing, producer and consumer economic data has caused the dollar index to currently trade up 1.4% to 97.33
Precious metals extended earlier losses into the close, fueled largely by inverse movements with the dollar index
June gold closed at -1.7% to $1186.70/oz and July silver closed at -1.8% to $17.05/oz
WTI oil also finished down 2.72% to $58.04/barrel for the session, driven by multiple catalysts- dollar strength, Mid-east tensions and considerations on the slowing of US oil rig shutdowns.
Natural gas closed modestly lower by 2.1% to $2.82/MMBtu while July copper lost 1.1% and closed at $2.78/lb
11:43 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (138) outpacing new highs (62) (:SCANX) : Stocks that traded to 52 week highs: AEC, ALN, ALR, ATAI, BPMC, BSQR, CAF, CAG, CBPO, CBS.A, CRUS, CTRP, CVC, DE, DRRX, DSKX, EHIC, ERI, ERN, FFKT, FOMX, FSI, FTNT, GGAC, GKNT, GTN, GTN.A, HALO, HCKT, HMST, INNL, IRMD, JFC, KWEB, LTM, MGPI, MOMO, MSCI, NORD, OLED, OPY, OSBC, OUTR, OZRK, PANW, PFSI, PLAY, PMC, PZZA, Q, QQQC, RELY, SAGE, SBCP, SIEN, TCX, TMUS, TRR, TWC, VRX, VSTO, ZSPH
Stocks that traded to 52 week lows: AAME, ACI, ACST, ACXM, AI, ANR, AP, APOL, ARLP, AXE, BBDO, BIOL, BLH, BLIN, BLT, BOOM, BTU, CBD, CDI, CDNA, CECO, CEL, CENX, CGEN, CIM, CKP, CLI, CLUB, CNAT, CNS, CPST, CRD.B, CSTM, CTIC, CTL, DAVE, DEJ, DEST, DGICA, DGSE, DSCI, DTF, DX, DXM, EGP, ELRC, ENZ, EOX, FCFS, FHCO, FOSL, FPT, FTEK, FTR, FXEN, GALT, GGB, GRC, GTY, HEAR, HGG, HK, HMY, HWCC, I, IGT, IKAN, IMRS, IO, ISH, JOE, KEM, KORS, LMIA, LTRX, MCF, MFV, MHG, MLHR, MNI, MTRX, MUH, MXWL, NATH, NCZ, NDLS, NGD, NNVC, NOR, NQP, NRP, NSC, NSPH, NTX, NUM, NYRT, OAKS, OESX, OMEX, ORN, QUIK, RBCN, RELL, RFIL, RFP, RGSE, RNWK, ROKA, RST, RXII, RYN, SGI, SGNL, SHLO, SHOS, SKBI, SPEX, SPW, SYNL, SYX, TC, TDC, TESS, TGD, TGH, TRIV, TROX, TRX, USEG, VIV, VPCO, VSAR, WHZ, WILN, WIN, WPG, WTW, WYNN
ETFs that traded to 52 week highs: EWH, HAO
ETFs that traded to 52 week lows: FUD, FXY, JJA, JO, RJA
Axcelis Technologies (ACLS) announced that it has received an order for a 200mm Purion H single wafer, high current implanter from TowerJazz Semiconductor. The system is scheduled to ship in the third quarter.
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