From Briefing.com: The broader market closed out the final trading day of January with nice gains, closing out the day at session highs. Action closed with the S&P 500 leading the way up, at the end of the day higher by 46.88 points (+2.48%) to 1940.24. The Dow Jones Industrial Average followed those gains closely, adding 396.66 points (+2.47%) today to close 16466.30. The Nasdaq Composite rounded out the bunch, higher by 107.28 points (+2.38%) to close 4613.95. This week's action took the three major indices to -5.2%, -5.6% and -8.0% YTD, respectively. The market averages started the final session of the week on a bullish note and extended the early upside momentum for much of Friday. The Bank of Japan move to adopt a negative interest rate policy for some excess reserves has been widely cited for the advance.
Market data today came in the form of the Q4 GDP report which showed an annualized rate of real GDP growth of just 0.7%, down from 2.0% in Q3. The Employment Cost Index rose 0.6%, while the GDP Deflator was up 0.8% after a 1.3% increase in Q3. The Chicago Purchasing Managers Index was up 12.7 points to 55.6 from 42.9 in December. In addition, the final reading for the University of Michigan Consumer Sentiment Survey for January dipped to 92.0 from the preliminary reading of 93.3.
Technology (XLK 41.24, +1.26 +3.15%) closed out the month near session highs, as action stepped higher minute-by-minute. Shares of component Electronic Arts (EA 64.54, -5.25 -7.52%) were under pressure on the session as the company reported better than expected Q3 earnings, but was weighed down by a worse than expected Q4 guide. Other sectors finished Friday XLE +2.92%, XLB +2.89%, XLF +2.79%, XLI +2.69%, IYZ +2.47%, XLP +2.03%, XLU +2.00%, XLV +1.64%, XLY +1.09% with not a one in the red.
Semis (SOX 613.71, +26.86 +4.58%) names were strong today as two bellwethers in the sector reported quarterly earnings. Components Seagate Tech (STX 29.05, +2.30 +8.58%) and Western Digital (WDC 47.98, +2.29 +5.01%) reported quarterly results which for the most part beat expectations on the top and bottom lines. Both stocks saw some nice gains into the opening of the session, and ultimately both finished up on the day. Other SOX components which showed strength today included MU +11.58%, QRVO +7.99%, NXPI +6.40%, SWKS +6.37%, AMAT +5.82%, AVGO +5.81%, ARMH +5.74%, MRVL +5.61%, ON +5.55%.
In the S&P 500 Information Technology sector (685.91, +23.61 +3.56%), action was helped by a majority of big names reporting quarterly results. Among them, credit card giant Visa (V 74.49, +5.16 +7.44%) saw strong upside today as the company reported quarterly results after last night's bell. Another outperformer on the session was component Microsoft (MSFT 55.09, +3.03 +5.83%), which also reported quarterly results last night and also saw nice gains on Friday. Other components which closed the session TSS +5.77%, XRX +5.63%, PYPL +5.55%, ADBE +5.45%, TDC +5.18%, JNPR +5.08%, NVDA +4.42%, CSC +4.26%, FSLR +4.22%, RHT +3.95%.
Other notable news items among sector components:
Xerox (XRX 9.75, +0.52 +5.63%) to separate into two independent publicly-traded companies. XRX also reported Q4 results, and announced that it entered into an agreement with Carl Icahn whereby Icahn will appoint three directors to the Board.
A Bloomberg article highlighted that Apple (AAPL 97.34, +3.25 +3.45%) is working on a wireless-charging phone.
Harris (HRS 86.97, +2.18 +2.57%) received a $316 million cost-plus-award-fee contract modification to build two payloads for the fourth and fifth weather satellites for NASA.
Cisco Systems' (CSCO 23.79, +0.69 +2.96%) Chief Development Officer Pankaj Patel notified the company of his decision to step down during the second half of 2016.
IBM (IBM 124.79, +2.57 +2.10%) has closed the acquisition of The Weather Company's B2B, mobile and cloud-based web-properties, weather.com, Weather Underground, The Weather Company brand and WSI, its global business-to-business brand. The cable TV segment was not acquired by IBM, but will license weather forecast data and analytics from IBM under a long-term contract.
Intel (INTC 31.02, +1.05 +3.50%) promoted two corporate officers and elected six new corporate vice presidents. Steven Fund was promoted from corporate vice president to senior vice president; Peng Bai was elected corporate vice president; Brice Hill was elected corporate vice president; Christina Min was elected corporate vice president; Matthew Smith was elected corporate vice president; Weng Kuan Tan was elected corporate vice president; Jason Waxman was elected corporate vice president.
Yahoo! (YHOO 29.51, +0.76 +2.64%) launched The Vertical with Woj, a new basketball-centric digital destination run by Yahoo NBA insider, Adrian Wojnarowski.
Amphenol (APH 49.57, +1.11 +2.29%) confirmed its Board of Directors approved the Q1 dividend of $0.14 per share. Will be paid on or about April 6, 2016 to shareholders of record as of March 15, 2016.
Elsewhere in the technology space:
BlackBerry (BBRY 7.12, +0.25 +3.64%) received TSX approval to increase maximum number of common shares that may be repurchased to 27 million from 12 million.
Intelsat (I 3.34, +0.04 +1.21%) appointed Jacques Kerrest as CFO.
USA Tech (USAT 3.22, +0.24 +8.05%) named Leland Maxwell interim CFO.
In reaction to quarterly results:
Microsoft (MSFT) reported better than expected Q2 EPS and revenues of $0.78 and $25.69 billion, respectively. On the conference call, MSFT guided for Q3 productivity and business revs of $6.4-6.6 billion, Q3 intelligent cloud segment revs of $6.1-6.3 billion, Q3 personal computing revs of $9.1-9.4 billion, and Q3 OpEx of $7.7-7.8 billion.
Visa (V) reported better than expected Q1 EPS of $0.69 on worse than expected revenues of $3.56 billion. Also, the company expects client incentives as a percent of gross revenues in the range of 17.5% to 18.5% range.
MasterCard (MA 88.77, +5.39 +6.46%) reported better than expected Q4 EPS of $0.79 on worse than expected revenues of $2.52 billion. The company also guided on the conference call for FY16 at low end of FY16-18 outlook (low double digit net rev CAGR, mid-teens EPS CAGR) due to FX headwinds.
Electronic Arts (EA) reported better than expected Q3 EPS of $1.83 on slightly worse than expected revenues of $1.803 billion. The company also issued worse than expected guidance for the Q4 period of EPS of $0.40 and revenues of $875 million.
Xerox (XRX) reported better than expected Q4 EPS of $0.32 on revenues which fell 7.6% year-over-year to $4.65 billion. The company also issued guidance for the Q1 and FY16 period which was better than expected. For Q1, XRX sees EPS of $0.21-0.24 and for FY16, XRX sees EPS of $1.10-1.20.
NetSuite (N 69.37, +3.84 +5.86%) reported better than expected Q4 EPS of $0.05 on revenues which rose 30.6% year-over-year to $206.23 million. The company also guided Q1 EPS of $0.02-0.03 on revenues of $212-214 million. Also, management guided for FY16 EPS of $0.40-0.45 on revenues of $950-970 million.
Seagate Tech (STX) reported better than expected Q2 EPS and revenues of $0.82 and $2.99 billion, respectively.
Solera (SLH 54.26, -0.26 -0.48%) reported worse than expected Q2 EPS and revenues of $0.72 and $308 million, respectively.
Companies reporting quarterly results Monday morning: CYOU, NSSC, SOHU
Analyst actions:
SNDK was upgraded to Buy from Hold at Needham,
JNPR was upgraded to Outperform from Mkt Perform at Bernstein,
FLEX was upgraded at Raymond James and Stifel,
N was upgraded to Buy from Hold at Canaccord Genuity,
DST was upgraded to Outperform from Neutral at Robert W. Baird,
MSCC was upgraded to Outperform from Market Perform at Wells Fargo,
TEAM was upgraded to Mkt Outperform from Mkt Perform at JMP Securities,
PCCC was upgraded to Mkt Perform from Underperform at Raymond James,
CPSI was upgraded to Buy from Hold at Topeka Capital Mkts;
SYNA was downgraded to Buy from Strong Buy at Needham,
CY was downgraded to Neutral from Buy at Sterne Agee CRT,
NTCT was downgraded to Hold from Buy at Needham
Weekly Recap - Week ending 29-Jan-16True to this month's form, the past week featured a fair share of gyrations in equities, but when the week was done, the market was looking down on last Friday's close. The S&P 500 gained 1.8% for the week, narrowing its January decline to 5.1% while the tech-heavy Nasdaq ended the week higher by 0.5% to trim its January drop to 7.9%.
The major averages were able to register their second consecutive weekly gain, but relative weakness in biotechnology and large cap names like Apple (AAPL), Amazon (AMZN), and Qualcomm (QCOM) kept the tech-heavy Nasdaq behind the broader market. Amazon reported below-consensus results while Apple and Qualcomm beat estimates, but cautious guidance from the two induced profit taking in their respective shares. To be fair, Facebook (FB) and Microsoft (MSFT) provided some counterbalance in the Nasdaq after both reported above-consensus results.
However, it wasn't all earnings as the last week of January featured a fair dose of central bank talk and activity. The Federal Reserve released its January statement on Wednesday, leaving the door open to the potential of four rate hikes taking place before the end of 2016. Meanwhile, the Bank of Japan took a step in the opposite direction by announcing the introduction of negative interest rates into its policy arsenal. Instead of paying interest, the central bank will now charge a rate of 0.1% to accounts held by financial institutions. The decision was spurred by a 5-4 vote, leading to a slide in the yen while the Nikkei and other global equity markets surged on Friday.
The Bank of Japan decision weighed on the yen, leading to a 220-pip (+1.9%) spike in the dollar/yen pair (121.05). The currency pair returned to late December levels while global equities surged, reflecting speculation among investors that actions from the BoJ may get in the way of the Federal Reserve's tentative plan for four rate hikes in 2016.
Eight sectors registered weekly gains between 0.7% (materials) and 4.3% (telecom services), but only three groups ended January in the green with consumer staples, utilities, and telecom services logging respective monthly gains of 0.5%, 4.9%, and 5.5%. On the flip side, the materials sector was the weakest performer, falling 10.6% in January while energy saw the slimmest January decline, dropping 3.1%.
Index Started Week Ended Week Change % Change YTD %
DJIA 16093.51 16466.30 372.79 2.3 -5.5
Nasdaq 4591.18 4613.95 22.77 0.5 -7.9
S&P 500 1906.90 1940.24 33.34 1.7 -5.1
Russell 2000 1020.76 1035.38 14.62 1.4 -8.8
9:02 am BlackBerry received TSX approval to increase maximum number of common shares that may be repurchased to 27 mln from 12 mln (BBRY) :
The co received approval from the Toronto Stock Exchange to amend its current normal course issuer bid in order to increase the maximum number of common shares that may be repurchased from 12,000,000 common shares, or 2.5% of the public float as at June 22, 2015 (the reference date for the NCIB), to 27,000,000 common shares, or 5.8% of the public float. BlackBerry also announced that it has entered into an automatic purchase plan with its designated broker to allow for purchases of up to 2,685,524 common shares in connection with the NCIB. Under TSX rules, BlackBerry is allowed to purchase daily, through the facilities of the TSX, a maximum of 578,619 common shares representing 25% of the average daily trading volume, as calculated per the TSX rules.The co does not expect that the amended NCIB will have a significant impact on BlackBerry's cash balance.
8:02 am Seagate Tech beats by $0.11, beats on revs (STX) :
Reports Q2 (Dec) earnings of $0.82 per share, $0.11 better than the Capital IQ Consensus of $0.71; revenues fell 19.2% year/year to $2.99 bln vs the $2.94 bln Capital IQ Consensus.Gross Margin 24.8%.Operating cash flow was $382 mln.
2:12 am Canadian Solar to receive a financing package of up to $70 mln in loans and equity investment from IFC (CSIQ) :
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