From Briefing.com: The broader market ended trading lower as oil and foreign markets slid. The S&P 500 closed with the worst losses, shedding 5.29 points (-0.26%) to 2065.89. The Dow Jones Industrial Average was close behind, losing 41.62 points at the close (-0.24%) to 17581.43. The Nasdaq Composite rounded out the bunch lower by 4.56 points (-0.09%) to 5030.15. As mentioned, the broader market experienced pressure as UK's FTSE: -0.8%, Germany's DAX: -1.0%, France's CAC: -1.0%, Spain's IBEX: -1.5%, Portugal's PSI: -2.1%, Italy's MIB Index: -1.2%, Irish Ovrl Index: -1.2% all ended lower. Also seeing pressure in today's trading action, December crude oil futures spent the entire session in the red, ending lower by 1.8% to $43.22/barrel.
Market data today included Durable Orders, Consumer Confidence and Case-Shiller Index. Durable goods orders declined 1.2% in September after declining a downwardly revised 3.0% (from -2.3%). The Conference Board's Consumer Confidence Index declined to 97.6 in October from a downwardly revised 102.6 (from 103.0). The Case-Shiller 20-city Home Price Index for August rose 5.1.
The Technology sector (XLK 43.41, -0.25 -0.57%) finished Tuesday near session lows ahead of sector component Apple's (AAPL 114.55, -0.73 -0.63) quarterly results. Of note today, highly-weighted component IBM (IBM 137.86, -5.80 -4.04%) saw some pressure today following news that the company learned of an SEC investigation on IBM relating to revenue recognition with respect to the accounting treatment of certain transactions in the U.S., U.K. and Ireland. Other sectors finished as follows: XLV +1.81%, XLP +0.14%, XLU -0.36%, XLB -0.43%, XLY -0.47%, XLK -0.57%, XLF -0.58%, XLI -1.10%, XLE -1.20%, IYZ -1.38% with only healthcare and consumer staples escaping in the green.
Telecoms (FCOM 26.54, -0.44 -1.63%) were notably weak today on the back of T-Mobile US' (TMUS 39.02, -2.36 -5.70%) worse than expected Q3 results. The company reported EPS of $0.15 on revenues which rose 7% YoY to $7.8 billion, yet missed expectations. The telecom firm also raised net customer adds guidance to 3.8-4.2 million from 3.4-3.9 million for the 2015 period.
Semis (SOX 665.71, -4.47 -0.67%) again turned in a day of underperformance as Marvell's (MRVL 8.05, -1.39 -14.77%) independent registered public accounting firm, PricewaterhouseCoopers, resigned. Among other reasons, the firm left as it did not see eye to eye in regards to the company's scope of the 2016 audit. Other names in the semi sector which underperformed included: SUNE -8.99%, SWKS -2.05%, QRVO -1.86%, AVGO -1.72%, ARMH -1.68%, ON -1.64%, ATML -1.43%, NXPI -1.21%.
In the S&P 500 Information Technology sector (731.41, -4.01 -0.55%), selling pressure kept the sector down as largely held names like XRX -7.38%, FSLR -2.79%, HPQ -2.21%, TEL -2.18%, WU -2.09%, SWKS -2.05%, QRVO -1.86%, CA -1.78%, AVGO -1.72%, FLIR -1.68%, PYPL -1.37% ended lower on the session.
Other notable news items among sector components:
IBM (IBM) disclosed in its quarterly 10Q filing that in August 2015 it learned that the SEC was conducting an investigation relating to revenue recognition with respect to the accounting treatment of certain transactions in the U.S., U.K. and Ireland. IBM added $4 billion to the company's buyback program, bringing total authorization to about $6.4 billion. The company also affirmed the quarterly dividend of $1.30 per share. IBM announced the collaboration with Twitter (TWTR 31.30, +0.41 +1.33%) and The Weather Channel, introducing IBM Insight Cloud Services. Cisco Systems (CSCO 29.05, +0.10 +0.35%) yesterday announced its intent to acquire data-analysis firm ParStream. Financial terms of the deal were not disclosed, but CSCO noted it expects the deal to close in Q2, FY16.
CSCO also announced its intent to acquire Lancope for $452.5 million in cash and assumed equity awards.
InterActiveCorp (IACI 64.57, -3.00 -4.44%) entered into a new agreement with Alphabet's (GOOG 708.49, -4.29 -0.60%) Google to extend their long-term relationship through March 2020.
Synaptics (SYNA 84.50, +0.15 +0.18%) announced that Alphabet's (GOOG) Google has adopted the Synaptics ClearPad Series 3 family of touch controller solutions to power its newest flagship smartphones, the Nexus 5X by LG and the Nexus 6P.
Intuit (INTU 98.03, +0.32 +0.33%) to appoint Brad Smith as Chairman effective at the timing of the annual shareholder meeting in January 2016.
Salesforce.com (CRM 77.75, -0.47 -0.60%) announced plans to double its workforce in the Seattle area.
Ingenico Group (INGIY 23.13, -0.05 -0.22%) announced that it was advancing collaboration with Intel (INTC 34.47, -0.12 -0.35%) in creating for retailers a secure connectivity path from the cash register to the payment terminal, end-to-end. The Group has achieved the first implementation of the Intel Data Protection Technology for Transactions solution into Ingenico mobile POS.
Qualcomm (QCOM 59.28, +0.07 +0.12%) unveiled the Qualcomm Snapdragon 618 IP camera reference design and development platform. Co also introduced its latest LTE modems, which are designed to support reliable, optimized cellular connectivity to a growing array of devices and systems within the Internet of Things
NetApp (NTAP 33.36, +0.21 +0.63%) announced that Manila is production ready for the mainstream enterprise.
Symantec (SYMC 20.44, -0.12 -0.58%) introduced Symantec Advanced Threat Protection, the first solution that can detect and remediate advanced threats across control points, from a single console with just a click, all with no new endpoint agents to deploy.
Elsewhere in the technology space:
Marvell (MRVL) announced that its independent registered public accounting firm, PricewaterhouseCoopers, has resigned.
Integrated Device (IDTI 25.31, +1.73 +7.34%) in addition to reporting quarterly results announced that it would acquire ZMDI for $310 million. The transaction will add $20 million of quarterly revenues and be accretive to earnings in the first full quarter post-close.
Comtech Telecom (CMTL 23.46, -0.29 -1.22%) received a $1.7 million contract from a major U.S. system integrator to supply 500W Ka-Band traveling wave tube amplifiers for HTS gateways.
Network-1 (NTIP 2.00, -0.08 -3.85%) reported the USPTO issued a notice of intent to issue Ex Parte Reexamination Certificate, rejecting a challenge to the company's remote power patent.
Looksmart (LOOK 0.65, -0.06 -8.45%) shareholders approve reverse split and spin-off of the company's assets and liabilities into LookSmart Group, Inc.
Sysorex Global (SYRX 0.91, -0.02 -2.50%) secured a $1 million engagement with a U.S. Government agency for AirPatrol ZoneDefense mobile device detection and locationing system.
SMTC (SMTX 1.51, +0.0.2 +1.34%) extends Jim Currie's appointment as the interim CFO to April 30, 2016.
Rambus (RMBS 10.53, +0.29 +2.83%) approved an accelerated share repurchase program of about $100 million in common stock.
ReneSola (SOL 1.32, -0.07 -5.04%) announced the resignation of CFO Daniel Lee. VP of Financial Control Maggie Ma will serve as Interim CFO while the company searches for a successor.
Smith Micro Software (SMSI 0.71, -0.03 -4.33%) eliminated the position of Chief Strategy Officer, thereby terminating James Mains.
MKS Instruments (MKSI 34.06, -0.18 -0.53%) lowered the quarterly dividend to $0.165 from $0.17 per share.
Moko Social Media (MOKO 1.92, flat) requested a trading halt pending an announcement regarding a proposed capital raising.
In reaction to quarterly results:
Amkor (AMKR 6.26, +0.61 +10.80%) reported a beat on the top and bottom line of Q3 results. The company saw EPS of $0.12 on revenues which fell 9.7% YoY to $734 million. The company also issued downside guidance for Q4 EPS of ($0.02)-$0.05 on revenues of $660-710 million.
Aixtron (AIXG 6.39, +0.63 +10.94%) reported Q3 EPS and revenues which beat expectations. AIXG saw EPS of 0.01 on revenues which rose 19.7% YoY to 54.6 million. The company also reaffirmed guidance for the FY15 period of revenues of 190-200 million.
Monolithic Power (MPWR 61.66, +3.90 +6.75%) reported Q3 EPS which beat expectations at $0.55 on revenues which were mostly in-line at $91.2 million. The company also guided Q4 revenues in-line at $84-88 million.
Yandex (YNDX 14.99, +0.94 +6.69%) reported Q3 EPS and revenues which beat expectations. EPS for the period was RUB 10.89 per share on revenues which rose 18.2% YoY to RUB 15.44 billion.
GrubHub (GRUB 24.51, -7.58 -23.62%) reported Q3 EPS which missed expectations at $0.08 on revenues which slightly missed expectations and rose 38.4% YoY to $85.7 million. The company also guided Q4 EPS worse than expected at $98-100 million.
Knowles (KN 17.10, -3.77 -18.06%) reported Q3 EPS which was better than anticipated at $0.16 on revenues which were in-line and fell 2.1% YoY to $294.6 million. KN also guided Q4 EPS of $0.18-0.24 on revenues of $290-310 million.
MicroStrategy (MSTR 168.24, -28.02 -14.28%) reported Q3 EPS of $2.06 on revenues which fell 14.4% YoY to $129.5 million and missed expectations.
Companies scheduled to report quarterly results tonight/tomorrow morning: AKAM, ANAD, AAPL, BBOX, BKFS, FEIC, FISV, HLIT, INFN, IPHI, MRCY, NATI, NCR, NVMI, PEGA, RSYS, RUBI, TER, TSS,TWTR, ULTI, VDSI, XOOM/ARW, ADP, BAH, CARB, DHX, FLIR, LVLT, LFUS, RDWR, SLAB, SONS, SNCR, TEL, UMC, VNTV, WEX, WILN
Analyst actions:
NTGR was upgraded to Buy from Sell at Rosenblatt,
VMW was upgraded to Buy from Hold at Drexel Hamilton;
PMCS was downgraded to Neutral from Positive at Susquehanna, KN was downgraded to Underperform from Mkt Perform at FBR Capital,
BCE was downgraded to Underperform from Neutral at Macquarie
5:05 pm Teradyne beats by $0.02, reports revs in-line; guides Q4 EPS in-line, revs below consensus (TER) :
Reports Q3 (Sep) earnings of $0.40 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.38; revenues fell 2.5% year/year to $466.0 mln vs the $465.7 mln Capital IQ Consensus. Co issues guidance for Q4, sees EPS of $0.07-0.12, excluding non-recurring items, vs. $0.10 Capital IQ Consensus Estimate; sees Q4 revs of $295-320 mln vs. $328.1 mln Capital IQ Consensus Estimate.
4:33 pm Apple beats by $0.09, beats on revs; guides Q1 in-line (AAPL) :
Reports Q4 (Sep) earnings of $1.96 per share, $0.09 better than the Capital IQ Consensus of $1.87; revenues rose 22.3% year/year to $51.5 bln vs the $50.96 bln Capital IQ Consensus and $49-51 bln guidance; gross margin of 39.9% vs 39.2% ests (guidance 38.5-39.5%) iPhones 48.1 mln vs 48.8 mln ests & 39.3 mln last year iPads 9.9 mln vs 10.1 mln ests & 12.3 mln last year Macs 5.7 mln vs 5.6 mln ests & 5.5 mln last yearCo issues in-line guidance for Q1, sees Q1 revs of $75.5-77.5 bln vs. $76.95 bln Capital IQ Consensus; gross margin 39-40% vs. 39.9% estimates.Q1 revenue would be up 2.5% YoY at midpoint of guidance.
4:07 pm FEI agrees to acquire DCG Systems for $160 million in cash; expects slight accretion to 2016 GAAP EPS (FEIC) :
DCG is a supplier of electrical fault characterization, localization and editing equipment, serving process development, yield ramp and failure analysis applications for a wide range of semiconductor and electronics manufacturers.
DCG generated revenue of $76 million in its fiscal year ended January 31, 2015. The transaction is expected to be slightly accretive to FEI's 2016 GAAP EPS. Co intends to fund the acquisition with cash on hand. The transaction is expected to close by the end of 2015
4:15 pm : The stock market endured its second consecutive retreat on Tuesday, but the overall trading dynamic was very similar to the range-bound affair from Monday. The S&P 500 lost 0.3% while the Nasdaq Composite (-0.1%) outperformed throughout the session.
In some ways, the cautious posture was not all that shocking considering tomorrow afternoon will feature the release of the October FOMC policy directive, which will cross the wires at 14:00 ET.
As for today, nine sectors ended the day in negative territory with cyclical groups showing relative weakness across the board. The energy sector (-1.2%) spent its second consecutive day behind the remaining nine groups as lower oil prices weighed. To that point, WTI crude fell 1.8% to $43.22/bbl.
Similar to energy, the industrial sector (-1.0%) surrendered close to 1.0% while the remaining cyclical sectors posted slimmer losses. For its part, the industrial space was pressured by transport stocks as the Dow Jones Transportation Average tumbled 2.6% with JetBlue Airways (JBLU 25.36, -0.85) leading the dive. Shares of JBLU fell 3.2% even though the company reported a one-cent beat on in-line revenue.
Elsewhere among cyclical sectors, technology (-0.6%) traded ahead of the broader market during morning action, but ended among the laggards after IBM (IBM 137.86, -5.80) disclosed that the Securities and Exchange Commission is conducting an investigation into the company's revenue recognition with a focus on transactions in the U.S., U.K., and Ireland. IBM tumbled 4.0% while another influential sector component-Apple (AAPL 114.55, -0.73)-lost 0.6% ahead of its quarterly report.
Moving to the countercyclical side, the consumer staples sector (+0.1%) outperformed slightly, which was largely thanks to an intraday spike in Walgreens Boots Alliance (WBA 95.16, +5.68), brought on by a Wall Street Journal report indicating the company will acquire Rite Aid (RAD 8.67, +2.59) for roughly $10 billion.
On the upside, the health care sector (+1.7%) spent the entire session in the green after Merck (MRK 53.47, +0.56) and Pfizer (PFE 34.99, +0.83) reported better than expected results. The two Dow components posted respective gains of 1.1% and 2.4% while biotechnology also contributed to the strength in the sector with iShares Nasdaq Biotechnology ETF (IBB 327.65, +10.20) spiking 3.2%.
Treasuries rallied throughout the morning, hitting their highs around midday before surrendering a portion of their gains; however, the 10-yr note settled firmly in the green with its yield slipping two basis points to 2.03%.
Today's participation was ahead of recent averages as more than a billion shares changed hands at the NYSE floor.
Economic data included Durable Orders, Consumer Confidence, and Case-Shiller Index:
Durable goods orders declined 1.2% in September after declining a downwardly revised 3.0% (from -2.3%) while the Briefing.com consensus expected a decline of 1.3%
The drop wasn't a surprise as manufacturers are struggling to counteract the negative effects of a strong dollar and global economic weakness
Excluding transportation, durable goods orders declined 0.4% in September after declining a downwardly revised 0.9% (from +0.2%) in August while the consensus expected an increase of 0.2%
The Conference Board's Consumer Confidence Index declined to 97.6 in October from a downwardly revised 102.6 (from 103.0) while the Briefing.com consensus expected a decline to 102.5
The Present Situation Index declined to 112.1 in October from 120.3 while the Expectations Index fell to 88.0 from 90.8
The Case-Shiller 20-city Home Price Index for August rose 5.1% against a 5.0% increase expected by the Briefing.com consensus
This followed the previous month's revised increase of 4.9% (from 5.0%)
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET.
Nasdaq Composite +6.2% YTD
S&P 500 +0.3% YTD
Dow Jones Industrial Average -1.4% YTD
Russell 2000 -4.8% YTD
DJ30 -41.62 NASDAQ -4.56 SP500 -5.29 NASDAQ Adv/Vol/Dec 845/1.78 bln/2073 NYSE Adv/Vol/Dec 802/971.9 mln/2288
3:40 pm :
Natural gas futures were volatile again today given the bearish supply/weather outlook situation
Also note that the Dec contract is now the front-month contract, which ended the day flat at $2.36/MMBtu
Dec crude oil spent the day in the red all day and closed -1.8% at $43.22/barrel
Precious metals were less volatile
Gold remained consolidated in afternoon trade. Dec gold finished $0.50 lower to $1165.60/oz, while Dec silver ended -0.3% at $15.86/oz
12:06 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (175) outpacing new highs (82) (SCANX) : Stocks that traded to 52 week highs: ABCB, AEPI, CDNS, CIA, CORE, CUBE, CUNB, EBF, ESSA, EXR, FB, FBC, FBNC, FDP, FIZZ, FLO, FMX, FNFG, FNLC, FONR, GABC, GIG, GSOL, HCSG, HEOP, HSIC, HTBI, ICE, IDTI, IGLD, JAXB, JJSF, JRVR, KEP, KRNY, LANC, LKOR, LMT, MCRI, MKC.V, MNRO, MPWR, MSFT, MTN, MYGN, NAVG, NBTB, NCI, NOC, NWBI, OA, ORIT, OZRK, PRA, PSA, PSCU, QCRH, QTS, RITT, RIVR, SAP, SFBS, SHBI, SHOR, SIRI, SKYW, SPG, SSS, STL, SUI, SYBT, TOWN, TRV, TSS, TTWO, UBOH, UQM, VTN, WCN, WGL, XLNX, YDKN
Stocks that traded to 52 week lows: AAVL, AHGP, AI, AIMT, AIQ, APAM, APOL, ARCI, ASCMA, ATI, ATLS, AVH, BDR, BSM, CAB, CAI, CDI, CDRB, CEN, CENX, CGI, CHMI, CMI, CMLS, CNNX, CNX, CPLA, CROX, CRR, CSTM, CTIC, CUR, DDD, DECK, DEST, DOM, DSW, DWSN, EAC, EAT, ECHO, ELGX, ENTL, ENZN, ERA, ERF, EVEP, EVH, EVRI, EXP, FCH, FMSA, FOGO, FOSL, FRGI, FUEL, GI, GNRT, GOGL, GRUB, GYRO, HART, HBIO, HCLP, HDP, HEB, HNH, HOTR, HWAY, IPI, KIQ, KODK, KSU, KYN, LGCY, LIQD, LNG, LNTH, LORL, LPSN, LPTN, MBUU, MCEP, MDSO, MDVX, MHR, MIL, MPET, MPLX, MRVL, MSL, MSM, MWE, NC, NETE, NGL, NM, NNBR, NRG, NRP, NRZ, NSM, NSPR, NTG, NXTD, OCIP, ODFL, OLLI, ORIG, ORN, PAGP, PCAR, PEIX, PERF, PHH, PHII, PMT, PRTY, PSG, PSO, PTCT, PXLW, R, RCAP, RCII, RCKY, RDN, RIBT, RICE, RLGT, RLJ, RLOC, RMCF, ROYT, RPRX, RRC, RRTS, RT, SAIA, SAVE, SBLK, SCON, SCSS, SKUL, SMRT, SQI, SSE, SSI, STWD, SVU, SWN, SXC, SYRX, TANH, TCS, TDW, TLN, TNDM, TOR, TRMR, TWER, TWIN, UPL, USAP, VDTH, VICL, VOXX, VSI, WAC, WAYN, WDC, WLB, WMT, WSCI, ZFGN
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: UHN,
8:03 am Cisco Systems announces its intent to acquire Lancope for $452.5 million in cash and assumed equity awards (CSCO) :
Lancope is a privately held network security company based in Alpharetta, GA. Lancope provides network behavior analytics, threat visibility and security intelligence to help protect companies against top cyber security threats.
The Lancope team will join the Cisco Security Business Group organization led by David Goeckeler, senior vice president and general manager. Under the terms of the agreement, Cisco will pay $452.5 million in cash and assumed equity awards, plus additional retention based incentives for Lancope employees who join Cisco. The acquisition is expected to close in the second quarter of fiscal year 2016
8:02 am IPG Photonics misses by $0.05, beats on revs; guides Q4 EPS below consensus, revs below consensus (IPGP) :
Reports Q3 (Sep) earnings of $1.18 per share, $0.05 worse than the Capital IQ Consensus of $1.23; revenues rose 22.0% year/year to $243.54 mln vs the $240.89 mln Capital IQ Consensus. Co issues downside guidance for Q4, sees EPS of $1.00-1.15 vs. $1.17 Capital IQ Consensus Estimate; sees Q4 revs of $215-230 mln vs. $234.6 mln Capital IQ Consensus Estimate.
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