| | | From Briefing.com: It was another thinly-traded session to begin the week, yet that didn't stop the major indices from posting modest gains.
A pickup in selling interest in the final hour curtailed the day's gains, which ramped up in mid-morning action following a test and successful defense of the S&P 500's 50-day exponential moving average in the 2104/2101 area. That test came after some stronger than expected data for construction spending and the ISM Index that overshadowed a disappointing Personal Income and Spending report for April.
There were only two sectors that ended the day lower -- telecommunication services (-0.5%) and energy (-0.2%) -- yet there wasn't a single sector that finished up or down more than 0.5%.
The S&P 500 information technology sector (+0.3%) outperformed the S&P 500 (+0.2%) by a slim margin with M&A activity underpinning things. To that end, last week's speculation that Intel (INTC 33.91, -0.56, -1.6%) was close to acquiring Altera (ALTR 51.68, +2.83, +5.8%) was confirmed today with Intel announcing a $16.7 billion all-cash offer to acquire Altera.
Notable news items from sector components included the following:
CA, Inc. (CA 30.13, -0.32, -1.1%): Announced appointment of Otto Berkes as Chief Technology Officer, effective June 15, 2015. Berkes most recently served as the chief technology officer at HBO.
Corning (GLW 20.88, -0.04, -0.2%): Announced the availability of Corning Lotus NXT Glass, its third-generation glass composition for high-performance displays.
Cisco Systems (CSCO 29.20, -0.11, -0.4%): Announced Presidents Rob Lloyd and Gary Moore will be leaving Cisco. Chuck Robbins discussed the leadership transition, saying, "Today I am announcing that at the end of this fiscal year, Rob and Gary will be leaving Cisco. They will remain in their President roles until July 25th. Going forward, we will move to a flatter leadership team designed for the speed, innovation and execution that is required of us over the next decade....Looking ahead, I will announce my next generation organizational structure and my leadership team within two weeks. This simplified structure will allow us to move with speed to accelerate our innovation and help our customers transform in the digital age."
Cognizant Tech (CTSH 65.41, +0.69, +1.1%): Vice Chairman sold 100K shares at $64.42-64.75 worth ~$6.5 mln.
IBM (IBM 170.18, +0.53, +0.3%): Announced that Tata Sky, an Indian broadcast satellite television provider, has selected its MobileFirst Platform for launching mobile offerings in India.
Intel (INTC 33.91, -0.55, -1.6%): Confirmed it will acquire Altera (ALTR 51.69, +2.84, +5.8%) for $54 per share in an all-cash transaction valued at approximately $16.7 billion. Altera will become an Intel business unit to facilitate continuity of existing and new customer sales and support. Intel plans to continue support and development for Altera's ARM-based and power management product lines. The transaction is expected to be accretive to Intel's non-GAAP EPS and free cash flow in the first year after close. Intel intends to fund the acquisition, which is expected to close within six to nine months, with a combination of cash from the balance sheet and debt.
Microsoft (MSFT 47.24, +0.38, +0.8%): Announced that Windows 10 will be available July 29 in 190 countries.
Nvidia (NVDA 22.38, +0.25, +1.1%): Reuters reports that Nvidia said it expects its cloud computing revenue to hit $1 billion in the next two to three years.
Qualcomm (QCOM 69.41, -0.27, -0.4%): Subsidiary Qualcomm Technologies announces that its Qualcomm Snapdragon 810 processor will power Google's next-gen Project Tango smartphone development platform.
SanDisk (SNDK 68.24, -0.14, -0.2%): Launched two new, USB 3.0 flash drives -- the 128GB SanDisk Ultra Fit USB 3.0 Flash Drive, the world's smallest USB 3.0; and the 256GB SanDisk Ultra USB 3.0 Flash Drive, SanDisk's highest capacity USB flash drive to-date. Company also entered the portable SSD market with a family of high-performance drives, including the SanDisk Extreme 900 Portable SSDs.
Total System (TSS 41.18, -0.02, -0.1%): Sr EVP and CIO sold 103,992 shares at $41.12-41.35 worth ~$4.3 mln.
Elsewhere in the technology space:
Alibaba Group (BABA 90.75, +1.43, +1.6%): Want China Times reports that Alibaba is going to sell Japanese cosmetics and other goods on Tmall beginning this summer through a collaboration with Yahoo Japan.
Blackberry (BBRY 9.51, -0.29, -3.0%): BlackBerry and Typo Products LLC, Typo Innovations LLC, Show Media LLC, Hallier Investments LLC, and Laurence Hallier have settled their outstanding legal disputes. As part of the settlement, Typo Products LLC, Typo Innovations LLC, Show Media LLC, Hallier Investments LLC, and Laurence Hallier have agreed to permanently discontinue selling anywhere in the world keyboards for smartphones and mobile devices with a screen size of less than 7.9 inches. Typo Products LLC, Typo Innovations LLC, Show Media LLC, Hallier Investments LLC, and Laurence Hallier may continue to sell keyboards for devices with a screen size of 7.9 inches or larger. Other terms of the settlement are confidential.
Infineon (IFNNY 13.07, -0.03, -0.2%): Bloomberg reported that Infineon said it has developed a radar sensor semiconductor and that it is working with Google to use the chip in applications for the Internet of things that includes wearables or automotive safety.
Integrated Silicon (ISSI 20.70, +0.18, +0.9%): After reviewing the revised Cypress (CY 13.82, +0.09, +0.7%) offer (including the Cypress comments to the merger agreement draft provided by ISSI on May 21, 2015) with its financial and legal advisors, ISSI remains concerned about the ability of Cypress to finance the approximately $680 million purchase price with only approximately $157 million in cash and cash equivalents and ~$494 million in debt on its balance sheet at March 31, 2015. ISSI has previously asked Cypress to provide it with a financing commitment letter to support the proposed purchase price. However, Cypress has not provided such letter. This letter is necessary for due diligence purposes so that ISSI can have customary assurances that the purchase price can be paid by Cypress. A letter sent to the ISSI board by Cypress said, "the Merger Agreement does not contain any financing conditions and includes a representation and warranty by Cypress that it will have all the funds available as and when needed to consummate the merger." As originally announced on March 12, 2015, ISSI continues to expect to close the transaction with Uphill in the third calendar quarter of 2015.
Lattice Semi (LSCC 6.46, +0.20, +3.2%): Subsidiary SiBEAM, Inc announces that Google ATAP has selected it as a partner for integrating touchless gesture sensing to smart devices.
Lexmark (LXK 45.65, -0.33, -0.7%): EVP sold 48K shares at $46.03-46.13 worth ~$2.2 mln.
SINA (SINA 50.21, +9.48, +23.3%): Company announced that it has entered into a legally binding subscription agreement with Mr. Charles Chao, Chairman of SINA's board of directors and Chief Executive Officer, for the issuance and sale of 11,000,000 newly issued ordinary shares of the Company to Mr. Chao. Pursuant to the agreement, Mr. Chao will subscribe for and purchase directly or through a special purpose vehicle beneficially owned and controlled by him, 11,000,000 newly issued ordinary shares of SINA for a total purchase price of approximately US$456 million in cash. Mr. Chao has agreed to subject all the shares he or his affiliate will acquire in the transaction to a contractual lock-up restriction for six months after the closing.
Unisys (UIS 20.57, +0.03, +0.1%): Named Tarek El-Sadany as SVP of Technology and Chief Technology Officer. El-Sadany was most recently vice president of Global Product Support Services for Oracle Corporation.
Analyst Action:
Altera (ALTR 51.68, +2.83, +5.8%): target raised to $54 from $52 at FBR Capital... target raised to $54 from $42 at Topeka Capital Markets
CA Tech (CA 30.13, -0.32, -1.1%): downgraded to Sell from Neutral at Citigroup
F5 Networks (FFIV 125.11, -0.58, -0.5%) downgraded to Neutral from Buy at Citigroup
Juniper Networks (JNPR 27.06, -0.74, -2.7%): downgraded to Sell from Neutral at MKM Partners; target $22
Xilinx (XLNX 48.33, +0.91, +1.9%): upgraded to Strong Buy from Market Perform at Raymond James
4:10 pm : The stock market began June on a modestly higher note with the S&P 500 adding 0.2%.
Index futures spiked just before 7:00 ET, reacting to chatter that a deal between Greece and its creditors will be announced today. That rumor was struck down within 15 minutes of making the rounds, but equity futures did not retrace that morning spike until the cash market opened for action.
The major averages returned to their flat lines once the cash session began, but persistent relative strength among influential groups like health care (+0.4%), technology (+0.3%), consumer discretionary (+0.3%), and industrials (+0.4%) helped the market climb to a fresh high during the afternoon. However, it is worth noting that the Monday advance occurred amid light volume with just 665 million shares changing hands at the NYSE floor. As for Greece, the country is expected to be presented with a final proposal prepared by leaders from France, Germany, and the EU.
Eight sectors registered gains with industrials (+0.4%) ending atop the leaderboard thanks to a rebound in transport stocks. The Dow Jones Transportation Average rallied 1.1% with airlines pacing the move after the Chief Executive Officer of Southwest Airlines (LUV 37.85, +0.88) said the company plans to limit its seat capacity growth. Shares of LUV gained 2.4% while the Dow Jones Transportation Average narrowed its Q2 decline to 4.0%.
Elsewhere among cyclical sectors, consumer discretionary (+0.3%) and technology (+0.3%) also displayed relative strength with M&A activity underpinning the tech sector. Specifically, Altera (ALTR 51.68, +2.83) spiked 5.8% after agreeing to be acquired by Intel (INTC 33.90, -0.55) for $54/share in an all-cash transaction valued at $16.70 billion.
Overall, four of six cyclical sectors ended in-line with or ahead of the S&P 500 while energy (-0.2%) and materials (unch) struggled to keep pace. The energy sector was pressured in the early going by weakness in crude, but the sector narrowed its loss as the energy component also recovered its intraday decline, settling at $60.24/bbl.
Moving to the countercyclical side, consumer staples (unch) and telecom services (-0.5%) lagged throughout the session while health care (+0.4%) and utilities (+0.2%) registered gains. The health care sector finished among the leaders even as biotechnology spent the day among the laggards. The iShares Nasdaq Biotechnology ETF (IBB 364.81, -0.22) shed 0.1%.
Treasuries spent the day in a steady decline, sending the 10-yr yield higher by five basis points to 2.18%.
Economic data included Personal Income/Spending data, Core PCE Prices, Construction Spending, and the ISM Index:
- Personal income increased 0.4% in April after being flat in March while the Briefing.com Consensus expected an increase of 0.3%
- According to the wage data from the April employment report, aggregate earnings increased roughly 0.3%, which translated into a 0.2% increase in total employee compensation
- Personal spending was flat in April after increasing an upwardly revised 0.5% (from 0.4%) in March while the consensus expected an increase of 0.2%
- Core PCE prices rose 0.1% while the Briefing.com consensus expected a reading of 0.2%
- Construction spending increased 2.2% in April after increasing an upwardly revised 0.5% (from -0.6%) in March while the Briefing.com consensus expected an increase of 0.8%
- That was the largest monthly increase in construction spending since a similar gain in May 2012
- The ISM Manufacturing Index increased to 52.8 in May from 51.5 in April while the consensus expected an increase to 51.9
- Despite poor regional manufacturing reports, the national index showed a fairly well rounded acceleration in manufacturing activities
Tomorrow, the Factory Orders report for April (Briefing.com consensus 0.0%) will be released at 10:00 ET.
- Nasdaq Composite +7.3% YTD
- Russell 2000 +3.8% YTD
- S&P 500 +2.6% YTD
- Dow Jones Industrial Average +1.2% YTD
DJ30 +29.69 NASDAQ +12.90 SP500 +4.34 NASDAQ Adv/Vol/Dec 1432/1.77 bln/1437 NYSE Adv/Vol/Dec 1638/664.6 mln/1428 3:35 pm :
- WTI crude oil futures recovered in afternoon trade to erase most of its losses.
- July crude ended today's session $0.02 lower at $60.24/barrel.
- July nat gas gained $0.02 to $2.65/MMBtu
- Precious metals lost steam following this morning's econ-driven surge
- Aug gold ended today's session $1.60 lower to $1188.50/oz, while July silver fell $0.01 to $16.70/oz
- Copper fell $0.01 today to $2.72/lb
- Wheat futures surged higher today, closing 4% higher to $4.95/bushel ahead of the weekly USDA crop progress report
1:17 pm 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
ALTR (51.81 +6.06%): Finally confirmed reports it would be acquired by Intel (INTC) for $54/share, or ~$16.7 bln.
BMY (66.97 +3.67%): Rebounding from Friday's steep decline on the heels of further updated trials results; co also announced FDA acceptance of the BLA for Opdivo +Yervoy regimen, in patients with previously untreated advanced melanoma.
LNKD (201.95 +3.6%): Outperforming following renewed activist chatter.
Large Cap Losers
JNPR (26.97 -2.99%): Downgraded to Sell from Neutral at MKM Partners; tgt $22.
BRCM (55.77 -1.9%): Pulling back following confirmation of Intel (INTC)/Altera (ALTR) deal; some had speculated Intel may offer a competing bid for Broadcom following last week's announcement it would be acquired by Avago Tech (AVGO).
MGM (19.63 -2.09%): Casino names underperforming following data out of Macau that gross gaming revenues fell 37% y/y.
Mid Cap Gainers
SINA (50.69 +24.45%): Announced an agreement with its Chairman and CEO for a $456 mln investment in the form of newly issued shares.
GPRO (58.44 +5.37%): Announced the availability of its new HERO+ LCD camera, which features a touch screen display.
SF (54.86 +3%): Reports out it is in talks to purchase Barclay's (BCS) wealth management division.
Mid Cap Losers
ENBL (16.8 -5.62%): Announced that Lynn Bourdon has submitted his resignation and stepped down from his positions as President and CEO.
SHAK (78.89 -4.73%): Continued weakness following an additional cautious mention on Mad Money; shares down 18% since 5/22.
BBRY (9.48 -3.27%): Announced a settlement with Typo to resolve their outstanding litigation.
11:52 am Market View: Telecom- IYZ -0.90% & Materials- XLB -0.50% the weakest SPX large-cap sector ETFs approaching midday here with SPX now @ 2107.53 +0.16 (:TECHX) :
11:49 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (124) outpacing new lows (110) (:SCANX) : Stocks that traded to 52 week highs: ABCD, ADXS, AEC, AFSI, AGEN, ALN, ALTR, AMAG, AMCN, AMED, AOS, APTS, ATRC, AVGO, BCV, BFAM, BOOT, BSTC, CAPX, CBIN, CBPO, CBS.A, CE, CHE, CIVI, CLCD, CNC, COHU, COKE, CORI, CPK, CSGS, CVBF, DRC, DXPS, EBAY, EBS, EGRX, EMKR, EPAM, EQIX, ERN, FEYE, FNFV, FONE, FSI, FSL, FTAI, GLOB, GSBD, GTN, HALO, HOLX, HRTX, HSP, IACI, IDCC, IMGN, INCY, INFN, INNL, ISSI, IVC, LYTS, MDLZ, MFG, MKSI, MLVF, MMI, MNTA, MSBF, NEP, NPTN, NVEE, NVMI, NXPI, NYCB, OMCL, OMG, ON, ONTY, OPK, PANW, PAY, PBCT, PFSW, PHH, PN, PPO, PRAH, QCRH, QLGC, RENN, RPTP, RTRX, RXDX, SAGE, SAL, SBCP, SBUX, SEIC, SGU, SHLX, SIMO, SLAB, SMFG, SNPS, SOXX, SPR, SSNI, STRP, SUPN, SWKS, TCX, TMUS, TTMI, TW, TXTR, UEC, UEPS, UUU, VIMC, YLCO, ZTS
Stocks that traded to 52 week lows: AA, AHC, AMBR, ANR, ARO, ASM, AVH, AVP, AXE, BIOS, BLT, BOOM, BOXC, BTU, BWINB, CCG, CEN, CENX, CKP, CLD, CLUB, CNS, CNW, CP, CPA, CRD.B, CTCM, CTL, CUR, CVSL, CZR, CZZ, DEJ, DOM, EDD, EQGP, ERJ, ESEA, ESIO, EVLV, FAX, FCO, FHCO, FPO, FSNN, GALT, GGB, GMCR, HART, HGG, HGT, HNRG, HWCC, ICAD, INF, INVE, IO, KIQ, KSU, LF, LL, MCF, MFV, MIND, MNI, MTRX, MXWL, NATH, NAV, NCS, NETE, NOR, NRP, NSC, NSPH, NVET, OFG, PGND, POT, PPSI, PQ, PRI, PSB, QUIK, QUMU, RBCN, RDS.B, REXI, RNO, RNWK, SHLO, SJT, SMRT, SMT, STB, SYX, TGH, TNC, TRCO, TRIV, TRMB, VKTX, VNCE, WILC, WPG, WTW, WYNN, YLCO, YRCW, ZQK
ETFs that traded to 52 week highs: SMH, SOXX
ETFs that traded to 52 week lows: EWM, FXY, JJG, KOL
8:31 am Altera confirms it will be acquired by Intel ( INTC) for $54 per share in an all-cash transaction valued at ~$16.7 bln (shares halted) ( ALTR) : Intel (INTC) confirmed it would acquire Altera for $54 per share in an all-cash transaction valued at approximately $16.7 billion.
Altera will become an Intel business unit to facilitate continuity of existing and new customer sales and support. Intel plans to continue support and development for Altera's ARM-based and power management product lines. The transaction is expected to be accretive to Intel's non-GAAP EPS and free cash flow in the first year after close. Intel intends to fund the acquisition, which is expected to close within six to nine months, with a combination of cash from the balance sheet and debt. Rumor/Smumor - Eating Crow now... RtS |
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