From Briefing.com: 4:34 pm Closing Market Summary: Averages Settle Tuesday Mixed (:WRAPX) :The S&P 500 gave back its slim Monday advance in the second session of the week, dropping 0.1%, with nine of its eleven sectors settling in negative territory. Meanwhile, the Nasdaq (+0.3%) cruised to its second win of the week as technology stocks outperformed and the Dow (unch) eked out a very narrow victory.
With the week's first major event--Wednesday's testimony from Fed Chair Janet Yellen--on the horizon, investors were cautious at the start of Tuesday's session, leaving the S&P 500 near its unchanged mark for the majority of the morning. However, the benchmark index made a sharp move into the red around 11:00 ET, dropping as low as 0.6% below its flat line, after Donald Trump Jr. tweeted an email exchange that involved him setting up a meeting with a Russian lawyer in an attempt to gain some possibly incriminating information on then-presidential candidate Hillary Clinton.
The market's initial reaction was likely prompted by the notion that there might have been collusion between Russia and the Trump campaign to influence the outcome of the U.S. presidential election. However, the risk-off sentiment didn't stick and the benchmark index quickly rebounded, retracing about half of its loss in just 30 minutes.
Outside of the equity market, safe-haven assets like U.S. Treasuries, gold, and the Japanese yen did move modestly higher on Tuesday, but the CBOE Volatility Index (VIX 10.91, -0.20)--which points to the market's anticipation of short-term uncertainty--declined by 1.8%. Gold climbed 0.2% to $1,215.90/ozt, the yen added 0.2% against the U.S. dollar, and the benchmark 10-yr yield--which moves inversely to the price of the 10-yr Treasury note--dropped one basis point to 2.36%.
Only the energy and technology sectors finished Tuesday in the green with energy (+0.5%) being the top-performing group, thanks in large part to crude oil's positive performance. The commodity jumped 1.5% to $45.07/bbl despite trading around 1.0% below its Monday closing price in early-morning action. It's tough to credit a single bullish catalyst for crude oil's advance as technical forces have been coming into play within the crude futures market as of late, but it's worth noting that a European inventory report showed a decline in European product stockpiles.
Meanwhile, the top-weighted technology sector (+0.4%) put together another solid performance, extending its two-day gain to 1.2%, with Facebook (FB 155.27, +1.77) showing relative strength. FB shares jumped to a new session high after the company announced that ads for Facebook Messenger will become available to advertisers globally. Chipmakers also outperformed, pushing the PHLX Semiconductor Index higher by 0.8%.
On the downside, the influential financial sector (-0.7%) struggled on Tuesday, especially following the release of Donald Trump Jr.'s email exchange, and eventually settled with the telecom services group (-0.7%) at the very bottom of the day's leaderboard. However, Dow component Goldman Sachs (GS 226.95, +1.11) was able to register its second win of the week, climbing 0.5%.
In Washington, Senate Majority Leader Mitch McConnell announced that the upper house will delay its August recess by two weeks, giving Senate Republicans some extra time to iron out their version of the health care reform bill. The health care sector (-0.1%) finished in line with the broader market.
Reviewing today's economic data, which was limited to May Wholesale Inventories and May JOLTS:
May Wholesale Inventories increased 0.4% (Briefing.com consensus +0.3%). The prior month's reading was revised to -0.4% from -0.5%.
The market doesn't typically pay much attention to this release since the full business inventories report is usually released a short time later.
The May Job Openings and Labor Turnover Survey showed that job openings decreased to 5.666 million from a revised 5.967 million (from 6.044 million) in April.On Wednesday, investors will receive the weekly MBA Mortgage Applications Index and the Fed's Beige Book for July. The two reports will be released at 7:00 ET and 14:00 ET, respectively.
Nasdaq Composite +15.1% YTD
S&P 500 +8.3% YTD
Dow Jones Industrial Average +8.3% YTD
Russell 2000 +4.1% YTD
Tech Stocks from Briefing.com
A rocky Tuesday ended with the broader market split on either side of flat lines. For the most part, the Dow Jones Industrial Average ended flat (21409.07, +0.55 +0.00%). The S&P 500 turned in a losing affair, but only just, as the index lost 1.90 points (-0.08%) to 2435.53. The tech-heavy Nasdaq Composite registered the strongest Tuesday session, adding 16.91 points (+0.27%) to 6193.30 as heavily-weighted NASDAQ 100 names AAPL +0.3%, GOOGL +0.3%, MSFT +0.0% and INTC +0.8% all turned in strong sessions.
The Technology (XLK 55.53, +0.12 +0.22%) space finished higher, one of only two S&P sectors which could say that at the bell on Tuesday. Component Micron (MU 31.37, +0.87 +2.85%) held up nicely among the up and down action on Tuesday as the stock benefitted from favorable sell side commentary regarding strong June PC data. The Energy XLE +0.55% space was the other S&P sector which ended the session in the green, followed by XLU -0.08%, XLI -0.09%, XLB -0.11%, XLV -0.11%, XLRE -0.16%, XLY -0.23%, XLP -0.26%, XLF -0.76%, IYZ -1.61%.
Looking at a tech name which didn't fare as well today, however, social media platform Snap (SNAP 15.47, -1.52 -8.95%) saw shares break the IPO price lower today only to commence a free-fall (of sorts) to post-IPO lows. The stock was downgraded ahead of the open this morning to an Equal Weight rating at Morgan Stanley, one of the lead underwriters of the IPO from early-March. The street was tough on this name today, but rightfully so as Facebook's (FB 155.27, +1.77 +1.2%) Instagram is hot on its heels with some strong offerings of its own.
In the S&P 500 Information Technology (956.67, +3.39 +0.36%) space, trading climbed out of an afternoon dip to end just shy of highs. Component Western Digital (WDC 91.73, +2.46 +2.76%) captured solid gains today after reports surfaced that it has submitted a matching bid for Toshiba's (TOSBF 2.13, -0.10 -4.48%) flash memory unit. Other names in the space which outperformed today included AMAT +2.70%, FLIR +2.24%, LRCX +1.91%, ADI +1.44%, QRVO +1.43%, NVDA +1.42%, KLAC +1.36%, NTAP +1.30%, ADS +1.28%, MA +1.22%, FB +1.15%.
Other notable news items among sector components:
Symantec (SYMC 29.01, +0.01 +0.03%) to acquire U.S. and Israel-based Skycure; terms not disclosed.
Western Digital (WDC) was strong today after reports suggested WDC submitted a matching bid for
Toshiba's (TOSBF) flash memory unit.
Facebook (FB 155.27, +1.77 +1.15%) said Messenger ads to become available to advertisers globally.
Sphere 3D (ANY 0.13, -0.02 -16.69%) completed a 1:25 reverse stock split; to begin trading ex-split tomorrow.
Citrix Systems (CTXS 78.56, -1.37 -1.71%) announced a leadership transition to accelerate cloud transformation, enhance profitability and return capital to shareholders; reaffirmed Q2 guidance.
Immersion (IMMR 8.60, +0.04 +0.47%) filed a complaint in the US District Court alleging Fitbit (FIT 5.24, +0.01 +0.19%) infringed 3 of its US patents.
Cypress Semi (CY 13.77, +0.06 +0.44%) director Wilbert van den Hoek resigned due to a disagreement with the Board.
In reaction to quarterly results:
Barracuda Networks (CUDA 23.18, -0.82 -3.42%) reported in-line Q1 EPS of $0.18 on better than expected revenues of $94.18 million. The company also guided Q2 revenues in the range of $92-94 million on EPS between $0.16-0.18. For FY18, the company expects revenues between $370-380 million on EPS of $0.73-0.78.
Analyst actions:
STM was upgraded to Overweight at JP Morgan;
SNAP downgraded to Equal Weight from Overweight at Morgan Stanley;
TWLO was initiated with an Outperform at Robert W. Baird,
VSM was initiated with a Buy at Needham
