From Briefing.com: You were either a buyer, a seller, or sat on your hands this morning as the markets opened following the worst three day span in more than four years. Yesterday's selloff likely claimed many trading stops, but today was a different story (at least until the final hour of trade). For its part, the Dow Jones Industrial Average (15666.44, -204.91 -1.29%) led the markets lower today - following initial strength, the index could not hold on and added to weekly losses, ending today about 4.8% versus the Monday open. Fueled at the open by the overnight session's announcement by the People's Bank of China cut its main lending rate 25 basis points to 4.6% and lowered its reserve requirement ratio 50 basis points to 18.0%, the markets showed initial strength.
As a result, the Shanghai Composite finished the session -7.6%, resisting the global rebound. Other US indices finished - S&P 500 (1867.62, -25.59 -1.35%) and Nasdaq Composite (4506.49, -19.76 -0.44%). A late rush of selling at the close brought all three major indices below flat lines, despite spending the majority of the day more than +1.0%.
Strength today came notably from technology. Names like Apple (AAPL 103.74, +0.62 +0.60%), Adobe (ADBE 74.57, +0.30 +0.40%) and Facebook (FB 83.00, +0.91 +1.11%) finished the day with nice gains. Notable technology sector outperformers were Social Media, (SOCL 16.63, +0.30 +1.84%), Solar (TAN 27.64, +0.62 +2.29%) and Internet (FDN 64.01, +0.19 +0.30%) all finished notably higher on the session, resisting the late session selling surge. Other sectors finished XLU -3.09%, XLF -1.68%, XLB -1.57%, XLE -1.45%, IYZ -1.27%, XLI -1.19%, XLV -1.01%, XLP -0.76%, XLY -0.43%.
The S&P 500 Information Technology sector ended the session in the green, opposite the broader market. Notable sector component Qorvo (QRVO) finished the day leading the pack, as the stock operated in a trading range today between $52.97-49.78. In spite of an overall positive trading day among the three major indices, it seems the rally held up its hands and just gave up in the last hour, dictating late trade in technology among other sectors.
Notable news items among sector components:
Apple (AAPL) was mentioned favorably in a Barron's report out midday.
Intel (INTC 25.87, -0.38 -1.45%) and BlueData announced a broad strategic technology and business collaboration, as well as an additional equity investment in BlueData from Intel Capital. The collaboration will bring together BlueData's infrastructure software for big data with data center architecture based on Intel Xeon processor technology. Intel Capital's investment, its third in BlueData since 2012, is part of a $20 million funding round led by the chip maker's strategic investment arm.
Elsewhere in the technology space:
Inovalon (INOV 20.98, +0.37 +1.80%) announced a deal to acquire Avalere Health for $140 million. The purchase price is comprised of $135 million of cash and $5 million of restricted stock. Avalere reported $47.1 million of revenue in the calendar year ended December 31, 2014 and, given the expected timing of closing, the transaction is estimated to be mildly accretive in 2015, adding a penny or less of Non-GAAP diluted net income per share.
Atmel (ATML 7.41, +0.82 +12.44%) announced CEO Steven Laub extended his retirement date to facilitate the completion of the ongoing strategic evaluation process.
Nidec (NJ 18.35, +0.46 +2.57%) announced it acquired a 100% ownership interest in Arisa, S.A., a press machine manufacturer based in Spain, from its founding families on August 24, 2015.
Twitter (TWTR 24.48, -0.78 -3.11%) was notified by the SEC that it wants the company to describe alternative metrics to explain trends in user agreement. From the letter, "Please describe the alternative metrics you anticipate presenting in future filings to explain trends in user engagement and advertising services revenue. Also, please describe your reasons for choosing such metric."
China Telecom (CHA 54.87, +1.69 +3.18%) confirmed that Wang Xiaochu has resigned from his position as the Executive Director, Chairman and CEO.
Taiwan Semi (TSM 18.76 flat) announced TSMC Solar, its 100% owned subsidiary, will cease manufacturing operations at the end of August 2015 as TSMC believes that its solar business is no longer economically sustainable.
Authentidate Holding (ADAT 0.29, +0.16 +137.70%) and Peachstate Health Management, LLC d/b/a AEON Clinical Laboratories announced the companies have entered into a non-binding letter of intent for the acquisition of all of the outstanding membership interests of AEON in exchange for shares of a newly created class of Series E Preferred Stock of Authentidate. The Letter of Intent contemplates the AEON members will be issued such number of Series E Shares as shall be convertible into 19.9% of the outstanding shares of the Company's Common Stock on the date of the closing of the merger transaction, and an additional 5% of the outstanding shares of the Company's Common Stock upon approval of the merger transaction by the shareholders of the Company.
China Information Tech (CNIT 1.38, +0.10 +7.81%) announced certain management changes - appointed Zhiqiang Zhao as President, Junping Sun as Chief Investment Officer, and Zhixiong Huang as Chief Operating Officer.
Hortonworks (HDP 23.18, -0.87 -3.62%) announced it has signed a definitive agreement to acquire Onyara, Inc., the creator of and key contributor to Apache NiFi, a top-level open source project. Financial terms of the deal were not disclosed.
Plexus (PLXS 35.55, -0.40 -1.11%) announced a $30 million share repurchase program during FY16.
GSE Systems (GVP 1.34 flat) announced Christopher Sorrells has been appointed Interim Chief Operating Officer, effective August 25, 2015. Earnings among notable tech names:
Best Buy (BBY 32.96, +3.69 +12.61%) reported Q2 (Jul) earnings of $0.49 per share on revenues which rose 0.8% year/year to $8.53 billion. Comps were +3.8% (+2.7% ex-100 bps impact from installment billing); adj. operating margin was +50 bps to 3.4%.
Leju Holdings (LEJU 5.20, +0.21 +4.21%) reported Q2 (Jun) earnings of $0.12 per share on revenues which rose 34.4% year/year to $157.8 million.
ReneSola (SOL 1.16, -0.01 -0.85%) reported Q2 (Jun) loss of $0.02 per share on revenues which fell 30.7% year/year to $268.4 million. SOL issued upside guidance for Q3, sees Q3 revs of $330-340 million and gross margin to be in the range of 15% to 16%. ReneSola currently has a total of ~77.4MW in existing projects, including 51.1MW in the United Kingdom, 1.2MW in Japan, 9.7MW in Bulgaria and 15.4MW in Romania. The Company also has a late stage project pipeline with over 200MW in development across the UK, U.S. and Japan.
Companies reporting tonight: JKHY, NMBL, SLH
Analyst actions:
AAPL was upgraded to Outperform from Market Perform at Wells Fargo, ADBE was upgraded to Outperform from Neutral at Robert W. Baird, AVGO was upgraded to Buy from Outperform at Credit Agricole, WDAY was upgraded to Buy from Neutral at DA Davidson,
PAY was upgraded to Overweight from Neutral at Piper Jaffray, VNTV was upgraded to Neutral from Negative at Susquehanna, ROVI was upgraded to Overweight from Neutral at JP Morgan, TER was upgraded at Craig Hallum and Credit Suisse,
CHT was upgraded to Buy from Neutral at Citigroup
4:19 pm Transocean to propose cancellation of third and fourth installments of dividend; Co was previously paying a $0.15/quarter dividend (RIG) :
Co announced today that the company will convene an Extraordinary General Meeting of Shareholders. The EGM, which will be open to shareholders of record as of October 12, 2015, will be held at 5:00 p.m., CEST, on October 29, 2015, in Cham, Switzerland. The Board of Directors will propose the following items for approval at the EGM:
The election of Jeremy D. Thigpen, the company's President and Chief Executive Officer, as a member of the Board for a term extending until completion of the 2016 Annual General Meeting. The cancellation of the third and fourth installments of the dividend approved at the company's annual general meeting held on May 15, 2015. A reduction of the par value of each share of the company to CHF 0.10 from currently CHF 15. A portion of the aggregate par value reduction amount is proposed to be used to reduce the company's balance sheet loss as recorded on the company's standalone statutory balance sheet, and the remainder is proposed to be allocated to the company's statutory capital reserves. In light of the deterioration of the offshore drilling market and concerns regarding the timing of the market's recovery, the company is evaluating its investments in affiliates as recorded on its Swiss standalone statutory balance sheet for impairment on an interim basis. Based on analysis carried out to date, the company expects the carrying amount of these investments to be further impaired. As a result, the company may recognize an aggregate loss associated with these non-cash impairments, expected to be in excess of CHF 2 billion, on its Swiss interim standalone statutory balance sheet as of July 31, 2015. SThe cancellation of all shares of the company that have been repurchased to date under the company's share repurchase program approved in 2009, as required under Swiss law.
4:10 pm : The stock market ended the Tuesday session on a lower note despite starting the day with a sharp spike. The S&P 500 lost 1.4% after being up 2.9% while the Nasdaq Composite surrendered 0.4% after being up 3.6%.
The market began the day with a broad-based spike after most global stock markets rebounded during overnight action. Interestingly, the rebound did not include China's Shanghai Composite as the index lost 7.6%. That being said, the focus will be on the index tonight considering the People's Bank of China cut its main lending rate 25 basis points to 4.6% and lowered its reserve requirement ratio 50 basis points to 18.0% this morning.
The PBoC rate-cut announcement took place well after Asian markets ended for the day, and the news was met with a spike in S&P futures. Once the trading day began, the S&P 500 rallied through the first two hours of action, but returned into the middle of its trading range during the afternoon, and fell to lows during the final 60 minutes of the session.
In some ways, the selling during the final hour resembled action observed on Monday morning as liquidity dried up notably and bid-ask spreads widened past typical levels. The S&P 500 surrendered nearly 40 points during the final hour, pulling all sectors into the red. Interestingly, the utilities sector (-3.2%) ended at the bottom of the leaderboard as the rate-sensitive group suffered from higher yields intraday and extended its losses during afternoon selling.
More notably, heavily-weighted sectors like financials (-1.7%), industrials (-1.6%), and health care (-1.4%) ended in the red while consumer discretionary (-0.4%) and technology (-1.2%) surrendered their gains after being up more than 3.0% apiece.
The late afternoon tumble occurred after the Treasury market closed for the day, but 10-yr note futures rallied after the cash close. The benchmark instrument settled on its low with the yield up 13 basis points at 2.13%, but safe-haven demand drove the yield to 2.09% after the cash close.
Interestingly, the CBOE Volatility Index (VIX 37.08, -3.66) ended on its high, but still finished the day well below yesterday's settlement despite the late swoon.
Once again, corporate news was relegated to the backburner, but investors did receive a couple earnings reports this morning. Best Buy (BBY 32.95, +3.68) soared 12.6% after beating earnings and revenue estimates while Toll Brothers (TOL 35.08, -2.98) lost 7.8% after missing earnings and revenue estimates.
Economic data included Consumer Confidence, New Home Sales, Case-Shiller 20-city Index, and FHFA Housing Price Index:
The Conference Board's Consumer Confidence Index increased to 101.5 in August from an upwardly revised 91.0 (from 90.9) while the Briefing.com consensus expected an increase to 93.1
The August jump in confidence wiped away all of the discomfort from July and returned the index past June levels (99.8) to the highest mark since January 2015
New home sales increased 5.4% in July to 507,000 from a downwardly revised 481,000 (from 482,000) while the Briefing.com consensus expected an increase to 511,000
After starting the year on a tear, new home sales have settled into a range of around 500,000 per month since March
The Case-Shiller 20-city Home Price Index for June rose 5.0% against a 5.1% increase expected by the Briefing.com consensus
This followed the previous month's increase of 4.9%
The FHFA Housing Price Index for June rose 0.2%, which followed a revised increase of 0.5% in May (from 0.4%)
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while July Durable Orders (Briefing.com consensus -0.6%) will be reported at 8:30 ET.
Nasdaq Composite -4.9% YTD
Russell 2000 -8.4% YTD
S&P 500 -9.3% YTD
Dow Jones Industrial Average -12.1% YTD
DJ30 -204.91 NASDAQ -19.76 SP500 -25.60 NASDAQ Adv/Vol/Dec 1537/2.15 bln/1511 NYSE Adv/Vol/Dec 1390/1.23 bln/1750
3:40 pm :
The dollar index continued to trade in positive territory all day, which helped weigh on commodities
Following recent losses, commodities, as measured by the Bloomberg Commodity Index, are at a 16-year low
Oil prices remain a big story
Oil rallied this morning, but have since given back some. Oct crude finished today's pit session +2.8% at $39.32/barrel. In electronic trade, crude is at $39.05/barrel
In other energy, Sept nat gas rose +1.5% to $2.69/MMBtu today.
Precious metals lost out today, while copper futures rallied
Dec gold lost -1.3% today to end at $1138.90/oz, while Sept silver fell -0.5% to $14.65/oz
Sept copper gained +2.2% to $2.31/lb
11:50 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (148) outpacing new highs (10) (:SCANX) : Stocks that traded to 52 week highs: ARL, BEAT, EVBS, FBNK, GAS, MPB, PPO, RCPT, UEPS, YCB
Stocks that traded to 52 week lows: ACC, AFB, AIQ, AQMS, ARC, ARCW, ARMF, BBG, BBGI, BCEI, BDN, BEBE, BKH, BMR, BRG, BSI, BVN, CAAS, CEQP, CHEF, CJES, CKP, CLNT, CMCO, CORR, CRD.A, CRDC, CRZO, CSB, CUZ, CVM, CYTR, DAKT, DCIX, DDC, DHF, DNAI, DRAM, DSW, ECR, EDR, EGO, EGP, FARM, FLAG, FSBK, FSTR, FVE, GBNK, GBSN, GEOS, GFN, GGN, GHM, GLPW, GNRT, GSM, HFBC, HGSH, HRZN, HURC, HZO, IRC, IRT, JW.A, KEM, KTOS, LMBS, LPT, MAB, MARA, MCC, MCF, MDM, MDVX, MIL, MITL, MN, MNR, MNTX, MOV, MTX, MYE, MYOS, NAVI, NHLD, OCIP, ODC, OFG, PCCC, PDFS, PHX, PJC, PKOH, PLM, POM, PRGX, PRIM, PSTI, PTEN, QDEL, QUAD, RAS, RBY, REGI, REXR, RLOG, RMGN, RNWK, SAFT, SIF, SIR, SKBI, SLW, SMCP, SMTP, SSN, STKS, SWN, SYNL, TBBK, TDC, TDW, TESO, TG, TIGR, TLR, TOR, TUTI, UEIC, ULTR, UTI, UTIW, UUUU, VHI, VPG, VRTV, VXDN, VXUP, WEA, WGBS, WHZ, WPC, WPG, WPP, YPRO, ZAIS, ZAZA
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: PALL
4:32 am Atmel CEO agrees to extend his retirement date to facilitate the completion of an ongoing strategic evaluation process (ATML) : The Company states does not intend to make further public announcements regarding the status of the evaluation process until it is completed, and there can be no assurance as to its outcome or timing.
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