From Briefing.com: 4:10 pm : The stock market endured a forgettable start to the new trading week as the major averages ended on their lows. The S&P 500 fell 1.3%, ending at its lowest level of 2014.
Equities began the session with modest losses and spent the first three hours of action near their flat lines. The indices were able to inch back into positive territory during the late morning, but the move lacked conviction and failed to invite dip-buyers to the party. Shortly thereafter, sellers were the ones partying as the indices spent the entire afternoon in a steady downdraft.
In all likelihood, the selling was exacerbated by the fact many participants were not positioned to absorb today's volatility. On that note, the CBOE Volatility Index (VIX 13.37, +1.23) began the session in the red and tested multi-month lows before afternoon weakness sparked a rush for downside protection.
All ten sectors ended in the red but cyclical groups saw the largest losses. The consumer discretionary sector (-2.0%) finished behind the remaining groups as retailers lagged after Bon-Ton Stores (BONT 13.41, -2.09), Express (EXPR 18.15, -0.87), Lululemon (LULU 49.70, -9.90), and PVH (PVH 129.55, -2.58) issued disappointing guidance. The four names lost between 2.0% and 16.6% while the SPDR S&P Retail ETF (XRT 83.36, -2.48) fell 2.9%, widening its January loss to 5.4%. For its part, the discretionary sector extended its January decline to 2.6% after ending 2013 ahead of the remaining nine sectors with a gain of 40.4%.
Elsewhere, the energy space (-1.9%) also played a significant part in pressuring the broader market. The sector lagged throughout the session as crude oil fell 0.9% to $91.78 per barrel. The other commodity-related sector-materials (-1.4%)-fared a bit better but also finished behind the S&P 500 even as gold futures added 0.4% to $1251.10 per troy ounce.
On the countercyclical side, consumer staples (-0.6%), health care (-0.8%), telecom services (-1.1%), and utilities (-0.9%) finished ahead of the broader market.
In M&A news, Beam (BEAM 83.42, +16.45) surged 24.6% after the company agreed to be acquired by Suntory Holdings for $83.50 per share.
Despite the selloff, participation was below average as 719 million shares changed hands on the floor of the New York Stock Exchange.
Treasuries ended on their highs with the 10-yr yield down three basis points at 2.83%.
Economic data was limited to the December Treasury budget, which showed a surplus of $53.20 billion after showing a deficit of $1.20 billion in December 2012.
Tomorrow, December Retail Sales as well as December export prices ex-agriculture and import prices ex-oil will be reported at 8:30 ET while the November Business Inventories report will cross the wires at 10:00 ET.
Russell 2000 -1.2% YTD
Nasdaq -1.5% YTD
S&P 500 -1.6% YTD
DJIA -1.9% YTD
DJ30 -179.11 NASDAQ -61.36 SP500 -23.17 NASDAQ Adv/Vol/Dec 729/2.15 bln/1883 NYSE Adv/Vol/Dec 869/718.6 mln/2182 3:30 pm :
Feb natural gas outperformed the commodities space today, rising on near-term forecasts for colder weather. It climbed as high as $4.29 per MMBtu after coming off its session low of $4.20 per MMBtu set in early morning floor action. It settled with a solid 5.2% gain at $4.27 per MMBtu
Feb crude oil extended Friday's losses as it spent all of today's pit trade in negative territory. The energy component brushed a session high of $92.38 per barrel shortly after equity markets opened but slipped back below the $92 per barrel level. It brushed a session low of $91.65 per barrel moments before settling with a 0.9% loss at $91.78 per barrel
Feb gold rose for a third consecutive session, lifting from a session low of $1243.90 per ounce set at pit trade open. The yellow metal brushed a session high of $1252.80 per ounce by late morning action. It eventually settled with a 0.4% gain at $1251.10 per ounce
Mar silver also trended higher today. It broke into positive territory in late morning floor trade after trading as low as $19.97 per ounce earlier in the session. It touched a session high of $20.43 per ounce moments before settling at $20.37 per ounce, or 0.7% higher.
5:22PM Benchmark Elec expects to exceed Q4 rev and EPS guidance (BHE) 22.51 0.00 : Co announced that it expects sales and earnings per share to exceed the high end of guidance for the fourth quarter of 2013. On October 24, 2013, the Company had provided fourth quarter guidance for sales between $685 and $715 million (vs current Capital IQ Consensus Estimate of $701.07 mln) and diluted earnings per share between $0.34 and $0.38 (excluding restructuring, acquisition and Thailand flood related items; vs $0.36 Capital IQ Consensus Estimate).
4:00PM 3D Systems announces hiring of new VP of Alliances and Partnerships (DDD) 91.58 -2.87 : DDD announced that Neal Orringer, a leading voice on manufacturing in the Obama administration, will be joining the company as its Vice President of Alliances and Partnerships.
In this timely created position, Orringer will report directly to 3DS President and CEO Avi Reichental, with responsibilities over government business and regulatory affairs as well as forging strategic alliances with corporate, research and educational partners.
Orringer joins 3DS from the Obama administration, where he helped lead task forces for the U.S. Secretary of Commerce focused on advanced manufacturing and U.S. economic development policy.
12:34PM 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
BEAM (83.07 +24.04%): Acquired by Suntory Holdings Limited for $83.50 per share in cash (~$16 bln)
JNPR (25.47 +8.20%): Elliott Management (holder of 6.2% of common stock) laid out plan for company that it believes can result in a stock price of $35-40 per share
MRK (53.08 +6.43%): Initiated rolling submission to the FDA of a Biologics License Application for MK-3475, the company's investigational anti-PD-1 immunotherapy, for patients with advanced melanoma who have been previously treated with ipilimumab; co also provided update on accelerated strategic actions for growth at 32nd Annual J.P. Morgan Healthcare Conference: expects to realize a net reduction of annual operating expenses of approximately $2.5 billion by the end of 2015 with 40 percent, or $1.0 billion, to be realized by the end of 2014
Large Cap Losers
ISRG (394.4 -6.13%): Mentioned cautiously at Northland Securities, reporting that co is offering price dicscounts of up to $50%
SNI (77.79 -5.15%): WSJ reporting that co has ended merger discussions with Discovery Communications (DISCA)
KSS (54.14 -5.00%): Weakness in certain department store retail companies: JWN, JCP, TJX also lower Mid Cap Gainers
ALNY (102.2 +54.36%): Acquired Mercks's wholly owned subsidiary Sirna Therapeutics, comprising intellectual property and RNAi assets including pre-clinical therapeutic candidates, chemistry, siRNA-conjugate and other delivery technologies; co also expanded strategic agreement with Genzyme to develop and commercialize treatments for rare genetic diseases
NMBL (42.34 +10.95%): Upgraded to Outperform from Sector Perform at Pacific Crest, target $46
QIHU (86.85 +7.17%): Upgraded to Buy from Hold at Stifel, target $108; initiated with a Buy at UBS
Mid Cap Losers
ICPT (361.55 -18.9%): Reversal following strong gains seen last week; co reported that lipid abnormalities involving increased total cholesterol and LDL and decreased HDL were seen in OCA-treated patients compared to placebo in FLINT clinical trial
LULU (50.48 -15.30%): Sees Q4 EPS of $0.71-0.73 (lowered from $0.78-0.80) vs $0.79 estimate, revs of $513-518 mln (lowered from $535-540 mln) vs $540.06 mln estimate; downgraded to Market Perform from Outperform at Cowen
ASNA (20.32 -7.41%): Sees FY14 EPS of $1.10-1.15 ex items vs $1.32 estimate; total comparable sales for November - December rose 1% LSI (LSI) announced that LSI Nytroflash accelerator cards have been selected as the PCIe flash acceleration technology for Oracle's (ORCL) next-generation Database Machine, Oracle Exadata X4. In addition, the cos have collaborated on bringing a new LSI Nytro technology called Dynamic Logical Capacity to Exadata customers.
8:59AM Juniper Networks: Elliot Management announces value plan for JNPR; says plan can result in stock price of $35-$40 per share (JNPR) 23.54 :
Elliott Management Corporation, which owns 6.2% of the common stock of JNPR, filed a Schedule 13D and released a presentation today entitled "Juniper Networks: Elliott Management's Perspectives," available at www.new-juniper.com.
"Juniper's new CEO along with its existing management team and Board have a unique opportunity to immediately unlock significant value at the Company through three straightforward and much-requested courses of action," said Jesse Cohn, Portfolio Manager at Elliott.
"The highly value-accretive steps spelled out today include cost realignment, capital return to shareholders, and the optimization of Juniper's product portfolio."
As set out in the presentation, Elliott believes that these initiatives can collectively result in a stock price of $35-$40 per share, which is up to 70% above the current price.
Briefing.com note: On Jan. 8, 2014 Elliott
8:36AM Freescale Semi launches a formal process to identify a successor to Alan Campbell, chief financial officer, who has announced his decision to retire from the co (FSL) 15.36 :
Co announced that it has launched a formal process to identify a successor to Alan Campbell, CFO, who has announced his decision to retire from the company. The company has engaged an executive recruitment firm to assist in the process. Campbell will continue in his role as CFO during the transition. Campbell joined Motorola in 1979 and became the chief financial officer of its Semiconductor Products Sector in 2000.
F5 Networks (FFIV 90.03, +1.51): +1.7% following a William Blair upgrade to 'Outperform' from 'Market Perform.'
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