From Briefing.com: 4:29 pm Closing Market Summary: Averages Climb to New Record Highs (:WRAPX) :The stock market claimed its first victory of the week in style with the S&P 500 (+0.8%), the Nasdaq (+0.8%), and the Dow (+0.7%) all closing at new record highs. It was also encouraging that the Dow Jones Transportation Average (+1.2%) and the domestically-oriented Russell 2000 (+1.9%), both leading indicators that do well when it's thought that economic activity is picking up, finished well above the broader market.
A better than expected ADP National Employment Report for May (253,000 actual vs 180,000 Briefing.com consensus) was enough to place the major averages a tick above their flat lines at the opening bell. However, the early momentum stalled immediately thereafter as the S&P 500 faced some technical resistance at its previous record close (2,415.8).
Range-bound action prevailed until around 11:00 ET when the Energy Information Administration (EIA) released its weekly crude inventory report. The EIA reading came in better than expected, showing that U.S. crude stocks declined by 6.4 million barrels (-3.0 million barrels consensus) for the week ended May 26.
Crude oil held a modest gain of 0.5% going into the EIA release and then more than doubled it in the aftermath, climbing as high as $49.17/bbl. The energy sector (+0.7%), and the broader market, also moved higher, helping the S&P 500 overcome the technical resistance it faced in early-morning action.
From there, the stock market never looked back as the financial sector (+1.2%) continued to pick up strength into the afternoon. The financial sector's solid performance undoubtedly had a positive impact on investor sentiment considering the group's recent struggles. For instance, just yesterday, the sector slipped 0.8% on cautious commentary from industry leaders.
The influential health care sector (+1.2%) also played an important leadership role as biotech names outperformed. The sector benefited from broad strength, but the biotechnology industry made a notable contribution, evidenced by the 1.8% increase in the iShares Nasdaq Biotechnology ETF (IBB 290.89, +5.14).
Retailers also performed exceptionally well, pushing the SPDR S&P Retail ETF (XRT 41.64, +0.90) higher by 2.2% and helping the consumer discretionary sector (+0.9%) finish ahead of the broader market. The lightly-weighted materials group (+1.1%) also demonstrated relative strength, but most of the remaining sectors settled roughly in line with the broader market.
However, the top-weighted technology sector (+0.3%) lagged throughout Thursday's session amid spiritless performances from some of its most influential components, including Apple (AAPL 153.18, +0.42), Microsoft (MSFT 70.10, +0.26), Facebook (FB 151.53, +0.07), and Alphabet (GOOGL 988.29, +1.20). Still, for the year, the technology sector is higher by an impressive 20.0%.
Crude oil, which helped free the stock market of technical resistance early, faded into the close, settling flat at $48.32/bbl. However, the stock market did just the opposite with a late-afternoon uptick leaving the major averages at their session highs. For the week, the S&P 500 now trades higher by 0.6%.
It's also worth noting that President Trump officially announced his decision to withdraw the U.S. from the Paris Climate Accord, as expected. The announcement did not move the broader market.
U.S. Treasuries settled the day slightly lower with the benchmark 10-yr yield climbing one basis point to 2.21%. Meanwhile, the U.S. Dollar Index (97.14, +0.23) added 0.2%.
In addition to the ADP Employment Change Report for May, investors received several other economic reports on Thursday, including Initial Claims, April Construction Spending, and the May ISM Manufacturing Index:
The latest weekly initial jobless claims count totaled 248,000 while the Briefing.com consensus expected a reading of 239,000. Today's tally was above the revised prior week count of 235,000 (from 234,000). As for continuing claims, they declined to 1.915 million from the revised count of 1.924 million (from 1.923 million).
The key takeaway from the report is that it reflects a general reluctance still among employers to cut payrolls, which is indicative of a belief that it is tough to find new workers and/or the demand outlook is favorable.
The Construction Spending report for April showed a decrease of 1.4% while the Briefing.com consensus expected an increase of 0.5%. The prior month's reading was revised to 1.1% from -0.2%.
The key takeaway from the report is that it will curtail some of the second quarter GDP growth estimates since spending in April was roughly in-line with the first quarter average.
The ISM Manufacturing Index for May rose to 54.9 from an unrevised reading of 54.8 in April while the Briefing.com consensus expected a downtick to 54.7.
The key takeaway from the report is that the manufacturing sector is still humming along in an expansion mode, paced by growth in new orders.
Tomorrow, investors will receive the Employment Situation Report for May (Briefing.com consensus 185,000) and the April Trade Balance (Briefing.com consensus -$44.3 billion).
Nasdaq Composite +16.0% YTD
S&P 500 +8.5% YTD
Dow Jones Industrial Average +7.0% YTD
Russell 2000 +2.9% YTD
4:10 pm Broadcom beats by $0.19, beats on revs; guides JulQ revs above consensus (AVGO) :
Reports Q2 (Apr) non-GAAP EPS of $3.69 per share, excluding non-recurring items, $0.19 better than the Capital IQ Consensus of $3.50; non-GAAP revenues rose 17.9% year/year to $4.20 bln vs the $4.11 bln Capital IQ Consensus and vs prior guidance of $4.025-4.175 bln.
Co issues upside guidance for Q3 (Jul), sees Q3 non-GAAP revs of $4.375-4.525 bln, excluding non-recurring items, vs. $4.27 bln Capital IQ Consensus Estimate.
Non-GAAP operating margin from continuing operations was 44.1% vs 37.3% last year and 43.5% in JanQ.
"We delivered strong financial results for our second fiscal quarter with revenue, gross margin and EPS all above the top end of guidance...Anticipating that end markets will remain healthy, we expect [JulQ] revenue growth of approximately 6% sequentially, driven by solid growth from our wired segment and a seasonal second half ramp in our wireless segment."
Co has approved a quarterly, interim cash dividend of $1.02 per ordinary share. A corresponding distribution will also be paid by the Partnership, of which the company is the General Partner, to holders of REUs, in the amount of $1.02 per REU. The dividend and the distribution are both payable on June 30, 2017 to shareholders or unitholders of record on June 19, 2017.
Tech Stocks from Briefing.com
The broader market surged to begin June as both the S&P and the Nasdaq made all-time highs. The Nasdaq Composite edged out the S&P, gaining 48.31 points (+0.78%) to 6246.83. The S&P 500 was up 18.26 points (+0.76%) to 2430.06, while the Dow Jones Industrial Average added 135.53 points (+0.65%) to 21144.18.
Today's economic data included the latest weekly initial jobless claims count totaled 248,000, above the revised prior week count of 235,000 (from 234,000). As for continuing claims, they declined to 1.915 million from the revised count of 1.924 million (from 1.923 million). The Construction Spending report for April showed a decrease of 1.4% while the prior month's reading was revised to 1.1% from -0.2%. The ISM Manufacturing Index for May rose to 54.9 from an unrevised reading of 54.8 in April.
Finishing at the bottom of the list, albeit still in the green, the Technology (XLK 56.67, +0.14 +0.25%) sector was the worst performing S&P sector. Component CenturyLink (CTL 25.87, +1.46 +5.98%) was the best performer today as it was announced that after the closing of the CTL/Level 3 (LVLT 61.86, +2.34 +3.93%) deal, current LVLT CEO Jeff Storey would join CTL as COO. The US Telecom IYZ +1.50% space led the S&P higher today, followed by XLF +1.33%, XLB +1.15%, XLV +1.14%, XLY +0.94%, XLP +0.81%, XLU +0.71%, XLI +0.67%, XLE +0.63%, XLRE +0.31%.
In the S&P 500 Information Technology (969.59, +2.75 +0.28%) space, trading made a new all-time high today at $969.77. Component Alphabet (GOOG 966.95, +2.09 +0.22%) was modestly higher as the company was the subject of some reports which suggested it may face a large fine from the EU related to its shopping service; the company was also the subject of a report that it would give publishers time to prepare for an upcoming ad blocker software change to its Chrome web browser. Other names in the space which outperformed included FLIR +2.77%, JNPR +2.56%, MSI +2.48%, AKAM +2.44%, QCOM +2.36%, VRSN +2.35%, WU +2.21%, GLW +1.96%, GPN +1.86%, PYPL +1.82%, CSRA +1.72%.
Other notable news items among sector components:
Alphabet (GOOG) may face large EU fine related to its shopping service, according to Reuters. Also today, the WSJ reported that GOOG will give publishers time to prepare for an incoming ad blocking change to its Chrome web browser.
OSI Systems (OSIS 80.21, +1.02 +1.29%) to acquire the global explosive trace detection business from
Smiths Group (SMGZY 21.08, flat) for $75.5 million in cash.
CenturyLink (CTL) announced that upon closing of the CenturyLink/Level 3 (LVLT) acquisition, Jeff Storey, currently president and CEO of Level 3, will join CenturyLink as its president and COO.
Arista Networks (ANET 148.52, +1.14 +0.77%) traded higher today after reports of a favorable patent ruling.
Vivendi (VIVHY 22.10, +0.45 +2.08%) confirmed that Arnaud de Puyfontaine was appointed as Executive Chairman of Telecom Italia (TI 9.47, +0.01 +0.11%) at the company's Board meeting held today.
Itron (ITRI 68.60, +0.95 +1.40%) appointed Joan Hooper as CFO effective June 5.
Intelsat (I 3.03, -0.05 -1.62%) announced the termination of a debt exchange offers. As a result, Intelsat 'expects that OneWeb and SoftBank (SFTBY 40.64, +0.07 +0.17%) will exercise their respective termination rights under the Combination Agreement and related Share Purchase Agreement on June 2'.
Citron Research was out positive on BlackBerry (BBRY 11.39, +0.82 +7.76%) shares.
In reaction to quarterly results:
Hewlett Packard Enterprise (HPE 17.52, -1.29 -6.86%) reported in-line Q2 EPS of $0.35 on revenues which beat market expectations at $9.9 billion. For Q3, the company sees EPS below market expectations at $0.24-0.28. For FY17, the company sees EPS of $1.46-1.56.
Mobileye N.V. (MBLY 61.92, +0.02 +0.03%) reported better than expected Q1 EPS and revenues of $0.25 and $124.7 million, respectively.
Palo Alto Networks (PANW 138.99, +20.40 +17.20%) reported better than expected Q3 EPS and revenues of $0.61 and $431.8 million, respectively. For Q4, PANW expects EPS ahead of market expectations at $0.78-0.80 and revenues of $481-491 million.
Ciena (CIEN 27.19, +3.71 +15.80%) reported better than expected Q2 EPS and revenues of $0.45 and $707.02 million, respectively. For Q3, the company sees revenues of $710-740 million. For FY17, CIEN sees revenue growth of 8-9% which equates to about $2.808-2.834 billion.
Box (BOX 20.48, +1.78 +9.52%) reported a better than expected Q1 loss per share of $0.13 and revenues of $117.2 million. For Q2, the company sees EPS and revenues in-line of ($0.13)-($0.12) and $121-122 million, respectively. For FY18, the company sees EPS and revenues in-line at ($0.48)-($0.44) and $502-506 million, respectively.
Companies scheduled to report quarterly results after the bell: AVGO, GWRE, VMW, WDAY
Analyst actions:
PANW was upgraded to Buy from Hold at Gabelli & Co,
CIEN was upgraded to Buy from Hold at Drexel Hamilton,
BOX was upgraded to Overweight from Neutral at Mitsubishi UFJ,
PLT was upgraded to Overweight from Neutral at JP Morgan,
BNFT and SONS were upgraded to Outperform from Mkt Perform at William Blair;
VOD was downgraded to Reduce from Accumulate at Standpoint Research;
FDC and GPN were both initiated with Buy ratings at Stifel
