From Briefing.com: 4:29 pm Closing Market Summary: Nasdaq Ekes Out Another Record Close (:WRAPX) :The Nasdaq (+0.1%) eked out another record close on Thursday, its third in a row, while the S&P 500 (unch) and the Dow (-0.1%) settled just short of their unchanged marks. Action was fairly range-bound with the benchmark index staying true to a ten-point range from start to finish.
There were few surprises in the latest policy decisions from the European Central Bank and the Bank of Japan, with both central banks deciding to leave interest rates unchanged. ECB President Mario Draghi said in his post-decision press conference that the economy has continued to expand, but a substantial degree of accommodation is still necessary as underlying inflation remains subdued.
However, Mr. Draghi didn't dispel the notion that the ECB might soon announce a tapering of the bank's asset purchase program, saying simply the ECB is not setting a date for a change to quantitative easing. The euro climbed 1.0% to 1.1627 against the greenback, sending the U.S. Dollar Index (94.09, -0.55) to an 11-month low.
Meanwhile, the BoJ pushed back the expected time frame for hitting its inflation target of 2.0% to "around FY19" from "around FY18", leaving the impression that it won't be changing its ultra-accommodative monetary policy anytime soon. The yen slipped 0.1% to 112.00 against the U.S. dollar.
In the states, Treasuries rallied across the curve following the aforementioned policy decisions. The benchmark 10-yr yield traded as low as 2.24%, but came up a bit in the late afternoon to finish just one basis point below its flat line at 2.26%.
Earnings season was once again the focal point in the stock market on Thursday. Dow components American Express (AXP 85.35, -0.58) and Travelers (TRV 124.57, -1.89) sold off after delivering their quarterly reports, losing 0.7% and 1.5%, respectively. AXP beat top and bottom line estimates, but reported a 33.0% decline in profit for the second quarter. Meanwhile, TRV missed bottom-line estimates.
However, despite the negative performances from AXP and TRV, the influential financial sector (-0.1%) managed to stay in line with the broader market. Similarly, the top-weighted technology space (unch) was able to keep pace despite challenges on the earnings front. Namely, Qualcomm (QCOM 53.97, -2.81) dropped 5.0% after providing disappointing earnings guidance.
The lightly-weighted telecom services group (+1.4%) settled at the top of the leaderboard after T-Mobile US (TMUS 61.12, -0.85) beat top and bottom line estimates in addition to raising its full-year guidance. However, ironically, TMUS was one of the only telecom components to not finish in positive territory, ending the day lower by 1.4%.
Like telecom services, the health care (+0.6%) and utilities (+0.7%) sectors outperformed, but, on the downside, a total of seven spaces finished in the red. The industrial space was one of the weakest performers, dropping 0.6%, as transports weighed, evidenced by the 1.0% decrease in the Dow Jones Transportation Average.
C.H. Robinson (CHRW 65.01, -3.68) paced the DJTA's retreat, dropping 5.4%, after missing bottom-line estimates. Union Pacific (UNP 106.14, -1.70) also underperformed, losing 1.6%, after its better than expected earnings and revenues were overshadowed by projections for flat volume growth in the third quarter.
It's also worth pointing out that Special Counsel Robert Mueller will be considering President Trump's business dealings in his investigation on Russia's involvement in the 2016 U.S. presidential election. The stock market slipped on the initial headline, but reclaimed the slide within 30 minutes.
Reviewing Thursday's economic data, which included the July Philadelphia Fed Index, the weekly Initial Claims Report, and the June Leading Indicators Index:
The Philadelphia Fed Survey for July declined to 19.5 from an unrevised 27.6 in June while economists polled by Briefing.com had expected a reading of 22.0.
The key takeaway from the report is that the downturn was led by a sharp drop in new orders, which isn't the best preliminary signal for third quarter economic growth prospects.
The latest weekly initial jobless claims count totaled 233,000 while the Briefing.com consensus expected a reading of 245,000. Today's tally was below the revised prior week count of 248,000 (from 247,000). As for continuing claims, they rose to 1.977 million from the revised count of 1.949 million (from 1.945 million).
The report covered the period in which the survey for the July employment report was conducted; accordingly, the key takeaway is that it should feed expectations for another month of strong nonfarm payroll gains.
The Conference Board's Leading Indicators report for June increased 0.6% (Briefing.com consensus 0.4%) after moving higher by an unrevised 0.3% in May.Investors will not receive any economic data on Friday.
Nasdaq Composite +18.7% YTD
S&P 500 +10.5% YTD
Dow Jones Industrial Average +9.4% YTD
Russell 2000 +6.3% YTD
Tech Stocks from Briefing.com
Action was mostly flat today, yet the tech-heavy Nasdaq Composite found a way to stay above water when others could not. The index added 4.96 points (+0.08%) to 6390.00. The Dow Jones Industrial Average, by contrast, lost 28.97 points (-0.13%) today to close at 21611.78, and the S&P 500 shed less than a point (-0.02%) to 2473.45.
The Technology (XLK 57.55, +0.13 +0.23%) space posted another strong session on Thursday, taking month-to-date gains to 4.7%. Component CenturyLink (CTL 23.22, +0.54 +2.38%) performed the best today after announcing its Managed Security Services 2.0 suite is now available in Asia Pacific. The remaining S&P sectors were led by the US Telecom space IYZ +0.92% and followed by XLU +0.72%, XLV +0.66%, XLP +0.02%, XLF -0.04%, XLY -0.21%, XLRE -0.28%, XLE -0.30%, XLI -0.56%, XLB -0.74%.
In the S&P 500 Information Technology (992.71, +0.42 +0.04%) space made it an ever 10 sessions of gains today. Despite this, there were weak points as component Alliance Data (ADS 238.62, -24.91 -9.45%) showed particular weakness following Q2 results and lowered FY17 guidance; similarly, component Qualcomm (QCOM 53.97, -2.81 -4.95%) was hit hard today after giving some unimpressive Q4 guidance in concurrently with earnings. In spite of these select weak points, other names which followed the broader trend higher today included SWKS +2.12%, QRVO +1.60%, NVDA +1.45%, CSRA +1.33%, FSLR +1.31%, HPE +1.30%, HPQ +1.28%, PYPL +1.27%, CRM +1.09%, NTAP +1.00%, MCHP +0.89%.
Other notable news items among sector components:
Corning (GLW 31.71, -0.02 -0.06%) acquired SpiderCloud Wireless a provider of in-building wireless solutions; terms not disclosed.
SAP AG (SAP 105.82, +0.28 +0.27%) in addition to reporting earnings announced an EUR500 million share buyback.
DXC Technology's (DXC 78.63, -0.08 -0.10%) Enterprise Services entered into Master Accounts Receivable Purchase Agreement.
Camtek (CAMT 5.41, -0.20 -3.57%) to sell its PCB business for $35 million to Principle Capital, a private-equity fund; co will sell it for $35 million, of which $32 million will be paid in cash upon closing and an additional amount of up to $3 million conditioned upon the PCB business' financial performance in 2018.
USA Tech (USAT 5.25, +0.45 +9.38%) priced a 8,333,333 common stock offering at $4.50 per share.
Pareteum (TEUM 1.15, +0.19 +19.79%) received two new cloud services contracts from UK-based Communications Service Providers; the new three-year contracts represent an additional $1 million to the company's current revenue backlog.
DragonWave (DRWI 0.89, flat) announced receipt of a repayment notice from Comerica Bank for the repayment in the amount of $17,243,336.
In reaction to quarterly results:
SAP AG (SAP) reported in-line Q2 EPS of EUR0.94 on better than expected revenues of EUR5.78 billion. The company also guided FY17 revenues in-line at EUR23.3-23.7 billion.
Qualcomm (QCOM 53.97, -2.81 -4.95%) reported better than expected Q3 EPS and revenues of $0.83 and $5.37 billion, respectively. For Q4, the company sees EPS below market expectations at $0.75-0.85 on revenue guidance mostly above market views at $5.4-6.2 billion.
T-Mobile US (TMUS 61.12, -0.85 -1.37%) reported better than expected Q2 EPS and revenues of $0.67 and $10.21 billion, respectively. For FY17, the company sees adjusted EBITDA of $10.5-10.9 billion, up from $10.4-10.8 billion.
Rogers Comms (RCI 51.58, +0.77 +1.52%) reported better than expected Q2 EPS of CAD1.00 on in-line revenues of CAD3.59 billion.
Check Point Software (CHKP 107.41, -8.31 -7.18%) reported better than expected Q2 EPS of $1.26 on in-line revenues of $458.6 million. The company also guided Q3 EPS of $1.18-1.28 on revenues between $440-465 million. CHKP also reaffirmed FY17 EPS of $5.05-5.25 and revenues of $1.85-1.90 billion.
Analyst actions:
HPQ was upgraded to Outperform from Sector Perform at RBC Capital Mkts;
NEWR and RNG were downgraded to Equal Weight from Overweight at Morgan Stanley,
NVEC was downgraded to Hold from Buy at Craig Hallum,
DIOD was downgraded to Neutral from Buy at Cleveland Research;
COUP was initiated with an Overweight at Cantor Fitzgerald
Expect quarterly results tonight from the following companies: ETFC, EBAY, MANH, MXIM, MSFT, NCR, SWKS, V
4:35 pm Super Micro Computer raises Q4 revenue guidance on strong Asia and storage demand, lowers EPS guidance due to three factors (SMCI) :
Raises Q4 rev to $712-717 mln from $655-715 mln vs $681.96 mln Capital IQ Consensus. Revenue exceeded expectations primarily due to stronger sales in Asia and at storage customers with strong shipments that accelerated late in the quarter.
Lowers Q4 EPS to $0.35-0.37 from $0.40-0.50 vs $0.45 Capital IQ Consensus. This includes an estimated negative impact of $0.09 related to three major items: expiring customer agreements with unfavorable DRAM and SSD pricing; urgent new projects with unanticipated R & D expense from major partners with NRE to be recovered in later quarters; and tax impact due to our global corporate tax structure.
Co will report on Aug 3.
4:20 pm Skyworks beats by $0.05, beats on revs; guides Q4 EPS above consensus, revs above consensus; increases quarterly dividend 14% QoQ to $0.32/share (SWKS) :
Reports Q3 (Jun) earnings of $1.57 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $1.52; revenues rose 19.8% year/year to $900.8 mln vs the $890.58 mln Capital IQ Consensus.
Co issues upside guidance for Q4, sees EPS of $1.75, excluding non-recurring items, vs. $1.73 Capital IQ Consensus Estimate; sees Q4 revs of $980 mln vs. $973.09 mln Capital IQ Consensus Estimate.
Skyworks' Board of Directors has declared a cash dividend of $0.32 per share of the Company's common stock, representing a 14 percent increase from the prior quarterly dividend of $0.28 per share. The dividend is payable on August 29, 2017, to stockholders of record at the close of business on August 8, 2017.
"Given our design win momentum and new product pipeline, we intend to sustainably outpace growth in our addressable markets."SWKS is an Apple (AAPL) supplier -- AAPL reports earnings August 1 after the close
4:14 pm Microsoft beats by $0.04, beats on revs (MSFT) :
Reports Q4 (Jun) earnings of $0.75 per share, excluding a $0.23/share ($1.8 bln) tax benefit, $0.04 better than the Capital IQ Consensus of $0.71; revenues rose 9.1% year/year to $24.7 bln vs the $24.29 bln Capital IQ Consensus.
Revenue in Productivity and Business Processes was $8.4 billion and increased 21% (up 23% in constant currency), with the following business highlights:
Office commercial products and cloud services revenue increased 5% (up 6% in constant currency) driven by Office 365 commercial revenue growth of 43% (up 44% in constant currency)
Office consumer products and cloud services revenue increased 13% (up 13% in constant currency) and Office 365 consumer subscribers increased to 27.0 million
Dynamics products and cloud services revenue increased 7% (up 9% in constant currency) driven by Dynamics 365 revenue growth of 74% (up 75% in constant currency)
LinkedIn contributed revenue of $1.1 billion during the quarter
Revenue in Intelligent Cloud was $7.4 billion and increased 11% (up 12% in constant currency), with the following business highlights:
Server products and cloud services revenue increased 15% (up 16% in constant currency) driven by Azure revenue growth of 97% (up 98% in constant currency)
Enterprise Services revenue decreased 3% (down 1% in constant currency) with declines in custom support agreements offset by growth in Premier Support Services
Revenue in More Personal Computing was $8.8 billion and decreased 2% (down 1% in constant currency) driven primarily by lower phone revenue, with the following business highlights:
Windows OEM revenue increased 1% (up 1% in constant currency), slightly ahead of the overall PC market
Windows commercial products and cloud services revenue increased 8% (up 8% in constant currency) driven by annuity revenue growth
Surface revenue decreased 2% (down 1% in constant currency) mainly due to product lifecycle transitions
Search advertising revenue excluding traffic acquisition costs increased 10% (up 11% in constant currency) driven by higher revenue per search and search volume
Gaming revenue increased 3% (up 4% in constant currency) as strength in Xbox software and services offset lower hardware revenue.
"We delivered a strong finish to the year with 30% growth in commercial bookings this quarter."
Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.
4:08 pm Maxim Integrated beats by $0.01, misses on revs; guides Q1 EPS below consensus, revs in-line; co raises quarterly dividend 9% to $0.36/share; co announces new share repurchase authorization $1 bln (MXIM) :
Reports Q4 (Jun) earnings of $0.63 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.62; revenues rose 6.3% year/year to $602 mln vs the $609.52 mln Capital IQ Consensus.
Co downside EPS guidance for Q1, sees EPS of $0.48-0.54, excluding non-recurring items, vs. $0.58 Capital IQ Consensus Estimate; sees Q1 revs of $555-595 mln vs. $592.35 mln Capital IQ Consensus Estimate.
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