From Briefing.com: 4:27 pm Closing Market Summary: Bears Dominate on Tuesday (:WRAPX) :
Wall Street took it to the chin on Tuesday as equities sold off into the closing bell, leaving the major averages at their worst marks of the day. The tech-heavy Nasdaq (-1.6%) was hit the hardest as technology and biotechnology stocks weighed. Meanwhile, the S&P 500 and the Dow settled with losses of 0.8% and 0.5%, respectively.
There was a notable jump in long-term rates on Tuesday as sovereign bond markets came under selling pressure in the wake of a morning remark from ECB President Mario Draghi that the threat of deflation is gone. The yield on the 10-yr Treasury note jumped six basis points to 2.20%, which contributed partly to the selling activity in richly-valued technology stocks and the underperformance of rate-sensitive areas like the S&P 500 utilities sector (-1.3%).
However, the heavily-weighted financial sector (+0.5%) benefited from the activity in the Treasury market as it resulted in a steepening of the yield curve, which is a positive for the financial industry's bottom line. The win marks the second in a row for the financial group and comes ahead of tomorrow's capital return plans, which will be released after the close.
Like financials, the energy sector (-0.2%) finished ahead of the broader market as crude oil cruised to its fourth-consecutive advance. Underpinned by a weaker dollar, the energy component jumped 2.0% to $44.25/bbl. Meanwhile, the U.S. Dollar Index (96.07, -1.04) tumbled 1.1% to a fresh nine-month low in reaction to the aforementioned remark from Mr. Draghi.
However, in the end, the bulls were just no match for the bears on Tuesday as ten of the eleven sectors finished in the red. The top-weighted technology group (-1.7%) finished at the very bottom of the leaderboard amid broad weakness. Alphabet (GOOGL 948.09, -24.00) was one of the sector's weakest components, dropping 2.5%, after European antitrust regulators hit the company with a $2.7 billion fine for skewing search results in favor of its own shopping site. Chipmakers also displayed notable weakness, sending the PHLX Semiconductor Index lower by 2.7%.
The lightly-weighted telecom services space (-1.4%) finished just a tick ahead of the technology group following news that Sprint (S 8.18, +0.17) has entered into exclusive talks with Charter Communications (CHTR 329.87, -2.78) and Comcast (CMCSA 39.25, -0.34) regarding a wireless deal. Wireless heavyweights Verizon (VZ 44.84, -0.91) and AT&T (T 37.70, -0.45) declined 2.0% and 1.2%, respectively, following the news.
Biotechnology stocks also exhibited notable weakness, leaving the iShares Nasdaq Biotechnology ETF (IBB 310.89, -8.65) lower by 2.7%, as investors took some money off the table following last week's biotech rally. However, the health care sector (-0.9%) held up relatively well, settling just a tick below the benchmark index.
Outside of real estate (-0.4%), the remaining laggards--consumer discretionary (-0.7%), industrials (-0.8%), materials (-0.7%), and consumer staples (-0.9%)--finished roughly in line with the broader market.
Also of note, the Senate decided to push back a vote on the Republican healthcare bill until after Congress returns from the July Fourth recess, as most expected.
Reviewing Tuesday's economic data, which included the June Consumer Confidence Index and the April Case-Shiller 20-city Index:
The consumer confidence reading for June rose to 118.9 from the prior month's revised reading of 117.6 (from 117.9). The Briefing.com consensus expected the survey to hit 116.7.
The key takeaway from the report is that consumer expectations for the short-term have been reined in some, but are still upbeat overall.
The April Case-Shiller 20-city Index hit 5.7% (Briefing.com consensus 5.9%) to follow last month's unrevised 5.9% increase.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index and May Pending Home Sales (Briefing.com consensus 0.5%). The two reports will be released at 7:00 ET and 10:00 ET, respectively.
Nasdaq Composite +14.2% YTD
S&P 500 +8.1% YTD
Dow Jones Industrial Average +7.8% YTD
Russell 2000 +3.4% YTD
4:07 pm CalAmp beats by $0.02, beats on revs; guides Q2 EPS midpoint below consensus; guides Q2 revs in line (CAMP) :
Reports Q1 (May) earnings of $0.29 per share, $0.02 better than the Capital IQ Consensus of $0.27; revenues fell 3.3% year/year to $88.1 mln vs the $86.85 mln Capital IQ Consensus. Adjusted EBITDA for the first quarter of fiscal 2018 was $13.2 million and Adjusted EBITDA margin was 15.0%, compared to Adjusted EBITDA of $13.7 million and Adjusted EBITDA margin of 15.1% in the first quarter of fiscal 2017.
Gross margin was 42.5% in the first quarter of fiscal 2018, up from 38.2% in the first quarter of fiscal 2017.
Co issues guidance for Q2, sees EPS of $0.23-0.29 vs. $0.29 Capital IQ Consensus Estimate; sees Q2 revs of $86-91 mln vs. $89.49 mln Capital IQ Consensus Estimate; Co sees Q2 adjusted EBITDA in the range of $10.5 to $13.5 million.
Tech Stocks from Briefing.com
Overall, the broader market began flat and fell off as the session progressed. Action ultimately wound down on Tuesday with all three major US indices near lows. The tech-heavy Nasdaq Composite doubled the percentage losses of the S&P today, slipping 100.53 points (-1.61%) to 6146.62. The S&P 500, for its part, shed 19.69 points (-0.81%) to 2419.38, while the Dow Jones Industrial Average could call itself the winner of the day, losing only 98.89 points (-0.46%) to 21310.66.
Market data today included the consumer confidence reading for June which rose to 118.9 from the prior months revised reading of 117.6 (from 117.9). Also, the April Case-Shiller 20-city Index hit 5.7% to follow last month's unrevised 5.9% increase.
The Technology (XLK 55.08, -0.92 -1.64%) space was the worst performing S&P sector today. Component Seagate Tech (STX 39.51, -2.88 -6.79%) was pressured by peer Western Digital's (WDC 91.85, -0.81 -0.87%) updated guidance. After tech, the Utilities XLU -1.18% space was the worst performer, followed by XLV -0.91%, XLP -0.88%, XLY -0.79%, XLI -0.75%, IYZ -0.63%, XLB -0.61%, XLRE -0.40%, XLE -0.17%, XLF +0.50%.
In the S&P 500 Information Technology (946.39, -16.06 -1.67%) space, trading ended at lows. Component NVIDIA (NVDA 146.58, -5.57 -3.66%) was lower despite announcing an autonomous driving partnership with Volkswagen (VLKAY 31.14, +0.54 +1.76%). Other names in the space which xxx.
Other notable news items among sector components:
According to the Wall Street Journal, Sprint (S 8.18, +0.17 +2.12%) is in discussions with Charter (CHTR 329.87, -2.78 -0.84%) and Comcast (CMCSA 39.25, -0.34 -0.86%) regarding wireless deal. CNBC's David Faber later commented on S/CHTR/CMCSA wireless talks; said it was unlikely Charter or Comcast will buy a stake in Sprint.
Pandora Media (P 8.47, +0.01 +0.12%) confirmed media reports that Tim Westergren has decided to step down from his position as CEO.
EU commission fined Alphabet (GOOG 927.33, -24.94 -2.62%) EUR 2.42 billion for 'abusing dominance as search engine by giving illegal advantage to own comparison shopping service'. In response, GOOG said it may consider an appeal.
Western Digital (WDC) raised Q4 earnings guidance to $2.85 from $2.55-2.65 and raised gross margin guidance to 41% from 40%, but kept revenue guidance unchanged at $4.8 billion.
PC-TEL (PCTI 6.93, -0.02 -0.29%) increased its quarterly dividend to $0.055 per share from $0.05 per share.
NAVER to acquire Xerox (XRX 29.01, -0.18 -0.62%) Research Centre Europe; expected to close in Q3.
CB&I (CBI 20.02, +5.62 +39.03%) shares were strong in reaction to a Court ruling in the Toshiba (TOSBF 2.60, -0.09 -3.35%) Westinghouse Electric case.
Micron (MU 31.66, -0.84 -2.58%) said it is discontinuing its Lexar removable storage retail business.
America Movil SA (AMX 15.97, -0.19 -1.18%) formed a JV with JCDecaux by merging their OOH businesses in Mexico.
Apple (AAPL 143.74, -2.08 -1.43%) rumored to have acquired German computer vision company SensoMotoric Instruments, according to MacRumors.
In reaction to quarterly results:
FactSet (FDS 165.65, -0.44 -0.26%) reported better than expected Q3 EPS of $1.85 on in-line revenues of $312.12 million. For Q4, the company sees EPS and revenues in-line at $1.86-1.92 and $321-328 million, respectively.
Companies scheduled to report quarterly results tonight/tomorrow: CAMP/PAYX
Analyst actions:
BBOX was upgraded to Buy from Neutral at Sidoti,
STM was upgraded to Buy from Hold at Stifel,
CCMP was upgraded to Buy from Hold at Needham;
PI was downgraded to Sector Weight from Overweight at Pacific Crest,
CAMT was downgraded to Hold from Buy at Needham;
WK, ULTI, QTWO, INST, HUBS, EVBG, CRM, BL, UPLD, RNG all initiated with Buy ratings at SunTrust, SHOP, MANH, PCTY were initiated with Hold ratings at SunTrust
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