From Briefing.com: The broader market closed Tuesday action with all three major US indices in the red. The Nasdaq Composite closed down 14.99 points (-0.35%) to 4268.76. The Dow Jones Industrial Average was lower by 12.67 points (-0.08%) to 16014.38, and the S&P 500 followed close behind, down 1.23 points (-0.07%) to 1852.21. Market data today came in the form of Wholesale Inventories which declined 0.1% month-over-month in December. In addition, December Job Openings and Labor Turnover Survey (JOLTS)results showed that job openings increased to 5.610 million from a revised 5.350 million (from 5.431 million) in November.
The Technology (XLK 38.75, -0.18 -0.46%) sector was lower today, but only just so. Trading in component CenturyLink (CTL 24.81, -0.82 -3.20%) was notable to the downside ahead of the company's quarterly results which are scheduled to be released tomorrow after the market close. Other sectors finished XLB +1.24%, XLV +0.74%, XLP +0.67%, XLI +0.60%, XLU +0.34%, XLF -0.15%, XLY -0.16%, IYZ -1.10%, XLE -2.41% with Materials leading the upside and Energy lagging.
Social Media (SOCL 15.93, -0.24 -1.48%) was again a notable laggard of the broader market as component Yelp (YELP 15.69, -0.37 -2.30%) reported quarterly earnings mid-session yesterday, and weakness continued today. Other SOCL names which displayed weakness today included LNKD -8.17%, CYOU -3.92%, GRPN -3.90%, TWTR -3.36%, YY -2.80%, ZNGA -2.39%.
The S&P 500 Information Technology sector (636.18, -2.55 -0.40%) was also lower today, finishing just below flat lines. Component Salesforce.com (CRM 57.33, +3.28 +6.07%) was a notable standout today as the name was upgraded to Hold from Underperform at Jefferies before the market opened. Other components which displayed weakness with the broader sector included WDC -4.13%, ADS -3.60%, QRVO -3.51%, AKAM -3.44%, XRX -3.20%, CTSH -3.18%, STX -3.13%, PYPL -2.71%, SYMC -2.70%, WU -2.35%, IBM -2.29%.
Other notable news items among sector components:
King Digital's (KING 17.96, +0.03 +0.17%) acquisition by Activision Blizzard (ATVI 28.81, +0.09 +0.31%) received clearance from The Fair trade Commission of the Republic of Korea.
PayPal's (PYPL 32.70, -0.91 -2.71%) Chief Technology Officer James Barrese to resign effective April 1.PYPL later named Sri Shivananda as the company's new Senior Vice President and Chief Technology Officer effective April 1, 2016.Fiserv (FISV 92.09, +0.28 +0.30%) announced that Tandem Bank has selected Agiliti from FISV as its technology platform.
Silicon Graphics (SGI 5.57, +0.55 +10.96%) entered into a non-exclusive Outsourced Manufacturing Agreement with Hewlett Packard Enterprise (HPE 12.72, +0.21 +1.68%).
Elsewhere in the technology space:
Advanced Energy (AEIS 27.71, -0.13 -0.47%) appointed Grant Beard as Chairman.
Heartland Payment Systems (HPY 87.58, -0.06 -0.07%) has acquired privately held Beanstalk Data. Financial terms of the deal were not disclosed.
GTT Communications (GTT 13.57, +0.61 +4.79%) to acquire Telnes Broadband for $18 million in cash and stock.
Infoblox (BLOX 14.86, +0.07 +0.47%) acquired cyber threat intelligence firm IID for $45 million in cash.
Silver Spring Networks (SSNI 11.12, +1.38 +14.17%) filed a $200 million mixed securities shelf offering.- SSNI was selected by Con Edison (ED 73.61, +0.52 +0.71%) and Orange & Rockland to support its Advanced Metering Infrastructure plan for electric and gas customers.
CSRA's (CSRA 22.34, -0.57 -2.49%) SRA International was awarded a five-year task order valued at $233 million.
In reaction to quarterly results:
Viacom (VIAB 32.86, -8.99 -21.48%) reported better than expected Q1 EPS of $1.18 on revenues which were worse than expected and came n 5.7% worse than a year ago at $3.15 billion. Among other areas, VIAB reported Domestic Advertising revenues which declined 4% (versus a 7% decline in Q3) as pricing increases were more than offset by a decline in traditional ratings at some of the company's networks.
21st Century Fox (FOXA 24.14, -0.45 -1.85%) reported Q2 EPS of $0.44 per share on revenues which were worse than expected and fell 8.4% year-over-year to $7.38 billion.
Omnicom (OMC 71.62, +1.86 +2.67%) reported better than expected Q4 EPS and revenues of $1.35 and $41.54 billion, respectively.
Fidelity Nat'l Info (FIS 57.93, +1.93 +3.45%) reported in-line EPS for Q4 of $0.93 on revenues which rose 11.0% year-over-year to $1.87 billion. The company also guided FY16 EPS worse than expected at $3.70-3.85 per share.
Benchmark Electronics (BHE 21.27, +0.77 +3.76%) reported better than expected Q4 EPS of $0.45 on revenues which fell 11.8% year-over-year to $626 million. BHE guided Q1 EPS worse than expected at $0.29-0.33 on in-line revenues for Q1 of $565-590 million.
MaxLinear (MXL 14.62, +1.07 +7.90%) reported better than expected Q4 EPS of $0.46 on revenues which rose 204.7% year-over-year to $98.95 million. MXL also guided Q1 revenues in-line at $100-105 million.
ON Semiconductor (ON 7.08, -0.32 -4.32%) reported better than expected Q4 EPS of $0.19 on revenues which fell 2.8% year-over-year to $840.3 million. The company also guided Q1 revenues in-line at $800-840 million.
Companies that report quarterly results tonight/tomorrow morning: ATEN AKAM BLKB CALX CALD CSC DIS DWRE APPS FDC INST LLNW MKTO MTSN MTSC NCR NUAN OTEX PAYC PRO QNST RSYS RKUS SCSC TRMB TCX VSAT WU/ARMH CRTO EEFT ORBK WIX
Analyst actions:
CRM was upgraded to Hold from Underperform at Jefferies,
SSNC was upgraded to Outperform from Mkt Perform at Raymond James;
QLYS was downgraded to Neutral from Buy at DA Davidson
5:07 pm Mattson beats by $0.06, beats on revs; guides Q1 EPS below consensus, revs below consensus ( MTSN) :
Reports Q4 (Dec) earnings of $0.03 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of ($0.03); revenues fell 41.5% year/year to $32 mln vs the $25.1 mln Capital IQ Consensus. Co issues downside guidance for Q1, sees EPS of ($0.08)-($0.04) vs. ($0.01) Capital IQ Consensus Estimate; sees Q1 revs of $22-28 mln vs. $30.88 mln Capital IQ Consensus Estimate, citing ongoing challenges in the semiconductor and semiconductor equipment industries, and particularly due to the continued postponement of orders from the Company's largest customer.While the Company realized a net benefit in revenue from acceptance of previously shipped systems in the fourth quarter of 2015, the Company expects a net deferral of revenue in the first quarter of 2016. In addition, higher margin revenue from spares, service and upgrades in the first quarter of 2016 is expected to be lower than the fourth quarter of 2015. For these reasons, gross margin in the first quarter of 2016 is estimated at 31 percent plus or minus 2 points.
5:01 pm Computer Sciences beats by $0.02, misses on revs ( CSC) :
Reports Q3 (Dec) earnings of $0.71 per share, $0.02 better than the Capital IQ Consensus of $0.69; revenues fell 10.2% year/year to $1.75 bln vs the $1.85 bln Capital IQ Consensus.
4:34 pm Corning and Altechna R&D (Workshop of Photonics) enter into a joint development agreement to develop new laser glass processing technologies. ( GLW) :
4:32 pm Celestica to file with the TSX a notice of intention to commence a new normal course issuer bid during 1Q16 ( CLS) : If this notice is accepted by the TSX, the co expects to repurchase (for cancellation), at its discretion during the 12 months following such acceptance, up to 10% of the public float of the co's issued and outstanding subordinate voting shares
4:22 pm SolarCity reports Q4, beats on revs; guides Q1 EPS below consensus ( SCTY) : Reports Q4 (Dec) earnings of $0.04 per share, which may not be comparable to the Capital IQ Consensus of ($2.59); revenues rose 60.8% year/year to $115.48 mln vs the $105.67 mln Capital IQ Consensus.MW Installed: Record 272 MW, up 54% year-over-year (Guidance 280-300 MW) MW Deployed: 253 MW, up 44% year-over-year Value of MW Deployed under Energy Contracts: $3.64 per watt at a 6% discount rate ($3.32 per watt contracted and $0.32 per watt estimated renewal)Cost per Watt: $2.71 per watt, down 5% year-over-year; Asset Financing in Q4 2015: $2.40 per watt. As of December 31, 2015, unrestricted Cash and Investments totaled $394 million, as compared to $418 million on September 30, 2015. The quarterly decline in cash of $137 million.Residential has consistently performed above expectations over the last year, and missed guidance largely on commercial installations.Going forward, plan on removing from guidance any large projects with construction deadlines late in the quarter.Guidance
Co issues downside guidance for Q1, sees EPS of ($2.65)-($2.55) vs. ($2.36) Capital IQ Consensus Estimate.Looking ahead to 2016, continue to target 1.25 GW Installed. Though the ITC extension certainly provides more tailwinds to growth, the primary focus is goal of generating positive cash by year-end."Though we are projecting a lower rate of growth in 2016 than in years past, our guidance still implies over 40% annual growth in 2016, a rate of growth that would be the envy of most industries and companies in this country".For Q1 2016 expect to install 180 MW, representing growth of 18% y/y, and a 34% decline as compared to Q4 2015. This represents a higher-than-usual seasonal slowdown that have historically experienced after strong fourth quartersExpect installations-and cash generation-to ramp throughout 2016. For Q1 2016, expect GAAP Operating Expenses of $230-240 mln.
4:10 pm : The stock market ended a volatile Tuesday affair with a final hour rally that led the major averages to within striking distance of their flat lines. Today's action was hallmarked by a rebound in the short-term oversold market as global growth concerns, the recent rout in financials, and an oil supply glut remained in focus for much of today's session. The S&P 500 (-0.1%) and the Dow Jones Industrial Average (-0.1%) were able to end their day ahead of the Nasdaq Composite (-0.4%).
Other contributing factors to today's action included:
- Uncertainty ahead of Congressional testimony from Fed Chair Janet Yellen on Wednesday and Thursday
- Looking ahead to influential earnings from Disney (DIS 92.32, +0.20), Time Warner (TWX 63.21, -4.09), Cisco Systems (CSCO 22.65, -0.28), CBS (CBS 42.65, -1.71), and American International Group (AIG 52.25, -0.05) later this week; and
- Awaiting retail sales data for January that will be released on Friday (Briefing.com consensus 0.2%)
Today's early weakness saw concerns tied to Japan's sharp losses, the yield on its government bond turning negative, and ongoing worries about the health of Europe's banking sector. On that note, the simmering sense of angst about the European banking sector's exposure to bad loans and negative interest rates continues to weigh especially heavy on Deutsche Bank (DB 15.38, -0.16), which has surrendered 36.3% since the beginning of 2016.
Oil was driven lower amidst the selling action overseas but rebounded into today's session. The rebound in oil helped lift the market from its opening lows, but a bearish report from the International Energy Agency sent oil lower. The report stated that supply glut concerns may be understated for the first half of 2016 and precedes the API Weekly Crude Inventory Report which will be released today at 16:35 ET. WTI crude tumbled 6.0% to $27.93/bbl.
The stock market struggled through the first half of the session, returning to its opening low around 13:15 ET. However, biotechnology began flashing some relative strength at the start and held its ground even as the market was revisiting its worst level of the day. The subsequent rebound saw the iShares Nasdaq Biotechnology ETF (IBB 248.40, +0.28) surge to a new high while the broader market followed suit. Neither the market nor the ETF could hold its ground, backing away from highs into the close.
Five sectors were able to end their day in positive territory with materials (+1.2%) and health care (+0.7%) showing the largest advance. The remaining advancers posted gains between 0.7% (health care) and 0.4% (utilities).
In the consumer discretionary space (-0.3%), media companies showed relative weakness after Viacom (VIAB 32.86, -8.99).announced a fifth straight quarter of missing sales estimates. The company's miss weighed on fellow media company Time Warner, which fell 5.1% ahead of its earnings release tomorrow morning. On a related note, Netflix (NFLX 86.13, +2.81) managed a 3.4% advance as headwinds for conventional cable and media companies served as a tailwind for the streaming company.
Independent oil and gas names saw the largest losses from the tumble in oil with EOG Resources (EOG 65.59 -2.84) and Anadarko Petroleum (APC 37.24, -2.81) surrendering 4.2% and 7.0%, respectively
In the heavyweight technology space, large-caps Facebook (FB 99.54, -0.21) and Alphabet (GOOGL 701.02, -3.14) were unable to end in positive territory. Meanwhile, Salesforce.com (CRM 57.33, +3.28) climbed 6.1% after Jefferies upgraded the stock to 'Hold' from 'Underperform'.
Today's participation was slightly above the recent average with 1.12 billion shares changing hands at the NYSE floor.
Treasuries ticked higher during the heaviest selling but backed away from these level as the stock market rallied in the final hour. The yield on the 10-yr note ended its day lower by two basis point at 1.73%.
Today's economic data included the Wholesale Inventories report for December and the December Job Openings and Labor Turnover Survey:
- Wholesale inventories declined 0.1% month-over-month in December (Briefing.com consensus unchanged) on top of a downwardly revised 0.4% decline (from -0.3%) in November. On a year-over-year basis, wholesale inventories were up 1.9%.
- Inventories of durable goods in December declined 0.3% after a 0.4% decline in November. The December downturn was governed by a 0.5% decline in machinery inventories and a 4.4% decline in metals inventories.
- The only areas that saw inventories increase were automotive (+0.3%), electrical (+1.0%), and miscellaneous durables (+1.6%).
- Inventories of nondurable goods increased 0.1% in December after declining 0.3% in November. The uptick was paced by a 0.8% increase in inventories for drugs and a 2.1% increase in apparel inventories. The only nondurable areas that saw inventories decline in December were petroleum (-7.8%) and alcohol (-1.0%).
- Wholesale sales were down 0.3% in December after declining 1.3% in November. The inventory-to-sales ratio held steady at 1.32, yet that was up noticeably from 1.24 in the same period a year ago.
- The December Job Openings and Labor Turnover Survey showed that job openings increased to 5.610 million from a revised 5.350 million (from 5.431 million) in November
Tomorrow's economic data will include the weekly MBA Mortgage Index and the Treasury Budget for January crossing the wires at 7:00 ET and 14:00 ET, respectively.
- Russell 2000 -15.1% YTD
- Nasdaq -14.8% YTD
- S&P 500 -9.4% YTD
- Dow Jones -8.1% YTD
DJ30 -12.67 NASDAQ -15.04 SP500 -1.23 NASDAQ Adv/Vol/Dec 1081/2.147 bln/1984 NYSE Adv/Vol/Dec 937/1.128 bln/2153
3:45 pm :
- Commodities had a tough day despite the weakness seen in the dollar index
- WTI oil sold off today, falling below $38/barrel momentarily
- Mar crude ended today's session -6% at $27.93/barrel, led continued oversupply issues and uncertainty that OPEC will coordinate and cut global oil production
- Mar nat gas lost steam as well, closing -2% at $2.10/MMBtu
- Copper sold off notably, ending the day at today's low. Mar copper closed -3% at $2.03/lb
- Apr gold fell 0.1 to $1197.80/oz today, while Mar silver lost 0.1% to end at $15.45/oz
Ultratech (UTEK) received a multiple system order from a leading outsourced semiconductor assembly and test company. Ultratech's AP300E lithography systems will be utilized for various advanced packaging applications including copper pillar, wafer-level packaging and emerging technologies including fan-out WLP and silicon interposers to support growth driven by mobile devices.
7:33 am Vishay beats by $0.02, reports revs in-line; guides Q1 revs in-line ( VSH) :
Reports Q4 (Dec) earnings of $0.14 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.12; revenues fell 9.0% year/year to $555.9 mln vs the $556.31 mln Capital IQ Consensus.Commenting on the results for the fourth quarter 2015, Dr. Gerald Paul, President and Chief Executive Officer, stated, "Revenues for the quarter came in close to expectations. Margins benefitted from belt tightening. Excluding exchange rate effects, revenues were virtually on the same level as in the previous quarter and down 5% compared to the fourth quarter 2014."Co issues in-line guidance for Q1, sees Q1 revs of $540-580 mln vs. $558.05 mln Capital IQ Consensus Estimate; sees gross margins of 22% - 24%
7:07 am Entegris beats by $0.04, beats on revs; guides Q1 EPS in-line, revs in-line; Announces $100 mln share buyback ( ENTG) :
Reports Q4 (Dec) earnings of $0.20 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.16; revenues fell 1.8% year/year to $266.8 mln vs the $255.83 mln Capital IQ Consensus. Co issues in-line guidance for Q1, sees EPS of $0.13-0.17, excluding non-recurring items, vs. $0.16 Capital IQ Consensus Estimate; sees Q1 revs of $250-265 mln vs. $254.65 mln Capital IQ Consensus Estimate.Entegris announced that the Company's Board of Directors has authorized the repurchase of up to $100 million of its common stock
7:06 am Silicon Graphics announces SGI management will host a conference call for investors to discuss a new OEM agreement today at 6:15 AM PT ( SGI) : The conference call can be accessed by dialing (888) 463-5422 (toll-free) or (970) 315-0484 (international) and entering the confirmation code: 48957521.
7:05 am Benchmark Electronics beats by $0.04, reports revs in-line; guides Q1 EPS below consensus, revs in-line ( BHE) :
Reports Q4 (Dec) earnings of $0.45 per share, $0.04 better than the Capital IQ Consensus of $0.41; revenues fell 11.8% year/year to $626 mln vs the $625.23 mln Capital IQ Consensus.
Q4 Bookings Update - New program bookings in the fourth quarter were $115 to $135 million.
Co issues guidance for Q1, sees EPS of $0.29-0.33, excluding non-recurring items, vs. $0.35 Capital IQ Consensus Estimate; sees Q1 revs of $565-590 mln vs. $590.04 mln Capital IQ Consensus Estimate.Capital AllocationFourth quarter 2015 common share repurchases totaled $16 million or 770,000 shares. $135 million remains available under the current share repurchase program.
SunEdison (SUNE) signed a solar power purchase agreement with Stockton East Water District in Northern California. SunEdison plans to install 2.2 MW of high-performance SunEdison solar panels on the water district's property. By going solar, the district expects to save more than $9.5 mln on energy costs over the next 20 years and 20 mln gallons of water annually.
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