From Briefing.com: 4:10 pm : U.S. equity markets ended the Thursday affair broadly higher, discounting the probability of a "Leave" vote in today's Brexit referendum. Additional focal points impacting today's trade included support from the oil pit, softening in the dollar, and leadership from the heavily-weighted financial (+2.1%) and technology (+1.5%) sectors. The Nasdaq Composite (+1.6%) ended its day ahead of the S&P 500 (+1.3%) and the Dow Jones Industrial Average (+1.3%).
The major averages began the day on a higher note as investors weighed a rally in global bourses. European indices extended their recent winning streak as the final round of preliminary Brexit polls indicated that the "Remain" group held a lead over the "Leave" camp in today's highly anticipated Brexit vote. In response, investors adopted a risk-on posture while safe haven assets extended their recent losing streak.
The benchmark index gapped higher at the beginning of the session, climbing above technical and psychological resistance at the 2100 area. The S&P 500 (+1.3%) extended its opening advance in the early afternoon as the heavyweight financial (+2.1%) and technology (+1.5%) groups bolstered a move higher in the broader market. Additionally, WTI crude lifted the broader market as it finished higher by 2.0% ($50.12/bbl; +$1.00), extending its weekly gain to 4.4%.
The S&P 500 (+1.3%) extended its advance in the final hour of trade, finishing the day at a freshly minted session high (2113.32). All ten sectors finished in the green with the economically-sensitive financial (+2.1%) sector leading energy (+1.7%) and materials (+1.6%). The remaining cyclical sectors posted gains between 0.9% (consumer discretionary) and 1.5% (technology) while countercyclical utilities (+0.3%) ended at the bottom of the board.
The financial sector (+2.1%) rebounded alongside European banking names as the group responded to shifting expectations regarding the probability of a Brexit. On the home front, life insurance names and investment brokerages finished with the largest gains as Prudential (PRU 76.95, +2.92) and Charles Schwab (SCHW 29.69, +1.35) gained 3.9% and 4.8%, respectively. Meanwhile, Bank of America (BAC 14.04, +0.43) and Citigroup (C 44.46, +1.78) outperformed ahead of results from the latest supervisory stress tests. On a side note, the banking names will not receive approval to bolster their capital return programs until the Federal Reserve releases results from its Comprehensive Capital Analysis and Review after the close on June 29.
The PHLX Semiconductor Index (+2.6%) outperformed the broader technology space (+1.5%) as Micron (MU 14.05, +1.33) rallied 10.5%. The company benefited from upgrades to "Buy" and "Positive" at Nomura and Susquehanna, respectively. Elsewhere, software names outperformed with Adobe Systems (ADBE 96.21, +2.20) rebounding 2.3%. Conversely, Red Hat (RHT 78.39, -1.36) was under pressure after disappointing investors with its mixed outlook.
Biotechnology outperformed in the health care space (+1.3%), evidenced by the 2.2% gain in the iShares Nasdaq Biotechnology ETF (IBB 262.10, +5.54). The sub-group was likely benefiting from yesterday's positive ruling regarding Medicare spending. On the flipside, Humana (HUM 187.31, -0.36) lost 0.2% after the California Department of Insurance voiced concerns regarding the company's proposed merger with Aetna (AET 121.00, +0.84).
The U.S. Dollar Index (93.38, -0.34) ended lower as the greenback lost ground to the euro and the pound. The single currency gained 0.7% against the buck (1.1372) while the cable gained 1.2% (1.4891). Separately, the dollar climbed 1.5% against the yen (105.93) as safe haven assets remained pressured.
The Treasury complex retreated today as the yield on the 10-yr note rose five basis points to 1.74%.
Today's participation was below the recent average as fewer than 831 million shares changed hands on the NYSE floor
Today's economic data included weekly initial claims, New Home Sales for May, and BC Leading Indicators for May:
Initial claims for the week ending June 18 fell by 18,000 from the prior week to 259,000 (Briefing.com consensus 273,000)
The four-week moving average dipped by 2,250 to 267,000.
There were no special factors influencing the initial claims reading, which held below 300,000 for the 68th straight week.
Continuing claims for the week ending June 11 decreased by 20,000 to 2.142 million.
With that reading, the four-week moving average for continuing claims decreased by 4,500 to 2.147 million.
New home sales declined 6.0% month-over-month in May to a seasonally adjusted annual rate of 551,000 (Briefing.com consensus 560,000) from a downwardly revised 586,000 (from 619,000) in April.
Despite the monthly sales drop, new home sales in May were 8.7% above the same period a year ago.
The downturn in May featured a 33.3% decline in sales in the Northeast, although every region experienced a sales drop with the exception of the Midwest (+12.9%).
Notably, the South and the West -- the two biggest regions for new home sales -- saw sales decline 0.9% and 15.6%, respectively.
The median sales price of a new home increased 1.0% year-over-year to $290,400.
With the slower sales pace in May, the inventory of new homes for sale jumped to a 5.3-month supply from 4.9 months in April.
The Conference Board reported a 0.2% decline in its Leading Economic Index for May.
That was well below the Briefing.com consensus estimate, which called for a 0.2% increase, and it followed on the heels of two consecutive monthly gains.
In the six-month period ending May 2016, the leading economic index was flat after increasing 1.2% during the previous six months.
The Conference Board added that the weakness among the leading indicators has become somewhat more widespread than the strengths in recent months.
The decline in May was led by average weekly initial claims, which subtracted 0.23 percentage points, offsetting gains in six other components.
The strongest of those gains was the interest rate spread, which added 0.16 percentage points to the index.
The Conference Board estimated small positive contributions for manufacturers' new orders for:
Consumers goods and materials (+0.01 percentage points) and nondefense capital goods orders excluding aircraft (+0.02 percentage points).
Separately, the Coincident Index was unchanged in May while the Lagging Economic Index increased 0.3%.
Tomorrow's economic data includes Durable Orders for May (Briefing.com consensus -0.6%) and the final reading of Michigan Consumer Sentiment for May (Briefing.com consensus 94.0), which will cross the wires at 8:30 ET and 10:00 ET, respectively.
S&P 500 +3.4% YTD
Dow Jones +3.4% YTD
Russell 2000 +3.0% YTD
Nasdaq Composite -1.9% YTD
DJ30 +230.24 NASDAQ +76.72 SP500 +27.87 NASDAQ Adv/Vol/Dec 2408/1.587 bln/627 NYSE Adv/Vol/Dec 2547/830.2 mln/511 3:30 pm :
The dollar index recovers half of this morning's losses, currently down -0.2% around the 93.54 level, aiding select commodities
Commodities, as measured by the Bloomberg Commodity Index, are up +0.3% at 88.35
Crude oil closes near its year-to-date highs, breaking above the $50/barrel resistance in afternoon pit trading
August crude oil futures rose $1.00 (+2.0%) to $50.12/barrel
Baker Hughes rig data is scheduled to be released tomorrow at 12:00 pm ET
Monthly IEA data is scheduled to be released on July 13
Natural gas breaks above afternoon resistance after an initial decline post-EIA data, which showed a larger-than-expected build compared to Consensus
July natural gas closed $0.02 higher (+0.8%) at $2.69/MMBtu
Working gas in storage was 3,103 Bcf as of Friday, June 17, 2016, according to EIA estimates
Stocks were 618 Bcf higher than last year at this time and 678 Bcf above the five-year average of 2,425 Bcf
Natural gas inventory showed a build of +62 bcf vs expectations for inventory to be a build of approximately +58 bcf
At 3,103 Bcf, total working gas is above the five-year historical range
In precious metals, gold sees a modest downtrend as the dollar recovers some of its morning losses, ending lower on the day
August gold ended today's session down $6.70 (-0.5%) to $1263.10/oz
Silver trades near parity with the previous day's close
July silver closed today's session $0.03 higher (+0.2%) at $17.35/oz
Base metal copper trades to a 6-week high in afternoon pit trading
July copper closed $0.03 higher (+1.4%) at $2.16/lb
Today's session began on a higher note as U.S. equity futures traded higher lockstep with European bourses. Equity indices in the region displayed a bullish bias as investors responded to the final round of preliminary Brexit polls. The polling data indicated that the "Remain" camp leads the "Leave" faction. As a result, risk assets received a bid with a rally in the pound leading the move. Cable notched a new six-month high overnight, climbing to the 1.4950 price level.
Economic date today came in the form of the initial claims reading, which for the week ending June 18 fell by 18,000 from the prior week to 259,000. Continuing claims for the week ending June 11 decreased by 20,000 to 2.142 million. Further, new home sales declined 6.0% month-over-month in May to a seasonally adjusted annual rate of 551,000 from a downwardly revised 586,000 (from 619,000) in April. Also, the Conference Board reported a 0.2% decline in its Leading Economic Index for May.
The session was capped off with solid gains as stocks pushed to highs when the bell rang. Bullish action began to persist about a half hour before the close, and continued until the finish ahead of tonight's Brexit decision. The tech-heavy Nasdaq Composite led the way higher, advancing 76.72 points (+1.59%) to close 4910.04. The S&P 500 was up 27.87 points (+1.34%) to 2113.32 when the bell rang, and the Dow Jones Industrial Average finished above 18K, adding 230.24 points (+1.29%) to end 18011.07.
Technology (XLK 43.97, +0.59 +1.36%) posted impressive gains today as component Micron (MU 14.05, +1.33 +10.46%) was higher by % following two premarket upgrades at Nomura and Susquehanna. Other sectors as measured by the S&P closed the day XLF +2.10%, XLE +1.65%, XLB +1.54%, XLV +1.31%, XLI +1.16%, XLY +0.98%, XLP +0.61%, XLU +0.28% with Financials leading the charge and Utilities lagging, but still ending the day in the green.
In the S&P 500 Information Technology (727.30, +10.76 +1.50%) sector, trading ended near highs with components Red Hat (RHT 78.39, -1.36 -1.71%) and Accenture (ACN 118.94, -0.14 -0.12%) ending among the few laggards, feeling the pressure following quarterly results. Other names in the sector which closed the day higher included WDC +5.09%, QRVO +4.74%, AKAM +4.52%, JNPR +4.48%, NTAP +3.29%, ADSK +2.93%, SWKS +2.85%, QCOM +2.79%, HPQ +2.70%.
Other notable news items among sector components:
In addition to reporting quarterly results, Red Hat (RHT) announced the acquisition of 3scale; financial details of the deal were not disclosed. RHT also announced a $1 billion share buyback.
Harris (HRS 84.14, +0.75 +0.90%) received a $1.7 billion multi-year contract from the US Army.
Biological Industries announced a co-branding agreement with Corning's (GLW 20.79, +0.24 +1.17%) subsidiary, Mediatech, Inc., which will enable cell therapy, research, and manufacturing organizations around the world to purchase the innovative, xeno-free NutriStem human pluripotent stem cell medium in conjunction with GLW's existing portfolio of stem cell-focused technologies. Before the end of this year, Corning and BI will launch a jointly-branded NutriStem hPSC XF Medium, which will continue to be manufactured by BI, but marketed, distributed and supported worldwide by Corning's global commercial team.
HP (HPQ 12.95, +0.34 +2.70%) recalled batteries for HP and Compaq notebook computers due to fire and burn hazards. The recall involves lithium-ion batteries containing Panasonic (PCRFY 9.20, +0.31 +3.43%) cells used in the notebook computers.
Elsewhere in the tech space:
Alarm.com (ALRM 25.09, +2.57 +11.41%) to acquire two business units from Icontrol Networks for about $140 million. The deal is expected to be EPS accretive on a non-GAAP basis for FY17.
SunEdison (SUNEQ 0.13, -0.00 -2.43%) CEO Ahmad Chatila resigned. The company will appoint John Dubel as CEO, both effective June 22.
Groupon's (GRPN 3.35, +0.10 +3.08%) on-demand delivery service OrderUp enters into partnership with Qdoba Mexican Eats, a sub of Jack in the Box (JACK 87.72, +1.68 +1.95%), to deliver from a number of the restaurants' locations.
T-Mobile US (TMUS 43.67, +0.97 +2.27%) appointed Peter Osvaldik as Chief Accounting Officer.
CACI Intl (CACI 90.89, -8.41 -8.47%) issued worse than expected guidance for 2017 in the form of EPS of $6.02-6.43 and revenues of $4.05-4.25 billion.
58.com (WUBA 46.63, +1.38 +3.05%) divested 65.7% its stake in Mayi in exchange for a minority stake in Tujia by completing a share swap in Mighty Talented Limited.
Black Knight Financial (BKFS 34.99, +0.99 +2.91%) acquired Motivity Solutions. Financial terms of the deal were not disclosed.
In reaction to quarterly results:
Accenture (ACN) reported in-line Q3 EPS of $1.41 on better than expected revenues which rose 8.6% versus last year to $8.43 billion. The company also guided Q4 revenues of $8.25-8.50 billion. For the FY16 period, the company raised EPS expectations to $5.29-5.33 from $5.21-5.32 - also raised revenue expectations to growth of 9.5-10.5% from 8-10%.
BlackBerry (BBRY 7.00, +0.26 +3.86%) reported better than expected Q1 EPS of net breakeven and revenues which fell 39.2% versus last year and came in worse than expectations to $400 million ($424 million in non-GAAP). For the FY17 period, the company issued better than expected guidance for EPS of ($0.15).
Red Hat (RHT) reported in-line EPS for Q1 of $0.50 on revenues which rose 18.1% versus last year to $567.9 million. For Q2, the company sees EPS of about $0.54 on revenues of $587-593 million. For FY17, RHT expects EPS of $2.19-2.23 (down from $2.22-2.26 due to the 3scale acquisition) and revenues of $2.38-2.42 billion.
Companies scheduled to report quarterly results tonight: SNX
Analyst actions:
MU was upgraded to Positive from Neutral at Susquehanna and to Buy from Reduce at Nomura;
SCTY was downgraded to Equal Weight from Overweight at Morgan Stanley,
MTD was downgraded to Neutral from Buy at Citigroup,
CACI was downgraded to Market Perform from Outperform at Wells Fargo,
POWI was downgraded to Neutral from Buy at Sidoti;
GRPN, EBAY and AMZN were initiated with Buy ratings at Maxim Group,
MTSC was initiated with an Overweight at JP Morgan,
VDSI was initiated with a Buy at Sidoti,
ZEN was initiated with a Buy at UBS
4:33 pm Rambus extends its license agreement with NAGRA (RMBS) : Co has extended the license agreement with NAGRA, a digital TV division of the Kudelski Group, for the use of its Differential Power Analysis countermeasures in selected NAGRA digital TV offerings.
4:31 pm Universal Display to acquire Adesis for ~$36 mln in cash (OLED) :
Co will acquire Adesis, Inc for $36 mln in cash.
Adesis is a privately held contract research organization (:CRO) with 43 employees specializing in organic and organometallic synthetic research, development, and commercialization. Adesis is a critical technology vendor to companies in the pharmaceutical, fine chemical, biomaterials, and catalyst industries, and has worked with Universal Display over the last few years to help advance and accelerate a number of Universal Display's product offerings. Andrew Cottone will continue as the President of Adesis, and Steve Abramson will become the Chairman of the Board of Adesis.
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