From Briefing.com: 4:10 pm : The stock market ended the Thursday affair on a flat note, responding to a reversal in crude oil and exhibiting caution ahead of tomorrow's release of the Employment Situation Report for June. Other focal points impacting today's trade included strengthening in the dollar and the outperformance of the heavyweight technology (+0.3%), industrial (+0.3%), and consumer discretionary (+0.4%) sectors. The Nasdaq Composite (+0.4%) ended ahead of the S&P 500 (-0.1%) and the Dow Jones Industrial Average (-0.1%).The major averages began the day on a modestly higher note, trading higher alongside a rebound in European bourses and a rally in crude oil. Global equity markets tilted to the upside as participants weighed dovish minutes from the Fed's June policy meeting. The central bank struck an accommodative tone, citing the need for further economic data before voting to continue policy rate normalization. The FOMC also commented that it would need to monitor conditions overseas should the United Kingdom vote to leave the European Union.
U.S. indices slipped mid-morning as investors eyed a downturn in crude oil. The energy component came under pressure after inventory data from the Department of Energy failed to impress investors. The EIA reported that crude oil inventories declined by 2.22 million barrels (consensus: between -2.3 million and -2.6 million barrels), which fell roughly in-line with expectations. However, investors were likely anticipating a larger draw after API inventory data disclosed that crude oil inventories fell by 6.73 million barrels (last: -3.86 million barrels). Furthermore, the downturn in crude oil occurred ahead of a vote by the U.S. Department of the Interior regarding offshore drilling rights in Alaska. WTI crude ended its day lower by 4.6% ($45.19/bbl; -$2.18).
The benchmark index ticked off a session low (2089.39) in the final hour, maintaining technical support near the 2090 price level. Five sectors ended in the red with utilities (-1.8%), telecom services (-1.6%), and energy (-1.1%) rounding out the leaderboard. On the flipside, consumer discretionary (+0.4%), industrials (+0.3%), and technology (+0.3%) led the pack.
The PHLX Semiconductor Index (+1.2%) demonstrated relative strength, trimming its weekly loss to 0.5%. Micron (MU 12.20, +0.47) outperformed in the index gaining 4.0%. Elsewhere, NVIDIA (NVDA 48.89, +1.24) jumped 2.6% after announcing the launch of a new video card on July 19. In the broader technology sector (+0.1%), Western Digital (WDC 47.66, +2.20) climbed 4.8% after raising its quarterly earnings and revenue guidance above consensus.
The Dow Jones Transportation Average (+0.5%) finished ahead of the broader market as airlines trimmed their losses. In the group, Delta Air Lines (DAL 36.37, +0.79) and American Airlines (AAL 29.40, +1.05) gained 2.2% and 3.7%, respectively. In the industrial sector (+0.3%), Dow component General Electric (GE 31.82, +0.08) outperformed, extending its monthly gain to 1.1%. The broader industrial sector has ticked lower by 0.2% in July.
The health care space (-0.2%) ended its day lower as health care plan names underperformed. On that note, Aetna (AET 115.47, -4.77) and Humana (HUM 162.74, -17.24) lost a respective 4.0% and 9.6%. The two prospective merger partners fell amid reports that they will meet with the Department of Justice tomorrow regarding their pending deal. On the flipside, biotechnology outperformed, evidenced by the 0.6% gain in the iShares Nasdaq Biotechnology ETF (IBB 267.84, +1.60).
In the consumer staples group (-0.1%), PepsiCo (PEP 107.49, +1.57) climbed 1.5% after reporting above-consensus bottom-line results for the quarter. The company also raised its earnings guidance for the fiscal year. Elsewhere, WhiteWave Foods (WWAV 56.23, +8.80) surged 18.6% after announcing that Danone (DANOY 14.30, +0.15) would acquire the company for $56.25 per share.
The U.S. Dollar Index (96.27, +0.22) ended off its session high as the pound, euro, and commodity currencies lost ground to the greenback. Cable fell 0.2% (1.2909) while the single currency lost 0.3% against the buck (1.1064). The dollar/Canadian dollar ended higher by 0.3% (1.2997) amid weakness in oil. Separately, the dollar lost 0.5% against the safe-haven yen (100.74).
The Treasury complex ended modestly lower as the yield on the 10-yr note rose two basis points to 1.39%.
Today's participation was above the recent average as more than 851 million shares changed hands on the NYSE floor.
Today's economic data included June Challenger Job Cuts, ADP Employment Change Report for June, and weekly initial claims:
June Challenger Job Cuts reported in at 38,500, which compares to the prior month's reading of 30,200.
The ADP Employment Change report for June pointed to the addition of 172,000 jobs
The more influential Employment Situation Report (Briefing.com consensus 175K) will be released tomorrow at 8:30 ET.
Weekly initial claims for the week ending July 2 totaled 254,000 while the Briefing.com consensus expected a reading of 268,000.
With today's report, the series has been running below 300,000 for 70 consecutive weeks.
This is the longest sub-300,000 streak since 1973.
The latest initial claims reading lowered the four-week moving average for claims to 264,750.
Continuing claims for the week ending June 25 declined by 44,000 to 2.124 million.
The four-week moving average for this series increased by 3,000 to 2.148 million.
Friday's economic data will include the Employment Situation Report for June (Briefing.com consensus 175,000) and Consumer Credit for May (Briefing.com consensus $15.3 billion), which will be released at 8:30 ET and 15:00 ET, respectively.
Dow Jones +2.7% YTD
S&P 500 +2.6% YTD
Russell 2000 +1.2% YTD
Nasdaq Composite -2.6% YTD
DJ30 -22.74 NASDAQ +17.65 SP500 -1.83 NASDAQ Adv/Vol/Dec 1679/1.532 bln/1228 NYSE Adv/Vol/Dec 1637/851.3 mln/1356
3:30 pm :
The dollar index extends this morning's gains, currently up +0.3% around the 96.31 level, weighing on all commodities
Commodities, as measured by the Bloomberg Commodity Index, are down -2.3% at 85.53
Crude oil futures close near lows of the session after EIA data showed a smaller-than-expected draw compared to Consensus
August crude oil futures fell $2.18 (-4.6%) to $45.19/barrel
Crude oil inventories had a draw of -2.223 mln (consensus called for a draw between -2.3 mln and -2.6 mln barrels)
Gasoline inventories had a draw of -0.122 mln
Distillate inventories had a draw of -1.574 mln
Natural gas sees an initial move higher post-EIA inventory data before reversing, giving up its gains, and ending lower for the day
August natural gas closed $0.01 lower (-0.4%) at $2.78/MMBtu
Natural gas inventory showed a build of +39 bcf vs expectations for inventory to be a build between +36 and 46 bcf.
Working gas in storage was 3,179 Bcf as of Friday, July 1, 2016, according to EIA estimates.
Stocks were 538 Bcf higher than last year at this time and 599 Bcf above the five-year average of 2,580 Bcf.
At 3,179 Bcf, total working gas is above the five-year historical range.
In precious metals, gold drifts lower as the dollar extends this morning's rally
August gold ended today's session down $5.10 (-0.4%) to $1362.00/oz
Silver eases off its morning lows after seeing a notable retreat from yesterday's 2-year highs, still closing lower for the day as the dollar index gains momentum
September silver closed today's session $0.33 lower (-1.6%) at $19.85/oz
Base metal copper adds onto this morning's losses in afternoon pit trading
September copper closed $0.03 lower (-1.4%) at $2.12/lb
December corn closed $0.01 lower (-0.3%) at $3.48/bushel
September wheat closed $0.04 lower (-0.9%) at $4.24/bushel
November soybeans closed $0.53 lower (-4.9%) at $10.23/bushel
U.S weather is a driver to prices because the country produces about 32% of the world's soybeans
Note on geographical production:
Combined, the U.S., Brazil and Argentina are the largest producing countries of soybeans
Together, the three countries are expected to produce a total of 81.3% of the world's soybeans this year
U.S. 31.9%
Brazil 31.8%
Argentina 17.6%
In the 2015/16 crop year, these same three countries produced 83.1% of the world's soybeans
As a reminder, the quarterly grain stock report released June 30th showed:
Corn stocks Up 6% from June 2015
Soybean stocks Up 39%
All wheat stocks Up 30%
4:06 pm Ultra Clean Holdings announces CFO Casey Eichler will step down effective July 29 to pursue other opportunities, Sheri Brumm has been promoted to CFO effective July 30 (UCTT) :
Sheri Brumm previously served as Senior Vice President of Finance and Chief Accounting Officer.
4:06 pm SunPower and Total (TOT) extend credit support agreement through 2018 (SPWR) : SunPower has amended and extended the terms of its existing credit support agreement with Total S.A through 2018. With this agreement, Total will guarantee SunPower's letters of credit in support of certain company activities. The companies have amended and restated the initial agreement, signed in 2011, to reduce the amount available under the facility to $500 million to more appropriately match SunPower's current and long-term credit needs. Additionally, terms for the facility remain substantially unchanged, subject to certain financial covenant requirements.
The major averages began on a modestly higher note, buoyed by positive employment readings and an uptick in oil. However, equities slipped through the morning with the heaviest selling following the release of the Department of Energy's weekly inventory report. The report fell largely in-line with expectations, but failed to measure up to the API inventory data. The EIA reported that crude oil inventories declined by 2.22 million barrels while the API data showed that crude oil inventories fell by 6.73 million barrels.
When Thursday trading was done, equities were mixed. Trading in the Nasdaq Composite was the lone out-performer today as the index added 17.65 points (+0.36%) to 4876.81. By comparison, the Dow Jones Industrial Average lost 22.74 points (-0.13%) to 17895.88, and the S&P 500 was down 1.83 points (-0.09%) to 2097.90 when the day was done.
Market data today included June Challenger Job Cuts which registered at 38,500, compared to the prior month's reading of 30,200. Also, the ADP Employment Change report for June pointed to the addition of 172,000 jobs and the weekly initial claims for the week ending July 2 totaled 254,000.
Technology (XLK 43.45, -0.01 -0.02%) trading went higher to begin the session but followed the broader market lower as the day unfolded. Component Western Digital (WDC 47.66, +2.20 +4.84%) postured up to some solid gains on the back of better than expected prelim Q4 results and the announcement of Oliver Leonetti's replacement at the CFO position, Mark Long. Other sectors as measured by the S&P closed the session XLY +0.43%, XLI +0.27%, XLB +0.26%, XLF +0.13%, XLV -0.15%, XLP -0.20%, IYZ -0.30%, XLE -1.02%, XLU -1.85% as Consumer Discretionary led the day in positive territory and Utilities were the worst performer.
In the S&P 500 Information Technology (714.27, +1.76 +0.25%) sector turned in another session of gains. Component First Solar (FSLR 44.34, -4.79 -9.75%) was downgraded to Hold from Buy at Deutsche Bank and saw pressure throughout the trading day. Other notable movers among sector components included MU +4.01%, QRVO +3.42%, SWKS +2.92%, NVDA +2.60%, HPQ +1.98%, MCHP +1.84%, TEL +1.62%, GLW +1.54%, CTXS +1.41%, NTAP +1.40%, LLTC +1.38%, AMAT +1.21%.
Other notable news items among sector components:
Western Digital (WDC) pre-announced Q4 EPS of $0.72 from prior $0.65-0.70 and revenues of $3.46 billion from prior $3.35-3.45 billion, both of which were above expectations. Additionally, WDC announced Mark Long will succeed Oliver Leonetti as CFO in September.
Accenture's (ACN 112.70, -0.78 -0.69%) Chairman and CEO Pierre Nanterme sent a letter to colleagues alerting them of his recent diagnosis with colon cancer.
Microsoft's (MSFT 51.38, flat) COO, Brian Turner, to leave the company to become CEO of Citadel Securities.
Paychex (PAYX 60.59, -0.25 -0.41%) increased its quarterly dividend to $0.46 per share from $0.42 per share and announced a $350 million repurchase program.
NVIDIA (NVDA 48.89, +1.24 +2.60%) announced the launch of the GeForce GTX 1060, the company's latest graphics card starting at $249 (competition to Advanced Micro's (AMD) $200 Radeon RX480 model).
Elsewhere in the tech space:
AVG Tech (AVG 24.58, +5.78 +30.74%) to be acquired by Avast Software for $25.00 per share.
Emcore (EMKR 6.18, +0.48 +8.42%) completed its strategic review, and subsequently announced a special dividend of $1.50 per share.
Convergys (CVG 25.07, +0.04 +0.16%) to acquire German-based buw for EUR 123 million. The deal is expected to be accretive to CVG earnings.
Samsung (SSNLF 1220, flat) announced earnings guidance for Q2 in the range of Q2 sales of KRW49-51 trillion and operating profit of KRW8.0-8.2 trillion.
SeaChange (SEAC 3.33, +0.03 +0.91%) named Peter Faubert as CFO.
ComScore (SCOR 25.85, +0.77 +3.07%) signed a local TV measurement agreement with Dispatch Printing Co television stations WTHR-TV in Indianapolis, Indiana & WBNS-TV in Columbus, Ohio. Financial terms of the deal were not disclosed.
Analyst actions:
LPSN was upgraded to Buy from Hold at The Benchmark Company,
WEX was upgraded to Equal Weight from Underweight at Barclays;
T was downgraded to Neutral from Buy at Citigroup,
RHT was downgraded to Equal Weight from Overweight at Morgan Stanley,
FSLR was downgraded to Hold from Buy at Deutsche Bank,
YUME and WU were downgraded to Underweight from Equal Weight at Barclays,
BR was downgraded to Equal Weight from Overweight at Barclays;
TER was initiated with a Buy at Needham,
RNG was initiated with a Buy at Craig Hallum
