From Briefing.com: The broader market ended Monday with notable declines, snapping an optimistic end to last week. The fall was led by the Nasdaq Composite, which lost 72.69 points (-1.58%) today to close 4518.49. The S&P 500 was down 29.82 points (-1.56%) when the day was done to 1877.08. The tamest of losses was in the Dow Jones Industrial Average, which pressured by oil, lost 208.29 points (-1.29%) to 15885.22. Declines steepened as the final hour of trading brought the three major indices to their knees, with all three ending the day at session lows.
Pressure began as oil futures slid into the open, and remained slick as the session progressed. Eventually, March Crude Oil futures fell $1.71 (-5.34%) to $30.34/barrel in pit trading, but continued the decline, slipping into the sub-$30-level in electronic trading. Furthering the oil pressure, early this morning, Iraq's oil ministry reported that oil production surpassed 4.1 million barrels a day in December. This underscored supply glut worries that were recently compounded by the lifting of international sanctions against Iran. Additionally, market participants await the Federal Reserve policy meeting on Wednesday and the advance estimate for Q4 GDP on Friday.
Technology (XLK 39.91, -0.47 -1.16%) was among the worst performing sectors, also ending at session lows. Shares of component SanDisk (SNDK 61.74, -5.68 -8.42%) were pressured on the session as the shares were downgraded to an Underperform rating at Credit Agricole ahead of the market open. Other sectors closed the session XLE -4.66%, XLB -3.19%, XLF -2.02%, XLI -1.23%, XLY -1.15%, XLV -0.93%, XLP -0.89%, XLU -0.84%, IYZ -0.49% as Energy weighed, and Telecoms provided some relief.
Resisting most of the broader market action to the downside were Telecoms (FCOM 25.80, -0.06 -0.23%). The sector displayed relative strength (albeit closing at a modest loss) as component AT&T (T 35.00, -0.14 -0.40%) disclosed it expects a record noncash, pre-tax gain of about $2.2 billion related to the annual re-measurement of pension and post-employment benefit plans. Components which displayed strength like the broader sector today included WIN +2.4%, EGHT +2.0%, TDS +0.7%, USM +0.7%, TMUS +0.1%.
Action to the downside today was led by Internet (FDN 65.14, -1.14 -1.72%) names. Component Twitter (TWTR 17.02, -0.82 -4.60%) was downgraded this morning to a Hold rating at Stifel following the announcement of executive departures from the company. Four executives, including Alex Roetter and Kevin Weil, who have run all of the product and engineering together the last eighteen months, Katie Stanton, who led the media team, and Skip Schipper, who was vice president of human resources all informed TWTR they have chosen to leave the company.
Today, the S&P 500 Information Technology sector (663.14, -9.21 -1.37%) was weak, as broader market action took the sector to session lows as the bell rang. Component Yahoo! (YHOO 29.78, +0.03 +0.10%) displayed relative strength in a session pressured by the broader market decline on the heels of a premarket upgrade by Pivotal Research Group to a Buy rating. Other components which displayed relative weakness today included EA +0.81%, CTSH +0.68%, MSI +0.61%, XRX +0.33%, JNPR +0.27%, FFIV +0.16%, MCHP +0.14%.
Other notable news items among sector components:
A Bloomberg article detailed an agreement by Alphabet (GOOG 711.67, -13.58 -1.87%) to pay $185 million to the UK regarding a tax dispute.
Analog Devices (ADI 51.05, -0.33 -0.64%) introduced a phased-locked loop (PLL) synthesizer with integrated voltage-controlled oscillator (VCO) that allows mobile network operators to improve cellular base station performance and the quality of wireless service.
F5 Networks (FFIV 93.92, +0.15 +0.16%) named Mike Convertino Chief Information Security Officer.
Western Digital (WDC 42.47, -2.28 -5.09%) entered into a patent cross-license agreement with IBM (IBM 122.08, -0.47 -0.38%), acquired more than 100 patent assets.
According to The Information, Amazon (AMZN 596.53, +0.15 +0.03%) may work with Alphabet's (GOOG) subsidiary Google's Android on a smartphone instead of marking its own phone.
Broadcom (BRCM 54.05, +0.01 +0.02%) announced multiple customer products based on the BCM3390 cable modem silicon have achieved the industry's first DOCSIS 3.1 certification.
Xilinx (XLNX 47.51, -0.21 -0.44%) announced a demonstration of its next generation Video Over IP, Processing and Connectivity solutions for the Broadcast and Pro A/V industry at ISE 2016.
Accenture (ACN 101.75, -0.48 -0.47%) has been selected by a US-based financial institution to modernize its life and annuity business and support continuous process improvement through the implementation of the Accenture Life Insurance & Annuity Platform (ALIP).
IBM (IBM) announced Indian-retailer Chumbak has selected IBM Cloud to ensure seamless operation of business processes to fast-track its growth.
Elsewhere among technology names:
GrubHub (GRUB 18.71, -0.46 -2.40%) announced initiatives to enhance shareholder value. The company sees revenues at the high end of guidance, EBITDA above guidance. Also, the Board authorized a $100 million stock buyback.
Rambus (RMBS 11.20, -0.20 -1.75%) extended its patent license agreement with Advanced Micro Devices (AMD 2.12, +0.10 +4.95%).
AT&T (T) disclosed it expects to record Q4 noncash, pre-tax gain of about $2.2 billion related to the annual re-measurement of pension and postemployment benefit plan.
Agilent (A 37.61, -0.37 -0.97%) subsidiary announced expanded FDA approval of complementary diagnostic test to include melanoma.
Wi-LAN (WILN 0.99 -0.03 -2.94%) entered into a license agreement with Thermo Fisher (TMO 134.73, -0.56 -0.41%).
Net 1 UEPS Techs (UEPS 10.43, +0.19 +1.86%) has acquired the remaining 56% of Transact24 Limited.
USA Tech (USAT 2.90, -0.06 -2.03%) acquired VendScreen for $5.6 million.
Cray (CRAY 36.49, +3.42 -10.34%) received a $36 million upgrade contract in Europe.
TowerJazz (TSEM 11.98, -0.01 -0.08%) defended itself against short seller thesis, calling the report false and misleading.
Zhaopin (ZPIN 15.82, -0.19 -1.19%) announced Robert Pu as new CFO, replacing James Guo, effective Feb 29.
Anadigics (ANAD 0.68, +0.03 +4.60%) announced that a competing bidder has made an unsolicited further amended offer to acquire the company at a price of $0.76 per share.
Analyst actions:
DBD and NCR were upgraded to Buy from Neutral at Northcoast,
YHOO was upgraded to Buy from Hold at Pivotal Research Group,
PYPL was upgraded to Neutral from Sell at Monness Crespi & Hardt,
INTC was upgraded to Overweight from Equal Weight at Macquarie,
DGII was upgraded to Buy from Neutral at Sidoti,
RSYS was upgraded to Buy from Hold at Needham,
ENTG was upgraded to Overweight from Equal Weight at Pacific Crest;
TWTR was downgraded to Hold from Buy at Stifel,
SNDK was downgraded to Underperform from Outperform at Credit Agricole,
HDP was downgraded to Perform from Outperform at Oppenheimer
4:13 pm Rambus beats by $0.03, beats on revs; guides Q1 revs in-line, FY16 rev above estimates, which likely includes Smart Card Software, acquired for GBP 64.7 mln in cash (RMBS) :
Reports Q4 (Dec) earnings of $0.18 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.15; revenues rose 6.7% year/year to $76.8 mln vs the $73.72 mln Capital IQ Consensus, primarily due to higher royalty revenue from SK hynix, IBM and the renewal of our patent license agreement with Toshiba in the fourth quarter of 2015 as well as higher contract revenue, offset by lower royalty revenue from Renesas and STMicroelectronics.Co issues in-line guidance for Q1, sees Q1 revs of $71-75 mln vs. $73.23 mln Capital IQ Consensus Estimate. Co issues guidance for FY16, sees FY16 revs of $310-325 mln (including Smart Card Software and may not compare to) $293.99 mln Capital IQ Consensus. Co has acquired Smart Card Software Ltd which includes Bell Identification Ltd (Bell ID) and Ecebs Ltd (Ecebs) through the purchase of all outstanding shares of Smart Card Software Ltd., for 64.7M in cash. As part of this acquisition, the advanced mobile payment platform developed by Bell ID, along with the smart ticketing platform created by Ecebs, will be incorporated into the Rambus Cryptography Research Division. Rambus expects the acquisition to be accretive to pro forma earnings within the first twelve months.
4:08 pm Sanmina reports EPS in-line, misses on revs; guides Q2 EPS above consensus, revs in-line (SANM) :
Reports Q1 (Dec) earnings of $0.58 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.58; revenues fell 9.9% year/year to $1.53 bln vs the $1.59 bln Capital IQ Consensus. Co issues guidance for Q2, sees EPS of $0.55-0.59, excluding non-recurring items, vs. $0.52 Capital IQ Consensus Estimate; sees Q2 revs of $1.55-1.65 bln vs. $1.57 bln Capital IQ Consensus Estimate.
4:20 pm : The stock market ended its first session of the week under heavy selling pressure, pinned down by declining oil prices, added selling pressure in the financial sector, a decidedly poor showing from the small-cap stocks and a violation of a technical support level at 1890 for the S&P 500. The biggest loser of the day was the Russell 2000 (-2.3%). It was followed by the Nasdaq Composite (-1.6%), the S&P 500 (-1.6%), and the Dow Jones Industrial Average (-1.3%).
There was weakness from the start of today's trading and not a whole lot of buying interest in general throughout the session. The lack of buying interest stemmed in part from an understanding that the week ahead contains a number of potentially important market-moving catalysts:
Earnings results from the likes of Apple (AAPL 99.41, -2.01), Amazon.com (AMZN 596.53), Boeing (BA 124.04, -0.60), and Ford (F 11.98, -0.16) to name a few luminaries
The Federal Open Market Committee meeting on Wednesday
The Bank of Japan meeting on Thursday; and
The advance estimate for fourth quarter GDP, which the Atlanta Fed's GDPNow model forecast is for just 0.7% real growth
The weakness in oil prices began overnight as supply concerns once again took root. Selling pressure intensified late in the day as the commodity settled its pit session down 5.8% at $30.34 per barrel. Selling pressure in the stock market picked up with the drop to session lows for oil and persisted into the close as extended trading action took oil prices even lower.
The energy sector (-4.5%) was the worst-performing sector today and was followed by the materials (-3.3%) and financials (-2.3%) sectors. The telecom services (-0.3%), consumer staples (-0.8%), and utilities (-0.9%) sectors exhibited relative strength but still finished lower for the day.
The technology sector (-1.4%) reversed sharply intraday as large-cap constituents Alphabet (GOOGL 733.62, -11.84), Facebook (FB 97.01, -0.93), and Apple went on the defensive. The three companies declined between 1.0% and 2.0%. Alphabet is set to report earnings after the bell next Monday while Facebook reports after the close on Wednesday, and Apple reports after Tuesday's close.
The consumer discretionary space (-1.2%) was also under pressure, yet gains in Amazon.com and McDonald's (MCD 119.20, +0.80) helped keep losses in check. McDonald's was a top-performing Dow component after the company impressed investors with its latest earnings report and a reassuring-sounding outlook.
The Dow Jones Transportation Average (-1.9%) for its part had a tough day courtesy of weakness in many of its components, but primarily the railroads: Kansas City Southern (KSU 65.20, -2.21), CSX (CSX 21.97, -1.20), and Union Pacific (UNP 68.79, -1.20).
The weakness in the transports pressured the industrials sector (-1.3%), which also had to deal with a Goldman Sachs downgrade of Caterpillar (CAT 57.91, -0.50) to "Sell" from "Neutral." in other developments, Johnson Controls (JCI 34.21, -1.39) and Tyco (TYC 34.15, +3.56) announced a merger, although that news didn't do anything to help turn the tide of selling interest in the broader market.
The lightly-weighted telecom services outperformed the broader market thanks to a strong showing from Verizon (VZ 47.03, -0.01).
Treasuries ticked higher throughout today's session as equities declined. The benchmark note ended its day on its high with the yield on the 10-yr note lower by four basis points at 2.01%.
Today's participation was lighter than the recent trend with only one billion shares changing hands on the NYSE floor.
There were no major U.S. economic releases today, although there were some focal points of weakness that included a disappointing trade balance report out of Japan, which featured an 8.0% year-over-year decline in exports, and a poor reading from the Dallas Fed Manufacturing Survey.
Tomorrow's economic data includes November's Case-Schiller 20-city Index (Briefing.com consensus 5.8%), the FHFA Housing Price Index for November, and January's Consumer Confidence report. DJ30 -208.29 NASDAQ -72.69 SP500 -29.82 NASDAQ Adv/Vol/Dec 724/1.778 bln/2266 NYSE Adv/Vol/Dec 468/1.024 bln/2641
3:40 pm :
Oil prices lost steam today following the notable run seen late last week
In floor trading today, Mar crude oil finished down 5.3% lower at $30.34/barrel
In electronic trade, Mar crude extended losses, falling just below $30/barrel minutes ago
In other energy, Mar natural gas gained one cent to end at $2.15/MMBtu Precious metals held some gains, largely driven by weakness in the dollar index
Feb gold rose $8.40 today to end at $1104.50/oz. Mar silver finished +1.1% at $14.24/oz
Copper slipped one cent to $1.99/lb
Advancers & Decliners
NYSE AMEX NASDAQ BB
Advancing Issues 480 (15%) 415 (29%) 653 (24%) 82 (38%)
Declining Issues 2,615 (83%) 969 (69%) 1,969 (73%) 88 (41%)
Unchanged Issues 49 (2%) 27 (2%) 58 (2%) 45 (21%)
Total Issues 3,144 1,411 2,680 215
New Highs 16 3 11 1
New Lows 97 19 103 36
Up Volume 461,059,516 (845%) 218,974,164 (28%) 307,613,944 (16%) 46,209,506 (4%)
Down Volume 3,829,440,637 (7015%) 561,672,731 (71%) 1,603,218,507 (84%) 151,122,915 (12%)
Unchanged Volume 59,055,094 (108%) 12,814,276 (2%) 9,056,002 (0%) 1,039,951,804 (84%)
Total Volume 54,587,9511 793,461,1711 1,919,888,4531 1,237,284,2251
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