From Briefing.com: 4:20 pm : The major averages closed Wednesday's session in the green with the S&P 500 adding 0.3%. The Dow outperformed the benchmark index with a 0.5% gain.The stock market held a modest gain going into President-elect Trump's first news conference since winning the presidential election. However, the market gave back all of its gains and more after Mr. Trump expressed a desire to bring back pharmaceutical operations to the United States and voiced support for competitive drug price bidding. The biotechnology industry plunged immediately, with the iShares Nasdaq Biotechnology ETF (IBB 278.04, -8.31) closing lower by 3.0%. Most sectors returned to or above their pre-conference levels in the afternoon, but health care (-1.0%) could not overcome biotechnology's sizable blow. Investors hoping to hear about President-elect's infrastructure spending plans came away empty handed.
Telecom services (-0.5%) and real estate (-0.5%) also finished in negative territory, while the remaining eight spaces closed in the green. Energy (+1.2%) topped the day's leaderboard, piggybacking on crude oil's climb. The commodity finished higher by 2.7% at 52.20/bbl amid reports that Saudi Arabia, the world's top exporter, plans to cut supply to Asia. Crude extended its gain despite a big inventory build that was revealed by the latest stockpile data.
The top-weighted technology space (+0.7%) also finished near the top of the standings after an afternoon push from some of its top components. For instance, Apple (AAPL 119.75, +0.64), Facebook (FB 126.09, +1.74), and IBM (IBM 167.75, +2.23) advanced between 0.6% and 2.2%. Chipmakers also provided a boost as the PHLX semiconductor Index closed up 0.4%.
Financials (+0.5%) erased their week-to-date loss that was carried into Wednesday's session. The sector rallied to a session high during late afternoon action.
Cyclical sectors have a commanding lead for the week, as five of the six are in positive territory. Materials and technology set the pace with week-to-date gains of 0.9% and 0.7%, respectively. Conversely, all five defensive sectors are posting week-to-date losses with real estate (-2.4%) leading the retreat.
U.S. Treasuries finished the trading day modestly higher after the Treasury's $20 billion 10-year reopening auction drew a high yield of 2.342% on a bid-to-cover of 2.58x. The 10-yr yield closed one basis point lower at 2.37%.
Wednesday's lone economic report was the MBA Mortgage Index, which increased 5.8%.
Tomorrow's economic data will include December Import/Export Prices and Initial Claims (Briefing.com consensus 235k) at 8:30 am ET, followed by the Treasury Budget at 2:00 pm ET.
- Russell 2000 +1.2% YTD
- Dow Jones Industrial Average +1.0% YTD
- S&P 500 +1.6% YTD
- Nasdaq Composite +3.4% YTD
DJ30 +98.75 NASDAQ +11.83 SP500 +6.42 NASDAQ Adv/Vol/Dec 1679/1.77 bln/1377 NYSE Adv/Vol/Dec 2029/1.06 bln/919 3:30 pm :
- Crude oil ended a volatile session higher despite EIA data showing builds above Consensus for both gasoline and crude oil stocks; rig count data on tap for Friday
- Feb 2017 crude oil futures rose $1.38 (+2.7%) to $52.20/barrel
- Baker Hughes rig count data will be released Friday at 1 pm ET.
- Contributing factors affecting the price of oil:
- Saudi Arabia has told its Asian customers that it will reduce their crude supplies slightly in Feb.
- Iraq plans to raise crude exports from its southern port of Basra to an all-time high of 3.641 mln bpd in February.
- European and Chinese traders are shipping a record 22 mln barrels of crude from the North Sea & Azerbaijan to Asia this month.
- Today's EIA inventory data showed crude production rose notably. Overall production was 8.95 mln bpd last week, the most since April of last year.
- U.S. crude production was projected to rise by 110k barrels/day in 2017 to 9 mln bpd, according to EIA data released yesterday.
- Natural gas traded lower ahead of tomorrow's EIA, after yesterday's notable +6% rally
- Feb 2017 natural gas closed $0.07 lower (-2.1%) at $3.22/MMBtu
- In precious metals, gold ended at a 7-week high on continued dollar index weakness
- Feb gold ended today's session up $10.50 (+0.9%) to $1,196.90/oz
- Mar silver closed today's session $0.01 lower (-0.1%) at $16.83/oz
- The dollar index was -0.2% around the 101.82 level, provided support to precious metals
- Commodities, as measured by the Bloomberg Commodity Index, were +0.4% around the 87.21 level
After a soft close to Tuesday's action, the stock market began today's affair in the red. Opening losses would not hold, however, as the market gradually drifted higher into the afternoon. Back and forth action ultimately ended with the markets split at the bell as a sell-off after midday trimmed leads. The leader today was the Nasdaq Composite which added 20 points (+0.36%) to 5551.82. The S&P 500 was mostly flat at the close to 2268.90, and the Dow Jones Industrial Average lost 31.85 points (-0.16%) to 19855.53. By comparison FANG stocks FB -0.44%, AMZN -0.13%, NFLX -0.81%, GOOG -0.23% ended lower as Tech big pressured with the broader market.
Today's economic data included the November Wholesale Inventories reading which was up 1.0%. The prior month's reading was revised to -0.1% from -0.4%. Also, the November Job Openings and Labor Turnover Survey showed that job openings decreased to 5.198 million from a revised 5.451 million (from 5.534 million) in October.
Action in the Technology (XLK49.40, +0.01 +0.02%) space mirrored that of the broader market today as action hovered around flat lines. Component Yahoo! (YHOO 42.30, +0.96 +2.32%) was one of the better performing names today after announcing a reduction in Board members following the sale to Verizon (VZ 52.76, +0.08 +0.15%). Other sectors as measured by the S&P closed Wednesday IYZ +0.76%, XLI +0.42%, XLY +0.36%, XLV +0.35%, XLF +0.26%, XLB +0.06%, XLU -0.31%, XLP -0.50%, XLE -0.95%, XLRE -1.25%.
In the S&P 500 Information Technology (828.59, -0.62 -0.07%) space, trading was back and forth today, ultimately ending in the red. Component Xerox (XRX 7.03, +0.06 +0.86%) was among the names in the red today after being upgraded premarket to Buy at Goldman. Other names in the space which closed QRVO +3.73%, SWKS +2.19%, AVGO +2.03%, ATVI +1.80%, HPE +1.73%, AMAT +1.07%, MCHP +0.67%, CSCO +0.66%.
Other notable news items among sector components:
Yahoo! (YHOO) will reduce number of Board members following the sale to Verizon (VZ) - five directors including Marissa Mayer intend to resign. The company name will change to Altaba.
WNS (WNS 27.29, +0.38 +1.41%) to acquire Denali Sourcing Services for $40 million in cash. The company expects the deal to be accretive to fiscal 2017 earnings.
Cognex (CGNX 65.71, +1.74 +2.72%) announced they acquired Chiaro Technologies & Webscan. Financial terms of the deal were not disclosed.
Rocket Fuel (FUEL 2.02, flat) is further organizing its operations to accelerate its ongoing transformation. The company will eliminate 11% of the employee base.
Axcelis Tech (ACLS 14.90, +0.20 +1.36%) announced shipments in 4Q16 of the Purion XE high energy implanter to multiple customers in the Asia Pacific Region. The company guided Q4 revenues on the high end of its guidance, and EPS above guidance.
Coupa Software (COUP 24.80, +0.89 +3.72%) acquired Spend360 International. Financial terms of the deal were not disclosed.
Analyst actions:
XRX, ETFC, VOD were upgraded to Buy from Neutral at Goldman,
BIDU was upgraded to Buy from Hold at Stifel,
TWLO was upgraded to Buy from Hold at Canaccord Genuity,
CUDA was upgraded to Neutral from Underperform at DA Davidson,
NTDOY was upgraded to Outperform from Neutral at Macquarie;
FDS was downgraded to Underweight from Equal Weight at Barclays,
TMUS was downgraded to Neutral from Buy at MoffettNathanson,
YNDX was downgraded to Hold from Buy at VTB Capital,
HIMX was downgraded to Hold from Buy at Craig Hallum;
TRVG was initiated at Deutsche Bank, Goldman, Cowen, BofA/Merrill, Citigroup and others,
LPTH was initiated with a Buy at Dougherty,
EXPE was initiated with a Sell at Citigroup,
PCLN was initiated with a Buy at Citigroup,
TRIP was initiated with a Neutral at Citigroup,
PYPL was initiated with a Buy at Berenberg,
QTWO, WNS, ICFI, GDOT, SYNT were initiated with Buy ratings at Loop Capital,
PYPL, UIS, CACI, CTSH were initiated with Hold ratings at Loop Capital |
