YAHOO [BRIEFING.COM]: Equity markets started today's session lower
by nearly 0.5%. The losses held early on before the S&P 500 got a lift from
a strengthening euro. Challenged by low volume, stocks then staged a slow climb
off their lows resulting in a marginally positive close. The S&P 500 ended
higher by 0.2%.
Two companies saw heavy selling after reporting their quarterly results. Ubiquiti Networks (UBNT 8.71, -6.30) fell 42.0% despite an
earnings and revenue beat. However, the company issued lower guidance which was
responsible for today's heavy selling which has dropped the stock to its lowest
level since the shares started trading in October 2011.
Elsewhere, Grocery store operator Roundy's
(RNDY 7.71, -2.52) plunged 24.6% after missing on earnings. Revenues were
slightly below expectations and the company lowered their full-year outlook.
The disappointing report combined with multiple analyst downgrades puts the
stock at its all-time low, near $7.70.
The telecommunications sector has managed to stay positive today. As most
sector components traded in-line with the broader market, Level 3 Communications (LVLT 21.94, +1.76) spiked
8.7% after securing additional financing. In addition, analyst coverage of the
stock was initiated at Goldman Sachs with a buy rating.
Financials underperformed the broader market before rallying into the close.
The SPDR Financial Select Sector
ETF (XLF 14.94, +0.01) gained 0.1%. Within the sector, American Express (AXP 55.85, -0.62) and Morgan Stanley (MS 14.61, -0.10) slipped 1.1% and 0.7%
respectively. Barclays
(BCS 11.52, +0.31) outperformed other banks as shares gained 2.8%. Today's
advance came on the heels of an announcement that Sir David Walker will be the
next Chairman.
Manchester United
(MANU 14.00, 0.00) was flat on its first day as a publically traded company as
underwriters supported the stock at $14.00. This week's other IPO, Bloomin' Brands (BLMN 12.86, -0.63) dipped 4.7%. Shares
of the company saw their first down day since it began trading on Wednesday.
J.C. Penney (JCP 23.40, +1.30) gained
5.9%. The company delivered disappointing earnings and reported a 21.7%
decrease in same store sales. However, an upbeat earnings call and likely
short-covering led to a reversal in the stock. The stock lifted off its
pre-market lows as company's Chief Executive Officer Ron Johnson indicated that
last quarter's earnings do not reflect the success of recent pricing and
marketing changes which have only been in effect for less than a month.
The economic calendar was light today as well. Export prices, excluding
agriculture, declined by 0.3% in July after they had decreased by 1.4% in the
prior month. Excluding oil, import prices were down in July by 0.4%, which
follows the 0.3% decrease experienced in the prior month.
The Treasury Budget for July showed a $69.6 billion deficit, which is better
than the deficit of $71.0 billion that had been broadly expected. The report
has mattered little to market participants as equity indices did not respond to
the news.
Stimulus chatter continues as markets make
slim advances
Looking back on the week, Monday started with headlines indicating that The
People's Bank of China suggested it would take monetary policy up a notch in
the back half of the year and vowed to bolster the economy with improved credit.
It also sees a broader use of currency in cross-border trade and investing. Knight Capital Group
(KCG 2.90, -0.17) confirmed weekend reports that it will raise $400 million in
convertible preferred stock. The preferred stock will be
convertible into approximately 267 million shares of common stock of the
company. The S&P 500 ended higher by 0.2%.
Tuesday began with comments out of
On Wednesday, European macro data was light, with
Thursday's latest weekly initial jobless claims count totaled 361,000, which
was lower than the expected 375,000. The trade deficit narrowed to $42.9
billion during June after an upwardly revised prior month deficit of $48.0
billion. Economists polled by Briefing.com had expected that the June deficit
would come in at $47.5 billion. Consumer staples were Thursday's main laggard. Monster Beverage (MNST 54.27, -6.93) plunged 9.7% after
missing earnings expectations by $0.02 and missing revenue forecasts by $3
million. The S&P was nearly unchanged on the day.
Handful of earnings scheduled to come in
Crude oil struggled in negative territory for all of today's floor
trade even with a weaker dollar. The energy component was as low as $91.93 per
barrel but was able to erase most of the day's losses. Despite the down
session, crude settled the week 1.7% higher at $92.93 per barrel.
Natural gas continued yesterday's afternoon and overnight losses as it trended
lower for its entire pit session and hit a session low of $2.76 per MMBtu, despite bullish inventory data yesterday. The
September contract is now at a new one month low following these losses, which
is largely driven by milder weather conditions. Nat gas ended 6% lower at
$2.77/MMBtu.
Gold began pit trade in the red and fell as low as $1608.10 per ounce in
morning action. However, buyers stepped in and took prices into positive
territory and to a session high of $1629.70 per ounce as the dollar weakened.
The third consecutive session of gains pushed prices up such that the yellow
metal settled the week 0.9% higher at $1622.90 per ounce. Action in earlier
sessions came in response to moves by the dollar, weak Chinese data and a
better-than-expected
Silver came off its session low of $27.53 per ounce and rallied to a session
high of $28.32 per ounce in late morning action. The metal was unable to stay
in the black and spent the remainder of floor trade chopping around just below
the break-even level. Despite securing a gain in today's pit session, silver
closed the week 1.0% higher at $28.05 per ounce.
There will be a considerable drop off in the number of companies reporting
earnings next week. Just over 20 companies in the S&P 500 are expected to
report their quarterly results. Going forward, earnings will largely be
dominated by retailers whose fiscal periods end in July. Local deal website Groupon
(GRPN 7.44, +0.79) will report Monday after the close, while Home Depot (HD 53.06, -0.09) TJX (TJX 44.46, -0.54) and Michael Kors
(KORS 42.32, -0.68) will report on Tuesday morning.DJ30 +42.76 NASDAQ +2.22
SP500 +3.07 NASDAQ Adv/Vol/Dec 1093/1.52 bln/1371
NYSE Adv/Vol/Dec 1620/566.1 mln/1377