From Briefing.com: A wildly volatile week in US equities markets was capped off with a strong rally into the weekend. All major indices rose over one percent, except the Russell 2000 (+0.8%)as small caps lagged in Friday's rally. The Dow Jones Industrial Average (+1.5%) led the way, followed by the S&P 500 (+1.3%), and then the Nasdaq (+1.2%).
Today's advance began in pre-market trade, primed by an upbeat start in UK amid general election results. Then came Nonfarm Payrolls numbers, which beat expectations (223K; Briefing.com consensus 218K), although hourly earnings growth remained weak. Nevertheless, the better than expected payroll growth sent futures roaring to highs and gave cash equities a steriod shot in the arm in opening trade.
Turning to the technology sector, the S&P 500 Information Technology Sector Index rose 1.5% as it outperformed the broader market. Notable performances in the sector include, Visa (V 69.47, +2.89, +4.3%), Microchip Tech (MCHP 48.97, +1.56, +3.3%), and Cognizant Tech (CTSH 63.09, 1.78, +2.9%). Also, its worth noting the laggards that showed relative weakness in today's rally, NVIDIA (NVDA 20.81, -1.68, -7.5%), Salesforce.com (CRM 72.40, -2.12, -2.6%) and Teradata (TDC 40.86, -0.94, -2.3%) were the worst performers on the day.
Notable news items from sector components included the following:
Nokia (NOK 6.93, +0.21, +3%): Entered into a strategic partnerships with HP (HPQ 33.41, +0.59, +1.8%),
Microsoft (MSFT 47.75, +1.05, +2.3%) and Telefonica (TEF 14.98, +0.27, +1.8%) to develop a new IT infrastructure, expected to be completed in Q1 2017
Visa (V 69.47, +2.89, +4.3%): Bloomberg article reported that Visa is in talks to acquire Visa Europe (currently a seperate entity). Visa Europe has an estimated value of $15-20 billion.
Google (GOOG 538.22, +7.52, +1.4%): Announced it will allow users to order food from search results, could affect GrubHub's business (GRUB 40.23, +0.82, +2.1%)
Elsewhere in the technology space:
Advanced Semi (ASX 7.05, -0.11, +1.5%): Reported April revs increased 15.8% YoY to NT$22.0 bln. ASX also announced an agreement with TDK Corporation to establish a JV to manufacture IC embedded substrates using TDK's SESUB technology.
LM Ericsson (ERIC 11.47, +0.39, +3.5%) Has filed suits against Apple in Germany, the United Kingdom and the Netherlands. Ericsson had offered to enter into arbitration with Apple (AAPL 127.52, +2.26, +1.8%) to reach a mutually beneficial global licensing agreement for its standard-essential patents, but that offer has now expired. The proceedings in the three countries were recently initiated and refer to the 2G and 4G/LTE standards, as well as other technology that is not standardized, but is related to, for instance, the design of semiconductor components and non- cellular wireless communications.
Chipmos Technology (IMOS 22.75, -0.55, -2.4%): Reported revenue for the month of April 2015 was $55.9 million, a decrease of 3.5% from the month of March 2015 and a decrease of 4.0% from the same period in 2014. U.S. figures are based on the exchange rate of NT$30.64 to US$1.00 as of April 30, 2015.
Rocket Fuel (FUEL 8.32, +0.69, +9%): Reported an unsolicited, conditional proposal to be acquired by Gravity4 for $350 mln in cash. Its Board of Directors will evaluate the proposal with the assistance of its financial and legal advisors. The Board advises stockholders to take no action at this time.
Nintendo (NTDOY 22.39, +0.23, +1%): Announced plans to introduce smartphone games in Asia & S America, according to Nikkei Asian Review
Analyst Action:
Alcatel-Lucent (ALU 3.80, +0.16, +4.4%): upgraded to Buy from Hold at Societe Generale
Nuance Communications (NUAN 16.57, +1.26, +8.2%): upgraded to Buy from Hold at Craig Hallum; price target raised to $20 from $15... price target raised to $18 from $16 at FBR Capital; Market Perform
LM Ericsson (ERIC 11.47, +0.39, +3.5%): upgraded to Buy from Neutral at BofA/Merrill
Pros Holdings (PRO 18.26, -3.29, -15.3%) downgraded to Sell from Hold at Craig Hallum... price target lowered to $30 from $40 at Northland Capital; Outperform
NVIDIA (NVDA 20.81, -1.68, -7.5%): downgraded to Neutral from Buy at ROTH Capital; price target lowered to $22 from $26... price target lowered to $25 from $27 at Stifel; Buy
Ubiquiti Networks (UBNT 28.40, +0.05, +0.2%): downgraded to Neutral from Buy at Sun Trust... downgraded to Market Perform from Outperform at Raymond James
Rosetta Stone (RST 7.48, -0.41, -5.2%) downgraded to Market Perform from Outperform at Barrington Research
Micrel (MCRL 13.87, +0.37, +2.7%): downgraded to Hold from Buy at Stifel... downgraded to Market Perform from Outperform at Wells Fargo
NICE Systems (NICE 62.89, +0.64, +1%): price target raised to $60 from $55 at Barclays; Equal Weight... price target raised to $68 from $57 at RBC Capital; Sector Perform
CyberArk Software (CYBR 66.13, +4.66, +7.6%): price target raised to $65 from $50 at Barclays; Equal Weight... price target raised to $70 from $65 at Oppenheimer; Outperform
Tableau Software (DATA 110.69, +13.26, +13.6%): price target raised to $119 from $109 at UBS; Buy... price target raised to $158 from $150 at Cantor Fitzgerald... price target raised to $145 from $127 at DA Davidson; Buy... price target raised to $120 from $110 at RBC Capital; Outperform... price target raised to $110 from $100 at FBR Capital; Market Perform
Imperva (IMPV 53.98, +8.87, +19.7%): price target raised to $50 from $45 at Topeka Capital; Hold... price target raised to $65 from $50 at Needham; Buy... price target raised to $58 from $55 at Oppenheimer; Outperform... price target raised to $58 from $50 at RBC Capital; Outperform
Qorvo (QRVO 76.56, +1.00, +1.3%): price target raised to $88.50 from $82.50 at Northland Capital; Outperform
Weekly Recap - Week ending 08-May-15Dow +267.05 at 18191.11, Nasdaq +58.00 at 5003.55, S&P +28.10 at 2116.10
The stock market enjoyed a broad-based surge on Friday, which helped the S&P 500 (+1.4%) erase its weekly loss. As a result, the benchmark index added 0.4% for the week.
Equity indices registered the bulk of their gains at the open thanks to a pair of factors that underpinned the sharp spike before the first trade was made in the cash market. First, the UK general election proved surprising as conservatives expanded their presence in the parliament and won 331 of 650 seats. Meanwhile, Ed Miliband (Labour), Nick Clegg (Liberal Democrats), and Nigel Farage (UKIP) resigned from leading their respective parties. Although the results were surprising, markets cheered the preservation of status quo with UK's FTSE surging 2.3%.
Index futures held modest gains following the election results and they extended their gains once the U.S. Nonfarm Payrolls report for April beat expectations (223K; Briefing.com consensus 218K); however, it is worth noting that the March reading was revised down to 85K from 126K and hourly earnings growth remained weak (+0.1%; consensus +0.2%).
The report sparked a fire under equities and Treasuries as lackadaisical wage growth is likely to be used as an argument in favor of the Federal Reserve maintaining its current policy stance for longer. Treasuries soared in reaction to the report, but they retreated from their highs during the afternoon. Still, the 10-yr note ended in the green with its yield down four basis points at 2.14%. The benchmark yield narrowed its weekly increase to two-basis points and ended the week beneath its 200-day moving average (2.19%).
All ten sectors finished the day in positive territory and only three groups posted gains slimmer than 1.0%. Materials (+1.6%) and health care (+1.6%) jockeyed for the lead throughout the session, but the energy sector (+1.6%) overtook them both as part of a late rally. On a related note, crude oil rose 0.7% to $59.42/bbl.
Moving on, the health care sector received a boost from biotechnology with iShares Nasdaq Biotechnology ETF (IBB 351.93, +7.82) spiking 2.3%, and above its 50-day moving average, which had been an area of focus during the past two weeks.
Interestingly, today's broad advance masked the underperformance among a couple other high-beta areas like chipmakers and transport stocks.
The PHLX Semiconductor Index gained 1.0%, but spent the day behind the broader market as NVIDIA (NVDA 20.81, -1.68) weighed. Shares of NVDA fell 7.5% after the company reported in-line results and guided lower. That being said, the broader technology sector (+1.4%) ended a step ahead of the broader market with large cap names like Apple (AAPL 127.52, +2.26), Google (GOOGL 548.95, +6.91), and Microsoft (MSFT 47.75, +1.05) picking up the slack. Microsoft was a standout, climbing 2.3% after Reuters reported the company is no longer looking to acquire Salesforce.com (CRM 72.40, -2.12).
Elsewhere, the industrial sector (+1.2%) settled just behind the broader market even as transport stocks underperformed with the Dow Jones Transportation Average advancing 0.6%. Five components of the bellwether complex registered losses with Landstar System (LSTR 63.18, -0.86) sliding 1.3%.
Today's participation was below recent averages as 759 million shares changed hands at the NYSE floor.
Economic data included Nonfarm Payrolls and Wholesale Inventories:
- Nonfarm payrolls added 223,000 new jobs in April, up from a downwardly revised 85,000 (from 126,000) in March while the Briefing.com consensus expected an increase of 218,000
- Private payrolls increased by 213,000 jobs in April after adding a downwardly revised 94,000 (from 129,000) in March while the consensus expected an increase of 215,000
- The average hourly wage increased 0.1% in April after increasing a downwardly revised 0.2% in March
- The average workweek remained at 34.5 hours for a second consecutive month
- The combination of the increase in payrolls and wages along with constant hours pushed aggregate earnings levels up 0.3% in April. Earnings were flat in March
- The unemployment rate fell to 5.4% in April from 5.5% in March, which met consensus expectations
- Wholesale inventories increased 0.1% in March after increasing a downwardly revised 0.2% (from 0.3%) in February while the Briefing.com consensus expected an increase of 0.3%
- The BEA assumed that wholesale inventories increased 0.6% in the advance Q1 2015 GDP report. The downside miss in March combined with the revisions to February will result in a downward revision to first quarter GDP when the second estimate is released at the end of the month
There is no economic data on Monday's schedule.
Week in Review: Stocks Roundtrip
The stock market kicked off the trading week on an upbeat, albeit quiet, note. The Dow and S&P 500 gained 0.3% apiece while the Nasdaq Composite (+0.2%) slipped behind the broader market during afternoon action. "Quiet" was the general theme on Monday as most global equity markets also posted gains while Japan's Nikkei and UK's FTSE were closed for holidays. Seven of ten sectors finished in the green with financials (+1.0%) and utilities (+0.7%) ending in the lead. The countercyclical utilities sector lost the lead during the final hour while financials crept higher throughout the day, also overtaking the health care sector (+0.6%) during afternoon action.
Equity indices ended Tuesday on a sharply lower note following a daylong retreat that was paced by the Nasdaq Composite (-1.6%). For its part, the S&P 500 lost 1.2% with all ten sectors ending in the red. The Tuesday selloff followed an overnight session that featured a 4.1% drop in China's Shanghai Composite after some equity brokers increased their margin requirements, which led to forced selling. Furthermore, markets across Europe also struggled with Germany's DAX diving 2.5% amid spiking yields. To that point, Germany's 10-yr bund yield surged 13 basis points to 0.52% after hovering near 0.16% as recently as last week while Italy's 10-yr yield soared 34 basis points to 1.83%. Rising interest rates were not unique to Europe as the U.S. 10-yr note registered its sixth consecutive decline, sending its yield higher by three basis points to 2.17%. The benchmark yield hit its highest level since early March and spent the day near its 200-day moving average, representing the first appearance near that level in more than a year.
The stock market registered its second consecutive decline on Wednesday with the S&P 500 (-0.4%) bouncing off its 100-day moving average (2,070). The key indices began the day with slim gains, but the Dow, Nasdaq, and S&P 500 quickly returned below their 50-day moving averages and continued lower throughout the day. Adding to the pressure were comments from Fed Chair Janet Yellen who reminded investors that equity valuations are "generally quite high" and that raising the fed funds rate is likely to be followed by a spike in Treasury yields. The opening spike notwithstanding, the Wednesday session was largely a repeat of Tuesday's slide; however, the Nasdaq, which underperformed on Tuesday, retreated alongside the broader market on Wednesday. The major indices cut their losses in half during the final hour, but nine sectors settled in the red with the countercyclical telecom services space (-1.2%) ending behind its peers. More notably, the largest sector by weight-technology (-0.8%)-was the second-weakest performer with large cap names fueling the weakness. Shares of Microsoft (MSFT 46.28, -1.32) tumbled 2.8% while the likes of Apple (AAPL 125.01, -0.79), Google (GOOGL 535.08, -7.96), Oracle (ORCL 43.26, -0.66), and Intel (INTC 32.22, -0.42) lost between 0.6% and 1.5%. It is worth noting that unlike Intel, some other chipmakers outperformed with the PHLX Semiconductor Index shedding just 0.1%.
The market snapped its two-day skid with a Thursday advance that lifted the S&P 500 (+0.4%) into the neighborhood of its 50-day moving average (2,089). The benchmark index narrowed its week-to-date loss to 1.0% while the Nasdaq Composite (+0.5%) outperformed, narrowing its weekly loss to 1.2%. Equity indices vacillated near their flat lines during the opening hour and followed their shaky start with a broad-based rally. However, the cash market masked the fact that S&P 500 futures were down more than 15 points overnight. That weakness coincided with selling in the Treasury market, which abated once the benchmark 10-yr yield kissed the 2.30% level. To be fair, the overnight selloff in Treasuries did not take place in a vacuum as Germany's 10-yr bund endured a sharp plunge that briefly sent its yield as high as 0.79%. German bunds were able to retrace the entire move, returning to 0.59% while U.S. Treasuries did that and then some. The 10-yr note rallied throughout the session, dropping its yield six basis points to 2.18% and back below the 200-day moving average (2.19%).
| Index | Started Week | Ended Week | Change | % Change | YTD % | | DJIA | 18024.06 | 18191.11 | 167.05 | 0.9 | 2.1 | | Nasdaq | 5005.39 | 5003.55 | -1.84 | 0.0 | 5.6 | | S&P 500 | 2108.29 | 2116.10 | 7.81 | 0.4 | 2.8 | | Russell 2000 | 1228.11 | 1234.93 | 6.82 | 0.6 | 2.5 |
5:37 pm This week's biggest % gainers/losers (:SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).
This week's top 20 % gainers
Healthcare:GEVA (213.9 +116.3%),ALDR (37.23 +39.44%),BPMC (23.6 +27.36%),EXEL (3.43 +21.2%),SGEN (41.13 +20.86%),SRNE (12.35 +19.32%),RGEN (37.39 +18.74%),ARRY (7.48 +18.35%),ADRO (30.85 +18.24%),BLUE (163.72 +17.84%)
Materials:BAK (10.03 +20.7%)
Industrials:PCTY (32.75 +20.85%)
Consumer Discretionary:NLS (21.82 +26.13%)
Information Technology:SSNI (11.95 +21.94%),MGI (10.04 +20.96%),SREV (4.35 +20.5%),HUBS (46.75 +20.33%),ELNK (5.77 +20.21%),IMPV (53.98 +19.24%),
Energy:GLNG (46.08 +27.65%)
This week's top 20 % losers
Healthcare:FLDM (26.95 -28.53%),BIOS (3.63 -22.1%),RIGL (3.74 -17.07%),SCMP (15.45 -16.8%),SQNM (3.83 -16.56%),ANIP (52.93 -16.02%)
Materials:GFI (3.71 -15.87%)
Industrials:TNET (28.87 -19.83%),ENPH (10.26 -19.53%),KEYW (7.66 -17.37%)
Consumer Discretionary:SKUL (8.27 -24.2%),NDLS (16.25 -21.76%)
Information Technology:QLYS (36.98 -29.08%),ENOC (10.07 -21.7%)
Financials:NSM (19.98 -22.29%),ONDK (15.68 -18.71%)
Energy:CEQP (5.2 -19.25%),SD (1.6 -16.67%),LPI (13.34 -15.57%),IO (1.96 -15.52%)
3:31 pm Earnings Preview for the week of May 11 - 15 (:SUMRX) : Of the companies reporting earnings for the week of May 11 - 15 some of the bigger names include:
Monday:
Pre Market - AES, ACT, DISH, CNP, DF, AER, RBC, ENDP, BRSS, W, SSYS, RDNT, BID, STRL, FRM, VRTS, CRK, EVEP, MHR, MBLY, MGIC, PLUG, LGND, GWPH, ICPT
After Hours - MTZ, MDR, FMC, DPLO, SF, RAX, DRYS, PRSC, EGL, TRQ, HI, ORIG, TTEC, MR, PINC, SCAI, PEIX, MBI, PAHC, PAAS, YY, IPXL, TEP, VRTU, IPAR, CALL, JUNO
Tuesday:
Pre Market - ACM, ECA, LDOS, ARCO, IFF, FMSA, ARES, WMS, ATRO, IBP, CRCM, DCIX, OTIV, NAVB, EGRX
After Hours - MCK, STKL, HMIN, DCO, Z, SSRI, LMNS, PE, RSPP, EXAR, ESIO, OPWR, PRSS, NEWR, INGN, TUBE, FIVN, NVMI, HDP, VSLR, CDNA, CARA, VTAE, VTL, RENN, ZFGN
Wednesday:
Pre Market - M, ARMK, PCP, RL, IGT, ZBRA, ZAYO, MRKT, ACAT, ELOS, SHLX, DSX, EZCH, MTLS, CRME
After Hours - CSCO, JCP, VIPS, RNDY, NTES, JACK, VOXX, WX, LXFT, SPKE, TGB, FENG, AMPH, SHAK, FPRX
Thursday:
Pre Market - KSS, QIWI, CSTM, VWR, GIL, TK, PLCE, PERY, PBH, HIMX, TNK, MANU, STOR, MMYT, PFNX, HSGX
After Hours - JWN, AMAT, SYMC, HTHT, DAR, KING, EXP, ANET, LOCO, GLOB, SANW, MDLY, UPLD, VCYT, JYNT
Friday:
Pre Market - HGG, OCUL, JMG
12:04 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (131) outpacing new lows (54) (:SCANX) : Stocks that traded to 52 week highs: ACIW, AFT, AIG, ALDR, AMSG, AOS, ASH, ATSG, ATVI, AVY, AXS, AYN, BAMM, BANC, BK, BLKB, BLUE, BPMC, BRCM, BT, BTO, CBS.A, CDK, CE, CHKE, CII, CKSW, CLBH, CMT, CNMD, CORI, CRH, CRUS, CSFL, CSH, CUTR, CYNI, DATA, DOVR, DRC, EBIX, ECF, ELNK, ENI, ESNT, FCAP, FEUZ, FIX, FSBW, GEVA, GPN, GT, HIFS, HILL, HME, HUBS, HW, IACI, IMPV, INFA, ING, INTU, IPHI, JBLU, JNPR, JPM, LEG, LLNW, LMAT, LO, LVNTA, MA, MATX, MDLZ, MFLX, MKL, MLM, MMI, MRTX, MTD, MTG, MTU, NCOM, NGHC, NHTC, NICE, NLS, NRZ, OBAS, OCR, OLED, PAYC, PLCE, PRE, PZZA, QCRH, QTWO, RBA, RGEN, ROCK, SEDG, SEE, SFG, SKX, SMFG, SNA, SPR, SSRG, STMP, SUM, SUNE, SWK, SYT, TMK, TROV, TSE, TSS, TWOU, UK, USCR, UVE, VAC, VMC, VNTV, WAT, WIBC, WIFI, WIX, WNC, WWAV, XPO
Stocks that traded to 52 week lows: AHGP, ANR, ASCMA, ATRM, AVP, CBAY, CDZI, CEL, CRD.B, DCTH, DSCO, DSS, EGL, EGY, EMES, ENOC, ENZ, FTEK, FTK, GALE, GLPW, HTGC, IO, IPHS, KERX, LC, MCF, MERU, MNKD, NNVC, OFG, OXGN, PANL, PNX, POM, PRGN, PRKR, PRO, QUMU, RCAP, RXII, SMLP, SNI, SSYS, TESS, TGEN, TICC, TROX, UBNT, UNXL, UTSI, VRA, WHZ, WIN
ETFs that traded to 52 week highs: MOO
ETFs that traded to 52 week lows: SMN, VXZ
7:30 am Solar Power acquires a controlling interest in Convertergy Energy Technology for $13.8 mln, in addition to repayment of a $1.5 mln loan ( SOPW) : Under the terms of the share purchase agreement, SPI will acquire 100% of the outstanding capital stock of Convertergy I Holdings Limited, which owns 76.8% of the equity interest in Convertergy Technology, for an aggregate consideration of $13.8 million and will repay a shareholder loan of $1.5 million owed by Convertergy Technology |
