Sector Investing

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 14-Feb-14

Dow +126.80 at 16154.39, Nasdaq +3.35 at 4244.03, S&P +8.80 at 1838.63

The stock market ended an upbeat week on a positive note. The Dow Jones Industrial Average (+0.8%) paced the advance while the S&P 500 gained 0.5%. The Nasdaq (+0.1%) lagged, but was able to finish at its highest level since late 2000.

Today's advance capped an impressive week during which the benchmark S&P 500 gained 2.3%. Even though stocks rallied sharply, it is worth noting that all five sessions of the week saw below-average volume while bellwether groups like financials and transports struggled to keep pace with the broader market. The financial sector added just 0.2% on Friday, extending its weekly gain to 1.6%. For its part, the Dow Jones Transportation Average (+0.3%) added 0.9% for the week.

Similar to financials, other top-weighted sectors like health care (+0.4%) and technology (+0.2%) lagged while consumer discretionary (+0.6%), energy (+1.5%), industrials (+0.7%), and materials (+0.7%) picked up the slack.

The energy sector drew considerable strength from its largest member, ExxonMobil (XOM 94.11, +2.68), which surged 2.9%. The Dow component regained its 100- and 200-day moving averages in a move that was aided by an ISI Group upgrade to 'Buy' from 'Neutral.' On a related note, crude oil ended little changed at $100.29/bbl.

Elsewhere among commodities, precious metals remained on a torrid pace. Gold futures posted their seventh day of gains, climbing more than 5.0% in that timeframe. Meanwhile, silver capped an eight-day run that saw the metal jump nearly 8.0%. This translated into another strong session for gold miners as the Market Vectors Gold Miners ETF (GDX 26.35, +0.48) rose 1.9%.

Mining shares contributed to the outperformance of the materials sector, which also benefitted from gains among steelmakers after Cliffs Natural Resources (CLF 23.16, +1.26) reported better-than-expected results.

Staying on the earnings theme, apparel retailer V.F. Corp (VFC 56.85, -3.04) slumped after announcing disappointing results and issuing a profit warning. The stock tumbled 5.1%, which kept a lid on its peers. The rest of the discretionary sector held up well with help from homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 25.21, +0.28) rose 1.1%.

Interestingly, builder shares outperformed even as Treasury yields inched higher. The benchmark 10-yr yield rose one basis point to 2.74% after ending last week at 2.68%.

As mentioned earlier, trading volume was well below average with only 609 million shares changing hands at the NYSE. Today's final tally represented the lowest total since January 3.

Today's economic data included three reports:

Export prices, excluding agriculture, ticked up 0.2% in January after increasing 0.3% in the prior reading. Excluding oil, import prices rose 0.3%, which follows last month's downtick of 0.1%.
Industrial production declined 0.3% in January after increasing 0.3% in December while the Briefing.com consensus expected an increase of 0.3%. Once again, the hard economic data did not mesh with the results in the ISM report and the related regional surveys. Those reports showed solid, albeit slightly unsteady production levels in January. Instead of translating into slightly positive growth, however, actual manufacturing production fell 0.8% in January. That was the largest drop since May 2009. Making matters worse, manufacturing production growth was revised down for each month going back to October. After the revisions, fourth quarter manufacturing production only increased 4.2%, down from an originally reported gain of 6.2%. This comes after the ISM Production Index was recorded above 60 during that entire time, suggesting manufacturers are definitely not doing what they are saying in the surveys. The motor vehicle sector was hit especially hard in January. Assemblies fell by 1.0 million, from 11.64 million in December to 11.62 million in January.

The preliminary reading for the University of Michigan Consumer Sentiment Index for February was unchanged at 81.2 while the Briefing.com consensus expected the index to fall to 80.2. The Current Conditions Index weakened slightly, falling from 96.8 in January to 94.0. This was offset by an increase in the Expectations Index from 71.2 to 73.0 in February.

Bond and equity markets will be closed on Monday for Presidents' Day.

Week in Review: Stocks Charge Ahead Amid Light Volume

The stock market began the week on a subdued note. The Dow Jones Industrial Average, Nasdaq, and S&P 500 posted gains between 0.1% and 0.5% with the Nasdaq Composite ending in the lead. Overall, the session had a 'wait-and-see' feel as many participants stuck to the sidelines ahead of Janet Yellen's testimony on monetary policy. The limited participation was reflected in the trading volume as only 640 million shares changed hands at the NYSE.

On Tuesday, the stock market rallied steadily with the Dow Jones Industrial Average (+1.2%) providing the lead. Thanks to the advance, the Dow narrowed its 2014 loss to 3.5% while the Nasdaq (+1.0%) was able to swing from a loss to a year-to-date gain of 0.4%. The S&P 500 (+1.1%) regained its 50-day moving average with all ten sectors contributing to the climb. Contrary to the expectations of many, Janet Yellen's testimony before the House Financial Services Committee was uneventful as the Chair struck a tone consistent with remarks made by her predecessor. When asked about the impact of the disappointing jobs reports for December and January on the Fed's reaction function, Ms. Yellen said it would be premature to alter policy based on a limited sample size. All ten sectors took part in the advance with energy (+1.4%) and materials (+1.2%) ending in the lead. Despite the broad rally, trading volume was below average as less than 700 million shares changed hands at the NYSE.

Equity indices took a bit of a breather on Wednesday after the S&P 500 surged nearly 4.5% in the six sessions since February 3. The benchmark index shed less than a point while the Dow Jones Industrial Average slipped 0.2%. Overall, the session was very quiet as the key averages respected narrow ranges. The S&P 500 spent the bulk of the trading day near its flat line while the Nasdaq (+0.2%) outperformed. Again, participation was well below average with less than 630 million shares changing hands at the NYSE.

Thursday's session saw the stock market rally steadily throughout the trading day despite starting on a lower note. Small caps led the way with the Russell 2000 climbing 1.3% while the S&P 500 advanced 0.6%. The benchmark index was down as much as 0.6% at the start after overnight weakness in the futures market set the stage for a lower open. The losses in futures coincided with a wave of yen strength that once again stoked fears about potential forced unwinds of the yen-based carry trade. Adding to the early weakness was a disappointing retail sales report for January. Even though stocks opened lower, the S&P 500 found support at its 50-day moving average in the 1810 area. The index also drew strength from the retreat in the yen as the dollar/yen pair climbed off its low just under the 101.75 level.

 
 Index	   Started Week	  Ended Week   Change  %Change	 YTD % 
 DJIA	     15794.08	   16154.39    360.31	2.3	-2.5 
 Nasdaq	      4125.86	    4244.02    118.16	2.9	 1.6 
 S&P 500	1797.02	    1838.63	41.61	2.3     -0.5 
 Russell 2000  1116.55	    1149.21	32.66	2.9	-1.2

4:27PM 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: IO (4.13 +38.44%), AMAP (20.35 +32.81%), MRIN (12.21 +31.71%), CALL (17.25 +28.68%)
Services: ATHN (189.01 +34.23%), OWW (8.79 +24.82%)
Industrial Goods: CSTE (56.12 +28.72%)
Healthcare: LGND (76.92 +39.3%), ARWR (18.99 +35.76%), RLYP (37.95 +29.45%), ECYT (14.49 +28.44%), LCI (43.13 +27.97%), SNTA (6.24 +27.96%), VNDA (13.46 +27.62%), CADX (14 +27.06%)
Consumer Goods: SKX (35.47 +28.73%)
Basic Materials: AZC (3.21 +64.1%), SVM (2.88 +29.41%), SNMX (9.78 +27.48%)

This week's top 20 % losers

Technology: LNKD (186.13 -14.22%), ITRI (36.12 -14.1%), JIVE (7.63 -13.83%), RAX (33.81 -13.71%), EGOV (18.6 -11.68%)
Services: BLOX (19.41 -42.23%), NSP (27.41 -15.59%), FURX (95.9 -13.59%), G (15.09 -13.12%), URS (43.37 -10.77%), RJET (9.11 -9.54%)
Healthcare: MDCO (29.52 -10.98%), CI (77.71 -10.81%), INSM (16.61 -10.53%)
Financial: GTS (15.54 -10.23%)
Consumer Goods: BNNY (37 -11.06%), BGS (28.87 -9.87%)
Basic Materials: WPX (17.46 -10.82%), IPI (14.42 -9.76%), SZYM (11.07 -9.05%)

12:44PM 3D Systems and Hasbro (HAS) announced partnership to co-develop, co-venture and deliver play experiences powered by 3D printing (DDD) 74.06 +3.39 : Alliance leverages entirety of Hasbro's world-renowned brands and retail presence with 3DS's powerful 3D printing portfolio to redefine play.

Large Cap Gainers

CPB (42.63 +4.05%): Beat quarterly EPS by $0.05 ($0.76 ex items vs $0.71 estimate), revs rose 5.5% yoy to $2.28 bln vs $2.27 bln estimate; sees FY14 EPS of $2.53-2.58 vs $2.51 estimate; expects continuing operations to grow sales by 4 to 5%, adjusted EBIT to grow by 4 to 6%
MUR (59.52 +4.02%): Reuters reporting that co is considering selling its Asian oil and gas assets for upwards of $3 bln
HOT (78.2 +3.77%): Upgraded to Buy from Neutral at UBS, target raised to $85 from $75

Large Cap Losers

A (56.44 -6.06%): Beat quarterly EPS by $0.01 ($0.67 vs $0.66 estimate), revs fell 0.1% yoy to $1.68 bln vs $1.69 bln estimate; sees Q2 EPS of $0.71-0.73 ex items vs $0.81 estimate, revs of $1.72-1.74 bln vs $1.77 bln estimate; sees FY14 EPS of $2.96-3.16 ex items vs $3.19 estimate, revs of $6.90-7.10 bln vs $7.04 bln estimate
VFC (56.39 -5.85%): Missed quarterly EPS by $0.02 ($0.82 ex items vs $0.84 estimate), revs rose 8.5% yoy to $3.26 bln vs $3.36 bln estimate; sees FY14 EPS of $3.00-3.05 vs $3.10 estimate, revs +7-8% (~$12.09-12.21 bln) vs $12.46 bln estimate
DISH (56.67 -2.83%): Downgraded to Neutral from Buy at Citigroup

Mid Cap Gainers

IM (29.42 +13.35%): Beat quarterly EPS by $0.10 ($0.88 vs $0.78 estimate), revs rose 4.0% yoy to $11.83 bln vs $11.53 bln estimate; target raised to $32 from $26 at Needham
CIEN (25.14 +7.94%): Announced strategic global agreement with Ericsson (ERIC); companies to collaborate on accelerating adoption of SDN-based open architectures
COTY (14.75 +7.51%): Reported Q2 EPS of $0.28 ex items (in-line), revs fell 4.1% yoy to $1.32 bln vs $1.3 bln estimate

Mid Cap Losers

GNC (45.92 -12.35%): Missed quarterly EPS by $0.02 ($0.63 ex items vs $0.65 estimate), revs rose 8.6% yoy to $613.7 mln vs $631.94 mln estimate; sees FY14 EPS of $3.18-3.24 ex items vs $3.44 estimate; downgraded to Neutral from Buy at Goldman
CGNX (35.46 -11.15%): Reported Q4 EPS of $0.23 (in-line), revs rose 16.5% yoy to $95.7 mln vs $94.66 mln estimate; sees Q1 revs of $88-91 mln vs $91.43 mln estimate
SJM (89.95 -5.45%): Missed quarterly EPS by $0.02 ($1.66 ex items vs $1.68 estimate), revs fell 6.0% yoy to $1.47 bln vs $1.53 bln estimate; lowered FY14 EPS guidance to $5.55-5.60 (from $5.72-5.82) vs $5.77 estimate, lowered FY14 rev guidance to a decline of 5% (from a decline of 2%) or ~$5.602 bln vs $5.78 bln estimate

12:11PM Nokia confirms that recent developments in India related to ongoing tax proceedings are not expected to affect the timing of the closing of Microsoft (MSFT) transaction (NOK) 7.22 +0.02 :
Co announced that recent developments in India related to ongoing tax proceedings are not expected to affect the timing of the closing nor the material deal terms of the anticipated transaction between Nokia and Microsoft, announced on September 3, 2013. The transaction is still expected to close in the first quarter of 2014, subject to regulatory approvals and other customary closing conditions, irrespective of the proceedings in the Indian tax case.

CEA-Leti and STMicroelectronics (STM) have presented the successful demonstration of an ultra-wide-voltage range digital signal processor, based on 28nm ultra-thin body buried-oxide FD-SOI technology.

9:12AM Agilent's Dako announces positive findings in an independent French multicenter study on the performance of Dako's HER2 IQFISH pharmDx (A) 60.08 :

Dako, an Agilent Technologies co, announced positive findings in an independent French multicenter study on the performance of Dako's HER2 IQFISH pharmDx.

The Toulouse, France, breast cancer group led by Magali Lacroix-Triki has published a peer-reviewed publication in the Journal of Histopathology that supports the use and performance of Dako's HER2 IQFISH pharmDx for HER2 gene amplification status assessment in breast cancer. Dako introduced the IQFISH hybridization buffer chemistry in 2012. The IQFISH buffer reduces test turnaround time from 17 hours to just 3.5 hours. As an aid in the treatment decision, HER2 IQFISH pharmDx can quantitatively determine HER2 gene amplification in the tumor.

The French study found that Instant Quality (IQ) FISH provides "excellent quality signals without any background staining, thus allowing excellent reading conditions." The study also points out "almost perfect agreement between IQFISH and FISH" and that IQFISH is a "safe, reliable and fast method that is easy to use in routine practice" with few reruns. The statement is significant in that the tissue came from five different laboratories using four different fixation methods.

The study concludes that the highly concordant results (99.3%) and assay robustness support IQFISH as a useful alternative to FISH, allowing reliable assessment of HER2 status. It also finds that using this method enables pathologists to report the results to the oncologist within a day, meaning patients can begin cancer treatment sooner than ever.

Agilent Technologies (A 56.20, -3.88): -6.5% after its below-consensus guidance overshadowed its one-cent beat.

7:01AM Ciena announces strategic global agreement with Ericsson (ERIC); companies to collaborate on accelerating adoption of SDN-based open architectures (CIEN) 23.29 : Co and Ericsson (ERIC) announced a strategic global agreement that includes packet-optical distribution, converged IP/optical joint development and distribution as well as an SDN collaboration framework. Ericsson will offer Ciena's Converged Packet Optical portfolio, including the 6500 Packet-Optical Platform and 5400 family, to deliver a broader set of infrastructure solutions as customers migrate to new converged network architectures. In addition, Ciena's WaveLogic coherent optical technology will be integrated into Ericsson's IP portfolio, creating a solution that allows customers to seamlessly interoperate routers with Ciena's industry-leading photonics.

6:04AM Trina Solar announces acquisition of majority stake in Hubei Hongyuan; financial terms not disclosed (TSL) 15.36 :

Co announced that it has entered into an agreement with Shenzhen S.C. New Energy Technology, a solar equipment manufacturer, to acquire a majority stake in Shenzhen S.C.'s wholly-owned subsidiary, Hubei Hongyuan PV Science and Technology, a specialized PV cell producer located in Xiantao, Hubei Province.

Trina Solar will hold a 51% stake in Hubei Hongyuan with the remaining 49% stake held by Shenzhen S.C. The new joint venture company will expand Hubei Hongyuan's existing production facilities and solid infrastructure to achieve an expected capacity of 420 MW by the middle of 2014.

4:03AM ReneSola supplies several million watts of solar PV to Chevron (CVX) (SOL) 3.35 : ReneSola (SOL) announces that it provided 10,000 of its high efficiency solar PV modules to Chevron (CVX) Energy Solutions, one of the largest installers of solar power in the United States, for a 3.1MW multi-site project in Lemoore, California. The multi-array project will consist of 2.85MW of ReneSola's 72-cell 300W polycrystalline modules and 260KW of 260W monocrystalline modules.

1:39AM Suntech Power provides update on NYSE appeal (STPFQ) 0.38 : Co announces that the NYSE's Committee for Review has upheld a decision previously made by NYSE Regulation to commence delisting proceedings of the Company's American Depositary Shares. The Company expects a Form 25 (Notification of Removal from Listing and/or Registration) will be filed shortly with the SEC to delist the Company's American Depositary Shares.

As previously announced, trading of the Company's American Depositary Shares has been suspended by the NYSE since November 11, 2013. Quotations of the Company's American Depositary Shares have been, and the Company expects will continue to be, available on the OTC market under the symbol "STPFQ".

Brocade (BRCD) reported first quarter earnings of $0.24 per share, which is higher than expected, while revenues fell 3.3% year/year to $559 million which is higher than expected. Non-GAAP gross margin was 67.2%, compared to 64.8% in Q4 2012 and 65.6% in Q3 2013. The company sees second quarter revenues in the range of $520-540 million which is lower than expected Sees Non-GAAP gross margin 65.5-66.0%. Sees Non-GAAP EPS in the range of $0.17-0.19, which is line with estimates. Sees operating cash flow of approximately $135-145 million. Expect SAN revenue to be down 10% to 13% Qtr./Qtr Q2 14 IP Networking revenue to be flat to up 7% Qtr./Qtr. as expect a modest recovery in the Americas region including U.S. Federal.

Agilent (A) reported first quarter earnings of $0.67 per share, which is higher than expected, while revenues fell 0.1% year/year to $1.68 billion which is lower than expected. The company issue guidance for the second quarter with EPS of $0.71-0.73 and revenues of $1.72-1.74 billion which is worse than expected. The company issued guidance for the fiscal year 2014 with EPS of $2.96-3.16, which is worse than expected with revenues of $6.90-7.10 billion which is line with estimates.

LogMeIn (LOGM) reported fourth quarter earnings of $0.16 per share, which is higher than expected, while revenues rose 22.2% year/year to $45.2 million which is higher than expected. The company issued first quarter EPS of $0.20-0.21 and revenues $46.8-47.3 million which is higher than expected. The company issued guidance for fiscal year 2014 with EPS of $0.86-0.96 and revenues $198-202 million which is higher than expected.

j2 Global (JCOM) reported fourth quarter earnings of $0.91 per share, excluding non-recurring items, which is higher than expected, while revenues rose 35.3% year/year to $138 million which is below estimates. j2 Global Quarterly Dividend Increased by 13% to $0.2625 per Share versus Q1 2013. The company guidance for fiscal year 2014 with EPS of $3.23-3.47 and revenues $580-600 million which is higher than expected.