From Briefing.com: 4:23 pm Closing Market Summary: Another Day, Another Flat Finish (:WRAPX) :
The S&P 500 (+0.1%) finished at a new record close (just barely), but the headline is much more exciting than the reality. Wednesday's session was rather quiet at the macro level with the benchmark index hovering within a seven-point range. The Nasdaq (+0.1%) also eked out another record close, its third of the week, while the Dow (-0.2%) settled a step below its unchanged mark. The Russell 2000 outperformed the major U.S. indices, adding 0.6%.
Investors shrugged off President Trump's unexpected firing of FBI director James Comey, even though some mainstream media outlets suggested that the event may forestall tax reform efforts. The CBOE Volatility Index (VIX 9.99, +0.03, +0.3%) remained at a historically low level at Wall Street's closing bell.
Crude oil's 3.1% advance secured the energy sector's (+1.1%) spot atop the day's leaderboard. The commodity rallied following the Energy Information Administration's weekly inventory report, which showed a larger than expected draw in U.S. crude stocks for the week ended March 5 (5.3 million barrels actual vs 2.0 million barrels consensus). WTI crude settled at $47.28/bbl.
Out of the ten remaining sectors, seven--financials (+0.3%), materials (+0.4%), technology (+0.4%), consumer staples (+0.1%), utilities (+0.2%), telecom services (+0.3%), and real estate (+0.6%)--finished in the green. The top-weighted technology sector's positive performance was underpinned by chipmakers, which rallied around NVIDIA's (NVDA 121.29, +18.35) upbeat earnings report. The company spiked 17.8% after reporting better than expected earnings/revenues and issuing positive guidance. The PHLX Semiconductor Index added 2.1%.
Conversely, the three laggards--consumer discretionary (-0.3%), industrials (-0.4%), and health care (-0.3%)--received no help on the earnings front. Walt Disney (DIS 109.66, -2.41) and Priceline (PCLN 1824.77, -86.36) weighed on the consumer discretionary sector, losing 2.2% and 4.5%, respectively. Both companies reported better than expected earnings, but PCLN missed top-line estimates and issued disappointing guidance.
Allergan (AGN 229.72, -8.79) was the worst-performing component in the health care sector, tumbling 3.7%, despite reporting upbeat earnings/revenues and providing positive guidance. Analysts at Goldman did downgrade AGN shares to 'Neutral' from 'Buy' on Wednesday morning, which contributed to the company's poor performance. Biotech names also weighed on the sector, evidenced by the 0.4% decrease in the iShares Nasdaq Biotechnology ETF (IBB 291.89, -1.06).
In the industrial sector, Boeing (BA 183.18, -2.31) took center stage following reports that the company halted 737 MAX flights for engine inspections. BA shares finished lower by 1.3%.
U.S. Treasuries hovered just above their flat lines for the majority of Wednesday's session, however, a late-afternoon downtick took them into the red. The benchmark 10-yr yield settled one basis point higher at 2.41%.
On the data front, investors received April Import/Export Prices, the April Treasury Budget, and the weekly MBA Mortgage Applications Index:
Import prices excluding oil rose 0.3% in April after adding 0.2% in March. Export prices excluding agriculture increased 0.1% in April after rising 0.1% in March (revised from 0.2%).
The key takeaway from the report is that it won't alter the market's current assumptions about the likely path of the Fed's monetary policy.
The Treasury Budget for April showed a surplus of $182.4 billion versus a surplus of $106.5 billion for April 2016.
The Treasury Budget data is not seasonally adjusted, so the April surplus cannot be compared to the $176.2 billion deficit registered in March.
The weekly MBA Mortgage Applications Index increased 2.4% to follow last week's 0.1% downtick.
Tomorrow, market participants will receive April PPI (Briefing.com consensus 0.2%) and Initial Claims (Briefing.com consensus 242,000). Both reports will cross the wires at 8:30 ET.
Nasdaq Composite +13.9% YTD
S&P 500 +7.2% YTD
Dow Jones Industrial Average +6.0% YTD
Russell 2000 +3.1% YTD
Tech Stocks from Briefing.com
At the close, the market was split in that the Nasdaq and S&P closed higher while the Dow was below flat lines. Specifically, the Nasdaq Composite added 8.56 points (+0.14%) to 6129.14. The S&P 500 was up 2.71 points (+0.11%) to 2399.63, while the Dow Jones Industrial Average lost about 32.67 points (-0.16%) to 20943.11.
Economic data today included import prices, which excluding oil rose 0.3% in April after adding 0.2% in March. Export prices excluding agriculture increased 0.1% in April after rising 0.1% in March (revised from 0.2%). The Treasury Budget for April showed a surplus of $182.4 billion versus a surplus of $106.5 billion for April 2016. Lastly, the weekly MBA Mortgage Applications Index increased 2.4% to follow last week's 0.1% downtick.
The Technology (XLK 55.49, +0.21 +0.38%) space ended just off highs. Component NVIDIA (NVDA 121.29, +18.35 +17.83%) was the strongest name in the space today after reporting better than expected Q1 EPS and revenues. The Energy space XLE +1.32% led the remaining ten S&P sectors, followed by XLRE +0.54%, XLF +0.34%, XLB +0.32%, XLU +0.16%, XLP +0.07%, XLI -0.21%, XLV -0.29%, IYZ -0.34%, XLY -0.34%.
In the S&P 500 Information Technology (949.98, +3.62 +0.38%) space, trading was also higher as the tech space in general enjoyed some strong gains. Component Electronic Arts (EA 108.16, +12.15 +12.65%) was among the better performing names today after a stellar Q4 report. Other names in the space which outperformed today included ATVI +2.51%, SYMC +2.38%, FSLR +2.21%, AMAT +1.97%, MU +1.77%, VRSN +1.74%, TXN +1.31%, AVGO +1.26%, ADSK +1.19%.
Other notable news items among sector components:
TrueCar (TRUE 17.80, +0.49 +2.83%) announced a new partnership with eBay Motors (EBAY 33.88, +0.16 +0.47%) 'to provide a leading edge new car buying service for eBay's shoppers.'
Hackett Group (HCKT 15.65, -4.59 -22.68%) acquired European consultancy firm Aecus and Oracle cloud applications implementer Jibe Consulting; financial terms not disclosed.
West Corp (WSTC 23.11, -1.00 -4.15%) to be acquired by funds affiliated with Apollo Global (APO 27.02, -0.15 -0.55%) for $23.50 per share in cash.
Oracle (ORCL 45.53, +0.05 +0.11%) announced that the Oracle Cloud Platform has been validated to develop applications using India Stack services. Key to the country's "Digital India" vision, India Stack is a set of APIs that allows developers working with government, businesses, and startups to utilize a unique digital Infrastructure to deliver secure presence-less, paperless, and cashless service delivery.
In reaction to quarterly results:
Priceline (PCLN 1824.41, -86.72 -4.54%) reported better than expected Q1 EPS of $9.88 on worse than expected revenues of $2.42 billion. The company also guided Q2 EPS of $13.30-14.00, worse than expected.
NVIDIA (NVDA) reported better than expected Q1 EPS and revenues of $0.85 and $1.94 billion, respectively. For Q2, the company sees revenues of $1.95 billion, plus or minus 2% (about $1.911-1.989 billion).
Electronic Arts (EA) reported Q4 earnings of $1.81 on better than expected revenues of $1.53 billion.
Microchip (MCHP 78.51, +2.06 +2.69%) reported better than expected Q4 EPS and revenues of $1.16 and $902.7 million, respectively. For Q1, the company sees EPS and revenues ahead of market expectations at $1.17-1.27 and $920.7-965.9 million, respectively.
Zayo Group Holdings (ZAYO 32.71, -2.31 -6.60%) reported better than expected Q3 EPS of $0.11 on revenues of $550.2 million.
Yelp (YELP 28.33, -6.37 -18.36%) reported better than expected Q1 EPS of $0.19 on revenues of $197.32 million. For Q2, the company sees revenues between $202-206 million. For FY17, YELP lowered its revenue guidance to $850-865 million from $880-900 million.
TrueCar (TRUE) reported a better than expected Q1 loss of $0.01 on better than expected revenues of $75.8 million. For Q2, TRUE expects revenues ahead of market expectations at $79-81 million. For FY17, the company sees revenues in-line at $322-327 million.
Silver Spring Networks (SSNI 9.91, -1.75 -15.01%) reported a worse than expected Q1 loss of $0.44 per share on worse than expected revenues of $50.3 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: IOTS, ASYS, EGAN, LPSN, CALL, NTES, PEGA, QTM, QUIK, SNAP, SYMC, TTGT/BITA, CRNT, HIMX, TU
Analyst actions:
YELP was upgraded to Buy from Neutral at Goldman and to Market Perform from Underperform at Wells Fargo,
NVMI was upgraded to Buy from Hold at Stifel,
NTNX was upgraded to Equal Weight from Underweight at Morgan Stanley,
VEC was upgraded to Buy from Hold at Drexel Hamilton;
YELP was downgraded to Sector Perform from Outperform at RBC Capital Mkts and to Neutral from Buy at MKM Partners,
PANW was downgraded to Mixed from Positive at OTR Global,
ZAYO was downgraded to Neutral from Overweight at JP Morgan and to Mkt Perform from Strong Buy at Raymond James,
ZBRA was downgraded to Market Perform from Outperform at Wells Fargo,
FUEL was downgraded to Neutral from Outperform at Credit Suisse,
SSNI was downgraded to Sector Weight from Overweight at Pacific Crest,
PCTI was downgraded to Hold from Buy at Wunderlich,
WSTC was downgraded to Neutral from Outperform at Robert W. Baird, to Market Perform at Wells Fargo, to Market Perform from Outperform at William Blair and to Hold from Buy at Deutsche Bank,
HCKT was downgraded to Neutral from Buy at Roth Capital and to Hold from Buy at Craig Hallum;
FDS was initiated with a Hold at Deutsche Bank,
SMTC was initiated with an Outperform at Robert W. Baird,
MX was initiated with a Neutral at Citigroup,
CSLT was initiated with a Buy at Dougherty
