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From Briefing.com: Weekly Recap - Week ending 04-Mar-16The stock market enjoyed its third consecutive week of gains that put the S&P 500 back above its 100-day moving average (1999.8) for the first time since late December. The benchmark index spiked 2.7% for the week, extending its three-week run to 7.3% while the Nasdaq outperformed, climbing 2.8% this week and 8.8% over the past three weeks.

U.S. equity indices soared alongside their counterparts in Japan (+5.2%), Hong Kong (+4.2%), China (+3.9%), Germany (+3.3%), and France (+3.3%) during what was a bit of a peculiar week. Specifically, the week started amid rising stimulus hopes after disappointing manufacturing data from China reinforced expectations for a global slowdown, but as the week continued, the attitude went from "worse than expected" to "better than feared," essentially leaving a bad-is-good (more stimulus) and good-is-good (more growth) dynamic in place. This idea was on full display on Friday when investors received a February Employment Situation Report, which showed a surprising divergence. Namely, nonfarm payrolls increased by a healthy 242,000 (Briefing.com consensus 190,000) with upward revisions to January and December, but February average hourly earnings were down 0.1% (Briefing.com consensus 0.2%) after being up 0.5% in January.

At first glance, the decline in average hourly earnings should be viewed as something that may detract the Fed from raising rates sooner than expected due to negative implications to consumer spending-and that is likely the message the market received and rallied behind on Friday. However, that did not stop the Atlanta Fed from revising its GDPNow first quarter GDP forecast up to 2.2% from 1.9% and specifically citing a larger contribution from real consumer spending growth (+3.3% from +3.1%) for the revision.

This could explain why, on Friday morning, the belly of the expectations curve of the fed funds futures market briefly signaled a 50.1% chance of a rate hike at the September meeting. The curve receded a bit since the morning with the market now expecting a 52.0% chance of a hike in November and a 48.9% chance of a move in September. On Monday, the fed funds futures market saw December as the next month entering into the rate hike conversation with the probability of a hike at the corresponding policy meeting running at 54.4%.

Index Started Week Ended Week Change % Change YTD %
DJIA 16639.97 17006.77 366.80 2.2 -2.4
Nasdaq 4590.47 4717.02 126.55 2.8 -5.8
S&P 500 1948.05 1999.99 51.94 2.7 -2.2
Russell 2000 1037.17 1081.93 44.76 4.3 -4.8

The broader market action closed the session with slight gains. Action in the final hour was on a slight upward trend as all three major indices tested breaking flat lines near 3 p.m. ET, but a late-day bounce took all three higher, and that is where we finished. Leading the modest advance, the Dow Jones Industrial Average gained 62.87 points (+0.37%) today to close 17006.77. The S&P 500 was up 6.59 points (+0.33%) to close 1999.99, and the Nasdaq Composite added 9.60 points (+0.20%) to close 4717.02. Today's action takes the indices to -2.4%, -2.2% and -5.8% YTD, respectively.

Market data today included nonfarm payrolls which increased by 242,000 and private sector payrolls which increased by 230,000. The unemployment rate was 4.9% in February, and January average hourly earnings were down 0.1% after being up 0.5% in January. The average workweek declined 0.2 to 34.4 hours, and the January Trade Balance report showed a widening in the deficit to $45.7 billion from a downwardly revised deficit of $44.7 billion (from $43.4 billion) for December.

Friday closed with Technology (XLK 42.42, +0.11 +0.26%) managing slight gains as component Hewlett Packard Enterprise (HPE 15.44, +1.84 +13.53%) reported better than expected Q1 EPS and in-line revenues. Other sectors closed today XLB +1.16%, XLU +1.12%, XLE +0.96%, XLP +0.42%, XLI +0.41%, XLF +0.41%, XLY -0.09%, XLV -0.24%, IYZ -0.30%.

In the S&P 500 Information Technology sector (699.68, +2.42 +0.35%), trading culminated with in a sell-off and sideways final hour of action as component Broadcom (AVGO 146.06, +8.73 +6.36%) reported better than expected Q1 EPS and revenues, driving the stock higher. Other components which closed Friday with gains included SWKS +4.15%, YHOO +2.98%, ADSK +2.66%, EBAY +1.96%, QRVO +1.61%, MCHP +1.54%, INTU +1.50%, AAPL +1.49%, JNPR +1.41%, TDC +1.40%, XRX +0.96%.

Elsewhere in the technology space:

Carmike Cinemas (CKEC 29.25, +4.14 +16.49%) to be acquired by AMC Theatres (AMC 27.02, +1.32 +5.14%) for $30.00 per share in cash.

SunEdison (SUNE 1.78, +0.26 +17.11%) and TerraForm Power (TERP 9.84, +0.36 +3.80%) entered into a settlement agreement with the shareholders of Latin America Power Holding. The agreement resolved all of the disputes among the parties regarding the termination of the acquisition of Latin America Power.

Liquidity Services (LQDT 4.85, +0.22 +4.75%) placed the winning bid equal to 64.5% of its gross resale proceeds that will be returned to the government.

INTL FCStone (INTL 27.41, +0.82 +3.08%) filed a $250 million mixed securities shelf offering.

CGI Group (GIB 42.50, -0.77 -1.78%) to repurchase 7.1 million of its shares held by Caisse de dpt et placement du Qubec. The repurchase represents $400 million investment by CGI.

In reaction to quarterly results:

Hewlett Packard Enterprise (HPE) reported better than expected Q1 EPS of $0.41 and in-line revenues of $12.72 billion. The company also guided Q2 EPS in-line at $0.39-0.43 and reaffirmed guidance for FY16 EPS of $1.85-1.95.

Broadcom (AVGO) reported better than expected Q1 EPS and revenues of $2.41 and $1.78 billion, respectively. For the Q2 period, AVGO expects revenues of $3.475-3.625 billion.

Mentor Graphics (MENT 19.70, -0.29 -1.45%) reported better than expected Q4 EPS of $0.63 on revenues which were in-line at $337.27 million. For the Q1 period, MENT sees better than expected EPS and revenues of about $0.00 and about $220 million, respectively. For the FY17 period, MENT sees EPS of about $1.68 and revenues of $1.215 billion.

Nimble Storage (NMBL 7.36, -0.89 -10.79%) reported in-line EPS for Q4 at a loss per share of $0.12, with better than expected revenues which also rose 32.0% versus last year to $90.1 million. For the Q1 period, NMBL sees EPS of ($0.27)-($0.25) on revenues of $83-86 million.

Ambarella (AMBA 42.11, -4.13 -8.93%) reported better than expected Q4 EPS of $0.64 on better than expected revenues of $68 million. For the Q1 period, AMBA sees worse than expected revenues of $55-57 million.

Companies scheduled to report quarterly results next week: LMOS, PCTI, BITA, DGLY, JW.A, SOL, ATTO, FENG, QUMU, SEMI, BOX, CMTL, MXPT, RST, SQ, VSLR, CSIQ, DATE, VNET, ABTL, CMLS, EXA, FNSR, FXCM, KTOS, QADA, PAY, VMEM

Analyst actions:

HPE was upgraded to Outperform from Mkt Perform at Bernstein,
LITE was upgraded to Buy from Hold at Jefferies;
NMBL was downgraded at JP Morgan and Piper Jaffray,
SBAC was downgraded to Market Perform from Outperform at Wells Fargo;
SPLK, NOW, MSFT, DATA, WDAY, QLIK, CRM and ORCL were initiated at Macquarie,
SPLK, QLIK and DATA were initiated at BMO Capital,
VOD was initiated with a Buy at Nomura

4:26 pm Closing Market Summary: Stocks Register Third Consecutive Weekly Advance (:WRAPX) :

The stock market ended an upbeat week on a wobbly note. The S&P 500 added 0.3% after being up 0.8% going into the late afternoon. Despite the late slip from session highs, the benchmark index still registered its third consecutive weekly advance, climbing 2.7% since last Friday.

Today's session featured something for fans of symmetry as stocks started and ended the trading day on a shaky note. The volatile action occurred in the wake of a February Employment Situation Report that left participants wondering what to make of it. On one hand, the report pointed to strong headline growth in payrolls (242,000; Briefing.com consensus 190,000), but on the other hand, average hourly earnings decreased 0.1% (Briefing.com consensus 0.2%), dropping the annualized earnings growth rate to 2.2% year-over-year from 2.5% that was observed in January. This puts the rate back in a lackluster range that has held for years and has negative implications for consumer spending.

That view likely bolstered the market's belief that a surprise rate hike in March is off the table, inviting an intraday rally in stocks. However, this argument gets a bit fuzzier when taking into account today's upward revision to Atlanta Fed's GDPNow forecast for the first quarter, which was raised to 2.2% from 1.9% on March 1. The Atlanta Fed pointed to an increase in expectations for real consumer spending growth (to +3.3% from +3.1%) as the main reason for the improved outlook.

Furthermore, shortly after the jobs report was released, the fed funds futures market saw a shift in the belly of the expectations curve, briefly signaling a 50.1% chance of a rate hike at the September meeting. The curve receded a bit since the morning with the market, at day's end, expecting a 52.0% chance of a hike in November and a 48.9% chance of a move in September. On Monday, the fed funds futures market saw December as the first month entering into the rate hike conversation with the probability of a hike at the corresponding policy meeting running at 54.4%.

Interestingly, the afternoon slide that cut the market's gain in half occurred near the 100-day moving average (1999.8) in the S&P 500 as the index tried to register its first close above that mark since December 31. The benchmark average settled just above that level (by 0.18!) after spiking off its 50-day moving average (1940.5) on Tuesday.

Seven sectors ended the day with gains, paced by materials (+1.2%), utilities (+1.2%), energy (+0.9%), and financials (+0.4%). On the flip side, health care (-0.2%) and consumer discretionary (UNCHF) lagged throughout the day while technology (+0.4%) ended just ahead of the broader market as relative strength in chipmakers helped mask some weakness among select top-weighted components. Alphabet (GOOGL 730.22, -1.37), Microsoft (MSFT 52.03, -0.32), and Facebook (FB 108.39, -1.19) lost between 0.2% and 1.1% while the PHLX Semiconductor Index (+1.1%) outperformed after Wells Fargo upgraded the chipmaker sector to 'Overweight.'

On the earnings front, SOX index component Broadcom (AVGO 146.06, +8.73) surged 6.4% in reaction to better than expected results.

The Friday advance in equities was accompanied by selling in the Treasury market. The 10-yr note ended off its low with its yield up five basis points at 1.88% after testing the 1.90% mark. Today's volatility invited increased volume as more than 1.35 billion shares changed hands at the NYSE floor.

Economic data included the Employment Situation Report and Trade Balance:

Nonfarm payrolls increased by 242,000 (Briefing.com consensus 190,000) and Private sector payrolls increased by 230,000 (Briefing.com consensus 180,000) January nonfarm payrolls revised to 172,000 from 151,000 and January private sector payrolls revised to 182,000 from 158,000 Unemployment rate was 4.9% (Briefing.com consensus 4.9%) versus 4.9% in January The U6 unemployment rate, which accounts for the total unemployed plus persons marginally attached to the labor force and the underemployed, was 9.7% versus 9.9% in January Persons unemployed for 27 weeks or more accounted for 27.7% of the unemployed versus 26.9% in January January average hourly earnings were down 0.1% (Briefing.com consensus 0.2%) after being up 0.5% in January Over the last 12 months, average hourly earnings have risen 2.2% versus 2.5% in January The average workweek declined 0.2 to 34.4 hours (Briefing.com consensus 34.6) February manufacturing workweek was unchanged at 40.8 hours Factory overtime was 3.3 hours for the third month in a row The labor force participation rate was 62.9% versus 62.7% in January The January Trade Balance report showed a widening in the deficit to $45.7 billion (Briefing.com consensus -$44.0 bln) from a downwardly revised deficit of $44.7 billion (from -$43.4 bln) for December Exports were down $3.8 billion from December while imports were down $2.8 billion. Monday's data will be limited to the 15:00 ET release of the January Consumer Credit report (Briefing.com consensus $16.50 billion).

S&P 500 -2.2% YTD Dow Jones Industrial Average -2.4% YTD Russell 2000 -4.8% YTD Nasdaq -5.8% YTD

4:01 pm Lattice Semi's CFO Joe Bedewi to leave the company (LSCC) :

Co announces the transition of Joe Bedewi, Corporate Vice President and Chief Financial Officer, who will leave the Company effective April 2, 2016. As part of the transition, Max Downing, Lattice's Vice President of Finance, has been named Interim Chief Financial Officer. A formal search for a successor Chief Financial Officer has commenced.

7:01 am Plug Power closes $30 mln loan facility with a specialty finance company (PLUG) :

The proceeds will be used for general corporate and working capital purposes, including to help finance lease transactions for certain customers. Co will discuss this loan facility and partnership in more detail on March 10, 2016 during its 2015 fourth quarter and year end results conference call.

6:55 am SunEdison and TerraForm Power (TERP) enter into settlement agreement with the shareholders of Latin America Power Holding; resolves all of the disputes among the parties regarding the termination of the acquisition of Latin America Power (SUNE) :

The parties have resolved the case on mutually acceptable terms. The parties have agreed that the arbitration proceeding between the parties will be terminated upon final payment, the related action filed in New York state court will be dismissed without prejudice and the temporary restraining order issued in that action will be vacated immediately. The parties have agreed that the acquisition of Latin America Power by SunEdison will not be completed.

The financial terms of the settlement include total payment of $28.5 million to be made by SunEdison, Inc. and/or SunEdison Holdings Corporation. The settlement imposes no payment obligations on TerraForm Power. None of the parties has admitted to any wrongdoing or liability with respect to the claims asserted in the arbitration and New York state court action, and the parties have granted each other full releases subject to the fulfillment of SunEdison's payment obligations under the settlement agreement.