From Briefing.com: 4:25 pm : The stock market finished Thursday just below its flat line as the S&P 500 shed 0.1%. The Nasdaq outperformed, adding a modest 0.2%.
Stocks were able to overlook the red flags in other markets during the opening hour, but selling interest picked up soon thereafter. The S&P 500 saw a ten-point dip in the late morning amid defensive action in other asset classes. However, the slip, which came ahead of tomorrow's release of the Employment Situation Report for December (Briefing.com consensus 175K), was largely erased by the close.
Cyclical sectors performed slightly worse than their defensive counterparts, as five of the six finished in negative territory. Leading the retreat was the financial sector (-1.0%), which broke its three-session winning streak. Industrials (-0.4%), materials (-0.3%), and energy (-0.3%) also trailed the broader market.
Energy had a poor showing despite crude oil ending the day up 0.9% at $53.87/bbl. The advance occurred as the U.S. dollar retreated for the second consecutive day. The U.S. Dollar Index (101.52, -0.97) finished lower by 1.0%, thanks to strength in the euro (1.0593) and the Japanese yen (115.61). The two currencies increased 1.0% and 1.4% against the dollar, respectively.
The consumer discretionary space (-0.1%) settled in line with the broader market, bouncing back from heavy selling pressure in the morning. The sector started Thursday on the wrong foot after Macy's (M 30.86, -4.98) and Kohl's (KSS 42.01, -9.87) issued disappointing guidance due to weak holiday sales, pushing the SPDR S&P 500 Retail ETF (XRT 44.02, -1.15) lower by 2.6%. However, the sector's top-weighted stock, Amazon (AMZN 780.45, +23.27) had a solid showing, ending the day higher by 3.1%.
The top-weighted technology sector (+0.2%) was the only cyclical group to finish the day in positive territory. However, the win didn't come easy as weakness in chipmakers sent the PHLX Semiconductor Index lower by 0.9%. That soft spot was offset by gains in top components like Apple (AAPL 116.61, +0.59) and Facebook (FB 120.67, +1.98).
On the countercyclical side, health care (+0.5%) finished the day at the top of the leaderboard by capitalizing on biotechnology's positive performance; the iShares Nasdaq Biotechnology ETF (IBB 278.10, +0.87) added 0.3%. Real estate (+0.5%), consumer staples (+0.3%), and utilities (+0.1%) also finished in the green, drawing strength from a decline in yields.
U.S. Treasuries climbed into the late morning and returned to their highs just ahead of the close. The benchmark 10-yr yield fell seven basis points to 2.37%.
Economic data included ADP Employment Change, Initial Claims, and ISM Services:
The latest weekly initial jobless claims count totaled 235,000 while the Briefing.com consensus expected a reading of 265,000. Today's tally was below the revised prior week count of 263,000 (from 265,000). As for continuing claims, they rose to 2.112 million from the revised count of 2.096 million (from 2.102 million).
The key takeaway from the report is that it points to tight labor market conditions as employers overall appear to be reluctant to cut staff.
The ADP National Employment Report showed an increase of 153,000 in December (Briefing.com consensus 170,000) while the November reading was revised lower to 215,000 from 216,000. The ADP reading precedes Friday's more influential Employment Situation Report for December, which the Briefing.com consensus expects will show the addition of 175,000 nonfarm payrolls. The Employment Situation Report for November indicated that nonfarm payrolls increased by 178,000.
The ISM Services Index for December held at 57.2 while the Briefing.com consensus expected a downtick to 56.6.
The key takeaway from the report is that respondents' comments were mostly positive about business conditions and the overall economy, reinforcing the market's belief that the U.S. economy, which is driven predominately by the non-manufacturing sector, was exhibiting some encouraging growth characteristics as 2016 came to an end.
For further detail on today's economic releases, be sure to visit Briefing.com's Economic Calendar
Tomorrow, the Employment Situation report for December (Briefing.com consensus 175K) and November Trade Balance (Briefing.com consensus -$42.20 billion) will be reported at 8:30 ET while November Factory Orders (Briefing.com consensus -2.1%) will cross the wires at 10:00 ET.
Nasdaq Composite +2.0% YTD
S&P 500 +1.4% YTD
Russell 2000 +1.1% YTD
Dow Jones Industrial Average +0.7% YTD
DJ30 -42.87 NASDAQ +10.93 SP500 -1.75 NASDAQ Adv/Vol/Dec 1289/1.62 bln/1779 NYSE Adv/Vol/Dec 1292/1.14 bln/1638
3:30 pm :
Crude oil ended a volatile pit trading session near its highs of the day despite EIA reporting notable builds in both gasoline & distillates; rig count on tap
Feb crude oil futures rose $0.50 (+0.9%) to $53.78/barrel
Baker Hughes rig count data will be released tomorrow at 1 pm ET.
Crude caught a bid close to the end of pit trading as headlines crossed indicating that Saudi Arabia plans to cooperate fully with the OPEC/non-OPEC production cut
EIA highlights:
Crude oil inventories had a draw of -7.1 mln barrels (consensus called for a draw of -2.15 mln barrels).
Gasoline inventories had a build of +8.3 mln barrels (consensus called for a build of +1.79 mln barrels).
Distillate inventories had a build of +10.1 mln barrels.
Natural gas ended a volatile session higher after EIA reported a smaller-than-expected draw in natural gas inventory vs. Consensus
Feb natural gas closed $0.03 higher (+0.9%) at $3.28/MMBtu
EIA highlights:
Natural gas inventory showed a draw of -49 bcf vs expectations for inventory to be a draw of approximately -82 bcf.
Working gas in storage was 3,311 Bcf as of Friday, Dec 30, 2016, according to EIA estimates.
Stocks were 364 Bcf less than last year at this time & 21 Bcf below the 5-year avg of 3,332 Bcf.
At 3,311 Bcf, total working gas is within the 5-year historical range.
In precious metals, gold ended pit trading at a 1-month high on continued dollar index weakness
Feb 2017 gold ended today's session up $18.40 (+1.6%) to $1183.60/oz
Mar 2017 silver closed today's session $0.11 higher (+0.7%) at $16.64/oz
The dollar index extended yesterday's losses, was -1.1% around the 101.56 level after Tuesday's 14-year high
Commodities, as measured by the Bloomberg Commodity Index, were +0.4% around the 87.53 level
After two sessions in the green to begin 2017, the market finished split though the session took a decided hit when the market reacted negatively to some market data around 11 a.m. ET. In the end, however, the Nasdaq Composite was the only index which escaped Thursday with gains, adding 10.93 points (+0.20%) to 5487.94. The Dow Jones Industrial Average, by contrast, shed about 42.87 points (-0.21%) to 19899.29, and the S&P 500 lost about 1.75 points (-0.08%) to 2269.00.
In the Technology (XLK 49.04, +0.08 +0.16%) space, trading was back and forth about flat lines, but ultimately ended modestly in the green. Component Yahoo! (YHOO 41.34, +1.28 +3.20%) was the best performer today on the back of some commentary from Verizon (VZ 54.64, +0.12 +0.22%) EVP Marni Walden about the YHOO deal. Other sectors as measured by the S&P ended the day split -- XLRE +0.51%, XLV +0.44%, XLP +0.26%, XLU +0.10%, XLY -0.07%, XLE -0.21%, XLB -0.24%, XLI -0.30%, IYZ -1.01%, XLF -1.01%.
Action in the S&P 500 Information Technology (819.77, +1.76 +0.22%) space was mostly higher today except for a few moments in the early-afternoon under breakeven. Component NVIDIA (NVDA 101.74, -2.65 -2.54%) was the worst performer today after some announcements at the annual Consumer Electronics Showcase (CES). Other names in the space which finished higher with the broader sector included AKAM +1.79%, SYMC +1.75%, ADBE +1.70%, FB +1.67%, ATVI +1.55%, V +1.17%, VRSN +1.06%, GOOG +0.90%, EBAY +0.84%, CA +0.82%.
Other notable news items among tech names:
T-Mobile US (TMUS 57.61, -1.21 -2.06%) announced in Q4, the company added 2.1 million net customers and 4.1 million branded postpaid net customers, exceeding the guidance for additions of 3.7-3.9 million. Further, branded prepaid churn was 3.94% in the fourth quarter of 2016, down 26 basis points year-over-year and up 12 basis points sequentially. Also, branded postpaid phone churn was 1.28%, down 18 basis points year-over-year .
NVIDIA (NVDA) announced Android-powered NVIDIA SHIELD TV. NVDA and Audi shifted their decade-long partnership into high gear, announcing that they are collaborating to put advanced AI cars on the road starting in 2020.
Twitter (TWTR 17.09, +0.23 +1.36%) will be the exclusive global platform to distribute, on a free basis, more than 70 hours of live competition coverage across 31 PGA tournaments through the remainder of the 2016-17 season.
Shares of Time Warner (TWX 95.09, -1.62 -1.68%) were weaker today following report that President Elect Trump is still against the AT&T (T 42.65, -0.12 -0.28%) / TWX M&A deal.
Alphabet (GOOG 794.02, +7.12 +0.90%) acquired Limes Audio. Financial terms of the deal were not disclosed.
Acacia Research (ACTG 7.10, +0.15 +2.16%) signed a patent license agreement with Ericsson (ERIC 5.87, -0.02 -0.34%) and Telefonaktiebolaget LM Ericsson. The company also signed a patent license agreement with Alcatel-Lucent (NOK unit 4.90, +0.06 +1.24%) resolving litigation that was pending in the US District Court.
Ericsson (ERIC) and Cisco (CSCO 30.17, +0.07 +0.23%) are extending their strategic partnership to include a new Wi-Fi solution offering, named Evolved Wi-Fi Networks. EWN combines Ericsson's 3GPP access, core networks and applications with Cisco's Wi- Fi portfolio, to provide reliable Wi-Fi with the highest performance to Ericsson's mobile, cable and other industries customers.
Accenture (CAN 114.99, -1.75 -1.50%) and Blue Prism are working together to provide RPA solutions to help organizations across industries automate a wide range of business processes for reduced costs, improved compliance and increased productivity.
Novanta (NOVT 21.40, -0.35 -1.61%) to acquire the assets of ThingMagic, a division of Trimble (TRMB 30.49, -0.48 -1.55%), for $20 million in cash.
magicJack VocalTec (CALL 8.10, +0.80 +10.96%) shareholder Caregie Technologies and Founder Paul Posner nominate five candidates for election to CALL's Board. Caregie intends to submit a proposal to purchase CALL for $8.50 per share.
Corp. Exec. Board (CEB 74.85, +12.95 +20.92%) agreed to be acquired by Gartner (IT 90.56, -11.23 -11.03%) for $2.6 billion in cash and stock. CEB shareholders will receive $54.00 in cash and 0.2284 shares of Gartner common stock for each share of CEB common stock they own. The deal is expected to be immediately accretive.
Castlight Health (CSLT 4.35, -0.65 -13.00%) announced a strategic acquisition of privately held Jiff. John Doyle to become CEO and Derek Newell to become president of combined company.
GSE Systems, Inc. (GVP 3.30, +0.15 +4.76%) entered into new $5 million revolving line of credit, which replaces the previous credit facility that was scheduled to mature in March 2017.
GoPro (GPRO 9.35, +0.33 +3.66%) confirmed drone Karma set to re-launch in 2017.
Analyst actions:
MA was upgraded to Top Pick from Outperform at RBC Capital Mkts,
WDC and PSTG were upgraded to Outperform from Market Perform at BMO Capital,
AMTD was upgraded to Buy from Neutral at Nomura,
AEIS was upgraded to Buy from Hold at Needham,
TWLO was upgraded to Overweight from Sector Weight at Pacific Crest,
TU was upgraded to Buy at Canaccord Genuity;
DATA was downgraded to Hold from Buy at Wunderlich,
CSLT was downgraded to Mkt Perform from Outperform at Raymond James;
ADBE was initiated with an Outperform at BMO Capital,
PANW, CHKP, FTNT, FEYE and TEAM were initiated with Market Perform ratings at BMO Capital,
PYPL and GDOT were initiated with Buy ratings at Guggenheim,
WU was initiated with a Neutral at Guggenheim
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