Stock Market Update from Briefing.com

Briefing.com

11:55 am: [BRIEFING.COM] The major averages remain near their recent levels, with the S&P 500 trading higher by 0.3%.

Earlier this morning we noted the underperformance of the health care sector (-0.1%), which remains in a position of relative weakness at this juncture. Meanwhile, other heavily-weighted groups like consumer discretionary (+0.3%) and technology (+1.2%) are among the leaders, while financials (+0.1%) lag.

Even though the financial sector trails the broader market today, the economically-sensitive group has had a better showing than the broader market so far this week. The financial sector holds a week-to-date gain of 1.0% versus a 0.9% increase for the S&P 500.

11:30 am: [BRIEFING.COM] Equity indices have spent the past 30 minutes in a slow climb towards their opening highs. The S&P 500 now trades about three points below its session high, while the Nasdaq hovers roughly 20 points below its best level of the session.

With the major averages fighting their way back from session lows, eight sectors now trade in the green, while two of the smallest groups-telecom services (-1.5%) and materials (-0.2%)-remain in negative territory.

On the upside, the discretionary sector (+0.4%) follows the lead of technology (+1.2%), with help from homebuilders after DR Horton (DHI 22.95, +1.60) reported better than expected earnings. The stock trades higher by 7.4%, while the broader iShares Dow Jones US Home Construction ETF (ITB 23.72, +0.39) sports an advance of 1.7%.

11:00 am: [BRIEFING.COM] The major averages hover near their respective flat lines after slumping from their opening highs.

The technology sector (+0.8%) continues trading well ahead of the remaining groups, but the earnings-driven strength of the sector has not translated into buying interest in other areas of the market. Outside of technology, only consumer staples (+0.2%), and utilities (+0.6%) trade in the green.

On the downside, the health care sector (-0.5%) lags amid renewed weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 227.83, -3.16) is lower by 1.4% as it trades near its 20-day moving average (228.44).

10:35 am: [BRIEFING.COM]

  • The dollar index sold off this morning, which gave a boost to the precious metals space
  • Both gold and silver rallied about an hour ago... gold rallied $23/oz to $1299/oz in 10 minutes
  • In current trade, June gold is +0.4% at $1289.30/oz, while May silver is +1.2% at $19.67/oz
  • Natural gas has been in positive territory all day so far and was modestly higher just ahead of inventory data
  • Following the data, nat gas dropped, but quickly recovered and is now +0.4% at $4.25/MMBtu (May contract)
  • May crude oil is currently +0.6% at $102.02/barrel.

9:55 am: [BRIEFING.COM] The major averages have slumped from their opening highs in a swift move lower that was likely related to the recent headlines from Ukraine, indicating Russia has announced the start of military exercises on the Ukrainian border in response to the 'anti-terrorism' operation launched against pro-Russian separatists by the government in Kiev.

The weakness in equities was accompanied by strength in Treasuries (10-yr yield at 2.69%), gold futures (+0.5% to $1291.60/ozt), and the yen (102.22 vs the dollar), all of which tend to be on the receiving end of buying interest when geopolitical concerns come to the forefront.

The technology sector (+0.8%) continues holding a solid gain, while most other cyclical groups hover in the red. Conversely, the defensively-oriented utilities sector (+0.6%) has climbed to a fresh session high.

9:45 am: [BRIEFING.COM] As expected, the Nasdaq (+0.6%) began the day well ahead of the other indices thanks to significant strength in the technology sector (+1.2%), while the Dow Jones Industrial Average has surrendered its opening gain.

The top tech component, Apple (AAPL 565.76, +41.01), trades higher by 7.8% after reporting strong results, while Citrix Systems (CTXS 61.01, +5.02), F5 Networks (FFIV 109.58, +1.39), and Facebook (FB 62.45, +1.08) also trade with gains after beating earnings expectations.

Outside of the technology sector, there isn't too much strength among other groups as only the consumer discretionary space (+0.3%) is higher by more than 0.1%.

On the downside, health care (-0.3%) and industrials (-0.3%) underperform.

Treasuries have erased the bulk of their losses, sending the benchmark 10-yr yield to 2.70%.

9:15 am: [BRIEFING.COM] S&P futures vs fair value: +9.80. Nasdaq futures vs fair value: +61.50. Equity indices are on track to begin today's session on a sharply higher note, with the Nasdaq expected to provide the early lead after several components reported above-consensus earnings.

Most notably, Apple (AAPL 569.00, +44.25) is indicated to open higher by 8.4% after beating earnings and revenue expectations on stronger-than-expected iPhone shipments. The company increased its share buyback program to $90 billion and announced a 7:1 share split, which is set to go into effect on June 2.

Apple notwithstanding, participants also received better-than-expected earnings from other Nasdaq components like Citrix Systems (CTXS 58.90, +2.91), F5 Networks (FFIV 114.85, +6.66), and Facebook (FB 63.60, +2.24).

On the economic front, the durable orders report for March was solid as durable goods orders increased 2.6% against the 2.0% rise expected by the consensus. Orders excluding transportation also surprised to the upside with an increase of 2.0% against an increase of 0.5% that was broadly expected.

With regard to initial claims, the report revealed an increase to 329,000 from a revised rate of 305,000 (Briefing.com consensus 312,000). In all likelihood, the report was impacted by seasonal adjustments related to the Easter holiday.

Treasuries hovered near their lows, but trimmed their losses over the past 30 minutes amid reports indicating Russia has announced it will conduct military drills on the Ukrainian border in response to the situation in the southeastern part of the country, where the army has clashed with pro-Russian separatists. The benchmark 10-yr yield has narrowed its increase to one basis point as it hovers near 2.71%.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: +12.00. Nasdaq futures vs fair value: +65.00. The S&P 500 futures trade 12 points above fair value.

Asian markets ended the Thursday session on a mixed note after the release of several economic data points. Japan's Corporate Services Price Index rose 0.7% year-over-year (expected 0.8%, previous 0.7%), while the Foreign Bonds Buying report indicated net sales in the amount of JPY463.90 billion (previous purchases of JPY114.60 billion). The Reserve Bank of New Zealand hiked its official cash rate to 3.0% from 2.75%, as expected, and raised its GDP target to 3.5% from 3.3%, citing pent-up demand and inflationary pressures. South Korea's GDP rose 0.9% quarter-over-quarter (consensus 0.8%, previous 0.9%), while the year-over-year reading jumped 3.9% (expected 3.8%, prior 3.7%).

  • Japan's Nikkei lost 1.0%, ending near its session low amid weakness in exporter shares. NEC, Sony, and Toshiba lost between 2.3% and 4.2%. Stocks related to the materials sector outperformed, with Nisshin Steel and Sumitomo Metal Mining both up near 4.0%. 
  • Hong Kong's Hang Seng posted a modest gain of 0.2% as consumer names displayed relative strength. Belle International, Li & Fung, and Sands China gained between 1.0% and 1.4%. Power Assets Holdings was the weakest performer, falling 3.2%. 
  • China's Shanghai Composite lost 0.5%, registering its second consecutive decline as industrials and utilities weighed. Shenyang Jinshan Energy and Zhejiang Hangxiao Steel Structure both lost near 6.5%. 
Major European indices trade higher across the board. Mario Draghi discussed eurozone monetary policy once again, saying any worsening in the medium-term outlook for inflation could trigger the deployment of an asset purchase program.

Economic data was limited. Germany's Ifo Business Climate Index rose to 111.2 from 110.7 (consensus 110.5), as Business Expectations improved to 107.3 from 106.4 (expected 105.8) and Current Assessment ticked up to 115.3 from 115.2 (forecast 115.7). Great Britain's CBI Distributive Trades Survey jumped to 30 from 13 (expected 17). French Business Survey slipped to 100 from 101, as expected. Also of note, Swiss trade surplus narrowed to CHF2.05 billion from CHF2.30 billion (expected CHF 2.14 billion).
  • Germany's DAX is higher by 0.5% with industrials in the lead. Deutsche Post and Deutsche Lufthansa are both up near 1.5%. Utilities lag as E.ON and RWE hold respective losses of 0.6% and 0.1%. 
  • Great Britain's FTSE trades up 0.6%. Drug maker AstraZeneca leads with a gain of 5.4% after beating earnings estimates. Consumer names Associated British Foods and Unilever lag. The two hold respective losses of 1.1% and 1.5%. 
  • In France, the CAC is higher by 0.9%. Alstom is the top performer, up 12.1%, amid reports General Electric is looking into buying the company for about $13 billion. Carrefour lags, down 3.1%.

8:32 am: [BRIEFING.COM] S&P futures vs fair value: +11.70. Nasdaq futures vs fair value: +64.70. The S&P 500 futures trade 12 points above fair value.

The latest weekly initial jobless claims count totaled 329,000, which was higher than the 312,000 that had been expected by the Briefing.com consensus. Today's tally was above the revised prior week count of 305,000 (from 304,000). As for continuing claims, they fell to 2.680 million from 2.741 million.

Separately, March durable goods orders rose 2.6%, which was better than the 2.0% increase expected among economists polled by Briefing.com. This comes after the prior month's revised reading reflected an increase of 2.1% (from 2.2%). Excluding transportation, durable orders rose 2.0% (consensus +0.5%) to follow the prior month's revised increase of 0.1% (from 0.2%).

7:56 am: [BRIEFING.COM] S&P futures vs fair value: +11.00. Nasdaq futures vs fair value: +57.50. U.S. equity futures hold gains, with the Nasdaq futures (+1.6%) outperforming thanks to an earnings beat from the top index component, Apple (AAPL 566.27, +41.52), which sports a pre-market gain of 8.1%.

Reviewing overnight developments:

  • Asian markets ended mixed. Hong Kong's Hang Seng +0.2%, China's Shanghai Composite -0.5%, and Japan's Nikkei -1.0%. 
    • In economic data: 
      • Japan's Corporate Services Price Index rose 0.7% year-over-year (expected 0.8%, previous 0.7%), while the Foreign Bonds Buying report indicated net sales in the amount of JPY463.90 billion (previous purchases of JPY114.60 billion). 
      • The Reserve Bank of New Zealand hiked its official cash rate to 3.0% from 2.75%, as expected. 
      • South Korea's GDP rose 0.9% quarter-over-quarter (consensus 0.8%, previous 0.9%), while the year-over-year reading jumped 3.9% (expected 3.8%, prior 3.7%). 
    • In news: 
      • In addition to hiking its interest rate, the Reserve Bank of New Zealand raised its GDP target to 3.5% from 3.3%, citing pent-up demand and inflationary pressures.
  • Major European indices trade higher across the board. Germany's DAX +0.5%, Great Britain's FTSE +0.6%, and France's CAC +0.9%. Elsewhere, Italy's MIB +0.7% and Spain's IBEX +0.4%. 
    • Economic data was limited: 
      • Germany's Ifo Business Climate Index rose to 111.2 from 110.7 (consensus 110.5), as Business Expectations improved to 107.3 from 106.4 (expected 105.8) and Current Assessment ticked up to 115.3 from 115.2 (forecast 115.7). 
      • Great Britain's CBI Distributive Trades Survey jumped to 30 from 13 (expected 17). 
      • French Business Survey slipped to 100 from 101, as expected. 
      • Swiss trade surplus narrowed to CHF2.05 billion from CHF2.30 billion (expected CHF 2.14 billion). 
    • Among news of note: 
      • Mario Draghi discussed eurozone monetary policy once again, saying any worsening in the medium-term outlook for inflation could trigger the deployment of an asset purchase program. 
In U.S. corporate news:
  • Aetna (AET 70.91, +2.00): +3.8% in reaction to its earnings and revenue beat. 
  • Apple (AAPL 566.27, +41.52): +8.1% after beating earnings and revenue expectations on stronger-than-expected iPhone shipments. The company increased its share buyback program to $90 billion and announced a 7:1 share split, which is set to go into effect on June 2. 
  • AstraZeneca (AZN 71.20, +3.42): +5.1% despite missing earnings estimates by three cents. 
  • Caterpillar (CAT 107.90, +4.52): +4.4% after beating earnings expectations by $0.39 and raising fiscal-year 2014 earnings guidance above consensus. 
  • Citrix Systems (CTXS 58.90, +2.91): +5.2% after its earnings and revenue beat overshadowed its below-consensus guidance for the second quarter. 
  • Facebook (FB 63.60, +2.24): +3.7% after beating on earnings and revenue. 
  • Qualcomm (QCOM 77.65, -3.06): -3.8% following its bottom-line beat on below-consensus revenue. 
  • Texas Instruments (TXN 44.13, -2.33): -5.0% despite beating earnings expectations and guiding Q2 earnings above consensus. 
  • UPS (UPS 97.00, -2.24): -2.3% after missing earnings and revenue estimates. The company attributed the disappointing report to severe winter weather.
  • Verizon (VZ 47.59, +0.16): +0.3% despite missing the Capital IQ consensus estimate by two cents. 
Weekly initial claims and March Durable Orders will be reported at 8:30 ET.

6:49 am: [BRIEFING.COM] S&P futures vs fair value: +12.50. Nasdaq futures vs fair value: +59.50.

6:49 am: [BRIEFING.COM] Nikkei...14404.99...-141.30...-1.00%.  Hang Seng...22562.80...+53.20...+0.20%.

6:49 am: [BRIEFING.COM] FTSE...6723.03...+48.30...+0.70%.  DAX...9633.87...+89.70...+1.00%.

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