The Week In Review
8/13/12-8/17/12August 17, 2012
Equities endured a choppy session concentrated mostly around the unchanged level. Today's economic data points and lackluster European trade did not serve as a catalyst for stocks. Options expiration gave a slight boost to volume, but it still finished well below its 50-day average. The S&P 500 traded within a three point intraday range and ended higher by 0.2%. The Nasdaq outperformed and posted a 0.5% gain.
Technology stocks were today's top performer as Oplink Communications surged 14.4% after beating on earnings and reporting in-line revenues. The company issued mixed guidance as they expect earnings for the upcoming quarter to come in near the top of the range. However, management warned that revenues could come up short of estimates. Competitor Finisar gained 3.0% as it benefited from Oplink's strength.
Two companies which began trading publically within the last year marked new all-time lows. Groupon slumped 5.0% as investors continued selling the stock since Monday's disappointing earnings. Average daily volume observed this week has been the highest since the company went public in November. Meanwhile, Facebook slid 4.1% after partial lock-up expiry took place yesterday.
While domestic financials showed mixed performance, their European counterparts have been rallying off multi-year lows over the past few weeks. Barclays and Deutsche Bank advanced 2.8% each. Meanwhile, Credit Suisse added 2.0% and UBS rose by 1.5%.
Molycorp plunged 11.8% on heavy volume. Shares of the company fell after the pricing of new stock and debt totaled more than $480 million. The number was higher than what investors had expected, and the decision to float additional debt and stock was met with a Dahlman Rose & Co. downgrade from 'buy' to 'hold.'
Healthcare stocks underperformed the broader market. McKesson shed 2.5% after being downgraded by Morgan Stanley from 'overweight' to 'equal-weight.' Elsewhere in the space, Spectrum Pharmaceuticals and Perrigo were lower on general sector weakness. The two names finished lower by 5.0% and 1.8%, respectively.
The preliminary University of Michigan Survey for August came in at 73.6, up from the 72.3 that was posted in the prior month, and better than the reading of 72.2 that had been widely expected.
Separately, leading Indicators for July increased by 0.4%, which was better than the 0.2% reading that had been widely forecasted to follow prior month's 0.3% decrease.
The volatility index, or VIX, has been trending lower over the past month. It ended today's session down 5.7% at 13.47 after hitting a session low of 13.32, last seen in June of 2007.
Mired in thin volume, markets finish higher on the week
Looking back on the week, Monday showed little change as equities began on a slightly negative note. After reaching session lows before the European close, stocks staged a slow recovery but were unable to break into positive territory. The S&P 500 ended lower by 0.1%. Sysco jumped 4.5% after reporting earnings and revenues ahead of expectations.
Tuesday was quiet as stocks got a lift at the open from strong U.S. retail sales and the mixed Eurozone GDP data. However, the strength did not extend into the afternoon as the major indices slowly came off their highs and settled near session lows. Another day of thin volume contributed to a narrow intraday range as the S&P 500 drifted to a flat finish. Groupon plunged 27.0% after receiving multiple downgrades in the wake of disappointing earnings and guidance.
On Wednesday, the major indices started the day on a down note before mounting a slow climb towards session highs. With thin volume and economic data largely in-line, the day's action was mostly flat. An afternoon push attempted to lift stocks to a higher close but the move lacked conviction. As a result, the Nasdaq ended higher by 0.5% while the S&P 500 and Dow finished flat. Abercrombie & Fitch led the session with a 9.0% gain after beating on earnings and revenues.
On Thursday, equities showed indecision during the first hour of the session but were lifted higher as the day went on. A notable increase in housing permits and in-line initial claims data supported the day's advances. The major indices retreated off their highs before the close but still ended firmly in the black. The Nasdaq gained 1.0% and the S&P ended higher by 0.7%. Facebook plunged 6.3% as the insider lock-up period expired.
August 16, 2012
US stock futures maintained modest gains premarket. Holding these small gains is good considering data showed a slight rise in weekly jobless claims and a decline in housing starts in July. First-time claims for state unemployment benefits rose in the latest week, the Labor Department reported Thursday. The number of initial claims in the week ending Aug. 11 rose 2,000 to 366,000. The consensus forecast of Wall Street economists was for claims to rise to 365,000. N top of the increase in jobless claims, new construction of U.S. houses retreated in July after a strong gain in the previous month. Starts fell 1.1% in July to a seasonally adjusted annual rate of 746,000 units. Economists surveyed by MarketWatch had expected a slight increase to an annual rate of 765,000 units. Futures on the Dow Jones Industrial Average gained 25 points to 13,160 and those on the S&P 500 index climbed 3.70 points to 1,407.2. Nasdaq-100 futures added 9 points to 2,747.5. On the open, the indices pulled back quickly, with the Dow Jones down 12 points, the S&P 500 down 0.04 points, and the Nasdaq up 6 points. Just after 10:00am the markets began to rally and did not stop until the close, pushing near the highs of the year. The Dow closed up 85.33 points or 0.65%, the S&P 500 up 9.99 points or 0.71%, and the Nasdaq up 31.46 points or 1.04%. European markets performed well with the major indices closing in positive territory. The FTSE-100 closed up 1.41 points or 0.03%. The CAC 40 was up nearly 1.00% or 31.29 points, and the DAX was traded higher at 49.49 points or 0.71%. Asian Markets were mixed with the Hang Seng down 89.34 points or 0.45%, the Nikkei 225 was bucking the trend up almost 2% or 167.72 points. In corporate news, Blyth Inc. (BTH) climbed up 16.96% to $43.38 after announcing a possible spinoff into a company known as ViSalus. GT Advanced Technologies Inc. (GTAT) was in the green up 13.91% at $6.14 after announcing the company was increasing their backlog. Cisco Systems (CSCO) had a nice pop up 9.63% at $19.02 after a solid earnings report yesterday and an increase in the dividend. Coinstar Inc. (CSTR) was also up today, 7.59% at $51.88 after rumors were spread that the company was in negotiations with a private equity firm to be bought out. On the other side of the positive moves in the aforementioned companies were the companies moving negative. Perry Ellis International Inc. (PERY) crashed today down, 15.58% at $18.80, after the company announced a loss of $2.4 million for the second quarter. Agilent Technologies (A) sunk into the red today, down 8.23% to $37.15. Agilent saw its shares fall after a poor earnings report and lowering its full year outlook. Finally, Perrigo Co. (PRGO) traded lower today down 6.58% at $108.93. Perrigo also tanked after a poor earnings report in which the company missed estimates significantly.
August 15, 2012
US stocks opened flat today after a release of the consumer price index. U.S. consumer prices were unchanged in July, as lower energy prices offset gains in food and other items. The core consumer price index rose 0.1%. In June overall consumer prices were unchanged, while the core gauge rose 0.2%. The CPI rose 1.4% over the year through July, the smallest 12-month change since late 2010. The core rate gained 2.1% over the past 12 months, the smallest gain since late 2011. The government also reported that real average hourly earnings were unchanged in July, compared with a 0.3% gain in June. The Dow opened down 16 points or 0.14%, the S&P 500 down 1.9 points or 0.14%, and the Nasdaq down 2.25 points or 0.08%. After opening lower, the indices began to rally to their highs around 10:00am after the Housing Market Index was announced at 37 beating the consensus of 35. Following the short rally, stocks pulled back down into negative territory. During mid-day trading the market was flat until around 2:00pm at which point another rally began. Once again this rally was short lived, as coming into the close the market turned down. The Dow closed down 7.36, the S&P 500 closing just positive up 1.60, and the Nasdaq showing the largest gain at 13.95. In European markets the FTSE 100 closed down 31.74 points which is 0.54%, the CAC 40 down 1.07 points or 0.03%, and Germany's DAX found itself down 27.59 points or 0.40%. Asian Markets were also down today with Japan's Nikkei 225 down 4.84 points or 0.05% and the Hang Seng down 239.39 points which is 1.18%. In corporate news, Deere and Company (DE) saw its shares crash 6.28% after missing analysts' estimates on net income. The company posted a net income of $1.98 per share versus Wall Street's view of $2.32 per share. Another company that saw its shares go into the red after earnings was Staples Inc. (SPLS). Staples shares dropped 14.60% after releasing that its US and international sales were significantly lower, at 5.5% and 18% respectively. On a better note, Abercrombie and Fitch (ANF) bounced 8.97% after beating analysts' estimates, although estimates were low based on the company's struggling shares. Another company that saw positive gains after earnings was Photronics Inc. (PLAB). Photronics jumped 10.66% after the company beat estimates by $0.01 per share and announced that revenues were in line with estimates. Overall, another flat day in the market.
August 14, 2012
U.S. stock futures extended gains on Tuesday after data showed that retail sales rose 0.8% to a seasonally adjusted $403.9 billion in July, posting the biggest gain since February. Another factor pushing the futures higher was a positive poll regarding investor confidence. Investor confidence in the global economic outlook in August saw its sharpest rise since the spring of 2009, according to the monthly Bank of America Merrill Lynch survey of fund managers released Tuesday. The report, which polled 173 fund managers, found that a net 15% of those surveyed believe the global economy will strengthen in the next year. The report cites "growing expectations of intervention by the European Central Bank" for the optimistic outlook and says that investors are becoming far less bearish on the euro zone. Futures on the Dow Jones Industrial Average gained 50 points to 13,187 and those on the S&P 500 index climbed 5.90 points to 1,408.5. Nasdaq-100 futures rose 11 points to 2,739. As trading began the indices began to lose some of their gains, and by mid-day had pulled back by nearly half. Coming into the last hour of trading stock began to give up even more reaching negative levels with around twenty minutes left in trading. The Dow closed down 2.48 points, the S&P 500 down 0.19 points, and the Nasdaq down 5.54 points. Foreign markets posted gains today, with many of the major indices in the green. In European markets; the FTSE 100 closed up 32.90 points or 0.56%, the CAC 40 up 23.86 points or 0.70%, and the DAX also up 64.71 points or 0.94%. In the Asian markets, the Hang Seng posted a gain of 210.32 points which is 1.05%, and the Nikkei 225 was also up 44.73 points or 0.50%. In corporate news; Home Depot (HD) released earnings today in which they beat EPS estimates, and raised their full year guidance; shares jumped nearly 4%. Michael Kors (KORS) was another company that had a great earnings report propelling their shares up 16%. Groupon (GRPN) also released a decent earnings report, however the company released news that there was a decline in gross billings from the March period, which analysts believe indicates a weakening in the company's core daily deals business. Furthermore, Groupon went on to cut their third quarter estimates, causing shares to crash over 26%. One of the largest losers of the day was Envivio Inc. (ENVI), which lost around 55% after cutting its second quarter revenue forecast. The company now estimates revenue of $10 million to $11 million, down from its previous range of $17 million to $18 million. Overall, it was a very flat day, leaving investors wondering what the market needs to continue its recent upward trend.
August 13, 2012
U.S. stocks started slightly lower Monday after concerns about Asian economic growth took some air out of the benchmark indexes' extended weekly winning streak. The Dow Jones Industrial Average fell 39 points to 13,169. The Nasdaq Composite dropped 3 points to 3,018. The S&P 500 fell 3 points to 1,403. Ahead of the open, Japan reported economic growth slowed to a 1.4% pace in the three months to June from 5.5% in the prior quarter. And brokerages cut their outlooks for China growth yet the major averages continue to hold up well. Quite day on the earnings and analyst confront. In the tech sector, Apple and Google keep creeping higher. Both were upgraded. IBM continues to bump up against the $200 level. Salesforce.com is up 3% on positive analyst comments. Cisco Systems is quiet ahead of earnings on Wednesday. The energy space continues to perk up. Conoco Phillips is higher on an upgrade. Pembina Pipeline is higher on an upgrade. In the retail space, Barrons wrote positive articles on GameStop and Sears over the weekend. Both are higher by more than 2%. Campbell Soup and Sears are higher by more than 2% thanks to upgrades. Through the first hour the recent trend continues with the averages battling back on initial weakness. However as the morning progressed, the averages drifted back lower, pushing to new lows. Apple and Google look good, but everything else is in the red. In the afternoon the averages fought back as they've consistently done. Google keeps pushing higher now up 2.5%. Apple also looks good, but the rest of the market is quiet. In the last hour the Nasdaq nudged into the green while the Dow tried to rebound only to pull back into the close. The Dow Jones Industrial Average finished down 38 points at 13,169. The S&P 500 lost a point to 1,404. The Nasdaq Composite ended up a point at 3,022.