From Briefing.com: 4:28 pm Closing Market Summary: Averages Settle Tuesday Mixed (:WRAPX) :
Top-tech names like Microsoft (MSFT 69.41, +1.37), Amazon (AMZN 966.07, +8.10), and NVIDIA (NVDA 136.81, +2.50) boosted the Nasdaq (+0.3%) to another record high on Tuesday while the Dow (unch) and the S&P 500 (-0.1%) settled just a tick below their unchanged marks. Trading activity was pretty flat throughout the session, as the S&P 500 drifted within a ten-point range.
Only the top-weighted technology (+0.5%) and financials (+0.2%) sectors ended the day in positive territory. As mentioned above, large-cap tech names underpinned the tech group. In addition, chipmakers showed broad strength, pushing the PHLX Semiconductor Index higher by 1.5%. With today's advance, the SOX index is up 7.1% so far in May. Meanwhile, Citigroup (C 62.49, +1.07) carried the financial sector, adding 1.7%.
On the flip side, the health care sector (-0.4%) struggled from the opening bell as some of its most influential components weighed; Pfizer (PFE 32.60, -0.52), UnitedHealth (UNH 168.12, -3.41), and Bristol-Myers (BMY 54.39, -0.71) ended with losses between 1.3% and 2.0%. PFE shares were downgraded to 'Sell' from 'Neutral' at Citigroup on Tuesday morning. However, strength within the biotech industry helped cap the sector's loss. The iShares Nasdaq Biotechnology ETF (IBB 295.30, +1.18) added 0.4%.
The energy sector (-0.4%) also underperformed as crude oil dropped 0.5% to $48.64/bbl following yesterday's 2.1% rally, and ahead of this afternoon's API inventory report, which will be released at 16:30 ET. Meanwhile, retailers weighed on the consumer discretionary space (-0.3%) following the latest batch of earnings reports.
TJX (TJX 73.76, -3.14) and Dick's Sporting Goods (DKS 41.04, -6.53) lost 4.1% and 13.7%, respectively, in reaction to their quarterly results. TJX missed top-line estimates and issued disappointing earnings guidance for the second quarter while DKS reported weak comparable store sales. However, the results weren't all bad with Home Depot (HD 158.26, +0.93) adding 0.6% on better than expected earnings and a 5.5% increase in comparable store sales. The SPDR S&P Retail ETF (XRT 41.74, -0.33) ended lower for the fourth consecutive time, losing 0.8%.
The XRT has dropped 5.4% since last Thursday when Macy's (M 22.82, -0.39) kicked off what has largely been a poor earnings season for retailers thus far. However, there are still a couple of opportunities for redemption for the retail industry with Target (TGT 54.53, -0.82) stepping up to the plate tomorrow morning and Wal-Mart (WMT 75.11, -1.18) delivering its quarterly results on Thursday.
In the bond market, U.S. Treasuries settled with modest gains across the board, leaving the benchmark 10-yr yield two basis points lower at 2.32%. Conversely, the U.S. Dollar Index (98.04, -0.77) slipped to its lowest level since the U.S. presidential election on November 8. The greenback lost 1.0% against the euro (1.1088) after eurozone GDP increased an in-line 0.5% quarter-over-quarter.
On the data front, investors received April Housing Starts and April Industrial Production on Tuesday:
Housing starts decreased to a seasonally adjusted annualized rate of 1.172 million units in April, down from a revised 1.203 million units in March (from 1.215 million). The Briefing.com consensus expected starts to increase to 1.255 million units. Building permits decreased to a seasonally adjusted 1.229 million in April from an unrevised 1.260 million for March. The Briefing.com consensus expected a reading of 1.270 million.
The key takeaway from the report stems from the drop in single-family permits, which suggests there will be continued supply shortages and affordability constraints in the new home market.
Industrial Production increased 1.0% in April (Briefing.com consensus 0.3%) while Capacity Utilization rose to 76.7% (Briefing.com consensus 76.2%) from an unrevised reading of 76.1% in March. The Industrial Production reading for March was revised to 0.4% from 0.5%.
The key takeaway from the report is that total industrial production saw its largest gain since February 2014, bolstered by a healthy 1.0% increase in manufacturing output, which was also the largest gain since February 2014.
Tomorrow, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET.
Nasdaq Composite +14.6% YTD
S&P 500 +7.2% YTD
Dow Jones Industrial Average +6.2% YTD
Russell 2000 +2.8% YTD
At the end of the session on Tuesday, only the tech-heavy Nasdaq Composite managed gains, up 20.20 points (+0.33%) to 6169.87 - an all-time high. The S&P 500 lost 1.65 points (-0.07%) to 2400.67, while the Dow Jones Industrial Average shed about 2.19 points (-0.01%) to 20979.75. Top Nasdaq 100 components MSFT +2.0%, AMZN +0.9%, GOOG +0.6% and INTC +0.5% were names that helped the index finish in the green today.
As far as data goes, today's included the housing starts reading decreased to a seasonally adjusted annualized rate of 1.172 million units in April, down from a revised 1.203 million units in March (from 1.215 million). Building permits decreased to a seasonally adjusted 1.229 million in April from an unrevised 1.260 million for March. Industrial Production increased 1.0% in April while Capacity Utilization rose to 76.7% from an unrevised reading of 76.1% in March. The Industrial Production reading for March was revised to 0.4% from 0.5%.
The Technology (XLK 56.13, +0.26 +0.47%) space was the best performer among its S&P counterparts. Component Yahoo! (YHOO 50.96, +1.10 +2.21%) had a decent session behind news of a self-tender offer to purchase for cash up to $3 billion of shares of its common stock. The company commented that in no event will the purchase price be less than $37.00 per share. After the tech space, the remaining 10 S&P sectors settled as follows -- XLF +0.29%, IYZ +0.22%, XLB +0.02%, XLP -0.09%, XLI -0.11%, XLY -0.34%, XLV -0.38%, XLE -0.50%, XLRE -0.51%, XLU -0.73%.
In the S&P 500 Information Technology (961.62, +4.74 +0.50%) space, trading also finished at an all-time high as the broader sector pulled the IT space out of modest morning losses. Component NVIDIA (NVDA 136.81, +2.50 +1.86%) registered another session of impressive gains behind what was ultimately relative inactivity on the news wires; the stock now sits about 32% higher compared to a week ago. Other names in the space which outperformed today included MCHP +1.87%, EBAY +1.84%, AMAT +1.69%, SWKS +1.68%, CSRA +1.54%, ADSK +1.45%, IBM +1.43%, STX +1.20%, PYPL +1.15%, CTSH +1.09%.
Other notable news items among sector components:
Facebook's (FB 149.78, -0.41 -0.27%) Instagram introduced face filters to its camera. Potential competition for Snap (SNAP 20.78, +0.04 +0.19%).
Advanced Micro (AMD 12.75, +1.33 +11.65%) traded higher today following circulation of a report which was dated yesterday suggesting that Intel (INTC 35.82, +0.19 +0.53%) plans to license AMD graphics chip.
Yahoo! (YHOO) commenced a self-tender offer to purchase for cash up to $3 billion of shares of its common stock. The company commented that in no event will the purchase price be less than $37.00 per share.
Moneygram (MGI 17.13, -0.17 -0.98%) stockholders approved the $18 per share cash merger with
Alibaba (BABA 124.02, +2.62 +2.16%) affiliate Ant Financial; transaction remains on track to close in the second half of 2017.
YY (YY 54.00, -1.38 -2.49%) announced that Zhou Chen has tendered his resignation as CEO for health reasons, effective immediately.
According to a Medium blog, Twitter (TWTR 19.49, +0.26 +1.35%) founder Biz Stone will return to the company.
According to the Boy Genius Report, Apple (AAPL 155.47, -0.23 -0.15%) may discontinue its iPad Mini product.
Alliance Data's (ADS 245.06, +0.21 +0.09%) Epsilon announced the signing of a relationship expansion agreement with AT&T (T 38.19, -0.40 -1.04%) Business Solutions, which markets telecom services to millions of AT&T business customers and prospects.
CTS Corp (CTS 21.60, +0.20 +0.93%) acquired Noliac A/S; terms not disclosed.
Wins Finance's (WINS 33.52, -0.58 -1.70%) President Jianming Hao resigned.
CA Tech (CA 31.71, +0.02 +0.06%) filed for mixed securities shelf offering; size not disclosed.
VMware (VMW 94.64, -0.01 -0.01%) acquired Apteligent.
In reaction to quarterly results:
Weibo (WB 78.60, +15.70 +24.96%) reported better than expected Q1 EPS and revenues of $0.26 and $199.2 million, respectively. For Q2, the company sees revenues ahead of market expectations at $240-250 million.
SINA (SINA 99.04, +15.00 +17.85%) reported better than expected Q1 EPS and revenues of $0.50 and $278.1 million, respectively.
Stratasys (SSYS 30.66, +0.73 +2.44%) reported in-line Q1 EPS and revenues of $0.05 and $163.2 million, respectively. For FY17, the company sees EPS in the range of $0.19-0.37 and revenues between $645-680 million.
Virtusa (VRTU 27.37, -5.03 -15.52%) reported worse than expected Q4 EPS of $0.43 on in-line revenues of $226 million. For Q1, the company sees EPS below expectations at $0.24-0.30 on in-line revenues of $222.5-227.5 million. For FY18, VRTU sees EPS below market expectations at $1.42-1.66 on in-line revenues of $930-950 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: ACXM/PLAB
Analyst actions:
MELI was downgraded to Neutral from Overweight at JP Morgan;
NATI was initiated with a Hold at Deutsche Bank
