From Briefing.com: 4:30 pm Ultratech announces expansion order from a foundry in Asia to add capacity for 28-nm production (UTEK) : Ultratech plans to ship the LSA101 tool to the customer's foundry in Asia in the fourth quarter of 2016.
4:16 pm Western Digital preannounces Q4 results above guidance/consensus; Mark Long to succeed Oliver Leonetti as CFO in Setpember (WDC) :
Co preannounces Q4 EPS $0.72 from $0.65-0.70 guidance vs $0.68 Capital IQ Consensus; revs $3.46 bln from $3.35-3.45 bln vs $3.41 bln Capital IQ Consensus
Co announced the appointment of Mark Long to oversee the company's finance organization as executive vice president, finance, in addition to his role as chief strategy officer. Long will succeed Olivier Leonetti as chief financial officer on Sept. 1, 2016. Leonetti is leaving the company to pursue other opportunities but will continue as CFO through Sept. 1, 2016.
4:11 pm Emcore completes strategic review, announces a special dividend of $1.50/share - shares halted (EMKR) :
As part of the strategic review process, the co evaluated its growth opportunities in existing and adjacent markets, analyzed its products, technologies and production capabilities, and concluded that it could fully leverage its core competency in Mixed-Signal Optics in both existing and new markets.
With this action, Emcore's Board will have returned ~$85 mln of cash to its shareholders since June 2015, representing ~50% of the cash received from operations sold in the prior fiscal year.
"The return of cash to shareholders will strongly improve the Return on Assets of the business by reducing our overall capitalization, while maintaining flexibility to invest in new market opportunities to accelerate earnings growth," says Jeffrey Rittichier, President and CEO. "As previously stated, we're encouraged by the performance of our CATV and Fiber Optic Gyro businesses and see strong growth opportunities in these and other areas to continue improving our financial performance," added Rittichier.
4:15 pm : The stock market ended the Wednesday affair on a higher note, rebounding from selling pressure in the opening hour. Factors impacting today's rebound included a positive reading of the ISM Services Index for June, a reversal in oil, softening in the dollar, and the outperformance of the heavily-weighted health care (+1.2%), consumer discretionary (+0.8%), and technology (+0.5%) sectors. The Nasdaq Composite (+0.8%) finished ahead of the S&P 500 (+0.5%) and the Dow Jones Industrial Average (+0.4%).
The major averages began the day on a choppy note as global bourses responded to implications from the United Kingdom's decision to leave the European Union. European indices led the losses as investors weighed reports from the U.K. that several real estate funds were halting redemptions due to liquidity concerns. Additionally, growing uncertainty in the Italian banking sector added to the negative bias in regional bourses.
U.S. equity markets shrugged off early weakness, responding in part to a better-than-expected reading of the ISM Services Index for June and a reversal in the biotechnology sub-group. The major averages extended their rebound through the afternoon as the minutes from the June FOMC meeting failed to rock the boat. The minutes indicated that the Fed will likely remain on hold, pending further economic data. Additionally, the central bank commented on the need to see the outcome of the Brexit referendum (the Fed meeting was held ahead of the vote) in order to better estimate the speed and path of interest rate normalization.
The benchmark index climbed in the final hour, testing and clearing resistance near the 2095/2096 price level. The S&P 500 (+0.5%) ended off its high with eight sectors trading in the green. The heavily-weighted health care (+1.2%) sector led consumer discretionary (+0.8%), and (+0.6%) energy. The remaining gainers finished with upticks between 0.2% (utilities) and 0.5% (technology).
In the health care space (+1.2%), biotechnology outperformed as the iShares Nasdaq Biotechnology ETF (IBB 266.24, +6.16) climbed 2.4%. In the ETF, Celgene (CELG 104.60, +4.35) gained 4.3% after signing a confidentiality agreement with Medivation (MDVN 62.33, +0.57). Additionally, Sanofi (SNY 41.23, -0.13) and Pfizer (PFE 35.86, +0.05) signed similar agreements, indicating that each could be exploring a potential transaction with Medivation. Elsewhere, Valeant Pharmaceuticals (VRX 23.06, +3.11) spiked 15.6% after Walgreens Boot Alliance (WBA 81.55, -1.97) announced during its conference call that it is pleased with its relationship with Valeant.
Retail names outperformed in the consumer discretionary sector (+0.8%), evidenced by the 1.5% gain in the SPDR S&P Retail ETF (XRT 42.29, +0.63). CarMax (KMX 50.45, +2.69) outperformed among specialty retailers, rallying 5.6%. Conversely, Netflix (NFLX 94.60, -3.31) ended lower by 3.4% after Jefferies downgraded the stock to "Underperform" from "Hold." This follows Netflix receiving a downgrade to "Hold" at Needham yesterday.
The economically-sensitive financial sector (+0.4%) finished modestly higher as banking names erased early losses. Wells Fargo (WFC 46.65, +0.44) and JPMorgan Chase (JPM 60.19, +0.64) ended the day higher by 1.0% and 1.1%, respectively. The two names began the day with respective losses of 0.7% and 1.1%. Real estate investment trusts were pressured through the session as risk appetite increased throughout the session.
The U.S. Dollar Index (96.05, -0.11) ended the day on a lower note as the euro and the yen gained ground against the buck. The euro/dollar pair ended higher by 0.2% (1.1103) while the greenback lost 0.4% against the yen (101.32). Separately, cable declined 0.7% (1.2931).
The Treasury complex finished on a mixed note as the yield on the 10-yr note ended flat at 1.37%.
Today's participation was above the recent average as more than one billion shares changed hands on the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index, May Trade Balance, and June ISM Services:
The weekly MBA Mortgage Index showed a seasonally adjusted increase of 14.2% in mortgage applications.
The trade deficit widened to $41.10 billion in May from $37.40 billion in April.
That was worse than the Briefing.com consensus, which expected the deficit to hit $40.00 billion.
Exports were down $0.30 billion to $182.40 billion while imports increased $3.40 billion to $223.50 billion.
The dynamic indicates some relative strength in the U.S. economy when compared to the rest of the world.
On a year-over-year basis, exports were down 4.9% to $47.20 billion while imports declined 4.7% to $54.30 billion. The goods and services deficit declined 3.5% to $7.20 billion.
The real goods deficit increased $3.60 billion to $61.10 billion, which will be a negative for Q2 GDP since it is above the first quarter average of $60.50 billion.
The Non-Manufacturing ISM Report on Business (aka The ISM Services Index) increased to 56.5 in June from 52.9 in May. The Briefing.com consensus estimate was pegged at 53.3.
The June report represented the 77th consecutive expansionary (i.e. above 50) reading and it was the highest mark of the year.
However, the true test is likely to take place in the upcoming months as the index approaches a multi-year high near 60.0.
The June improvement was driven by growth in most categories.
Business Activity/Production increased to 59.5 from 55.1, New Orders increased to 59.9 from 54.2, Employment ticked up to 52.7 from 49.7, and New Export Orders improved to 53.0 from 49.0.
Conversely, Prices slipped to 55.5 from 55.6 and Backlog of Orders declined to 47.5 from 50.0.
Tomorrow's economic data will include June Challenger Job Cuts and the June ADP Employment Change Report (Briefing.com consensus 152k), which will be released at 7:30 ET and 8:15 ET, respectively. Separately, weekly initial claims (Briefing.com consensus 268k) will cross the wires at 8:30 ET.
Nasdaq Composite -3.0% YTD
Russell 2000 +1.0% YTD
S&P 500 +2.7% YTD
Dow Jones +2.8% YTD
DJ30 +78.00 NASDAQ +36.26 SP500 +11.18 NASDAQ Adv/Vol/Dec 1868/1.69 bln/1155 NYSE Adv/Vol/Dec 1927/1.023 bln/1072
3:30 pm :
The dollar index snaps its 2-day streak of gains, trading down -0.2% around the 96.02 level, boosting commodities
Commodities, as measured by the Bloomberg Commodity Index, are up +0.1% at 87.53
Crude oil closes higher on the day ahead of today's API data while the dollar index trades lower in afternoon pit trading
August crude oil futures rose $0.64 (+1.4%) to $47.37/barrel
Factors potentially affecting the price of crude oil include:
5 recent attacks this weekend on various oil pipelines located in Nigeria by militant groups after a brief ceasefire
In Nigeria they pumped an avg 1.53 mln barrels a day last month, an increase of about 90,000 a day from May
U.S. oil production fell to 8.9 mln barrels/day in April from a high of nearly 9.7 mln barrels one year ago
Last Friday, Baker Hughes reported rig count data showing that rigs were added for 4 out of the 5 previous weeks, signaling that local production may be increasing
Baker Hughes rig count data will be released this Friday at 1 pm ET
Due to the shortened week, API data will be released Wednesday at 4:30 pm ET and EIA crude oil data will be released Thursday, 30 min after regularly scheduled natural gas inventory data
IEA Monthly data will be released July 13th
Natural gas eases off its lows as selling pressure subsides & energy futures turn positive ahead of tomorrow's EIA inventory data
August natural gas closed $0.03 higher (+1.1%) at $2.79/MMBtu
EIA natural gas inventory data will be released at its normally scheduled date/time tomorrow at 10:30 am ET
In precious metals, gold stages a modest afternoon rally as the dollar trades into negative territory for the day
August gold ended today's session up $8.70 (+0.6%) to $1367.10/oz
Silver closes pit trading at fresh 2-year highs for the second consecutive session
September silver closed today's session $0.25 higher (+1.3%) at $20.18/oz
Silver futures have rallied and closed higher for the past 6 consecutive sessions
Base metal copper ends near its morning lows to close afternoon pit trading down for the day
September copper closed $0.03 lower (-1.4%) at $2.15/lb
Equity futures moved lower lockstep with global bourses overnight, succumbing to persistent uncertainty regarding the United Kingdom's decision to leave the European Union. European banking names paced the retreat after reports indicated that several real estate funds in the U.K. are halting redemptions due to liquidity concerns. Furthermore, Italian banks added to the negative tone overseas as the country mulls state aid in the wake of more stringent regulations from the EU.
Today, market data came across in the form of the weekly MBA Mortgage Index which showed a seasonally adjusted increase of 14.2% in mortgage applications. Additionally, the trade deficit widened to $41.10 billion in May from $37.40 billion in April. Also, the Non-Manufacturing ISM Report on Business (aka The ISM Services Index) increased to 56.5 in June from 52.9 in May. The Federal Reserve also released June meeting minutes at 2:00 p.m. ET.
Broader market trading was mostly higher after a brief period of morning weakness. Action turned red to green about an hour and a half into Wednesday trading and gains held following the FOMC minutes. The positive bias was again led by the Nasdaq Composite which added 36.26 points (+0.75%) to 4859.16. The S&P 500 finished in the middle, higher by 11.18 points (+0.54%) to 2099.73, and the Dow Jones Industrial Average advanced 78.00 points (+0.44%) to end the day 17918.62.
Technology (XLK 43.46, +0.31 +0.72%) held onto positive action from the afternoon, closing at highs as component First Solar (FSLR 49.13, +1.36 +2.85%) out-performed on no particular news, but overall strength in the Solar (TAN 21.14, +0.52 +2.52%) sector. Other sectors as measured by the S&P closed Wednesday XLV +1.12%, XLY +0.86%, XLI +0.50%, IYZ +0.48%, XLE +0.43%, XLB +0.40%, XLF +0.27%, XLU +0.21%, XLP +0.09% with Healthcare leading the positive action and Consumer Staples lagging, yet still finishing in the green.
In the S&P 500 Information Technology (712.51, +3.75 +0.53%) sector, we saw action mirror broader market opening weakness, but ultimately rebound into positive territory as component Apple (AAPL) was modestly higher following a premarket initiation at Longbow. Other names in the space which ended the session modestly higher included HPQ +1.94%, CSRA +1.90%, WDC +1.65%, STX +1.55%, QRVO +1.45%, CSCO +1.38%, TDC +1.37%, AKAM +1.31%, RHT +1.25%.
Other notable news items among sector components:
The US Computer Emergency Readiness Team issued an alert stating that Symantec (SYMC 20.38, +0.03 +0.15%) and Norton security products contain critical vulnerabilities.
Fujitsu Limited, Oracle (ORCL 40.53, +0.13 +0.32%), and Oracle Japan have agreed to form a new strategic alliance to deliver enterprise-grade cloud services to customers in Japan and their subsidiaries around the world.
According to Moodstocks' website, Alphabet (GOOG 697.77, +3.28 +0.47%) acquired the company for an undisclosed sum.
Elsewhere in the tech space:
Twitter (TWTR 17.20, +0.06 +0.35%) appointed Bret Taylor, Founder and CEO of Quip, to serve as a Board member effective immediately.
Canadian Solar's (CSIQ 15.09, +0.27 +1.82%) CSI Solar Power sold it solar power projects in China for $32.8 million.
ExlService (EXLS 51.99, +0.20 +0.39%) acquired LISS Systems. Financial terms were not disclosed.
CDK Global (CDK 54.47, -0.24 -0.44%) said it secured a record number of contract renewals in its fiscal fourth quarter.
Pattern Energy Group (PEGI 23.74, +0.26 +1.11%) acquired from SunEdison (SUNEQ 0.13, flat) the development rights to the proposed 600 megawatt King Pine Wind power project. Financial terms of the deal were not disclosed.
Analyst actions:
LPL was upgraded to Outperform from Sell at Credit Agricole;
NFLX was downgraded to Underperform from Hold at Jefferies,
JNPR was downgraded to Hold from Buy at Deutsche Bank,
SYNA was downgraded to Hold from Buy at Lake Street,
VIV was downgraded to Equal Weight from Overweight at Morgan Stanley;
AAPL was initiated with a Buy at Longbow,
SITO was initiated with a Buy at Craig Hallum,
CMTL was initiated with an Outperform at Northland Capital
2:26 pm Ultratech issues response to a report by Glass Lewis & Co regarding the election of proposed Board Directors, 'strongly believes' they made the 'wrong conclusion' in 'failing' to recommend all 7 nominees (UTEK) :
Main points of response (as stated by Ultratech):
Believes Glass Lewis' analysis is flawed and reflects a fundamental misunderstanding of Ultratech's business and performance, as well as the cyclical nature of its industry.
Given Glass Lewis' lack of understanding of the key facts, Ultratech's Board and senior management are available to speak with any and all stockholders to offer context and answer questions about the co's strategy, performance, and corporate governance.
Strongly urges Ultratech stockholders to protect the value of their investment by voting for all seven of the co's director nominees on the white proxy card.
9:22 am EMC announces that Glass Lewis recommends shareholders vote to approve the merger among Denali Holding, Dell (:DELL), Universal Acquisition Co, & EMC (EMC) : Glass Lewis Stated, "Overall, we find that the proposed transaction is financially and strategically reasonable from the perspective of EMC and its shareholders. The proposed consideration represents what is, in our view, an attractive premium to the unaffected closing price of EMC shares and appears generally reasonable in numerous analyses presented by the independent financial advisors, including relative to peer trading multiples, premiums paid and discounted cash flows including stock based compensation expense. The proposed consideration will allow shareholders to realize a substantial portion of their investment in cash and to continue to participate in the future performance of VMware."
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