From Briefing.com: 4:16 pm Intel (halted, will resume at 16:20) beats by $0.06, reports revs in-line; guides Q2 revs below consensus; lowers FY16 guidance; announces restructuring, reducing 11% of workforce; CFO Smith taking new role in sales/operations (INTC) : Reports Q1 (Mar) earnings of $0.54 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.48; adj. revenues rose 8.0% year/year to $13.8 bln ($13.7 bln GAAP) vs the $13.83 bln Capital IQ Consensus. Note EPS benefitted from 18.4% tax rate. Client Computing Group revenue of $7.5 billion, down 14 percent sequentially and up 2 % YoY Data Center Group revenue of $4.0 billion, down 7 percent sequentially and up 9 percent yearover-yearInternet of Things Group revenue of $651 million, up 4 percent sequentially and up 22 % YoY Non-Volatile Memory Solutions Group revenue of $557 million, down 15 percent sequentially and down 6 % YoY Intel Security Group revenue of $537 million, up 5 percent sequentially and up 12 percent yearover-year.Co issues downside guidance for Q2, sees Q2 revs of $13-14 bln vs. $14.18 bln Capital IQ Consensus; gross margin ~61% (+/-2% points).Lowers FY16 rev growth to mid single digits from mid to high single digits (consensus +5.4%); lowers adj. gross margin to 62% (+/-2% points) from 63%; reaffirms cap-ex$Intel also announced a CFO succession plan. The current CFO, Smith, will transition to a new role at the company, leading sales, manufacturing and operations once his successor is in place. The company is beginning a formal search process for a new CFO that will assess both internal and external candidates. Smith will remain firmly focused on his CFO role and duties throughout the search and transition process. Intel announced a restructuring plan designed to align its operations with evolving business needs and improve efficiencies. The actions associated with the restructuring plan are expected to be fully completed by 2Q17. The restructuring plan is estimated to result in annualized pre-tax cost savings of ~$1.4 billion once it is fully implemented.Intel plans to close certain facilities and reduce up to twelve thousand positions globally, representing ~11% of Intel's worldwide workforce. Intel expects to incur pre-tax charges of ~$1.2 billion, substantially all of which are related to employee severance and benefits.
4:11 pm Yahoo! beats by $0.01, beats on revs (YHOO) :
Reports Q1 (Mar) earnings of $0.08 per share, $0.01 better than the Capital IQ Consensus of $0.07; revenues fell 17.6% year/year to $859 mln vs the $845.9 mln Capital IQ Consensus.Q1 Maven (Mobile, Video, Native and Social) Revenue +6% y/y; Q4 +26% y/y
Q1 Mobile revenue represented +11% y/y of traffic-driven revenue; Q4 33% y/y
Q1 Search Revenue:
Gross search revenue -15% y/y; Q4 -7% y/y
Number of Paid Clicks increased -21% y/y; Q4 -10% y/y
Price-per-Click +7% y/y; Q4 +3% y/y
Q1 Display Revenue:
GAAP display revenue -1% y/y; Q4 +13% y/y
Number of Ads Sold +8% y/y; Q4 +8% y/y
Price-per-Ad -6% y/y; Q4 +6% y/y
4:05 pm CalAmp reports EPS & revs in line with pre-announcement; guides Q1 EPS below consensus, revs below consensus; guides FY17 EPS below consensus, revs below consensus (CAMP) :
Reports Q4 (Feb) earnings of $0.32 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.32; revenues rose 2.3% year/year to $70.8 mln vs the $71.05 mln Capital IQ Consensus. Co pre-announced Q4 EPS of $0.32 and revenue of $71 mlnCo issues downside guidance for Q1, sees EPS of $0.18-0.24, excluding non-recurring items, vs. $0.26 Capital IQ Consensus Estimate; sees Q1 revs of $77-85 mln vs. $89.69 mln Capital IQ Consensus Estimate. Co issues downside guidance for FY17, sees EPS of $1.15-1.35, excluding non-recurring items, vs. $1.41 Capital IQ Consensus Estimate; sees FY17 revs of $375-400 mln vs. $414.04 mln Capital IQ Consensus Estimate.
4:15 pm : The S&P 500 ended its day higher by 0.3% after the index tested, but could not make a sustained move above the 2100 level. Today's trade featured weaker than expected housing data, an uptick in oil, mixed quarterly earnings reports, and, as a result, split performances between heavily-weighted financials (+1.1%) and technology (-0.9%). The Nasdaq Composite (-0.4%) ended its day behind the S&P 500 (+0.3%) and the Dow Jones Industrial Average (+0.3%).
Equity indices opened their day higher as global bourses exhibited increased risk appetite overnight. Japan's Nikkei (+3.7%) showed the largest uptick as commentary from Bank of Japan Governor Haruhiko Kuroda prompted speculation for future stimulus. At the same time, oil rebounded following yesterday's post-Doha meeting decline.
However, the major averages pulled back from their session highs as the heavily-weighted health care (+0.3%) space pulled away from its initial 0.9% gain. This pullback also corresponded with a downturn in the broader market after the benchmark hit a session high at 2104 and backed away from that level into the close.
By the end of the session, eight sectors finished above their flat lines as commodity-sensitive energy (+1.9%) and materials (+2.1%) led financials (+1.1%) and telecom services (+0.8%). Conversely, heavily-weighted technology (-0.6%) and consumer discretionary (-0.5%) ended with the largest losses.
The energy space (+1.9%) moved higher with oil as WTI crude finished its day higher by 2.8% at $42.34/bbl. The energy component has benefited from reports out of Kuwait that its oil and gas workers strike has extended into its third day. Meanwhile, the sector looks ahead to tonight's weekly API data. The inventory data is expected to show that crude stockpiles rose by 1.60 million barrels, compared to last week's build of 6.22 million barrels.
The economically-sensitive financial sector (+1.1%) extended its April gain to 3.6% as money center banks and investment brokerages moved higher in sympathy with Goldman Sachs (GS 161.65, +3.63). The company reported a bottom-line beat and light revenue for the first quarter. Meanwhile, Goldman Sachs also disclosed that revenue declined 40.3% on year-over-year basis. However, the stock recovered from a 1.3% loss to end higher by 2.3%. To be fair though, money center banks and investment brokerages are also likely benefiting from an uptick in oil, in light of their exposure to oil and gas assets.
In the technology space (-0.6%), Alphabet (GOOGL 776.25, -11.43) fell 1.5% after headlines indicated that that the European Union is scheduled to file an antitrust suit against the tech name regarding required applications on Android devices. Meanwhile, Dow component IBM (IBM 144.00, -8.53) was the worst performer in the price-weighted index after issuing below-consensus guidance for the second quarter. Additionally, IBM did beat top and bottom-line estimates for the quarter, but revenue fell 4.6% year-over-year.
Biotechnology underperformed in the health care space (+0.3%), evidenced by the 1.9% decline in the iShares Nasdaq Biotechnology ETF (IBB 279.53, -5.44). Conversely, Dow component UnitedHealth (UNH 130.50, +2.69) was the best component in the price-weighted index. The company gained 2.1% after beating bottom-line estimates and raising its full year earnings guidance to $7.75-7.95 per share from $7.60-$7.80 per share.
The PHLX Semiconductor Index (-1.2%) displayed relative weakness ahead of Intel's (INTC 31.60, -0.05) quarterly report this evening. Meanwhile, Skyworks (SWKS 72.23, -2.51) and Qorvo (QRVO 45.24, -1.92) lost a respective 3.4% and 4.1% after being downgraded from "Strong Buy" to "Outperform" at Raymond James.
The U.S. Dollar Index (94.06, -0.43) finished its day off its low as the greenback made up some ground against the euro and the Canadian dollar. The dollar/Canadian dollar pair ended at 1.2659 (-1.0%) while the euro finished higher by 0.4% (1.1362).
The Treasury complex ended its day lower with the yield on the 10-yr note rising two basis points to 1.79%.
Today's participation was above the recent average as more than 877 million shares changed hands on the NYSE floor.
Today's economic data included March Building Permits and Housing Starts:
The Housing Starts and Building Permits report for March was definitely a disappointment. Starts fell 8.8% from the prior month to a seasonally adjusted 1.089 million units (Briefing.com consensus 1.17 million).
The weakness in starts was presumably due to some of the typical Spring building getting pulled forward during the warmer-than-usual winter months. To be sure, there is always an excuse for everything in a trending market.
The downturn was paced by a 9.2% slide in single-family starts, which saw declines in all regions: Midwest (-21.2%), West (-9.1%), Northeast (-8.6%), and the South (-4.9%). Multi-unit starts were down 7.9%.
Building permits, meanwhile, declined 7.7% to 1.086 million (Briefing.com consensus 1.200 million).
Building permits are a leading indicator, so the March data is not an encouraging sign for future building activity. Only the South (+1.8%) saw a pickup in permits for single-family units.
The one positive in the report is that the number of homes under construction jumped to 990,000 from 985,000 in February. That will be a positive input in first quarter GDP forecasts as the first quarter average of 984,000 was above the fourth quarter average of 962,000.
Tomorrow's economic data will be limited to the weekly MBA Mortgage Index and March Existing Home Sales (Briefing.com consensus 5.30 million), which will cross the wires at 7:00 ET and 10:30 ET, respectively.
Dow Jones +3.6% YTD
S&P 500 +2.8% YTD
Russell 2000 +0.4% YTD
Nasdaq -1.2% YTD
DJ30 +49.44 NASDAQ -19.69 SP500 +6.46 NASDAQ Adv/Vol/Dec 1533/1.653 bln/1296 NYSE Adv/Vol/Dec 2121/877.8 mln/897
3:30 pm :
The dollar index drifts downwards in afternoon pit trading, currently near the 93.95 level, down -0.6%, boosting commodities across the board
Commodities, as measured by the Bloomberg Commodity Index, are up +2.5% at 82.65
Crude oil gives up some of this morning's gains, consolidating in the afternoon to close higher on the day after spiking notably higher in the morning
June Crude Oil futures rose $1.17 (+2.8%) to $42.34/barrel
Day 3 of the worker strike in Kuwait might be aiding crude oil's recent gains
Output was cut, at least temporarily, to 1.1 mln barrels per day from a more normal 3 mln barrels per day, which helped provide some level of support to oil prices
API inventory data is scheduled to be released tonight after the close
EIA petroleum inventory is scheduled to be released tomorrow at 10:30 am ET
Natural gas surges, seeing a notably smooth uptrend all day, extending yesterday's gains of +2% to add on another +7.7% on the day
May Natural Gas closed $0.15 higher (+7.7%) at $2.09/MMBtu
Cooler weather forecasts might be a catalyst for today's notable price action
Last Thursday's EIA inventory data showed a draw of -3 bcf vs expectations for inventory to remain unchanged, this now seems like more of a catalyst as the cooler-than-expected weather forecasts give more hope that larger amounts of inventory will be drawn down in the future
EIA weekly natural gas inventory data is scheduled to be released this Thursday at 10:30 am ET
In precious metals, gold drifts slightly downward after a morning rally, closing higher on the day
June gold ended today's session up $19.10 (+1.6%) to $1254.20/oz
Silver trades flat with a slightly upward bias after its initial morning rally, ending pit trading higher
May silver closed today's session $0.71 higher (+4.4%) at $16.97/oz
Silver closes pit trading at a 10-month high
Recent rally might be due to the correction in the trading ratio between gold & silver as these two commodities usually track each other but silver has lagged behind this year, traders/investors might be taking advantage of the widened spread, expecting the spread to narrow in the coming weeks/months
A weakening dollar in early pit trading also might have been another catalyst for today's notable rally in May silver futures
Base metal copper trades higher in afternoon pit trading
May copper closed $0.06 higher (+2.9%) at $2.22/lb
Trading in the broader market closed Tuesday split. In the green, the S&P 500 was up 6.46 points (+0.31%) to 2100.80. The Dow Jones Industrial Average was higher by 49.44 points (+0.27%) to 18053.60. The lone laggard today was the tech-heavy Nasdaq Composite which lost 19.69 points (-0.40%) today to close 4940.33. Action today was influenced by weaker than expected economic data, a rally in crude oil (+2.8%), and mixed quarterly earnings results. Trading began the session in the green as overseas bourses managed gains, most notably from the Japanese Nikkei which closed up 3.7% as the index saw strength on the back of weakness in the yen and grumblings of further stimulus measures.
Market data today came in the form of the Housing Starts and Building Permits report for March which was a disappointment. Starts fell 8.8% from the prior month to a seasonally adjusted 1.089 million units. Building permits, meanwhile, declined 7.7% to 1.086 million. Additionally, homes under construction jumped to 990,000 from 985,000 in February.
Technology (XLK 44.31, -0.22 -0.49%) movements were pretty much all to the downside today as early gains were surrendered easily and were never seen again. Component eBay (EBAY 24.30, -1.01 -3.99%) displayed weakness following a pre-market downgrade to Underweight at Morgan Stanley. Additionally, shares of video content streaming service Netflix (NFLX 94.34, -14.06 -12.97%) saw notable downside today following the company's Q1 report and net additions guidance. Other sectors as measured by the S&P closed the day XLB +2.14%, XLE +2.00%, XLF +1.26%, IYZ +0.93%, XLI +0.71%, XLV +0.35%, XLU +0.16%, XLP -0.06%, XLY -0.55% with Tech at the bottom of the pile.
In the S&P 500 Information Technology (735.99, -4.68 -0.63%) sector, trading went by the way of the broader tech sector, but ultimately ended well off session lows. Component IBM (IBM 144.00, -8.53 -5.59%) notably under-performed the broader market following better than expected Q1 results, but shares were notably weighed down by tepid Q2 guidance. Other names in the space which closed Tuesday trade lower included QRVO -4.07%, SWKS -3.36%, AVGO -3.10%, NVDA -1.79%, STX -1.75%, AMAT -1.67%, GOOG -1.65%, ADS -1.57%.
Other notable news items among sector components:
CSC (CSC 33.07 -0.34 -1.02%) signed a three-year contract with Transport for NSW to provide network managed services across the department's 1,200 sites including administration offices, motor registries, roadside depots and railway stations. The agreement, valued at more than AUD$100 million, includes the option of two one-year extensions.
Fuzzy Logix announced availability of its advanced analytics suite - DB Lytix - on Teradata (TDC 25.12, +0.33 +1.33%) Aster Analytics.
Broadcom (AVGO 151.07, -4.83 -3.10%) announced volume production of its new series of quad-core 64-bit 2GHz ARM v8 Cortex-A57 communication processors, the StrataGX BCM5871x, targeting a broad range of networking applications including virtual CPE (vCPE) and NFV appliances, 10G service routers and gateways, control plane processing for Ethernet switches, and network attached storage (NAS).
Kony and Cognizant (CTSH 59.85, -0.53 -0.88%) announced they will jointly develop and deliver solutions spanning enterprise mobile applications, mobile app design, and mobile back-end services to enhance business process efficiencies and security.
Western Digital (WDC 41.32, +0.29 +0.71%) and Veritas Technologies announced that the HGST Active Archive System is now certified with Veritas NetBackup enterprise data protection software.
Elsewhere in the space:
Consolidated Comms Illinois (CNSL 24.26, +0.08 +0.33%) to acquire Champaign Telephone Company and its sister company, Big Broadband Services, for $13.90 million.
Verizon (VZ 52.08, +0.35 +0.68%) and Hearst announced agreement to jointly acquire Complex in a 50/50 ownership structure.
Greenlight Capital/David Einhorn disclosed a reduced stake in SunEdison (SUNE 0.31, -0.02 -8.28%) following recent stock sales. Currently the firm holds a 1.6% stake vs. prior 4.0% stake.
Jack Henry (JKHY 83.33, +0.86 +1.04%) sold Goldleaf Enterprise Payments to Battery Ventures. Financial terms of the deal were not disclosed.
In addition to reporting quarterly results, Rogers Comms (RCI 38.91, -0.26 -0.66%) increased its quarterly dividend to $0.48 per share from $0.3584 per share.
In reaction to quarterly results:
IBM (IBM) reported better than expected Q1 EPS and revenues of $2.35 and $18.68 billion, respectively. The company also reaffirmed FY16 EPS guidance and guided Q2 EPS worse than expected on the conference call - the company noted it sees $13.50 FY16 by the end of the first half of the year; so with Q1 EPS of $2.35, that implies Q2 EPS of about $2.78-2.92 (worse than expectations).
Netflix (NFLX) reported better than expected Q1 EPS of $0.06 on in-line revenues which rose 24.5% versus last year to $1.96 billion. The company also issued downside guidance for Q2 EPS of $0.02. Additionally, the company gave guidance for Q2 US additions of 0.5 million and expects Q2 international contribution loss to improve sequentially.
TD Ameritrade (AMTD 30.98, -0.67 -2.12%) reported in-line Q2 EPS of $0.38 on revenues which were worse than expected at $846 million.
Rogers Comms (RCI) reported worse than expected Q1 EPS of C$0.51 on revenues which were in-line with expectations at C$3.25 billion.
Companies scheduled to report quarterly results tonight/tomorrow morning: CAMP, INTC, LLTC, MANH, VMW, YHOO/APH, ANGI, ARMH, ASML, CHKP, EMC, TEL
Analyst actions:
CRAY was upgraded to Buy from Neutral at Sidoti;
MXIM, ADI, NXPI, SWKS, QRVO, TXN were downgraded to Outperform from Strong Buy at Raymond James,
AEIS and ASML were downgraded to Neutral from Positive at Susquehanna,
AMAT was downgraded to Negative from Neutral at Susquehanna,
ADTN was downgraded to Sell from Neutral at Goldman,
P was downgraded to Mkt Perform from Outperform at Raymond James,
EBAY was downgraded to Underweight from Equal Weight at Morgan Stanley
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