From Briefing.com: 4:26 pm Maxwell Tech enters into definitive agreement to sell microelectronics product line to Data Device, a subsidiary of ILC Industries, for $21 mln in cash (MXWL) : The agreement includes all assets and certain liabilities related to the microelectronics product line. The sale transaction is expected to close by the end of April 2016.
4:18 pm Closing Market Summary: Rebound in Oil Rallies Averages (:WRAPX) :
The S&P 500 ended the Tuesday affair higher by 1.0%, taking part in a lockstep rally with crude oil. Other factors for today's gain included leadership from the heavily-weighted financial (+1.3%), health care (+0.8%), and industrial (+0.8%) sectors. The benchmark index (+1.0%) ended its day ahead of the Dow Jones Industrial Average (+0.9%) and ahead of the Nasdaq Composite (+0.8%).
Today's session began on a wobbly note as global growth concerns and earnings prospects pressured the major averages from their opening gains. Ahead of today's session the IMF lowered its 2016 growth estimate for the global economy from 3.4% to 3.2%. Meanwhile, mixed results in Alcoa's (AA 9.48, -0.26) first quarter earnings report also acted as a headwind. The company missed top-line expectations as revenue shrank 15.0% year-over-year.
On the commodities front, WTI crude began its day with a modest gain as investors eyed an upcoming meeting between oil producers in Doha. However, investors would not have to wait until Sunday for good news as reports indicated Saudi Arabia and Russia will freeze oil production at current levels even if Iran did not take part in a similar production cap. As a result, WTI crude climbed 4.1% ($42.12/bbl) before the end of its pit session. This represents a high for 2016 and a gain of 14.5% week to date.
The major averages followed the trajectory of oil after the news as the technology (+0.6%) and consumer discretionary (+0.8%) spaces recovered from some early losses. By the end of the day, all ten sectors were in the green with energy (+2.8%), financials (+1.3%), and materials (+1.2%) leading the advance.
Money center banks outperformed in the economically-sensitive financial (+1.3%) sector ahead of key earnings later this week. On that note, JPMorgan Chase (JPM 59.28, +1.08) gained 1.9% ahead of its first quarter report, which will be released tomorrow before the open. To be fair though, the rally in crude oil probably alleviated some pressure on the company as concerns about bad energy loans recede. JPMorgan Chase announced $600 million in loan loss reserves for energy and materials sector loans on February 23.
In the heavyweight health care space (+0.8%), AbbVie (ABBV 59.89, +1.39) outperformed after announcing that it received accelerated approval from the FDA for its chronic lymphocytic leukemia medication. Biotechnology ended ahead of the broader sector as Regeneron Pharmaceuticals (REGN 408.07, +11.93) extended its April gain to 13.2%.
CSX (CSX 24.99, +0.46) displayed relative strength in the industrial sector (+0.8%). The rail name is scheduled to report first quarter earnings after today's close. Elsewhere, Caterpillar (CAT 76.10, +1.47) gained 2.0% as the construction and farm equipment sub-group outperformed.
On the flipside, technology (+0.6%), consumer staples (+0.6%), and utilities (+0.7%) rounded out the leaderboard. In the influential technology sector (+0.6%), heavily-weighted Facebook (FB 110.61, +1.62) rallied as the company's CEO Mark Zuckerberg announced a new messenger platform. Meanwhile, the broader space underperformed as Juniper Networks (JNPR 23.06, -1.83) weighed on the networking sub-group. The stock fell 7.4% after the company lowered its top and bottom-line guidance for the first quarter.
The U.S. Dollar Index (94.00, +0.05) ended its day narrowly above its flat line as losses against the Canadian dollar partially offset gains against the yen and the euro. The dollar ended lower by 1.1% against the commodity-sensitive currency (1.2757). Meanwhile, the euro lost 0.2% against the dollar (1.1389) while the dollar/yen pair finished at 108.51 (+0.5%).
The Treasury complex ebbed lower as the rally in the broader market continued. The yield on the 10-yr note finished at 1.77% (+5 bps).
Participation was above the recent average as more than 951 million shares changed hands on the NYSE floor.
Today's economic data included March Import and Export Prices and the Treasury Budget for March:
Specifically, a 4.9% increase in import fuel prices in March helped drive a 0.2% increase in the price index for U.S. imports.
That is the first monthly increase since June 2015, although it would be remiss not to add that the import price index is still down 6.2% year-over-year.
Excluding fuel, import prices declined 0.1% for the third straight month with falling prices for consumer goods, food, and capital goods offsetting rising prices for nonfuel industrial supplies and materials.
Export prices, meanwhile, were unchanged in March after declining 0.5% in February, leaving them down 6.1% year-over-year. Excluding agriculture, the price index for nonagricultural exports rose 0.3% with higher prices for nonagricultural industrial supplies and materials more than offsetting falling auto prices. That was the first monthly increase for that measure since May 2015.The Treasury Budget statement for March showed a deficit of $108.0 billion. This Treasury data is not seasonally adjusted so the March deficit cannot be compared to the February surplus of $52.9 billionTomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index while March Core PPI (Briefing.com consensus 0.2%) and Retail Sales for March (Briefing.com consensus +0.1%) will be released at 8:30 ET. Finally, February Business Inventories (Briefing.com consensus -0.1%) and the Fed's Beige Book for April will be released at 10:00 ET and 14:00 ET, respectively.
Additionally, China's Trade Balance for March is tentatively scheduled to be released at 21:40 ET.
Nasdaq Composite -2.7% YTDRussell 2000 -2.7% YTDS&P 500 +0.9% YTDDow Jones +1.7% YTD3:35 pm :
The dollar index trades below 94.00, does not appear to be weighing on commodities in afternoon pit trading
Commodities, as measured by the Bloomberg Commodity Index, are up +2.0% at 80.89
Crude oil surges for the third day in a row, closing near its high of the day
May crude oil futures rose $1.65 (+4.1%) to $42.12/barrel
The April 17 Doha meeting between OPEC and non-OPEC members is approaching, regarded as a near-term catalyst to move oil prices
EIA crude oil inventory is scheduled to be released tomorrow at 10:30 am ET
Last week's inventory showed a surprise draw of -4.937 mln barrels, compared to expectations for a build of +3.1 mln barrels
API inventory data is scheduled to be released at 4:30 pm ET today
Last week's data showed a draw of -4.3 mln barrels, compared to the previous week's build of +8.8 mln barrels
Natural gas sees a sharp afternoon spike, closing near its high of the day
May natural gas futures closed $0.10 higher (+5.2%) at $2.01/MMBtu
In precious metals, gold rallies above the previous day's close in the afternoon, consolidating to close higher
June gold futures ended today's session up $2.80 (+0.2%) to $1260.90/oz
Silver sees an afternoon spike and trends upwards to close near its high of the day
May silver futures closed today's session $0.24 higher (+1.5%) at $16.22/oz
Base metal copper ends afternoon pit trading higher
May copper futures closed $0.06 higher (+2.9%) at $2.15/lb
Grain prices were more volatile than usual today, following the WASDE report
Corn and soybeans initially sold off notably, post-WASDE, but buyers stepped in and prices recovered
10:31 am Novatel Wireless sells several cellular module product lines, related IP and assets to Telit Communications (TTCNF) for an initial cash purchase price of $11 mln and conditional earn-out consideration (MIFI) :
Telit Communications has agreed to acquire several cellular module product lines, related IP and related assets from Novatel Wireless, for an initial cash purchase price of $11 million and conditional earn-out consideration, which Telit expects to be non-material.
As part of the Acquisition, Telit (TTCNF) acquired specific IP and was granted an exclusive license to other Novatel IP related to the acquired cellular module lines, including subsequent versions currently in development.
7:31 am SunOpta's unit intends to offer ~$300 mln in aggregate principal amount of senior secured second lien notes due 2023 in a private offering in the near future (STKL) :
Co announces that its subsidiary, SunOpta Foods intends, subject to market and other conditions, to offer ~$300 mln in aggregate principal amount of senior secured second lien notes due 2023 in a private offering in the near future. Co intends to use the net proceeds of the Notes offering, together with borrowings under its senior secured asset-based revolving credit facility to repay in full the term loans outstanding under the Second Lien Loan Agreement, dated October 9, 2015.Monday's tepid close was far from investors' minds as the broader market today closed higher today. Trading was led the S&P 500, which added 19.73 points (+0.97%) to 2061.72. The Dow Jones Industrial Average was up 164.84 points (+0.94%) at the close to end 17721.25. The Nasdaq Composite finished the day with the smallest gains, higher by only 38.69 points (+0.80%) to 4872.09. The broader market rallied as strength in crude oil and overall sector performance aided the advance. In market data, a 4.9% increase in import fuel prices in March helped drive a 0.2% increase in the price index for US imports. Export prices, meanwhile, were mostly unchanged in March after declining 0.5% in February, culminating in a 6.1% year-over-year decline.
Technology (XLK 44.06, +0.29 +0.66%) was modestly higher today as early losses did not hold. Component Corning (GLW 20.83, +0.22 +1.04%) wrapped up a day with solid gains as the stock was upgraded in the premarket session to a Buy rating from a Neutral at Goldman. Other sectors closed the session XLE +2.98%, XLB +1.39%, XLF +1.26%, XLV +0.81%, XLY +0.76%, XLU +0.70%, XLP +0.62%, IYZ +0.59%, XLI +0.58% with Energy leading the way higher on the back of a +4.1% gain in May crude oil futures.
In the S&P 500 Information Technology (731.96, +4.14 +0.57%) sector, trading was also pressured at the open, but ended higher. Component Juniper Networks (JNPR 23.06, -1.83 -7.35%) was pressured as the company lowered guidance for the Q1 period's EPS and revenue expectations. Other names in the sector which displayed strength included EBAY +1.50%, FB +1.49%, XRX +1.46%, AAPL +1.30%, ACN +1.14%, TEL +1.11%, TXN +1.07%, GOOG +0.95%.
Other notable news items among sector components:
Juniper Networks (JNPR) lowered guidance for Q1 EPS and revenues (which indecently are now worse than Street expectations) at $0.35-0.37 and $1.090-1.100 billion, respectively. Prior guidance for the two metrics stood at $0.42-0.46 and $1.15-1.19 billion, respectively. JNPR's management noted the update was due primarily to weaker than expected demand from the company's Enterprise segment and the timing of certain deployments of certain US and EMEA Tier 1 Telecoms.
Accenture (ACN 114.39, +1.29 +1.14%) announced the global rollout of an intelligent automation platform, Accenture myWizard, that enables smarter, more innovative and more efficient application services consisting of systems integration and application development and management.
Western Digital (WDC 43.97, -0.26 -0.59%) announced immediate worldwide availability of the new object storage-based HGST Active Archive System, SA-1000 model.
IBM (IBM 149.63, +0.38 +0.25%) announced plans to extend its global partnership with Box (BOX 12.06, +0.04 +0.33%) to provide enterprises with the choice to store data regionally in Europe and Asia on the IBM Cloud.
IBM (IBM) and the American Cancer Society announced a partnership to create the first advisor for people fighting cancer, powered by Watson cognitive computing.
Activision Blizzard's (ATVI 33.48, +0.07 +0.21%) Activision Blizzard Media Networks announced Major League Gaming's Counter-Strike: Global Offensive Major Championship (CS:GO Major) set new viewership records during its March 30 -- April 3 broadcast from Columbus, Ohio. Audiences generated 71 million video views,1 watched a record-breaking 45 million hours of live broadcast2 and set a new record of 1.6 million concurrent viewers3 across OTT, web, mobile and in-game streaming during this year's event.
Elsewhere in the tech space:
Research firm Gartner announced Worldwide PC shipments totaled 64.8 million in the first quarter of 2016. This represents a 9.6% decline versus last year.
Aly Nauman, a 4.4% shareholder in Integrated Device (IDTI 20.22, +0.79 +4.07%), proposed to acquire all outstanding shares of the company for $32.00/share.
Workday (WDAY 76.41, -0.62 -0.80%) named former VMware (VMW 50.38, -0.81 -1.58%) Chief Accounting Officer, Robynne Sisco as the company's CFO.
Pegasystems (PEGA 24.32, -0.12 -0.49%) announced the acquisition of Atlanta, GA-based OpenSpan, Inc., a privately held software provider of robotic process automation (RPA) and workforce analytics software. Financial details of the deal were not disclosed.
Novatel Wireless (MIFI 1.60, -0.04 -2.44%) sold several cellular modules product lines, related IP and assets to Telit Communications (TTCNF 2.89, -0.11 -3.67%) for an initial cash purchase price of $11 mln and conditional earn-out consideration.
Analyst actions:
SAP was upgraded to Buy from Hold at Berenberg,
GLW and YNDX were upgraded to Buy from Neutral at Goldman;
JNPR was downgraded to Neutral from Buy at UBS,
BAH was downgraded to Mkt Perform from Outperform at Raymond James;
P, RUBI and CRTO were initiated with a Buy at Citigroup,
WBMD was initiated with a Neutral at Citigroup,
ERIC was initiated with a Sell at Credit Agricole
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