From Briefing.com: What was lost on Tuesday was mostly made up on Wednesday as the major indices bounced back quickly from the prior day's selling interest in another patented buy-the-dip effort.
The Nasdaq Composite for its part made up all of Tuesday's 57-point decline and then some, rallying 74 points on the back of strength in large-cap components and a soaring semiconductor group. The latter was sent flying (and left short sellers reeling) by media reports suggesting Avago Technologies (AVGO 141.49, +10.20, +7.8%) may be close to acquiring Broadcom (BRCM 57.13, +10.07, +21.4%).
The Philadelphia Semiconductor Index rose as much as 4.2% before settling the day with a 3.9% gain. Every component in the index advanced on Wednesday. SunEdison (SUNE 30.68, +0.40, +1.3%), which gained "only" 1.3%, was the laggard of the bunch.
The S&P 500 information technology sector (+1.8%) paced Wednesday's turnaround effort, driven by gains in all but three of its 66 components. The outcasts were F5 Networks (FFIV 125.96, -0.12, -0.1%), Motorola Solutions (MSI 59.06, -0.05, -0.1%), and Western Union (WU 22.19, -0.05, -0.2%).
Notable news items from sector components included the following:
Broadcom (BRCM 57.13, +10.07, +21.4%): The Wall Street Journal reported the company is in advanced talks to be acquired by Avago Technologies (AVGO 141.49, +10.20, +7.8%)
Facebook (FB 80.55, +1.22, +1.5%): Oculus unit confirmed acquisition of Surreal Vision
IBM (IBM 172.00, +1.87, +1.2%): Company and Woodside announced they will use IBM Watson as part of the oil and gas company's next steps in data science. The cognitive computing system will be trained by Woodside engineers, enabling users to surface evidence-weighted insights from large volumes of unstructured and historical data contained in project reports
Qualcomm (QCOM 71.02, +1.66, +2.4%): At Cowen Conference, said it is confident Snapdragon can win back OEM -- Samsung after it was not in GS6 -- and that it is more of a product cycle issue
Texas Instruments (TXN 55.97, +1.41, +2.6%): At the Sanford Bernstein Conference, management highlighted that it will continue its focus on Free Cash Flow (FCF)/share enhancement as a metric for delivering shareholder value and said it will focus in the intermediate term on expanding and enhancing its Analog and Embedded processing businesses. Executive commented that current FCF yield outweighs the potential FCF benefit from a lot of current acquisition opportunities
Elsewhere in the technology space:
Atmel (ATML 8.85, +0.18, +2.0%): CEO sold 1.5 mln shares at $8.73 worth ~$13.1 mln
Ericsson (ERIC 11.10, 0.00, 0.0%): A Bloomberg article discussed that Ericsson is open to larger M&A deals. A Bernstein analyst out of London, who was quoted in the article, suggested Juniper Networks (JNPR 27.81, +0.83, +3.1%) or Ciena (CIEN 23.76, +0.60, +2.6%) could be good fits for Ericsson.
STMicroelectronics (STM 8.29, +0.27, +3.4%): Announced that its STiC2BB+STiC2PA home-networking reference design has received the MoCA 2.0 interoperability certificate
Twitter (TWTR 36.41, -0.10, -0.3%): Reuters reported that Twitter is still pitching Chinese companies to buy advertising space even though Twitter itself is blocked in China
VMware (VMW 86.54, -0.30, -0.4%): Director sold 271,757 shares at $87.2-87.54 worth ~$23.7 mln
Analyst Action:
Computer Sciences (CSC 69.21, +1.73, +2.6%): upgraded to Outperform from Market Perform at Wells Fargo
eBay (EBAY 59.38, +0.66, +1.1%): initiated with a Buy at Topeka Capital Markets; $68 target
Yahoo! (YHOO 43.38, +0.53, +1.2%): downgraded to Hold from Buy at Evercore ISI; target to $48 from $55
(Disclosure: Briefing.com has a business relationship with Yahoo!)
4:33 pm Semtech (halted) misses by $0.01, misses on revs; guides Q2 below consensus -- increases buyback to $100 mln -- will resume trade at 17:00 ( SMTC) :
Reports Q1 (Apr) earnings of $0.27 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.28; revenues fell 2.1% year/year to $130.1 mln vs the $132.41 mln consensus.Co issues downside guidance for Q2, sees EPS of $0.21-0.26, excluding non-recurring items, vs. $0.36 Capital IQ Consensus; sees Q2 revs of $120-130 mln vs. $140.76 mln Capital IQ Consensus. "We saw strong demand from our enterprise computing and communication end-markets driven by the datacenter and PON market segments. However, demand from our largest smartphone customer was much lower than anticipated, leading to results that were at the lower end of our guidance range."Co also announced that its Board of Directors approved an increase of the existing stock repurchase authorization to $100.0 million. Prior to the increase, the Company had ~$30.0 million remaining from the authorization that was expanded in November 2014.
4:15 pm : The major averages enjoyed a daylong rally on Wednesday that helped the S&P 500 (+0.9%) narrow its week-to-date decline to just 0.1%. Meanwhile, the Nasdaq Composite (+1.5%) closed at a fresh record high (5,106.59) and turned its weekly decline into a 0.3% advance for the week.
Equity indices began the session with modest gains and enjoyed an early surge amid reports that Greek officials and Eurogroup members have started crafting a staff-level agreement to secure funds for the country. However, those reports were refuted during the next hour with Bloomberg citing a Eurogroup official as saying the two sides have yet to begin working on a joint statement.
Strikingly, the stock market all but ignored the prompt refutation and continued rising into the afternoon with the technology sector (+1.8%) pacing the move.
The top-weighted tech sector enjoyed broad-based support from large cap components like Apple (AAPL 132.04, +2.42), Google (GOOGL 554.25, +7.06), and Microsoft (MSFT 47.61, +1.02) while chipmakers stole the show. To that point, the PHLX Semiconductor Index surged 3.9% after it was reported that Avago (AVGO 141.49, +10.19) is in advanced talks to acquire Broadcom (BRCM 57.13, +10.21). Shares of AVGO jumped 7.8% while Broadcom soared 21.8%.
Similar to technology, eight of the remaining nine sectors posted gains, but only financials (+0.9%) and health care (+1.1%) finished in-line with or ahead of the broader market. The growth-sensitive financial sector enjoyed broad support and extended its May gain to 2.7% while health care was boosted by biotechnology with iShares Nasdaq Biotechnology ETF (IBB 366.96, +6.66) climbing 1.9%.
Elsewhere, the consumer discretionary sector (+0.7%) finished not far behind the broader market after a few of its components reported earnings. Jeweler Tiffany & Co (TIF 94.54, +9.01) surged 10.5% following better than expected results while Michael Kors (KORS 45.93, -14.66) plunged 24.2% after reporting a one-cent miss and guiding Q1 results below analyst expectations. Also of note, homebuilder Toll Brothers (TOL 36.16, -0.83) lost 2.2% after reporting a two-cent beat on light revenue and narrowing its guidance.
On the downside, the energy sector (-0.1%) lagged throughout the session as crude oil struggled, falling 0.8% to $57.57/bbl.
Treasuries slumped to lows in reaction to the early report suggesting a Greek deal is near, but they reclaimed their losses as the session wore on. As a result, the 10-yr yield ended flat at 2.14%.
Today's participation was roughly in-line with last week's totals as 707 million shares changed hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which fell 1.6% to follow last week's 1.5% decline.
Tomorrow, weekly Initial Claims (Briefing.com consensus 274K) will be released at 8:30 ET while April Pending Home Sales (consensus 1.0%) will be reported at 10:00 ET.
- Nasdaq Composite +7.8% YTD
- Russell 2000 +4.1% YTD
- S&P 500 +3.1% YTD
- Dow Jones Industrial Average +1.9% YTD
DJ30 +121.45 NASDAQ +73.84 SP500 +19.28 NASDAQ Adv/Vol/Dec 2004/1.68 bln/842 NYSE Adv/Vol/Dec 2254/706.6 mln/815 3:30 pm :
- The dollar index is trading lower from yesterday's levels, after an early AM rally failed to hold its gains.
- The index traded as high as 97.80 during the day, but is now down near 97.38
- Crude oil saw moderate selling pressure throughout afternoon trading and into the close, largely reflecting sentiment regarding tomorrow's EIA supply data release
- The July contract settled at -0.8% to $57.57/barrel
- Natural gas traded in a narrow range following a pullback from mid-morning gains (as high as $2.92) to close $0.01 lower at $2.83/MMBtu
- Silver closed modestly lower by -0.5% to $16.66/oz while June gold ended flat at $1185.70/oz
- July copper ended the session $0.01 lower to $2.77/oz
11:32 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (82) outpacing new highs (71) (:SCANX) : Stocks that traded to 52 week highs: ACHC, AGO, AHS, ALDR, ALN, AMBA, AMED, AOS, ARKR, AVY, BFAM, BLUE, BSQR, CBPO, CDNS, CIEN, CYNI, CYT, DE, DPLO, DRC, DXJS, EGRX, FOMX, FSI, FSL, GGAC, GS, GT, GTN, GTN.A, GTT, HALO, HNT, HSP, HZNP, IDTI, JNPR, KTWO, LBTYA, LMBS, LO, LOGI, LPX, LYV, MFG, MGA, MMAC, MOH, MOMO, MSBF, NPTN, NXPI, ORBK, OZRK, PMC, RENN, RTRX, SIEN, STRP, STRZA, SUM, TCX, TECH, UHS, VIAS, WIFI, WWAV, XLS, ZSPH, ZTS
Stocks that traded to 52 week lows: AAME, ACI, ANR, ARAY, ARCI, ARO, AVH, AXE, BBDO, BLT, BOOM, BTU, BWG, CBD, CECO, CENX, CEQP, CLTX, CLUB, CPA, CPST, CSTM, CUR, DAVE, DGSE, DOM, EGP, ELRC, ENZ, FAX, FOSL, FREE, FXEN, GBIM, GGB, GIFI, HGT, HK, HMY, ICAD, IHC, INF, INVT, IO, IPDN, KEYW, KORS, MCF, MHG, MIND, MLHR, MNI, MRIN, NAV, NDLS, NGD, NNVC, NRP, NSC, NURO, OMEX, PLPC, PNX, REXI, RFP, RNWK, STB, TC, TDC, TGH, TPUB, TRIV, TRMB, VIV, VNCE, VRS, WPG, WTW, WYNN, YPRO, YRCW, ZQK
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: DBA, FXY, JJA, JO, RJA |
