Sector Investing

[ReturntoSender]

From Briefing.com: 4:20 pm : The major averages ended the Wednesday session on a mixed note. The Nasdaq (+0.4%) and Russell 2000 (+0.3%) posted modest gains while the Dow Jones Industrial Average (-0.1%) finished in the red. For its part, the S&P 500 (+0.03%) settled just above its flat line.

Stocks began the day in the red, but spent the first two hours of action in a steady climb off their lows. The cautious start took place amid broad-based weakness across major European markets where Germany's DAX, Great Britain's FTSE, and France's CAC all posted losses close to 1.0% apiece.

In addition to the weakness in Europe, losses among major Asian indices also weighed on the early sentiment. On that note, markets in Japan, South Korea, and Hong Kong fell 2.6%, 1.7%, and 1.7%, respectively, while China's Shanghai Composite (-0.2%) outperformed.

Even though China was an area of relative strength, jitters regarding the health of the country's financial system remained palpable. Copper futures continued yesterday's tumble overnight, but were able to regain those losses in the morning. The red metal added one cent, ending at $2.961/lb.

Although copper did not send the same warning signal as yesterday, gold futures and Treasuries reflected a measure of caution. Gold jumped 1.8% to $1370.60/ozt while Treasuries climbed steadily, ending on their highs. Bolstered by a solid 10-yr reopening, the benchmark note added 14 ticks, sending its yield lower by five basis points to 2.72%. The retreat in Treasury yields, gave a boost to the rate-sensitive utilities sector (+1.3%), which was the top performer among the 10 sectors.

Six of ten groups ended in the red while technology (+0.2%), energy (+0.04%), and consumer staples (+0.1%) fared a bit better than the broader market.

Technology drew strength from chipmakers (PHLX Semiconductor Index +0.9%) while the energy sector was underpinned by Chevron (CVX 115.65, +1.14). The stock rallied 1.0% after being added to the US Focus List at Credit Suisse. The staples sector benefitted from gains among food producers.

While the broader market did not move much during afternoon action, the same could not be said for shares of Herbalife (HLF 60.57, -4.82), which fell 7.4% after the company received a Civil Investigative Demand from the Federal Trade Commission. Herbalife responded to the notice, saying they welcome the inquiry due to 'tremendous amount of misinformation in the marketplace.'

Also of note, the daylong underperformance of three influential sectors-consumer discretionary (-0.1%), financials (-0.1%), and industrials (-0.2%)-kept the S&P 500 from pulling away from its flat line. Notably, the discretionary sector was pressured by apparel retailers after Express (EXPR 16.05, -2.19) missed on earnings and lowered its guidance well below analyst estimates. The stock plunged 12.0%.

Participation was on the light side with 646 million shares changing hands at the NYSE floor.

Another item of note that remained on the backburner, but has the potential to make a quick return to the forefront is the situation in Crimea.

This morning, Polish Prime Minister Donald Tusk and German Chancellor Angela Merkel held a joint press conference, announcing the European Union will sign parts of an association deal with Ukraine next week. In addition, Chancellor Merkel said the EU is set to impose additional sanctions on Moscow after Russian officials chose not to take part in a diplomatic contact group. This comes ahead of Sunday's referendum on Crimea joining the Russian Federation. With the referendum nearing, U.S. Secretary of State John Kerry will be in London tomorrow in hopes of meeting with Russian Foreign Minister Sergei Lavrov.

As the session drew to its close, President Obama, who met with Ukraine's acting Prime Minister Arseniy Yatseniuk in Washington, said 'We will stand with Ukraine and consider Russian incursion into Crimea against the law'

Economic data was limited to the weekly MBA Mortgage Index, which fell 2.1% to follow last week's increase of 9.4%.

Tomorrow, weekly initial claims, February retail sales, and February import/export prices will be released at 8:30 ET while January business inventories will cross the wires at 10:00 ET. The day's data will be topped off with the 14:00 ET release of the February Treasury budget, which was originally scheduled for today.


Nasdaq Composite +3.5% YTD
Russell 2000 +2.7% YTD
S&P 500 +1.1% YTD
Dow Jones Industrial Average -1.4% YTD

DJ30 -11.17 NASDAQ +16.14 SP500 +0.57 NASDAQ Adv/Vol/Dec 1479/2.00 bln/1168 NYSE Adv/Vol/Dec 1770/645.6 mln/1293 3:30 pm :

Precious metals traded higher today as a weaker dollar index boosted prices.
Apr gold rose for a third consecutive session and climbed as high as $1371.30 per ounce in late afternoon pit trade. It settled at $1370.60 per ounce, booking a gain of 1.8%.
May silver came off its session low of $20.95 per ounce set moments after floor trade opened. It touched a session high of $21.43 per ounce and settled with a 2.6% gain at $21.36 per ounce.
Apr crude oil fell for a third consecutive session following weaker-than-anticipated inventory data. The EIA reported that for the week ending Mar 7, crude oil inventories had a build of 6.18 mln barrels when a smaller build of 2.0-2.2 mln barrels was expected. In addition, the government announced plans to sell 5 mln barrels of sour crude from the SPR to test system capabilities. The energy component dipped to a session low of $97.55 per barrel and settled at $97.99 per barrel, or 2.0% lower.
Apr natural gas extended yesterday's losses as it pulled back from its session high of $4.59 per MMBtu set at pit trade open. It fell as low as $4.45 per MMBtu and settled with a 2.4% loss at $4.49 per MMBtu

3:57PM Exelis settles GPS patent infringement claim against Blackberry; terms confidential (XLS) 19.92 -0.17 : Co has reached a license agreement with Blackberry regarding patent infringement claims related to Exelis assisted Global Positioning System (GPS) technology. The license agreement resolves all issues regarding the company's claim that the mobile devices and components sold or supported by Blackberry, incorporating assisted GPS technology, infringed Exelis patent rights. Specific details of the license agreement will remain confidential.

12:39PM 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

TSLA (241.8 +3.15%): Rebounding following declines seen yesterday on reports that the state of New Jersey has blocked direct sales of carsVMW (106.45 +2.60%): Added to US Focuse List at Credit Suisse GMCR (107.99 +1.66%): Mentioned positively at Barron's Large Cap Losers
PGR (23.7 -3.34%): Reported Feb 2014 net income of $0.08 versus $0.17 in Feb 2013; reported Feb 2014 net premiums written rose 3% yoy to $1.538 bln
VIP (8.61 -2.71%): Announced it is under investigation by the SEC
Mid Cap Gainers
PAY (32.28 +10.38%): Beat quarterly EPS by $0.04 ($0.31 ex items vs $0.27 estimate), revs rose 1.6% yoy to $437 mln vs $428.65 mln estimate; sees Q2 EPS of $0.30-0.32 vs $0.31 estimate, revs of $440-445 mln vs $438.90 mln estimate; sees FY14 EPS of $1.40 vs $1.39 estimate, revs $1.78-1.81 bln vs $1.79 bln estimate; upgraded to Hold from Sell at Deutsche Bank; target raised to $43 from $37 at Sun Trust Rbsn Humphrey
NUS (79.36 +8.03%): Seeing rumors of positive developments regarding status of co's regulatory review in China; HLF also higher
RAD (6.79 +5.39%): Upgraded to Buy from Neutral at Goldman
Mid Cap Losers
CZR (24.2 -5.36%): Reported Q4 loss of $12.83 per share, revs rose 3.1% yoy to $2.08 bln vs $2.13 bln estimate
SALE (37.72 -4.34%): Co's final lock up period expired today; analysts at Wunderlich noted that lock up expiration could prompt additional profit taking
AEO (12.6 -3.85%): Downgraded to Underweight from Equal-Weight at Morgan Stanley; target lowered to $13 from $14

11:55AM Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (72) outpacing new lows (40) (SCANX) : Stocks that traded to 52 week highs: AA, ABCB, ACU, ATVI, BCR, BLMT, BPZ, BRK.A, BRK.B, CBZ, CELH, CISG, CLD, CPS, CPST, CTP, CUI, DBD, DFRG, DMND, DPS, EA, ESCA, FCH, GHC, GLUU, HST, IPG, ISIL, ITC, JACK, KNX, KONA, LADR, LDL, LHO, LUV, MAYS, MPC, MUX, NSC, ONTY, OXGN, PAY, PEB, PHX, PNK, PQ, PRMW, PSX, PUK, PX, QUMU, RARE, RCAP, RLOG, SBSA, SHEN, SPIL, SQBG, SZYM, TAS, TCBI, TOWR, TRNS, TSH, TXN, UCTT, VLO, VMW, VSB, YDKN

Stocks that traded to 52 week lows: AEPI, AH, AKO.A, ANR, AVNW, BAK, BIOC, CHL, CHU, CORR, CTCM, DMD, EGT, EPB, EXPR, FBR, HDY, HNP, HRZN, HSBC, KMG, KMI, KT, LAQ, LEI, MX, NEWL, PSO, PVD, QSII, RIG, RLOC, STLY, TEU, TLM, VHC, VHI, VIP, WLT, YZC

ETFs that traded to 52 week highs: DBA, FXE, FXF, GREK, JO

ETFs that traded to 52 week lows: JJC, RSX

ANADIGICS (ANAD) announced that the co's AWL9281 front-end integrated circuit is enabling WiFi connectivity in the Ascend P6S smartphone by Huawei.

8:38AM Capstone Turbine receives follow-on orders for 50 C65s from Horizon Power Systems for Multiple U.S. Oil and Gas customers (CPST) 2.18 : Co received orders for fifty Capstone C65 microturbines for oil and gas production in the United States. Horizon Power Systems, Capstone's exclusive oil and gas distributor for the Eagle Ford, Permian, San Juan and Wattenberg Shale plays, secured the orders to support the growing power needs of its existing customers. The orders will bring the total fleet to more than 550 microturbines in operation in Horizon's area of responsibility and will serve various stages of oil and gas production including powering central processing stations, well-head operation, and flare reduction.

7:06AM UTStarcom announces Shah Capital subscribed for and purchased 2 mln shares of common stock from the co for a price of $2.67 per share; Shah Capital's beneficial ownership in the co increased from 21.9% to 26.0% (UTSI) 2.55 :

Co announced that it entered into a Share Subscription Agreement with Shah Capital Opportunity Fund on March 11, 2014. The transaction was consummated on the same date.
Pursuant to the Subscription Agreement, Shah Capital subscribed for and purchased 2 mln shares of common stock, with par value $0.00375 per share, from the co for a price of $2.67 per share.
Following the close of the transaction, Shah Capital's beneficial ownership in the co increased from 21.9% to 26.0%. The purchase was made on top of the recent increase of ownership that occurred in Jan 2013, at which time Shah Capital increased its holdings from 17.2%.

VeriFone (PAY) reported first quarter earnings of $0.31 per share, while non-GAAP revenues rose 1.6% year/year to $437 million which is higher than expected. The company issued guidance for the second quarter with EPS of $0.30-0.32 which is line with estimates and revenues of non-GAAP $440-445 million which is above estimates. The company issued guidance for the fiscal year 2014 with EPS of $1.40 which is slightly above estimates and revenues of Non-GAAP $1.78-1.81 billion which is line with estimates.
Kopin (KOPN) reports Q4 EPS of ($0.16) which is below estimates and revenues of $5.5 miliion which is higher than expected. The company sees 2014 revenues of $18-22 million which is below estimates. 'There are strong signs that wearable headsets will begin to be introduced starting in late 2014 and grow rapidly into 2015. For Kopin, we expect to have our first generation components as well as concept and reference systems ready by the end of this summer, and then prepare for component manufacturing in the second half of 2014, with substantial wearable revenue growth expected in 2015."
Spansion (CODE) announced that the United States District Court of Virginia has issued two orders in Spansion's favor. The first court order dismisses the case that Macronix had filed against Spansion, explaining that Macronix's allegations failed to state a valid case for patent infringement. In the second order, the court held that, if Macronix files another complaint, the case will be transferred to the U.S. District Court of the Northern District of California, which could take more than a year for a decision. In Spansion's ITC case against Macronix, the trial is scheduled for the end of May 2014. "We expect a favorable final decision for Spansion's ITC investigation," senior vice president Ali Pourkeramati added.