From Briefing.com: 4:20 pm : The S&P 500 settled lower by 0.1% after spending most of the session in a steady climb off its opening low. Sellers were in control early on, but gave way to dip buyers after headlines indicated President Obama would meet with Congressional leaders at the White House early this evening in hopes of bridging some of the gaps that are preventing a budget agreement from being reached.
The Nasdaq (-0.1%) and the S&P were able to regain the bulk of their losses while the Dow (-0.4%) trailed throughout the session.
Six of ten sectors finished in the red with energy (+0.3%) ending in the lead as crude oil advanced 1.8% to $103.89 per barrel.
Another commodity-related sector, materials (+0.2%), also finished ahead of the broader market as steelmakers and miners contributed to the relative strength. The Market Vectors Steel ETF (SLX 45.51, +0.43) and Market Vectors Gold Miners ETF (GDX 24.49, +0.08) added 1.0% and 0.3% respectively. Underlying metals also registered gains as gold and copper futures advanced 2.4% and 1.2% to $1316.70 per troy ounce and $3.31 per pound, respectively.
The technology sector (+0.1%) was another notable outperformer with top components like Apple (AAPL 489.56, +1.60), Cisco Systems (CSCO 23.32, +0.08), and Microsoft (MSFT 33.92, +0.34) adding between 0.3% and 1.0%. The Nasdaq drew some of its strength from those names, but could not break into positive territory as biotechnology weighed. The iShares Nasdaq Biotechnology ETF (IBB 213.18, -0.60) shed 0.3%.
While most sectors were able to distance themselves from their opening lows, industrials (-0.4%) could not muster much strength as defense contractors lagged. The PHLX Defense Index tumbled 0.9% with names like Lockheed Martin (LMT 125.08, -2.42) and United Technologies (UTX 104.98, -2.40) falling 1.9% and 2.2%, respectively.
Treasuries settled near the middle of their range with the benchmark 10-yr yield down three basis points at 2.62%.
Trading volume was a bit below average as 691 million shares changed hands on the floor of the New York Stock Exchange.
In today's economic data, the ADP report indicated the addition of 166,000 new private jobs during September. That was up from August's downwardly revised 159,000 (from 176,000), but a bit below the Briefing.com consensus estimate, which expected the addition of 170,000 jobs.
The ADP report is designed to predict the final BLS private payroll levels. On that account, however, the ADP has not done a good job at predicting the initial payrolls numbers that are released in the Employment Situation Report. The fact that the ADP levels showed trends staying roughly the same over the last few months suggests that the official BLS payrolls will also continue on a flat trend line. The actual payroll gain in September is still unknown, but the ADP data do not suggest a big move up or down from last month's gain of 152,000 jobs.
Separately, the weekly MBA Mortgage Index slipped 0.4% to follow the prior week's increase of 5.5%.
In overseas news of note, Italian markets rallied after Silvio Berlusconi changed his tune and voiced support for Prime Minister Enrico Letta. It appears Mr. Berlusconi made his decision after seeing more than 20 PDL lawmakers ready to shun the party in order to preserve the current government.
Tomorrow, September Challenger Job Cuts will be released at 7:30 ET; weekly initial claims will be reported at 8:30 ET; and the September ISM Services report will cross the wires at 10:00 ET. The August factory orders report will not be released at its scheduled time due to the government shutdown.DJ30 -58.56 NASDAQ -2.96 SP500 -1.13 NASDAQ Adv/Vol/Dec 1002/1.70 bln/1523 NYSE Adv/Vol/Dec 1313/691.2 mln/1661
3:30 pm :
Nov crude oil rose for the first time in four sessions following a Bloomberg report that TransCanada (TRP) expects the expansion of its Keystone Gulf Coast pipeline to be completed by the end of the month. The company expects linefill to start shortly after completion. The move higher came despite weak inventory data that showed crude oil inventories for the week ending Sep 27th had a build of 5.47 mln barrels when a smaller build of 2.4 mln barrels was anticipated. The energy component lifted off its session low of $101.51 per barrel and settled with a 2.0% gain at $104.08 per barrel, slightly below its session high of $104.23 per barrel
Unlike crude oil, Nov natural gas trended lower after pulling back from its session high of $3.64 per MMBtu set moments after pit trade opened. It settled at its session low of $3.54 per MMBtu, or 1.9% lower
Precious metals traded higher today, gaining support from a drop in the dollar index and weaker-than-anticipated ADP employment data. The ADP report showed 166,000 new private jobs were added in September, while the Briefing.com consensus expected the report to show the addition of 170,000 new jobs
Dec gold rose for the first time in three sessions, lifting from its session high of $1297.30 per ounce. It settled 2.7% higher at $1320.70 per ounce, just below its session high of $1324.20 per ounce
Dec silver brushed a session high of $22.04 per ounce in late morning floor action and eventually settled with a 3.6% gain at $21.92 per ounce.
4:11PM CalAmp (+8%) makes new 13 year high in the after hours following upside Q2 results and solid Q3 guidance (EPS in-line, rev above consensus) (CAMP) 18.69 +0.49 :
4:05PM CalAmp beats by $0.03, beats on revs; guides Q3 EPS in-line, revs above consensus (CAMP) 18.69 +0.49 : Reports Q2 (Aug) earnings of $0.19 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.16; revenues rose 33.6% year/year to $58.8 mln vs the $54.82 mln consensus.
Wireless Datacom revenue increased to $47.2 million from $34.2 million in the same period last year, and Satellite revenue was $11.6 million compared to $9.8 million in the second quarter last year.
The consolidated gross margin was 33.7% in the fiscal 2014 second quarter, up from 32.1% in the second quarter last year. The increase in consolidated gross margin reflects the higher proportion of total revenues represented by the Wireless Datacom segment in fiscal 2014 versus the prior year and, within Wireless Datacom, the shift in revenue mix toward higher margin subscription-based revenues associated with the Wireless Matrix acquisition.
Co issues guidance for Q3, sees EPS of $0.19-0.23, excluding non-recurring items, vs. $0.21 Capital IQ Consensus; sees Q3 revs of $59-63 mln vs. $57.85 mln Capital IQ Consensus.
"Our focused execution coupled with continued strong customer demand for our products and services resulted in a 38% year-over-year increase in Wireless Datacom revenue during the second quarter. This growth was driven to a large extent by our Mobile Resource Management (MRM) products business, which benefited from significant channel demand for stolen vehicle recovery products, along with continued strength in fleet management and asset tracking. Our Wireless Networks business, which comprises the remainder of our Wireless Datacom segment, also generated strong year-over-year growth. The acquired operations of Wireless Matrix, along with growth in the Energy vertical, more than offset a year-over-year reduction in Rail revenue resulting from the completion of our Positive Train Control development project in the second quarter last year. In addition, our Satellite segment once again generated meaningful operating cash flow and contributed to our bottom-line profitability. We believe CalAmp's strong momentum exiting the second quarter and healthy pipeline of new opportunities, driven by an expanding network of global channel partners and a robust portfolio of innovative products, provide the Company with a strong tailwind as we enter the second half of fiscal 2014."
4:07PM Cascade Microtech acquires ATT Advanced Temperature Test Systems GmbH; transaction to be accretive to earnings beginning in the fourth quarter of 2013 (CSCD) 9.20 +0.17 : Co has acquired ATT Advanced Temperature Test Systems GmbH, which is headquartered in Munich Germany. ATT Systems provides enhanced thermal solutions for wafer testing over expanded temperatures that typically range from -60 to 300 degrees centigrade. The purchase price for the acquisition includes ~ 8.4 mln Euros in cash (net of ~ 0.4 mln Euros of acquired cash), ~ 1.6 mln shares of Cascade Microtech common stock, and deferred payments of ~ 0.8 mln Euros. "Based upon the unaudited, trailing 12-months' performance of ATT Systems, the purchase price for the company approximates six times EBITDA. Before the effects of purchase accounting, we expect this transaction to be accretive to earnings beginning in the fourth quarter of 2013, and will provide additional support to achieve our success model which includes EBITDAS of greater than 20% of revenue." Going forward, ATT Systems will be reported with Cascade Microtech's Systems segment.
Large Cap Gainers
PCLN (1067.09 +2.78%): Mentioned positively at Susquehanna
VLO (34.65 +2.40%): Upgraded to Buy from Neutral at Citigroup
ABX (18.46 +2.38%): Upgraded to Buy from Hold at Deutsche Bank
Large Cap Losers
LKQ (32.62 -3.00%): Downgraded to Hold from Buy at Wellington Shields
BAX (63.92 -2.53%): Downgraded to Neutral from Outperform at Credit Suisse, target lowered to $73 from $81
GMCR (75.46 -1.97%): Largely followed investor David Einhorn says his firm is still short the stock, believes co will miss on the earnings side at least once over the next year
Mid Cap Gainers
GPN (56.24 +10.93%): Beat quarterly EPS by $0.05 ($1.00 ex items vs $0.95 estimate), revs rose 6.7% yoy to $629.7 mln vs $624.13 mln estimate; sees FY14 EPS of $3.98-4.05 ex items vs $3.97 estimate, revs of $2.51-2.56 bln vs $2.53 bln estimate; announced it intends to enter into an accelerated $100 mln accelerated share repurchase plan
OIBR (2.1 +10.85%): Co and Portugal Telecom (PT) announced they have signed a memorandum of understading setting out the bass for a merger of activities; PT also higher
P (27.16 +6.38%): Announced that September listener hours increased 18% year over year to 1.36 bln, active listeners increased 25% to 72.7 mln
Mid Cap Losers
BBRY (7.53 -4.95%): Disclosed it expects to incur $400 mln in pre-tax charges related recently announced workforce reductions; had previously estimated charges of $100 mln
TGP (42.54 -3.91%): Priced follow-on public offering of 3 mln common units, which represent limited partner interest, at $42.62 per unt
AYI (95.68 -3.27%): target raised to $100 from $78 at Cannaccord Genuinty
ANADIGICS (ANAD) announced that the co's AWL9581 802.11ac front-end integrated circuit, AWT6651 ProEficient power amplifier, and ALT6702 HELP4 PA are enabling wireless connectivity in the new GALAXY Note 3 by Samsung Electronics (SSNLF).
Riverbed Technology (RVBD) announced that the SAP Integration and Certification Center has certified that Riverbed Stingray Traffic Manager version 9 integrates with the SAP NetWeaver 7.0 technology platform.
Axcelis Technologies (ACLS) has received an order for the co's new Purion MTM medium current implanter.
Cirrus Logic (CRUS) announced today that it has acquired a majority interest in MSC Investoren GmbH as the first step of a two part transaction in which Avnet will ultimately acquire the remainder of the company. MSC is a recognized value-add distributor focused on electronic component distribution, embedded computing technology and display solutions, as well as design and manufacturing. MSC leverages its unique combination of distribution, production and system integration capability to address the emerging customer demand for more complex electronic products. In calendar year 2012, MSC generated revenue in excess of $450 million, with embedded computer technology (including display solutions) accounting for almost 50 percent of its sales. Oppenheimer noted that
11:05 am Technology sector
The tech sector is trading just lower today, ahead of larger lossess in the broader market. Semiconductors are showing weakness as well with the SOX trading 0.4% lower. Within the chip index, HITT (-4.0%) is a notable standout. Among other major indices, the SPY is trading 0.6% lower today, while the QQQ is down 0.3% and the NASDAQ is trading 0.4% lower on the session. Among tech bellwethers, AAPL (+0.7%) is showing notable strength, while VZ (-1.1%) is under pressure.
This morning in tech earnings, ADSK (+2.6%) reaffirmed its Q3 guidance and guided Q4 below consensus. In news, PFPT (-3.5%) acquired Sendmail for ~ $23 mln in cash. PFPT co expects Sendmail to have an immaterial impact on rev while widening the co's non-GAAP net loss by ~ $2 mln or $0.06 per share. Also, BBRY (-3.9%) disclosed a $400 mln charge following recent workforce reduction announcement, up from its previous expectation of $100 million. Among M&A in the tech space, TI (0.0%) and OIBR (+9.3%) announced a MOU for merger of activities. In rumors, MSFT (-0.1%) investors want Chairman Bill Gates to step down, according to reports.
Among notable analyst upgrades in tech this morning, STX (+1.5%) was upgraded to Outperform at Pacific Crest. In downgrades, ARMH (-1.2%) was downgraded to Neutral at Natixis, and SPLK (-0.1%) and FARO (-3.4%) were downgraded to Hold at Needham. There are no notable names in tech scheduled to report after the close.
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