From Briefing.com: The broader market closed Friday with notable losses. The decline saw the Nasdaq lose in excess of 191 points at the low of the day. Stocks did rebound off those daily lows somewhat, leaving losses across the board of worse than -2%. The Nasdaq Composite led the way down, shedding 126.59 points (-2.74%) to 4488.42. The Dow Jones Industrial Average also closed down today, with losses of 390.97 (02.39%) to 15988.08. The S&P 500 closed down 41.55 points (-2.16%) to 1880.29. YTD, today's losses leave the Nasdaq down about -10.4%, the Dow down -8.3% and the S&P down -8.0%.
Today was loaded with economic data. The Producer Price Index report for December produced a 0.2% decline as index for final demand services ticked up 0.1%. The December Retail Sales report declined 0.1% while sales ex-auto also declines 0.1%. Empire Manufacturing Survey for January registered a reading of -19.4, which was below last month's revised reading of -6.2 (from -4.6). Industrial production decline 0.4% in December, and total industry capacity utilization dipped to 76.5%. Total business inventories were down 0.2% in November and the preliminary reading for the University of Michigan Index of Consumer Sentiment for January was 93.3, up from a December reading of 92.6.dd
Technology (XLK 39.32, -1.16 -2.87%) also succumbed to the selling pressure. Component TE Connectivity (TEL 55.08, -2.36 -4.11%) was particularly weak today as shares were downgraded in the premarket session to a Neutral rating from a Buy at Longbow. Other sectors ended Friday XLE -2.89%, IYZ -2.84%, XLF -2.24%, XLY -2.05%, XLB -2.05%, XLI -1.76%, XLP -1.57%, XLV -1.40%, XLU -0.89%.
Semis (SOXX 77.69, -3.64 -4.48%) were again under pressure. Component Intel (INTC 29.76, -2.98 -9.10%) led the sector declines as the company reported Q4 results and disappointing news regarding PC demand, concerns among the company's Chinese prospects and a lackluster guide for the Q1 period. Other SOX names which closed lower included NXPI -7.86%, MU -7.86%, QRVO -7.15%, ASML -6.55%, ARMH -6.13%, SWKS -6.00%, LRCX -5.55%, NVDA -5.48%.
The Social Media (SOCL 17.45, -0.31 -1.75%) sector was also an underperformer today. Component Facebook (FB 94.97, -3.40 -3.46%) as according to reports, the company received an unfavorable ruling in a German court regarding the find-a-friend service. Other SOCL names which displayed weakness today included YNDX -7.28%, TWTR -5.58%, WB -5.42%, NTES -5.38%, GRPN -4.74%, SINA -4.70%, RENN -4.66%, P -4.55%, YHOO -3.89%.
The S&P 500 Information Technology sector (656.49, -21.35 -3.15%) did not resist the selling either. Component Analog Devices (ADI 49.82, -0.68 -1.35%) closed in the red as the company lowered certain Q1 guidance. Other components which closed in the red included ADSK -6.17%, HPQ -4.80%, CSCO -4.32%, AVGO -4.23%, QCOM -4.00%.
Other notable news items among sector components:
IBM (IBM 130.00, -2.91 -2.19%) has acquired IRIS Analytics, a privately held company specializing in real-time analytics to help combat payment fraud. Financial terms of the deal were not disclosed.
Vivendi (VIVHY 20.52, -0.09 -0.44%) announced the unwinding of its remaining hedge of 41.5 million
Activision Blizzard (ATVI 34.91, -0.49 -1.38%) shares (about 5.7% of ATVI's total common shares) and sold its entire position for net proceeds of $1.1 billion (about 1 billion).
Alliance Data (ADS 251.28, -4.96 -1.94%) reported December average receivables of $13.17 billion, up about 22% year-over-year. The delinquency rate as of December 31, 2015 was 4.2%.
Level 3 (LVLT 46.71, -1.65 -3.41%) and Alphabet's (GOOG 694.45, -20.27 -2.84%) Google reached a new multi-year, settlement-free interconnection agreement. The new arrangement is centered on the concept of bit mile balance, in which both parties commit to carrying equitable amounts of bit miles, taking into account both the amount of traffic and the distance over which that traffic is carried by each network.
Internet Brands will acquire Demandforce, a leading marketing software service provider, from Intuit (INTU 91.49, -2.83 -3.00%).
Elsewhere in the technology space:
Code Rebel (CDRB 3.66, +1.49 +68.66%) entered into a non-binding Letter of Intent to engage in a merger with Aegis Identity Software.
Digital Ally (DGLY 5.95, +0.41 +7.40%) announced that yesterday afternoon the USPTO confirmed the validity of its revolutionary auto-activation technology for law enforcement body cameras. DGLY also has filed suit in the U.S. District Court for the District of Kansas against TASER (TASR 14.63, -0.85 -5.49%) alleging willful patent infringement against TASR's Axon body camera product line.
Verifone (PAY 22.47, -1.17 -4.95%) signed an agreement to acquire AJB Software Design, a Toronto-based provider of payment gateway and switching solutions for large merchants in the U.S. and Canada.
Kyocera Corp's (KYO 42.29, -2.06 -4.64%) Kyocera Communication Systems subsidiary has made an agreement with AlpacaDB to acquire Labellio, an image recognition web service powered by deep learning. Change in ownership will take place on January 19th, 2016.
Rocket Fuel (FUEL 3.13, -0.23 -6.85%) named Eric Duerr as Chief Marketing Officer.
In reaction to quarterly results:
Intel (INTC) reported Q4 EPS which was better than expected at $0.74 on revenues which rose 1.3% year-over-year to $14.91 billion. The company reported gross margins of 64.3% for the period versus guidance of 62%. INTC also issued in-line guidance for Q1 revenues of $13.6-14.6 billion. Management also raised FY16 revenues guidance to mid-to-high single digits from mid-single digits after completing the Altera acquisition. They also see non-GAAP gross margins of 63%, plus or minus 2%, versus 62% prior to the Altera completion and capital expenditures of $9-10 billion, down from the prior $9.5-10.5 billion.
Pros Holdings (PRO 15.39, -3.89 -20.18%) reported a better than expected Q3 loss per share of $0.16 on revenues which fell 12.5% year-over-year to $40.86 million. PRO also issued downside Q4 guidance for EPS in the range of ($0.21)-($0.19) on revenues of $40-7-42.7 million.
Analog Devices (ADI) lowered certain Q1 guidance. ADI now expects Q1 revenues in the range of $745-765 million, down from the prior $805-855 million reflecting weaker than forecasted customer demand in the company's portable consumer business unit, which began in December, and is expected to continue into Q2.
Companies scheduled to report quarterly results next week: ADTN, AMD, CREE, IBM, LLTC, APH, ASML, TEL, FFIV, LOGI, PLCM, PTC, XLNX, AVT, FCS, QSII, TZOO, VZ, EGHT, DGII, MXIM
Analyst actions:
JNPR and NUAN were upgraded to Buy from Hold at Standpoint Research,
ADI was upgraded to Neutral from Reduce at Nomura,
MCHP was upgraded to Buy from Hold at Needham,
ADTN was upgraded to Buy from Hold at Drexel Hamilton,
CACI was upgraded to Outperform from Neutral at Credit Suisse,
NOK was upgraded to Buy from Hold at Argus,
EA was upgraded to Buy from Neutral at BofA/Merrill,
MKTO was upgraded to Outperform from Sector Perform at RBC Capital Mkts,
PLT was upgraded to Overweight from Neutral at JP Morgan;
TSL was downgraded to Neutral from Buy at Goldman,
TXTR was downgraded to Sell from Buy at The Benchmark Company,
FFIV and CVLT were downgraded to Neutral from Buy at Sterne Agee CRT,
PRO was downgraded to Hold from Buy at Stifel, III was downgraded to Neutral from Outperform at Macquarie
Weekly Recap - Week ending 15-Jan-16The second trading week of 2016 was not much better than the first as the stock market extended its January decline. The S&P 500 lost 2.2%, extending its January drop to 8.0%.
To be fair, volatility between Monday and Thursday left the S&P 500 flat for the week as of Thursday's close, but broad-based selling on Friday sent the benchmark index to its lowest level since October 2014. Furthermore, the S&P 500 registered its lowest weekly close since April 2014 with nine sectors posting weekly losses between 0.2% (telecom services) and 4.4% (materials). The countercyclical utilities sector (+0.7%) eked out a slim gain for the week as lower Treasury rates kept the rate-sensitive sector afloat.
Investor focus remained on China at the start of the week as the People's Bank of China took steps to stamp out speculation in the yuan. As a result, offshore yuan liquidity tightened, sending the overnight Hong Kong Interbank Offered Rate to 66.8%. The rate dropped to 2.1% by week's end, but the People's Bank of China was not done there, engaging in large-scale liquidity injections into capital markets.
Despite the fervent efforts from the PBoC, the Shanghai Composite lost 9.0% for the week, widening its January drop to 18.0%.
The dive in global equities was accompanied by selling in the energy market which pressured crude oil to its lowest level since late 2003. WTI crude ended the week lower by 11.2% at $29.45/bbl with Friday's 5.7% slide taking place amid expectations that the International Atomic Energy Agency will release a report that will pave the way to lifting oil export sanctions on Iran.
Speaking of reports, the market received the first batch of quarterly earnings with results from the financial sector coming in roughly in line with expectations. However, it is worth noting that both Citigroup (C) and JPMorgan Chase (JPM) increased their loan loss reserves for the first time in six years due to their exposure to the energy sector.
Index Started Week Ended Week Change % Change YTD %
DJIA 16346.45 15988.08 -358.37 -2.2 -8.2
Nasdaq 4643.63 4488.42 -155.21 -3.3 -10.4
S&P 500 1922.03 1880.29 -41.74 -2.2 -8.0
Russell 2000 1046.39 1007.74 -38.65 -3.7 -11.3
3:20 pm Earnings preview for the week of January 18th (:SUMRX) :
Confirmed companies reporting earnings for the week of January 18th include:
Monday (January 18)
Markets closed - Martin Luther King, Jr. Day
Tuesday (January 19)
Pre-Market: UNH, BA, DAL, MS, SCHW, MTB, CMA, FHN, SNV, EDU, WTFC, OMN
After-Hours: IBM, NFLX, AMD, WWD, CREE, LLTC, IBKR, FULT, ADTN, RNST, PNFP, OKSB
Wednesday (January 20)
Pre-Market: GS, TEL, ASML, APH, NTRS, AMTD, EAT, CBSH, UCBI
After-Hours: RJF, LOGI, PLXS, XLNX, FFIV, BGG, PTC, SLM, TCBI, CATY, CNS, CVBF, EGBN, CUBI
Thursday (January 21)
Pre-Market: VZ, UAL, TRV, UNP, LUV, PPG, BK, BBT, FITB, ORI, ALK, KEY, HBAN, GMT, MTG, WBS, BKU, FNB, PVTB, HOMB, IIIN, CBU, SASR
After-Hours: AXP, SLB, SBUX, CE, ISRG, MXIM, HXL, ETFC, RMD, SIVB, PBCT, ASB, HBHC, WAAL, FFBC, FFIN, EGHT, DGII, CSII, BMTC, VASC
Friday (January 22)
Pre-Market: GE, SYF, STI, CFG, COL, LM, KSU
After-Hours: MBFI
9:47 am Microsemi closes acquisition of PMC-Sierra (PMCS) (MSCC) :
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