From Briefing.com: 4:08 pm Exar misses by $0.01, misses on revs; guides Q1 EPS in-line, revs in-line (EXAR) : Reports Q4 (Mar) earnings of $0.08 per share, $0.01 worse than the Capital IQ Consensus of $0.09; revenues fell 16.1% year/year to $36.78 mln vs the $38.28 mln Capital IQ Consensus. Co issues in-line guidance for Q1, sees EPS of $0.09-0.13 vs. $0.10 Capital IQ Consensus Estimate; sees Q1 revs of $39.4-$41.2 mln vs. $39.73 mln Capital IQ Consensus Estimate.
4:08 pm Cree files counterclaims in the US District Court for the Middle District of North Carolina against Feit Electric to stop infringement of two patents related to LED bulbs (CREE) :
4:20 pm : The stock market ended its day broadly lower as weaker-than-expected earnings and guidance weighed on retail names and the broader consumer discretionary sector (-2.0%). Other focal points of today's action included an upswing in oil, weakness in the dollar, a broken support (2074/76) level in the S&P 500 (-1.0%), and the underperformance of the heavily-weighted health care (-1.3%) and financial (-1.1%) sectors. The Dow Jones Industrial Average (-1.2%) finished behind the benchmark index (-1.0%) and the Nasdaq Composite (-1.0%).
Equity indices began under pressure as weaker than expected earnings results and guidance from the likes of Walt Disney (DIS 102.29, -4.31), Macy's (M 31.38, -5.61) and Fossil (FOSL 28.44, -11.66) dampened investor sentiment. However, the major averages ticked off their opening lows ahead of the Department of Energy's weekly stockpile report.
The inventory data came in above consensus with larger-than-expected draws in crude oil (-3.41 million barrels; est. +0.71 million) and gasoline (-1.23 million barrels; est. -0.71 million) stockpiles. In response, the energy component jumped off the $44.20/bbl level, bringing the broader market with it. However, the upswing in equities would prove to be short-lived. The benchmark index fell back to its morning low and continued to test support at 2074/76. The benchmark index would break that support in afternoon trade.
The major averages ended near their lows with nine sectors finishing in negative territory. The heavily-weighted consumer discretionary (-2.0%), health care (-1.3%), and financial (-1.1%) sectors rounded out the board while the remaining decliners ended with losses between 0.1% (energy) and 0.7% (industrials).
Retail names ended with the largest losses in the consumer discretionary space (-2.0%). Macy's (M 31.38, -5.61) and Fossil (FOSL 28.44, -11.66) led the group lower following disappointing results and guidance. The two names surrendered 15.2% and 29.1%, respectively. The SPDR S&P Retail ETF (XRT 41.72, -1.94) lost 4.4% as it traded lower in sympathy with the names. Elsewhere, Kohl's (KSS 38.70, -2.48) and Nordstrom (JWN 45.43, -3.43) underperformed ahead of tomorrow's quarterly reports.
In the health care space (-1.3%) biotechnology demonstrated relative weakness, evidenced by the 3.0% decline in the iShares Nasdaq Biotechnology ETF (IBB 256.10, -7.95). The ETF trimmed its weekly gain to 0.3%, compared to the 0.2% loss in the broader sector.
Real estate investment trusts underperformed in the financial sector (-1.1%). In the sub-group, Macerich (MAC 77.64, -3.78) and Simon Properties (SPG 203.24, -1068) fell 4.6% and 5.0%, respectively.
The commodity-sensitive energy space (-0.1%) fell beneath its flat line in the final hour as the broader sector erased a 0.7% gain. Independent oil and gas names ended with the largest gains as ConocoPhillips (COP 43.68, +0.81) and Devon Energy (DVN 32.54, +1.00) gained a respective 1.9% and 3.2%. WTI crude ended its pit session higher by 3.4% at $46.20/bbl.
The U.S. Dollar Index (93.82, -0.40) ended off its low as the greenback pared losses against the yen and the euro. The euro/dollar pair finished higher by 0.5% at 1.1423 while losing 0.8% against the yen (108.44).
The Treasury complex ended off its high with the yield on the 10-yr note falling three basis points to 1.73%.
Today's participation was above the recent average as more than 922 million shares changed hands on the NYSE floor.
Today's data included the weekly MBA Mortgage Index and the Treasury Budget for April:
The MBA Mortgage Index showed a seasonally adjusted increase of 0.4%. This compares to last week's reading of -3.4%.
Bolstered by individual tax receipts, the Treasury Budget for April showed a surplus of $106.5 billion; however, that was much less than the surplus of $156.7 billion seen in the same period a year ago.
The Treasury data are not seasonally adjusted, so the April surplus cannot be compared to the March deficit of $108.0 billion.
Total receipts in April were $438 billion while total outlays were $332 billion.
Receipts were $33 billion less than receipts in April 2015. A large portion of that difference can be attributed to a lower level of individual tax receipts this year ($266 billion) versus last year ($288 billion). Total outlays, meanwhile, were $17 billion more than last year.
The 12-month deficit is $510.9 billion versus $460.6 billion in March.
Tomorrow morning the Bank of England will announce its latest policy decision at 7:00 ET.
On the home front, tomorrow's economic data will be limited to weekly initial claims (Briefing.com consensus 270k) and Import and Export Prices for April, which will all be released at 8:30 ET.
Nasdaq Composite -4.9% YTD
Russell 2000 -1.9% YTD
S&P 500 +1.0% YTD
Dow Jones +1.6% YTD
DJ30 -217.23 NASDAQ -49.19 SP500 -19.93 NASDAQ Adv/Vol/Dec 850/1.713 bln/2130 NYSE Adv/Vol/Dec 1096/922.4 mln/1886
3:30 pm :
The dollar index drops even further in the afternoon, currently down -0.5% around the 93.83 level
Commodities, as measured by the Bloomberg Commodity Index, are up +1.6% at 84.71
Crude oil spikes above the previous day's close after the release of EIA petroleum storage data showed an unexpected draw compared to estimates
June crude oil futures rose $1.50 (+3.4%) to $46.20/barrel
API data released yesterday after the bell showed U.S. crude oil inventories had a build of +3.45 mln barrels vs consensus for a build of +300,000 barrels
EIA data released this morning at 10:30 am ET showed crude oil inventories had a draw of -3.410 mln (consensus called for a build of about +0.4 mln)
Gasoline inventories had a draw of -1.231 mln
Distillate inventories had a draw of -1.647 mln
Natural gas sees an afternoon rally, closing slightly above the previous session's closing price
June natural gas closed $0.01 higher (+0.5%) at $2.17/MMBtu
EIA natural gas storage data is scheduled to be released tomorrow at 10:30 am ET
In precious metals, gold stages a rally off its lows of the day around $1272.70/oz, closing notably higher
June gold ended today's session up $11.00 (+0.9%) to $1275.70/oz
Gold is currently up about +20% since the beginning of 2016
Silver drifts modestly lower in the afternoon, still holding on to its initial morning gains, closing pit trading higher
June silver closed today's session $0.23 higher (+1.4%) at $17.32/oz
Base metal copper inches up in afternoon trade
June copper closed $0.01 higher (+0.5%) at $2.10/lb
The broader market sold-off following yesterday's strong session. Leading the lower bias, the Dow Jones Industrial Average lost 217.23 points (-1.21%) to end 17711.12. The Nasdaq Composite followed, down 49.19 points (-1.02%) to 4760.69. Rounding out the trio, the S&P 500 finished with losses just under 1%, shedding 19.93 points (-0.96%) to end 2064.46. Slightly after midday, the market digested the latest Treasury Budget report, which was bolstered by individual tax receipts. The Treasury Budget for April showed a surplus of $106.5 billion; however, that was much less than the surplus of $156.7 billion seen in the same period a year ago. Also, the weekly MBA Mortgage Index showed a seasonally adjusted increase of 0.4% compared to last week's reading of -3.4%.
Today's session began on a choppy note as investors weighed below-consensus quarterly reports and guidance, weakness from global bourses, and vacillating oil trade. Overseas, Italian banking names anchored European indices as the group moved lower following weaker-than-expected results from Banco Popolare. Meanwhile, WTI crude slipped as investors digested disappointing stockpile data from the American Petroleum Institute and reports indicating that production from Canada's oil sands region is scheduled to pick up.
The stock market carved out session highs mid-morning as participants reviewed the latest inventory data from the Department of Energy. The weekly report showed larger-than-expected draws in crude inventories (-3.41 million barrels) and gasoline stockpiles (-1.23 million barrels). June Crude Oil Futures ended the session +3.4% to $46.20 per barrel.
In the scope of other sectors, Technology (XLK 42.49, -0.31 -0.72%) ended Wednesday near session lows and around the middle of the pack. Component Electronic Arts (EA) was the best performing name in the space today following a Q4 earnings and revenue beat, and a better than expected FY17 EPS and revenue guide. Other sectors as measured by the S&P closed today XLU +0.37%, XLE +0.31%, IYZ -0.32%, XLB -0.35%, XLP -0.80%, XLI -0.83%, XLF -1.07%, XLV -1.20%, XLY -2.01% as Utilities and Energy were able to escape losses.
In the S&P 500 Information Technology (702.11, -4.75 -0.67%) sector, trading managed modest gains toward the beginning of the session but sold-off with the broader market. Component Alphabet (GOOG 715.29, -7.89 -1.09%) was notably weak following an afternoon article from Politico suggesting the FTC may re-open its prior investigation regarding Google's dominance of Internet search. Other names in the space which were modestly weak today included WDC -4.25%, STX -2.75%, AKAM -2.41%, V -2.23%, XRX -2.21%, ADP -2.07%, EBAY -1.74%, QRVO -1.39%, MSI -1.38%, JNPR -1.30%, RHT -1.29%, PAYX -1.29%, MA -1.26%, CSCO -1.22%.
Elsewhere in the tech space:
GrubHub (GRUB 24.85, +0.09 +0.36%) completed its acquisition of LAbite. Further, GRUB updated guidance for Q2, as they now see revenues of $113-115 million, up from prior $109-111 million. Also, they see adjusted EBITDA of $30-32 million versus prior $29-31 million. GRUB also noted expectations for FY16 revenues of $465-480 million, up from prior $450-465 million. They also see adjusted EBITDA of $125-133 million, up from the prior $122-130 million.
SNC-Lavalin (SNCAF 37.19, flat) and CGI (GIB 45.40, +0.36 +0.80%) jointly announced a twelve-year IT outsourcing agreement valued at $500 million
Maxim Integrated (MXIM 36.40, -0.11 -0.30%) announced the retirement of Kip Hagopian as MXIM's Chairman of the Board. William Sullivan, currently a member of MXIM's Board, will assume the Board Chair position effective immediately. Mr. Hagopian will continue to serve on the Board, in a non-Chair director capacity, until the end of MXIM's 2016 fiscal year, June 25, 2016.
In addition to reporting quarterly results, Rocket Fuel (FUEL 2.57, -0.12 -4.46%) filed for a $50 million mixed securities shelf offering.
TerraForm Global (GLBL 2.57, -0.08 -3.02%) amended its credit and guaranty agreement with Goldman Sachs Bank USA.
In addition to reporting quarterly results, Canadian Solar (CSIQ) announced current CFO Michael Potter decided to leave the company to pursue other interests. As such, Huifeng Chang has been named CFO effective May 22.
In reaction to quarterly results:
Electronic Arts (EA) reported better than expected Q4 EPS and non-GAAP revenues of $0.50 and $924 million, respectively. EA also guided FY17 EPS and non-GAAP revenues ahead of expectations at about $3.50 and about $4.9 billion.
Nuance Communications (NUAN 16.72, -0.49 -2.85%) reported better than expected Q2 EPS of $0.38 and in-line revenues which fell 0.1% versus last year to $487.4 million. For Q3, NUAN sees in-line EPS and revenues of $0.35-0.38 and $483-497 million, respectively. For the FY16 period, NUAN raised EPS guidance to $1.48-1.56 from $1.41-1.51 and lowered revenue guidance modestly to $1.975-2.005 billion from $1.98-2.03 billion.
New Relic (NEWR 25.95, +0.06 +0.23%) reported in-line earnings at a loss per share of $0.24 for Q4. For the period, the company reported better than expected revenues which rose 57.3% versus last year to $52.5 million.
ScanSource (SCSC 40.15, +1.43 +3.69%) reported worse than expected Q3 EPS and revenues of $0.64 and $798.4 million, respectively. For Q4, SCSC expects to report EPS worse than expected at $0.70-0.74 and revenues in-line at $900-950 million.
Canadian Solar (CSIQ 17.38, +1.92 +12.42%) reported better than expected Q1 EPS and revenues of $0.39 and $721.4 million, respectively. For Q2, CSIQ sees revenues better than the Street expectations at $710-760 million. The company also guided FY16 revenues ahead of expectations at $3.2-3.6 billion, up from $2.9-3.1 billion.
Alarm.com (ALRM 21.53, -1.07 -4.73%) reported better than expected Q1 EPS and revenues of $0.12 and $59 million, respectively. For FY16, ALRM sees EPS in-line at $0.47-0.49, up from $0.46-0.48. Also, ALRM sees better than expected revenues for FY16 in the range of $239-242.5 million, up from $236-239.5 million.
KEYW Holding (KEYW 7.93, +0.96 +13.77%) reported better than expected Q1 EPS of $0.05 and worse than expected revenues which rose 6.9% versus last year to $73.6 million. KEYW also guided for FY16 revenues in the range of $285-305 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: CA PMTS EXAR NTES RPD SINA WB YRD/HIMX
Analyst actions:
FIS was upgraded to Buy from Neutral at Sterne Agee CRT,
QIHU was upgraded to Buy from Hold at Stifel,
IDTI was upgraded to Buy from Neutral at BofA/Merrill,
TLK was upgraded to Buy from Reduce at HSBC;
ATTO was downgraded to Neutral from Outperform at Credit Suisse;
CGNX, NATI and IPGP were initiated with a Mkt Perform at FBR Capital,
TRMB was initiated with an Outperform at FBR Capital
9:01 am Maxim Integrated Chairman Kip Hagopian retires; William Sullivan to assume Chairman role effective immediately (MXIM) :
Mr. Hagopian will continue to serve on the Board, in a non-Chair director capacity, until the end of Maxim's 2016 fiscal year, June 25, 2016.
William Sullivan, who will assume the position of Chairman, is a veteran of more than two decades at Hewlett-Packard (HP), and from 2005 to 2015, served as Chief Executive Officer of Agilent Technologies, a global provider of scientific instruments, software, services and consumables in life sciences, diagnostics, and applied chemical markets, after its spin-out from HP.
6:10 am Canadian Solar beats by $0.21, beats on revs; guides Q2 revs above consensus; guides FY16 revs above consensus (CSIQ) :
Reports Q1 (Mar) earnings of $0.39 per share, $0.21 better than the Capital IQ Consensus of $0.18; revenues fell 16.2% year/year to $721.4 mln vs the $662.89 mln Capital IQ Consensus. Total solar module shipments were 1,198 MW, of which 1,172 MW were recognized in revenue, compared to 1,398 MW recognized in revenue in the fourth quarter of 2015, and first quarter shipment guidance in the range of 1,085 MW to 1,135 MW. Co issues upside guidance for Q2, sees Q2 revs of $710-760 mln vs. $700.77 mln Capital IQ Consensus Estimate. Guidance: For the second quarter of 2016, the Company expects total module shipments to be in the range of ~1,200 MW to 1,250 MW, including ~30 MW of shipments to the Company's utility-scale solar projects that may not be recognized in second quarter 2016 revenue. Co issues raised guidance for FY16, sees FY16 revs of $3.2-3.6 bln from $2.9-3.1 bln vs. $3.16 bln Capital IQ Consensus Estimate. For the full year 2016, the Company maintains its guidance for total module shipments to be in the range of ~5.4 GW to 5.5 GW, with ~5.0 GW recognized in revenue.
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