From Briefing.com: The broader market closed out the first day back from the Presidents' Day weekend with solid gains. The Nasdaq Composite led the way higher, up nearly 98.44 points (+2.27%) to 4435.96. The S&P 500 advanced 30.80 points (+1.65%) to 1895.58. The 'laggard' on the day was the Dow Jones Industrial Average which gained 'only' 222.57 points (+1.39%) to 16196.41. Today's market data came in the form of the Empire Manufacturing Survey which showed a reading of -16.6 for February. In addition, the NAHB Housing Market Index for February was 58, down from a revised 61 in January (from 60).
Technology (XLK 39.97, +0.70 +1.78%) was higher for the entire session. Component Qualcomm (QCOM 46.73, +2.17 +4.87%) was upgraded this morning to an Outperform rating at Bernstein as they had a favorable view on the company's royalty rate outlook. Other sector action ended XLY +2.42%, XLI +2.01%, XLV +1.88%, XLF +1.61%, XLB +1.53%, IYZ +1.37%, XLE +0.99%, XLP +0.80%, XLU +0.64%.
Social Media (SOCL 16.53, +0.66 +4.16%) names were strong today as component Groupon (GRPN 4.08, +1.19 +41.18%) was aided by a 13F stake disclosed by Alibaba (BABA 66.29, +5.40 +8.87%) in which the BABA now holds 32,972,000 shares of GRPN. Other SOCL names higher today included WB +12.08%, NTES +8.82%, RENN +8.42%, YHOO +8.28%, UNTD +8.12%, YELP +7.46%, CYOU +6.83%.
Semis (SOXX 80.17 +2.72 +3.51%) were also among the best performing sectors in tech today as Micron (MU 10.81, +0.79 +7.88%) was upgraded to Buy from Neutral at Mizuho before the market opened; Micron held its Analyst Day on Friday and Mizuho called for a bottom in the stock at the moment. Other stocks in the green in the sector included QRVO +8.60%, SWKS +6.61%, ON +6.22%, MRVL +5.92%, TSM +4.95%, NVDA +4.90%, ADI +4.90%, CREE +4.76%.
In the S&P 500 Information Technology sector (657.98, +12.22 +1.89%), action was also decidedly to the upside. Component NetApp (NTAP 23.09, +1.20 +5.48%) displayed relative strength today ahead of the company's quarterly results which are scheduled for tomorrow after the market closes. Other components finished the session JNPR +6.27%, STX +4.85%, WU +4.78%, HPQ +4.14%, AVGO +3.76%, TSS +3.68%, AKAM +3.53%, VRSN +3.52%, FSLR +3.41%, +3.38%.
Other notable news items among sector components:
Alphabet (GOOG 691.00, +8.60 +1.26%) filed a 330,240 share Class C capital stock shelf offering by selling stockholders.
Fiserv (FISV 94.35, +1.28 +1.38%) announced former TE Connectivity (TEL 55.50, +1.01 +1.85%) CFO and EVP, Robert Hau, was appointed CFO effective March 14, 2016.
Telefonica Business Solutions has become one of the first service providers to offer the Cisco (CSCO 25.84, +0.73 +2.91%) portfolio of collaboration cloud services as a fully integrated service.
Harris (HRS 73.46, +1.41 +1.96%) received a $12 million order to provide the Armed Forces of the Philippines (AFP) with Harris Falcon III tactical vehicular radios, intercom systems and handheld radios, as part of a communications modernization program.
IBM (IBM 122.74, +1.70 +1.40%) unveiled the new IBM z13s mainframe. IBM also announced in connection to the mainframe the security embedded into hardware, intelligent security capabilities and an expanded partner ecosystem.
Accenture (ACN 96.91, +2.21 +2.33%) launched four new digital network offerings - Digital Network Deployment Services, Service Experience Engineering and Management Services, Field Installation and Repair Services Transformation, and Next Generation Enterprise Services.
Calix (CALX 5.99, +0.32 +5.64%) is using the Oracle (ORCL 35.68, +0.15 +0.41%) Cloud Platform to significantly speed the development and delivery of innovative new services such as Web content management and customer portals for its customers, which include many of the world's leading service providers.
Microchip (MCHP 41.63, +1.22 +3.02%) launched its MPLAB Xpress Cloud-based Integrated Development Environment.
Computer Sciences (CSC 27.64, +0.0.2 +0.07%) intends to redeem all outstanding 6.50% Senior Notes due 2018.
Elsewhere in the technology sector:
Vodafone (VOD 30.26, +0.36 +1.20%) and Liberty Global (LBTYA 35.28, +2.45 +7.46%) formed a JV to combine their Dutch operations.
Gogo (GOGO 10.08, -3.81 -27.43%) responded to the declaratory judgment action filed against it by
American Airlines (AAL 397.95, +4.90 +1.25%) last Friday.
Fairchild Semi's (FCS 19.87, -0.59 -2.88%) Board of Directors reaffirmed their commitment to the ON Semiconductor (ON 7.51, +0.44 +6.22%) agreement. The BoDs also determined the proposal from China Resources and Hua Capital was not superior.
SAP SE (SAP 75.74, +2.06 +2.80%) announced plans to accelerate its leadership position in the cloud with innovations built on the SAP HANA platform, predictive capabilities and mobile business intelligence that aim to enable users to benefit from consumer-grade experience and enterprise-scale performance. With the acquisition of the Roambi suite of solutions and related key assets, SAP intends to bring mobile access to analytics to everyone.
Baidu.com's (BIDU 157.52, +4.79 +3.14%) special committee retained financial and legal advisors to evaluate the previously announced acquisition offer for its stake in Qiyi.com.
Agilent (A 37.07, +0.85 +2.35%) filed a debt securities shelf offering for an undisclosed amount.
Journal Media (JMG 499.50, +1.50 +0.30%) received recommendation from Glass Lewis that shareholders vote 'for' merger with Gannett (GCI 15.34, +0.76 +5.21%).
Alibaba (BABA) filed a 13F showing a 32,972,000 share position in Groupon (GRPN).
VisionChina Media (VISN 9.40, +0.20 +2.17%) to divest its subway mobile TV ad business for $119 million.
In reaction to quarterly results:
Sonus Networks (SONS 6.93, +1.61 +30.14%) reported better than expected Q4 EPS and revenues of $0.23 and $76.33 million, respectively. SONS also guided Q1 EPS and revenues better than expected at ($0.03)-($0.01) and $58-59 million, respectively. SONS also expects FY16 EPS of $0.20-0.27 and revenues for FY16 of $255-265 million.
Liberty Global (LBTYA) reported Q4 OCF +2.5% to $2.19 billion. Revenues were down -0.3% to $4.6 billion.
Yandex N.V. (YNDX 13.57, +0.62 +4.79%) reported worse than expected EPS for Q4 of RUB 11.24 on revenues which were better than expected and grew 23.4% year-over-year to RUB 18.09 billion.
Companies reporting quarterly results tonight/tomorrow morning: A, DIOD, HLIT, IMPR, SAAS, MXWL, PDVW, RAX, VDSI, ZEN, ZIXI/ADI, SCOR, CYRN, GCI, MGIC, PCLN, SPNS, SHOP, TMUS
Analyst actions:
QCOM was upgraded to Outperform from Mkt Perform at Bernstein,
MU was upgraded to Buy from Neutral at Mizuho,
PANW was upgraded to Buy from Neutral at DA Davidson,
VIAB was upgraded to Buy from Neutral at Citigroup,
DISH was upgraded to Equal Weight from Underweight at Barclays,
MTCH was upgraded to Neutral from Sell at BTIG Research,
COMM was upgraded to Outperform from Mkt Perform at Raymond James;
SUNE was downgraded to Neutral from Buy at BofA/Merrill,
ARMH was downgraded to Neutral from Outperform at Macquarie,
WEB was downgraded to Hold from Buy at Deutsche Bank
4:17 pm Vishay increases quarterly dividend to $0.0625/share from $0.06/share ( VSH) :
4:10 pm Rackspace beats by $0.09, reports revs in-line; guides Q1 revs below consensus; guides FY16 revs below consensus ( RAX) :
Reports Q4 (Dec) earnings of $0.31 per share, $0.09 better than the Capital IQ Consensus of $0.22; revenues rose 10.7% year/year to $522.8 mln vs the $521.16 mln Capital IQ Consensus. Adjusted EBITDA for Q4 of 2015 was $184 million, for a margin of 35.1 percent, up 11.0 percent from the fourth quarter of 2014.Co issues downside guidance for Q1, sees Q1 revs of $517-521 mln vs. $530.08 mln Capital IQ Consensus Estimate. Co issues downside guidance for FY16, sees FY16 revs of $2.08-2.16 bln vs. $2.21 bln Capital IQ Consensus Estimate.Guidance Details: Excluding the expected negative impact of currency movements and a small divestiture, we expect our normalized year-over-year growth rate for the quarter to range between 9.2 percent and 10.2 percent.... Excluding the expected negative impact of currency movements and a small divestiture, we expect our normalized growth rate for the year to range between 6 percent and 10 percent. Adjusted EBITDA margins are expected to range between 33 percent and 35 percent for the first quarter and the full year.
4:09 pm Diodes beats by $0.08, beats on revs; guides Q1 revs in-line ( DIOD) :
Reports Q4 (Dec) earnings of $0.14 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.06; revenues fell 4.2% year/year to $214.4 mln vs the $202.14 mln Capital IQ Consensus. Co issues in-line guidance for Q1, sees Q1 revs of $214-235 mln vs. $214.05 mln Capital IQ Consensus Estimate. Eexpect non-GAAP gross margin to be 28-32%. Non-GAAP operating expenses are expected to be approximately 24.5-26.5%. Expect interest expense to be approximately $3.4 million.
4:09 pm Agilent beats by $0.03, misses on revs; guides Q2 EPS below consensus, revs below consensus; guides FY16 EPS below consensus, revs in-line ( A) :
Reports Q1 (Jan) earnings of $0.46 per share, $0.03 better than the Capital IQ Consensus of $0.43; revenues were unchanged from the year-ago period at $1.03 bln.Adjusted operating margin was 20.2% for the first quarter, up 200 basis points over a year ago. Co issues downside guidance for Q2, sees EPS of $0.37-$0.39 vs. $0.42 Capital IQ Consensus Estimate; sees Q2 revs of $965-$985 mln vs. $1.01 bln Capital IQ Consensus Estimate. Co issues guidance for FY16, sees EPS of $1.81-$1.87 vs. $1.89 Capital IQ Consensus Estimate; sees FY16 revs of $4.10-$4.12 bln vs. $4.16 bln Capital IQ Consensus Estimate.
4:07 pm Harmonic reports EPS in-line, beats on revs; guides Q1 EPS below consensus, revs in-line; guides FY16 EPS below consensus, revs above consensus ( HLIT) :
Reports Q4 (Dec) loss of $0.01 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of ($0.01); revenues fell 19.7% year/year to $86.6 mln vs the $83.74 mln Capital IQ Consensus. Co issues guidance for Q1, sees EPS of ($0.03)-(0.02), excluding non-recurring items, vs. ($0.01) Capital IQ Consensus Estimate; sees Q1 revs of $82-86 mln vs. $85.60 mln Capital IQ Consensus Estimate. Co issues downside EPS guidance for FY16, sees EPS of $0.09-0.12, excluding non-recurring items, vs. $0.14 Capital IQ Consensus Estimate; sees FY16 revs of $400-415 mln vs. $393.52 mln Capital IQ Consensus Estimate.
4:02 pm Analog Devices increases quarterly dividend to $0.42/share from $0.40/share; increases share buyback to $1 bln ( ADI) :
In addition, BoDs approved an increase to co's share repurchase authorization to $1 bln. As of January 30, 2016, the Company had $415 million remaining under its previous authorization.4:15 pm : The stock market ended its first session of the week on a higher note, with the major indices continuing their rally from the end of last week. Today's trade saw a departure from the recent trend of equities trading lockstep with oil, as well as a persisting appetite for risk in recently sold off sectors. The Nasdaq Composite (+2.3%) ended ahead of the S&P 500 (+1.7%) and the Dow Jones Industrial Average (+1.4%).
U.S. futures were able to capitalize on positive sentiment out of Europe and Asia thanks in part to dovish comments and a positive view on the banking sector from the President of the European Central Bank Mario Draghi. In remarks on Monday, the central bank President defended the banks' capital position and reiterated that the ECB is prepared to do its part to help bolster growth in the region. This sentiment paired with a deal between OPEC and non-OPEC members on a production level freeze was enough to boost futures overnight.
However, market sentiment soured on this deal shortly before the U.S. open, as market participants appeared to favor a production cut agreement. Additionally, doubt over whether Iran and Iraq will participate in the freeze has taken some shine off the deal. Regardless, Saudi Arabia, Russia, Qatar, and Venezuela have proposed a freeze in production at January levels. WTI crude ended its pit session lower by 1.0% at $29.05/bbl.
All ten sectors were able to end their day in positive territory with consumer discretionary (+2.5%), industrials (+2.0%), technology (+1.9%), financials (+1.8%), and health care (+1.8%) leading the pack. These also happen to be the heaviest weighted sectors in the S&P 500, and they outweighed relative weakness in energy (+0.8%).
In the consumer discretionary space, large-cap Priceline (PCLN 1110.68, +52.67) outperformed ahead of its earnings report before tomorrow's open. Meanwhile, diversified media companies showed relative strength after last week's rough outing. On that note, Viacom (VIAB 34.29, +1.48) rebounded 4.5% after falling 18.1% since its February 8 earnings report.
Money center banks demonstrated relative strength in the financial sector. Morgan Stanley (MS 23.72, +0.63) outperformed after receiving several upgrades including an upgrade at JP Morgan from "Neutral" to "Overweight". Conversely, American International Group (AIG 52.06, -0.94) pulled back slightly from Friday's 4.9% rally.
The high-beta chipmakers outperformed in the heavyweight technology space. Sub-group constituents Micron Technology (MU 10.81, +0.79) and Qorvo (QRVO 40.78, +3.23) helped lead the PHLX Semiconductor Index (+3.5%) with gains of 7.9% and 8.6%, respectively. Meanwhile, large cap Apple (AAPL 96.55, +2.56) outperformed.
In the health care space, Bristol-Myers Squibb (BMY 62.18, +1.98) gained 3.3% after Barron's voiced a positive view on the stock over the weekend. Biotechnology had a better showing than the broader health care sector, evidenced by a 3.0% climb in the iShares Nasdaq Biotechnology ETF (IBB 258.72, +7.53).
Treasury yields fluctuated in a narrow range today as the rally in equities went on throughout the day. The yield on the 10-yr note ended its session higher by three basis points at 1.78%.
Today's participation was close to recent averages with more than 1.2 billion shares changing hands at the NYSE floor.
Today's economic data included the Empire Manufacturing Survey for February and the NAHB Housing Market Index for February.
- The Empire Manufacturing Survey showed a reading of -16.6 for February (Briefing.com consensus -9.9) versus a prior reading of -19.4. Granted the pace of slowdown decelerated in February, yet things are still a long way from being in a state of expansion in the New York Fed region
- The NAHB Housing Market Index for February came in at 58 from a revised 61 in January (from 60) while the Briefing.com consensus expected the reading to come in at 60.0.
After today's session FOMC voting member and Boston Fed President Eric Rosengren is scheduled to speak at 19:30 ET.
Tomorrow's economic data includes the 7:00 ET release of the weekly MBA Mortgage Index while January PPI (Briefing.com consensus -0.2%), January Housing Starts (Briefing.com consensus 1171k), and January Building Permits (Briefing.com consensus 1200k) will be released at 8:30 ET. Separately, the January Industrial Production Report (Briefing.com consensus +0.3%) and Capacity Utilization (Briefing.com consensus 76.6%) will cross the wires at 9:15 ET. Finally, the FOMC minutes from the January 27th meeting will be released at 14:00 ET.DJ30 +222.57 NASDAQ +98.44 SP500 +30.80 NASDAQ Adv/Vol/Dec 2503/1.934 bln/609 NYSE Adv/Vol/Dec 2534/1.206 bln/577
3:40 pm :
- Commodities, as measured by the Bloomberg Commodity Index, are still in the red and are currently -1%
- WTI pulled back a large amount from its $31.53/barrel high for today. Mar crude finished floor trading -1% at $29.05/barrel
- In other energy, Mar natural futures slipped -3.6% to $1.90/MMBtu
- Mar copper had a nice day, rising 1% to $2.05/lb, while precious metals lost steam
- Mar silver fell 3% to $15.33/oz, while Apr gold lost -$31.50 to $1207.90/oz
11:39 am Cisco Systems continues strong performance ( CSCO) : The aggressive gap higher start last Thursday has been appreciably extended again (is a top performing Dow component) with it reaching up near its early Jan gap between 25.74 and 25.82 (session high 25.74). Note that the top of the gap lines up with its Nov trough while the Dec low and 50% retrace of the entire Oct-Feb slump are at 25.96/25.97.
8:01 am Fairchild Semi Board of Directors reaffirms commitment to ON Semiconductor ( ON) agreement; determines proposal from China Resources and Hua Capital is not superior ( FCS) :
FCS's board of directors determined that the unsolicited proposal received on December 28, 2015, from China Resources Microelectronics and Hua Capital Management to acquire FCS does not constitute a "Superior Proposal" as defined in the co's Agreement and Plan of Merger with ON Semiconductor ( ON). FCS reaffirmed its commitment to ON Semiconductor agreement, under which a wholly owned subsidiary of ON Semiconductor agreed to acquire all of the outstanding shares of FCS common stock for $20.00 per share in cash.
Applied Micro Circuits Corporation (AMCC), a global leader in computing and connectivity solutions, today announced that XS Inc., a leading supplier of customized solutions for enterprise and hyper scale data center customers, has selected AppliedMicro's X-Gene 2 server CPU for its next-generation V-Raptor servers.
Microchip Technology (MCHP) announced its MPLAB Xpress Cloud-based Integrated Development Environment is now available |
