From Briefing.com: 4:30 pm Closing Market Summary: Stocks Finish Lower on Wednesday (:WRAPX) :
The bears edged the bulls from the jump on Wednesday with geopolitics fueling the cautious sentiment. The S&P 500 (-0.4%) finished below its 50-day moving average (2351), which has been a mainstay of support since the election. The Dow (-0.3%) and the Nasdaq (-0.5%) settled on opposite sides of the benchmark index while the Russell 2000 (-1.3%) underperformed.
Secretary of State Rex Tillerson's visit to Moscow frequented the day's headlines. Mr. Tillerson did end up meeting with Russian President Vladimir Putin despite earlier reports that the Mr. Putin would not meet with the U.S. diplomat. However, the conversations were rough with Mr. Tillerson saying that U.S.-Russia relations are "at a low point."
Back in the U.S., President Trump made headlines on a couple of occasions. First, Mr. Trump made it clear that health care reform will once again take priority over tax reform. Second, the president reiterated his belief that the U.S. dollar is too strong, and, in the same breath, said that he was undecided on re-nominating Fed Chair Janet Yellen. Based on his comments, it appears that Mr. Trump is seeking Fed officials that will keep the U.S. dollar, and interest rates, as low as possible.
The U.S. Dollar Index (100.12, -0.50) tumbled from its flat line in the wake of President Trump's comments, finishing the day with a loss of 0.5%. Conversely, U.S. Treasuries moved higher in electronic trade with the benchmark 10-yr yield (2.26%) losing four basis points to drop below the key technical support level of 2.30%.
However, despite the notable headlines, equities watched the news pass by, sticking to their modest losses. Sector standings reflected a cautious sentiment with countercyclical groups outperforming their cyclical peers, but the broader market's loss remained modest throughout the session.
The industrials (-1.3%), financials (-0.9%), and materials (-1.2%) sectors finished at the bottom of the day's leaderboard, while the consumer staples (+0.5%), utilities (+0.7%), and telecom services (+0.6%) groups settled at the top.
Following today's loss, the financial sector now trades in negative territory for the year (-0.3%). The space will be looking to get its 2017 campaign back on track with earnings reports from JPMorgan Chase (JPM 85.40, -0.33), Citigroup (C 58.51, -0.52), and Wells Fargo (WFC 53.12, -1.04) tomorrow morning.
Through it all, the best summary of today's action may be the increase in the CBOE Volatility Index (VIX 15.96, +0.89). The VIX Index sits at its highest level since the presidential election, indicating that investors need results rather than words to keep moving stocks forward.
On the data front, investors received a batch of economic reports on Tuesday, including March Import/Export Prices, March Treasury Budget, and the weekly MBA Mortgage Applications Index:
Import prices excluding oil rose 0.2% in March after adding 0.4% in February (revised from 0.3%). Export prices excluding agriculture increased 0.2% in March after rising 0.3% in February.
The monthly readings for March might have been mixed, yet the key takeaway from the report is that the year-over-year readings speak to a trend of rising inflation for core import and export prices.
The Treasury Budget for March showed a deficit of $176.2 billion versus a deficit of $108.0 billion for March 2016. The Treasury Budget data is not seasonally adjusted, so the March deficit cannot be compared to the $192.0 billion deficit registered in February.
The weekly MBA Mortgage Applications Index, which was released earlier this morning, increased 1.5% to follow last week's 1.6% decline. In addition, investors will receive the March Treasury Budget this afternoon at 14:00 ET.
Tomorrow, investors will see a slew of economic data, including March PPI (Briefing.com consensus 0.0%) and Initial Claims (Briefing.com consensus 251,000) at 8:30 ET and the preliminary reading of the University of Michigan Consumer Sentiment Survey (Briefing.com consensus 96.3) at 10:00 ET.
Nasdaq Composite +8.4% YTD
S&P 500 +4.7% YTD
Dow Jones Industrial Average +4.2% YTD
Russell 2000 +0.2% YTD
4:52 pm Ixia shareholders approved acquisition of Ixia by Keysight Technologies (KEYS) for $19.65 per share in cash; closing of the merger is expected to occur as early as the second half of April 2017 (XXIA) :
4:32 pm Xilinx announces multi-year CEO succession plan; Victor Peng will become Chief Operating Officer effective immediately (XLNX) :
announced a multi-year CEO succession plan, including two senior level promotions.
Victor Peng will become Chief Operating Officer (COO) of Xilinx, effective immediately.
In addition, Krishna Rangasayee has been promoted to Executive Vice President of Sales, reporting to Mr. Peng.
As part of the succession plan, Xilinx has signed a multi-year employment agreement with Mr. Gavrielov to continue as President and CEO, which includes an additional year of transition and consulting services following his tenure as CEO.
4:05 pm Applied Optoelectronics sees Q1 results above guidance (shares halted) (AAOI) :
Co sees Q1 EPS of $1.00-1.02 (Prior guidance was for $0.80-0.88) vs $0.83 Capital IQ Consensus Estimate, sees revs of ~$96.2 mln (Prior guidance was for $87-91 mln) vs $89.77 mln Capital IQ Consensus Estimate
"We delivered another strong quarter with our top and bottom-line results expected to exceed our guidance," said Dr. Thompson Lin, Applied Optoelectronics, Inc. founder, president and CEO. "Our results were driven by continued robust demand for our market-leading datacenter products and solid execution. We are pleased with our momentum and look forward to sharing the additional details of our first quarter performance on our conference call in May."
4:04 pm SemiLEDs reports Q2 EPS of ($0.30), ex items vs ($0.17) prior qtr; revs -33.3% q/q to $1.8 mln; sees Q3 revs approx $2.0 million +/- 10% (LEDS) : Q2 op margin was -62% vs -41% in the first quarter of fiscal 2017. The cash and cash equivalents was $4.1 million at February 28, 2017, compared to $4.8 million at the end prior qtr.
Today's action began in the red and never looked back. Opening losses grew as the session progressed, eventually ending Wednesday just above lows. The worst performer today was the Nasdaq Composite which lost 30.61 points (-0.52%) to 5836.16. The S&P 500 was down 8.85 points (-0.38%) to 2344.93, while the Dow Jones Industrial Average shed 59.44 points (-0.29%) to 20591.86.
Finishing about middle of the pack as far as S&P sectors go, the Technology (XLK 52.58, -0.18 -0.34%) space was morning losses expand as the session progressed, ultimately finishing slightly off lows. Despite this negative bias, component HP (HPQ 18.02, +0.48 +2.74%) managed a strong Wednesday after the stock was upgraded to a 'Buy' rating at Citigroup ahead of the open. The rest of the S&P was led by the Utilities sector XLU +0.74% followed by IYZ +0.39%, XLP +0.38%, XLV +0.00%, XLRE -0.16%, XLY -0.40%, XLE -0.42%, XLF -0.81%, XLB -1.24%, XLI -1.38%.
In the S&P 500 Information Technology (892.07, -3.57 -0.40%) space, trading ended near lows in light of broader market pressure. Component Qualcomm (QCOM 53.39, -1.96 -3.54%) was one of the worst performing names in the space today following an arbitration ruling against QCOM in favor or BlackBerry (BBRY 8.93, +1.23 +16.04%) in the amount of about $815 million. Other names in the space which underperformed today included SWKS -2.55%, NTAP -2.20%, WDC -2.14%, QRVO -2.05%, MU -1.80%, ADI -1.55%, XLNX -1.54%, STX -1.53%, GLW -1.38%, FFIV -1.32%, APH -1.29%.
Other notable news items among sector components:
The IDC reported Q1 worldwide shipments of traditional PCs (desktop, notebook, workstation) +0.6% y/y to 60.3 million units (previous forecast had expected shipments to decline 1.8% in the quarter).
Gartner reported Q1 worldwide PC Shipments declined 2.4% and for the first time since 2007, quarterly PC shipments were below 63 million units.
BlackBerry (BBRY) announced a binding interim arbitration decision that awards it $814,868,350 in royalty overpayments made to Qualcomm (QCOM).
Qualcomm (QCOM) increased its quarterly dividend to $0.57 from $0.53 per share.
TiVo (TIVO 18.50, -0.70 -3.65%) signed a multi-year Intellectual Property License deal with Roku.
VMware (VMW 91.22, -1.21 -1.31%) to acquire Wavefront; terms not disclosed.
Workday (WDAY 83.45, +2.14 +2.63%) announced that Target (TGT 53.40, -0.31 -0.58%) has chosen Workday Human Capital Management, including Workday Learning, Workday Payroll, and Workday Recruiting.
Accenture (ACN 115.58, -0.50 -0.43%) acquired Beespath's ClosingBridge platform; financial details not disclosed.
According to CNBC, Facebook's (FB 139.58, -0.34 -0.24%) Messenger app now has 1.2 billion users, up from 1 billion about six months ago.
Analyst actions:
HPQ was upgraded to Buy from Neutral at Citigroup,
GRUB was upgraded to Outperform from Perform at Oppenheimer,
ERIC was upgraded to Neutral from Underperform at Credit Suisse,
BBRY was upgraded to Sector Perform from Sector Underperform at CIBC,
SNX was upgraded to Buy from Hold at Stifel,
VRSN was upgraded to Neutral from Sell at Citigroup;
ADBE was initiated with a Buy at Stifel,
NOW was initiated with a Hold at Stifel,
FDC and TSS were initiated with Neutral ratings at Atlantic Equities,
GPN and VNTV were initiated with Overweight rating at Atlantic Equities,
OSIS was initiated with a Buy at Jefferies,
ABY was initiated with a Hold at Jefferies,
TLND was initiated with an Overweight at Pacific Crest,
JIVE was initiated with a Buy at B. Riley & Co.,
PCTY was initiated with a Buy at Lake Street,
CALD was initiated with an Outperform at William Blair
