From Briefing.com: The broader market finished Wednesday with modest losses. The Nasdaq Composite led the way lower by 40.85 points (-0.84%) to close 4840.12. The S&P 500 ended lower by 11.83 points (-0.58%) to 2018.94. The Dow Jones Industrial Average shed 48.50 points (-0.28%) to end Wednesday 17168.61. Economic data on the Wednesday session was limited to the weekly MBA Mortgage Index which jumped 11.8% to follow last week's 27.6% decline.
The Technology (XLK 41.70, -0.32 -0.76%) sector ended the session with notable losses. The sector traded most of the morning session in the green, but around midday turned negative, and finished near lows of the day. Other sectors finished as follows XLP +0.02%, XLI +0.02%, XLU -0.20%, XLY -0.47%, XLF -0.72%, XLK -0.76%, XLB -0.89%, XLV -0.91%, IYZ -1.13%, XLE -1.23%.
As a subsector, Cloud Computing (SKYY 29.36, -0.57 -1.92%) was weak on the session as large components VMware (VMW 55.42, -13.34 -19.40%) and EMC (EMC 25.77, -1.72 -6.26%) announced the plans for the new cloud business jointly owned 50:50 by the two -Vitrustream. Virtustream's financial results to be consolidated into VMware financial statements beginning in Q1 2016. Other names displaying weakness in the sector today included RAX -3.72%, TDC -3.31%, WIT -3.01%, BCOV -2.80%.
Combating the weakness in the broader market, Semiconductor (SOX 653.24, +1.37 +0.21%) names were notably strong. M&A was active in the space today, as deals between both SNDK/WDC and KLAC/LRCX.
SanDisk (SNDK 76.78, +1.59 +2.11%) agreed to be acquired by Western Digital (WDC 71.44, -3.42 -4.57%) for $86.50 per share, or about $19 billion. In regards to the
KLA-Tencor (KLAC 63.98, +10.12 +18.79%) acquisition by Lam Research (LRCX 70.79, +0.76 +1.09%), the company would be acquired for about $67.02 per share or about $10.6 billion.
Internet (FDN 69.89, -1.30 -1.83%) names were also notably weak today as key holding Yahoo! (YHOO 31.12, -1.71 -5.21%) reported less than stellar results. Other names in the sector which posted weakness included Twitter (TWTR 29.30, -1.61 -5.22%), following a downgraded at Morgan Stanley, CSOD -4.67%, GRPN -3.45%, PYPL -2.98%,. LNKD -2.33%.
In the S&P 500 Information Technology (699.46, -5.51 -0.78%) sector, trading action lasted in positive territory for most of the morning. The afternoon was a different story, as the sector fell at about noon into negative territory and closed near session lows. Names which posted notable weakness today were RHT -1.85%, ADSK -1.67%, NVDA -1.30%, GOOGL -1.21%, MSFT -1.19%, HPQ -1.16%.
Other notable news items among sector components:
SanDisk (SNDK) has agreed to be acquired by Western Digital (WDC) for $86.50 per share, or about $19 billion. If the previously announced investment in Western Digital by Unisplendour Corporation Limited closes prior to this acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock; and if the Unisplendour transaction has not closed or has been terminated, $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock.
Qualcomm's (QCOM 58.97, -0.03 -0.05%) Capsule subsidiary received FDA 510(k) clearance for SmartLinx Vitals Plus, a patient monitoring system that integrates vital signs monitoring and clinical documentation into one scalable platform.In addition to reporting quarterly results,
EMC (EMC) and VMware (VMW) announced the plan to form a new cloud services business called Virtustream headed by Rodney Rogers as CEO.
Yahoo! (YHOO) and Alphabet's (GOOG 642.61, -7.67 -1.18%) Google entered into a Google Services Agreement under which Google will provide Yahoo with search advertisements through Google's AdSense for Search service, web algorithmic search services through Google's Websearch Service, and image search services.
KLA-Tencor (KLAC) in addition to reporting quarterly results, announced it will be acquired by Lam Research (LRCX) for about $67.02 per share, or about $10.6 billion. The deal is expected to be accretive to LRCX's non-GAAP earnings and free cash flow per share during the first 12 months post-closing.
Elsewhere in the technology space:
Ingram Micro (IM 28.77, -0.25 -0.86%) agreed to acquire Brazilian Group ACAO. The company expects $300 million in annual value-added solutions revenues, and for the deal to be modestly accretive to 2016 FY non-GAAP EPS.
SolarWinds (SWI 58.31, +8.11 +16.16%) will be acquired by Silver Lake Partners and Thoma Bravo for $60.10 per share in cash, or about $4.5 billion.
Blonder Tongue Labs (BDR 0.50, -0.18 -26.50%) said it continued to experience lower than anticipated sales during Q3, and that the company's liquidity position has not improved.
Trend Micro (TMICY 36.17, +0.32 +0.89%) has acquired HP TippingPoint for about $300 million. The agreement encompasses security technology, intellectual property, industry expertise, as well as a large, loyal enterprise customer base.
Nokia (NOK 6.94, -0.02 -0.29%) received all required regulatory approvals to proceed with the filing of its public exchange offer for Alcatel-Lucent (ALU 3.74, -0.01 -0.27%).
Telecomm Sys (TSYS 3.82, -0.17 -4.26%) received $5 million in incremental funding from the U.S. Army for sustainment of AN/TSC-198A SNAP, VS Aperture Terminals. Combined with the initial funded contract value of $18.6 million, this brings funding to date to $23.6 million.
Westell Tech (WSTL 1.14 flat) appointed Mike Moran as SVP and Chief Technology Officer. Prior to joining WSTL, Moran served in a variety of aspects with Tellabs (TLAB).
Blackbaud (BLKB 61.24, -1.19 -1.91%) appointed Mary Beth Westmoreland as Chief Technology Officer.
In reaction to quarterly results:
Tremor Video (TRMR 1.85, -0.05 -2.63%) named John Walsh as Chief Technology Officer.
KLA-Tencor (KLAC) reported Q1 EPS and revenues which beat expectations. KLAC saw Q1 EPS of $0.71 on revenues of $643 million.
Cree (CREE 23.96, -0.95 -3.81%) reported a beat on the top and bottom lines of Q1 expectations. The company saw EPS of $0.21 on revenues of $425.5 million. Also, CREE guided Q2 EPS of $0.21-0.26 on revenues of $425-445 million.
VMware (VMW) reported Q3 EPS in-line with preannouncements; the company saw EPS of $1.02 on revenues of $1.67 billion. The company also guided Q4 EPS of $1.23-1.27 on revenues of $1.825-1.875 billion. VMW also sees FY15 revenues of $6.60-6.66 billion on EPS of $4.04-4.08. FY16 revenues are expected to grow high single digits to low double digits.
Zix Corp (ZIXI 5.00, +0.32 +6.84%) beat on the top and bottom lines of Q3 expectations. The company saw EPS of $0.07 on revenues of $14.0 million.
SanDisk (SNDK) reported Q3 EPS and revenues which beat expectations; the company saw EPS of $1.09 on revenues of $1.45 billion.
Analyst actions:
Yahoo! (YHOO) reported Q3 EPS and revenues which missed expectations. For Q3, YHOO saw EPS of $0.15 on revenues of $1 billion. Guided Q4 revenues of $1.16-1.12 billion.
SMGZY upgraded to Buy from Neutral at Citigroup;
TWTR was downgraded to Underweight from Equal Weight at Morgan Stanley,
YHOO was downgraded to Neutral from Buy at Mizuho,
VMW was downgraded at Atlantic Equities, Maxim Group, Monness Crespi & Hardt, Raymond James, Susquehanna, Pacific Crest, Nomura, BofA/Merrill, Sterne Agee CRT,
MU was downgraded to Hold from Strong Buy at Needham,
HIMX was downgraded to Market Perform from Outperform at Northland Capital,
SWI was downgraded to Mkt Perform from Mkt Outperform at JMP Securities,
CVG was downgraded to Neutral from Buy at Sidoti,
ZG was downgraded to Neutral from Buy at Guggenheim
4:10 pm : The stock market ended Wednesday on a lower note after enduring a shaky session. The S&P 500 lost 0.6% after failing to overtake its 100-day moving average (2,038) for the second day in a row. Just like yesterday, the Nasdaq Composite (-0.8%) underperformed while the Dow Jones Industrial Average (-0.3%) displayed relative strength.
Equities began the day with modest gains, but the S&P 500 notched its high during the opening minutes of the session and returned to its flat line in short order. The index traded just above the unchanged level into the afternoon, but slid to lows shortly after 13:00 ET. The S&P 500 staged a late charge to its flat line, but could not overtake that level, dropping to a new low instead.
Although the market spent another day inside a relatively narrow range (21 S&P points), the same could not be said about the health care sector, which ended lower by 0.9% after showing a 1.0% gain at the start that briefly morphed into a 2.5% decline. The intraday volatility was brought on by a swoon in the biotech space after Citron Research published a report on Valeant Pharmaceuticals (VRX 118.61, -28.13), calling into question the company's relationship with Philidor RX, which is a specialty pharmacy. According to Citron, Valeant appears to have created a network of specialty pharmacies modeled after Philidor, whose purpose was to generate phantom sales of VRX products. Shares of Valeant were down nearly 40.0% during afternoon action, but they narrowed their loss to 19.2% after a brief trading halt was lifted. Valeant responded to Citron's allegations during the trading halt, calling them "erroneous." It is worth noting that the afternoon rebound was aided by comments from fund manager Bill Ackman of Pershing Square Capital Management who told CNBC that his fund bought an additional two million shares in VRX today. As for the remainder of the biotech space, the iShares Nasdaq Biotechnology ETF (IBB 304.48, -1.48) ended off its low, but still surrendered 0.5%. Notably, Biogen (BIIB 276.34, +10.53) spiked 4.0% after the company beat estimates, raised its guidance, and announced a restructuring plan.
Similar to the health care sector, energy (-1.0%), materials (-0.9%), and technology (-0.8%) ended among the laggards while most of the remaining sectors fared a bit better. The top-weighted technology sector settled behind the broader market, which masked a 0.2% uptick in the PHLX Semiconductor Index after SanDisk (SNDK 76.78, +1.59) agreed to be acquired by Western Digital (WDC 71.44, -3.42) for $86.50/share. Shares of SanDisk jumped 2.1% while another index component-KLA-Tencor (KLAC 63.98, +10.12)-surged 18.8% after agreeing to be acquired by Lam Research (LRCX 70.79, +0.76) for $67.02/share.
On the upside, the industrial sector (+0.1%) displayed relative strength throughout the day thanks to a 1.6% gain in Boeing (BA 141.19, +2.31) after the Dow component reported better than expected results and boosted its guidance.
Unlike stocks, Treasuries advanced into the afternoon, holding the bulk of their gains into the close with the 10-yr yield sliding four basis points to 2.03%.
Today's participation was in line with average as more than 830 million shares changed hands at the NYSE floor. Economic data was limited to the weekly MBA Mortgage Index, which jumped 11.8% to follow last week's 27.6% plunge.
Tomorrow, weekly Initial Claims (Briefing.com consensus 265,000) will be released at 8:30 ET while the August FHFA Housing Price Index will cross the wires at 9:00 ET. Also of note, September Leading Indicators (consensus -0.1%) and Existing Home Sales (expected 5.39 million) will be reported at 10:00 ET.
Nasdaq Composite +2.2% YTD
S&P 500 -1.9% YTD
Dow Jones Industrial Average -3.7% YTD
Russell 2000 -4.9% YTD
DJ30 -48.50 NASDAQ -40.85 SP500 -11.83 NASDAQ Adv/Vol/Dec 734/1.74 bln/2094 NYSE Adv/Vol/Dec 879/835.2 mln/2176
3:40 pm :
The dollar index climbed higher today, which helped weigh on commodities today
Dec WTI crude oil remained in the red today, ultimately closing out today's session -2.4% at $45.22/barrel following weekly storage data
In other energy, Nov nat gas lost 3.2% to $2.40/MMBtu
After gold sold off earlier today, the precious metals held losses. Dec gold finished the day -0.9% at $1167.10/oz
Dec silver ended -1% at $15.73/oz, while Dec copper lost -0.4% to $2.36/lb.
4:36 pm Unisys beats by $0.53, misses on revs (UIS) :
Reports Q3 (Sep) earnings of $0.67 per share, $0.53 better than the Capital IQ Consensus of $0.14 (3 estimates); revenues fell 16.2% year/year to $739.2 mln vs the $769.37 mln Capital IQ Consensus.Operating profit margin of 1.2%; 7.2% before restructuring charges of $17 million and pension expense of $27 million.
4:35 pm Texas Instruments beats by $0.09, beats on revs; guides Q4 EPS above, rev in-line (TXN) :
Reports Q3 (Sep) earnings of $0.76 per share, $0.09 better than the Capital IQ Consensus of $0.67; revenues fell 2.1% year/year to $3.43 bln vs the $3.28 bln Capital IQ Consensus. Co issues in-line guidance for Q4, sees EPS of $0.64-0.74 vs. $0.62 Capital IQ Consensus; sees Q4 revs of $3.07-3.33 bln vs. $3.12 bln Capital IQ Consensus Estimate. "Revenue declined 2 percent from a year ago. While our overall demand remained weak, revenue was stronger than we expected. "Our core businesses of Analog and Embedded Processing each grew year over year. Together, they comprised 85 percent of third-quarter revenue and have delivered nine consecutive quarters of year-over-year growth. "Gross margin was 58.2 percent of revenue, reflecting the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter analog production."
4:10 pm Seagate Tech appoints David H. Morton Jr. Executive VP and CFO effective immediately (STX) :
Co promotes David H. Morton, Jr. to Executive VP and CFO effective immediately.
Patrick O'Malley, Co's current CFO, will remain with the Co as executive VP with responsibility for a broad range of strategic and operational issues. Morton most recently served as Seagate's senior vice president, treasurer and principal accounting officer responsible for overseeing Seagate's corporate finance, treasury and accounting activities.
4:07 pm Seagate Tech announces Board approval for a 17% increase in the company's targeted regular cash dividend; to increase from $2.16 to $2.52 per share annually (STX) :
4:07 pm Mellanox Tech beats by $0.04, beats on revs; guides Q4 revs in-line (MLNX) :
Reports Q3 (Sep) earnings of $0.75 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.71; revenues rose 42.0% year/year to $171.4 mln vs the $168.64 mln Capital IQ Consensus. Co issues in-line guidance for Q4, sees Q4 revs of $171-176 mln vs. $172.30 mln Capital IQ Consensus Estimate.
4:06 pm Exponent declares a quarterly cash dividend of $0.15 per share; approves an additional $35 mln in share repurchases, with a total authorization now of ~$50 mln (EXPO) :
11:31 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (94) outpacing new lows (84) (SCANX) : Stocks that traded to 52 week highs: AAP, ADEP, AMRK, ASR, ATNI, BBCN, BCOM, CB, CBZ, CDW, CINF, CLI, CLX, CNCE, CSBK, CTS, EFSC, EFX, EGHT, ENVI, EQIX, ESXB, EXPD, EXPE, EXR, FDEF, FISV, FNLC, GSBC, GT, HA, HAFC, HCKT, HFWA, HOMB, HTBI, IGLD, IM, IPHI, JNPR, KRNY, LB, LEA, MANH, MATW, MATX, MLHR, MO, MTS, MXL, NDAQ, NEO, NI, NPK, NVR, NWBI, OGS, OZRK, PAC, PFS, PFSW, PGR, PRA, PSA, QCRH, RNR, RNST, ROCK, RRM, RSG, SFNC, SHOR, SIGI, SIRI, SIX, SKYW, SSS, STRS, SWI, SYKE, TBNK, TE, TFSL, TNK, TOWN, TRV, UBOH, UVE, VRSN, WAFD, WCN, WGL, WTM, WTR
Stocks that traded to 52 week lows: AAVL, ADMS, AGIO, AKRX, AMTX, APPY, ASCMA, ASTE, ATOS, ATRS, BBLU, BCOR, BDE, BKD, BOJA, CBIO, CIT, CPHD, CREE, CSTM, CUR, CXRX, DEST, DK, DOM, EAT, ENDP, ENZN, EPZM, EXP, FATE, FDEU, FLKS, FOGO, FRGI, FSC, FSI, GI, GNK, I, IBM, IMMY, LDRH, LIFE, LNTH, LOB, MFRM, MSLI, NEOS, NGL, NNBR, NTRA, OLLI, ORN, PAH, PCTI, PETX, PII, PMTS, PSO, PSTI, PTCT, RCG, RGNX, RNN, SIEN, SLGN, SMSI, SNTA, SSTK, SVU, SXC, SYRX, TLN, TNDM, TOR, TUMI, USAP, VMW, VRX, VSAR, WCC, WSCI, WWW
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: UNG
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