From Briefing.com: The broader market was all negative at the end Thursday trading. Leading the way down, the Dow Jones Industrial Average shed 254.56 points (-1.60%) to 15660.18. The S&P 500 followed closely behind, lower by 22.78 points (-1.23%) to 1829.08. The Nasdaq Composite rounded out the trio down 16.75 points (-0.39%) to 4266.84. Toward the end of the session, the market saw a big bounce off the lows, aided by a Dow Jones headline suggesting OPEC members are ready to cooperate on a possible production cut. This led to a quick rebound in oil, which jumped over a point before retracing a bit. It also provided some relief to the equity markets at a convenient time, as the S&P 500 was testing lows of the day which also correspond with the January lows. Oil and the stock market retraced a portion of said knee-jerk spikes on the news, albeit still finishing well off lows.
Market data today came in the form of Initial Claims which showed claims falling by 16,000 for the week ending February 6 to 269,000. In addition, today was day two of Fed Chair Janet Yellen's testimony on monetary policy in front of the Senate Banking Committee. While Ms. Yellen acknowledged in the Q&A portion that negative interest rates have not been taken off the table as a policy tool of accommodation, she also asserted that the current economic evidence is not enough to suggest a rate cut is the Fed's next move.
Technology (XLK 38.71, -0.10 -0.26%) was also vulnerable to the selling pressure today. Component Computer Sciences (CSC 27.05, -0.67 -2.42%) was pressured to the downside today as the company filed to delay its Form 10-Q. Other sectors closed the session IYZ +1.15%, XLY -0.06%, XLE -0.42%, XLP -0.80%, XLV -1.61%, XLU -1.76%, XLI -1.99%, XLB -2.17%, XLF -3.06% with Telecoms the only standout and Financials posting the worst losses.
Technology bellwether Twitter (TWTR 14.31, -0.67 -4.47%) also released quarterly results last night after the close. Results for the Q4 period were mostly better than expected, but all eyes were on the Q1 guidance (which came in worse than expected). The stock was subsequently downgraded at Pacific Crest and Topeka Capital Mtks today as the firms noted challenging Monthly Active User growth in an environment that requires the company to post anything but stagnation.
In the Internet (FDN 58.89, +0.68 +1.17%) sector, component LivePerson (LPSN 4.09, -0.94 -18.59%) reported a mixed Q4 print. The attention was on LPSN's guidance, though, which on the top and bottom lines for Q1 and FY16 was worse than the Street expectations. Other FDN names which saw red today included AMTD -2.43%, NFLX -2.37%, ETFC -2.22%, RAX -2.05%, BV -1.68%, VHC -1.45%, YHOO -1.25%.
In the S&P 500 Information Technology sector (637.19, -1.26 -0.20%), action was most notably to the downside -- at least initially. The late session surge pulled the sector out of the red, but gains were short-lived and action settled in the red to close the session. Component Cisco Systems (CSCO 24.68, +2.17 +9.64%) was among the best performing large-cap stocks across the entire market today as the company released better than expected Q2 results after last night's closing bell. Other components which finished lower included FSLR -4.74%, STX -3.84%, NTAP -2.90%, HPQ -2.80%, XRX -2.14%.
Other news items among sector components:
In addition to reporting quarterly results, Cisco Systems (CSCO) increased its quarterly dividend to $0.26 per share from $0.21 per share. The company also increased its share repurchase program by $15 billion.
Microsoft (MSFT 49.69, -0.02 -0.04%) and hardware firm Acer, Inc. expanded their existing relationship to now include pre-installing Microsoft services and apps on its portfolio of Android smartphones and tablets.
Computer Sciences (CSC) filed to delay form 10-Q. The company expects to file the report on or before February 16.
In addition to reporting quarterly results, FLIR Systems (FLIR 28.62, +0.09 +0.32%) increased its quarterly dividend to $0.12 per share from $0.11 per share.
Yahoo! (YHOO 26.76, -0.34 -1.25%) and PGA TOUR announced a relationship to deliver free, live, and on-demand video content from the PGA TOUR to fans around the world, no cable subscription or authentication required.
Elsewhere in the technology space:
Ingram Micro (IM 27.18, -0.84 -3.00%) acquired the Central & Eastern Europe Division of RRC Group. The deal is expected to be slightly accretive to IM's 2016 non-GAAP earnings.
A Dealbook report in afternoon trading pegged music-streaming service Pandora Media (P 9.09, +0.69 +8.21%) as being in talks to be acquired.
Amazon (AMZN 503.82, +13.34 +2.72%) authorized a $5 billion share repurchase.
In addition to reporting quarterly results, j2 Global (JCOM 74.64, +10.50 +16.37%) increased its quarterly dividend to $0.3250 per share from $0.315 per share. The company also extended its share repurchase program by an additional year.
Insight Enterpr's (NSIT) Board authorized a $50 million stock repurchase program.
In addition to reporting quarterly results, Cornerstone OnDemand's (CSOD 24.62, +0.24 +0.98%) CFO Perry Wallack provided notice of his intent to retire.
Travelzoo (TZOO 7.18, +0.34 +4.97%) authorized the repurchase of up to 1 million common shares.
In reaction to quarterly results:
Cisco Systems (CSCO) reported better than expected Q2 results with EPS of $0.57 and revenues which fell 0.1% year-over-year to $11.93 billion. The company also guided Q3 EPS in-line at $0.54-0.56.
Nokia (NOK 5.88, +0.06 +1.03%) reported better than expected Q4 EPS of 0.15 on revenues which rose 2.8% year-over-year to 3.61 billion.
Thomson Reuters (TRI 34.62, -1.00 -2.81%) reported better than expected Q4 EPS of $0.65 on revenues which fell 2.0% year-over-year to $3.15 billion.
CenturyLink (CTL 27.28, +2.69 +10.94%) reported better than expected Q4 results with EPS of $0.80 and revenues of $4.48 billion. The company also guided Q1 EPS better than expected at $0.67-0.73 and revenues of $4.40-4.45 billion. CTL also sees better than expected FY16 EPS of $2.50-2.70 on revenues of $17.55-17.8 billion.
Expedia (EXPE 103.37, +9.02 +9.56%) reported worse than expected Q4 EPS of $0.77 on revenues which rose 25.3% year-over-year to $1.7 billion. Gross bookings increased 40%.
Twitter (TWTR) reported better than expected Q4 EPS of $0.16 on revenues which rose 48.3% year-over-year to $710.47 million. The company also guided Q1 revenues worse than expected at $595-610 million. Advertising revenue were $641 million, an increase of 48% year-over-year.
TripAdvisor (TRIP 61.07, +6.72 +12.36%) reported better than expected Q4 results with EPS of $0.45 on revenues which rose 7.3% year-over-year to $309 million.
Zynga (ZNGA 1.81, -0.32 -15.02%) reported in-line EPS and revenues for the Q4 period of ($0.00) and $185.77 million, respectively. In addition, ZNGA guided Q1 EPS in-line at ($0.01)-$0.00 on worse than expected Q1 revenue guidance of $160-175 million.
LivePerson (LPSN) reported better than expected Q4 EPS of $0.07 on revenues which rose 1.7% year-over-year to $59.2 million. LPSN also guided Q1 EPS and revenues worse than expected at ($0.02)-0.00 and $55-56 million, respectively. Further, LPSN also guided FY16 EPS and revenues worse than expected at $0.05-0.10 and $230-235 million, respectively.
Companies scheduled to report quarterly results tonight/tomorrow before the open: ATVI AMBR AMKR BCOR BCOV CBS COHU CRAY CYBR ELON ELLI FEYE GRPN GUID INFN KN LOGM LXFT MGI P PDFS QLIK ROVI SSNC VRNS VRSN WEB ZG/IPG IPGP ZAYO
Analyst actions:
CSCO was upgraded to Buy from Hold at Jefferies,
NCIT was upgraded at Noble Financial and Sun Trust Rbsn Humphrey,
HDP was upgraded to Neutral from Negative at Susquehanna,
FDC was upgraded to Outperform from Neutral at Credit Suisse,
LVLT was upgraded to Overweight from Equal Weight at Morgan Stanley;
TWTR was downgraded to Hold from Buy at Topeka Capital Mkts,
V and MA were downgraded to Neutral from Buy at BofA/Merrill,
ARMH was downgraded to Underperform from Mkt Perform at Bernstein,
WIT was downgraded to Equal Weight from Overweight at Morgan Stanley,
MWW was downgraded to Mkt Perform from Outperform at FBR Capital,
SEMI and CCMP were downgraded at Citigroup
4:16 pm Cohu beats by $0.03, reports revs in-line; guides Q1 revs above consensus ( COHU) :
Reports Q4 (Dec) earnings of $0.09 per share, excluding non-recurring items, $0.03 better than the two analyst estimate of $0.06; revenues fell 29.9% year/year to $63.5 mln vs the $62.94 mln Capital IQ Consensus. Co issues upside guidance for Q1, sees Q1 revs of ~$64 mln vs. $59.95 mln Capital IQ Consensus Estimate.
4:12 pm Amkor reports EPS in-line, misses on revs; guides Q1 EPS below two analyst estimate, revs below consensus ( AMKR) :
Reports Q4 (Dec) earnings of $0.02 per share, in-line with the Capital IQ Consensus of $0.02; revenues fell 21.3% year/year to $671 mln vs the $688.43 mln Capital IQ Consensus. Co issues downside guidance for Q1, sees EPS of ($0.15)-($0.03) vs. $0.02 two analyst estimate; sees Q1 revs of $785-$835 mln vs. $863.90 mln Capital IQ Consensus Estimate. Co states: "Market conditions in Q1 remain sluggish, with particular weakness in the high-end smartphone market.Despite challenging market conditions, we expect that Q1 revenues will increase 21% sequentially, driven by incremental revenue from J-Devices. At this time, we expect full year 2016 capital expenditures of around $650 million."
4:10 pm Cray beats by $0.09, reports revs in-line; guides Q1 revs in-line; reaffirms FY16 revs guidance ( CRAY) :
Reports Q4 (Dec) earnings of $0.79 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.70; revenues rose 2.1% year/year to $267.5 mln vs the $265.28 mln Capital IQ Consensus. Total non-GAAP gross profit margin for 2015 was 32%, compared to 34% for 2014. Co issues in-line guidance for Q1, sees Q1 revs of approx $100 mln vs. $97.19 mln Capital IQ Consensus Estimate. Co reaffirms guidance for FY16, sees FY16 revs of approx $825 mln vs. $817.70 mln Capital IQ Consensus Estimate.Guidance CommentaryFor 2016, while a wide range of results remains possible, the Company expects revenue to be in the $825 million range. Revenue is expected to be in the range of $100 million for the first quarter of 2016, with the remainder of the year heavily weighted to the fourth quarter. Non-GAAP gross margin for the year is expected to improve and to be one to two percentage points higher than for 2015. Non-GAAP operating expenses for the year are anticipated to be about $205 million. Based on this outlook, the Company expects to improve its GAAP and non-GAAP operating profit margin for 2016 as compared to 2015.
4:20 pm : The capital markets have been a hot mess in 2016 and things heated up again on Thursday on a series of headlines that led mostly to a risk-averse disposition.
The concise overview is that stock prices declined, oil prices fell, gold prices surged, the yen continued to strengthen, and the 10-year Treasury yield slipped to its lowest level (1.54%) since August 2012.
To say the least, there were a lot of factors at play on Thursday, including a second day of monetary policy testimony from Fed Chair Yellen in front of the Senate Banking Committee. The key headline items contributing to the broader market's weakness included the following:
A 3.9% decline in Hong Kong's Hang Seng Index in its first day of trading after the Lunar New Year celebration A decision by Sweden's Riksbank to take its key borrowing rate further into negative territory with a 15 basis point cut to -0.50% Renewed concerns about the financial position of European banks, which took a heavy toll on European bourses and the S&P 500 financial sector (-3.0%)Reports that Boeing (BA 108.44, -7.92, -6.8%) is the subject of an SEC investigation into its accounting for costs and sales of its 747 and 787 planes; and Underlying angst about the state of the global economy and earnings prospects in general The confluence of these factors, and others, led to a decidedly negative start to the day for the equity market.
Fed Chair Yellen didn't provide any reprieve from the selling pressure during her testimony either. She did acknowledge that negative interest rates are still on the table as a potential tool for further policy accommodation, yet she also asserted that economic evidence to date is not enough to suggest a rate cut is the Fed's next move.
Strikingly, the Dow Jones Industrial Average and S&P 500 fell to new lows for the day after the conclusion of her testimony while the Nasdaq Composite came back to test its morning low. In the case of the S&P 500, it cut a path through its January 20 intraday low (1812.29) to 1810.10. Just as it did, however, a headline from Dow Jones crossed the wires suggesting OPEC members are ready to cooperate on a possible production cut.
That headline led to a dramatic change in the trading tone, as the major indices rallied late in the day on the back of a resurgent energy sector (-0.4%), which had been down as much as 3.1% in response to a 5.1% drop in oil prices during pit trading to $26.14 per barrel.
At the same time, there was a large wave of buying interest in large-cap technology stocks that bolstered the S&P 500 technology sector (-0.2%) and helped drive the Nasdaq Composite back into positive territory after being down as many as 74 points earlier in the session. A closing volley of selling interest left the Nasdaq down 0.4% for the day.
By the time the closing bell rang, all S&P 500 sectors had worked their way back from larger losses but none ended with a gain. The financial sector (-3.0%) was the most conspicuous underperformer.
The technology sector (-0.2%), which got a nice boost from Cisco (CSCO 24.68, +2.17, +9.6%) after its pleasing earnings report, exhibited relative strength along with the consumer staples (-0.8%), telecom services (-0.5%), energy sector (-0.4%) and consumer discretionary (-0.1%) sectors.
The US Treasury market was a picture of strength throughout Thursday's trading. Granted the benchmark 10-yr note finished off its best levels of the session, yet it drew some notable buying interest that dropped its yield to 1.64% from 1.70 % on Wednesday.
That move was precipitated by a flight-to-safety amid the volatility elsewhere. Similarly, gold prices also benefited from the safety trade, rising 4.4% to $1247.30/troy ounce.
The only economic release today was the weekly initial claims report. It was better than expected with claims decreasing by 16,000 to 269,000 (Briefing.com consensus 280,000) for the week ending February 6. Friday will feature the influential Retail Sales report for January at 8:30 a.m. ET.
Volume on Thursday was heavier than average with 1.32 billion shares trading at the NYSE. The advance-decline line favored decliners at the NYSE by a 4-to-1 margin, which was better than earlier in the day but still indicative of a market lacking conviction from buyers.DJ30 -254.56 NASDAQ -16.76 SP500 -22.78 NASDAQ Adv/Vol/Dec 879/2.15 bln/2200 NYSE Adv/Vol/Dec 572/1.32 bln/2554
3:40 pm :
- The big story in electronic trading was the headlines that OPEC is ready to cooperate on a production cut, according to a UAE Minister
- Who knows now exactly where we go from here. In recent months, there have been a number of rumors about en OPEC meeting
- However, today's news does seem to have a little more weight.
- Mar crude oil closed floor trading -5.1% at $26.14/barrel
- Following the OPEC headlines, Mar crude ran from $26.05 to about $27.33/barrel... oil is now
- In other energy, Mar nat gas slid 3.4% to $1.98/MMBtu
- Precious metals rallied notably today
- Apr gold surged $54.51 to $1249.21/oz, while Mar silver surged $0.51 to $15.78/oz
7:34 am Photronics reports prelim Q1 results with sales below prior guidance and consensus ( PLAB) :
Co sees Q1 (Jan) EPS of $0.15-0.17, excluding items, down from prior guidance of $0.14 -0.23, vs. $0.19 Capital IQ Consensus Estimate; sees Q1 (Jan) revs of $128 -130 mln, prior $133-143 mln vs. $137.33 mln Capital IQ Consensus Estimate."Similar to the last several quarters, demand for high-end memory and FPD photomasks during the first quarter was very strong; however high-end logic, which can be lumpy, was soft due to lower demand from some foundry costumers in Asia, causing our sales to be lower than we previously communicated.... Additionally, the seasonal slowdown we experienced in mainstream IC was greater than normal, causing demand for those products to be lower than our projections. As a result of the lower demand for our products and the operating leverage in our model, we anticipate earnings will be in the low-end of our previous guidance, excluding the one-time gain. Nevertheless, we were able to continue our trend of positive cash flow, building our net cash position to over $100 million. While our first quarter results were slightly below expectations, we remain confident that the long-term growth outlook for our business is positive and are committed to our strategic growth plan."
2:16 am Nokia beats by $0.03, reports revs in-line; proposes special dividend ( NOK) :
Reports Q4 (Dec) earnings of 0.15 per share, 0.03 better than the Capital IQ Consensus of 0.12; revenues rose 2.8% year/year to 3.61 bln vs the 3.58 bln Capital IQ Consensus.5% year-on-year net sales decrease in Q4 2015 and 3% net sales growth in full year 2015. On a reported basis, Greater China and Middle East & Africa were the strongest regions.170% year-on-year net sales growth in Q4 2015 and 77% net sales growth in full year 2015. On a year-on-year basis, non-IFRS operating profit grew 318% in Q4 2015 and 102% in full year 2015, primarily related to the growth in net sales resulting from a settled arbitration.Nokia's Board of Directors will propose a dividend of EUR 0.16 per share for 2015 and a special dividend of EUR 0.10 per share (dividend of EUR 0.14 per share for 2014). Proposed dividend is estimated to result in a maximum payout of approximately EUR 960 million in dividend and EUR 600 million in special dividend.
Outlook:Due to the very recent acquisition of Alcatel-Lucent ( ALU), Nokia believes it is not appropriate to provide an annual outlook for the new combined Networks business at the present time, and intends to provide its full year outlook in conjunction with its Q1 results announcement. Q1 2016 net sales and non-IFRS operating margin are expected to be influenced by factors including: A flattish capex environment in 2016 for overall addressable market; A declining wireless infrastructure market in 2016, with a greater than normal seasonal decline in Q1 2016Additionally, co announced that its Board of Directors has approved the Nokia equity program for 2016 |
