From Briefing.com: The broader market closed the Wednesday session split. The notable outperformer was the Nasdaq Composite, which added 14.83 points (+0.35%) today to close 4283.59. The S&P 500 was lower by less than one point (-0.02%) to 1851.86. The Dow Jones Industrial Average shed 99.64 points (-0.62%) today to close 15914.74 as March Crude Oil futures closed down -1.6% to $27.54/barrel following today's EIA storage data. Today's action was most notably to the upside, but gains did not hold as highs of the day from just after 10 a.m. ET slowly peeled off as the session progressed.
About an hour into the session, Fed Chair Janet Yellen began her semiannual monetary policy report before the House Financial Services Committee. Briefly, the takeaway from Ms. Yellen's testimony sounded like Ms. Yellen was open to taking a pass on raising the fed funds rate in March, but that she was not willing to concede anything past that meeting because more time and data need to pass to help the Fed gain a better feel for the effects on the U.S. economy of the recent tightening in financial conditions and foreign economic developments.
Also today, the January Treasury Budget showed a surplus of $55.2 billion versus a deficit of $17.5 billion for the same period a year ago. The Treasury data are not seasonally adjusted, so the January surplus cannot be compared to the December deficit of $14.4 billion.
Technology (XLK 38.87, +0.12 +0.31%) was also higher when the day was done as component Akamai Tech (AKAM 47.96, +8.39 +21.20%) reported better than expected Q4 results and announced a $1 billion share buyback program. Other sectors finished the day XLV +0.89%, IYZ +0.34%, XLU -0.11%, XLP -0.12%, XLY -0.17%, XLE -0.41%, XLI -0.48%, XLF -0.54%, XLB -0.95% as Materials were the worst performing sector and Healthcare led the way higher.
Cloud Computing (SKYY 25.38, +0.61 +2.46%) names were among the best performing today as component Open Text (OTEX 47.01, +4.16 +9.71%) reported better than expected Q2 results. Other SKYY components which displayed strength included ZNGA +4.93%, ATVI +4.65%, RHT +3.15%, EQIX +3.13%, TDC +2.83%, NFLX +2.69%.
In the end, the S&P 500 Information Technology sector (638.45, +2.27 +0.36%) was modestly higher as the entire session was spent in the green. A notable underperformer in the sector today was component Computer Sciences (CSC 27.72, -3.08 -10.00%) which reported a mixed Q3 print. The company beat on the bottom line, but missed on the top line of expectations. Other components which displayed relative strength in line with the broader sector were V +2.87%, ADS +2.81%, STX +2.65%, ADSK +2.53%, CRM +2.49%, ADBE +2.27%, CTSH +1.89%, TEL +1.66%, MA +1.63%, VRSN +1.61%, EMC +1.57%, NTAP +1.54%, FB +1.47%.
Other notable news items among sector components:
Western Union (WU 17.01, +0.01 +0.06%) increased its quarterly dividend to $0.16 per share from $0.155 per share.
Corning (GLW 18.14, -0.33 -1.79%) and Altechna R&D (Workshop of Photonics) announced effective Feb. 4, 2016, they have entered into a joint development agreement to develop new laser glass processing technologies.
On the company's earnings conference call, Akamai Tech (AKAM) CEO stated he intends to enter into purchase plans to purchase $10 million worth of stock over the next six month.AKAM also announced a $1 billion share repurchase program, and the re-alignment of the company's current products and development organization and global sales, channels and marketing teams into two divisions to focus on the company's Media and Web customers and solutions.RSA has extended its relationship with Accenture (ACN 94.21, +0.98 +1.05%), selecting the company as its preferred supplier for insurance business process outsourcing (BPO) services for an additional six years to 2021.
On the company's blog, Microsoft (MSFT 49.71, +0.43 +0.87%) announced it acquired iOS music app Groove.
Elsewhere in the tech space:
Zayo Group Holdings (ZAYO 22.98, +1.09 +4.98%) was awarded a $15.6 million, 12-year contract by the City of Fort Worth to provide a dark fiber solution to upgrade its municipal network.
Time Warner (TWX 60.07, -3.14 -4.97%) increased its quarterly dividend to $0.4025 per share from $0.35 per share.- TWX also announced a $5 billion share repurchase program.
Tucows (TCX 19.96, +1.52 +8.24%) announced a $40 million share buyback.
Wix.com (WIX 17.85, +2.00 +12.62%) to separate the positions of Chairman and CEO.
FXCM (FXCM 9.96, -0.04 -0.40%) reported January trading metrics. Retail customer trading volume was $331 billion, down 13% year-over-year.
In reaction to quarterly results:
Walt Disney (DIS 88.82, -3.59 -3.88%) reported better than expected Q1 results with EPS of $1.63 and revenues which rose 13.8% year-over-year to $15.24 billion. Media Networks revenues increased 8% to $6.3 billion, Cable Networks revenues were up 9% to $4.5 billion, Broadcasting revenues were up 7% to $1.8 billion, Parks and Resorts revenues were up 9% to $4.3 billion, Studio Entertainment revenues were up 46% to $2.7 billion and Consumer Products and Interactive Media revenues were up 8% to $1.9 billion.
Time Warner (TWX) reported better than expected Q4 EPS of $1.06 on worse than expected revenues which fell 5.9% year-over-year to $7.08 billion. The company also guided FY16 EPS better than expected at $5.30-5.40 (up from $5.25 previously).
ARM Holdings (ARMH 37.74, -3.65 -8.82%) reported in-line Q4 EPS of GBP0.08 on better than expected revenues of GBP269.1 million.
Western Union (WU) reported better than expected Q4 EPS of $0.42 on worse than expected revenues which also fell 2.1% year-over-year to $1.38 billion. The company also guided FY16 EPS in-line at $1.58-1.70 and expects low to mid-single digit constant currency revenue increase.
Akamai Tech (AKAM) reported better than expected Q4 EPS and revenues of $0.72 and $579.16 million, respectively. The company also guided Q1 EPS and revenues in-line at $0.61-0.64 and $554-570 million, respectively.
Trimble Navigation (TRMB 21.38, +2.56 +13.60%) reported better than expected Q4 EPS and revenues of $0.27 and $559.7 million, respectively. The company also guided Q1 EPS and revenues in-line at $0.25-0.30 and $565-595 million, respectively.
Open Text (OTEX) reported better than expected Q2 results with EPS of $1.01 and revenues of $465.35 million.
Nuance Communications (NUAN) reported better than expected Q1 EPS of $0.36 on revenues which rose 4.4% year-over-year to $494.9 million.
Computer Sciences (CSC) reported Q3 EPS which was better than expected at $0.71 and worse than expected revenues which fell 10.2% year-over-year to $1.75 billion.
Companies scheduled to report quarterly results tonight/tomorrow morning: APDN BKFS CTL CSCO CGNX CSOD DTRM EXPE FORR HDP HUBS NSIT JCOM LPSN MB MOSY NCIT QUIK RPD TTGT TWTR ZNGA/ALU DBD ETM FLIR LIOX MANU MGI TYPE MWW NTWK NICE NLSN NOK TRI TIME TZOO TRIP VG WWE
Analyst actions:
CRM was upgraded to Buy from Outperform at Credit Agricole,
TRMB was upgraded to Buy from Hold at Needham, PRO and
AKAM were upgraded at Craig Hallum,
TXTR was upgraded to Hold from Sell at The Benchmark Company;
RKUS was downgraded to Neutral from Buy at Sun Trust Rbsn Humphrey,
WU was downgraded to Neutral from Outperform at Macquarie,
KS was downgraded to Hold from Buy at Deutsche Bank
5:10 pm After-hours earnings summary: TSLA +12%, CSCO +8%, TWTR little changed after initially trading lower (:SUMRX) :
Tesla Motors (TSLA) +12% in extended hours after missing Q4 estimates but offering better than feared FY16 guidance, reaffirmed deliveries. TSLA also said it sees net cash flow positive in FY16.Twitter (TWTR) is little changed after initially trading lower by more than 10%, following a mixed quarter and downside guidance. TWTR reported Q4 earnings of $0.16 per share, $0.04 better than the Capital IQ Consensus of $0.12; revenues rose 48.3% year/year to $710.47 mln vs the $710.05 mln Capital IQ Consensus. Q4 Monthly Active Users 320 mln vs. expectations for a slightly higher number, similar to Q3's 324 mln. Cisco Systems (CSCO) is +8% after it beat on the top and bottom lines; guided Q3 EPS in-line, approved $15 billion increase to stock repurchase program. iRobot (IRBT) is lower by 11% after it beat on the top and bottom lines but guided Q1 EPS and revs below consensus, revs below consensus; guides FY16 EPS below consensus, revs below consensus.LifeLock (LOCK) is little changed after it beats by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY16 EPS below consensus, revs below consensus.Skechers USA (SKX) is higher by 8% after it reported EPS in-line, beats on revs; comfortable with Q1 consensus estimates.Whole Foods (WFM) beats by $0.06, reports revs in-line; reaffirms FY16 revs guidance. Expedia (EXPE) is +14% after they missed misses by $0.24, reports revs in-line. Zynga (ZNGA) is -7% reports EPS in-line, revs in-line; guides Q1 EPS in-line, revs below consensus; announces acquisition of Zindagi Games.
4:32 pm Cisco Systems increases qtrly dividend to $0.26 from $0.21/share; increases repurchase program ( CSCO) : Also, as noted in the 16:10 earnings comment, CSCO's BoDs approved a $15 bln increase to the co's stock repurchase authorizationCisco's board had previously authorized up to $97 billion in stock repurchases.
4:10 pm Cisco Systems beats by $0.03, beats on revs; guides Q3 EPS in-line, approves $15 billion increase to stock repurchase program ( CSCO) :
Reports Q2 (Jan) earnings of $0.57 per share, $0.03 better than the Capital IQ Consensus of $0.54; revenues fell 0.1% year/year to $11.93 bln vs the $11.75 bln Capital IQ Consensus.Non-GAAP total gross margin and product gross margin were 64.2% and 63.3%, respectively.Cash Flow from Operating Activities was $3.9 bln, an increase of 36% compared with $2.9 bln for 2Q15.Co approves a $15 bln increase to the authorization of the stock repurchase program. CSCO had previously authorized up to $97 bln in stock repurchases. Co issues in-line guidance for Q3, sees EPS of $0.54-$0.56 vs. $0.55 Capital IQ Consensus Estimate. Sees 1-4% revenue growth, which is normalized to exclude SP Video CPE business.
4:16 pm MoSys reports EPS in-line, beats on revs ( MOSY) :
Reports Q4 (Dec) loss of $0.09 per share, in-line with the single analyst estimate of ($0.09); revenues rose 60.0% year/year to $1.6 mln vs the $1.46 mln two analyst estimate.
4:04 pm iRobot beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY16 EPS below consensus, revs below consensus ( IRBT) :
Reports Q4 (Dec) earnings of $0.60 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.57; revenues rose 29.6% year/year to $206.4 mln vs the $202.89 mln Capital IQ Consensus. Co issues downside guidance for Q1, sees EPS of ($0.03)-$0.04, excluding non-recurring items, vs. $0.29 Capital IQ Consensus Estimate; sees Q1 revs of $125-135 mln vs. $138.16 mln Capital IQ Consensus Estimate. Co issues downside guidance for FY16, sees EPS of $1.20-1.40, excluding non-recurring items, vs. $1.64 Capital IQ Consensus Estimate; sees FY16 revs of $630-642 mln vs. $688.37 mln Capital IQ Consensus Estimate.
4:01 pm QuickLogic reports EPS in-line, misses on revs ( QUIK) :
Reports Q4 (Dec) loss of $0.08 per share, excluding non-recurring items, in-line with the two analyst estimate of ($0.08); revenues fell 36.8% year/year to $3.6 mln vs the $4 mln two analyst estimate.
4:20 pm : The major averages ended Wednesday's affair under heavy selling pressure, which left the Dow Jones Industrial Average and S&P 500 in negative territory when the closing bell rang. The Nasdaq managed a modest gain, yet still gave back a huge chunk of an earlier 101-point gain. Once again, trade centered on troubles inthe oil patch, concerns over global and domestic growth, currency swings, and the future path of the fed funds rate. Today saw limited articulation of that final point as Fed Chair Yellen gave her semiannual monetary policy report before the House Financial Services Committee.
The major averages hit session highs within the first hour of trading but were unable to hold those levels as participants once again showed a propensity to sell into strength. The financial sector, for instance, was an early leader -- and an influential one at that -- as it followed in the footsteps of European banks, which attracted a bargain-hunting bid on Wednesday. Deutsche Bank (DB 16.21, +0.83), which has been under heavy selling presure of late on investor concerns about its financial condition, helped lead that effort. Financials (-0.5%) here, though, were unable to hold their gains and helped precipitate the late-day selling interest.
Oil prices attempted an early rally, climbing above $29.00/bbl after the weekly inventory report from the EIA report showed a draw of 0.754 million barrels. That rally was short-lived though and the commodity soon rolled over. The disappointing price action there after an ostensibly bullish catalyst took some wind out of the stock market's sails. WTI crude settled the day down 1.6% at $27.54/bbl. The S&P 500 energy sector declined 0.5%.
Fed Chair Yellen's testimony was largely a middle-of-the-road presentation as she made it sound as if the Fed is open to holding off on another rate hike at its March meeting; however, she didn't make it sound as if the Fed is willing to concede anything past that meeting. One notable thing she said in the Q&A portion of her testimony was that she doesn't think it will be necessary to cut rates soon, yet she did add the Fed will do what is necessary to achieve its goals.
By and large, the response to Ms. Yellen's presentation was mixed and was reflected in the S&P closing the day relatively flat.
Healthcare (+0.9%) and technology (+0.4%) were the only sectors that were able to end the day with a gain, yet both groups ended the session well off their highs (+2.4% and +1.8%, respectively). The technology group saw leadership from large-cap components like Facebook (FB 101.00, +1.46) and Microsoft (MSFT 49.71, +0.43) while health care could attribute its relative strength to the biotechnology stocks.
The commodity-sensitive materials sector (-1.0%) ended the day with the worst performance.
At their highs of the day, the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 were up 1.2%, 2.4%, and 1.3%, respectively.
There were 1.05 billion shares traded at the NYSE, which was a bit light of the recent average.
Treasuries traded in a narrow range for most of the session, but came on strong in the afternoon and rolled to their best levels of the session as stocks sold off in the final hour of trading. The yield on the 10-yr note dropped four basis points to 1.69%.
Strikingly, the late selling in the equity market took place alongside a strengthening in the Japanese yen. The stronger yen has been problematic for Japanese exporters and has been a catalyst for heavy selling in Japan's stock market this month.
Today's economic data included the weekly MBA Mortgage Index and the Treasury Budget for January:
- Mortgage applications were up 9.3% in the latest week driven by a 16.0% surge in refinancing applications.
- The January Treasury Budget showed a surplus of $55.2 billion versus a deficit of $17.5 billion for the same period a year ago. This Treasury data is not seasonally adjusted, so the January surplus cannot be compared to the December deficit of $14.4 billion.
- Total receipts in January were $313.6 billion while total outlays were $258.4 billion. Receipts were $6.8 billion more than January 2015 receipts while total outlays were $65.9 billion less than January 2015. The 12-month deficit decreased by $72.7 billion to $405.3 billion.
Tomorrow's economic data is limited to the weekly Initial Claims (Briefing.com consensus 280k). Tomorrow will also conclude Fed Chair Yellen's semiannual monetary policy report before the House Financial Services Committee
- Russell 2000 -15.2% YTD
- Nasdaq -14.5% YTD
- S&P 500 --9.4% YTD
- Dow Jones -8.7% YTD
DJ30 -99.64 NASDAQ +14.83 SP500 -0.35 NASDAQ Adv/Vol/Dec 1489/2.147 bln/1415 NYSE Adv/Vol/Dec 1650/1.049 bln/1427
3:40 pm :
- The dollar index has been sliding lower since morning trade and is now in negative territory
- However, commodities such as precious metals are still sitting in the red
- WTI oil prices were a big mover today, surging today above $29/barrel following the weekly EIA storage data
- However, this move was short-lived and Mar crude closed the day -1.6% at $27.54/barrel
- In other energy, natural gas lost steam today as well, with the Mar contract ending the day -2.4% at $2.05/MMBtu
- Metals closed lower today as well. Apr gold finished -0.3% at $1194.70/oz, while Mar silver ended -1.2% at $15.27/oz
4:47 am Nokia publishes results for its public exchange offer for Alcatel-Lucent ( ALU); Nokia to hold ~91% of the share capital of ALU ( NOK) :
Co published the results of the reopened offer period of Nokia's public exchange offer for Alcatel-Lucent securities.
426 695 572 Alcatel-Lucent ordinary shares, 52 286 499 ADSs, 4 795 096 OCEANE 2018 convertible bonds, 19 971 720 OCEANE 2019 convertible bonds, and 56 644 832 OCEANE 2020 convertible bonds have been tendered into the Reopened Offer in France and/or in the U.S As a consequence, following settlement of the Reopened Offer which is expected to occur on February 12, 2016, Nokia will hold 91.25% of the share capital and at least 91.17% of the voting rights of Alcatel Lucent, 99.62% of the outstanding OCEANE 2018 convertible bonds, 37.18% of the outstanding OCEANE 2019 convertible bonds, and 68.17% of the outstanding OCEANE 2020 convertible bonds. This equates to Nokia holding 88.07% of the share capital on a fully diluted basis
3:21 am ARM Holdings reports EPS in-line, beats on revs ( ARMH) :
Reports Q4 (Dec) earnings of GBP0.08 per share, in-line with the Capital IQ Consensus of GBP0.08; revenues rose 19.1% year/year to GBP269.1 mln vs the GBP263.15 mln Capital IQ Consensus.OutlookChips based on ARMv8-A technology are expected to continue to gain share in mobile and enterprise markets, and the higher royalty rate earned on these products helps to underpin growth in royalty revenues. Increased economic uncertainty may influence consumer and enterprise spending, potentially impacting semiconductor revenues and industry confidence. Based on current conditions in the semiconductor market, co expects Group dollar revenues for the full year to be broadly in line with market expectations.
Thanks for the well wishes Bob and everyone. Sorry to hear about your second Dad... Bob. You are a great guy, always positive, even in the face of great adversity. I am sure he was as proud to know you as you were him. RtS |
