From Briefing.com: The broader market closed the session with significant losses, led by the Dow Jones Industrial Average which lost 252.15 points (-1.47%) today to close 16906.51. The S&P 500 was also lower today, ending the day down 26.45 points (-1.31%) to 1990.26. The Nasdaq Composite was also in the red when the bell rang, as the index lost 55.67 points (-1.14%) to 4835.77. Market weakness came as the overnight session again focused on Asian securities. The Shanghai Composite was the lone standout, up +2.3% when the trading was done on the heels of a devaluation of the yuan to five-year lows by the People's Bank of China. The volatility in China led to weakness across Europe and drove a decline in oil prices as WTI Crude dropped 5.5% today to $33.96/barrel.
Market data today included the ADP Employment report which stated the addition of 257,000 jobs in December. Also released was the November Trade Balance report which showed the trade deficit narrowing to $42.40 billion from a downwardly revised $44.60 billion deficit in October. Factory Orders declined 0.2% in November, and the ISM Services Index for December dipped to 55.3 from 55.9 in November.
Technology (XLK 41.65, -0.51 -1.21%) outperformed the broader market today as the sector finished lower but slightly off lows of the day. Today in an update, Netflix (NFLX 117.68, +10.02 +9.31%) issued an update, stating the service is now available in 190 countries, and that the company continues to explore options to provide services in China. Other sectors closed the XLE -3.85%, XLB -2.62%, XLI -1.54%, XLF -1.53%, XLY -0.98%, IYZ -0.85%, XLV -0.82%, XLP -0.34%, XLU -0.18% with Energy leading the decline.
Particularly weak today, Semiconductors (SOX 631.20, -18.27 -2.81%) saw pressure, as did the broader markets, as the sector finished off lows of the day but still lost more than 2%. Weakness stemmed from continued pressure on Apple (AAPL 100.70, -2.01 -1.96%) suppliers following the Nikkei article which was published yesterday suggesting the company could cut production of the most recent iteration of phones in Q1. Other semi names which displayed weakness included QRVO -6.12%, ADI -4.26%, NVDA -4.13%, MU -4.05%, AVGO -3.08%, MXIM -2.90%, SUNE -2.65%.
The S&P 500 Information Technology sector (698.20, -9.05 -1.28%) outperformed the broader market today as the sector spent the entire session in the red, yet regained some of the day's losses in the final hour of trading. Of note, component Yahoo! (YHOO 32.16, -0.04 -0.12%) outperformed the broader market in spite of being sent a letter from shareholder Starboard regarding certain ineffective measures taken by management. Other components closed the session TDC -4.08%, HPQ -3.59%, FSLR -3.48%, WU -2.28%, WDC -2.23%, INTC -2.22%.
Other notable news items among sector components:
Starboard delivered a letter to Yahoo's (YHOO) Board of Directors this morning. Among other points, Starboard highlighted what it perceives as investors' lack of confidence in management and management's lack of progress on turning around the Core Business. In statements, Starboard also revealed it and YHOO have been approached in the past regarding interest in the Core Business, but ultimately those talks have not culminated in a deal.
Hortonworks (HDP 19.86, -0.44 -2.17%) amended its commercial agreement with Yahoo (YHOO).
Apple (AAPL) announced customers spent over $1.1 billion on apps or in app purchases during the two weeks ending Jan 3.
Alliance Data (ADS 270.18, -3.87 -1.41%) announced a new stock repurchase program to acquire up to $500 million of the company's common stock during 2016.
MasterCard (MA 93.35, -1.65 -1.74%) announced a partnership with Coin to bring MasterCard payments to a wide array of fitness bands, smart watches and other wearable devices.
Lattice Semi (LSCC 6.21, +0.06 -0.98%) confirmed its flexible charging controller family, the LIF-UC family, supports the Qualcomm (QCOM 48.64, -0.50 -1.02%) Quick Charge standard.
Oracle (ORCL 35.82, +0.18 +0.51%) announced the acquisition of AddThis. Deal is reportedly valued at $200 million.
Cisco (CSCO 26.01, -0.28 -1.07%) introduced the Cisco Infinite cloud software video entertainment solutions are currently provided as a service to over 70 content and service providers worldwide. These solutions are helping them grow their businesses by delivering services faster and reducing operating costs.
Sky (SKYAY 64.84, -0.74 -1.12%) announced it is using Cisco (CSCO) video software solutions to power its next-generation home entertainment system, Sky Q. Available in 2016, Sky Q is a family of advanced products, connecting wirelessly to create a new ecosystem that makes it easier than ever for customers to access their favorite TV.
Cisco (CSCO) announced that KBRO, Taiwan's largest cable television provider, is deploying the Cisco cBR-8 Evolved Converged Cable Access Platform to deliver faster Internet connections that will help KBRO's customers.
SanDisk (SNDK 75.57, -0.52 -0.68%) expanded its SSD product line with a new high-performance, durable, water-resistant portable SSD. Co also announced availability of the new SanDisk X400 SSD, the world's thinnest one terabyte M.2 solid state drive
MPS, a mutual protection organization for doctors, dentists and professionals, has selected Accenture (ACN 102.16, -0.20 -0.20%) to help the organization improve the experience it provides members. Accenture will work with Avanade and Sapiens on this initiative.
Elsewhere in the technology space:
Netflix (NFLX) issued an update stating its services are now available in more than 190 countries, and that it continues to explore options for providing its service in China.
SPS Commerce (SPSC 64.64, -2.15 -3.22%) acquired ToolBox Solutions for about $18.4 million in cash and $4.5 million in stock. The company anticipates the acquisition to negatively impact Adjusted EBITDA by about $800K and expects the acquisition to be accretive to Adjusted EBITDA starting in the first quarter of 2017.
T-Mobile US (TMUS 40.05, -0.17 -0.42%) preannounced Q4 subscriber metrics with net adds up 2.1 million or about 3.4% to 63 million customers.
Enzo Biochem (ENZ 4.66, -0.07 -1.48%) reached a $9 million patent infringement settlement with Agilent (A 40.73, +0.18 +0.44%).
Rubicon Project (RUBI 15.70, -0.37 -2.30%) entered into a direct advertising pact with Zynga (ZNGA 2.57, +0.01 +0.39%).
ExOne (XONE 10.49, -0.26 -2.42%) shipped eleven 3D printing machines to customers during Q4.
ON Semiconductor (ON 9.19, -0.49 -5.06%) extended tender offer to acquire Fairchild Semi (FCS 21.10, -0.09 -0.42%) until January 20.
Mobileye N.V. (MBLY 38.03, +1.90 +5.26%) signed Memorandum of Understanding with Volkswagen (VLKAY 28.14, -0.20 -0.71%) and announces a strategic partnership to explore and integrate REM into Volkswagen's fleet.
MBLY also announced at the CES conference a new mapping technology development called Road Experience Management.
Rofin-Sinar Technologies (RSTI 25.77, -0.13 -0.50%) issued a letter to shareholders stating the company is disappointed by SilverArrow Capital's outright rejection of Rofin's settlement offer and unreasonable take-it-or-leave-it counteroffer.
Sapiens Int'l (SPNS 10.61, +0.35 +3.41%) received a new contract valued at about $30 million over the next 2 years.
Applied DNA Sciences (APDN 3.14, -0.08 -2.48%) was awarded a contract to provide metal marking product valued at between $130,000-260,000 per annum.
Anadigics (ANAD 0.66, -0.01 -1.42%) received a competing bid with superior offer to acquire the company at $0.62 per share, surpassing GaAs Labs' amended offer at $0.58 per share.
Analyst actions:
CVG was upgraded to Buy from Neutral at Sidoti;
AAPL was downgraded to Neutral from Buy at Rosenblatt,
IFNNY was downgraded to Mkt Perform from Outperform at Bernstein
4:32 pm NetApp announces departure of CFO; reaffirms guidance (NTAP) :
Reaffirmed Q3 $0.66-0.71 vs $0.68 Capital IQ Consensus Estimate; revs $1.4-1.5 bln vs $1.45 bln Capital IQ Consensus Estimate
Co announced that Nick Noviello has decided to pursue another opportunity. Effective immediately, Jeffrey Bergmann, vice president of corporate finance, will assume the role of interim chief financial officer. NetApp has initiated a search process to identify a permanent CFO and will consider both internal and external candidates.
Co also announced organizational changes that will flatten and streamline the structure and enable focused execution in driving efficiency and velocity in the business.
4:14 pm EXFO reports Q1 IFRS EPS of $0.03 vs $0.04 Capital IQ Consensus Estimate; revs -2.7% y/y to $55.2 mln vs $57.2 mln Captial IQ Consensus Estimate (EXFO) :
Co sees Q2 revs of $52-57 mln vs $53.7 mln Capital IQ consensus; sees Q2 EPS of $0.04-0.08 vs $0.03 Capital IQ consensus. IFRS net earnings include $0.01/share in after-tax amortization of intangible assets and stock-based compensation costs.
Bookings attained $58.5 mln in the first quarter of fiscal 2016 compared to $54.2 mln in the same period last year and $54.9 mln in Q4; Adjusted EBITDA totals $5.3 mln, 9.6% of sales.
4:20 pm : The major averages ended their midweek session sharply lower with the S&P 500 (-1.3%) registering its third consecutive decline as global markets responded to fresh international concerns and continued pressure in oil. The benchmark index settled just above its worst level of the day while the tech-heavy Nasdaq (-1.1%) outperformed.
The selloff in futures began during the Asian session even though the Shanghai Composite (+2.3%) was able to end its day in positive territory. This came on the heels of the People's Bank of China devaluing the yuan to its lowest level in five years against the dollar. Meanwhile, other Asian markets succumbed to continuing selling pressure after North Korea announced that it successfully carried out a hydrogen nuclear device test. The resulting force from the blast was equivalent to a 5.1 magnitude earthquake, but U.S. officials expressed doubt regarding the success of this trial. These two issues weighed heavily on European markets and helped to drive down oil prices from their overnight levels. Oil sunk further on the day following the weekly gasoline inventories that reported a build of 10.5 million barrels. WTI crude ended its pit session lower by 5.4% at $34.04/bbl.
Once the U.S. session began, the stock market gapped down, spending the late morning in a slow climb off its first-hour low; however, the rebound effort found resistance in the middle of today's trading range and stocks marked new lows in afternoon action. A slight rebound during the final hour helped the S&P 500 end the day eleven points above its low.
The late-afternoon dive to lows took place about 45 minutes after the release of the FOMC Minutes from the December meeting, which showed that it was generally agreed that liftoff conditions were met in December. Interestingly, that did not stop some members from voicing concerns about a "considerable" risk to the inflation outlook. Despite the December rate hike, the minutes struck a dovish tone, leading to renewed worries that the Fed may have embarked on a tightening path amid less-than-ideal macroeconomic conditions. Speaking of less-than-ideal macroeconomic conditions, the World Bank lowered its 2016 global growth forecast to 2.9% from 3.3%, blaming a slowdown in emerging markets for the downward adjustment.
Leading the downside energy (-3.6%), materials (-2.6%), telecom services (-1.7%), and financials (-1.6%) trailed while utilities (-0.2%), consumer staples (-0.3%), health care (-0.8%), and consumer discretionary (-1.0%) outperformed.
In the consumer discretionary space, Netflix (NFLX 117.68, +10.02) was able to climb above both its 100-day (111.30) and its 50-day (117.01) moving averages after the company announced that its services are now available in 190 countries. The company soared 9.3% today. Elsewhere in the space, Amazon (AMZN 632.65, -1.14) started the day in negative territory but quickly rose to its flat line within the first hour. The stock ended its day lower by 0.2% but outperformed the broader sector.
Switching to technology (-1.3%), sector heavyweights Apple (AAPL 100.70, -2.01) and Microsoft (MSFT 54.05, -1.00) trailed the market with respective losses of 2.0% and 1.8%. Apple confronted the $100.00 price level while near its low but was able to defend that position. Microsoft on the other hand ceded it 50-day moving average (54.45). Elsewhere, the high-beta chipmakers had a sub-par day evidenced by the PHLX Semiconductor Index sliding 2.8%.
Meanwhile in energy, Dow component Chevron (CVX 86.07, -3.54) paced the retreat in the broader sector with a 4.0% decline. Fellow Dow member Exxon Mobil (XOM 77.47, -0.65) was able to outperform the space despite the heavy loss in oil.
In Treasuries, the benchmark note ended the day near its high with the yield on the 10-yr lower by six basis points at 2.18%.
Today's participation was ahead of average as more than a billion shares changed hands at the NYSE floor.
Economic data included ADP Employment, Trade Balance, Factory Orders, and ISM Services:
The ADP Employment report pointed to the addition of 257,000 jobs in December while the Briefing.com consensus expected a reading of 190,000
The November Trade Balance report produced a positive headline surprise, showing the trade deficit narrowing to $42.40 billion (Briefing.com consensus $44.70 billion) from a downwardly revised $44.60 billion deficit in October (from -$43.90 billion)
However, the narrowing deficit was a byproduct of imports, which were $3.80 billion less than October, falling more than exports, which were $1.60 billion less than October
Factory orders declined 0.2% in November, which was in-line with the Briefing.com consensus estimate
November marked the third decline in factory orders over the last four months
Excluding transportation, factory orders declined 0.3%
The ISM Services Index for December dipped to 55.3 from 55.9 in November, coming in below the Briefing.com consensus estimate, which was pegged at 56.4
December marked the 71st straight month of growth for the ISM Services Index. Conversely, the ISM Manufacturing Index was at 48.2 in December, which marked the first time since June-July 2009 that it has been below 50.0 in two consecutive months.
Tomorrow's economic data will be limited to the Challenger Job Cut report, which will be released at 7:30 ET, and the weekly Initial Claims report (Briefing.com consensus 270k), which will cross the wires at 8:30 ET.
Russell 2000 -3.6% YTD
Nasdaq -3.4% YTD
Dow Jones -3.0% YTD
S&P 500 -2.6% YTD
DJ30 -252.15 NASDAQ -55.67 SP500 -26.45 NASDAQ Adv/Vol/Dec 817/1.959 bln/2145 NYSE Adv/Vol/Dec 783/1.025 bln/2301
3:40 pm :
Commodities took a hit today on broad market weakness. The dollar index traded flat/modestly lower, which helped provide a little upside to commodities, but in late-trading action, the World Bank cut its 2016 global growth forecast to 2.9% in 2016 and 3.1% in 2017, adding another negative catalysts to the space.
WTI oil futures plunged today as the near-term trend remains bearish
Front-month Feb crude dropped 5.5% today to $33.96/barrel
In other energy, Feb nat gas slipped 2.2% to $2.27/MMBtu
Gold put in a nice rally, rising $13.60 to $1091.90/oz, while Mar silver, on the other hand, ended unchanged at $13.98/oz.
Copper slid one cent to $2.09/lb
2:07 pm BlackBerry and its units introduce new platforms at CES (BBRY) :
BBRY announces a partnership with Sharecare, a digital health and wellness engagement platform, to provide consumers with better insights into their health.
BBRY unit QNX Software Systems Limited announces a new addition to its portfolio of automotive software products, the QNX Platform for ADAS. QNX also showcased advances in ADAS, V2V, V2I, and OS technologies that will enable autonomous and semi-autonomous vehicles.
1:56 pm LG Elec to collaborate on Netflix's (NFLX) global business expansion (LGEAF) :
Co announces that LG has initiated a global partnership with Netflix to facilitate the expansion of Netflix's (NFLX) global on-demand Internet streaming operations beyond the Internet TV network's already established markets (the Americas, Western Europe, Australia, New Zealand and Japan).
NFLX issued an update earlier & announced it is now available in more than 190 countries -- see 12:51
12:51 pm Netflix issues update, says now available in more than 190 countries, continues to explore options for providing its service in China (NFLX) :
Following Reed Hasting's keynote speech at CES, Netflix announced that it has launched its service globally, simultaneously bringing its Internet TV network to more than 130 new countries around the world. The development makes Netflix's service now available in more than 190 countries.
In 2016, the company plans to release 31 new and returning original series, two dozen original feature films and documentaries, a wide range of stand-up comedy specials and 30 original kids series -- available at the same time to members everywhere.
Netflix will not yet be available in China, though the company continues to explore options for providing the service. It also won't be available in Crimea, North Korea and Syria due to U.S. government restrictions on American companies.
Netflix today added Arabic, Korean, Simplified and Traditional Chinese to the 17 languages it already supports.
The company also made comments at the conference about launching in India
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