From Briefing.com: The market spent a good chunk of Wednesday's session on the defensive after the S&P 500 failed to take out its 50-day simple moving average (2103) in convincing fashion off the open. Fortunes turned, however, after the Federal Open Market Committee meeting produced more of the same (i.e. no change in rates and no clear sense about when the Fed might actually raise the fed funds rate for the first time since June 2006).
A knee-jerk reaction to that decision and Fed Chair Yellen's press conference pushed the S&P 500 above 2106, yet the bullish bias was not maintained. Some late selling interest pushed the S&P 500 back to 2100, leaving it once again below its 50-day simple moving average.
The S&P 500 information technology sector (+0.2%) performed in-line with the broader market, having been held back some by the underperformance of Apple (AAPL 127.30, -0.30, -0.2%).
Notable news items from sector components included the following:
Cisco Systems (CSCO 28.94, +0.22, +0.8%): The Wall Street Journal reported that Cisco acknowledged on Wednesday a plan to make investments and partnerships worth more than $10 bln in China over the next several years.
Computer Sciences (CSC 67.31, +0.37, +0.6%): Two Executive VPs sold 55,016 shares at $67.93-68.45 worth ~$3.7 mln
eBay (EBAY 60.55, +0.03, +0.1%): Bloomberg reported, citing people familiar with the matter, that eBay is planning to select a buyer for its enterprise division by July 1.
Google (GOOG 529.26, +1.11, +0.2%): Announced its biggest expansion of Google Trends since 2012, highlighting the ability to obtain real-time data on more than 100 billion searches.
Intel (INTC 31.95, +0.32, +1.0%): Completed its acquisition of Recon Instruments on June 16
Jabil Circuit (JBL 24.33, -0.26, -1.1%): After Wednesday's close, reported Q3 (May) core earnings of $0.49 per share, excluding non-recurring items, which was in-line with estimates. Revenues rose 15.1% year/year to $4.36 bln. For Q4 (Aug), sees core EPS of $0.40-0.50, excluding non-recurring items, and revenues of $4.45-4.65 bln. The midpoint of those respective ranges are both below analysts' average expectations.
Microsoft (MSFT 45.97, +0.14, +0.3%): Announced changes to its senior leadership team. Executive Vice President Terry Myerson will lead a newly formed team, Windows and Devices Group, focused on enabling more personal computing experiences powered by the Windows ecosystem. Executive Vice President Scott Guthrie will continue to lead the Cloud and Enterprise team focused on building the intelligent cloud platform that powers any application on any device. As a result of the organizational moves, Stephen Elop, Kirill Tatarinov and Eric Rudder will leave Microsoft after a designated transition period. Unrelated to the engineering restructuring changes, Chief Insights Officer Mark Penn has decided to pursue another venture outside Microsoft and will be leaving the company in September.
Oracle (ORCL 44.91, +0.27, +0.6%): After Wednesday's close, reports Q4 (May) earnings of $0.78 per share, excluding non-recurring items, which was eight cents shy of analysts' average estimate. Revenues fell 5.4% year/year to $10.71 bln, which was also below estimates. Software and Cloud Revenues were $8.4 bln, down 6%, but +2% in constant currency vs. -2 to +8% guidance. Company said, "We expect to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year. That means Oracle would sell more new SaaS and PaaS business than salesforce.com plans to sell in their current fiscal year -- the only remaining question is how much more.
Elsewhere in the technology space:
Alcatel-Lucent (ALU 3.73, -0.04, -1.1%): Launched a new device for residential and business use that will allow operators to accelerate the deployment of ultra-broadband access in order to meet ever-growing demand for faster data speeds in homes and the workplace.
Alibaba (BABA 86.80, +0.71, +0.8%): Cainiao, the logistics affiliate of Alibaba Group, announced the establishment of three fresh food distribution centers in three major Chinese cities: Beijing, Shanghai and Guangzhou. The three centers are expected to support cold chain delivery of fresh food purchased on Taobao Marketplace and Tmall.com to the doorsteps of Chinese consumers within 24 hours.
Integrated Silicon (ISSI 21.40, +0.07, +0.3%): Proxy advisory firm Glass Lewis recommends shareholders vote for the proposed acquisition by Uphill Investments for $21.00/share. Special Meeting of Stockholders to be held on June 19, 2015.
Mitel Networks (MITL 9.19, +0.01, +0.3%): Selected by T-Mobile (TMUS 39.77, +0.92, +2.4%) as the preferred supplier of T-Mobile's new cloud solution, Cloud & Clear, launched in the Netherlands.
Nokia (NOK 7.12, -0.02, -0.3%): Company and Alcatel-Lucent (ALU 3.73, -0.04, -1.1%) announced the US Dept. of Justice has granted early termination of the US anti-trust period for their combination.
The Priceline Group (PCLN 1163.57, -12.63, -1.1%): Announced that Maelle Gavet has joined the company's senior leadership team as the Executive Vice President of Global Operations, effective July 6, 2015.
Qihoo 360 Tech. (QIHU 70.15, +4.10, +6.2%): The company announced that its board of directors has received a preliminary non-binding proposal letter, dated June 17, 2015, from Mr. Hongyi Zhou, chairman and chief executive officer of the Company, CITIC Securities Co. Ltd. or its affiliates, Golden Brick Capital Private Equity Fund I L.P., China Renaissance Holdings Limited or its affiliates and Sequoia Capital China I, L.P. and/or its affiliates, to acquire all of the outstanding Class A and Class B ordinary shares of the Company not owned by them or their affiliates, including Class A ordinary shares represented by American depositary shares, for $51.33 in cash per Class A or Class B ordinary share, or $77.00 in cash per ADS. The Board intends to form a special committee consisting of independent directors to consider the proposal. The Board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process.
TripAdvisor (TRIP 87.65, +11.20, +14.7%): Starting later this summer, travelers shopping for hotel rooms on TripAdvisor will be able to conveniently make a booking at any of Marriott's more than 4,200 hotels around the world through the TripAdvisor site.
Analyst Action:
Facebook (FB 81.79, +0.73, +0.9%): target raised to $108 from $100 at Brean Capital
NVIDIA (NVDA 21.58, +0.25, +1.2%): upgraded to Buy from Neutral at Tigress Financial
Salesforce.com (CRM 74.42, +1.02, +1.4%): initiated with a Neutral at Exane BNP Paribas; target $81
6:39 pm Emcore announces updated preliminary results from modified Dutch auction tender offer: ~8.77 mln shares tendered at or below $6.55 per share (EMKR) : Co announces updated preliminary results of its modified "Dutch auction" tender offer, which expired at 5:00 P.M., New York City time, on June 15, 2015. Based on the preliminary count by American Stock Transfer & Trust Company, LLC, the depositary for the tender offer, a total of 8,771,948 shares of EMCORE common stock were properly tendered and not properly withdrawn at or below $6.55 per share, including 837,416 shares that were tendered through a notice of guaranteed delivery. In accordance with the terms and conditions of the tender offer and based on a preliminary count by the depositary, the Company expects to accept for purchase approximately 6,870,229 shares of EMCORE common stock at an anticipated price of $6.55 per share, for a total aggregate cost of approximately $45 million, excluding fees and expenses related to the tender offer.
4:09 pm Closing Market Summary: Stocks Climb as Fed Stands Pat (:WRAPX) : The stock market ended the midweek session on an upbeat note with the S&P 500 settling four points below its 50-day moving average (2,104). The benchmark index added 0.2% while the Dow and Nasdaq posted comparable gains.
Equity indices began the trading day with modest gains, but the first half of the session saw a steady retreat with liquidity drying up ahead of the afternoon release of the FOMC policy statement, which called for no change to the current monetary policy stance. However, the accompanying interest rate forecast implied two 25-basis point increases before the year ends. Furthermore, the Fed lowered its 2015 GDP growth forecast range to 1.8-2.0% from the range of 2.3-2.7% that was forecast in March.
Stocks struggled for direction immediately after the release, but rallied to highs during Chair Janet Yellen's press conference, which was viewed as dovish. To that point, Ms. Yellen said the central bank would like to see more "decisive evidence" on inflation and employment before hiking rates.
U.S. Treasuries retreated into the afternoon, but surged back to unchanged in the wake of the FOMC statement. The benchmark 10-yr yield ended at 2.31% after hitting 2.40% in the afternoon. Meanwhile, the Dollar Index (94.27, -0.73) dropped to a new low for the month with the euro climbing to 1.1340 against the greenback.
Speaking of the euro, the single currency advanced even though the day went by without any progress between Greece and its creditors. According to Bloomberg, Greek Prime Minister said his government is ready to give a "big no" to what is perceived to be a bad deal offered by the EU. That being said, the European Central Bank increased Greece's Emergency Liquidity Assistance to $84.10 billion from $83.00 billion.
Eight of ten sectors registered gains with four of six cyclical groups ending ahead of the broader market. The energy sector (-0.2%) was among the early leaders, but returned to its flat line by the close even as crude oil narrowed its decline to 0.2% at $59.77/bbl by the pit close.
Similar to energy, the financial sector (-0.1%) settled behind the broader market while consumer discretionary (+0.5%), technology (+0.2%), industrials (+0.2%), and materials (+0.4%) posted gains. The consumer discretionary sector ended ahead of other cyclical groups thanks to strength among media and retail names while industrials kept pace with the market even as transport stocks struggled.
The Dow Jones Transportation Average lost 0.4%, widening this week's decline to 1.2%. Shares of FedEx (FDX 176.73, -5.40) were largely responsible for the weakness, falling 3.0% after the logistics company reported disappointing earnings and revenue.
Moving to the countercyclical side, consumer staples (+0.5%) and utilities (+0.9%) outperformed while health care (+0.1%) and telecom services (unch) finished behind the broader market. The slight uptick in the health care sector masked relative strength in biotech names that sent iShares Nasdaq Biotechnology ETF (IBB 366.55, +2.17) higher by 0.6%.
Today's participation was relatively light with roughly 700 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which fell 5.5% to follow last week's 8.4% increase.
Tomorrow, weekly Initial Claims (Briefing.com consensus 276K), May CPI (consensus 0.5%), and Q1 Current Account Balance (expected -$116.70 billion) will all be reported at 8:30 ET while May Leading Indicators (expected 0.4%) and the Philadelphia Fed Survey for June (consensus 8.0) will be reported at 10:00 ET.
Nasdaq Composite +6.9% YTD Russell 2000 +5.5% YTD S&P 500 +2.0% YTD Dow Jones Industrial Average +0.6% YTD
4:07 pm Oracle misses by $0.08, misses on revs; Oracle guides on the call (ORCL) : Reports Q4 (May) earnings of $0.78 per share, excluding non-recurring items, $0.08 worse than the Capital IQ Consensus Estimate of $0.86; revenues fell 5.4% year/year to $10.71 bln vs the $10.93 bln consensus.
Software and Cloud Revenues were $8.4 bln, down 6%, but +2% in constant currency vs. -2 to +8% guidance. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $416 million, growing 29%, and up 35% in constant currency. Cloud infrastructure as a service (IaaS) revenues were $160 million, growing 25%, and up 31% in constant currency. Hardware Systems Revenues were $1.4 billion, down 4%, but up 5% in constant currency. "We expect to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year. That means Oracle would sell more new SaaS and PaaS business than salesforce.com plans to sell in their current fiscal year -- the only remaining question is how much more. Oracle's planned SaaS and PaaS revenue growth rate is around 60% in constant currency; salesforce.com has a planned growth rate of around 20%. When you contrast those growth rates it becomes clear that Oracle is on its way to becoming the world's largest enterprise cloud company."Co will guide in constant currency on the call at 17:00.
4:07 pm Jabil Circuit reports EPS in-line, misses on revs; guides AugQ EPS in-line, revs below consensus (JBL) : Reports Q3 (May) core earnings of $0.49 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.49; revenues rose 15.1% year/year to $4.36 bln vs the $4.45 bln consensus. For Q4 (Aug), co sees core EPS of $0.40-0.50, excluding non-recurring items, vs. $0.47 Capital IQ Consensus Estimate; sees Q4 revs of $4.45-4.65 bln vs. $4.75 bln Capital IQ Consensus Estimate.
"We continue to make great progress as we further diversify our business, and our fiscal third quarter is another good indication that we're executing against our growth strategy. During the quarter, our Electronics Manufacturing Services segment delivered strong operating performance, while our Diversified Manufacturing Services segment increased revenue by 41% YoY...I'm pleased with our performance year to date and I believe we're well-positioned and poised to capture further growth in fiscal 2016."
4:02 pm TerraForm Power announces $500 mln underwritten public offering of shares of its Class A common stock (TERP) : Co intends to use the net proceeds from the offering, along with the net proceeds of its recently completed offering of $150 mln of its senior notes due 2023, to (a) repay amounts outstanding on its revolving credit facility, which amounts were used to fund previously announced acquisitions including Canadian solar plant acquisitions from Invenergy and Moose Power and the acquisition of certain solar generation facilities from a wholly-owned subsidiary of Integrys Energy, and (b) for general corporate purposes, which may include the funding of future acquisitions from its sponsor (SunEdison) (SUNE), future acquisitions from third parties, and/or debt repayment.
3:26 pm Integrated Silicon: Proxy advisory firm Glass Lewis recommends shareholders vote for the proposed acquisition by Uphill Investments for $21.00/share (ISSI) : (Special Meeting of Stockholders to be held on June 19, 2015)
11:47 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (218) outpacing new lows (73) (:SCANX) : Stocks that traded to 52 week highs: ACET, ACGL, ADPT, ADUS, AFG, AGM.A, AGO, ALGN, ALJ, ALN, AMED, ANN, ANTH, AOS, ASB, ATAI, ATML, ATRC, AWH, AXTA, BANR, BBP, BF.A, BF.B, BFAM, BHBK, BID, BKS, BLKB, BOH, BOKF, BOOT, BOTJ, BRO, BSFT, CASI, CBSH, CIEN, CMN, CNC, CNMD, CNO, COF, COKE, COLB, COT, CRI, CSFL, CTRX, CVBF, CWCO, CYBR, CYNI, CYT, DATA, DKL, DLPH, DRC, DSKX, DXCM, EGBN, EGRX, ELLI, ENFC, ENS, ENSG, ESNT, FCB, FCSC, FEYE, FHN, FMBI, FMER, FNB, FNFG, FRED, FRSH, FTNT, FULT, GBCI, GEVA, GIII, GIL, GIMO, GKNT, GWB, HAFC, HBOS, HDS, HF, HNT, HOLX, HOMB, HRC, HRTX, HSP, HSTM, HTLF, IBKC, IBKR, IMPV, IMS, INCR, INDB, INFN, INSY, JAKK, JPM, KEY, KFY, KYTH, LAZ, LGF, LHCG, LNBB, LTXB, MATW, MBFI, MCRI, MIDD, MKL, MLNX, MMC, MOFG, MORN, MSFG, MTD, MW, NBIX, NHTC, NI, NMBL, NPBC, NPTN, NTES, NTRS, NYCB, OMCL, OPY, OSBC, OSIR, OZRK, PACW, PANW, PBCT, PBH, PENN, PFPT, PGTI, PLAY, PLMT, POZN, PRGS, PRTA, PSCH, PSCT, Q, QABA, QADA, QTWO, RARE, RDN, RDUS, RELY, RNG, RNST, ROCK, ROL, RPTP, RVNC, SBCP, SBNY, SBUX, SCHL, SEE, SF, SFBS, SFG, SGYP, SHOP, SIMO, SINA, SMCP, SNV, SOHO, SPB, SPCB, SPNS, SPWH, SSB, STI, SUNE, SUSQ, SYNA, TFSL, THG, THRM, TILE, TMK, TPX, TREE, TSCO, UBSI, UEPS, UMPQ, USPH, UUU, VDSI, VIRT, VOYA, VR, VSTO, VTWG, WBS, WIBC, WIFI, WTFC, ZAIS
Stocks that traded to 52 week lows: ARLP, ATU, AUMN, AUY, AVH, AZUR, BLT, BMR, BWG, CEL, CEQP, CLBS, CNX, CPN, CRVP, CSTM, CTCM, DDD, DTEA, EC, EOD, FAM, FGB, FMY, FSC, FSNN, FSYS, GDP, GFI, GGB, GHM, GHY, GRPN, HGT, HTLD, IEP, ISD, KST, KT, LFL, LPL, MFV, MIN, NGD, NSA, NSM, NTL, NWS, PCN, PHK, PHT, PKX, PLPC, PLTM, RESN, RITT, RJET, RLJE, RMGN, RNO, SGL, SXCP, TEO, VBF, VBND, VEDL, VPV, VXUP, WEA, WLT, XPL, YUMA, ZSAN
ETFs that traded to 52 week highs: IHF, IWC, KBE, KCE, KIE, KRE
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