From Briefing.com: 4:03 pm Ixia guides Q1 below guidance and consensus (XXIA) : Ixia currently expects Q1 revenue to be between $108-11 mln (Prior guidance $121-126 mln), Capital IQ consensus $123.3 mln.Expects Q1 Non-GAAP EPS to be between $0.05-0.08 (Prior $0.10-0.14), Capital IQ consensus $0.12.Our topline performance was primarily impacted by an unexpected and marked slowdown in network test spending from our North America network equipment manufacturer customers in March, and we continued to experience delays in closing network visibility deals".
4:03 pm Ixia lowers Q1 guidance (XXIA) :
4:15 pm : The stock market ended Thursday on a flat note as the indices surrendered their slim intraday gain during the final hour. Meanwhile, better than feared earnings reports from the beleaguered financial sector (+0.3%) lent support to the major averages for a second day in a row. Additionally, today's action also featured the latest inflation data for the month of March, and continued trepidation regarding this quarter's corporate earnings reports. The Dow Jones Industrial Average (+0.1%) ended its day ahead of both the S&P 500 (UNCH) and ahead of the Nasdaq Composite (UNCH).
The trading day began on a choppy note as investors weighed quarterly earnings reports from names like Wells Fargo (WFC 48.79, -0.24), Bank of America (BAC 14.14, +0.35), and BlackRock (BLK 354.91, +6.62) against their diminished expectations for the first quarter. At the same time, March CPI data came in cooler-than-expected, which could justify the Fed leaving rates unchanged at the April 26-27 meeting. As a side note, this is the last inflation reading ahead of that meeting.
Risk appetite managed to pick up as the session went on, and the benchmark index was able to extend out of its initial six-point trading range. By the end of the session, six sectors traded above their flat lines as energy (+0.4%) led financials (+0.3%), telecom services (+0.3%), and health care (+0.1%).
In the economically-sensitive financial sector (+0.3%), money center banks again helped lead the advance as Bank of America (BAC 14.14, +0.35) gained 2.5% after reporting a bottom-line beat on light revenue. The company attributed part of the revenue shortfall to a 16.0% decline in trading revenue for the quarter. Meanwhile, Wells Fargo (WFC 48.79, -0.24) ended its day beneath its flat line as investors weighed a $200 million increase to its loan loss reserves against a top and bottom-line beat. The broader sector has gained 4.3% this week, but remains down 3.7% on the year.
Baker Hughes (BHI 43.18, +1.88) displayed relative strength in the energy space (+0.4%). The company rallied 4.6% after reports indicated that Carlyle (CG 17.05, -0.19) is discussing a potential acquisition of $7 billion worth of assets from the company and Halliburton (HAL 38.38, +0.07). This deal would help Baker Hughes and Halliburton complete appropriate divestments to aid their proposed merger. Separately, WTI crude ended its day lower by 0.6% at $41.45/bbl.
In the health care space (+0.1%) large cap components Bristol-Myers (BMY 67.87, +0.30) and Merck (MRK 56.45, +0.49) outperformed. Bristol-Myers gained 0.4% after announcing that the FDA accepted priority review of its Hodgkin's Lymphoma drug. Meanwhile, Merck outperformed after its Zepatier medication received positive results in a head-to-head clinical trial against a competitor's medication.
Conversely, four sectors ended in the red with consumer staples (-0.5%), materials (-0.1%), utilities (-0.1%), and technology (-0.1%) rounding out the leaderboard. In the technology space (-0.1%), the high-beta chipmakers underperformed after Taiwan Semiconductor (TSM 25.30, -0.87) issued below-consensus guidance for the second quarter.
The U.S. Dollar Index (94.96, +0.21) rebounded throughout the day after the below-consensus CPI readings pressured the greenback. The dollar ended its day 0.1% higher against the yen at 109.40 while the euro/dollar pair finished lower by 0.2% at 1.1258.
The Treasury complex ended its session off its low with the yield on the 10-yr note ending higher by three basis points at 1.79%.
Today's participation was above the recent average as more than 882 million shares changed hands on the NYSE floor.
Today's economic data included Core CPI for March and weekly initial claims:
The Consumer Price Index (CPI) for March showed only a 0.1% increase for the all items index (Briefing.com consensus +0.3%). Similarly, core CPI, which excludes food and energy, was up only 0.1% (Briefing.com consensus +0.2%) after a 0.3% increase in February.
With the March data, total CPI was up 0.9% over the last 12 months versus 1.0% in February while core CPI rose 2.2% versus 2.3% in February.
The moderation in those year-over-year growth rates will likely draw the Fed's attention as a basis for holding off on a rate hike at the April 26-27 meeting. This CPI report is the last inflation report ahead of that meeting.
The energy index (+0.9%) drove the increase in the all items index, logging its first increase since November. The food index was down 0.2% following a 0.2% increase in February.
Driving the modest gain in core CPI were the indexes for shelter, recreation, medical care, education, tobacco, and personal care, although increases there were offset to a large extent by declines in the indexes for apparel, airline fares, communication, household furnishings, and used cars and trucks. The apparel index, in particular, was down 1.1% after a 1.6% increase in February.
Initial claims for the week ending April 9 were 253,000 (Briefing.com consensus 268,000), a decrease of 13,000 from the prior week.
There were no special factors influencing initial claims, which logged their 58th straight week below 300,000 -- the longest streak since 1973!
The four-week moving average for initial claims decreased by 1,500 to 265,000.
Continuing claims for the week ending April 2 dropped to 2.171 million, a decrease of 18,000 from the prior week.
The four-week moving average for this series stands at 2.178 million -- the lowest level since November 18, 2000.
Tomorrow's economic data will include the 8:30 ET release of Empire Manufacturing for April (Briefing.com consensus 2.3). Meanwhile, Industrial Production (Briefing.com consensus +0.0%) and Capacity Utilization (Briefing.com consensus 75.5%) for March will be reported at 9:15 ET. Finally, the day's data will be capped off with the preliminary reading of the University of Michigan's Consumer Sentiment Index for April (Briefing.com consensus 92.0) and the Net Long-Term TIC Flows for February, which will cross the wires at 10:00 ET and 16:00 ET, respectively.
Nasdaq Composite -1.2% YTD
Russell 2000 -0.7% YTD
S&P 500 +1.9% YTD
Dow Jones +2.9% YTD
DJ30 +18.15 NASDAQ -1.53 SP500 +0.36 NASDAQ Adv/Vol/Dec 1386/1.508 bln/1425 NYSE Adv/Vol/Dec 1329/882.8 mln/1655
3:30 pm :
The dollar index trends lower in the afternoon, recovering those losses near the closing of pit trading and trading near 94.90
Commodities, as measured by the Bloomberg Commodity Index, are down -0.7% at 80.65
Crude oil plummets in afternoon trade to fresh new lows of the day, closing just above those lows
May Crude Oil futures fell $0.25 (-0.6%) to $41.45/barrel
The April 17 meeting between OPEC & non-OPEC members in Doha, Qatar is fast-approaching, expected to be a near-term catalyst to move oil prices
Natural gas trends notably lower, sees a brief spike following the release of EIA inventory data, and then resumes its downtrend, closing just off the low for the day
May Natural Gas closed $0.06 lower (-3.0%) at $1.97/MMBtu
EIA Natural gas inventory released at 10:30 ET showed a draw of -3 bcf vs expectations for inventory to remain unchanged (+/- 0 bcf)
In precious metals, gold consolidated in the afternoon, trading sideways after the steep morning drop
June gold ended today's session down $21.50 (-1.7%) to $1226.60/oz
Silver trended modestly up in the afternoon, consolidating near the close of pit trading to close higher for the day
May silver closed today's session $0.14 lower (-0.9%) at $16.18/oz
Base metal copper closes unchanged
May copper closed flat at $2.17/lb
At the end of the day, markets were split. Upside was led by the Dow Jones Industrial Average which added 18.15 points (+0.10%) to close 17926.43. The S&P 500 was up less than a point (+0.02%) when the day was done to end 2082.78. The tech-heavy Nasdaq Composite was the lone laggard today as the index lost 1.53 points (-0.03%) to end 4945.89. A quite, mixed session was met with quiet volume, as only 882 million shares traded at the NYSE versus an average near 1,035 million while as the NASDAQ floor, only 1,508 million shares exchanged hands versus the average near 1,768 million.
Market data today came in the form of the Consumer Price Index which for March showed only a 0.1% increase for the all items index. This CPI report is the last inflation report ahead of the April 26-27 Fed meeting. Additionally, the initial claims reading for the week ending April 9 was 253,000, a 13,000 decline from the prior week. Continuing claims for the week ending April 2 dropped to 2.171 million, a 18,000 decline from last week.
Markets parsed earnings reports from major financial institutions this morning as both Bank of America (BAC 14.14, +0.38 +2.76%) and Wells Fargo (WFC 48.79, -0.24 -0.49%) reported quarterly prints this morning. Results at BAC were mixed while peer WFC reported results which were better than anticipated. Financials (XLF 22.99, +0.06 +0.26%) were again one of the best performing sectors today as measured by the S&P.
Technology (XLK 44.49, -0.05 -0.11%) ended on modest losses as the sector hovered near flat lines for almost the entirety of the session. Component SunEdison (SUNE 0.58, +0.21 +58.14%) spiked higher today as the company announced the completion of the investigation by the Audit Committee and Independent Directors. Other sectors as measured by the S&P closed the day IYZ +0.29%, XLE +0.23%, XLF +0.22%, XLI +0.18%, XLB +0.07%, XLV +0.06%, XLY +0.00%, XLU -0.12%, XLP -0.45% as Telecoms and Energy led the way higher and Consumer Staples was the worst performer.
In the S&P 500 Information Technology (741.21, -0.80 -0.11%) sector, trading closed Thursday on modest losses. Component Seagate Tech (STX 27.11, -6.82 -20.10%) was under severe pressure today as the company announced preliminary Q3 revenues which were worse than expected, sending the stock near YTD lows. Other names in the space which were in the red with the broader sector included WDC -6.65%, MU -4.41%, NTAP -3.97%, FSLR -2.00%, SYMC -1.49%, GLW -1.47%, LRCX -1.45%, SNDK -1.12%, JNPR -1.05%, INTC -1.03%, HRS -0.88%.
Other notable news items among sector components:
Seagate Tech (STX) announced preliminary Q3 revenues which were worse than expected. For the Q3 period, STX expects revenues of about $2.6 billion, slightly worse than Street expectations.
ServiceNow (NOW 63.00, -0.77 -1.21%) and BMC Software entered into a confidential settlement agreement to resolve all patent-related litigation between the two parties. NOW took total aggregate charges of $270 million for litigation settlement expenses in the quarter ended March 31, 2016.
Micron (MU 10.40, -0.48 -4.41%) intends to offer $1 billion aggregate principal amount of senior secured notes due 2023 through an offering to qualified institutional buyers.
Alliance Data (ADS 214.48, -0.66 -0.31%) announced that Precima, a consulting and analytics firm specializing in shopper insights and housed within its LoyaltyOne business, and U.K.-based Wm Morrison
Supermarkets PLC (MRWSY 13.87, -0.22 -1.56%) signed a new multi-year agreement to use Precima's expertise in analyzing data and generating insights to improve customers' shopping trips.
Fiserv (FISV 99.67, -0.62 -0.62%) announced that Xceed Financial Credit Union, a $1 billion asset credit union based in El Segundo, California, has extended its relationship with Fiserv and is transitioning its in-house DNA account processing platform to a Fiserv-hosted environment.
Elsewhere in the tech space:
SunEdison (SUNE) disclosed the completion of the investigation by the Audit Committee and Independent Directors. The Independent Directors also identified several specific issues regarding the cash forecasting and liquidity management practices. Additionally, SUNE was the subject of a Bloomberg article last night highlighting the company missed a $2.6 million payment on a bond.
Synaptics (SYNA 87.21, +5.94 +7.31%) saw relative strength today following reports that the company was in talks with a Chinese investor group regarding a potential buyout.
DragonWave (DRWI 7.38, +1.42 +23.83%) successfully completed five customer trials of the newly launched Harmony Enhanced MC dual carrier product.
Utopia Global announced the signing of a global reseller agreement with SAP (SAP 79.03, +0.70 +0.89%). As part of the agreement, SAP will resell Utopia's Master Data Governance for Retail and Fashion Management solution under the name SAP Master Data Governance application, retail and fashion management extension by Utopia.
Genpact (G 27.54, -0.06 -0.22%) filed for mixed securities shelf offering.
Sphere 3D (ANY 1.19, flat) filed for about a 7.3 million common share offering by selling shareholders.
Lattice Semi (LSCC 5.73, -0.63 -9.91%) was actively traded today following reports that Tsinghua is apparently not interested in a full acquisition of the company.
TiVo (TIVO 9.27, +0.04 +0.43%) popped midday on reports that it and Rovi (ROVI 17.97, -0.01 -0.06%) remain in active merger discussions.
Analyst actions:
AMAT was upgraded to Buy from Neutral at UBS,
RHT was upgraded to Overweight from Sector Weight at Pacific Crest,
IGNMF was upgraded to Equal Weight from Underweight at Barclays;
was downgraded to Hold from Buy at Craig Hallum,
CPSI was downgraded to Neutral from Outperform at Robert W. Baird,
STWRY was downgraded to Underweight from Equal Weight at Barclays;
INTU was initiated with a Buy at Brean Capital
7:43 am Micron announces proposed $1 bln offering of senior secured notes due 2023 to qualified institutional buyers (MU) : The co intends to use the net proceeds from the offering for general corporate purposes, including to fund capital expenditures, working capital, and to pay related fees and expenses.
7:07 am iRobot sends letter to shareholders arguing against Red Mountain Capital (IRBT) :
Co announces it mailed a letter to shareholders to set the record straight about Red Mountain Capital's campaign in connection with iRobot's upcoming 2016 Annual Meeting of Stockholders to be held on May 25, 2016. IRBT believes that Red Mountain Capital has a fundamental lack of understanding of IRBT's business and Willem Mesdag has a personal agenda to join the board despite no known operating experience or industry expertise.
5:58 am Taiwan Semi beats by NT 0.01, reports revs in-line; guides Q2 revs below consensus (TSM)
Reports Q1 (Mar) earnings of NT 2.50 per share, $0.01 better than the Capital IQ Consensus of NT 2.49; revenues fell 8.3% year/year to NT 203.5 bln vs the NT 202.3 bln Capital IQ Consensus. Co issues downside guidance for Q2, sees Q2 revs of NT 215-218 bln vs. NT 226.46 bln Capital IQ Consensus Estimate.Gross margin for the quarter was 44.9%, operating margin was 34.6%, and net profit margin was 31.8%. The February 6, 2016 earthquake negatively impacted TSMC's gross margin by 2.2 percentage points and operating margin by 2.4 percentage points.Outlook: "We expect our business in the second quarter will benefit from continued inventory restocking and recovery of the delayed shipments from the earthquake...Gross profit margin is expected to be between 49% and 51%."
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