From Briefing.com: 4:27 pm Closing Market Summary: Equity Indices Open the Week Slightly Lower (:WRAPX) :
Investors lacked conviction in the first session of the abbreviated week, which made for flat, range-bound action in the stock market on Tuesday. The major U.S. indices settled just a tick below their unchanged marks with the S&P 500 and the Nasdaq slipping 0.1% apiece and the Dow losing 0.2%. However, the domestically-oriented Russell 2000 suffered a more substantial loss, dropping 0.8%.
Seven of the eleven sectors finished in negative territory with the energy (-1.3%) and financials (-0.8%) groups leading the retreat. Crude oil weighed on the energy sector early, opening Tuesday's session with a loss of over 1.0%. However, the commodity rallied in the afternoon to settle lower by just 0.3% ($49.63/bbl). For financials, banks finished lower across the board with Goldman Sachs (GS 218.42, -4.36) showing relative weakness (-2.0%).
The health care sector (-0.2%) also finished in negative territory, but held up relatively well considering the biotechnology industry's negative performance; the iShares Nasdaq Biotechnology ETF (IBB 284.30, -3.92) dropped 1.4%. The remaining laggards--industrials (-0.1%), materials (-0.1%), consumer staples (unch), and real estate (-0.3%)--settled just a step below their unchanged marks.
On the flip side, the telecom services sector (+1.4%) led Tuesday's session from start to finish with the group's top components by market cap--AT&T (T 38.55, +0.43) and Verizon (VZ 46.20, +0.88)--adding 1.1% and 1.9%, respectively. Verizon's strength followed positive commentary from BTIG Research while AT&T's positive performance was prompted by an upgrade to 'Neutral' from 'Sell' at MoffettNathanson.
The top-weighted technology sector (+0.3%) was underpinned by chipmakers, which pushed the PHLX Semiconductor Index higher by 0.6%, while the utilities group (+0.3%) outperformed amid broad strength. The last advancer--consumer discretionary (unch)--eked out a slim victory.
In the bond market, U.S. Treasuries moved higher in a curve-flattening trade as Core CPE inflation fell to a 1.5% year-on-year pace in April from 1.6% in March. Fed Governor Lael Brainard came out later in the session and said that another rate hike would likely be appropriate soon. The 10-yr yield (2.21%) dropped four basis points while the 2-yr yield (1.28%) lost two basis points.
The fed funds futures market continues to sit on the expectation that the Fed will raise the fed funds rate again at the June 13-14 FOMC meeting, but then hold off on another rate hike until 2018. The CME's FedWatch Tool shows only a 45.3% probability of a subsequent rate hike at the December meeting, down from 53.5% a week ago.
Today's participation was a bit light following the extended holiday weekend; 770.4 million shares changed hands at the NYSE floor (50-day simple moving average: 1.0 billion).
Investors received several economic reports on Tuesday, including April Personal Income and Personal Spending, the May Consumer Confidence Index, and the March Case-Shiller 20-City Index:
Personal income and personal spending were both up 0.4% for the month of April, which was in-line with the Briefing.com consensus estimates. The PCE Price Index was up 0.2%, as was the core-PCE Price Index, which excludes food and energy (Briefing.com consensus +0.1%), and the personal savings rate as a percentage of disposable income held steady at 5.3%.
The key takeaway from the report is the year-over-year changes for the PCE Price Index (1.7% from 1.9% in March) and the core-PCE Price Index (1.5% from 1.6% in March) decelerated from the prior month. That is unlikely to alter the prevailing view that the Fed will raise the target range for the fed funds rate at its June meeting, although it will stir some belief that another rate hike this year may not happen.
The consumer confidence reading for May fell to 117.9 from the prior month's revised reading of 119.4 (from 120.3). The Briefing.com consensus expected the survey to hit 119.5.
The key takeaway from the report is that a downshift in consumers' view of the short-term outlook triggered the lower overall reading for May.
The March Case-Shiller 20-city Index hit 5.9% to follow last month's unrevised 5.9% increase.
Tomorrow, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, May Chicago PMI (Briefing.com consensus 57.3) at 9:45 ET, April Pending Home Sales (Briefing.com consensus 0.8%) at 10:00 ET, and the Fed's Beige Book for May at 14:00 ET.
Nasdaq Composite +15.2% YTD
S&P 500 +7.8% YTD
Dow Jones Industrial Average +6.4% YTD
Russell 2000 +1.0% YTD
Beginning the shortened week, the broader market closed lower. The Dow Jones Industrial Average declined 50.81 points (-0.24%) to 21029.47. The S&P 500 lost 2.91 points (-0.12%) to 2412.91, while the tech-heavy Nasdaq Composite shed about 7.00 points (-0.11%) to 6203.19.
Economic data today came in the form of the Personal income and personal spending reports, which were both up 0.4% for the month of April. The PCE Price Index was up 0.2%, as was the core-PCE Price Index, which excludes food and energy, and the personal savings rate as a percentage of disposable income held steady at 5.3%. The consumer confidence reading for May fell to 117.9 from the prior month's revised reading of 119.4 (from 120.3). Lastly, the March Case-Shiller 20-city Index hit 5.9% to follow last month's unrevised 5.9% increase.
As it were, the Technology (XLK 56.62, +0.24 +0.43%) space was the best performer in the S&P today. Component Micron (MU 30.70, +0.94 +3.16%) was the best stock in the space as reports surfaced over the weekend that the company may opt to invest $2 billion in a Japanese memory chip facility. After Technology, the next best sector in the S&P today was the Utility space XLU +0.32%, followed by IYZ +0.09%, XLY +0.08%, XLB -0.02%, XLI -0.03%, XLP -0.04%, XLV -0.14%, XLRE -0.28%, XLF -0.68%, XLE -1.34%.
In the S&P 500 Information Technology (969.77, +3.00 +0.31%) space, trading also bucked the broader market trend lower, closing at a new all-time high. Aiding that advance was component First Solar (FSLR 39.50, +2.66 +7.22%), part of broader Solar strength today behind comments from President Trump about the Paris Climate Accord as well as reports of possible tariffs on solar imports into the U.S. Other names in the space which outperformed today included HPQ +2.54%, ADI +2.40%, NVDA +2.14%, FLIR +1.94%, STX +1.67%, SYMC +1.52%, WDC +1.42%, TEL +1.28%, MSI +1.18%, XRX +1.14%, LRCX +1.13%.
Other notable news items among sector components:
TiVo (TIVO 18.70, +2.30 +14.02%) received final initial determination issued by the administrative law judge in the Company's ITC case against various respondents, including Comcast (CMCSA 41.10, +0.19 +0.46%).
The Nikkei Asian Review detailed the possibility that Micron (MU) may invest $2 billion a Japanese memory chip facility.
Trimble (TRMB 35.86, +0.10 +0.28%) acquired Network Mapping Group; financial terms not disclosed.
Xactly (XTLY 15.55, +2.15 +16.04%) to be acquired by Vista Equity Partners for $15.65 per share in cash.
Vonage's (VG 6.85, -0.06 -0.87%) CEO Alan Masarek adopted a pre-arranged stock trading plan.
Telephone and Data (TDS 28.00, +0.14 +0.50%) announced James Butman, currently Chief Operating Officer (COO) at TDS Telecom, will succeed retiring TDS Telecom President and CEO, David Wittwer at the end of 2017. Wittwer will continue to serve as a member of the TDS Board of Directors.
CardConnect (CCN 15.05, +1.40 +10.26%) to be acquired by First Data (FDC 16.82, +0.18 +1.08%) for $15.00 per share.
Orbotech (ORBK 35.61, +0.39 +1.11%) received a $24 million order from Xianyang CaiHong Optoelectronics Technology.
Parkervision (PRKR 2.17, +0.07 +3.33%) announced that the Middle District of Florida granted ParkerVision's request to lift the stay and reopen its patent infringement case against Apple (AAPL 153.67, +0.06 +0.04%), LG (LPL14.46, +1.05 +7.83%) and Qualcomm (QCOM 57.34, -0.18 -0.31%).
Tyler Tech (TYL 170.76, +0.26 +0.15%) acquired Modria, a company specializing in online dispute resolution (ODR) for government and commercial entities. Financial terms were not disclosed.
Cevian Capital disclosed a 5.57% active stake in Ericsson (ERIC 7.19, +0.20 +2.86%).
Analyst actions:
ZNGA was upgraded to Overweight from Neutral at Piper Jaffray,
SYMC was upgraded to Overweight from Equal Weight at Barclays,
T was upgraded to Neutral from Sell at MoffettNathanson,
MSI was upgraded to Buy from Neutral at Northcoast,
VOD was upgraded to Outperform from Mkt Perform at Bernstein;
AMBA was downgraded to Sector Weight from Overweight t Pacific Crest,
BBRY was downgraded to Mkt Perform from Outperform at Raymond James,
DRWI was downgraded to Sector Underperform from Sector Perform at CIBC,
DCM was downgraded to Neutral from Buy at Goldman,
XTLY was downgraded to Hold from Buy at Lake Street;
DXC was initiated with a Hold at Stifel,
RPD was initiated with a Buy at Monness Crespi & Hardt,
SWIR was initiated with a Hold at TD Securities,
DGLT was initiated with a Buy at Lake Street
7:06 am Cypress Semi announces that Glass Lewis has recommended stockholders vote for the election of Messrs. Martino and McCranie to the Cypress Board (CY) : In its May 26 report, Glass Lewis says that CypressFirst has made the case to support replacement of executive chairman Ray Bingham and lead director Eric Benhamou, "two current directors whose continued service we believe unaffiliated investors have been afforded adequate cause to view skeptically," adding that CypressFirst candidates Messrs. Martino and McCranie are "experienced industry executives" who "appear highly credible."
3:11 am Samsung exploring various investment options in order to respond to the NAND flash memory market (SSNLF) :
Co states this includes but not limited to investment in Xi'an. However, no final decision has been made at this time.
Co states it will provide an update on this matter within one month or when more details become available and indicated
(updated disclosure is expected to be made on or before June 28)
