Sector Investing

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 27-Sep-13

Dow -70.06 at 15258.24, Nasdaq -5.83 at 3781.59, S&P -6.92 at 1691.75

Equities ended the week on a lower note with the S&P 500 shedding 0.4%. The index widened its loss for the week to 1.1% as participants exhibited caution ahead of the weekend given the uncertainty associated with the ongoing budget showdown.

Earlier today, the Senate passed a funding bill that would keep the government running through November 15. The bill passed with a 54-44 vote after the provision to defund Obamacare was removed from the language. However, the bill will now head back to the House of Representatives where the defunding provision originated. President Obama weighed in during the late afternoon, saying it is up to Congress to keep government operating and that the G.O.P. is blocking the process.

Concerns over the budget debate have weighed on sentiment throughout the week, contributing to the weakness in the S&P. Meanwhile, the Nasdaq displayed relative strength and finished the week with a slim gain of 0.2%.

The Nasdaq outperformed today as biotechnology overshadowed the underperformance of the tech sector (-0.6%). The iShares Nasdaq Biotechnology ETF (IBB 210.73, +0.57) added 0.3%, also contributing to the relative strength of the health care sector, which tacked on 0.1%.

Another pocket of relative strength could be found among discretionary shares (+0.1%). Even though homebuilders lagged and the iShares Dow Jones US Home Construction ETF (ITB 22.38, -0.29) lost 1.3%, the sector received support from apparel manufacturers. Dow component Nike (NKE 73.64, +3.30) rallied 4.7%, notching a fresh record high after reporting better-than-expected earnings and above-consensus worldwide futures orders.

Elsewhere, traditional tech companies lagged with top-weighted names like Apple (AAPL 482.75, -3.47), Google (GOOG 876.39, -1.78), and Intel (INTC 22.98, -0.43) posting losses between 0.2% and 1.8%. Microsoft (MSFT 33.27, +0.50) outperformed, climbing 1.5% amid reports Ford (F 17.05, -0.22) Chief Executive Officer Alan Mulally may become the next CEO of the tech company.

On the earnings front, shares of Accenture (ACN 74.09, -1.78) lost 2.4% after the company's cautious first-quarter revenue guidance outweighed its mixed earnings.

The industrial sector (-0.6%) also weighed on the S&P amid broad weakness. Transportation-related names were pressured by airlines with United Continental (UAL 30.91, -3.16) tumbling 9.3%. The broader Dow Jones Transportation Average lost 0.6% even as crude oil posted a modest decline (-0.3% at $102.68/bbl).

Treasuries climbed steadily and the benchmark 10-yr yield slipped two basis points to 2.63%.

Below-average volume plagued the market throughout the week, and today's session saw 647 million shares change hands on the floor of the New York Stock Exchange.

On Monday, the September Chicago PMI will be reported at 9:45 ET.

Week in Review: Budget Battle Weighs on Markets

Monday's session saw the major averages start the week on a lower note as the S&P 500 shed 0.5%. Stocks spent the first half of the session in a steady retreat, but managed to regain a portion of their losses during afternoon action. Concerns about the lack of progress in budget negotiations contributed to the decline with participants keeping one eye on Washington throughout the week. Seven of ten sectors finished in the red while technology (+0.3%), telecom services (+0.1%), and utilities (+1.2%) outperformed. The technology sector-and the Nasdaq-received an opening boost from the shares of Apple after the largest sector component reported strong weekend demand for two of its latest devices. As a result of better-than-expected sales, the company said it expects fourth quarter revenue to come in near the top end of analyst estimates. Apple settled higher by 5.0% and component suppliers like Cirrus Logic (CRUS 22.97, -0.28) and Skyworks Solutions (SWKS 24.77, -0.24) also displayed strength.

On Tuesday, the S&P 500 settled lower by 0.3%, registering its fourth consecutive loss. Small caps outperformed the benchmark average as the Russell 2000 added 0.2%. Stocks slipped during the opening hour in reaction to a below-consensus consumer confidence report for September. Despite the opening slip, the S&P recovered swiftly, but was unable to hold the 1,700 level into the close as financials and technology weighed. The financial sector (-0.6%) underperformed for a second consecutive day with JPMorgan Chase (JPM 52.24, +0.35) leading to the downside. The stock fell 2.2% after The New York Times revealed the Department of Housing and Urban Development sought a $20 billion settlement in a mortgage-backed securities issuance case against the bank.

The S&P 500 shed 0.3% on Wednesday, extending its losing streak to five sessions. Stocks endured a sloppy session as the S&P made two unsuccessful attempts at holding the 1,700 level. After opening just above its flat line, the S&P 500 slipped into the red before recovering swiftly with the help of energy (-0.1%) and materials (+0.2%). The financial sector (+0.5%) also fueled this morning's rebound after losing roughly 3.5% during the past four sessions.

On Thursday, the S&P 500 added 0.4%, snapping its five day losing streak that saw the index surrender almost 2.0%. Although the benchmark average settled in the green, it was unable to maintain all of its early gain or register a close above the 1,700 level. In general, some of the Thursday's price action mirrored that of Wednesday with the S&P making two unsuccessful runs at 1,700. The Nasdaq ended in the lead (+0.7%), benefitting from the outperformance of biotech as the iShares Nasdaq Biotechnology ETF climbed 1.6%.

 
 Index	    Started Week  Ended Week  Change  %Change   YTD % 
 DJIA	      15451.09	   15258.24  -192.85	-1.2	16.4 
 Nasdaq	       3774.73	    3781.59     6.86	 0.2	25.2 
 S&P 500	1709.91	    1691.75   -18.16	-1.1	18.6 
 Russell 2000   1073.82	    1074.19     0.37	 0.0	26.5

4:38PM This week's biggest % gainers/losers (SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

Technology: SWIR (16.52 +27.55%), GWAY (20.44 +23.73%), HSOL (4.18 +17.44%), LTXC (6.57 +15.57%)
Services: SSTK (72.87 +20.42%), ASNA (20.01 +17.22%)
Industrial Goods: JKS (22.5 +29.67%), ZOLT (16.7 +27.13%)
Healthcare: MAKO (29.48 +78.57%), PACB (5.59 +64.02%), SRPT (46.79 +26.79%), GERN (3.7 +26.42%), CLDX (36.01 +25.14%), DYAX (6.87 +22.81%), GEVA (62.41 +17.51%), PCRX (47.47 +15.79%)
Financial: GCAP (13.11 +20.27%), HCI (41.66 +15.45%)
Consumer Goods: FN (16.06 +14.2%)
Basic Materials: KIOR (2.65 +64.2%)

This week's top 20 % losers

Technology: BBRY (8.03 -24.43%), CY (9.05 -19.69%), EOPN (22.79 -13.11%)
Services: CRRS (2.3 -43.47%), JCP (9.05 -20.7%), HTZ (22.32 -18.62%), CZR (19.71 -15.83%)
Industrial Goods: XONE (45.08 -17.42%), BRSS (17.44 -14.74%)
Healthcare: BIOS (8.84 -24.38%), CLVS (60.59 -18.24%), ABMD (18.75 -15.43%), INFI (17.01 -14.12%), CVM (1.75 -14%), PTLA (24.61 -13.84%)
Financial: TWGP (6.91 -17.89%)
Basic Materials: SA (10.62 -20.33%), IAG (4.77 -16.58%), NG (2.34 -14.23%), CDE (12.3 -13.55%)

2:38PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).

Large Cap Gainers

NKE (73.83 +4.96%): Beat quarterly EPS by $0.08 ($0.86 vs $0.78 estimate), revs rose 7.7% yoy to $6.97 mln vs $6.97 mln estimate; upgraded to Buy from Neutral at Sterne Agee; target raised to $74 from $69 at TAG; target raised to $70 from $65 at Janney; downgraded to Hold from Buy at Stifel
MSFT (33.75 +2.99%): Ford CEO Alan Mulally reported to be front runner to become co's next CEO; also seeing reports that China has approved plans to end its ban on video game consoles
MU (17.91 +2.52%): Target raised to $24 from $20 at Stifel

Large Cap Losers

UAL (31.72 -6.90%): Announced Q3 2013 consolidated system available seat miles are expected to decrease 1.1% year over year; downgraded to Neutral from Buy at Buckingham Research
TCK (27.3 -3.87%): Initiated with a Neutral at Citigroup
TS (46.68 -3.71%): Downgraded to Neutral from Buy at BofA/Merrill

Mid Cap Gainers

THO (58.89 +4.36%): Beat quarterly EPS by $0.09 ($1.04 ex items vs $0.95 estimate), revs rose 18.7% yoy to $914 mln vs $913.14 mln estimate
FL (34.17 +4.29%): Trading higher following strong quarterly results from Nike (NKE)
TFSL (11.6 +3.66%): Announced resumption of fourth stock repurchase program, which has 2.156 mln shares remaining

Mid Cap Losers

LL (102.81 -8.99%): Co confirmed search warrants were executed at its corporate offices by the Department of Homeland Security's Immigration and Customs Enforcement and the U.S. Fish and Wildlife Service
JCP (9.53 -8.54%): Announced an offering of 84 mln shares of common stock at $9.65 per share; target range lowered to $4-5 from $6-7 at Wells Fargo; downgraded to Neutral from Buy at Buckingham Research
DXCM (27.1 -7.16%): Trading lower following approval of competitor Medtronic's artificial pancreas device system

9:01AM CalAmp's Mobile Resource Management business undergoing strong international expansion (CAMP) 17.19 : Co announced achievements in its strategic global expansion for its mobile resource management (MRM) portfolio of products and services. CalAmp's market-pacing wireless MRM devices and solutions are used for monitoring and control of remote and mobile assets as well as collecting and reporting business-critical data.

7:08AM BlackBerry reports dismal Q2 results -- in-line with last week's preannouncement, well below consensus (BBRY) 7.95 : Reports Q2 (Aug) loss of $0.47 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of ($0.47); the adjusted loss from continuing operations and adjusted diluted loss per share exclude the impact of the Z10 Inventory Charge of ~$934 mln ($666 million after tax) and pre-tax restructuring charges of ~$72 mln ($51 million after tax) related to the CORE program incurred in the second quarter of fiscal 2014.

Rev fell 45.0% year/year to $1.57 bln vs the $1.63 bln consensus. The revenue breakdown for the quarter was ~49% for hardware, 46% for service and 5% for software and other revenue. During Q2, the co recognized hardware revenue on ~3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers.

During the quarter, ~5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company's inventory in the channel.

The total of cash, cash equivalents, short-term and long-term investments was $2.6 billion as of August 31, 2013, compared to $3.1 billion at the end of the previous quarter. Cash flow used in operations in the second quarter was ~$136 million. Uses of cash included intangible asset additions of ~$268 million and capital expenditures of ~$112 million.

"While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."