From Briefing.com: 4:10 pm : The S&P 500 added 0.6% after a pair of weekend headlines provided an opening boost to equities. Stocks began the session sharply higher after Larry Summers, who was thought to be the hawkish frontrunner, withdrew his name from consideration to be the next chairman of the Federal Reserve.
In addition, news that Russia and the United States have signed an agreement to decommission Syria's chemical weapons within a year also contributed to the early bid.
With Larry Summers becoming an afterthought in the Fed chair discussion, bonds and equities rallied while the dollar slipped. The benchmark 10-yr note was up close to a point before surrendering most of its gain into the close. The 10-yr yield ended lower by two basis points at 2.87%.
The intraday reversal in Treasuries may have reflected the market's expectation for a $10-$15 billion tapering announcement coming at Wednesday's FOMC press conference.
Nine of ten sectors finished in positive territory while the underperformance of technology (-0.3%) weighed on the Nasdaq. The largest tech stock, Apple (AAPL 450.12, -14.78), settled lower by 3.2% as sellers were in control throughout the session. High-beta chipmakers fared a bit better as the PHLX Semiconductor Index tacked on 0.4%.
Energy (+0.02%) and consumer discretionary (+0.4%) shares lagged while the remaining cyclical sectors outperformed. The energy space ended little changed as crude oil fell 2.0% to $106.08 per barrel after the agreement to dismantle Syria's chemical weapons reduced the likelihood of a military intervention.
Meanwhile, financials (+1.1%), industrials (+1.3%), and materials (+1.1%) held near their highs into the close. The industrial sector was a notable leader as just about all components posted gains. Dow member Boeing (BA 115.67, +4.34) surged 3.9% amid reports indicating the company is nearing a fighter jet deal with South Korea's government. Transports also displayed strength as the Dow Jones Transportation Average advanced 1.1%.
Countercyclical sectors ended mixed as consumer staples (+0.9%), health care (+0.8%), and telecom services (+0.8%) outperformed while utilities (+0.2%) lagged.
Participation was a bit on the light side as 655 million shares changed hands on the floor of the New York Stock Exchange.
With the budget debate heating up once again, President Obama spoke earlier today, reminding once again that he has no plans to negotiate over the debt ceiling.
In today's economic data, the Empire Manufacturing Survey for September registered a reading of 6.3, which was down from the prior month's reading of 8.2. Economists polled by Briefing.com had expected that the survey would improve to 9.0.
Separately, August industrial production increased 0.4% while the Briefing.com consensus expected an uptick of 0.5%. Capacity utilization hit 77.8%, which was in-line with the Briefing.com consensus.
Tomorrow, August CPI and core CPI will be reported at 8:30 ET while July net long-term TIC flows and the September NAHB Housing Market Index will be released at 9:00 ET and 10:00 ET, respectively.
4:34PM NVIDIA appoints Colette Kress as CFO (NVDA) 15.81 +0.01 : Co announced that it has named Colette as executive vice president and chief financial officer. Kress most recently served for three years as senior vice president and chief financial officer at Cisco's Business Technology and Operations Finance organization.
4:30PM Photronics promotes Dr. Peter Kirlin to President (PLAB) 7.76 +0.12 : Co announced the appointment of Dr. Peter Kirlin as President of the Company. Dr. Kirlin has served as the Company's Senior Vice President, US and Europe, since August 2008.
4:01PM Axcelis announces appointment of Kevin Brewer as Chief Financial Officer (ACLS) 2.23 -0.04 : Co announced the appointment of Kevin J. Brewer as executive vice president and chief financial officer. Mr. Brewer, who has served as the company's interim CFO since July, will continue to report directly to Chairman and CEO Mary Puma.
2:23PM Emulex: Starboard delivers letter to Emulex CEO And Board of Directors; states that emulex is deeply undervalued; believes a newly reconstituted board composed of independent directors is required to unlock value (ELX) 8.00 +0.27 : Letter stated "Starboard Value LP, together with its affiliates, currently owns securities representing beneficial ownership of approximately 7.9% of the outstanding shares of Emulex Corporation, making us one of the Company's largest shareholders. We have conducted extensive research on Emulex, its different businesses, and the markets in which those businesses operate. Based on this research, we believe Emulex is extremely undervalued and that clear opportunities exist within the control of management and the Board of Directors of the Company to unlock significant shareholder value."
"After years of underperformance, we believe Emulex's current share price does not properly reflect the value of its underlying assets. Despite the recent concerns about growth, we believe Emulex's core fibre channel HBA product segment is a valuable asset that will continue to generate strong cash flow for years to come. It is time for a significant change at Emulex. Specific changes must be made to address years of dismal operating and share price performance as well as sub-optimal corporate governance."
"We believe a newly reconstituted Board comprised of independent directors and shareholder advocates should be able to evaluate each of Emulex's businesses with a fresh perspective and determine the right strategy to enhance shareholder value. We believe it is critical for the Board to adopt a disciplined framework by which to analyze the current cost structure, strategic positioning, and future capital allocation decisions. In addition, we believe that the Board must set margin targets that imply step-function improvements in profitability across each of its businesses and then use these targets to hold management accountable for performance."
Large Cap Gainers
ABX (18.47 +4.23%): Mentioned positively in Barron's article
CF (201.82 +4.12%): Chairman and CEO Stephen R. Wilson announced he will retire as CEO effective January 1, 2014; W. Anthony Will, Senior Vice President, Manufacturing and Distribution, has been selected to succeed Wilson
BMY (45.22 +3.82%): Upgraded to Overweight from Neutral at JP Morgan, target raised to $52 from $50
Large Cap Losers
QIHU (84.11 -4.27%): Weakness following strategic collaboration between Sohu.com's Sogou and Tencent Holdings; QIHU has been rumored to be a potential acquirer of Sogou
ALTR (37.81 -2.22%): Hearing reiterated with a Reduce rating at Nomura, price target $27
AAPL (454.9 -2.15%): Seeing reports that China Telecom has cut iPhone subsidies
Mid Cap Gainers
ATI (31.43 +9.78%): Kennametal (KMT) to acquire co's Tungsten Materials Business for $605 mln
KS (48.78 +8.06%): Strength in packaging makers following Packaging Corporation of America's (PKG) acquisition of Boise (BZ)
SOHU (68.76 +6.19%): Co, Sogou, and Tencent Holdings announced the establishment of a strategic cooperation
Mid Cap Losers
IAG (5.12 -4.66%): Co's partners in the Yatela Mine in Mali have decided to suspend mining excavation activities
ARCP (12.22 -4.08%): To issue common and series D preferred stock via private placement to series C preferred holders at closing of merger with CapLease
UA (76.29 -2.82%): Downgraded to Neutral from Positive at Susquehanna
Nokia (NOK) unveiled two new ultra-affordable camera phones: the Nokia 108 and the Nokia 108 Dual SIM.
07:27 am EZchip downgraded to Perform at Oppenheimer as firm cuts 2014 estimates: . Oppenheimer downgrades EZCH to Perform from Outperform after they reviewed their 2014 estimate and determined they needed to lower it. Their 2014 estimate is now $1.29, down from $1.43. Moreover, with the Street estimate being $1.54, they expect that to come down as they head into the new year. They note mgmt gives guidance for only one quarter ahead. After reviewing their rev by customer, they now believe JNPR sales will be down 52%, CSCO will be up 36%, and everything else ~15%. While this still seems aggressive, they note it is well below Street. They also note, they estimate that CSCO contributes about 66% of 2014 earnings, up from just a bit above 50% in 2013.
10:39 am Technology
The tech sector is trading higher today, trailing wider gains in the broader market. Semiconductors are showing relative strength, however, with the SOX trading 0.8% higher. Within the chip index, STM (+2.7%) is a notable standout. Among other major indices, the SPY is trading 0.8% higher today, while the QQQ is up 0.4% and the NASDAQ is trading 0.5% higher on the session. Among tech bellwethers, VZ (+1.4%) is showing notable strength, while AAPL (-2.0%) is under pressure.
There were no notable tech earnings this morning. In news, PERI (-12.0%) announced an agreement to combine Conduit's Client Connect business with Perion in an all-stock transaction. The deal is to be immediately accretive. Among M&A in the tech space, QIHU (-2.7%) is lower, potentially related to news that Sohu, Sogou and Tencent Holdings jointly announced the establishment of a strategic cooperation. It was speculated that QIHU may purchase Sogou. In rumors, MU (+2.6%) sees reduced DRAM supplies, according to reports. There were no notable upgrades in the tech space this morning. In downgrades, Oppenheimer downgraded EZCH (-2.1%) to Perform and GIMO (-3.0%) was downgraded to Mkt Perform at Raymond James. OCLR (+0.6%) is the only notable name in tech set to report tonight
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