From Briefing.com: 4:10 pm : Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups finished above their respective lows.
Top-weighted financial (-1.5%) and health care (-1.6%) sectors trailed throughout the session, which emboldened sellers and prevented dip-buyers from turning the tide. Interestingly, the largest S&P 500 sector, technology, outperformed with a loss of 0.9% even as the tech-heavy Nasdaq (-1.4%) lagged.
The outperformance of the tech sector was largely due to big gains in the shares of MasterCard (MA 790.57, +26.96) and Visa (V 205.66, +6.23). The pair posted respective gains of 3.5% and 3.1% after MasterCard announced a 10-1 stock split, increased its quarterly dividend by 83.0%, and announced a new share repurchase program in the amount of $3.50 billion. Furthermore, Visa's strength contributed to outperformance of the price-weighted Dow Jones Industrial Average (-0.8%).
Even though the Dow outperformed, only five index components finished in positive territory and Visa was the only listing that added more than 1.0%. Other advancers included Coca-Cola (KO 40.13, +0.28) and Procter & Gamble (PG 84.02, +0.37) while the broader consumer staples sector eked out a gain of 0.2%.
Finding shades of green in other areas proved particularly difficult today as bonds and commodities sold off. The 10-yr note fell 10 ticks, sending its yield higher by four basis points to 2.84%. Crude oil (-1.1% to $97.40) and gold futures (-0.7% to $1252.50/ozt) also retreated while copper bucked the trend, climbing 0.6% to $3.286/pound.
With stocks ending on their lows, the CBOE Volatility Index (VIX 15.36, +1.45) finished at its highest level since mid-October.
Participation was right in-line with average as just over 725 million shares changed hands on the floor of the New York Stock Exchange.
Among news of note, negotiators in Washington secured a two-year budget agreement that aims to reduce sequester cuts by $63 billion and lower the deficit by roughly $20 billion. The deal has yet to receive full Congressional approval with votes in the House and the Senate expected to take place next week.
The weekly MBA Mortgage Index ticked up 1.0% following last week's 12.8% fall.
Separately, the Treasury budget deficit declined to $135.20 billion in November from $172.10 billion in November 2012. Since the data are not seasonally adjusted, the November deficit cannot be compared to the decline in October. The Briefing.com consensus expected the budget deficit to fall to $140.00 billion.
The Congressional Budget Office released their budget preview earlier in the week and predicted a shortfall of $140 billion. The market was well aware of the CBO's forecast, therefore the reaction to the budget data was limited.
Tomorrow, weekly initial claims, November Retail Sales, and November export prices ex-agriculture and import prices ex-oil will all be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of the October Business Inventories report.
Nasdaq +32.6% YTD
Russell 2000 +29.7% YTD
S&P 500 +25.0% YTD
DJIA +20.9% YTD
DJ30 -129.60 NASDAQ -56.68 SP500 -20.40 NASDAQ Adv/Vol/Dec 597/1.79 bln/1959 NYSE Adv/Vol/Dec 599/727.2 mln/2473
3:35 pm :
Jan crude oil slipped further into negative territory today on higher-than-anticipated builds in gasoline and distillate inventories.
Although the EIA reported that crude oil inventories had a draw of 10.6 mln barrels when consensus called for a draw of 2.7-3.0 mln, gasoline stockpiles rose 6.7 mln vs expectations for a build of 1.7-2.0 mln barrels. Distillate inventories rose 4.5 mln barrels when consensus called for a smaller build of 1.5-1.6 mln.
The energy component pulled back from its session high of $98.43 per barrel set moments after pit trade opened and brushed a session low of $97.20 per barrel. It settled with a 1.1% loss at $97.47 per barrel.
Jan natural gas, on the other hand, came off its session low of $4.21 per MMBtu and broke into positive territory in late morning pit action. It trended higher for the remainder of the session and settled with a 2.4% gain at its session high of $4.34 per MMBtu.
Feb gold spent most of today's floor trade chopping around in negative territory. It dipped to a session low of $1254.60 per ounce in morning action and eventually settled 0.3% lower at $1256.80 per ounce.
Mar silver rose to a session high of $20.48 per ounce moments before equity markets opened but lost steam as the session progressed. It erased most of the earlier gains and closed just 0.1% higher at $20.35 per ounce.
4:30PM SunEdison announces intention to refinance its capital structure (SUNE) 12.79 -0.23 : Co announced that it intends to offer, subject to market and other conditions, $400 million aggregate principal amount of convertible senior notes due 2018 (the "2018 notes") and $400 million aggregate principal amount of convertible senior notes due 2021 (the "2021 notes" and, together with the 2018 notes, the "notes") in a private placement.
The notes will be offered by the initial purchasers only to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. The Company also intends to grant to the initial purchasers a 30-day option to purchase an additional $80 million aggregate principal amount of each series of notes on the same terms and conditions.
4:29PM SunEdison adjusted Q4 outlook; lowers semiconductor materials revenue estimate to $205-215 from $220-230 due to lower volume (SUNE) 12.79 -0.23 : Co updated its expectations for key metrics for Q4 and full year 2013. Our range of project completions for the 2013 Q4 remains unchanged.
"However, in an effort to retain more long-term project value, we have elected to keep additional solar projects on our balance sheet in Q4 rather than sell them. Therefore, the mix of projects in sold versus held on our balance sheet has shifted. In addition, due to continued market weakness, unit volumes in our semiconductor business are now expected to be below prior expectations for the fourth quarter. Pricing, however, remains approximately flat and we believe our market share remains consistent with the past several quarters."
Large Cap Gainers
SNI (80.77 +7.34%): Variety reporting that Discovery Communications (DISCA) is considering making a bid for the company; CNBC's David Faber reporting that co's are not actively discussing a deal
MA (794 +3.98%): Announced 10-for-1 stock split, 83% increase in quarterly dividend, and $3.5 bln share repurchase program
CAM (56.24 +2.48%): Announced $750 mln increase in share repurchase authorization
Large Cap Losers
IEP (114.5 -13.7%): Mentioned cautiously in Barron's article, says co "looks grossly overvalued"
ECA (18.36 -4.47%): Announced capital program focused on generating profitable growth through investment in five core liquids-rich resource plays; announced that a restructuring resulted in an approximate 20% workforce reduction since the beginning of November; co expects to take an ~$65 mln after-tax charge as a result of the restructuring
RBS (10.64 -3.77%): Confirmed that Nathan Bostock will resign from role as Group Finance Director; Bostock had been in role for just 10 weeks and is joining rival Santander
Mid Cap Gainers
NRF (11.49 +15.64%): Announced plan to spin-off asset management business into a separate publicly traded company in a tax-free transaction
URBN (37.24 +4.20%): Disclosed that thus far Q4 comparable retail segment net sales are mid single-digit positive
GRPN (10.26 +2.19%): Upgraded to Outperform from Market Perform at Wells Fargo
Mid Cap Losers
OPK (9.92 -13.7%): Mentioned negatively in blog article (note: author of article disclosed short position in the stock)
LH (89.28 -9.95%): Reaffirmed FY13 EPS of $6.90-7.05 ex items vs $7.02 estimate, revs +3% to ~$5.84 bln vs $5.82 bln estimate; sees FY14 EPS of ~$6.50 ex items vs $7.55 estimate, revs +2% to ~$5.96 bln vs $5.95 bln estimate; downgraded to Hold from Buy at Canaccord Genuity; target lowered to $89 from $98 at Mizuho
ALSN (25.9 -5.51%): Announced the sale of 12.5 mln shares of common stock by funds affiliated with The Carlyle Group and Onex Corporation
10:03AM BlackBerry announces that RMHS has selected BlackBerry's enterprise mobility management solution - BlackBerry Enterprise Service 10 (BES10) - along with BlackBerry Z10 smartphones to enhance mobile productivity (BBRY) 5.82 -0.14 :
9:02AM JDS Uniphase plans to acquire Network Instruments for $200 mln (JDSU) 12.32 : Co announces that it has entered into a definitive agreement to acquire Network Instruments, a leading developer of enterprise network and application-performance management solutions for global 2000 companies. JDSU plans to acquire Network Instruments for $200 mln in cash, subject to certain adjustments.
The acquisition of Network Instruments further strengthens JDSU as a key solutions provider to the enterprise, data center and cloud networking markets. It expands the addressable market for JDSU's Network and Service Enablement business segment by more than $1 bln in markets growing at nearly 13 percent, including the application-aware network performance management and network packet broker markets.
Broadcom (BRCM) announced that HTC has chosen Broadcom's quad-core baseband and connectivity platform for the new HTC Desire 6160 Android smartphone.
SunEdison (SUNE) and the SunEdison Rural Energy Fund announced that the IRS recognized SREF as a 501(c)(3) public charity.
Silicon Labs (SLAB) has expanded its family of 8-bit Si10xx wireless microcontrollers with two new options optimized for both cost-sensitive and performance-intensive designs
Select solar names showing strength: SPWR +0.6% (Total, SunPower (SPWR) and Etrion secure financing with OPIC 70MWp Salvador Solar Project in Chile), TSL +0.6% (announces appointment of new CFO ), JASO +0.6% (announces Mr. Herman Zhao has been appointed the co's new chief financial officer ),
FNSR +0.6% (prices $225 mln of 0.50% of Convertible Senior Notes due 2033; offering was increased by $25 mln)
RVBD +1.3% (initiated with a Buy at Citigroup), QCOM +1% (assumed with a Buy from a Neutral at Citigroup)
Cisco Systems (CSCO 20.96, -0.25): -1.2% after Citigroup initiated the stock with a 'Sell' rating.
6:03AM JA Solar announces Mr. Herman Zhao has been appointed the co's new chief financial officer (JASO) 8.80 : Co announced changes to its management team, effective January 1, 2014. Mr. Herman Zhao has been appointed the co's new chief financial officer ("CFO"). Mr. Min Cao, the co's current CFO, will assume the role of chief strategy officer upon Mr. Zhao's appointment.
Concurrently, Mr. Jian Xie, the co's current chief operating officer ("COO"), will assume broader leadership at the co as its president, and current chief technology officer Mr. Yong Liu will become the co's COO. Mr. Herman Zhao previously served as JA Solar's CFO from July 2006 to May 2008. Since then, he has served as CFO at Legend Silicon, a Silicon Valley-based fabless semiconductor co, and Sky Solar Holdings, a downstream solar-project developer.
6:02AM Trina Solar announces appointment of new CFO (TSL) 12.23 : Co announced it has accepted Terry Wang's resignation as Chief Financial Officer effective January 10, 2014 to pursue other interests. Teresa Tan will be appointed as Chief Financial Officer of the Company immediately upon Mr. Wang's departure. Most recently, Ms. Tan worked for Parker Hannifin (PH).
Archipelago International has implemented Cisco (CSCO) cloud networking solutions for wireless and wired network access for their guests as well as a scalable and effective dashboard to manage their rapidly expanding network.
2:20AM Total, SunPower (SPWR) and Etrion secure financing with OPIC 70MWp Salvador Solar Project in Chile (TOT) 58.42 : Total (TOT), Etrion and SunPower (SPWR) announce that financing has been secured for construction of the 70-megawatt-peak Salvador project in the Atacama region of Chile. Project Salvador will be the world's largest solar power plant based on spot market electricity revenues.
PV Salvador, the project special purpose vehicle, recently signed a project finance facility agreement with the Overseas Private Investment Corp, the U.S. government's development finance institution, to finance 70% of the ~$200 mln project cost through long-term, non-recourse project debt. The remaining 30% equity portion will be funded by Etrion, Total and the initial project developer, Solventus, based on their ownership interests of 70%, 20% and 10%, respectively.
Etrion has a $42 mln credit facility from its major shareholder, the Lundin family, to fund its equity commitment. Following initial payback of Etrion's equity investment of $42 mln, Etrion's ownership in Project Salvador will decrease from 70% to 50.01%. After 20 years of operations, Etrion's ownership will decrease to zero.
2:07AM Finisar prices $225 mln of 0.50% of Convertible Senior Notes due 2033; offering was increased by $25 mln (FNSR) 21.56
Net 1 UEPS Techs (UEPS) announced that it has signed Relationship Agreements with its BEE partners for the issuance of 4.4 mln shares ("BEE Shares"), which will be partially restricted as to resale for a period of five years. In terms of the agreements, co will issue 4.1 mln shares of common stock at a price of ZAR 60.00 per share (calculated as 75% of the closing price of our common stock on the JSE Limited on December 6, 2013) to Business Venture Investments 1567 Proprietary Limited (RF) and 300,000 shares to Born Free Investments 272 Proprietary Limited. In order to facilitate the transactions, the co's wholly owned subsidiary Net1 Applied Technologies South Africa Proprietary Limited, will lend the funds to the BEE partners at a market related interest rate to effect the purchase of the BEE Shares and these shares will act as the collateral for the loan. The loan is repayable over a period of five years and the transactions are subject to certain conditions, including obtaining the relevant regulatory approvals.
Photronics (PLAB) reported fourth quarter earnings of $0.09 per share, excluding non-recurring items, which is higher than expected, while revenues rose 1.7% year/year to $106 million which is line with estimates.Quarterly Non-GAAP diluted EPS of $0.09; exceeds revised guidance of $0.06 - $0.07, which was issued on Nov 13. The company also warned on the top line of revs of $105-106 million on Nov 13. Photronics' fourth-quarter revenues reflect reduced high-end IC photomask sales, which were affected by decreased demand in memory photomasks due to customer delays in transitioning to new nodes and a delay in fully completing the qualification process with a key Asian foundry customer. Even with softer revenues, we delivered on the bottom line and achieved non-GAAP net income of $0.09 per diluted share, which exceeded our revised guidance range. Our business model is strong and when we complete our current qualifications and our customers transition to new nodes we expect robust top- and bottom-line growth."
Tessera Tech (TSRA) announced the appointment of Thomas Lacey as chief executive officer, effective immediately. Lacey, who was appointed interim CEO in May 2013, will also continue to serve on the Company's Board of Directors, which he joined in May 2013.
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