From Briefing.com: 4:47 pm Tessera Tech subs file legal proceedings for patent infringement against Broadcom (AVGO) (TSRA) : Co announced today that it and certain of its subsidiaries filed legal proceedings for patent infringement in both domestic and international jurisdictions against Broadcom and, in some cases, against certain of Broadcom's customers and distributors.
The proceedings are in the United States International Trade Commission, the U.S. District Court for the District of Delaware, and courts in Germany and the Netherlands, alleging infringement of a total of eight patents. Tessera first reached out to Broadcom several years ago to explore technical collaboration on semiconductor technology development, and subsequently to discuss licensing Tessera's intellectual property. Following a series of in-depth licensing discussions, the parties were unable to reach a licensing arrangement.'Today's actions were not taken lightly and are made only after years of effort to reach a fair and equitable resolution without litigation. At this point, we believe that litigation is necessary to defend our intellectual property rights. As we have said in connection with other legal matters, we remain willing to negotiate a resolution that fairly compensates Tessera and its shareholders for our valuable intellectual property. However, we are also fully prepared to proceed through the entirety of the legal process, and we remain very confident in our ability to achieve a positive outcome.'The Company expects 2016 litigation expense will remain within its current target operating model based on anticipated case activity for the remainder of the year.
4:15 pm : The S&P 500 (-0.2%) began its week on a flat note with the index traversing a narrow eight-point range. Focal points for today's action included hawkish commentary from FOMC members, a downtick in the dollar, a modest loss in oil, and the underperformance of the heavily-weighted health care (-0.5%) sector. The benchmark index (-0.2%) finished behind the Nasdaq Composite (-0.1%) and the Dow Jones Industrial Average (-0.1%).
The major indices began their day on a choppy note as investors ruminated over a string of hawkish remarks from members of the Federal Open Market Committee. Over the weekend, Boston Fed President and FOMC voter Eric Rosengren kept the door open for a June rate hike when he stated that criteria for the next hike are "on the verge" of being met. St. Louis Fed President James Bullard and San Francisco Fed President John Williams also echoed this sentiment when they each stated that an interest rate hike could be argued for sooner than the market expects.
Oil rebounded from a session low before the cash market opened, but pressured equities as it hovered beneath its flat line. The energy component ended lower by 0.6% ($48.12/bbl). Meanwhile, countercyclical utilities (-1.0%) and telecom services (-0.7%) showed the largest losses as rate-sensitive groups continued to struggle.
Equities established new lows in the final hour of trade as heavily-weighted health care (-0.5%) and consumer discretionary (-0.4%) joined utilities (-1.0%) and telecom services (-0.7%) on the bottom of the leaderboard. On the flipside, materials (+1.2%) and consumer staples (UNCH) ended at the front of the pack.
In the materials space (+1.2%), Monsanto (MON 106.00, +4.48) gained 4.4% after receiving an offer to be acquired by Bayer (BAYRY 95.48, -4.72) for $122 per share in cash. Monsanto shares have risen 17.3% since reports first indicated that Bayer was interested in the company on May 11.
The high-beta chipmakers outperformed as the sub-group moved higher on reports that Apple (AAPL 96.43, +1.21) requested 78 million units of the iPhone 7 from its suppliers, which is more than what was previously expected. Elsewhere, Red Hat (RHT 74.80, +1.63) gained 2.2% after receiving positive commentary from Barron's.
Biotechnology outperformed in the health care group (-0.5%), evidenced by the 0.7% gain in the iShares Nasdaq Biotechnology ETF (IBB 266.03, +1.85). Conversely, CIGNA (CI 126.15, -5.13) fell 3.9% after headlines signaled that there were disagreements with Anthem (ANTM 133.18, -2.55) over their potential merger. Furthermore, the Department of Justice recently voiced concerns regarding the merger of the two health care providers.
In the consumer discretionary sector (-0.4%), retail names continued to underperform as the SPDR S&P Retail ETF (XRT 40.87, -0.39) lost 1.0%. On that note, ETF components Best Buy (BBY 33.00, +0.66) and AutoZone (AZO 742.08, -19.48) are scheduled to report earnings tomorrow morning.
The U.S. Dollar Index (95.29, -0.05) pulled back as the greenback trimmed its gain over commodity currencies and the euro. The euro/dollar pair finished flat at 1.1218 while the dollar gained 0.3% against the Canadian dollar (1.3148). Separately, the dollar lost 0.8% against the yen (109.27).
Treasuries ended on a mixed note with the yield on the 10-yr note ending at 1.83% (-1 bps). Meanwhile, the yield on the 2-yr note rose one basis point to 0.89%. The 2-yr yield has increased by 11 basis points since April's settlement (0.78%) while the yield on the 10-yr note has dropped one.
Today's participation fell below the recent average as fewer than 800 million shares changed hands on the NYSE floor.
Investors did not receive any economic data today.
Tomorrow's economic data will be limited to the April New Home Sales Report (Briefing.com consensus 521,000), which will be released at 10:00 ET.
Nasdaq Composite -4.8% YTD
Russell 2000 -2.2% YTD
S&P 500 +0.2% YTD
Dow Jones +0.4% YTD
DJ30 -8.01 NASDAQ -3.78 SP500 -4.28 NASDAQ Adv/Vol/Dec 1494/1.714 bln/1335 NYSE Adv/Vol/Dec 1481/799.0 mln/1515
3:30 pm :
The dollar index turns negative, giving up its initial morning gains, down -0.1% around the 95.23 level
Commodities, as measured by the Bloomberg Commodity Index, are down -0.6% at 84.38
Crude oil stages a modest rally off its afternoon lows around $47.60/barrel, still extending last session's losses & closing in the red for the day
July crude oil futures fell $0.30 (-0.6%) to $48.12/barrel
Crude oil reminders:
Friday afternoon's Baker Hughes total U.S. rig count was down 2 to 404 rigs following last week's decline of 9 rigs
Demand for gasoline is high as memorial day weekend approaches
Steady U.S. oil production drop, just under 8.8 mln barrels a day
The next OPEC meeting is scheduled to take place on June 2, 2016
EIA petroleum inventory data is scheduled to be released at 10:30 am ET on Wednesday, API data is scheduled to be released Tuesday after the bell
Natural gas turns negative after its initial notable morning +2.5% rally (possibly due to short covering), shedding half of last session's gains
June natural gas closed $0.01 lower (-0.5%) at $2.05/MMBtu
EIA natural gas inventory data is scheduled to be released Thursday at 10:30 am ET
In precious metals, gold consolidates near its afternoon highs as the dollar turns negative, finishing just below the previous session's close
June gold ended today's session down $1.20 (-0.1%) to $1251.30/oz
Silver sees a brief rally off its afternoon lows, managing to close at a loss for the day
July silver closed today's session $0.10 lower (-0.6%) at $16.42/oz
Base metal copper ends afternoon pit trading unchanged
July copper closed flat at $2.06/lb
4:01 pm SunPower and Total (TOT) sign power purchase agreement for the supply of 300 gigawatt hours per year of clean solar energy to Metro of Santiago (SPWR) :
Equity indices began the day on a choppy note as investors deciphered commentary from Fed officials. St. Louis Fed President Bullard struck a hawkish tone this morning when he contended that there was a better case for continuing the Fed's path toward interest rate normalization, as opposed to holding steady at this juncture. Additionally, the FOMC voter voiced his belief that the U.S. labor market is at or beyond full employment. This matched comments from fellow FOMC voter Boston Fed President Eric Rosengren, who stated that criteria for the next hike are "on the verge" of being met.
The markets closed Monday all in the red. Despite trading in positive territory for the majority of the day, a broader sell-off in the final moments of the session took all three major US indices into the red. Losses were led by the S&P 500 which closed lower by 4.28 points (-0.21%) to 2048.04. The Nasdaq Composite followed, down 3.78 points (-0.08%) to 4765.78. The Dow Jones Industrial Average was the most modest decliner today, shedding only 8.01 points (-0.05%) to 17492.93.
Technology (XLK 42.62, -0.05 -0.12%) backed up Friday's impressive session with modest losses Monday. Component Micron (MU 11.14, +0.34 +3.15%) was notably strong today as the company disclosed this afternoon executive officer Brian Shirley entered into a 10b5-1 trading plan for up to 48,750 shares of stock over a 12-month period beginning in July 2016. Other sectors as measured by the S&P closed Monday XLB +1.17%, XLP +0.10%, XLF -0.09%, XLI -0.18%, XLE -0.26%, XLY -0.35%, XLV -0.40%, IYZ -0.42%, XLU -0.89% with Materials and Consumer Staples the only sectors managing to stave off losses.
In the S&P 500 Information Technology (706.47, -0.73 -0.10%) sector, trading followed the broader market lower at the end of the day. Component Apple (AAPL 96.43, +1.21 +1.27%) traded in the green all session as the stock was the subject of a premarket article suggesting the company asked suppliers for 78 million iPhone 7 units. Other names in the space which closed higher included ***.
Other notable news items among sector components:
Symantec (SYMC 16.92, flat) filed for a $500 million shelf offering of convertible notes by selling security holders.According to UDN,
Apple (AAPL) has asked for 78 million iPhone 7 units from suppliers.
Avnet (AVT 39.27, +0.02 +0.05%) announced an expanded, exclusive distribution agreement with
Broadcom Limited (AVGO 148.10, +1.37 +0.93%). Under the new agreement, Avnet will serve as the exclusive broadline distributor for Broadcom in the Americas and EMEA regions. Avnet will also continue its franchise in Asia.
CSC (CSC 35.00, flat) to acquire Aspediens, Europe's leading provider of technology-enabled solutions for the service-management sector and a preferred partner of ServiceNow (NOW 70.23, +0.23 +0.33%). Financial terms of the deal were not disclosed.
Intuit's (INTU 104.62, +1.59 +1.54%) QuickBooks announced a strategic alliance with BDO USA, LLP. Under the alliance, BDO will use Intuit QuickBooks as a technology partner to provide online accounting services to its small business clients.
According to Two Big Ears, Facebook (FB 115.97, -1.368 -1.18%) acquired the company. Financial terms of the deal were not disclosed.
Elsewhere in the tech space:
FactSet (FDS 156.24, +0.86 +0.55%) entered into a definitive agreement to sell its market research business focused on advisor-sold investments and insurance, consisting of Market Metrics and Matrix Solutions, to Asset International, a portfolio company of Genstar Capital. The total purchase price is about $165 million, subject to certain working capital adjustments, with an additional earn-out of $10 million based on the achievement of certain growth targets over the next two years.
Canadian Solar (CSIQ 18.54, +0.48 +2.66%) closed a 36.4 million ($52 million) project financing facility with BayernLB to refinance a portfolio of four solar power plants, totaling 40.2 megawatts in the UK. This financing facility with BayernLB is non-recourse project finance, with a term of 17 years.
Pegasystems (PEGA 25.75, +0.14 +0.55%) increased its share repurchase program from about $24 million, the amount remaining in the current program, to $50 million.
Xura (MESG 24.61, +3.63 +17.30%) entered into a definitive agreement to be acquired by affiliates of Siris Capital Group, LLC in a transaction reflecting an equity value of about $643 million. In addition, as part of the transaction, Xura's existing credit facility will be refinanced. Under the terms of the agreement, Siris will acquire all of the outstanding shares of Xura's common stock for $25.00 per share in cash.
RigNet (RNET 12.95, -0.05 -0.38%) to restructure its TSI business into its Managed Services business.
Actions Semi (ACTS 1.79, +0.27 +17.89%) announced its Board of Directors has received a preliminary non-binding proposal letter, dated May 19, 2016, from Mr. Hsuan-Wen Chen, former CEO of the company, and certain of his affiliates and affiliated entities, that proposes a "going-private" transaction involving the acquisition of all of the outstanding equity interest of ACTS not already owned by the Consortium Members at price of $2.00 per American depositary share or $0.333 per ordinary share, each ADS represents six ordinary shares.
Aixtron (AIXG 6.25, +0.77 +14.05%) receives takeover offer from Fujian Grand Chip and Grand Chip Investment GmbH, a 100% direct subsidiary of FGC, valued at 670 million. Pursuant to the agreement, GCI will launch a voluntary public takeover offer to acquire all of the outstanding ordinary shares, including all ordinary shares represented by AIXTRON ADS. Under the terms of the agreement, AIXTRON shareholders will be offered 6.00 Euros in cash per each ordinary share.
21Vianet (VNET 13.99, -0.46 +3.18%) announced that Tus-Holdings Co., Ltd., a large integrated enterprise established in reliance on Tsinghua University, has, through its affiliated investment vehicle, entered into definitive share subscription agreement to make $388 million equity investment in the company. Pursuant to the Share Subscription Agreement, an affiliated investment vehicle of Tus-Holdings will make a $388 million investment in 21Vianet, with a share subscription price of about $2.712 per ordinary share, or $16.274 per ADS.
In reaction to quarterly results:
Vivint Solar (VSLR 2.69, +0.17 +6.75%) closed a tax equity investment fund with a new investor, with an aggregate funding commitment of $75 million, which will enable the company to install more than 45 megawatts of residential solar energy systems.
Micron (MU 11.14, +0.34 +3.15%) disclosed today that on May 16, 2016, Brian Shirley, an executive officer of the company, entered into a prearranged trading plan under Rule 10b5-1 , which provides for the sale of up to 48,750 shares of the company's stock over a 12-month period beginning in July 2016.
Ebix (EBIX 44.58, +0.09 +0.20%) announced a 3:1 stock split. The company anticipates a record date of approximately July 15, 2016. Anticipates shares will begin trading split-adjusted on or about August 1, 2016.
ReneSola (SOL 1.42, +0.19 +15.45%) reported better than expected Q1 EPS and revenues of $0.06 and $260.7 million. SOL also guided Q2 revenues ahead of expectations at $280-290 million, and reaffirmed FY16 revenue guidance in the range of $1.0-1.2 billion.
Companies scheduled to report quarterly results tonight: ZPIN
Analyst actions:
SQ was upgraded to Buy from Outperform at Credit Agricole,
OLED was upgraded to Buy from Neutral at Goldman;
VSAT was downgraded to Sell from Hold at Drexel Hamilton,
IMASY was downgraded to Equal Weight from Overweight at Morgan Stanley;
RDCM was initiated with a Buy at Needham,
BNFT and ULTI were initiated with a Neutral at Goldman,
INTU and CSOD were initiated with a Buy at Goldman
8:01 am Vivint Solar closes tax equity investment fund with a new investor, with an aggregate funding commitment of $75 mln (VSLR) : The co announced today it closed a tax equity investment fund with a new investor, with an aggregate funding commitment of $75 million, which will enable the company to install more than 45 megawatts of residential solar energy systems.
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