Sector Investing

[ReturntoSender]

From Briefing.com: The new week started on a downbeat note with each of the major indices losing ground, none more so than the Nasdaq Composite (-0.9%), which got clipped by weakness in large-cap technology components.

The S&P 500 dropped 0.7%, falling a little more than 13 points to drive it below its 100-day moving average, which has been an influential source of support in 2015. A weak showing from the airline stocks, which knocked the Dow Jones Transportation Average lower by 2.1%, and relative weakness in Apple (AAPL 127.80, -0.85, -0.7%), which failed to get a boost from the news coming out of its developers conference, weighed heavily on the broader market.

The S&P 500 information technology sector (-1.2%) was the weakest link in Monday's market. A poor showing from Intel (INTC 31.31, -0.53, -1.7%), which suffered its sixth straight losing session, and the semiconductor stocks in general, factored into the underperformance. The Philadelphia Semiconductor Index declined 1.9%.


Notable news items from sector components included the following:

Accenture (ACN 94.77, -0.63, -0.7%): Etihad Airways announced the signing of a collaboration agreement with Accenture to support the implementation of its business transformation program. As part of the agreement, Accenture will provide strategy and management consulting services in the areas of human resources, finance, and procurement and supply management. Accenture will work with the airline's technology partner, SAP (SAP 73.42, -0.22, -0.3%), to implement a new enterprise resource planning software solution. It will also set up and operate a new testing center for these solutions.

Apple (AAPL 127.80, -0.85, -0.7%): Developers Conference got underway in San Francisco with Apple introducing a new Apple Music Service for $9.99/month after 3 month trial (available on iPhone, iPad, iPod touch, Mac and PC starting June 30)... Says that iOS9 (public beta for iOS9 in July) will increase battery life, security and reduce memory space needed... Apple also noted that it will make Swift open source... Apple previewed watchOS 2, the first major software update for Apple Watch, giving developers the tools to build faster and more powerful apps running natively on Apple Watch. Starting today, developers can take advantage of innovative hardware features of Apple Watch including the Digital Crown, Taptic Engine and heart rate sensor, along with software APIs to build new app experiences... Apple News app very similar to Flipboard and has millions of topics; rivals Facebook Insant Articles
Applied Materials (AMAT 19.87, -0.28, -1.4%): Announced the election of Willem Roelandts as Chairman of the Board, effective immediately; Roelandts is currently Applied Materials' lead independent director.

Broadcom Corporation (BRCM 53.24, -1.11, -2.0%): Announced it has licensed MIFARE, a widely deployed protocol for contactless ticketing, transportation and access applications.

Cisco (CSCO 28.27, -0.31, -1.1%): Kansas City, MO., and Cisco signed an agreement to deploy a Smart+Connected City framework for coverage within city limits.

Corning (GLW 20.76, +0.05, +0.2%): Barron's profiled a positive view on Corning, suggesting it could have as much as 40% upside in the next 18 months.

eBay (EBAY 60.86, -2.37, -3.8%): Gave guidance for eBay Marketplace and Paypal businesses ahead of spin off:

Ebay: Sees FY15 sales +0-5% ex-FX, with 32-34% operating margin; sees +0-5% revenue growth ex-FX in FY16 with 31-35% operating margin and EPS growth faster than revenue.

Long term sees top line growth flat margins and EPS growth faster than revenue growth
PayPal: Sees FY15 FX-neutral revenue +15-18%, with non-GAAP operating margin -100 bps to 20-21%, mid-20% TPV growth and $1.6-1.8 bln FCF growth.

Sees medium term FX-neutral revenue growth ~15%; non-GAAP operating margin stable to growing

Google (GOOG 526.83, -6.50, -1.2%): Launched self-driving car project website

Intel (INTC 31.31, -0.53, -1.7%): President sold 47,394 shares at $32.69 worth ~$1.5 mln


Elsewhere in the technology space:

Alibaba (BABA 88.29, -2.42, -2.7%): Aliyun, Alibaba Group's cloud computing arm, today announced the launch of Marketplace Alliance Program, a global partnership program that provides enterprises with access to Aliyun's full suite of cloud computing services and international partners.

Integrated Silicon (ISSI 20.35, -0.38, -1.8%): Company announced that Cypress Semiconductor (CY 12.70, -0.68, -5.2%) has failed to finalize a merger agreement by the deadline of June 7, 2015 imposed by Cypress, even after Cypress received the negotiated draft agreement from ISSI on Friday, June 5, 2015. ISSI said it believes a transaction with Cypress would be unlikely to close without substantial divestitures or other actions required by antitrust authorities. Company adds that Cypress' position is not in the best interest of ISSI's stockholders, and could not be accepted, since a merger closing would be highly uncertain.

Radware (RDWR 23.73, -0.52, -2.1%): Announced it has provided to Cisco Systems its distributed denial of service mitigation technology for the new Cisco Firepower 9300 appliance

Twitter (TWTR 36.46, -0.54, -1.5%): Filed for an offering of ~10.43 mln shares on behalf of selling shareholders

Analyst Action:

KLA-Tencor (KLAC 55.97, -1.00, -1.8%): target lowered to $64 from $70 at UBS

Micron (MU 25.92, -0.67, -2.5%): target lowered to $35 at UBS

Red Hat (RHT 78.24, +0.34, +0.4%): target raised to $85 from $80 at RBC Capital Markets

4:10 pm : The major averages began the new trading week on a cautious note with the S&P 500 (-0.7%) settling beneath its 100-day moving average (2,085) for the first time since late March. The benchmark index retreated into the afternoon while the Nasdaq Composite (-0.9%) underperformed throughout the day.

Broadly speaking, the Monday session was very quiet with no corporate news to account for the decline; however, the continued lack of progress between Greece and its creditors weighed on investor sentiment in Europe and the U.S.

As for Greece, Finance Minister Yanis Varoufakis met with his German counterpart, Wolfgang Schaeuble, today, describing the meeting as "very helpful." That being said, Bloomberg reported there appear to be growing differences between German Chancellor Angela Merkel and Mr. Schaeuble with regard to the handling of the crisis.

Interestingly, the S&P 500 climbed off its session low in the afternoon once the Wall Street Journal reported that Greece's creditors have offered to extend the current bailout program until March 2016. The extension would be achieved by drawing EUR11 billion from the bank bailout fund. The news helped the benchmark index make a brief return above its 100-day average before sliding to a new low ahead of the close.

Nine sectors registered losses with all six cyclical groups ending in the red. The largest sector by weight-technology (-1.2%)-lagged throughout the day, which kept a lid on the overall market. Top-weighted components like Apple (AAPL 127.80, -0.85), Microsoft (MSFT 45.73, -0.41), and Google (GOOGL 543.48, -6.05) lost between 0.7% and 1.1% while high-beta chipmakers also struggled. Shares of Intel (INTC 31.30, -0.54) settled lower by 1.7% while the broader PHLX Semiconductor Index fell 1.9%.

Similarly, another high-beta group-transport stocks-kept the market under pressure with the Dow Jones Transportation Average losing 2.1%. The bellwether complex narrowed its June advance to 0.4% as all 20 components registered losses with JetBlue's (JBLU 19.02, -1.47) 7.2% plunge leading the way. For its part, the industrial sector (-0.7%) underperformed throughout the day.

Unlike technology and industrials, the remaining cyclical groups ended near the broader market while the four countercyclical sectors settled ahead of the S&P 500. Consumer staples (-0.1%) and telecom services (+0.2%) ended near their flat lines while health care (-0.4%) and utilities (-0.6%) settled just ahead of the broader market.

Interestingly, the utilities sector received no respite from today's strength in Treasuries that pressured the benchmark 10-yr yield to 2.39% (-2 bps).

Today's participation was on the light side with fewer than 685 million shares changing hands at the NYSE floor.

Tomorrow, the Wholesale Inventories report for April (Briefing.com consensus 0.2%) and the April Job Openings and Labor Turnover Survey will both be released at 10:00 ET.

Nasdaq Composite +6.0% YTD
Russell 2000 +4.2% YTD
S&P 500 +1.0% YTD
Dow Jones Industrial Average -0.3% YTD

DJ30 -82.91 NASDAQ -46.83 SP500 -13.55 NASDAQ Adv/Vol/Dec 1013/1.58 bln/1879 NYSE Adv/Vol/Dec 897/682.9 mln/2160

3:40 pm :

The dollar index continued to slide lower today, which provide price support to select commodities, such as gold
Natural gas rallied today, but this was largely due to current weather conditions.
July nat gas futures ended today's session 4.6% higher at $2.71/MMBtu
WTI sold off today following Iraq news/post-OPEC decision, ultimately ending the day $0.97 at $58.16/barrel
Aug gold gained $5.20 today to $1173.30/oz, while July silver lost $0.04 to $15.95/oz.
July copper rose $0.01 to $2.70/lb

11:47 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (187) outpacing new lows (137) (:SCANX) : Stocks that traded to 52 week highs: AAC, ABG, ADPT, ADXS, AEIS, AFMD, AGEN, AHS, ALJ, ALLB, ALN, AMAG, AMBA, AMED, AMPH, AMSG, ANCX, ASB, ATTU, AVID, BANC, BANR, BBNK, BBP, BBT, BID, BKU, BKYF, BLMT, BLOX, BOFI, BOH, BOOT, CAF, CATY, CBSH, CBYL, CCXI, CFG, CFNL, CHE, CMT, COLB, COTY, COWN, CRI, CUBI, CVBF, CYBR, DCOM, DOVR, DOX, DPLO, DRRX, EFSC, EGRX, EHIC, ENSG, EROS, ETFC, EURN, EWBC, EXPR, FCSC, FEYE, FHN, FMBI, FMER, FNB, FNFG, FRC, FRME, FTNT, FULT, GDDY, GIII, GIMO, GLOB, GMED, GRIF, GTWN, HALO, HBK, HOMB, HTH, HZNP, IART, IDTI, IMPV, IMS, INDB, INFN, ISLE, IVC, JD, KEY, KWEB, LAD, LEG, LGND, LIOX, LTXB, LYV, MASI, MBFI, MBTF, MENT, MIC, MKSI, MMAC, MMI, MNTA, MORN, MS, MTSI, MXL, NAT, NFLX, NICE, NPTN, NVEE, NWBO, NYCB, OMCL, OMG, ONFC, ORBK, OZRK, PANW, PBCT, PBHC, PBIP, PFPT, PFSI, PGTI, PLAB, PN, PNC, PNFP, POWR, POZN, QABA, RDWR, REGN, RELY, RENN, RLGT, ROL, RPTP, SEIC, SF, SFG, SGEN, SGYP, SIEN, SINA, SIRO, SIVB, SKX, SNFCA, SNOW, SNPS, SNV, SNX, SOHU, SPWH, SRNE, SUNE, SUPN, TANH, TAST, TFX, TLMR, TPX, TXMD, UCBI, UEPS, VRTU, WAL, WBS, WIBC, WINA, WMS, WSFS, WTFC, ZIXI, ZNH

Stocks that traded to 52 week lows: AA, AFB, AGNC, AMCF, ARR, BAX, BBN, BEP, BHK, BJZ, BKN, BLE, BLJ, BOTA, BOXC, BSMX, BTA, BTZ, BWG, BYM, CBL, CMU, CNI, CPN, CSI, CSTM, CTL, CTP, CXE, DPG, DTF, DX, EDE, EFC, EGF, ELLO, EVJ, EVP, FAM, FCO, FHY, FMY, FPT, GBAB, GG, GOV, GPL, HCP, HMY, HNRG, HTR, HTS, IF, INF, IQI, JMM, KIQ, KLAC, KTF, LE, LFVN, LOCM, LOR, MAV, MDIV, MFA, MFT, MFV, MGF, MHI, MPA, MQT, MTGE, MUH, MUI, MUJ, MUR, MYD, MYM, MZF, NBB, NBD, NEA, NID, NIM, NIQ, NMY, NPM, NQP, NRK, NRP, NSC, NTC, NTN, NTX, NUM, NUO, NVG, NXJ, NXN, NXP, OIA, PAI, PDLI, PG, PHT, PKX, PLTM, PNF, POT, PSB, PTY, PW, RFP, SBGL, SJI, SJR, SMT, SNR, SRET, SVBL, TAC, TRMB, TRP, UBA, UCP, USEG, UTI, VBF, VEDL, VIV, VNCE, VRA, WIA, WPC, YPRO, ZUMZ

ETFs that traded to 52 week highs: KBE, KCE, KRE, XBI

ETFs that traded to 52 week lows: EWM, IDX, KOL

10:22 am Intel continues breakdown off May peak (INTC) : The stock is down for the sixth session in a row with the morning extension to 31.47 leaving it modestly above a support zone at 31.38/31.28. This marks the 62% retrace of the March-May rally and a 10% drop off the May peak.