From Briefing.com: The broader market ended Thursday with gains of better than +1.4%. The advance was led by the Nasdaq Composite which added 88.94 points (+1.97%) today to close 4615.00. The S&P 500 was higher by 31.56 points (+1.67%) when the day was done to end 1921.84. The Dow Jones Industrial Average was higher by 227.64 points (+1.41%) today, ending at 16379.05. Today's action leaves the three major indices -7.8%, -6..0% and -6.0% YTD, respectively.
Economic data came in today in the form of the Initial Claims report which showed that claims increased to 284,000 from last week's unrevised rate of 277,000. Also, Continuing Claims for the week ended January 2 were 2.263 million, a 33,000 increase form the previous week. Import prices excluding oil fell 0.4% in December after declining 0.2% in November, and Export prices excluding agriculture decreased 1.0% in December after falling 0.6% in November.
Technology (XLK 40.48, +0.75 +1.89%) also rebounded from yesterday's losses, finishing just down off daily highs. Component IBM (IBM 132.83, +1.66 +1.27%) finished with nice gains as the company announced the Federal Reserve Bank of Atlanta's Retail Payments Office selected the company to modernize its clearing house processing platform. Other sectors finished Thursday XLE +4.30%, XLV +2.68%, IYZ +1.86%, XLU +1.51%, XLB +1.35%, XLI +1.19%, XLF +0.87%, XLY +0.72%, XLP +0.47% as Energy led the rally.
Chinese Tech names (QQQC 20.41, +0.65 +3.29%) were among the best performers today as overnight, the People's Bank of China injected 160 billion yuan in reverse 7-day repos and continued to pin the yuan near its recently higher levels. While this intervention did little to stop a selloff in broader regional markets, the Shanghai Composite was able to advance 2.0%. QQQC components which finished the day higher included SOHU +5.67%, SINA +4.42%, BIDU +3.73%, VNET +2.94%, NQ +2.86%, YY +1.86%.
Semis (SOX 601.57, +12.08 +2.05%) were also among the best performers today as trading in the sector only briefly dipped below flat lines early in the session, then rallied the rest of the day on broader market strength. Component Taiwan Semi (TSM 21.82, +1.34 +6.54%) traded strong today as the company reported better than expected Q4 results. Other SOX names which grabbed nice gains today included SNDK +4.22%, LRCX +4.15%, SWKS +3.83%, AMAT +3.77%, ASML +3.61%, QCOM +3.54%, KLAC +2.90%, INTC +2.62%, TER +2.43%, ON +2.41%.
Shares of CTSH +4.21%, STX +3.35%, WU +3.25%, FB +3.07%, YHOO +2.99%, MSFT +2.85% led the advance in the S&P 500 Information Technology sector (677.84, +13.42 +2.02%) today as broader market strength today took the sector higher.
Other notable news items among sector components:
Best Buy (BBY 26.43, -2.83 -9.67%) reported Domestic revenue during the Holiday period of $10.1 billion decreased 0.8% versus last year, driven mostly by a comparable sales decline of 1.4%. The company also expects non-GAAP operating income rate decline of about 15 to 30 basis points versus their previous expectation of a rate decline of 25 to 45 basis points. As a result, the company expects a negative $0.01 to negative $0.03 year-over-year non-GAAP diluted EPS impact in Q4 FY16.
Dialog Semi's (DLGNF 32.00, flat) Board has determined not to revise its proposal to acquire
Atmel (ATML 7.93, -0.03 -0.38%). Dialog will inform Atmel that it will waive the remainder of the four business day notice period to which Dialog is entitled under its merger agreement with Atmel.
Elsewhere in the technology space:
Seagate (STX 32.11, +1.04 +3.35%) announced the French Alternative Energies and Atomic Energy Commission has selected the Seagate ClusterStor L300 for its GS1K HPC storage needs.
IBM (IBM) announced the Federal Reserve Bank of Atlanta's Retail Payments Office has selected IBM to modernize its automated clearing house processing platform.
GoPro (GPRO 12.48, -2.13 -14.58%) lowered its Q4 revenue guidance to $435 million from $500-550 million on lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter. The company also lowered its non-GAAP gross margin expectations to 34.5% and 35.5% from 45.5-46.5%. Management also noted Zander Lurie has resigned from his role as Senior Vice President of GoPro Entertainment and has been appointed to serve on GoPro's board of directors.
WebMD Health (WBMD 49.12, -4.09 -7.69%) announced that in light of recent news reports, the company is reporting that it is not currently in any negotiations to be acquired.
Ericsson (ERIC 9.22, +0.12 +1.32%) extended its patent cross license agreement with Chinese-based Huawei. The company also reaffirmed expectations for full year 2015 IPR revenues of SEK 13-14 billion.
Nokia (NOK 7.38, +0.11 +1.51%) and Alcatel-Lucent (ALU 4.05, +0.07 +1.76%) announced first day of combined operations. NOK also reopened the public exchange offer for ALU shares in France and US.
In reaction to quarterly results:
Taiwan Semi (TSM) reported Q4 earnings of TWD2.81 per share on revenues which fell 8.5% year-over-year to TWD203.52 billion. The company also issued in-line guidance for Q1 of revenues of NT$198-201 billion.
Infosys (INFY 17.85, +1.39 +8.44%) reported Q3 EPS of $0.23 per share on revenues which rose 16.6% year-over-year to $2.41 billion. INFY also guided FY16 revenues of +12.8-13.2% year-over-year in constant currency versus the prior range of +11.5-13.5%.
WNS (WNS 27.44, +1.33 +5.09%) reported Q3 EPS of $0.50 per share of revenues which rose 6.2% year-over-year to $144.4 million. WNS also guided FY16 EPS in the range of $1.86-1.90, up from the prior range of $1.83-1.91. The company also narrowed FY16 revenues guidance to $528-532 million from $523-539 million.
Analyst actions:
SIMO was upgraded to Buy from Hold at Standpoint Research,
INFY was upgraded to Outperform from Perform at Credit Suisse,
RTEC was upgraded to Buy from Hold at Stifel;
NVDA and FFIV were downgraded to Underweight from Equal Weight at Barcalys,
TEL was downgraded to Neutral from Buy at Longbow,
ATML was downgraded to Mkt Perform from Strong Buy at Raymond James,
UBNT was downgraded to Mkt Perform from Outperform at Bernstein,
YELP was downgraded to Sell from Neutral at B. Riley & Co
4:41 pm Analog Devices sees Q1 revenue in the range of $745-765 mln, Capital IQ consensus $829 mln; Sees EPS in the range of $0.51-0.55, Capital IQ consensus $0.69 (ADI) :
Co announced it expects revenue in the first quarter of fiscal 2016 to be in the range of $745-765 mln (Prior $805-855 mln). The lowered revenue outlook is the result of weaker than forecasted customer demand in the company's portable consumer business unit, which began in December, and is expected to continue into the second fiscal quarter. Demand trends across ADI's core markets of industrial, automotive, and communication infrastructure are tracking within the range of prior expectations. ADI is forecasting non-GAAP gross margin of approximately 62% in the first quarter compared to its original forecast due to an inventory reserve associated with the updated revenue outlook. The company expects its non-GAAP gross margin to return to its model range in the second fiscal quarter of 2016.
4:16 pm Universal Display: USPTO has granted co patent for a new family of 'Phosphorescent Emitters' and patent for a novel 'OLED Display Architecture' (OLED) :
4:13 pm Intel beats by $0.11, reports revs in-line; guides Q1 revs in-line; updates FY16 guidance to include Altera (INTC) :
Reports Q4 (Dec) earnings of $0.74 per share, $0.11 better than the Capital IQ Consensus of $0.63; revenues rose 1.3% year/year to $14.91 bln vs the $14.8 bln Capital IQ Consensus. Client Computing Group revenue of $32.2 billion, down 8% YoY. Data Center Group revenue of $16.0 billion, up 11% YoY. Internet of Things Group revenue of $2.3 billion, up 7% YoY.Gross margin 64.3% vs. 62% guidanceCo issues in-line guidance for Q1, sees Q1 revs of $13.6-14.6 bln vs. $13.89 bln Capital IQ Consensus; gross margin 62% (+/- 2%).Co raises FY16 revs to mid to high single digits from mid single digit growth (consensus +5.6%) after completing ALtera acquisition; sees non-GAAP gross margin 63% (+/- 2%) from 62% before Altera; lowers cap-ex to $9-10 bln from $9.5-10.5 bln.
4:25 pm : The stock market ended its Thursday affair near its best level of the day thanks to daylong rallying. The last half hour saw a bit of selling pressure, but the S&P 500 settled within x points of its high. Today's rally occurred alongside a rebound in crude oil, while dovish remarks from St. Louis's Fed President James Bullard provided extra ammunition. The tech-heavy Nasdaq (+2.0%) lead the S&P 500 (+1.7%) and the Dow Jones Industrial Average (+1.4%).
Before the opening bell, JPMorgan Chase (JPM 58.20, +0.86) reported above-consensus Q4 earnings of $1.32 per share while revenue rose 0.6% year-over-year to $22.89 billion. During the company's conference call, JPMorgan addressed its first loan loss reserve build in six years, which was driven by downgrades, specifically in the company's oil and gas portfolio. The company went on to state that oil companies have been surprisingly resilient and that they expect to see a normal cycle increase as the economy looks "pretty good."
Elsewhere, St. Louis Fed President James Bullard stated that the "very substantial" decline in energy pricing has implications for monetary policy, but Mr. Bullard still believes that four rate hikes this year "sounds about right." Interestingly, stocks surged immediately following the comments, all but ignoring his unchanged outlook for the fed funds rate path. For its part, crude oil also built on its gain, ending its pit session higher by 2.6% at $31.22/bbl.
The strength in crude helped the energy sector (+4.5%) end in the lead while health care (+2.7%), technology (+2.0%), telecom services (+1.8%), and materials (+1.4%) followed.
In the energy space, Dow components Chevron (CVX 85.47, +4.14) and Exxon Mobil (XOM 79.12, +3.47) took advantage of the advance in oil, leading the index, with respective gains of 5.1% and 4.6%. Elsewhere in the energy space, pipeline companies Kinder Morgan (KMI 13.98 +1.03) and Williams Companies (WMB 18.29, +4.68) showed relative strength, climbing 8.0% and 34.4%, respectively. The pair had a strong showing despite a 5.7% decline in natural gas to $2.14/MMbtu.
Switching to the consumer discretionary space (+0.7%), the sector was anchored by large-cap components Home Depot (HD 119.62, -1.78) and Lowe's (LOW 69.91, +0.01) which underperformed with performances of -1.5% and unchanged, respectively. The cyclical sector was also hurt by continued weakness in Nike (NKE 58.51, -0.27) and Netflix (NFLX 107.06, +0.50).
Despite JPMorgan's above-consensus earnings, the financial sector (+1.0%) finished its day near the bottom of the board ahead of tomorrow morning's reports from Citigroup (C 45.38, +0.19), PNC (PNC 86.87, +0.97), and Wells Fargo (WFC 50.64, +0.91).
Looking at the top-weighted technology space, the high-beta chipmakers kept pace with the broader sector, evidenced by the 2.1% gain in the PHLX Semiconductor Index. Index component, Intel (INTC 32.74, +0.83) gained 2.6% ahead of the company's earnings release set for this evening.
Treasuries surrendered their slim overnight gains amid the rally in equities, leaving the 10-yr note unchanged with its yield at 2.09%.
True to recent form, trading volume was heavy with more than 1.2 billion shares changing hands at the NYSE floor.
Today's economic data included weekly Initial/Continuing Claims and December import/export prices:
The Initial Claims report showed that claims increased to 284,000 from last week's unrevised rate of 277,000 (Briefing.com consensus 275,000)
This was above the Briefing.com consensus but within the 250,000-300,000 range that has held since July 2014.
The Department of Labor said there were no special factors influencing the latest initial claims reading, which pushed the four-week moving average up by 3,000 to 278,750.
Continuing claims for the week ending January 2 were 2.263 million, an increase of 33,000 from the previous week's revised level of 2.234 million (from 2.230 million).
The four-week moving average for continuing claims increased by 5,250 to 2.224 million.
Import prices excluding oil fell 0.4% in December after declining 0.2% in November
Export prices excluding agriculture decreased 1.0% in December after falling 0.6% in November
Tomorrow, December CPI (Briefing.com consensus +0.1%), December Retail Sales (Briefing.com consensus +0.1%) and January Empire Manufacturing Index (Briefing.com consensus -3.5) will be reported at 8:30 ET. The December Industrial Production report (Briefing.com consensus 77.5%) will cross the wires at 9:15 ET while November Business Inventories (Briefing.com consensus +0.0%) and the preliminary reading of the Michigan Sentiment Index for January (Briefing.com consensus 92.6) will both be released at 10:00 ET.
Russell 2000 -9.7% YTD
Nasdaq -7.8% YTD
Dow Jones -6.0% YTD
S&P 500 -6.0% YTD
DJ30 +227.64 NASDAQ +88.94 SP500 +31.56 NASDAQ Adv/Vol/Dec 2156/2.147 bln/907 NYSE Adv/Vol/Dec 2077/1.216 bln/1011
3:45 pm :
The dollar index traded higher today, helping weigh on commodities, such as metals
Feb gold finished out today's session -$13.70 at $1073.40/oz, while Mar silver slipped 3% to $13.77/oz
Mar copper closed two cents higher at $1.98/lb
Moving onto the energy space, natural gas futures were weak today and extended losses following the weekly EIA storage data
Feb natural gas ended the day -6% at $2.14/MMBtu. WTI oil rose some today, following severe weakness in recent weakness
Front-month Feb crude close floor trading +2.6% at $31.22/barrel
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