Sector Investing

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From Briefing.com: 4:15 pm : The S&P 500 registered its first September decline, shedding 0.3% as nine of ten sectors ended in the red. After posting gains in each of the past seven sessions, several of this month's top performers fell victim to some profit-taking.

Financials, industrials, and materials led to the downside with losses ranging between 0.5% and 1.0%. The financial sector was pressured by the underperformance of most large banks as investors attempted to gauge the impact of a slowdown in the mortgage industry after US Bank (USB 36.87, +0.19) announced that its mortgage revenue fell roughly 20% in the third quarter. JPMorgan Chase (JPM 52.24, -1.02) was the weakest performer among the majors while the broader sector lost 0.7%.

Elsewhere, the industrial sector slid 0.5% as transportation companies displayed broad weakness. The Dow Jones Transportation Average fell 1.1% as 18 of 20 components ended lower.

Crude oil's continued strength may have also acted as a drag on transports with the energy component advancing 1.0% to $108.67 per barrel.

Although oil settled higher, the rest of the commodity complex did not fare nearly as well. Copper (-1.5%, $3.21/lb), gold (-3.0%, $1323.40/oz t), and silver (-5.5%, $21.91/oz t) futures were pressured throughout the day. Similarly, miners and steelmakers lagged as the Market Vectors Gold Miners ETF (GDX 25.29, -1.50) fell 5.6% and the Market Vectors Steel ETF (SLX 45.30, -0.54) lost 1.2%. The materials sector rounded out the bottom of today's leaderboard with its loss of 1.0%.

While most cyclical sectors trailed behind the broader market, discretionary shares (-0.2%) and technology (-0.1%) outperformed.

The discretionary space finished ahead of the S&P with help from media companies after Dow component Walt Disney (DIS 65.49, +1.55) said it plans to increase the size of its buyback. However, apparel manufacturers lagged after Lululemon (LULU 65.29, -3.73), Vera Bradley (VRA 18.85, -0.60), and Men's Wearhouse (MW 34.08, -4.69) issued profit warnings.

Countercyclical sectors ended mixed as the telecom services space added 1.0% while consumer staples, health care, and utilities lost between 0.2% and 0.3%.

Early afternoon headlines from Washington reminded participants that the U.S. budget situation remains far from solved.

House Speaker John Boehner said that spending reforms must be implemented in order to increase the debt ceiling. The Speaker also commented on Syria, saying that he has doubts about the plan to put Syria's chemical weapons under international control.

The remarks were followed by comments from Senate Majority Leader Harry Reid who said the current direction of House Republicans puts the government on track for a shutdown, and that giving in to the Tea Party is equivalent with rooting for a shutdown.

Treasuries surrendered their gains into the close, and the benchmark 10-yr yield ended little changed at 2.90%.

Volume was a bit below average as 642 million shares traded hands on the floor of the NYSE.

In today's economic data, weekly initial claims fell below the 300,000 level for the first time since March 2006. However, the Department of Labor said the sharp drop was due to computer problems. The initial claims level declined to 292,000 for the week ending September 7 from an unrevised 323,000 for the week ending August 31. The Briefing.com consensus expected the initial claims level to increase to 327,000.

The DoL announced that two states upgraded their computer systems, which resulted in an unexpected drop in claims. It is unknown how long the computer errors will remain in the system and it could affect the data for the next few weeks. It should be reiterated that the DoL does not believe the drop in claims this week signals a change in labor market conditions. Conditions remain better than where they were a few months ago but nowhere near as strong as a sub-300,000 reading would suggest.

Separately, export prices, excluding agriculture, ticked down 0.1% in August after an unchanged prior reading. Excluding oil, import prices declined 0.2%, which follows last month's decline of 0.4%.

The August Treasury Budget showed a deficit of $147.9 billion, down from a deficit of $190.5 billion in August 2012. Since the data are not seasonally adjusted, the data cannot be compared with the July level. The Briefing.com consensus expected the budget to show a deficit of $146.0 billion.

Tomorrow, August retail sales, retail sales ex-auto, PPI, and core PPI will all be reported at 8:30 ET. In addition, the preliminary reading of the September University of Michigan Consumer Sentiment Survey and July business inventories will be released at 9:55 ET and 10:00 ET, respectively.DJ30 -25.96 NASDAQ -9.04 SP500 -5.71 NASDAQ Adv/Vol/Dec 882/1.61 bln/1608 NYSE Adv/Vol/Dec 956/642.3 mln/2042
3:30 pm : Commodities remained mixed today. Metals traded lower and were the worst performing commodities today, while energy traded in positive territory.

Crude oil remained in positive territory all day. Syria remained a focus, while, separately, the International Energy Agency released a bullish report today, for the month of September, helping give crude oil price support. Oct crude oil ended today's pit trading session 1.0% higher at $108.65/barrel Natural gas futures spiked higher, to new session highs, following today's weekly inventory data figures. Prices actually began to spike minutes before the data came out.

Oct nat gas closed today 2.0% higher at $3.64/MMBtu.

Metals were the worst performing commodities today. Both precious metals extended lower and hit new session lows after floor trading closed. Dec gold ended the day down 2.4% at $1330.70/oz, while Dec silver closed 4.3% lower at $22.17/oz. Dec copper lost five cents to $3.21/lb.

Corn and wheat prices dropped sharply to new session lows today, while soybeans spiked to a new session high following the USDA's WASDE report, which came out at 12:00 noon

5:04PM NXP Semi: Selling shareholders commence secondary offering of 25 mln shares of common stock (NXPI) 38.02 -0.79 : Co announced that certain of its principal stockholders, including affiliates of funds managed or advised by Kohlberg Kravis Roberts & Co. L.P., AlpInvest Partners B.V., Apax Partners LLP, Bain Capital Partners, LLC and Silver Lake Technology Management, L.L.C., have commenced a registered secondary offering of 25,000,000 shares of common stock pursuant to NXP's shelf registration statement on Form F-3. NXP will not receive any proceeds from the sale of shares in the offering. Morgan Stanley & Co. LLC is acting as underwriter for the offering.

4:07PM Dell Board approves quarterly cash dividend of $0.08 per share (DELL) 13.85 0.00 : Co announced that on October 22, 2013 a quarterly cash dividend of $0.08 per common share will be payable to all shareholders of record as of the close of business on October 1, 2013. The payment date will not be affected by the date of the closing of the pending transaction with Michael Dell and Silver Lake, which may occur before or after such payment date.

4:02PM Brooks Automation appoints Lindon Roberson as Chief Financial Officer (BRKS) 9.30 -0.12 : Co announced the appointment of Lindon Robertson as Executive Vice President and Chief Financial Officer, effective October 1, 2013. Robertson previously was the Vice President and Chief Financial Officer of Graftech International (GTI).

Large Cap Gainers

ASML (93.14 +4.15%): Reinstated with a Buy at Goldman and added to Conviction Buy list.
WAG (52.41 +3.27%): Added to the Conviction Buy list at Goldman.
ECA (18.06 +3.7%): Upgraded to Outperform from Sector Perform at RBC Capital Markets.

Large Cap Losers

WFT (14.91 -5.27%): Disclosed it is selling 38.5% equity interest in Borets International for $400 mln; downgraded at Wells Fargo, Macquarie, and at Raymond James.
GG (26.34 -5.15%): Weakness in metals/mining stocks; ABX, NEM, MT also lower.
SNY (48.17 -2.11%): Announced decision to withdraw the Lixisenatide New Drug Application in the U.S.

Mid Cap Gainers

P (23.98 +12.16%): Named Brian McAndrews Chief Executive Officer, President and Chairman.
STM (9.01 +5.75%): Introduced two set-top box System-on-Chip families that include devices with UltraHD resolution and HEVC video-decoding support.
SEAS (30.17 +5.31%): Co on pace for record year in 2013; prelim YTD total rev and admissions rev through Aug 2013 increased by ~3% and 4%, respectively, vs same period in 2012.

Mid Cap Losers

LULU (64.38 -6.72%): Beat on EPS by $0.04, reported revs in-line; guided Q3 EPS, revs below consensus; lowered FY14 guidance, below consensus; announced a strategic global alliance for X-STATIC with Noble Biomaterials.

10:25AM Semiconductor Hldrs ETF probing this week's high again (SMH) 38.58 +0.12 : Noted relative strength in the sector after the early slip with the SMH testing Tuesday's high for the second day in a row at 38.58 (session high 38.58). Its multi-year high from July is at 38.72 -- ASML +4.5%, MU +1.2%, LRCX +1.1%, NVDA +1%, KLAC +0.9%, BRCM +0.9%, XLNX +0.5%.

10:15AM Dell stockholders approve merger transaction (DELL) 13.85 0.00 : Co announced that, based on a preliminary vote tally from the special meeting of stockholders, Dell stockholders have approved the proposal in which Michael Dell, Dell's Founder, Chairman and CEO, will acquire Dell in partnership with global technology investment firm Silver Lake Partners. In connection with the transaction, Dell stockholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share to stockholders of record as of a date prior to the effective time of the merger, for total consideration of $13.88 per share in cash. The agreement also guarantees the regular quarterly dividend of $0.08 per share for the fiscal third quarter would be paid to holders of record as of a date prior to closing. The total transaction is valued at approximately $24.9 billion.

Ciena (CIEN) announced that Virgin Media Business is deploying Ciena's converged packet optical solutions to provide Data Centre Interconnect services to Redstation, a UK data centre operator and cloud service provider.

Molex (MOLX) has signed definitive agreements as a strategic partner and investor in Vasa Applied Technologies, based in Or Yehuda, Israel.

7:40AM JinkoSolar Holding PV Projects Connected to the Grid Reach 100MW (JKS) 18.62 : Co announced that its 20MW solar PV power plant project in Shaya, Xinjiang Province and 10MW solar PV power project in Gonghe, Qinghai Province have been successfully passed the acceptance inspection conducted by the national grid. The company has so far successfully connected to the grid for more than 100MW of solar PV power projects.

Co states, "We are pleased to announce this milestone and aim to have more than 200MW projects connected to the grid by the end of this year, then have aggregate amount of more than 500MW by the end of 2014, generating approximately 630Gwh of electricity and RMB590 million in revenue in 2014. With favorable government policies, the completion of the Shaya and Gonghe projects marks the beginning of an exciting period where we expect to successfully develop further downstream projects and generate solid returns."

Technicolor and Qualcomm (QCOM) have collaborated to produce a new set-top box, known as SVELTE (Stimulating Video Experience over LTE), featuring LTE technology, terrestrial broadcast and Android OS.

Oracle (ORCL) announced StorageTek Linear Tape File System, Library Edition software. It enables customers to take advantage of tape's low cost per terabyte without the operations and cost overhead of legacy tape management.

Qualcomm (QCOM) announced that its Board of Directors has approved, effective immediately, a new $5.0 billion stock repurchase program. This replaces the prior $5.0 billion stock repurchase program announced on March 5, 2013, at which time we had also announced a 40 percent increase in the quarterly cash dividend. Since July 24, 2013, the Company repurchased ~40.1 million shares of common stock for ~$2.7 billion. The new stock repurchase program has no expiration date.