From Briefing.com: 4:15 pm : Equity indices opened the week on a down note, unable to overcome the uncertainty surrounding the transfer of political power in Washington D.C. An afternoon rebound helped the market erase a portion of its loss, but the S&P 500 still finished lower by 0.3% while the Nasdaq (unch) finished just below its flat line.The trading session was defined by risk-off action, leading to a downtick in the U.S. dollar and an uptick in the Treasury market. The 10-yr yield finished seven basis points lower at 2.40%, while the U.S. Dollar Index (100.14, -0.63) closed down 0.6%, a level not seen since early December.
However, the dollar's relative weakness was not enough to offset concerns about a bump in U.S. crude oil production, which pushed WTI crude down 0.9% to $52.75/bbl. Naturally, the energy sector followed, closing lower by 1.1% to finish at the bottom of today's leaderboard.
Crude oil doesn't deserve all of the blame, as Halliburton (HAL 54.80, -1.65) also contributed to the energy sector's decline, losing 2.9% after missing revenue estimates. McDonald's (MCD 121.38, -0.88) also reported quarterly results this morning. The company beat estimates, but shares declined 0.9% amid concerns about the strength of first-quarter results.
Yet, despite McDonald's downbeat report, the consumer discretionary sector (+0.1%) outperformed the broader market, finishing just above its flat line. Homebuilders had a hand in the sector's resistance to selling pressure, evidenced by the 0.4% jump in the iShares U.S. Home Construction ETF (ITB 27.91, +0.12). Also of note, the sector's top component, Amazon (AMZN 817.88, +9.55) finished higher by 1.2% after the New York Post reported that the company will be entering the auto parts retail space.
The technology sector was also able to resist the market's bearish trend, finishing with a modest 0.1% gain. Top components like Facebook (FB 128.93, +1.89), Alphabet (GOOGL 844.43, +16.26), Cisco Systems (CSCO 30.27, +0.17), and Visa (V 82.15, +0.31) were able to outpace losses from the semiconductor industry. The PHLX Semiconductor Index finished the day lower by 0.7%.
On the non-cyclical side, real estate (+0.6%) finished at the top of the leaderboard, while telecom services (+0.5%) and consumer staples (-0.1%) also outperformed. Conversely, utilities (-0.5%) and health care (-0.5%) had a rough showing. In top news from the health care space, a federal court ruling blocked Humana's (HUM 205.02, +4.49) pending merger with Aetna (AET 119.20, -3.33). Humana jumped 2.2% on the ruling, while Aetna lost 2.7%.
Looking ahead, the earnings season kicks into gear this week with around 20.0% of the S&P 500 set to report quarterly results. Yahoo! (YHOO 42.40, +0.35) is scheduled to report after today's close, while Dow components 3M (MMM 178.51, +0.02), DuPont (DD 72.78, -0.25), and Johnson & Johnson (JNJ 113.94, -0.21) will report on Tuesday morning.
Investors did not receive any economic data on Monday, with the first report of the week, December Existing Home Sales (Briefing.com consensus 5.55 million), scheduled for tomorrow morning at 10:00 am ET.
- Russell 2000 -0.7% YTD
- Dow Jones Industrial Average +0.2% YTD
- S&P 500 +1.2% YTD
- Nasdaq Composite +3.2% YTD
DJ30 -27.40 NASDAQ -2.39 SP500 -6.11 NASDAQ Adv/Vol/Dec 1209/1.51 bln/1748 NYSE Adv/Vol/Dec 1593/904.6 mln/1333 3:30 pm :
- Crude oil closed pit trading -0.9% as rising US output outweighed the first evidence of OPEC/non-OPEC compliance with the production cut accord
- Mar crude oil futures fell $0.49 (-0.9%) to $52.75/barrel
- Reminder: Friday's rig count data showed the biggest single weekly oil rig count increase in 4 years. The U.S. oil rig count increased by 29 to 551 rigs last week.
- Highlights of Sunday's OPEC/non-OPEC cut compliance committee meeting:
- Data from the meeting confirmed that 1.5 mln barrels of oil/day out of the planned 1.8 mln barrels/day have already been cut, & the participating countries remain on track to achieve 1.7 mln barrels/day in total output reductions by the end of this month.
- Russian Energy Minister Alexander Novak expressed that all countries are sticking to the deal and that results are above expectations.
- OPEC and other oil producers agreed on a specific method to monitor ongoing production cut compliance at the meeting going forward.
- Upcoming data reminders:
- Weekly API data will be released tomorrow after the bell.
- Weekly EIA data will be released this Wed at 10:30 am ET.
- Weekly Baker Hughes rig count data will be released this Friday at 1 pm ET.
- Natural gas ended pit trading notably higher after Friday's drop ahead of this coming Thursday's EIA data release at 10:30 am ET.
- Feb natural gas closed $0.04 higher (+1.3%) at $3.25/MMBtu
- In precious metals, gold closed pit trading at a 2-month high; silver & gold moved in tandem to close up nearly +1% together on continued dollar index weakness following the weekend's comments from President Trump regarding the strength of the dollar
- Feb 2017 gold ended today's session up $10.80 (+0.9%) to $1215.50/oz
- Mar 2017 silver closed today's session $0.16 higher (+0.9%) at $17.18/oz
- The dollar index was -0.6% around the 100.16 level, provided support to precious metals
- Commodities, as measured by the Bloomberg Commodity Index, were +0.3% around the 88.60 level
To start out the week, the broader market ended the session with modest losses. The morning sprint lower was outdone by a slow, methodical tick higher in the afternoon session. Ultimately, the S&P 500 was the worst performer, shedding about 6.11 points (-0.27%) today to end 2265.20. The Dow Jones Industrial Average lost 27.40 points (-0.14%) to 19799.85, and the Nasdaq Composite was the best performing index today, albeit in a losing effort, down 2.39 points (-0.04%) to 5552.94.
After a relatively up week last week, the Technology (XLK 49.89, +0.08 +0.18%) space seemed to be resigned to fleeting losses; however, on the back of some strong buying in the second half of the session, the space saw a positive bias into the close, ending near highs. Component Qualcomm (QCOM 54.88, -8.00 -12.72%) suffered even worse than on Friday, as the fallout of multiple lawsuits begins to take its toll on the stock. Other sectors as measured by the S&P closed out the session XLRE +0.61%, IYZ +0.37%, XLB +0.20%, XLY +0.07%, XLP -0.06%, XLV -0.42%, XLU -0.51%, XLI -0.55%, XLF -0.65%, XLE -1.06%.
As it were, the Social Media (SOCL 23.59, +0.44 +1.90%) space was the best performing sub-sector of Technology today, as component Yahoo! (YHOO 42.40, +0.35 +0.83%) posted a strong session ahead of tonight's quarterly print. Other name in the SOCL sector which displayed relative strength today included NTES +2.58%, P +1.66%, CYOU +1.56%, WB +1.32%, LN +1.19%, YELP +1.14%, SINA +1.05%, YNDX +1.01%, MTCH +0.89%.
The worst performing Technology sector today was Semiconductors (SMH 73.12, -0.65 -0.88%). The space was hit hard by QCOM's weak session despite research firm Gartner's report which suggested worldwide semiconductor revenue is slated to grow about 7.2% in 2017. In spite of the positive industry report, shares of CREE -1.98%, NXPI -1.84%, MSCC -1.41%, MRVL -1.13%, TER -1.03%, IDTI -0.48%, INTC -0.46%, MU -0.32% all posted losses today on the broad sector weakness.
In the S&P 500 Information Technology (836.50, +0.53 +0.06%) space, trading also ended near highs, but making a fresh all-time high intraday. Components Alphabet (GOOG 819.31, +14.29 +1.78%) and Facebook (FB 128.93, +1.89 +1.49%) made a strong showing today on no apparent catalyst. Other names in the space which finished higher today included SWKS +1.69%, QRVO +1.36%, TXN +1.31%, NVDA +1.04%, TEL +0.86%, KLAC +0.66%, CSCO +0.56%, HRS +0.52%, SYMC +0.41%.
Other notable news items among sector components:
IBM (IBM 171.03, +0.48 +0.28%) announced plans to acquire Agile 3 Solutions. Financial terms of the deal were not disclosed.
Western Digital (WDC 72.65, +0.02 +0.03%) named Martin Fink as chief technology officer (CTO). Fink succeeds CTO Steven Campbell who will depart the company to pursue other opportunities.
Sprint (S 9.18, +0.25 +2.80%) acquired 33% of Tidal. Financial terms of the deal were not disclosed.
NCI (NCIT 12.65, -1.30 -9.32%) discovered that its controller, acting alone, embezzled money from the company.
MeetMe (MEET 4.96, +0.01 +0.20%) was informed that CEO Geoffrey Cook sold 250,000 shares pursuant to pre-arranged Rule 10b5-1 trading plan.
Perion Network (PERI 1.61, +0.04 +2.55%) named Doron Gerstel as CEO.
Mimecast (MIME 20.93, -0.49 -2.29%) filed for $50 million mixed securities shelf offering and 20,539,000 ordinary shares by selling shareholders.
Analyst actions:
MSI was upgraded to Buy from Neutral at Citigroup,
MSFT was upgraded to Buy from Neutral at Tigress Financial,
TSU was upgraded to Overweight from Equal Weight at Morgan Stanley;
QCOM was downgraded to Neutral from Buy at Instinet and to Underperform from Buy at CLSA,
VZ was downgraded to Market Perform from Outperform at Wells Fargo,
WK and TVPT were downgraded to Equal Weight from Overweight at Morgan Stanley;
GRUB was initiated with a Hold at Craig Hallum,
ORAN was initiated with a Hold at Berenberg |
