Sector Investing

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From Briefing.com: The crux of sector gains and most trading action today was led by the nearly 9% rise in WTI Crude Oil prices - leading the energy sector (XLE 64.29, +3.03 +4.95%) higher as a whole. Not to be outdone, though, the technology sector (XLK 40.52, +0.92) also posted nice gains on Thursday, edging higher by 2.32% at the close.

The three major indices repeated yesterday's strength, beginning the session higher and never looking back. The Nasdaq Composite remained higher, ending up 115.17 +2.45% to 4812.71. The S&P 500 also finished higher, adding 47.15 +2.43% to 1987.66. The Dow Jones Industrial Average concluded Thursday trade in the green to the tune of 369.26 toward the upside +2.27% to 16,654.77. The last hour of trade, though, was more turbulent than the entire session, as the half hour between 2:30 and 3:00 p.m. ET saw a rapid decline in all three major indices. By 3:00 p.m. ET, the selling had slowed, and the indices pushed higher into the closing bell, ending the session near HoDs.

Notable electronic retail names Best Buy (BBY 35.70, +0.45 +1.28%) and Gamestop (GME 46.22, +0.86 +1.90%) ended the session higher today. The former reported Q2 results on this past Tuesday, while the latter is scheduled to report Q2 tonight after the close.

In addition, the overnight session again gave us a reason to open positive as the Shanghai Composite popped 5.3%, reportedly aided by an intervention from the People's Bank of China. Notable Chinese names which saw relative strength today included CEO +16.03%, JRJC +15.69%, WOWO +12.48%, NOAH +10.37%, QUNR +9.64%, LITB +9.52%, MOBI +9.32%, CTRP +9.18%, CMCM +9.11%. Most notably, CNOOC (CEO) saw strength today in addition to being an oil name as oil also saw strength today.

The S&P 500 Information Technology sector (675.01, +154.84) also continued yesterday's strength, ending the day up +2.40%. Notable names MU +8.67%, AVGO +8.66%, SNDK +6.75%, APH +5.16%, AMAT +4.59%, STX +4.49% were among those leading the way up. As you can tell by the aforementioned list, Semiconductors (SOX 609.75, +21.93 +3.73%) were among sectors with notable strength in the technology space. SOX names SUNE +9.54%, MRVL +6.11%, CREE +4.95% were higher on the session, continuing yesterday's strength with the broader market.
Notable news items among sector components:
Google (GOOG 637.19, +8.57 +1.36%) filed a response to the European Commission's Statement of Objections saying it believes the conclusions are wrong as a matter of fact, law, and economics, according to a blog post written by General Counsel Kent Walker.

Apple (AAPL 112.80, +3.11 +2.84%) confirmed invitations to the September 9 event.

Elsewhere in the technology space:

VMWare (VMW 79.43, +1.31 +1.68%) appointed Ray O'Farrell as Chief Technology Officer and Chief Development Officer effective immediately. O'Farrell most recently served as GM (GM 28.60, +0.50 +1.78%), Software-Defined Data Center Division.

21Vianet (VNET 18.00, +1.25 +7.46%) announced certain management changes; CFO Terry Wang has resigned as a director of the Board, Sean Shao was appointed as an independent director, effective on August 24.

NQ Mobile (NQ 4.11, +1.07 +35.20%) announced it entered into a legally binding framework agreement with Beijing Jinxing Rongda Investment Management Co. Ltd., a subsidiary of Tsinghua Holdings Co., Ltd and an independent third party, to sell its entire stake in FL Mobile Inc. Pursuant to the FL Framework Agreement, the company, along with the other existing shareholders of FL Mobile Inc., have agreed to sell to Beijing Jinxing the entire stake in FL Mobile Inc. that they currently hold for no less than about $626 million, with the final price being subject to the valuation of an independent third party valuer. Also entered into an agreement for the sale of all of NQ Mobile's interest in the NationSky business, including the entire interest in Beijing NationSky Network Technology Co., Ltd., to Mr. Hou Shuli, a founder and senior management member of Beijing NationSky, for an aggregate consideration of US $80 million cash.

Travelzoo (TZOO 9.09, +0.26 +2.94%) announced it acquired the Travelzoo Asia Pacific business, which includes the Travelzoo businesses in Australia, China, Hong Kong, Japan, Taiwan, and Southeast Asia. This business was independently operated by Azzurro Capital Inc. under a licensing agreement with Travelzoo Inc.

Vimicro (VIMC 10.80, +0.50 +4.85%) disclosed that its Chief Operating Officer, Zhiyuan Chen, resigned to pursue other interests effective on August 24, 2015.

Names which reported earnings:

Workday (WDAY 75.37, +2.90 +4.00%) reported Q2 (Jul) earnings of $0.02 per share on revenues which rose 51.3% year/year to $282.7 million. The company also issued in-line guidance for Q3, sees Q3 revenues of $300-303 million.

21Vianet (VNET) reported Q2 (Jun) adj loss per ADS of $0.02 per share on revenues which rose 30.5% year/year to $139.8 million. The company issueed downside guidance for Q3, sees Q3 revenues of RMB 900-940 million.

Avago Tech (AVGO 126.28, +10.08 +8.67%) reported Q3 (Jul) earnings of $2.24 per share on revenues which rose 36.0% year/year to $1.75 billion. The company also issued in-line guidance for Q4, sees Q4 non-GAAP revenues of $1.825-1.875 billion.

NQ Mobile (NQ) reported Q2 (Jun) ADS of $0.08 per share on revenues which rose 25.1% year/year to $102.1 million. The company issued downside guidance for Q3, sees Q3 revenues of $110-112 million. The company issued upside guidance for FY15, sees FY15 revenues of $455-460 million.

Analyst actions:

WDAY was upgraded to Buy from Neutral at Citigroup, SMI was upgraded to Outperform from Mkt Perform at Bernstein, SHEN was upgraded to Outperform from Mkt Perform at Raymond James; WDC was initiated with an Outperform at Wells Fargo, QLIK was initiated with a Buy at Nomura,
III was initiated with an Outperform at Macquarie

4:23 pm OmniVision beats by $0.07, reports revs in-line; guides Q2 EPS below consensus, revs below consensus (OVTI) :

Reports Q1 (Jul) earnings of $0.46 per share, $0.07 better than the Capital IQ Consensus Estimate of $0.39; revenues fell 18.9% year/year to $329.89 mln vs the $327.01 mln consensus.

Co issues downside guidance for Q2, sees EPS of $0.25-0.40 vs. $0.45 Capital IQ Consensus Estimate; sees Q2 revs of $300-330 mln vs. $350.93 mln Capital IQ Consensus Estimate.
"We are pleased with our results for the first quarter. We are encouraged by the sequential growth that we experienced in our mobile phones and automotive markets. Nevertheless, in the near-term, the business environment and demand from some of our end-markets will remain volatile. We will continue to drive our long-term business strategies as we aim to resume our growth trajectory in the long-term."

4:11 pm Autodesk beats by $0.02, reports revs in-line; guides Q3 below consensus citing effects of business model change (ADSK) :

Reports Q2 (Jul) earnings of $0.19 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.17; revenues fell 4.3% year/year to $610 mln vs the $612.65 mln consensus.

Autodesk is undergoing a business model transition in which the company will discontinue selling new perpetual licenses in favor of subscriptions and flexible license arrangements. desk is undergoing a business model transition in which the company will discontinue selling new perpetual licenses in favor of subscriptions and flexible license arrangements.
Co maintains billings and subscriptions outlook but now expects a greater portion of our sales to shift from perpetual licenses to new subscription types.
According to Autodesk Chief Financial Officer "Since the revenue from these new subscription types is deferred and recognized ratably we have revised our revenue, operating margin and EPS outlook for the year. Looking beyond this year, we are currently refining our plans around the pace and timeframe for the business model transition and look forward to providing more detail at our Investor Day event scheduled for September 29th."
Co issues downside guidance for Q3, sees EPS of $0.05-0.10 vs. $0.23 Capital IQ Consensus Estimate; sees Q3 revs of $580-600 mln vs. $627.70 mln Capital IQ Consensus Estimate.
Co issues downside guidance for FY16, sees EPS of $0.60-0.72 vs. $1.04 Capital IQ Consensus Estimate; sees FY16 revs of $2.465-2.505 bln vs. $2.59 bln Capital IQ Consensus Estimate.
Stock is halted, set to resume at 16:20.

4:06 pm Tessera Tech to acquire Ziptronix for $39 mln in cash; co states that no adjustments to 3Q15 revenue or EPS guidance is necessary (TSRA) : Co announced the acquisition of Ziptronix, Inc. for $39 million in cash. Ziptronix's patented ZiBond direct bonding and DBI hybrid bonding technologies deliver scalable, low total cost-of-ownership manufacturing solutions for 3D stacking. The addition of the Ziptronix team will not change Tessera's target operating expense structure. Tessera is making no adjustments to third quarter 2015 revenue or earnings per share guidance.

4:05 pm Violin Memory beats by $0.01, misses on revs; co will provide guidance on conference call (VMEM) :

Reports Q2 (Jul) loss of $0.19 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of ($0.20); revenues fell 17.7% year/year to $15.3 mln vs the $17.93 mln consensus.

Co reports Q2 non-GAAP gross margin of 47%
"With renewed growth in the second quarter and improving execution, we anticipate continued growth over the next several quarters fueled by new Flash Storage Platform wins and repeat purchases as customers begin to expand their initial Flash Storage Platform installations."

Co will provide third quarter fiscal year 2016 guidance during today's conference call. Guidance will be posted on Violin Memory's investor relations website following the conclusion of the conference call.

4:10 pm : The stock market registered its second consecutive advance on Thursday with the S&P 500 jumping 2.4% while the Nasdaq Composite (+2.5%) outperformed slightly. The market endured a late afternoon swoon, but was able to return to its high by the close.

Equities began the trading day on an upbeat note after the overnight session featured a rally across major global equity markets. China's Shanghai Composite took part in that move, soaring 5.3%, but the spike was reportedly aided by an intervention from the People's Bank of China.

Once the U.S. session got going, stocks followed the lead from Asia, rallying across the board with the energy sector pacing the advance. The growth-sensitive sector surged 5.0% while crude oil settled on its high, spiking 10.3% to $42.53/bbl., which represented the largest gain since 2009.

Similar to energy, the remaining nine sectors posted solid gains. Meanwhile, the S&P 500 surrendered 30 points in just an hour but reclaimed all 30 of those points during the next 30 minutes or so, highlighting the elevated volatility that has been in place as of late. To that point, at their Monday lows hit soon after the open, the Dow, Nasdaq, and S&P 500 were down 6.6%, 8.8%, and 5.3%, respectively. At their highs today, they were up 8.4%, 12.3%, and 6.6% from those lows, respectively.

Generally speaking, the indices have pivoted from being oversold on a short-term basis to being overbought on a short-term basis. The speed at which the sell-off and the rebound occurred has left everyone grappling to explain why it happened, what it means, and what comes next. No explanation is wholly sufficient and often matches the character of the market at the time it is provided.

While there might be reason to feel better about the market after the recent rebound, all this week's action truly succeeded in doing was damage retail investor psychology further and increase the level of uncertainty that was already in the market and had kept the S&P 500 range-bound.

On the corporate front, Avago Technologies (AVGO 126.26, +10.06) surged 8.7% after beating bottom-line estimates while the broader PHLX Semiconductor Index jumped 3.7%. For its part, the technology sector rallied 2.3%, settling not far behind the broader market.

Treasuries held gains during overnight action, but they slumped in the morning, hitting their lows right around 9:30 ET. After spending the morning in the red, the 10-yr note rallied off its low as stocks slid from highs. The benchmark note slipped from its afternoon high just ahead of the close, ending little changed with its yield at 2.18%.

Once again, participation was above average amid the heightened volatility with more than 1.2 billion shares changing hands at the NYSE floor.

Economic data included Initial Claims, Q2 GDP, and Pending Home Sales:

Initial jobless claims for the week ending August 22 declined by 6,000 to 271,000 while the Briefing.com consensus expected a reading of 275,000.
The prior week was left unrevised and there were no special factors affecting the latest claims report
The four-week moving average bumped up by 1,000 to 272,500
As expected, the second estimate for Q2 GDP produced an upward revision, but the surprise is that it was larger than expected
Q2 GDP was revised up to an annual growth rate of 3.7% from the advance estimate of 2.3% while the Briefing.com consensus estimate was looking for a jump to 3.1%
The drivers of the upward revision were personal consumption expenditures, nonresidential fixed investment, and private inventories
Pending home sales for July rose 0.5% while the Briefing.com consensus expected an increase of 1.0%

Tomorrow, July Personal Income (Briefing.com consensus 0.4%), Spending (expected 0.4%), and core PCE Prices (expected 0.1%) will be reported at 8:30 ET while the final reading of the Michigan Sentiment index for August (expected 93.0) will cross the wires at 10:00 ET.DJ30 +369.26 NASDAQ +115.17 SP500 +47.15 NASDAQ Adv/Vol/Dec 2361/2.15 bln/643 NYSE Adv/Vol/Dec 2829/1.23 bln/327

3:35 pm :

Oil is the big story again. Both WTI crude brent crude oil have rallied as much as +10% today.
Front-month WTI crude oil ended today's floor session +9.8% at $42.47/barrel, while in other energy, Sept nat gas fell +0.03% to $2.66/MMBtu.
Sept copper put in a nice rally today, rising +3.6% to $2.33/lb, while Dec gold fell -0.2% to $1112.50/oz. Sept silver +2.6 to $14.41/oz.
The dollar index continued to climb higher today, which helped weigh on commodities, which are currently sitting at a 16-year low, according to the Bloomberg Commodity Index.

12:12 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (64) outpacing new highs (15) (:SCANX) : Stocks that traded to 52 week highs: ABCD, ARL, BEAT, CDW, CVGW, DLA, DY, EFOI, EXPR, FBNK, GGAC, NEOS, OSHC, TANH, TAYD

Stocks that traded to 52 week lows: ABX, AMTX, APWC, AVH, BETR, BVN, BXC, CBMX, CCUR, CYD, CYTX, DXPE, FLDM, FLKS, FRED, FSTR, GASS, GLBS, GPP, GRVY, HGR, HMY, INTX, ITRI, IVAC, LALT, LINC, LWAY, MAB, MYM, NAD, NID, NIQ, NSPR, NXZ, OBCI, PAI, PCTI, PLTM, PSG, QRHC, RBY, RIBT, RJET, SBGL, SVM, TG, TIF, TIGR, TUTI, TWIN, UACL, UNIS, VCIT, VPG, VPV, VSEC, WGBS, WIA, WPP, XCRA, XGTI, YUME, ZAZA

ETFs that traded to 52 week highs: none

ETFs that traded to 52 week lows: none


Other news: ANAD -5.8% (filed registration statement for up to $50 mln offering of a combination of debt and equity securities; disclosed entry into an At-The-Market Issuance Sales Agreement with MLV & Co to sell common stock),