From Briefing.com: Trading closed out the week with slight gains on Friday. The S&P 500 led the way higher, up 9.25 points (+0.46%) to 2033.11. The Dow Jones Industrial Average closed higher by 74.22 points (+0.43%) to 17215.97, and the Nasdaq Composite added 16.59 points (+0.34%) to end 4886.69. The markets traded sideways for the majority of the session, dipping below flat lines once around 2 p.m. ET, but trading the last two hours in an upward trend to end near highs of the day.
Social Media (SOCL 19.19, +0.38 +2.02%) names were strong on the session following news that Alibaba (BABA 71.99, +0.21 +0.29%) filed a non-binding proposal to acquire all outstanding shares of Youku Tudou (YOKU 24.92, +4.51 +22.07%) for $26.60 per share in an all-cash transaction. Chinese Internet name Weibo (WB 15.57, +1.84 +13.40%) was also higher on the session in light of the YOKU/BABA deal.
Market data today came in the form of Industrial Production, Michigan Sentiment, and JOLTS. Industrial production declined 0.2% in September after declining an upwardly revised 0.1% in August. Michigan Consumer Sentiment Index increased to 92.1 in the preliminary October reading from 87.2 in September. August Job Openings and Labor Turnover Survey showed that job openings decreased to 5.370 million from 5.668 million.
In the S&P 500 Information Technology sector (705.28, +2.01 +0.29%), ADBE +2.19%, FB +1.65%, NVDA +1.57%, FFIV +1.44%, CRM +1.38%, INTU +1.29%, LRCX +1.22%, TSS +1.14%, QCOM +1.10%, MSFT +1.06% outperformed, helping the sector finish at highs of the day. Top weighted Nvidia (NVDA) finished strong following M&A speculation intraday.
Other notable news items among sector components:
Red Hat (RHT 77.62, -0.08 -0.10%) to acquire Ansible; financial terms of the deal were not disclosed. The deal is expected to have no material impact to RHT's revenue for Q3 and Q4.
Cisco (CSCO 28.25, +0.10 +0.36%) announced the inauguration of openBerlin, a Cisco Innovation Center. The center is now fully operational in the Euref campus in Berlin's Schneberg district. Cisco intends to invest close to $30 million in the new site over the coming years.
Elsewhere in the technology space:
Youku Tudou (YOKU) announced the receipt of a non-binding proposal from Alibaba Group (BABA) to acquire all outstanding shares of YOKU for $26.60 per share in an all-cash transaction.
Advanced Micro (AMD 1.94, -0.03 -1.52%) announced a JV with Chinese firm Nantong Fujitsu Microelectronics to establish outsourced semiconductor assembly and test (OSAT) expertise.
WEX (WEX 92.11, -0.11 -0.12%) acquired integrated Software-as-a-Service firm Benaissance for $80 million. The company expects some slight accretion in 2016.
Periscom Semi (PSEM 17.55, -0.39 -2.17%) responded to preliminary proxy materials filed by Montage Technology Group. The company believes Montage's offer has significant financing, regulatory and other risks.
Marcell (MRVL 9.35, -0.07 -0.74%) retained Dave Eichler to serve as Interim CFO effective as of October 16.
Vringo (VRNG 0.41, +0.03 +8.48%) to acquire privately held International Development Group. The aggregate consideration will be unregistered shares of preferred stock convertible into shares of common stock representing about 11.4% of the combined company on a fully diluted basis.
Destiny Media Tech's (DSNY 0.22, -0.03 -12.61%) Board approved a proposed private placement offering of up to about 2 million units at a price of $0.25 per unit for maximum gross proceeds of $505,000.
China Information Tech (CNIT 1.00, +0.01 +1.13%) CFO Robin Yang has resigned due to personal reasons effective October 15.
StarTek (SRT 4.55, +0.04 +0.89%) CFO Lisa Weaver gave notice of her intention to resign. In addition, CIO Kamalesh Dwivedi separated from the company effective October 14.
Cinedigm Digital Cinema (CIDM 0.60, -0.02 -3.23%) to eliminate the current Chief Operating Officer position. Effective October 16, COO Adam Mizel will transition to a consulting role with the company.
Rubicon Tech (RBCN 1.23, -0.02 -1.60%) named Hany Tamim as COO.
Net Element (NETE 0.13, +0.00 +0.58%) terminated its $5 million senior convertible note offering.
T-Mobile US (TMUS 40.54, +0.62 +1.55%) will transfer its listing from the NYSE to the NASDAQ Global Select Market effective Oct. 26.
CounterPath (CPAH 0.29, -0.06 -17.14%) issued a corporate update and announced a 1-for-10 reverse stock split. The company also stated that leveraged collaborations with infrastructure and enterprise software companies such as Alcatel-Lucent (ALU 3.76, -0.03 -0.79%), to generate a pipeline of large opportunities in the Enterprise market, will translate into new revenue for it in fiscal 2016.
In reaction to quarterly results:
Advanced Micro (AMD) reported Q3 non-GAAP loss of $0.17, or ($0.09) excluding an $0.08 inventory write down. The company also reported revenues which fell 25.8% to $1.06 billion. The company guided for Q4 revenues of minus 10%, plus or minus 3%, sequentially to about $955-1029 million.
Analyst actions:
CCOI was upgraded to Buy from Hold at Drexel Hamilton,
BOX was upgraded to Overweight from Neutral at JP Morgan,
TWOU was upgraded to Buy from Neutral at Goldman,
BLOX was upgraded to Buy from Neutral at Sterne Agee CRT;
NTES was downgraded to Hold from Buy at Standpoint Research,
STX was downgraded at Craig Hallum, Needam and Pacific Crest,
OLED was downgraded to Neutral from Buy at Goldman,
WNS was downgraded to Neutral from Outperform at Robert W. Baird
Weekly Recap - Week ending 16-Oct-15Dow +74.22 at 17215.97, Nasdaq +16.59 at 4886.69, S&P +9.24 at 2033.1
The stock market endured a sleepy Friday session that capped an upbeat week. The S&P 500 added 0.5%, extending its weekly gain to 0.9%, while the Nasdaq Composite (+0.3%) underperformed on Friday, but still ended the week higher by 1.2%.
Overall, the Friday affair was pretty uneventful as the S&P 500 spent the bulk of the day in a ten-point range, climbing to a new high during the final hour. Four sectors settled ahead of the S&P 500 while the remaining six ended in-line with or behind the benchmark index.
Consumer staples (+1.0%) and health care (+1.0%) settled in the lead with the health care space holding up well despite an intraday swoon in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 314.32, -0.44) shed 0.1% after being up 1.1% at the start of the trading day. For the week, the health care sector gained 1.9% while the biotech ETF also climbed 1.9%.
Moving to the cyclical side, consumer discretionary (+0.6%) and financials (+0.4%) displayed relative strength since the opening bell while energy (+0.2%), industrials (-0.2%), materials (unch), and technology (+0.3%) spent the bulk of the session in the red.
Interestingly, the energy sector faced a daylong struggle even though crude oil erased its early loss to end the day higher by 1.9% at $47.26/bbl.
Elsewhere, the industrial sector (-0.2%) spent the day behind the remaining nine groups to widen its weekly decline to 1.2%. Top-weighted sector component General Electric (GE 28.98, +0.95) spiked 3.4% after reporting operating earnings of $0.32/share, which may not compare to estimates as the company continues divesting GE capital assets, but that strength could not offset broad weakness among transport stocks. The Dow Jones Transportation Average fell 1.6% with KC Southern (KSU 87.37, -10.63) diving 10.9% in reaction to disappointing quarterly results.
Similar to stocks, Treasuries drifted inside narrow ranges, but unlike equities, the 10-yr note settled on its low with the benchmark yield rising two basis points to 2.03%.
Despite the quiet intraday action, more than 900 million shares changed hands at the NYSE floor with options expiration boosting the final tally.
Economic data was limited to Industrial Production, Michigan Sentiment, and JOLTS:
Industrial production declined 0.2% in September after declining an upwardly revised 0.1% (from -0.4%) in August while the Briefing.com consensus expected a drop of 0.2%
Manufacturing production declined for a second consecutive month and for a third time over the past four months. Production fell 0.1% in September after declining 0.4% in August
The decline in manufacturing production was the result of a 0.1% decline in durable goods production. Despite lower output in the petroleum sector, nondurable goods production was flat in September
The University of Michigan Consumer Sentiment Index increased to 92.1 in the preliminary October reading from 87.2 in September while the Briefing.com consensus expected an increase to 88.4
The Current Conditions Index increased to 106.7 in October from 101.2 in September while the Expectations Index increased to 82.7 from 78.2
The August Job Openings and Labor Turnover Survey showed that job openings decreased to 5.370 million from 5.668 million
Monday's data will be limited to the 10:00 ET release of the NAHB Housing Market Index for October (Briefing.com consensus 62).
Week in Review: Stimulus Chatter Picks Up
The stock market began the trading week on a sleepy note with a Monday session that saw the S&P 500 bounce around an eight-point range. The benchmark index settled higher by 0.1% while the Nasdaq Composite (+0.2%) outperformed slightly. With the bond market closed for Columbus Day, a fair share of participants elected to forego the Monday session. The subdued activity was highlighted by below-average trading volume as fewer than 700 million shares changed hands at the NYSE floor. Eight sectors finished the day with gains while commodity-sensitive energy (-1.1%) and materials (-0.9%) underperformed throughout the session. The energy sector finished at the bottom of the leaderboard, narrowing its October gain to 10.9% while crude oil surrendered 5.2% to settle at $47.19/bbl.
The market ended Tuesday on a lower note after the major averages failed to hold their slim intraday gains. The S&P 500 settled lower by 0.7% while the Nasdaq Composite (-0.9%) underperformed. Overall, the Tuesday affair was relatively quiet with trading volume surpassing Monday's total by a relatively slim margin. To that point, fewer than 850 million shares changed hands at the NYSE floor. Equity indices faced some selling pressure after China's September trade balance ($60.34 billion; expected $46.79 billion) showed a 20.4% decline in imports (expected -15.0%), which was the 11th consecutive drop in that category, stirring up concerns about China's demand for goods and services from its neighbors. Accordingly, most Asian markets posted losses on Tuesday and the defensive sentiment infiltrated the European session.
The major averages ended the midweek session on a lower note with the S&P 500 (-0.5%) registering its second consecutive decline. The benchmark index settled near its worst level of the day while the Nasdaq Composite (-0.3%) outperformed. Equities displayed modest gains in the early going, but relative weakness in several influential sectors prevented the S&P 500 from holding its early gain. The index made another brief appearance above its flat line during the early afternoon, but slid to lows before the closing bell. The reasons for the retreat were not particularly difficult to find as economic data reported in the morning disappointed while quarterly earnings received since Tuesday's closing bell did not inspire confidence either. Eight sectors registered losses with four falling 1.0% or more. The financial sector (-1.0%) settled among the laggards after showing relative weakness throughout the day.
Equities charged higher on Thursday, erasing their entire decline from the early portion of the week. The S&P 500 spiked 1.5% while the Nasdaq Composite (+1.8%) outperformed. The broad-based rally in the U.S. followed an overnight session that featured dovish comments from two European Central Bank members, setting expectations for more monetary easing from the central bank. This started with Vitor Constancio who spoke in Hong Kong, joining the chorus of voices calling on the Federal Reserve to delay its first rate hike while Ewald Nowotny said that more needs to be done by the ECB in light of soft inflation data. The dovish remarks from two ECB policymakers weighed on the euro, sending the single currency lower by 0.8% against the dollar to 1.1383. To be fair, the Dollar Index (94.46, +0.47), which gained 0.5%, spiked to highs after the release of economic data, which included a 42-year low initial claims reading (255,000; Briefing.com consensus) and an in-line CPI report (+0.2%).
Index Started Week Ended Week Change % Change YTD %
DJIA 17084.49 17215.97 131.48 0.8 -3.4
Nasdaq 4830.47 4886.69 56.22 1.2 3.2
S&P 500 2014.89 2033.11 18.22 0.9 -1.3
Russell 2000 1165.36 1162.31 -3.05 -0.3 -3.5
3:37 pm Earnings Preview for the week of October 19 - 23 (:SUMRX) :
Of the companies reporting earnings for the week of October 19 - 23 some of the bigger names include:
Monday:
Pre Market - MS, HAL, GPC, VRX, HAS, MTB, LII
After Hours - IBM, FLEX, CCK, STLD, CE, HA, ZION
Tuesday:
Pre Market - VZ, UTX, LMT, TRV, BK, OMC, DOV, CP, PNR, FITB, NVR, RF, HOG, ATI, EAT, WWW
After Hours - ACE, CB, DFS, FTI, VMW, TEX, PKG, CLS, ESND, CMG, YHOO, SHLM, ISRG, ILMN,
WERN, NAVI, CREE, IBKR
Wednesday:
Pre Market - WIT, GM, BA, KO, ABB, EMC, ABT, MAN, KMB, SVU, TMO, BHI, ITW, BIIB, WFT, LAD, IPG, ABG, NLSN, APH, PII, OC, STJ, SLGN, NTRS, CSL
After Hours - AXP, KMI, TXN, LVS, AMP, BRCM, EBAY, LRCX, URI, TSCO, SNDK, RHI, RJF, SON, FBHS, CA, CCI, CTXS
Thursday:
Pre Market - DOW, CAT, UAL, MMM, MCD, RTN, UNP, LUV, DHR, LLY, NUE, AEP, FCX, RCI, PH, SWK, PCP, RS, CAM, WCC, DGX, BEN, PHM, R, DPS, ADS, DAN, ALK, ORI, SJR, FAF, UA, SIRI, GPK, BMS, TROW, MJN, USG, BCC, CAB, HUB.B, WAB
After Hours - T, AMZN, MSFT, GOOG, COF, PFG, SYK, TRN, JNPR, SKX, BCR, LSTR, SWN, SRCL, KLAC, MXIM, BYD, SMCI
Friday:
Pre Market - ERIC, PG, AAL, LYB, WHR, LEA, VFC, TRI, STT, DTE, RCL, ALV, TEN, SHPG, CFG, VTR, BPOP, COG, FNFG, B
11:51 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (90) outpacing new lows (22) (SCANX) : Stocks that traded to 52 week highs: ACGL, ADBE, AEPI, AGII, ATO, ATVI, AVB, AWK, BNCL, BNK, BSQR, CBNJ, CBZ, CENT, CENTA, CHFN, CLI, CLX, CNCE, CNO, COB, COR, CTAS, DEA, DWTR, EBSB, ECL, EFX, ELS, ENVI, EQC, EXLS, FCVA, FNLC, FONR, FPRX, GABC, GE, GSBC, HTBI, IPHI, JBT, LG, LGF, MATX, MEET, MLVF, MO, MPWR, MRKT, MSCC, MSEX, MSG, NAVG, NAZ, NDAQ, NFX, NI, NKE, NKSH, NVDA, NVX, OGS, OPOF, OSIS, PAYC, PFSW, PGR, PNY, PRMW, PSA, QADB, RAI, RENX, RNR, SABR, SHEN, SIGI, SRCL, SSRI, TAI, TNK, TOWN, TYL, UBSH, UTES, VLRS, VRTU, WGL, XTLY
Stocks that traded to 52 week lows: ARO, ARTW, BCOR, CXRX, DAKP, DAR, FSI, I, IDSA, ISH, LNN, PDLI, PPC, PWR, ROYL, SAVE, STX, TUMI, VOXX, VXDN, VXUP, WMT
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: none
9:00 am Rubicon Tech names Hany Tamim as COO (RBCN) : Mr. Tamim has experience in managing crystal growth and wafer manufacturing operations in both Malaysia and the United States, including 24 years with SunEdison (SUNE).
8:30 am Pericom Semi responds to preliminary proxy materials filed by Montage Technology Group, Believes montage offer has significant financing, regulatory and other risks (PSEM) :
"Since March of this year, Pericom and its independent financial advisors and outside legal counsel have engaged in good-faith discussions and negotiations with Montage regarding a potential transaction, as described in our preliminary proxy statement filed with the SEC on September 17, 2015 and updated on October 13, 2015. "During these discussions, we have clearly communicated to Montage our belief that there are financing, regulatory and other risks associated with its offer that make Montage's ability to close a transaction uncertain and significantly less likely than closing a transaction with Diodes (DIOD). "Nevertheless, the Pericom Board is willing to continue discussions with Montage to determine if Montage can resolve the issues we have identified."
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