From Briefing.com: 4:30 pm Closing Market Summary: Tech Stocks Weigh Again on Monday (:WRAPX) :The stock market opened the week with its second-consecutive decline as the top-weighted technology sector (-0.8%) weighed on the broader market. However, as a consolation prize, both the tech sector and the S&P 500 (-0.1%) finished near their best marks of the day. The tech-heavy Nasdaq (-0.5%) underperformed while the Dow (-0.2%) settled just a step behind the benchmark index.
At the beginning of Monday's session, it appeared that Wall Street may duplicate Friday's sector rotation trade; tech stocks opened sharply lower while financials and energy stocks opened distinctly higher. However, the three sectors quickly retraced a portion of their early moves with the financial sector actually entering negative territory within two hours of the opening bell. The financial space (+0.2%) came back a bit in the afternoon, but never returned to its early-morning high.
The technology sector (-0.8%) held a solid loss throughout the session as mega-cap names like Apple (AAPL 145.42, -3.56), Microsoft (MSFT 69.78, -0.54), Alphabet (GOOGL 961.81, -8.31), and Facebook (FB 148.44, -1.16) refused to let up. Apple showed relative weakness, dropping 2.4%, after the company was downgraded to 'Neutral' from 'Buy' at Mizuho early on Monday morning. Chipmakers also weighed on the tech sector, evidenced by the 0.5% decrease in the PHLX Semiconductor Index.
Like financials, the energy sector (+0.7%) never returned to its early-morning high, but, unlike financials, the energy group was able to stay above water throughout the session. Crude oil helped the sector's bullish disposition, climbing 0.5% to $46.06/bbl, but the commodity's performance was somewhat disappointing considering it closed near its session low.
The telecom services (+0.9%) and real estate (+0.6%) sectors were also strong throughout Monday's session, but their positive performances had a pretty modest impact due to their relatively small market caps; the two sectors comprise around 5.0% of the broader market combined.
General Electric (GE 28.94, +1.00) had a notable impact in the industrial sector (+0.5%), jumping 3.6%, after the company announced that Chairman and CEO Jeff Immelt will be retiring from the company. John Flannery, who is the current president and CEO of GE Healthcare, will be replacing Mr. Immelt.
In addition to GE's advance, the industrial space profited from the outperformance of transports, evidenced by the 0.7% increase in the Dow Jones Transportation Average. Logistics heavyweights like UPS (UPS 108.94, +1.91) and FedEx (FDX 209.12, +2.72) showed notable strength, adding 1.8% and 1.3%, respectively.
However, on the flip side, five sectors--consumer discretionary (-0.1%), materials (-0.5%), health care (-0.1%), consumer staples (-0.1%), and utilities (-0.2%)--paired with the technology sector to overpower the five advancers. Amazon (AMZN 964.91, -13.40) weighed heavily on the consumer discretionary group, overriding an otherwise positive performance from most of the group's components.
Still, despite the slip on Wall Street, safe-haven assets like U.S. Treasuries and gold ticked down; gold dropped 0.2% to $1,269.00/ozt while the benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, climbed one basis point to 2.21%.
However, it is worth pointing out that the CBOE Volatility Index (VIX 11.39, +0.69, +6.5%), sometimes called the 'investor fear gauge', did advance to a fresh three-week high.
Investors did not receive any economic data on Monday. Tomorrow's economic calendar will also be light with just one report--May PPI (Briefing.com consensus 0.0%)--on the docket. The report will be released at 8:30 ET.
Nasdaq Composite +14.7% YTD
S&P 500 +8.5% YTD
Dow Jones Industrial Average +7.5% YTD
Russell 2000 +4.6% YTD
Tech Stocks from Briefing.com
It wasn't enough that all three major US indices notched fresh all-time highs today, as the bears came out around noon and took both the S&P and the Nasdaq into the red. To that end, the Nasdaq Composite erased the entirety of its weekly gains in today's session, ending 113.85 points lower (-1.80%) to 6207.92. The S&P 500 lost 2.02 points (-0.08%) to 2431.77, while the Dow Jones Industrial Average managed to hold onto a modest advance, adding 89.44 points (+0.42%) to 21271.97. With this week's moves, the three major US indices are +15.3%, +8.6% and +7.6% YTD, respectively.
The Technology (XLK 56.02, -1.42 -2.47%) space got taken to the woodshed today, leading some on the street opining that the rally may be over. Some of the worst offenders today included the beloved bellwether FANG stocks -- FB -3.28%, AAPL -3.88%, AMZN -3.16%, GOOG -3.41%, MSFT -2.27%. On the flip side of tech, the Energy space XLE +2.41% killed it today, ending as the leader among the 11 S&P sectors, followed by XLF +1.89%, XLB +1.30%, XLV +0.68%, XLRE +0.47%, XLI +0.38%, XLU -0.09%, XLP -0.12%, XLY -0.44%, IYZ -0.51%.
In the S&P 500 Information Technology (957.79, -26.93 -2.73%) space, trading took its licks today. Component NVIDIA (NVDA 149.60, -10.34 -6.46%) was the worst performer today after a cautious research report out of Citron Research, erasing opening gains related to price target moves on the stock. Other names in the space which underperformed today included KLAC -6.38%, CTXS -5.88%, MU -5.70%, AMAT -5.67%, WDC -5.50%, ADI -4.66%, ADSK -4.65%, AVGO -4.55%, CRM -4.36%, LRCX -4.36%, ATVI -4.16%, TXN -4.08%.
Other notable news items among sector components:
SiriusXM (SIRI 5.20, -0.20 -3.70%) to make a $480 million strategic cash investment in Pandora (P 8.52, +0.10 +1.19%).
Pandora (P) later confirmed an agreement with SiriusXM (SIRI) to sell Ticketfly to Eventbrite for $200 million, in addition to affirming guidance.
Citron Research was out cautious on shares of NVIDIA (NVDA).
Maxim Integrated (MXIM 47.08, -2.33 -4.72%) announced the offering and pricing of $500.0 million of its 3.450% Senior Notes due 2027.
Papa Murphy's (FRSH 4.40, -0.11 -2.44%) announced Grubhub (GRUB 43.35, -0.46 -1.05%) as national delivery partner.
Amazon (AMZN 978.31, -31.96 -3.16%) announced plans for a new 855,000-square-foot fulfillment center in North Haven, Conn. The new site will create more than 1,500 new, full-time jobs with opportunities for employees to engage with advanced robotics. The company currently has facilities in Wallingford and Windsor.
In reaction to quarterly results:
Determine (DTRM 3.55, -0.02 -0.56%) reported a better than expected loss of $0.04 per share on better than expected revenues of $7.5 million.
VeriFone (PAY 17.68, -0.64 -3.49%) reported better than expected Q2 EPS of $0.30 on in-line revenues of $474 million. Sees Q3 EPS of $0.35-0.36 on revenues of $463-465 million. PAY also guided for FY17 EPS in the range of $1.32-1.34 on revenues between $1.861-1.866 billion.
Analyst actions:
ZNGA was upgraded to Overweight from Equal Weight at Morgan Stanley,
CNSL was upgraded to Strong Buy from Outperform at Raymond James;
SNAP was downgraded to Neutral from Buy at Citigroup;
CAVM and IDTI were initiated with Buy ratings at Longbow,
MB was initiated with an Overweight at JP Morgan,
ALRM was initiated with an Outperform at Northland Capital
