From Briefing.com: 4:28 pm Closing Market Summary: Stocks Cruise to Record Highs Again on Wednesday (:WRAPX) :
The Nasdaq (+0.6%) kept on rolling in the midweek session, cruising to its ninth-consecutive victory--which marks its longest winning streak in two years--and a new all-time high. The S&P 500 (+0.5%), the Dow (+0.3%), and the Russell 2000 (+1.0%) also notched new record closes, finishing at their best marks of the day.
Today's win was a team effort with all 11 of the S&P 500's sectors finishing in positive territory. The industrial sector (+0.2%) was the weakest performer while the energy group (+1.4%) was the strongest.
The energy space was underpinned by a positive performance from crude oil, which climbed 1.5% to $47.31/bbl on the heels of a better than expected EIA inventory report. According to the Department of Energy, U.S. crude stockpiles declined by 4.7 million barrels last week while the consensus expected a draw of just 3.5 million barrels.
Elsewhere, the influential health care sector (+0.8%) exhibited strength throughout the session with Vertex Pharmaceuticals (VRTX 159.69, +27.53) leading the charge. VRTX shares spiked 20.8% to a fresh all-time high after the biotech company announced positive clinical trial results for three of its newest Cystic-Fibrosis drugs. Unsurprisingly, the iShares Nasdaq Biotechnology ETF (IBB 319.63, +4.49) finished comfortably ahead of the broader market, climbing 1.4%.
The top-weighted technology sector (+0.6%) advanced for the ninth session in a row, but struggled to keep ahead of the broader market. IBM (IBM 147.53, -6.47) weighed on the group, dropping 4.2%, after reporting a decline in revenue for the 21st quarter in a row. Meanwhile, chipmakers finished modestly ahead of the benchmark index, evidenced by the 0.9% increase in the PHLX Semiconductor Index.
As for the laggards, financials struggled to stay afloat despite relatively upbeat earnings reports from Morgan Stanley (MS 46.62, +1.48) and US Bancorp (USB 52.08, +0.45). MS shares jumped 3.3% after the company reported better than expected earnings and revenues while USB shares added 0.9% after the company beat bottom-line estimates. Still, no matter how small the margin of victory, the financial group (+0.2%) managed to put an end to its three-session losing streak.
Like financials, the industrial group finished at the back of the pack. Transports weighed, sending the Dow Jones Transportation Average lower by 0.6%, with CSX (CSX 51.87, -2.77) and United Continental (UAL 74.24, -4.66) pacing the retreat. Both companies beat earnings per share estimates, with CSX also reporting better than expected revenues, but slipped on relatively unimpressive third-quarter guidance. CSX shares dropped 5.1% while UAL shares slipped a bit further, losing 5.9%.
In the bond market, U.S. sovereign debt finished relatively flat as participants hesitated to alter their positioning ahead of policy statements from two major central banks--the Bank of Japan and the European Central Bank. The BoJ will release its policy decision overnight while the ECB will release its decision tomorrow morning. The benchmark 10-yr yield climbed one basis point to 2.27%.
Reviewing Wednesday's economic data, which was limited to June Housing Starts and the weekly MBA Mortgage Applications Index:
Housing starts increased to a seasonally adjusted annualized rate of 1.215 million units in June (Briefing.com consensus 1.160 million), up from a revised 1.122 million units in May (from 1.092 million). Building permits increased to a seasonally adjusted 1.254 million in June (Briefing.com consensus 1.196 million), up from an unrevised 1.168 million in May.
The key takeaway from the report is that there was solid growth in both single-family starts (+6.3%) and permits for single-family homes (+4.1%), both of which are important given the supply constraints in the housing market that have crimped affordability for many prospective home buyers.
The weekly MBA Mortgage Applications Index rose 6.3% to follow last week's 7.4% decrease.On Thursday, investors will receive several economic reports, including the July Philadelphia Fed Index (Briefing.com consensus 22.0) at 8:30 ET, the weekly Initial Claims Report (Briefing.com consensus 245K) also at 8:30 ET, and the June Leading Indicators Index (Briefing.com consensus 0.4%) at 10:00 ET.
Nasdaq Composite +18.6% YTD
S&P 500 +10.5% YTD
Dow Jones Industrial Average +9.5% YTD
Russell 2000 +6.2% YTD
4:09 pm Qualcomm beats by $0.02, beats on revs; guides Q4 EPS below consensus, revs mostly above consensus (QCOM) :
Reports Q3 (Jun) earnings of $0.83 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.81; revenues fell 11.1% year/year to $5.37 bln vs the $5.25 bln Capital IQ Consensus.
Co issues mixed guidance for Q4, sees EPS of $0.75-0.85, excluding non-recurring items, vs. $0.91 Capital IQ Consensus Estimate; sees Q4 revs of $5.4-6.2 bln vs. $5.48 bln Capital IQ Consensus Estimate.
"We delivered better than expected results in our semiconductor business this quarter, which drove EPS above the midpoint of our expectations versus our April updated guidance," said Steve Mollenkopf, CEO of Qualcomm Incorporated. "Our products and technologies continue to enable the global smartphone industry, and we are expanding into many exciting new product categories, including automotive, mobile computing, networking and IoT. We believe that we hold the high ground with regard to the dispute with Apple [AAPL], and we have initiated new actions to protect the well-established value of our technologies."
As a result of the recent actions taken by Apple's contract manufacturers and the other licensee in dispute, we currently do not believe total reported device sales and related estimated ranges of device shipment and average selling price are meaningful in measuring our QTL business, and therefore, we are not providing such metrics for the fiscal third quarter.
During Q3, co returned $1.1 billion to stockholders, including $844 million, or $0.57 per share, of cash dividends paid and $300 million through repurchases of 5.2 million shares of common stock
Expects NXPI deal to clsoe by year end.
4:07 pm Plexus beats by $0.03, beats on revs; guides Q4 EPS in-line, revs in-line (PLXS) :
Reports Q3 (Jun) earnings of $0.74 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.71; revenues fell 7.3% year/year to $618.8 mln vs the $608.95 mln Capital IQ Consensus and at the high end of $595 mln to $625 mln guidance range.
Co issues in-line guidance for Q4, sees EPS of $0.77 to $0.87 vs. $0.84 Capital IQ Consensus Estimate; sees Q4 revs of $660 mln to $700 mln vs. $672.12 mln Capital IQ Consensus Estimate.
"We expect fiscal fourth quarter revenue to increase significantly as a result of ramping previously reported program wins. Consequently, we are guiding fiscal fourth quarter revenue in the range of $660 to $700 million. At this revenue level, in conjunction with continued strong operating performance, we anticipate GAAP EPS in the range of $0.77 to $0.87. Our wins momentum and qualified funnel of opportunities remain robust, giving us confidence that we can achieve meaningful growth in fiscal 2018."
Tech Stocks from Briefing.com
Both the Nasdaq Composite and the S&P 500 notched new all-time highs today as stocks surged with earnings season fully underway. The tech-heavy Nasdaq Composite won the day, though, adding 40.74 points (+0.64%) to 6385.04. Heavily weighted Nasdaq 100 names VRTX +20.9%, ISRG +2.1%, REGN +1.8%, DLTR +1.5% and GILD +1.4% all aided the strength. The S&P 500 was a close second, gaining 13.22 points (+0.54%) today to 2473.83, while the Dow Jones Industrial Average advanced about 66.02 points (+0.31%) to 21640.75.
The Technology (XLK 57.42, +0.29 +0.51%) space fell just shy of making all-time highs today as the broader market surge percolated down to the sector. Component Autodesk (ADSK 110.25, +2.55 +2.37%) was among the better performing names today as the stock was initiated ahead of the bell with a Buy rating at Deutsche Bank. As it were, all 11 S&P sectors finished in the green today, led by the Energy XLE +1.46% space, followed by XLB +0.96%, IYZ +0.90%, XLV +0.81%, XLRE +0.74%, XLY +0.47%, XLU +0.42%, XLP +0.37%, XLF +0.12%, XLI +0.09%.
In tech, Semis (SMH 87.77, +0.86 +0.99%) were among the best performing names today. Component ASML (ASML 150.63, +7.38 +5.15%) led the pack after reporting better than expected Q2 results. Peers IDCC +5.11%, CRUS +3.16%, CAVM +2.63%, ON +2.02%, MPWR +1.95%, MRVL +1.67%, TSM +1.51%, AVGO +1.40%, MKSI +1.39%, MSCC +1.37% all put up strong Wednesday sessions.
In the S&P 500 Information Technology (992.29, +5.50 +0.56%) space, trading made new all-time highs today; the IT space has not posted a down session in nine trading days. Component First Solar (FSLR 45.67, +1.65 +3.75%) was strong after receiving a premarket upgrade to a Buy rating from Axiom Capital's Gordon Johnson; shares were later downgraded to Hold at Standpoint Research citing valuation. Other names in the space which outperformed today included LRCX +3.06%, HPE +3.03%, CTXS +1.93%, JNPR +1.77%, HPQ +1.69%, TEL +1.60%, KLAC +1.56%, CA +1.56%, SWKS +1.52%, MSI +1.50%.
Other notable news items among sector components:
Hortonworks' (HDP 13.18, -1.10 -7.70%) Rajnish Verma, COO, has stepped down. Current CFO, Scott Davidson, will assume the additional responsibility of COO. The company also updated guidance for Q2 total GAAP revenue of $58-59 million.
Cray (CRAY 19.45, +0.55 +2.91%) implemented a restructuring plan, expects to reduce its workforce by approximately 190 employees.
Rapid7 (RPD 17.30, +0.26 +1.53%) acquired Komand; financial terms were not disclosed.
Booz Allen Hamilton (BAH 33.48, +0.48 +1.45%) was awarded a $140 million Air Force contract and $49.9 million Army contract.
xG Technology (XGTI 2.20, +0.12 +5.77%) received an order valued at about $1.5 million for microwave communications equipment from a 'leading' medical device manufacturer.
Science Applications (SAIC 71.04, +1.51 +2.17%) has been awarded a task order for $621 million from the U.S. General Services Administration (GSA) Federal Systems Integration and Management Center.
Toshiba (TOSBF 2.36, -0.05 -2.40%) won a court ruling to resume efforts to protect its intellectual property and deny Western Digital (WDC 94.48, +0.21 +0.22%) workers access to certain data and facilities effective immediately.
In reaction to quarterly results:
ADTRAN (ADTN 22.00, +1.50 +7.32%) reported better than expected Q2 EPS of $0.30 on revenues which rose about 13.5% compared to last year to $184.7 million. Also guided Q3 revs flat q/q compared to $184.7 million.
ASML (ASML) reported better than expected Q2 EPS and revenues of EUR1.08 and EUR2.1 billion, respectively. For Q3, the company sees revenues ahead of market expectations at about EUR2.2 billion.
IBM (IBM 147.53, -6.47 -4.20) reported better than expected Q2 EPS of $2.97 on in-line revenues of $19.29 billion. The company also reaffirmed FY17 EPS guidance of at least $13.80.
Analyst actions:
FSLR was upgraded to Buy from Hold at Axiom Capital,
JASO was upgraded to Hold at Axiom Capital,
TRIP was upgraded to Market Perform from Underperform at Cowen,
CSOD was upgraded to Outperform from Neutral at Credit Suisse;
PYPL was downgraded to Hold from Buy at SunTrust,
FSLR was downgraded to Hold from Buy at Standpoint Research;
