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Class of 2015: Upbeat and motivated says new survey

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Class of 2015: Upbeat and motivated says new survey

The Technology Sector is weighing on the broader market today. Shares of Apple (AAPL 114.63, -3.81 -3.22%) ended notably lower today, furthering the distance from the 200 day simple moving average with every minute of trade. AAPL's losses today bring the stock back to late-January 2015 levels, and about 14.79% lower than the all-time high from late-April of $134.54. In relation, AAPL supplier Skyworks (SWKS 88.56, -3.96) is among the weakest performers of the day, on no particular news-related action. SWKS, like AAPL crossed its 200 day simple moving average, and closed below it, at -4.28% on the day.

While AAPL and SWKS were lower on the day, Netflix (NFLX 121.03 +8.47) enjoyed a day of gains. The movie and TV show streaming giant finished Tuesday trade higher by +7.52%. The company was initiated with a Buy rating at Guggenheim, accompanied by a $160 target, about 32.20% higher from the closing price. Today's high of $122.79 also represented a new all-time high for the roughly 18 year old company, split-adjusted.

The weakness is not confined to the technology sector today, though, as almost every other sector (except Basic Materials, Cyclical Goods, and Non-Cyclical Goods) closed in the red. The S&P 500 2093.33, Dow Jones 17550.69, and Nasdaq 5105.55 all closed lower -- 0.22%, 0.27%, 0.19% respectively. The markets began the day higher, but by 11 a.m. ET, we were in the red. The pressure continues as all three major indices have finished the day lower in each of the past three trading session.

The S&P 500 Information Technology sector (703.68, -5.01 -0.71%) was also dragged down by top-weighted AAPL, but the technology giant was not the only tech name which closed lower on the session. FSLR +1.85%, ADSK +1.59%, MSFT +1.56%, YHOO +1.17%, EA +1.17%, TSS +1.14%, RHT +0.96%, ADS +0.88%, ADBE +0.81% were among the top leaders in the sector today, while QRVO -4.28%, SWKS -4.14%, LRCX -3.50%, AAPL -3.21%, AMAT -1.92%, AVGO -1.85%, WDC -1.70%, QCOM -1.52% were the top laggards.

Other notable news among sector components:

  • CA Tech (CA 29.03, +0.11 +0.38%) acquired ID management solutions provider, Xceedium, Inc; terms of the transaction were not disclosed, with closure expected this quarter.
  • Accenture (ACN 103.42, +0.21 +0.20%) acquired FusionX; financial terms of the transaction were not disclosed. The acquisition is expected to strengthen Accenture's Security practice and help clients accurately assess their ability to protect against, detect and, where necessary, respond to sophisticated and sustained cyber-attacks.
  • PayPal (PYPL 38.95, -0.44 -1.12%) named former United Continental's (UAL 58.95, +0.63 +1.08%) John Rainey as CFO, effective August 24, 2015.
  • Microchip (MCHP 42.79, +0.005 +0.01%) in addition to reporting earnings, announced the completion of the company's acquisition of Micrel (formerly MCRL). 
Elsewhere in the technology space:
  • eLong (LONG 17.10, +2.88 +20.25%) announced that its Board of Directors has received a preliminary non-binding proposal letter, dated August 3rd, 2015, from Tencent Holdings (TCEHY 18.42, +0.12 +0.66%), proposing a "going-private" transaction to acquire all outstanding ordinary shares of eLong, not already beneficially owned by TCH Sapphire Limited which is a wholly owned subsidiary of Tencent, the major shareholders in the Company accounting for at least 70% in voting power of the Company and certain members of Company management, for $18 in cash per American depositary share.
  • Ultra Clean Holdings (UCTT 8.02, +0.42 +5.53%) will acquire Miconex s.r.o., and expects the acquisition to be immediately accretive by about $0.01 to $0.02 to non-GAAP EPS for Q3 2015.
  • Sprint (S 3.49, +0.15 +4.49%) appointed Tarek Robbiati as CFO, Gnther Ottendorfer to Chief Operating Officer, Technology, and John Saw as Chief Technology Officer.
  • Digital Ally (DGLY 10.19, +0.39 +3.98%) received an order for 300 FirstVu HD body-worn video cameras from the Southeastern Pennsylvania Transportation Authority, along with FirstVU HD orders from other agencies, during the month of July.
  • Marvell (MRVL 12.25, -0.23 -1.84%) confirmed the mixed ruling in its case against Carnegie Mellon; award reduced by more than $1.25 billion. 
  • Zillow (Z 74.20, -2.30 -3.01%) named COO Kathleen Philips as CFO, promotes Chief Marketing Officer Amy Bohutinsky to Chief Operating Officer.
  • DragonWave (DRWI 0.26, -0.02 -8.47%) announced an agreement with Nokia (NOK 6.87, -0.06 -0.87%) to address the impact of reduced demand being experienced through this channel in the first half of FY16 including temporary cash flow measures as well as a new commercial arrangement for Support and Maintenance services. On the Q1 earnings call indicated it anticipated revenue growth of between 30% and 60% in Q2 relative to Q1. Co believes it will be within this guidance but at the lower end of the range given lower revenue than expected from India.
Notable earnings in the technology space: 
  • Rudolph Tech (RTEC 12.84, +1.88 +17.15%) reported Q2 (Jun) earnings of $0.23 per share on revenues which rose 38.2% year/year to $59.47 million.
  • Benefitfocus (BNFT 40.24, +3.92 +10.79%) reported Q2 (Jun) loss of $0.53 per share on revenues which rose 32.1% year/year to $42.7 million.
  • Sprint (S 3.49, +0.15 +4.49%) reported Q2 (Jun) loss of $0.01 per share on revenues which fell 8.7% year/year to $8.03 bln vs the $8.33 bln consensus.
  • Microchip (MCHP 42.79, +0.005 +0.01%) reported Q1 (Jun) earnings of $0.69 per share on non-GAAP revenues which rose 0.5% year/year to $534.0 million. The company also issued downside guidance for Q2 (Sep), sees EPS in the range of $0.58-0.66 on Q2 revenues non-GAAP revs of $532-569 million.
  • TriNet Group (TNET 16.33, -10.36 -38.82%) reported Q2 (Jun) earnings of $0.14 per share on revenues which rose 21.9% year/year to $640 million.
Analyst Actions:
  • RTEC was upgraded at Barrington Research and Credit Suisse, BBOX was upgraded to Buy from Neutral at Sidoti, MSTR was upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey, SSYS was upgraded to Overweight from Neutral at JP Morgan; ON was downgraded to Neutral from Outperform at Wedbush, XOOM was downgraded to Equal Weight from Overweight at Barclays

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