From Briefing.com: Some significant volatility in government bond markets jolted the stock market on Thursday along with reports suggesting Greece won't make its debt payment to the IMF on Friday, instead requesting to bundle its debt payments this month into a single payment on June 19. Separately, the IMF rattled investor confidence with an acknowledgment that it thinks the Fed should hold off on a rate hike until 2016.
Selling efforts in the stock market were broad-based and left the S&P 500 below its 50-day simple moving average at the close of trading. Every sector closed lower, paced by the cyclical sectors which did not act well amid the interest rate volatility and the added move by the IMF to cut its global growth forecast for 2015 and 2016.
The S&P 500 information technology sector (-0.9%) underperformed the broader market. Indicative of the broad-based selling interest, there were only three sector components -- eBay (EBAY 62.49, +0.48, +0.8%), NetApp (NTAP 33.87, +0.62, +1.9%), and Nvidia (NVDA 22.09, +0.39, +1.8%) -- that closed higher.
Notable news items from sector components included the following:
Apple (AAPL 129.36, -0.76, -0.6%): NYT previewed Monday's WWDC, featuring app development kit for the Watch and a streaming music service but no new Apple TV set top box. Separately, Apple announced the Apple Watch will be available in Italy, Mexico, Singapore, South Korea, Spain, Switzerland and Taiwan beginning Friday, June 26.
Avago Technologies (AVGO 141.20, -1.86, -1.3%): Announced that its Board of Directors has approved a quarterly, interim cash dividend of $0.40 per ordinary share. The dividend is payable on June 30, 2015 to shareholders of record at the close of business (5:00 p.m.) Eastern Time on June 19, 2015.
CA, Inc. (CA 29.62, -0.40, -1.3%): Company announced it has acquired Grid Tools, a leading provider of enterprise test data management, automated test design and optimization software solutions. Terms of the transaction were not disclosed. The acquisition extends CA's DevOps portfolio, and enables automated testing of software for faster development and time to market.
Cisco (CSCO 28.61, -0.48, -1.7%): Announced the new executive leadership team that incoming CEO Chuck Robbins has chosen to lead the organization. The following individuals and there titles were announced: Pankaj Patel, Executive Vice President, Chief Development Officer; Kelly Kramer, Executive Vice President and Chief Financial Officer; Rebecca Jacoby, Senior Vice President, Operations and Hilton Romanski, Senior Vice President, Chief Technology and Strategy Officer.
Google (GOOG 536.70, -3.61, -0.7%): Re/code reported that Chris O'Neill, the business chief for Google Glass, has left the position. O'Neill informed re/code, however, that he has not left the company.
Hewlett-Packard (HPQ 33.30, -0.66, -1.9%): Announced a five-year partnership with 20th Century Fox and Lightstorm Entertainment in support of the three sequels of Avatar. As part of the agreement, which extends through the release of the final film in the epic four-part saga, HP and its partners will use a variety of HP services, including HP Helion.
IBM (IBM 168.38, -1.54, -0.9%): The Universities and Science Minister Jo Johnson announced a 313 million partnership with IBM to boost Big Data research in the UK. Following the UK Government's 113 million commitment to expand the Hartree Centre at Daresbury over the next five years, IBM will further support the project with a package of technology and onsite expertise worth up to 200 million.
Intel (INTC 32.31, -0.42, -1.3%): Company and ANSYS, Inc. (ANSS 89.64, -1.38, -1.5%) announced they are collaborating to enable the delivery of high-performance systems on a chip for Intel Custom Foundry customers. Part of the collaboration will include electromigration and power reference flow for Intel's 14-nanometer process family and the certification of ANSYS RedHawk and ANSYS Totem.
Micron (MU 26.99, -0.10, -0.4%): At Morgan Stanley Conference, says PC end market seeing softness, but expects a rebound in PC and Mobile phone market in 2H15. Notes it is not seeing as aggressive behavior among suppliers as it has seen in the past. Micron expects to grow below industry average in 2015 during transition but to be back above industry average growth in 2016.
Elsewhere in the technology space:
Alibaba (BABA 90.59, -0.20, -0.2%): Company announced it has signed a strategic agreement with Shanghai Media Group to leverage both companies' Internet technology and media resources in order to penetrate China's financial information services industry. As part of the strategic agreement, Alibaba Group intends to invest ~$193.6 million into China Business News, a leading Chinese financial media company under SMG, to create a financial data and information services company.
Amazon.com (AMZN 430.78, -5.81, -1.3%): Noted that several million Prime members listen to Prime Music every month- more than doubling since September 2014. Total monthly Prime Music playback hours have more than tripled since September 2014.
Ciena (CIEN 24.64, +0.20, +0.8%): Before Thursday's open, reported Q2 (Apr) earnings of $0.35 per share, excluding non-recurring items, comfortably ahead of analysts' average expectation. Revenues rose 11.0% year/year to $621.6 mln, also ahead of estimates. Q2 adjusted gross margin was 43.8% versus prior guidance of 42-43%. For Q3, sees revenues of $610-640 mln and adjusted gross margin of approximately 43%. Ciena raised its FY15 adjusted operating margin guidance to 9-10% from 8-9%.
Cree (CREE 30.35, -0.28, -0.9%): To recall ~700k LED T8 Lamps due to a burn hazard. The recall notes that electrical arcing may cause the lamp to overheat and melt, posing a burn hazard.
FireEye (FEYE 47.95, +0.26, +0.6%): Company and Visa (V 68.21, -0.74, -1.1%) partner to co-develop tools and services to help merchants and issuers protect against advanced cyber attacks targeting payment data. As strategic partners, FireEye and Visa initially plan to offer tools that will provide greater cyber intelligence and enhanced threat monitoring and will continue to work together, along with FireEye's cyber forensics group Mandiant, to add more capabilities tailored to issuers and merchants of all sizes.
Lattice Semiconductor (LSCC 6.51, +0.16, +2.5%): Reuters reported that Lattice Semiconductor CEO Darin Billerbeck said company is open to a sale if at a higher premium than what Altera received with Intel's offer.
T-Mobile US (TMUS 39.34, +1.01, +2.6%): The Wall Street Journal reported that company and Dish Network (DISH 74.25, +3.44, +4.9%) are in merger talks, according to people familiar with the matter.
Analyst Action:
Ciena (CIEN 24.64, +0.20, +0.8%): target raised to $29 from $27 at MKM Partners
eBay (EBAY 62.49, +0.48, +0.8%): target raised to $70 from $64 at UBS
Facebook (FB 82.05, -0.39, -0.5%): target raised to $105 from $95 at Evercore ISI; Buy
FireEye (FEYE 47.95, +0.26, +0.6%): target raised to $55 from $50 at Stifel... target raised to $60 from $50 at Piper Jaffray
PMC-Sierra (PMCS 9.16, +0.20, +2.2%): initiated with a Buy at Craig Hallum; target $13.50
SAP AG (SAP 74.84, -0.82, -1.1%): target raised to $82 from $80 at Oppenheimer
Twitter (TWTR 36.71, -0.29, -0.8%): downgraded to Hold from Buy at Evercore ISI; target to $39 from $49
Xilinx (XLNX 47.21, -0.16, -0.3%): downgraded to Market Perform at FBR Capital
4:10 pm : The stock market finished the Thursday session on a lower note following a daylong retreat that sent the S&P 500 (-0.8%) below its 50-day moving average (2,100). As a result, the benchmark index will enter Friday down 0.5% for the week.
Equity indices struggled from the start as continued uncertainty surrounding Greece weighed on investor sentiment in Europe and the U.S. To that point, International Monetary Fund Managing Director, Christine Lagarde, voiced confidence that the troubled sovereign will make tomorrow's debt payment to the IMF. However, that contrasted with reports indicating Greece has requested permission to bundle all of its debt payments due this month into a single payment of about EUR1.60 billion to be paid on June 19. Meanwhile, Prime Minister Alexis Tsipras is scheduled to address the Greek parliament tomorrow evening.
In addition to commenting on Greece, Ms. Lagarde discussed the U.S., urging the Federal Reserve to delay its first rate hike until the first half of 2016. A lowered growth forecast was cited to support that argument with the IMF now expecting 2015 GDP growth of 2.5%, down from the previous forecast of 3.1%.
Treasuries marked fresh highs following the outlook change at the IMF, and built on their gains in the afternoon with the 10-yr yield falling six basis points to 2.31%. On a related note, the Dollar Index (95.49, +0.02) ended flat after erasing its overnight decline.
All ten sectors ended in the red with most growth-sensitive groups showing relative weakness. Energy (-1.2%) and materials (-1.3%) spent the bulk of the session behind other groups with energy pressured by a 2.8% drop in crude oil, which ended the pit session at $58.00/bbl ahead of tomorrow's semiannual OPEC meeting.
Elsewhere among cyclical sectors, industrials (-1.1%) and technology (-0.9%) also lost close to 1.0% apiece while the consumer discretionary sector (-0.7%) stayed ahead of the broader market thanks to mixed action among retail names. Teen apparel names rallied after Five Below (FIVE 37.77, +2.67) reported a one-cent beat and raised its guidance for the fiscal year. The stock spiked 7.6% while SPDR S&P Retail ETF (XRT 99.85, -0.09) shed 0.1%. Also of note, Dish Network (DISH 74.25, +3.44) jumped 4.9% after the Wall Street Journal reported the company has engaged in merger talks with T-Mobile US (TMUS 39.34, +1.01).
Moving to the countercyclical side, consumer staples (-0.8%), health care (-0.7%), and telecom services (-0.8%) settled near the broader market while the utilities sector (-0.2%) finished ahead of other groups thanks to today's drop in Treasury yields. The rate-sensitive sector extended this week's decline to 2.9%.
Today's participation was relatively strong when compared to recent averages as more than 710 million shares changed hands at the NYSE floor.
Economic data was limited to Initial Claims, Productivity/Unit Labor Cost Data, and Challenger Job Cuts:
- The initial claims level declined to 276,000 for the week ending May 30 from an upwardly revised 284,000 (from 282,000) for the week ending May 23 while the Briefing.com consensus expected a drop to 280,000
- Nonfarm productivity in the first quarter was revised down to -3.1% from an originally reported -1.9% in the advance release while the Briefing.com consensus expected a revision to -2.9%
- As expected from the negative revisions in second estimate of first quarter GDP, output growth was revised down to show a decline of 1.6% in Q1 2015, down from a previously reported 0.3% decline
- Hourly compensation was revised up to 3.3% from 3.1%. Combined with the decline in output, this caused a 6.7% increase in unit labor costs, up from the 5.0% reported in the preliminary reading
- The Challenger Job Cuts report for May showed a 22.5% year-over-year decline to follow the previous 52.8% spike
Tomorrow, the Nonfarm Payrolls report for May (Briefing.com consensus 225K) will be released at 8:30 ET while the Consumer Credit report for April (consensus $16.80 billion) will cross the wires at 15:00 ET.
- Nasdaq Composite +6.8% YTD
- Russell 2000 +3.9% YTD
- S&P 500 +1.8% YTD
- Dow Jones Industrial Average +0.5% YTD
DJ30 -170.69 NASDAQ -40.11 SP500 -18.23 NASDAQ Adv/Vol/Dec 774/1.71 bln/2158 NYSE Adv/Vol/Dec 679/711.9 mln/2391 3:40 pm :
- WTI crude oil futures ended today's pit trading session lower, ahead of tomorrow OPEC meeting in Vienna
- July crude ended $1.69 lower at $58.00/barrel
- Natural gas futures ended the day flat at $2.63/MMBtu
- Metals ended lower today
- Aug gold fell $9.30 to $1175.20/oz, while July silver lost $0.36 to $16.11/oz
- Copper fell $0.04 to $2.69/lb today
1:03 pm Cree to recall ~700k LED T8 Lamps due to a burn hazard ( CREE) : The recall notes that electrical arcing may cause the lamp to overheat and melt, posing a burn hazard.
12:17 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (105) outpacing new lows (97) (:SCANX) : Stocks that traded to 52 week highs: ACET, AGO, ALDR, ALN, AMBA, AMED, AMWD, ASMI, ATTU, ATVI, AUBN, AVID, BANC, BBNK, BF.B, BID, BIO, BKYF, BRLI, CAPX, CATY, CAVM, CBIN, CBPO, CFG, CHE, CIEN, CIVI, COHU, COKE, COLL, COTY, COWN, CRI, CSFL, CSL, CVGW, CYNI, DPLO, DRRX, DSKX, DTV, EBS, EGBN, EGRX, EHIC, ELNK, ENSG, EROS, EXPR, FENX, FEYE, FMS, GDDY, HALO, HILL, ING, IVC, KMPH, LAD, LDRH, LGND, LIFE, LTM, MBTF, MKSI, MMAC, MNTA, MTG, MTSI, NPTN, NVMI, NVO, NVSL, PBHC, PETS, PGTI, PN, PRTA, QCRH, QLGC, RBA, RDI, RELY, RTRX, RXDX, SBCP, SGYP, SIEN, SIMO, STRP, SUPN, SUSQ, TAST, TCX, TI.A, TMUS, TROV, TXMD, UCBA, VISN, VRTU, WD, WOWO, ZION
Stocks that traded to 52 week lows: ACST, AGNC, AIQ, AMBR, AVP, AWF, BAX, BBDO, BGR, BIOL, BJZ, BKH, BKK, BOTA, BWG, CBD, CEN, CFNB, CHK, CLUB, CNS, DEJ, EDD, EFC, ESEA, EVA, EVLV, FAX, FCO, FGP, FPT, FTEK, GIFI, GLF, GMCR, HCP, HMY, HWCC, IF, IFT, INF, ISH, ITC, JOUT, LE, LEO, LFL, LUNA, MCF, MILL, MPA, MUI, NAV, NETE, NOR, NQP, NTX, NUM, NXN, OB, OGE, PAI, PDLI, PKX, PTX, RCS, RDS.B, RNO, RSO, SMT, SNH, SRC, SRET, SRF, SRT, SRV, TAC, TAL, TGH, TRMB, TRP, TTM, UCP, VKQ, VMEM, VPV, VRA, WBK, WEA, WHZ, WIA, WIN, WPC, WPG, YLCO, YPRO, ZAZA
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: EWM, IDX |
