Despite beginning Friday with modest gains, the three major averages ended the session with modest losses as a gradual decline through the first hour held pace into the close. The Dow Jones Industrial Average was the worst performer today, shedding 40.82 points (-0.19%) to 20940.51. The S&P 500 declined about 4.57 points (-0.19%) to 2384.20, while the Nasdaq Composite was lower by 1.33 points (-0.02%) when the bell rang to 6047.61. The moves on Friday took the three major indices to +5.9%, +6.5% and +12.3% YTD, respectively.
Among the few gaining sectors in the S&P today, the Technology (XLK 54.38, +0.14 +0.26%) space was modestly higher. Component Western Digital (WDC 89.07, +3.36 +3.92%) was the best performer in the space today on the back of a strong Q3 report and Q4 guidance. The Healthcare space led the 11 S&P sectors today XLV +0.27% followed by the XLE +0.07%, XLP -0.04%, XLY -0.40%, XLI -0.47%, XLU -0.48%, XLRE -0.57%, XLB -0.84%, XLF -0.97%, IYZ -1.22%.
In the S&P 500 Information Technology (928.33, +3.08 +0.33%) space, trading finished near highs after morning volatility. Component Alphabet (GOOG 905.96, +31.71 +3.63%) was one of the better performing names today following its Q1 earnings beat last night. Other names in the space which outperformed today included AKAM +1.99%, FB +1.73%, FFIV +1.71%, PYPL +1.21%, EBAY +1.03%, QCOM +1.00%, XRX +0.98%, CSCO +0.92%, CTSH +0.89%.
Other notable news items among sector components:
- In addition to reporting quarterly results, Gigamon (GIMO 31.70, -4.30 -11.94%) also announced that Kim DeCarlis has joined Gigamon as chief marketing officer.
- trivago (TRVG 17.12, +1.90 +12.48%) increased its full-year guidance after Expedia (EXPE 133.72, -2.48 -1.82%) released first quarter results. The company now expects annual revenue growth to be around 50% in 2017, with its adjusted EBITDA margin likely to be up slightly from 2016.
- Intel (INTC 36.13, -1.30 -3.47%), in addition to earnings, BoDs approved a $10 billion increase to the share buyback program; amount currently available for future buybacks now about $15 billion.
- Qualcomm (QCOM 53.74, +0.53 +1.00%): Apple (AAPL 143.65, -0.14 -0.10%) will be withholding payments to its contract manufacturers for the royalties those contract manufacturers owe under their licenses with Qualcomm until dispute is resolved. QCOM also lowered 3Q17 guidance; revenue guidance to $4.8-5.6 billion from $5.3-6.1 billion; also, lowered adjusted EPS guidance to $0.75-0.85 from prior guidance of $0.90-1.15.
- RealNetworks (RNWK 4.57, +0.01 +0.22%) announced the appointment of Cary Baker CFO and Treasurer effective May 5, 2017.
- Texas Instruments (TXN 79.19, -1.61 -1.99%) priced $300 million of 2.750% senior unsecured notes due March 12, 2021 and $300 million of 2.625% senior unsecured notes due May 15, 2024.
In reaction to quarterly results:
- Microsoft (MSFT 68.46, +0.19 +0.28%) reported better than expected Q3 EPS of $0.73 on revenues which grew 6.3% compared to last year to $23.56 billion. On the conference call, management guided for Productivity and business processes revenues between $8.2-8.4 billion, Intelligent Cloud revenues between $7.2-7.4 billion and Personal Computing revenues between $8.4-8.7 billion.
- Amazon (AMZN 924.99, +6.61 +0.72%) reported better than expected Q1 EPS and revenues of $1.48 and $35.71 billion, respectively. For Q2, the company guided revenues in-line at $35.25-37.75 billion.
- Alphabet (GOOG) reported better than expected Q1 EPS and revenues of $7.73 and $24.75 billion, respectively.
- Intel (INTC) reported better than expected Q1 EPS of $0.66 on revenues which rose 8.0% compared to a year ago to $14.8 billion. For Q2, the company sees in-line EPS and revenues of $0.63-0.73 and $13.9-14.9 billion, respectively. For FY17, INTC raised guidance to EPS of $2.71-2.99 and revenues of about $60 billion.
- Western Digital (WDC) reported better than expected Q3 EPS and revenues of $2.39 and $4.65 billion. On the conference call, management guided Q4 EPS of $2.55-2.65 on revenues of about $4.8 billion.
- KLA-Tencor (KLAC 98.22, -5.37 -5.18%) reported better than expected Q3 EPS and revenues of $1.62 and $914 million, respectively.
- GoPro (GPRO 8.25, -0.69 -7.72%) reported a better than expected Q1 loss per share of $0.44 on better than expected revenues of $218.61 million. The company also guided Q2 revenues ahead of market expectations at $260-280 million.
- Companies scheduled to report quarterly results Monday morning: BSFT, PLT
- WDC was upgraded to Overweight from Equal Weight at Morgan Stanley and to Buy from Neutral at BofA/Merrill, CHKP was upgraded to Equal Weight from Underweight at Barclays; AMZN was downgraded to Sector Weight from Overweight at Pacific Crest, GIMO was downgraded to Neutral from Outperform at Credit Suisse, to Neutral from Buy at Dougherty and to Market Perform from Outperform at William Blair, EXPE was downgraded to Hold from Buy at Stifel, WDC was downgraded to Market Perform from Outperform at Wells Fargo, AVT was downgraded to Hold from Buy at SunTrust and to Neutral from Buy at Longbow, ENTG was downgraded to Hold from Buy at Craig Hallum, PDFS was downgraded to Market Perform from Outperform at Northland Capital; SNAP was initiated with a Hold at Canaccord Genuity