From Briefing.com: 4:32 pm Semtech beats by $0.02, beats on revs; guides Q1 EPS above consensus, revs above consensus (SMTC) :
Reports Q4 (Jan) earnings of $0.37 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.35; revenues rose 18.0% year/year to $140 mln vs the $138.34 mln Capital IQ Consensus.
Co issues upside guidance for Q1, sees EPS of $0.39-0.43, excluding non-recurring items, vs. $0.36 Capital IQ Consensus Estimate; sees Q1 revs of $142-150 mln vs. $141.33 mln Capital IQ Consensus Estimate.
4:06 pm Vishay Precision: Activist Ancora Advisors sends a letter to the Board of Directors of Vishay Precision Group actively urging the co's shareholders to support Ancora's 14a-8 proposal to eliminate the company's dual class structure (VPG) : The letter also urges the company to immediately do either of the following: (1) re-engage the strategic alternatives process in order to find a buyer for the company; or (2) replace current CEO Ziv Shoshani with an external highly-qualified and independent chief executive officer.
4:18 pm Closing Market Summary: Crude Oil's Plunge Leads Stock Market Lower On Wednesday (:WRAPX) :
Crude oil ($50.40/bbl) stole the spotlight on Wednesday, plunging 5.3%, after the latest Energy Information Administration (EIA) inventory report showed a much higher build than the consensus estimate (8.2 million vs 2.0 million est.). The major averages held their ground for some time amid the energy component's plummet, but succumbed to selling pressure in the final stretch. The Nasdaq (+0.1%) finished with a slim gain while the S&P 500 and the Dow closed with losses of 0.2% and 0.3%, respectively.
Unsurprisingly, the energy sector closed the day at the bottom of the leaderboard with a loss of 2.5%. The rate-sensitive utilities (-1.5%) and real estate (-1.5%) groups also finished solidly lower amid an increase in interest rates following a better than expected ADP National Employment Report, which clobbered the consensus estimate; the reading showed that a whopping 298,000 private-sector jobs were added in February (Briefing.com consensus 180,000).
In light of the ADP release, economists will be adjusting their estimates for nonfarm payroll gains (Briefing.com consensus 188,000) in Friday's Employment Situation Report for February, which is regarded as the last potential barrier for a rate hike in March. Following today's economic data, the CME Fed Watch Tool now assigns an implied probability of 90.8% to a March rate hike, up from 81.9% on Tuesday. Furthermore, the market expects to see another rate hike by the September meeting. The U.S. Dollar Index (102.04, +0.23) ticked up in tandem with rate hike expectations, adding 0.2%.
In the same breath, U.S. Treasuries finished the day in negative territory with the benchmark 10-yr yield closing four basis points higher at 2.55%.
At the top of the day's sector standings were the health care (+0.3%) and consumer discretionary (+0.3%) sectors with the latter space receiving a boost from retailers. The SPDR S&P Retail ETF (XRT 42.37, +0.43) added 1.0% after the latest batch of earnings reports, which included a stellar performance from The Children's Place (PLCE 118.15, +18.25). PLCE shares spiked 18.3% after the company reported better than expected earnings and issued upbeat guidance. In addition, The Children's Place also announced a new stock buyback and a dividend increase.
For the health care group, today's positive showing was more of a bounce-back performance following Tuesday's tumble, a day in which the sector saw selling pressure in response to the House Republicans' proposed Obamacare replacement.
The technology (+0.1%), financials (unch), and materials (+0.1%) sectors finished near their flat lines while the telecom services (-0.4%), consumer staples (-0.3%), and industrials (-0.4%) groups finished with modest losses.
Today's economic data included February ADP Employment Change, fourth quarter Productivity & Unit Labor Costs, January Wholesale Inventories, and the weekly MBA Mortgage Index:
The ADP National Employment Report showed an increase of 298,000 in February (Briefing.com consensus 180,000) while the January reading was revised to 261,000 from 246,000.
The ADP reading precedes Friday's more influential Employment Situation Report for February, which is widely considered the last potential barrier to a rate hike in March.
The unit labor costs were left unrevised during the fourth quarter, showing an increased 1.7%, which was higher than the 1.6% increase that had been anticipated by the Briefing.com consensus. The productivity reading was also left unrevised, showing an increase of 1.3%. The Briefing.com consensus expected an increase of 1.5%.
The key takeaway from the report is that productivity is low, with the average annual rate of productivity growth from 2011 to 2016 being 0.6% versus the long-term rate of 2.1% from 1947 to 2016. Low productivity gets in the way of a rising standard of living.
January Wholesale Inventories decreased 0.2%, while the Briefing.com consensus expected a downtick of 0.1%. The prior month's reading was left unrevised at +1.0%.
The market doesn't typically pay much attention to this release since the full business inventories report is usually released a few days later.
The weekly MBA Mortgage Applications Index increased 3.3% to follow last week's 5.8% uptick.
On Thursday, investors will receive February Challenger Job Cuts at 7:30 ET, with February Export/Import Prices and Initial Claims (Briefing.com consensus 240,000) following at 8:30 ET.
Nasdaq Composite +8.4% YTD
S&P 500 +5.6% YTD
Dow Jones Industrial Average +5.5% YTD
Russell 2000 +0.7% YTD
As Wednesday came to a close, the broader market seemed to lose its luster (of whatever luster it had today) as all three major averages fell to session lows at the bell tolled. Despite ending at lows, the Nasdaq Composite still managed gains, up 3.62 points (+0.06%) to 5837.55. The Dow Jones Industrial Average was the worst performer, shedding 69.03 points (-0.33%) today to end 20855.73, while the S&P 500 lost 5.41 points (-0.23%) to 2362.98.
Today's economic data included the ADP National Employment Report which showed an increase of 298,000 in February while the January reading was revised to 261,000 from 246,000. Also today, unit labor costs were left unrevised during the fourth quarter, showing an increased 1.7%. The productivity reading was also left unrevised, showing an increase of 1.3%. Additionally, January Wholesale Inventories decreased 0.2%, and the prior month's reading was left unrevised at +1.0%. Lastly, the weekly MBA Mortgage Applications Index increased 3.3% to follow last week's 5.8% uptick.
Despite a late-session decline, the Technology (XLK 52.84, +0.06 +0.11%) space managed to stay above water. Component Qualcomm (QCOM 57.77, +1.04 +1.83%) was the best performer in the sector today despite an unfavorable ruling that came down today in a PTAB case against Parkervision (PRKR 2.81, +0.22 +8.49%). The Consumer Discretionary space XLY +0.42% performed the best out of all S&P sectors today, followed by XLV +0.40%, XLF +0.04%, XLB +0.00%, XLP -0.22%, XLI -0.35%, IYZ -0.56%, XLU -1.44%, XLRE -1.49%, XLE -2.56%.
In the S&P 500 Information Technology (893.48, +0.90 +0.10%) space, trading barely ended above flat lines despite spending the entirety of the session in the green. Component Skyworks (SWKS 96.69, +1.64 +1.73%) was among the better performing names today following a premarket upgrade to a Buy rating on the stock at Mizuho. Other names in the space which outperformed today included ADSK +1.69%, VRSN +1.47%, SYMC +1.16%, XRX +1.09%, ATVI +1.08%, MSFT +0.92%, EA +0.79%, MSI +0.68%, AMAT +0.62%, CRM +0.61%, KLAC +0.56%, YHOO +0.55%.
Other notable news items among sector components:
Parkervision (PRKR) confirmed a favorable PTAB ruling vs. Qualcomm (QCOM).
Amazon's (AMZN 850.50, +4.48 +0.53%) AWS has acquired meeting productivity startup Do.com, according to TechCrunch.
Alphabet (GOOG 835.37, +3.46 +0.42%) said to be acquiring data science community Kaggle, according to TechCrunch.
Munich Leukemia Laboratory (MLL) has teamed up with IBM (IBM 179.45, -0.93 -0.52%) and Illumina (ILMN 164.40, -1.18 -0.71%) to help build a new cognitive technology prototype that aims to help researchers improve leukemia treatment.
GlobalStar (GSAT 1.41, flat) and Inmarsat (IMASY 9.38, +0.66 +7.57%) announced a new partnership to cross-sell their respective products and services.
Microsoft (MSFT 64.99, +0.59 +0.92%) to shutter its So.cl social network project effective March 15.
AMD (AMD 13.22, +0.17 +1.30%) announced their collaboration with Microsoft (MSFT) to incorporate the cloud delivery features of AMD's next-generation "Naples" processor with Microsoft's Project Olympus.
NVIDIA (NVDA 98.56, -0.18 -0.18%) unveiled the NVIDIA Jetson TX2, a credit card-sized platform that delivers AI computing.
Accenture (ACN 124.46, +0.32 +0.26%) has opened a Liquid Studio in Riga to help clients speed up innovation and software development cycles.
Extreme Networks (EXTR 6.77, +0.67 +10.98%) to acquire Avaya's networking business for about $100 million.
Time Warner's (TWX 98.51, +0.27 +0.27%) Turner and Warner Bros. have partnered with standalone domestic premium video subscription service Boomerang. The parties plan a subscription video service will launch in the spring.
In reaction to quarterly results:
Tech Data (TECD 89.87, -3.93 -4.19%) reported better than expected Q4 EPS of $2.45 on in-line revenues of $7.43 billion.
Ciena (CIEN 23.97, -2.20 -8.41%) reported worse than expected Q1 EPS and revenues of $0.26 and $621.5 million, respectively. For Q2, the company sees revenues in-line at $680-710 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: VNET RATE CMTL KEYW NCIT SMTC TTEC XTLY/ACTA CRCM INAP SSYS TSL
Analyst actions:
SWKS was upgraded to Buy from Neutral at Mizuho,
MANT was upgraded to Buy from Hold at Maxim Group,
ORBK was upgraded to Buy from Hold at Standpoint Research,
BT was upgraded to Neutral from Underperform at Macquarie;
NMBL was downgraded at Wells Fargo, Morgan Stanley, Susquehanna and Pacific Crest,
BT was downgraded to Neutral from Buy at Goldman,
VOD was downgraded to Underperform from Neutral at Macquarie;
SWKS was initiated with an Outperform at Wells Fargo,
QRVO was initiated with a Market Perform at Wells Fargo,
SPLK was initiated with a Buy at Rosenblatt,
AUXO was initiated with a Buy at B. Riley & Co.
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