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From Briefing.com: Weekly Recap - Week ending 29-Mar-13

Dow +52.38 at 14578.54, Nasdaq +11.00 at 3267.52, S&P +6.34 at 1569.19

The major averages ended the last session of the holiday-shortened week with slim gains. The S&P 500 added 0.4%, and notched its highest close of all-time, eclipsing the previous record close set on October 9, 2007.

The day began on a rather uneventful note, but the flat open was followed by a brief stumble which sent the S&P 500 into negative territory after the latest reading of the Chicago PMI missed expectations.

For March, the Purchasing Managers' Index fell to 52.4 from the 56.8 reported in the February report. Meanwhile, the Briefing.com consensus had expected a smaller decline, to 56.5.

The subsequent weakness was quickly bought up, which enabled the benchmark average to spend the rest of the day in a steady upward climb.

Although equities settled with gains, today's advance was paced primarily by defensively-minded groups. Health care and utilities led the broader market for the duration of the session, and ended as the top performing sectors on the day.

Notably, the health care sector ended the month as the top performing group. Further, having gained 15.2% year-to-date, the sector is also the best performer so far in 2013.

Today's other outperformers included industrials and materials. However, their gains were largely the result of rebound trade after the growth-oriented groups saw some weakness over the past two weeks.

The SPDR Materials Select Sector ETF (XLB 39.18, +0.15) settled higher by 0.4%, but even with today's gain, the sector ETF ended the month as the second weakest performer, trailing only behind telecom services.

The weakness of the materials sector is indicative of the persisting growth concerns. These same worries are being reflected by the price of copper futures, which fell 1.1% to $3.405 per pound, to end the quarter at their lowest level since November of last year.

While materials found themselves near the lead, cyclical financials and technology ended as the weakest performers.

Major bank stocks remained under pressure since the first Cypriot bailout proposal was unveiled two weeks ago. Morgan Stanley (MS 21.98, -0.31) was the weakest performer among the majors and the SPDR Financial Select Sector ETF (XLF 18.21, +0.05) registered a slim gain of 0.3% in today's action. However, even with today's gain, the bank sector ETF is down 1.6% since last Monday.

Elsewhere, the technology sector was unable to climb too far above yesterday's close as Apple (AAPL 442.66, -9.42) weighed. The largest tech stock sold off steadily throughout the day before ending lower by 2.1% Also of note, BlackBerry (BBRY 14.44, -0.12) slipped 0.8% after beating on earnings on below-consensus revenue.

Reviewing the final sector performance, utilities (+1.3%), health care (+1.0%), industrials (+0.6%), and materials (+0.5%) led the way. On the downside, energy (-0.3%), financials (+0.2%), and technology (+0.3%) lagged.

Looking back at the day's economic data, the latest weekly initial jobless claims count totaled 357,000. This was higher than the 338,000 that had been expected by the Briefing.com consensus. Today's tally was also above the revised prior week count of 341,000. As for continuing claims, they fell to 3.050 million from 3.077 million.

The third estimate of third quarter GDP showed growth of 0.4%, which was better than the 0.3% that had been expected by the Briefing.com consensus. Meanwhile, the third quarter GDP Deflator was revised up to 1.0%.

Note that equity and bond markets will be closed tomorrow in observance of Good Friday. However, a handful of economic data points will be reported on Friday. February personal income, personal spending and core PCE prices will all be reported at 8:30 ET. Lastly, the final March Michigan Consumer Sentiment Survey will be released at 9:55 ET.

Week in Review: Cyprus Remains in Focus

On Monday, the major averages ended the headline-filled session with modest losses, and the S&P 500 settled lower by 0.3%. Equities began the day amid broad strength with the early gains coming after Cyprus and the Eurogroup agreed on the terms of a rescue package for the island nation. The early gains did not hold past the opening hour after Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem gave an interview to Reuters in which he explained how the Cypriot bank restructuring may be used as a template for future bailout talks. Growth-oriented sectors were responsible for the bulk of Monday's losses. The industrial space ended as the biggest laggard amid broad weakness. Machinery producers lagged throughout the day, and Caterpillar (CAT 86.97, +0.07) lost 0.9%.

Tuesday ended with firm gains and the S&P 500 settled higher by 0.8%. After starting the day on a positive note, the benchmark average spent the balance of the session in a six-point range. Energy was the only economically-sensitive group which settled among the leaders. Crude oil contributed to the sector strength as the energy component climbed 1.5% to $96.26. Meanwhile, the SPDR Energy Select Sector (XLE 79.31, -0.23) ended higher by 1.1%.

Wednesday's session saw the S&P 500 overcome early losses to close lower by 0.1%. The index began the session lower by 0.8% as European worries remained at the forefront. The future of the eurozone was questioned as market participants speculated whether or not the European Union will copy the Cypriot playbook next time a troubled nation is in need of emergency assistance. Bank stocks reflected the uncertainty surrounding the eurozone. While most sectors ended the session well off their lows, banks settled near the bottom of today's range. The SPDR Financial Select Sector ETF ended lower by 0.5% and JPMorgan Chase (JPM 47.46, -0.31) was the weakest performer among the majors. Shares of JPMorgan fell 1.8% to close below their 50-day moving average.

 
 Index	  Started Week	Ended Week  Change  % Change	 YTD % 
 DJIA	    14512.03	 14578.54   66.51      0.5	11.3 
 Nasdaq	     3245.00	 3267.52    22.52      0.7	 8.2 
 S&P 500	1556.89	 1569.19    12.30      0.8	10.0 
 Russell 2000  946.27	  951.54     5.27      0.6	12.0

09:58 am Q4 GDP revised higher in Third estimate
Fourth quarter real GDP was revised up in the third estimate to 0.4% growth. That compared favorably to the Briefing.com consensus estimate of 0.3% growth and the first estimate that showed a 0.1% contraction. The GDP deflator was bumped up to 1.0% (Briefing.com consensus +0.9%) from 0.9%.

The upward revision was owed primarily to nonresidential investment, which increased 13.2% in the third estimate versus 9.7% in the second estimate. That bumped up the contribution to real GDP from nonresidential investment to 1.28 percentage points from 0.96 percentage points. Conversely, personal consumption expenditures growth was revised down to 1.8% from 2.1%. That reduced the contribution to real GDP from PCE to 1.28 percentage points from 1.47 percentage points. Small changes were seen in most other areas, including net exports, which contributed 0.33 percentage points versus 0.24 percentage point sin the second estimate. Real final sales of domestic product, which exclude the change in inventories, increased 1.9% versus 2.4% in the third quarter. The upward revision to Q4 GDP was nice to see, but clearly, growth was weak in the fourth quarter. This report won't have any impact on the market given its dated nature and the understanding that first quarter growth is looking much better at this juncture. Our Q1 GDP forecast currently sits at 2.9%.

09:57 am Initial Claims Back in Familiar Territory
Initial claims increased by 16,000 to 357,000 for the week ending March 23 (Briefing.com consensus 338,000). Initial claims had fallen below 350,000 for four weeks straight, so the latest number tips things back into the 350,000-400,000 zone where claims had been for most of the last year. We'll have to see if this is a return to prior form when next week's number is released. For the moment, we aren't going to read too much into it as a sign of weakening labor conditions. It doesn't appear as if the market is either since the S&P futures saw little change after its release. As an aside, the Department of Labor said this week's release reflects the annual revision to the weekly unemployment claims seasonal adjustment factors. Continuing claims for the week ending March 16 decreased 27,000 to 3.05 mln (Briefing.com consensus 3.04 mln).

07:59 am Verient Systems shares spike 6% following better than expected earnings
Verint Systems (VRNT $36.95 +2.12) reported fourth quarter earnings of $0.91 per share, excluding non-recurring items, $0.16 better than the Capital IQ consensus Estimate of $0.75; GAAP revenues rose 8.0% year/year to $229 million versus the $225.96 million consensus. The company issues guidance for fiscal year 2014 with EPS of $2.70-2.80, excluding non-recurring items, versus the $2.80 consensus; with non-GAAP rev +6-7%. "While this is our annual outlook, there are seasonal trends in the enterprise software industry, and therefore we expect Q1 to be down sequentially from Q4 levels both in terms of revenue and profitability. [in line with ests]"

07:46 am Five Below shares plunge 6% following miss on revenues and downside guidance
Five Below (FIVE $36.54 -2.02) reported fourth quarter earnings of $0.39 per share, excluding non-recurring items, $0.01 better than the Capital IQ consensus of $0.38, while revenues rose 38.0% year/year to $173.6 million versus the $170.5 mln consensus. This compares to Jan 15 guidance: adjusted EPS of $0.36-0.38 and revenue of $169-172 million. The company issued downside guidance for the first quarter with EPS of $0.02-0.03, excluding non-recurring items, versus the $0.05 Capital IQ Consensus Estimate and revenues of $92-94 million versus the $94.2 million consensus. The company issued downside guidance for fiscal year 2013 with EPS of $0.62-0.65, excluding non-recurring items, versus the $0.71 consensus and revenues of $516-521 million versus the $533.4 million consensus. Comparable store sales increased by 4.4% in the quarter. "The strong holiday quarter capped a year in which we delivered 41% sales growth and 50% adjusted operating income growth." "As we look to 2013, the planned 60 net store openings include promising new markets in Texas, as well as existing markets that offer significant opportunities for expansion."

07:43 am Blackberry shares soar 7% following beat on earnings
BlackBerry (BBRY $15.66 +1.08) reported fourth quarter earnings of $0.22 per share, excluding non-recurring items, $0.53 better than the Capital IQ Consensus Estimate of ($0.31), while revenues fell 35.9% year/year to $2.68 billion versus the $2.84 bln consensus. The revenue breakdown for the quarter was ~61% for hardware, 36% for service and 3% for software and other revenue. During the quarter, BlackBerry shipped ~6 million BlackBerry smartphones (~1 mln BlackBerry 10 units) and ~370,000 BlackBerry PlayBook tablets. Co reports approximately 76 mln subs. Co issues upside guidance for the first quarter, sees EPS approaching breakeven, excluding non-recurring items, versus the ($0.11) consensus. The company will be increasing its marketing investment in the first quarter of fiscal 2014 in support of the global launch of BlackBerry 10. Including the anticipated 50% sequential increase in marketing spending, the Company believes it will approach breakeven financial results in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins. "We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the Company returning to profitability in the fourth quarter." The co also announced that Mike Lazaridis, having fulfilled the commitment he made to the Board in January 2012, has decided to retire as Vice Chair and a Director of the Company.

07:42 am Red Hat shares fall 5% following slight miss on revenues
Red Hat (RHT $47.50 -2.47) reported fourth quarter earnings of $0.36 per share, excluding non-recurring items, $0.06 better than the Capital IQ consensus Estimate of $0.30, while revenues rose 17.1% year/year to $347.9 million versus the $349.44 mln consensus. "For FY13, the growth drivers in our business remained intact, driving record annual revenue, billings proxy and total backlog up 17%, 14% and over 19% year-over-year, respectively. Within total backlog, the value of customer contracts to be billed in the future and not reflected in our financial statements increased to over $280 mln, or up over 40%, as customers increased their commitments to Red Hat technologies in the data center. We continued to see momentum with large deals in Q4, closing a record number of deals in excess of $5 mln and $10 mln. We now provide solutions to over 90% of Fortune 500 companies as well as tens of thousands of smaller companies. New customer additions coupled with renewing and up-selling our existing customer base enabled us to exceed the billion dollar milestone in both subscription revenue and deferred revenues for the first time."

07:40 am PayChex shares fall 2% following in line revenues
Paychex (PAYX $34.00 -0.76) reported third quarter earnings of $0.40 per share, $0.01 better than the Capital IQ consensus of $0.39, while revenues rose 4.2% year/year to $593.3 million versus the $592.62 million consensus. Total service revenue increased 4% to $582.4 million. Payroll service revenue increased 2% to $393.7 million. Human Resource Services revenue increased 10% to $188.7 million. Operating income and operating income, net of certain items, both increased 7% to $225.0 million and $214.1 million, respectively. Co reaffirms FY13 guidance. FY13 payroll rev growth rate is based upon anticipated client base growth and modest increases in revenue per check. HRS revenue growth is expected to remain in line with our historical organic experience. Revenue growth is expected to be stronger in the fourth quarter. Prior acquisitions are expected to have minimal impact on projected revenue growth rates for fiscal 2013. Low High Payroll service revenue 2 % - 3 % HRS revenue 9 % - 11 % Total service revenue 5 % - 6 % Net income 5 % - 7 %

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