From Briefing.com: 4:15 pm : The major averages registered gains across the board, but a three-hour halt of all Nasdaq-listed issues prevented normal trading from taking place throughout the afternoon.
Stocks climbed out of the gate after upbeat survey data from China and the eurozone reassured investors. China's HSBC Manufacturing PMI jumped to 50.1 from 47.7 (48.3 expected) while the eurozone Manufacturing PMI improved to 51.3 from 50.3 (50.8 forecast). In addition, the Services PMI reading rose to 51.0 from 49.8 (50.2 expected).
The economic data provided a boost to growth-sensitive sectors as five of six cyclical groups registered gains larger than 1.0%. The technology sector lagged with an advance of 0.5%. The largest sector component, Apple (AAPL 502.96, +0.60), ended little changed and Dow member Hewlett-Packard (HPQ 22.22, -3.16) endured its worst session in two years, falling 12.5%, after reporting in-line results and saying it is unlikely to experience revenue growth in 2014.
Speaking of technology, the tech-heavy Nasdaq fell victim to an early-afternoon glitch that kept all member shares from trading for three full hours. The impact could be felt across other indices as they drifted inside narrow ranges on thin volume.
Once normal trading resumed during the final hour of the day, the major indices rose to fresh highs. The S&P tested its 50-day moving average, but could not settle above that level.
The energy sector finished atop the leaderboard with a gain of 1.4% as crude oil advanced 1.2% to $105.05 per barrel.
Interestingly, the discretionary sector also finished among the leaders despite weakness in the retail space. Recent quarterly reports from retailers have not reflected very well on consumer spending. That theme remained in effect today as Abercrombie & Fitch (ANF 38.53, -8.27) missed on earnings and revenue while guiding third quarter earnings below analyst expectations. The SPDR S&P Retail ETF (XRT 79.14, +0.12) ended little changed, but the discretionary sector climbed 1.1% with home builders contributing to the strength.
Treasuries registered losses as the benchmark 10-yr yield added nearly five basis point to 2.90%.
Trading volume was well below average with only 573 million shares changing hands on the floor of the NYSE as the afternoon Nasdaq halt took a bite out of activity.
Investors received a handful of economic data today. The initial claims level rose to 336,000 for the week ending August 17 from an upwardly revised 323,000 (from 320,000) for the week ending August 10. The Briefing.com consensus expected the initial claims level to increase to 337,000. The upward move in the initial claims level is likely just normal volatility. Over the past four weeks, moving average for initial claims has dropped to its lowest level since November 2007.
Separately, the Conference Board's Index of Leading Indicators increased 0.6% in July after holding flat in June. That was the strongest increase since increasing 0.8% in April. The Briefing.com consensus expected the index to increase 0.5%.
Since eight of the 10 components of the index are known prior to the release, the difference between the actual number and the consensus is typically minor. In this case, a smaller-than-expected decline in manufacturers' new orders of nondefense capital goods excluding aircraft was the likely cause for the small upside surprise.
Lastly, the June FHFA Housing Price Index rose 0.7% to follow last month's 0.8% increase.
Tomorrow's economic data will be limited to July new home sales with the report set to be released at 10:00 ET.DJ30 +66.19 NASDAQ +38.92 SP500 +14.16 NASDAQ Adv/Vol/Dec 1968/891.7 mln/519 NYSE Adv/Vol/Dec 2576/573.2 mln/480
3:35 pm :
- Oct crude oil lifted off its session low of $103.80 per barrel moments after equities markets opened. It touched a session high of $105.18 per barrel and settled at $104.99 per barrel, or 1.1% higher
- Sep natural gas extended yesterday's gains when a better-than-anticipated inventory build of 57 bcf (consensus called for a build of 66-69 bcf) pushed prices to a session high of $3.56 per MMBtu. It eventually settled with a 2.6% gain at $3.55 per MMBtu
- Dec gold and Sep silver rose to their respective session highs of $1381.40 and $23.33 per ounce after data released this morning showed the initial claims level rose to 336,000 for the week ending Aug 17 from an upwardly revised 323,000 for the week ending Aug 10.
- However, both metals pulled-back as they headed into afternoon floor trade. Gold settled just 60 cents higher at $1370.60 per ounce while closed at $23.03 per ounce, booking a 0.3% gain.
4:14PM Marvell beats by $0.04, beats on revs; guides Q3 EPS in-line, revs above consensus ( MRVL) 12.96 -0.09 : Reports Q2 (Jul) earnings of $0.23 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.19; revenues fell 1.1% year/year to $807.1 mln vs the $791.3 mln consensus.
Co issues in-line EPS guidance for Q3, sees EPS of $0.23-0.27, excluding non-recurring items, vs. $0.24 Capital IQ Consensus Estimate; sees Q3 revs of $850-890 mln vs. $845.23 mln Capital IQ Consensus Estimate.
4:09PM Micros Systems misses by $0.01, beats on revs; guides FY14 EPS in-line, revs in-line ( MCRS) 50.30 +1.03 : Reports Q4 (Jun) earnings of $0.62 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.63; revenues rose 8.6% year/year to $328.6 mln vs the $325.14 mln consensus.
Co issues in-line guidance for FY14, sees EPS of 2.46-2.50, excluding non-recurring items, vs. $2.48 Capital IQ Consensus Estimate; sees FY14 revs of 1.295-1.320 bln vs. $1.31 bln Capital IQ Consensus Estimate.
Large Cap Gainers
- ING (11.61 +5.26%): Heard upgraded to Overweight at Morgan Stanley.
- YHOO (27.8 +2.73%): Co is in talks with Foursquare regarding data partnership, according to reports.
- TSLA (153.74 +3.97%): Initiated with a Hold at Stifel; Bloomberg discussed that TSLA plans to add Europe and Asia factories following increased expectations for demand.
Large Cap Losers - HPQ (22.37 -11.86%): Reported EPS in-line, revs in-line; narrowed FY13 EPS guidance; COO Bill Veghte to become executive vice president and general manager of the HP Enterprise Group; CEO Whitman on conf. call said rev growth was unlikely in FY14.
- LTD (57.91 -3.24%): Beat on EPS by $0.01, reported revs in-line; guided Q3 EPS below consensus; guided FY14 EPS in-line; tgt raised to $50 from $48 at Canaccord Genuity.
- TGT (64.64 -1.31%): Tgt to $75 from $79 at Citigroup and to $71 from $73 at Susquehanna; downgraded to Buy from Strong Buy at ISI Group; downgraded to Underperform from Market Perform at William Blair; downgraded to Neutral from Buy at Janney; tgt lowered to $67 from $72 at Telsey Advisory Group; tgt lowered to $66 at UBS; tgt lowered to $74 at MKM Partners.
Mid Cap Gainers - HAIN (81.63 +11.98%): Beat on EPS by $0.03, beat on revs; guided FY14 EPS above consensus, revs above consensus; announced the appointment of a new CFO with the planned retirement of Ira J. Lamel.
- GME (53.15 +11.61%): Beat on EPS by $0.05, beat on revs; guided Q3 above consensus; raised FY14 guidance; upgraded at Monness, Crespi, Hardt.
- BTU (17.56 +5.85%): Named Glenn Kellow as President and COO; strength in select coal names.
Mid Cap Losers - ANF (38.14 -18.5%): Missed on EPS by $0.12, missed on revs; guided Q3 EPS below consensus; Q2 comps -10%; heard cautious comments at Citigroup and ISI; downgraded to Neutral at Janney; tgt lowered to $40.
- SHLD (39.91 -7.77%): Missed on EPS by $0.34, missed on revs.
- GFI (5.65 -8.13%): Reported a net loss from continuing operations for the June 2013 quarter of $129 mln compared with earnings of $27 mln in the March 2013 quarter and $105 mln in the June 2012 quarter; beat on revs; did not declare dividend; co to acquire Barrick's (ABX) Granny Smith, Lawlers and Darlot gold mines in Western Australia.
12:07PM Nasdaq 100 +22 sets new pullback low, not confirmed ( TECHX) : Earlier noted the AAPL test of its week low/psych level at 500. The recent penetration (session low 498.20) has led to a new pullback low in the Nasdaq 100. However, this has not been confirmed by the Nasdaq Comp with the Dow/S&P firming.
8:03AM SunEdison announces planned separation of its semiconductor business; expects IPO in early 2014 ( SUNE) 6.81 : Co announced that its Board of Directors has unanimously approved an initial public offering of its semiconductor business to create SunEdison Semiconductor, Inc. SunEdison plans to sell a minority ownership interest in the semiconductor business to the public. SunEdison expects to use proceeds from the separation to fund initiatives related to the solar business, to repay existing indebtedness and for general corporate purposes.
SunEdison expects to file a registration statement with the SEC in the third quarter of 2013, with the initial public offering scheduled by early 2014, subject to market conditions. A final decision regarding the amount of interest to be sold to the public at the time of the initial public offering will be determined by SunEdison's Board of Directors at a date to be determined.
07:50 am Hewlett Packard shares fall 6% following in line earnings; CEO says FY14 rev growth unlikely
Hewlett-Packard (HPQ $23.49 -1.89) reported third quarter earnings of $0.86 per share, excluding non-recurring items, which is in line with consensus, while revenues fell 8.2% year/year to $27.23 billion which is line with expectations.
Personal Systems revenue was down 11% YoY with a 3.0% operating margin. Commercial revenue decreased 3% and Consumer revenue declined 22%. Total units were down 8% with Desktops units down 9% and Notebooks units down 14%. Printing revenue declined 4% YoY with a 15.6% operating margin. Total hardware units were up 5% with Commercial hardware units up 12% and Consumer hardware units up 2%. Supplies revenue was down 4%. Enterprise Group revenue declined 9% YoY with a 15.2% operating margin.
Networking revenue was flat, Industry Standard Servers revenue was down 11%, Business Critical Systems revenue was down 26%, Storage revenue was down 10% and Technology Services revenue was down 7%. Enterprise Services revenue declined 9% YoY with a 3.3% operating margin. Application and Business Services revenue was down 11% and Infrastructure Technology Outsourcing revenue declined 7%. Software revenue was up 1% YoY with a 20.5% operating margin. Support revenue was up 4%, license revenue was flat, professional services revenue was down 11% and SaaS revenue was up 4%.
HP Financial Services revenue was down 6% YoY with a 4% decrease in net portfolio assets and a 9% decrease in financing volume. The business delivered an operating margin of 11.3%. The company issued narrowed guidance to EPS of $3.53-3.57 from $3.50-3.60 versus which is in with expectations. The company also announced changes to its executive leadership team that will help the company accelerate its turnaround. Bill Veghte, HP's chief operating officer, will become executive vice president and general manager of the HP Enterprise Group, a role that will now include responsibility for the coordinated development of the company's portfolio of cloud solutions. Dave Donatelli will take on a new role focused on identifying early-stage technologies as he did successfully with 3PAR and 3Com. In a separate organizational move, HP will combine its Marketing and Communications organizations under the leadership of Chief Communications Officer Henry Gomez.
Conference Call Notes:
- From macroeconomic standpoint management sees a continued weak enterprise spending environment, challenges in Europe, and softness in China; also seeing acceleration in shift to the cloud and mobility.
- The company was able to bring cash conversion cycle down to 18 days versus 27 days in the prior year.
- The company lowered operating net debt by $1.7 bln to $1.2 bln; debt is now at pre-Autonomy levels and approaching goal of $0. $3.4 bln U.S. Department of the Navy's Next Generation Enterprise Network contract is being contested, however, the company is confident in the Navy's ultimate selection of HP.
- Management sees continued PC market contraction, but relative strength and market share gains in growth markets such the Asia Pacific. Management reiterated that total company year over year revenue growth in 2014 is unlikely but remains confident in the progress of the turnaround plan.
- The company spent just $3 mln on repurchasing 168k shares during the quarter; material non-public information prevented buybacks; co plans to ramp up spending on repurchases in Q4; ~$8 bln remains of share repurchase authorization.
Semtech (SMTC) reported second quarter earnings of $0.52 per share, which is better than expected, while revenues rose 9.5% year/year to $165.01 million which is line with expectations. The company issued guidance for the third quarter with EPS of $0.31-0.37, excluding non-recurring items, which is below expectations with revenues of sees Q3 revs of $135-145 million which is below expectations. "We expect our Q3 results to be negatively impacted by both a reduction in demand and inventory corrections at several of our largest smartphone customers. We anticipate that this weakness will continue through most of the second half. However, we remain confident in our ability to manage through any short term demand fluctuations as we head towards our $1 billion revenue goal.
Synopsys (SNPS) reported third quarter earnings of $0.55 per share, excluding non-recurring items,which is better than expected, while revenues rose 8.8% year/year to $482.9 million which is line with estimates. The company issued guidance for the fourth quarter of $0.54-0.56, excluding non-recurring items, which is line with consensus and revenues of $500-510 million which is below expectations.
Advances & Declines
NYSE NASDAQ | Advances | 3,292 (79%) | 1,953 (77%) | | Declines | 800 (19%) | 520 (20%) | | Unchanged | 89 (2%) | 74 (3%) | | Up Vol* | 2,247 (80%) | 741 (81%) | | Down Vol* | 509 (18%) | 163 (18%) | | Unch. Vol* | 44 (2%) | 6 (1%) | | New Hi's | 100 | 109 | | New Lo's | 187 | 37 |
*in millions
more...
|
