From Briefing.com: 4:29 pm Closing Market Summary: Equities Finish Flat on Monday (:WRAPX) :
The equity market opened the week with a sleepy, range-bound performance that left the major averages little changed from where they closed on Friday. The S&P 500 and the Dow finished just a tick below their flat lines while the Nasdaq eked out a narrow victory.
Sector movement was very modest as market-moving headlines were few and far between. Seven groups advanced--technology (unch), consumer discretionary (+0.3%), utilities (+0.4%), consumer staples (+0.1%), real estate (+0.2%), telecom services (+0.2%), and materials (+0.2%)--and four groups declined--financials (-0.1%), health care (-0.3%), industrials (-0.1%), and energy (-0.2%).
The influential health care sector struggled following weekend reports that the Senate will delay a vote on health care reform, which was originally scheduled for this week, and ahead of tomorrow morning's earnings reports Johnson & Johnson (JNJ 132.15, -0.45) and UnitedHealth (UNH 186.35, -0.55).
Meanwhile, the consumer discretionary group outperformed, thanks in large part to retailers, which pushed the SPDR S&P 500 Retail ETF (XRT 40.22, +0.36) higher by 0.9%. Amazon (AMZN 1010.04, +8.23) also exhibited relative strength, adding 0.8%, after the company's target price was raised to $1,200 at UBS.
Outside of the equity market, select safe-haven assets, including gold and U.S. Treasuries, ticked up on Monday; gold advanced 0.5% to $1,234.00/ozt while the benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, slipped three basis points to 2.31%.
In addition, the CBOE Volatility Index (VIX 9.87, +0.36), which is used to gauge investors' anticipation of short-term volatility, jumped 3.7%. However, it's important to note that, despite today's advance, the VIX remains at a historically-low level.
Reviewing today's economic data, which was limited to the Empire Manufacturing Survey for July:
The Empire Manufacturing Survey for July fell to 9.8 from the prior month's reading of 19.8. The Briefing.com consensus estimate was pegged at 13.0.
On Tuesday, investors will receive several economic reports, including June Export/Import Prices at 8:30 ET, the July NAHB Housing Market Index (Briefing.com consensus 67) at 10:00 ET, and July Net Long-Term TIC Flows at 16:00 ET.
Nasdaq Composite +17.3% YTD
S&P 500 +9.8% YTD
Dow Jones Industrial Average +9.5% YTD
Russell 2000 +5.4% YTD
Tech Stocks from Briefing.com
Lower than average participation on Monday took morning gains off the table as the broader market gradually stepped lower into the close. A mixed finish saw the tech-heavy Nasdaq Composite as the only major index ending higher, up 1.97 points (+0.03%) to 6314.43. The Dow Jones Industrial Average lost about 8.02 points (-0.04%) today to 21629.72, while the S&P 500 finished less than a point lower (-0.01%) to 2459.14.
The Technology (XLK 56.87, +0.01 +0.02%) space ended just on this side of flat lines today. Component Akamai Tech (AKAM 51.77, +1.15 +2.27%) was strong today after CEO T. Leighton disclosed the purchase of about 19K shares under his 10b5-1 trading plan. The US Telecom IYZ +0.48% space was the best performer today, followed by XLU +0.46%, XLY +0.24%, XLRE +0.22%, XLB +0.20%, XLP +0.11%, XLI -0.06%, XLE -0.12%, XLF -0.32%, XLV -0.36%.
In the S&P 500 Information Technology (981.52, +0.44 +0.04%) space, trading escaped Monday with minimal gains. Component Fiserv (FISV 125.25, +1.64 +1.33%) performed well today after a premarket upgrade of the stock to a Buy rating at Guggenheim. Other names in the space which outperformed today included FFIV +2.21%, SYMC +1.46%, VRSN +1.11%, FLIR +1.03%, GLW +0.80%, MSFT +0.78%, PYPL +0.73%, CTXS +0.54%, JNPR +0.41%.
Other notable news items among sector components:
Western Digital's (WDC 94.57, +0.13 +0.14%) SanDisk obtained a court protection against Toshiba (TOSBF 2.10, +0.01 +0.48%) in preliminary injunction hearing.
Asure Software's (ASUR 13.76, -1.20 -8.02%) CFO Brad Wolfe resigned.
PayPal (PYPL 57.58, +0.42 +0.73%) expanded its partnership with Samsung (SSNLF 2080, flat) to enable PayPal as a payment method in Samsung Pay.
VirnetX Holding (VHC 4.05, -0.55 -11.96%) was informed by investor the previously disclosed share purchase will not occur on July 17 because the investor's financing sources have not yet completed their diligence.
Rubicon Project (RUBI 5.03, -0.04 -0.79%) acquired nToggle, a technology company that makes it easier and more cost effective for programmatic buyers to find the inventory they're looking for among the bid requests they receive each day; Rubicon paid $38.5 million in cash.
Alliance Data (ADS 262.07, -2.07 -0.78%) reported average receivables of $15,933,375 +16% Y/Y and Net charge-offs of 63,916; sees net loss rates consistent with its FY guidance.
Analyst actions:
FISV and VNTV were upgraded to Buy from Neutral at Guggenheim,
EPAY was upgraded to Outperform from Mkt Perform at Raymond James,
DLB was upgraded to Buy from Neutral at B. Riley & Co.,
EGOV was upgraded to Outperform from In-Line at Imperial Capital;
SAIC and BAH were downgraded to Hold from Buy at Jefferies;
HDP was initiated with a Buy at Craig Hallum,
ANSS and PTC were initiated with Neutral ratings at Goldman
Expect quarterly results after the close/before the open tomorrow from: NFLX/ERIC, AMTD
4:19 pm Netflix misses by $0.01, reports revs in-line; guides Q3 EPS above consensus, revs above consensus (NFLX) :
Reports Q2 (Jun) earnings of $0.15 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.16; revenues rose 32.3% year/year to $2.79 bln vs the $2.76 bln Capital IQ Consensus.
See Full List of Key Metrics in 16:14 comment
Co issues upside guidance for Q3, sees EPS of $0.32, excluding non-recurring items, vs. $0.22 Capital IQ Consensus Estimate; sees Q3 revs of $2969 vs. $2.88 bln Capital IQ Consensus Estimate.
Key excerpts from Shareholders Letter
In Q2, we underestimated the popularity of our strong slate of content which led to higher-than-expected acquisition across all major territories. As a result, global net adds totaled a Q2-record 5.2 million (vs. forecast of 3.2m) and increased 5% sequentially, bucking historical seasonal patterns. For the first six months of 2017, net adds are up 21% year-on-year to 10.2m.
International contribution profit of -$13 million vs. -$69 million was better than our -$28 million forecast due primarily to higher-than-forecasted paid members.
We are making good progress with our international expansion as improving profitability in our earlier international markets helps fund significant investment in our newer territories. As a result, we expect positive international contribution profit for the full year 2017, at current F/X exchange rates. This would mark the first ever annual contribution profit from our international segment.
Through the first half of 2017, our operating margin was 7.1%, putting us on track for our full year target of 7%, which we plan on growing in 2018 and beyond.
On competition: It seems our growth just expands the market. The largely exclusive nature of each service's content means that we are not direct substitutes for each other, but rather complements.
We anticipate free cash flow of -$2.0 to -$2.5 billion for the full year 2017. With our content strategy paying off in strong member, revenue and profit growth, we think it's wise to continue to invest.
Briefing.com Note: Prior guidance was for $2 bln.
