Sector Investing

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From Briefing.com: 4:15 pm : Equity indices finished the Wednesday session on a flat note after surrendering their modest intraday gains. More importantly, the S&P 500 was unable to register a fresh record closing high for the third day in a row.

Stocks slipped from their opening levels, but the early weakness was erased in a flash when it was reported that new home sales in January surpassed estimates (468,000 versus Briefing.com consensus 400,000). The upbeat report sent stocks to new highs, but the S&P 500 ran into resistance just below the 1853 area, which the index was unable to penetrate throughout the afternoon.

Eight of ten sectors ended in the red with energy (-0.6%) seeing the largest loss. However, the daylong underperformance of financials (-0.1%) was more notable as it marked the second day of relative weakness for the bellwether sector. Today's decline narrowed the sector's February gain to 1.8% versus a 3.5% increase for the S&P 500. That showing warrants close attention over the coming days given the vital role the financials play in feeding economic growth and influencing market sentiment.

Elsewhere, the tech sector (+0.1%) was a reluctant participant in the early advance. The reluctance was visible among several top sector components like Apple (AAPL 517.35, -4.71), Microsoft (MSFT 37.47, -0.07), and Visa (V 226.11, -1.00), which lagged throughout the session. Chipmakers, however, held up well with the PHLX Semiconductor Index adding 0.7%. Also of note, the discretionary space added 0.6% thanks to gains among homebuilders and retailers. Homebuilders rallied in reaction to the new home sales report, sending the iShares Dow Jones US Home Construction ETF (ITB 26.27, +0.72) higher by 2.8%. Meanwhile, retailers outperformed after Abercrombie & Fitch (ANF 40.04, +4.05) reported a bottom-line beat on below-consensus revenue.

Although the discretionary sector displayed relative strength, producers of basic materials (+0.7%) fared even better. This took place without the participation of miners as the Market Vectors Gold Miners ETF (GDX 26.05, -0.28) lost 1.1% while gold futures also fell 1.1% to $1328.00/ozt.

Treasuries finished at their best levels of the session with the benchmark 10-yr yield down four basis points at 2.67%.

Participation was on the light side as only 656 million shares changed hands at the NYSE.

Economic data was limited to two reports:

The weekly MBA Mortgage Index fell 8.5% to follow last week's decline of 4.1%. Notably, the purchase index dropped to levels last seen in 1995.
New home sales jumped 9.6% to 468,000 in January from an upwardly revised 427,000 (from 414,000) in December. The Briefing.com consensus expected new home sales to fall to 400,000. Weather-related problems were blamed for a wide variety of poor economic data throughout January. That included a sizable drop in existing home sales and a contraction in the NAHB homebuilders survey. Yet, weather was evidently not a problem in the new home sector as sales reached their highest level since July 2008.

Tomorrow, weekly initial claims and the Durable Goods report for January will be released at 8:30 ET. Also of note, Fed Chair Janet Yellen will appear before the Senate Banking Committee for the second part of her semiannual testimony on monetary policy.

Nasdaq Composite +2.8% YTD
Russell 2000 +1.7% YTD
S&P 500 -0.2% YTD
Dow Jones Industrial Average -2.3% YTD

DJ30 +18.75 NASDAQ +4.48 SP500 +0.04 NASDAQ Adv/Vol/Dec 1587/1.96 bln/1014 NYSE Adv/Vol/Dec 1848/656.3 mln/1171

3:30 pm :

Precious metals traded in negative territory today as the dollar index rose higher. Economic reports this morning showed that new home sales jumped 9.6% to 468,000 in January from an upwardly revised 427,000 (from 414,000) in December. The Briefing.com consensus expected new home sales to fall to 400,000.
Apr gold fell to a session low of $1322.30 per ounce in morning floor action and eventually settled with a 1.1% loss at $1328.00 per ounce.
Mar silver tumbled to a session low of $21.08 per ounce after pulling back from its session high of $21.67 per ounce set in early morning action. Unable to gain much momentum, it settled with a 3.2% loss at $21.25 per ounce.
Apr crude oil traded higher as it gained support on better-than-anticipated inventory data. The EIA reported that for the week ending Feb 21, crude oil inventories had a build of 0.068 mln barrels when a larger build of 1.2-1.3 mln barrels was anticipated. The energy component rose as high as $102.90 per barrel and settled at $102.62 per barrel, or 0.7% higher.
Apr natural gas spent its entire floor session in the red. It chopped around in the $4.51-4.62 per MMBtu range and eventually settled with a 2.8% loss at $4.54 per MMBtu.

4:48PM Technical Analysis Close: S&P/Dow form inside days for second session in a row (SUMRX) : The market opened on a slightly positive note following some constructive earnings and a mixed overnight performance. Trading activity has been consolidative of late and the S&P failed to build on the early upticks and slipped back into the red. Like the opening upticks, no follow through developed as it held near first level support at 1842/1840 and then rotated higher into mid-morning in the wake of the above consensus New Home Sales (458 K vs. 400 K). The small-/mid-caps posted new all time highs on this move with the Nasdaq 100/Comp reaching new 13 year highs. The S&P/Dow, however, stalled shy of Tuesday highs (first level resistance 1852/1854 S&P, session high 1852) and drifted laterally at slightly higher levels into the afternoon. A break below the midday/afternoon range low (and 2013/2014 close highs at 1848) led to some intraday weakness thereafter but the S&P held in the low end of the support zone (1840) and bounced to close near the flat line and within an inside day for the second session in a row.

Sectors that have posted gains were led by: Solar TAN, Home Const ITB, Retail XRT, Reg Bank KRE, Semi XSD, Bank KBE, Networking IGN, Software IGV. Groups that paced the way on the downside included: Silver SLV, Biotech IBB, Gold Miners GDX Gold GLD, Tobacco, Rail, Broker IAI, Oil Service OIH.

The S&P has now formed two inside days in a row following the 6.9% Feb surge into Monday's high. This kind of very narrow range action indicates that sellers remain sidelined despite the aggressive run but also that buying interest is limited amid the extended technical posture. While at least a brief corrective period seems warranted to bring buyers back into the fray, the obvious short term keys levels are at the highs/lows of the last two sessions (1852 and 1840). Support of note below is at 1836/1835 which marks congestion and the low of Monday's all time high bar.

4:06PM Riverbed Technology announces Satya Nadella has retired from the board of directors; Mr. Nadella is stepping down in order to more fully devote time to his new position as CEO of Microsoft (MSFT) (RVBD) 21.11 +0.45 :

12:27PM 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

TGT (60.71 +7.43%): Reported Q4 EPS of $0.81 (in-line), revs fell 3.8% yoy to $21.52 bln vs $21.44 bln estimate; sees Q1 EPS of $0.60-0.75 vs $0.85 estimate; sees FY15 EPS of $3.85-4.15 vs $4.15 estimate; sees FY15 comps +0-2%
DLTR (55.91 +6.13%): Trading higher despite reporting Q4 revs and EPS below consensus; sees Q1 EPS of $0.63-0.68 vs $0.69 estimate, revs of $1.98-2.04 bln vs $2.03 bln estimate; sees FY15 EPS of $2.91-3.13 vs $3.31 estimate, revs of $8.35-8.58 bln vs $8.66 bln estimate
YNDX (38.34 +5.91%): Co and Google (GOOG) announced a strategic partnership agreement in respect of online display advertising sales

Large Cap Losers

CHK (25.05 -7.01%): Missed quarterly EPS by $0.12 ($0.27 bs $0.39 estimate), revs rose 28.3% yoy to $4.54 bln vs $4.4 bln estimate; co reaffirmed it does not expect to pursue equity raises; co says it no longer needs to divest assets to survive or the fund capital programs
JAZZ (164.76 -5.84%): Missed quarterly EPS by $0.06 ($1.72 vs $1.78 estimate), revs rose 28.4% yoy to $235.8 mln vs $2.37.52 mln estimate; downgraded to Hold from Buy at Cantor Fitzgerald
EC (33.32 -4.09%): Reported Q4 net income declined 29.1% yyo to COP$2.6 bln, revs rose 7.6% yoy to COP$16.2 bln; Board approved earnings distribution proposal for FY13

Mid Cap Gainers

MIDD (298.61 +13.23%): Beat quarterly EPS by $0.37 ($2.62 vs $2.25 estimate), revs rose 29.4% yoy to $377.4 mln vs $364.86
CRI (75.1 +9.23%): Beat quarterly EPS by $0.01 ($1.02 vs $1.01 estimate), revs rose 11.6% yoy to $769.6 mln vs $759.95 mln estimate; sees Q1 EPS growth of +10-15% ex items (~$0.87-0.91) vs $0.86 estimate, revs +8-10% (~$638.3-650.1 mln) vs $648.70 mln estimate; sees FY14 EPS growth of +12-15% ex items (~$3.77-3.88) vs $3.91 estimate, revs +8-10% (~$2.85-2.90 bln) vs $2.89 bln estimate
ANF (39.22 +8.97%): Beat quarterly EPS by $0.29 ($1.34 ex items vs $1.05 estimate), revs fell 11.6% yoy to $1.3 bln vs $1.36 bln estimate; sees FY15 EPS of $2.15-2.35 vs $2.33 estimate

Mid Cap Losers

DGI (30.48 -25.88%): Reported Q4 EPS of $0.18, revs rose 35.3% yoy $169.7 mln vs $185.92 mln estimate; sees FY14 revs of $630-660 mln vs $710.28 mln estimate
CLH (46.25 -14.26%): Missed quarterly EPS by $0.11 ($0.44 vs $0.55 estimate), revs rose 57.3% yoy to $879.4 mln vs $894.2 mln estimate; sees Q1 revs of $820-840 mln vs $904.29 mln estimate; sees FY13 revs of $3.5-3.6 bln (lowered from $3.7-3.8 bln) vs $3.53 bln estimate
DWA (30.48 -13.41%): Missed quarterly EPS by $0.10 ($0.20 vs $0.30 estimate), revs fell 22.8% yoy to $204.3 mln vs $236.8 mln estimate

12:09PM Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (267) outpacing new lows (23) (SCANX) : Stocks that traded to 52 week highs: AAL, ACAD, ACT, ACU, AGN, AHT, AIMC, AIRT, ALLE, ALX, AMBC, AMRI, ANIK, ANIP, APD, ARII, ASPX, ASTE, ATHL, ATHN, ATNI, ATRO, AUDC, AUXL, AVGO, AYI, BDC, BEE, BF.B, BFAM, BIOA, BKD, BLDP, BMRN, BOFI, BOTA, CAH, CAVM, CBG, CBI, CBT, CCJ, CECO, CG, CGEN, CHD, CJES, CKEC, CLR, CLRO, CNET, CPST, CRWS, CRZO, CSC, CSGP, CSOD, CSTE, CTS, CVS, CW, CXP, CYNO, DAL, DATA, DFRG, DLPH, DMND, DNKN, DNN, DOW, DPS, DV, DYAX, EAT, EBIO, EFII, EGLT, EIGI, EMN, ENT, EOG, ESC, ESTE, EXAM, EXH, EXP, FEIC, FEYE, FIS, FL, FLT, FLXN, FR, FRX, FUN, GALT, GMED, GNCA, GOOG, GSM, GTAT, GWRE, HA, HAS, HBI, HD, HEI, HEI.A, HF, HI, HMNF, HP, HPTX, HRB, HRL, HURN, HW, HWG, HY, IACI, IDRA, IFF, IG, ILMN, IMN, IMPV, INCY, INTU, ISIL, JCS, JE, JFBI, JLL, JW.A, KEYW, KFRC, KND, KPTI, KS, KYTH, LECO, LEE, LII, LIOX, LTBR, LTXC, LUV, LVNTA, LXK, LYB, M, MANH, MAR, MCHX, MEMP, MEOH, MGIC, MIDD, MINI, MLM, MNRO, MPWR, MRNA, MRTX, MTDR, MTOR, MTW, MWA, NEU, NEWP, NP, NPK, NSLP, NTCT, NTT, NWBO, NYMT, OPHT, P, PCLN, PEB, PES, PMCS, PNFP, PNR, POL, PPG, PRGO, PRTA, PTC, PTCT, PZZA, QIHU, QURE, RCON, RCPT, RDY, ROC, ROG, ROK, RRC, RRD, RRST, RSPP, RVNC, SAFM, SALE, SCOR, SCTY, SCX, SEP, SHW, SIG, SILC, SIVB, SLG, SLXP, SNA, SNDK, SNSS, SPA, SPLK, SPN, SPNC, STZ, SUNE, SWKS, SYNA, SYNT, TASR, TEN, TK, TMO, TPL, TQNT, TRN, TSLA, TTM, TXI, TXN, UA, UBNT, UGI, UIS, UNT, URG, URZ, USCR, USG, VASC, VMC, VNDA, VRA, VRX, VVC, WBC, WEN, WIT, WRES, XLNX, XPO, YELP, YY, ZBRA, ZLC, ZNGA

Stocks that traded to 52 week lows: AAWW, BRC, CCCL, CLH, CRCM, CYNI, EC, EVRY, FMX, FST, KOF, NMIH, PTSX, QEP, SPRT, STLY, TAC, TBAC, UTIW, VLRS, VTUS, VVUS, WIFI

ETFs that traded to 52 week highs: COW, EGPT, EWK, FDN, IGV, ITB, IWF, IWM, IYM, MDY, NLR, PBD, PBW, PPH, QQQ, SKYY, SMH, SOCL, SOXX, TAN, UWM, VNM, XHB, XLB

ETFs that traded to 52 week lows: SMN

11:01AM Violin Memory announces ADN Group will distribute Violin solutions in the DACH region which includes Germany, Austria and Switzerland (VMEM) 4.01 +0.11 : Under the terms of the agreement, Bochum, Germany-based ADN will resell the complete portfolio of Violin solutions, including 6000 Series flash memory arrays, memory appliances and Violin Maestro and Symphony software.

Centrosolar America and TSMC Solar, a subsidiary of TSMC (TSM), announced an agreement for the deployment of TSMC Solar's CIGS solar modules across North America. The territory covered by the agreement includes solar energy markets in the United States, Canada, Mexico, Virgin Islands and Puerto Rico.

8:32AM O2Micro: Japanese Patent Office issues patent for O2Micro's power management invention (OIIM) 3.83 : Co announced that its Selector Circuit for Power Management in Multiple Battery Systems invention was patented by the Japanese Patent Office.

Freescale Semiconductor (FSL) is helping to enhance the security of the world's data centers, cloud services and web servers by collaborating with partners to expand the ecosystem and availability of its flagship C29x security coprocessor.

Cypress Semiconductor (CY) introduced a new addition to the TrueTouch Gen4X touchscreen controller family that supports advanced features and larger screen sizes.

EMCORE (EMKR) has been awarded a contract by ATK (ATK) to design and manufacture solar panels for NASA's InSight Mars Lander.

RTEC +2.1% (initiated with a Buy at B. Riley & Co.; tgt $14),

KLIC +1.9% (initiated with a Buy at B. Riley & Co)

Skyworks Solutions (SWKS) unveiled a set of antenna switch solutions supporting LTE, LTE-Advanced and next-generation carrier aggregation architectures.

1:14AM SunPower supplies Fuji Furukawa with 494 Kilowatts of its high efficiency solar panels (SPWR) 34.34 : Co announces it has supplied 494 kilowatts of its high efficiency E20/327 solar panels to Fuji Furukawa Engineering & Construction Co. FFEC has installed the solar panels at the Costco store located in Maebashi, Gunma, Japan, and the system is expected to commence operating next month. FFEC is acting as the engineering, procurement and construction contractor for this project.