From Briefing.com: 4:13 pm Closing Market Summary: Stocks Eke Out a Win on Wednesday (:WRAPX) :
Tuesday's positive sentiment lingered throughout Wednesday's session as the benchmark S&P 500 (+0.1%) chalked up its second win of the week. The Nasdaq (+0.4%) also settled higher while the Dow (-0.2%) finished a tad lower.
While the macro movement was rather subdued on Wednesday, a variety of catalysts mixed things up on the micro level. Maybe the most notable of which was the latest crude oil inventory report from the EIA, which showed a smaller than expected build of 0.9 million barrels (consensus +1.4 million). The reading awoke the bulls in the crude oil futures market and prompted WTI crude to settle 2.2% higher at $49.47/bbl. The energy sector (1.2%) capitalized on the commodity's positive performance to settle at the top of the day's leaderboard.
Amazon (AMZN 874.32, +18.32) also influenced today's price action, jumping 2.1% to push the consumer discretionary sector (+0.6%) to the second spot in the day's standings. Today's gain leaves the internet retail giant 3.3% higher since Monday when it bounced off its 50-day moving average. The positive performance was also reflected in the 2.0% increase in the SPDR S&P Retail ETF (XRT 42.54, +0.82).
Elsewhere on the corporate front, Vertex Pharmaceuticals (VRTX 108.01, +18.34) propped up the biotech industry after reporting that an experimental cystic fibrosis drug improved lung function. VRTX shares spiked 20.5% and led the iShares Nasdaq Biotechnology ETF (IBB 294.42, +2.41) higher by 0.8%, but it still wasn't enough to give the health care sector (unch) an edge on its peers.
The heavily-weighted financial group (-0.5%) kept the market's gain in check, but nearly all of the remaining sectors--industrials, materials, technology, consumer staples, telecom services, and real estate--failed to distinguish themselves from the broader market, settling within 0.3% of their respective flat lines. Meanwhile, the utilities space (-0.5%) finished with the financial group at the bottom of the day's leaderboard, but its impact was minimal due to its low market capitalization.
In the Treasury market, U.S. sovereign debt settled with a modest gain for the second time this week. The benchmark 10-yr yield closed four basis points lower at 2.38%.
On the data front, today's economic releases were limited to February Pending Home Sales and the weekly MBA Mortgage Applications Index:
Pending Home Sales for February rose 5.5% while the Briefing.com consensus expected an increase of 2.4%. Today's reading follows an unrevised 2.8% drop in January.
The weekly MBA Mortgage Applications Index decreased 0.8% to follow last week's 2.7% decline.
Tomorrow, investors will receive the third estimate of fourth quarter GDP (Briefing.com consensus 2.0%) and Initial Claims (Briefing.com consensus 245,000) at 8:30 ET.
Nasdaq Composite +9.6% YTD
S&P 500 +5.5% YTD
Dow Jones Industrial Average +4.5% YTD
Russell 2000 +1.0% YTD
4:13 pm Broadcom enters agreement to sell its data center center switching, routing, and analytics business to Extreme Networks (EXTR) for $55 mln in cash; transaction contingent on Broadcom closing its proposed acquisition of Brocade (BRCD) (AVGO) :
Brocade's data center networking business will be sold to Extreme for $55 million in cash, consisting of $35 million at closing and $20 million in deferred payments, as well as additional potential performance based payments to Broadcom, to be paid over a five-year term.
Extreme (EXTR) expects the acquisition to be accretive to cash flow and earnings for its fiscal year 2018 and expects to generate over $230 million in annualized revenue from the acquired assets.
The acquisition is expected to close within 60 days following the closing of Broadcom's acquisition of Brocade.
Co expects to close the Brocade acquisition in its third fiscal quarter ending July 30, 2017.
Extreme Networks will host a conference call at 4:30 p.m. ET today to discuss this announcement.
Following up a strong Tuesday, the broader market began lower but quickly ran to highs by midday. Action chugged higher into the close, but ultimately ended split. The tech-heavy Nasdaq Composite was the best performer today, adding 22.41 points (+0.38%) to 5897.55. The S&P 500 also finished above flat lines, gaining 2.56 points today (+0.11%) to 2361.13, while the Dow Jones Industrial Average began the session in the red and could not escape, losing 42.18 points (-0.20%) to 20659.32.
Economic data today was limited to the Pending Home Sales reading for February which rose 5.5% following an unrevised 2.8% drop in January. Additionally, the weekly MBA Mortgage Applications Index decreased 0.8% to follow last week's 2.7% decline.
Finishing Wednesday near highs, the Technology (XLK 53.31, +0.09 +0.17%) space made it two sessions in a row of gains. Component F5 Networks (FFIV 142.10, -5.03 -3.42%) was the worst performer today after the stock was downgraded premarket to a Sell rating at Deutsche Bank. Today's trade in the S&P was led by the Energy space XLE +1.37% followed by IYZ +0.91%, XLY +0.60%, XLRE +0.35%, XLP +0.18%, XLB +0.08%, XLV +0.03%, XLI -0.02%, XLU -0.27%, XLF -0.63%.
In the S&P 500 Information Technology (905.81, +1.86 +0.21%) space, trading capped off an up and down Wednesday affair with decent gains. Component Hewlett Packard Enterprise (HPE 23.67, +0.66 +2.87%) was the best performer today on continued strength. Other names which fared well in the middle of the week included WDC +1.66%, SYMC +1.55%, GOOG +1.28%, GOOGL +1.10%, ADSK +1.09%, NTAP +1.07%, STX +0.86%, ATVI +0.76%, TDC +0.71%, ADBE +0.69%.
Other notable news items among sector components:
MasterCard (MA 112.06, -0.41 -0.36%) acquired NuData Security. Financial terms were not disclosed.
Toshiba (TOSBF 1.92, -0.03 1.54%) announced Westinghouse Electric Co and its Group entities resolved to file for Chapter 11.
According to the WSJ, Snap (SNAP 22.55, +0.34 +1.53%) to partner with Comcast's (CMCSA 37.22, +0.13 +0.35%) NBCUniversal for the 2018 Winter Olympics with ad commitments to reach $75 million.
Exar (EXAR 12.99, +2.37 +22.32%) to be acquired by MaxLinear (MXL 27.95, +1.44 +5.43%) for $13.00 per share in cash.
DragonWave's (DRWI 1.40, +0.05 +3.70%) Harmony Enhanced MC backhaul solution was selected by Knoxville Utilities Board.
Applied Materials (AMAT 38.87, +0.05 +0.13%) priced $1.2 billion of 3.300% senior unsecured notes due 2027 and $1.0 billion of 4.350% senior unsecured notes due 2047.
In reaction to quarterly results:
Paychex (PAYX 59.06, -1.52 -2.51%) reported better than expected Q3 EPS of $0.55 on revenues which were in-line with market expectations at $795.8 million. The company also reaffirmed FY17 guidance.
Verint Systems (VRNT 43.50, +3.95 +9.99%) reported better than expected Q4 EPS of $0.90 on in-line revenues of $295.9 million. The company also guided FY18 EPS and revenues in line at about $2.70 and $1.12-1.16 billion, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: PRGS, SIGM/SAIC
Analyst actions:
FTV was upgraded to Buy from Hold at SunTrust,
ERIC was upgraded to Outperform from Mkt Perform at Bernstein,
SOL was upgraded to Neutral from Underperform at Credit Suisse,
CYBR was upgraded to Outperform from In Line at Evercore ISI,
FTNT was upgraded to Outperform from Neutral at Robert W. Baird;
FFIV was downgraded to Sell from Hold at Deutsche Bank,
CRTO was downgraded to Neutral from Buy at Goldman;
AMZN, FB, BABA, GOOGL, MELI, EBAY, WB, GDDY, WIX were all initiated with Overweight ratings at Barclays,
BIDU, SNAP, SHOP, WEB were all initiated with Equal Weight ratings at Barclays,
TWTR and GRPN were initiated with Underweight ratings at Barclays,
CYBR was initiated with a Buy at Needham,
CY was initiated with an Overweight at KeyBanc Capital Mkts,
CTSH was initiated with a Hold at Berenberg
