>>> US After Hours Summary: NFLX -8%, IBM -5% following earnings

After Hours Summary: NFLX -8%, IBM -5% following earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CE +8.1%, BMI +4.4%, SAVE +1.9%

Companies trading higher in after hours in reaction to news: HRTX +15.6% (FDA has indicated that there are no substantive deficiencies in the NDA for SUSTOL), HALO +2.1% (Co announced preclinical data for the discovery and early development of two potential drug candidates), DVAX +2% (presents encouraging data from clinical trial of immuno-oncology product candidate SD-101)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: AAOI -20.9%, ILMN -18.1%, RMBS -8.5%, NFLX -7.6%, IBM -4.6%

Companies trading lower in after hours in reaction to news: CPST -14.3% (to offer common stock and warrants)

>>> Netflix beats by $0.03, reports revs in-line; guides Q2 EPS below consensus

Netflix beats by $0.03, reports revs in-line; guides Q2 EPS below consensus
- Reports Q1 (Mar) earnings of $0.06 per share, $0.03 better than the Capital IQ Consensus of $0.03; revenues rose 24.5% year/year to $1.96 bln vs the $1.97 bln Capital IQ Consensus.
- Co issues downside guidance for Q2, sees EPS of $0.02, excluding non-recurring items, vs. $0.05 Capital IQ Consensus Estimate.

Key Excerpts from Shareholders Letter
- US revenue rose 18% y/y, reflecting 14% growth in average paid memberships and a 3% increase in ARPU.
- Our Q1 international contribution loss of $104 million came in better than forecast due to the timing of content spend.
- Our established markets around the world are all growing, and in early Q1 we added 130 more countries. By expanding broadly at once, we are learning more quickly about how best to please consumers across a wide variety of cultures and markets. In most of these markets, so far, Netflix is offered only in English and payment methods are limited primarily to international credit cards. In the coming quarters, we will add more local languages, content, payment options and customer support.
- In the US, our Q2 net adds forecast of 0.5 million is in­line with prior years (0.5, 0.6, 0.6, and 0.9 million from 2012­2015), taking into account a modest impact from the beginning of un­grandfathering
- We expect Q2 international contribution loss to improve sequentially primarily due to recent favorable currency movements. We anticipate that international contribution losses in the second half of 2016 will be similar to the first half, as ongoing investments offset improved profitability in our more mature markets.
- The increase in ARPU will allow us to invest more in content next year, and we are taking up our expected spend from about $5B in 2016 to over $6B on a P&L basis in 2017 (more on a cash basis).
- We are now turning our attention to mobile ­specific encodes, with a desire to deliver better video at lower bandwidth to these devices, which are increasingly important in our newest markets.
- We currently have $2.4 billion of long term debt. With our low debt to enterprise value of 5%, our plan is to raise additional capital through the high yield market later in 2016 or in early 2017.

>>> US Close Dow+0.60% S&P+0.65% Nasdaq+0.44% Russell+0.74%

Closing Market Summary: Dow Breaks 18,000 as Oil Rebounds Off Low

The stock market ended the Monday affair on a higher note as the major averages recovered from some early oil-fueled selling. Today's move higher was buttressed by the outperformance of the heavily-weighted health care (+0.9%), consumer discretionary (+0.9%), and financial (+0.7%) sectors. The S&P 500 (+0.7%) ended its day ahead of the Dow Jones Industrial Average (+0.6%) and the Nasdaq Composite (+0.4%).

Today's session began on a lower note as investors ruminated over the inability of OPEC and non-OPEC members to come together and agree on a supply cap. Accordingly, oil slid overnight as crude for May delivery dropped to $37.61 while June delivery fell to $39.00. However, oil prices rebounded off these levels as news of an oil and gas worker strike in Kuwait boosted the energy component. To be fair though, it's likely that today's trade also featured a fair amount of short-covering. May delivery crude ended at $39.78/bbl (-1.2%) while the June contract finished at $41.17/bbl (-1.4%).

The energy sector (+1.6%) trimmed an opening 1.6% decline and passed heavily-weighted health care (+0.9%), consumer discretionary (+0.9%), and financials (+0.7%) on the leaderboard. As a result, the major averages spent the bulk of the afternoon trading near or establishing new intraday highs. On that note, the Dow Jones climbed above the 18,000 level for the first time in 2016. 

In commodity-sensitive energy (+1.6%), ConocoPhillips (COP 45.00, +1.30) and Marathon Oil (MRO 13.36, +0.35) helped lead among independent oil and gas names. Meanwhile, Williams Companies (WMB 16.68, -0.87) declined 5.0% as concerns over the ability to close its merger with Energy Transfer Equity (ETE 9.87, +0.90) mounted. Elsewhere, refining names underperformed the broader sector.

The biotechnology sub-group outperformed in the health care space (+0.9%). Biotechnology moved higher with Regeneron Pharmaceuticals (REGN 422.38, +15.65) as the stock extended its April rally to 17.2%, compared to a gain of 4.2% in the broader sector. Meanwhile, the iShares Nasdaq Biotechnology ETF (IBB 284.97, +4.36) has moved higher by 9.3% over that period of time. Separately, Dow components UnitedHealth (UNH 127.81, +0.48) and Johnson & Johnson (JNJ 110.93, +0.75) gained a respective 0.4% and 0.7% ahead of their earnings releases before tomorrow's open.

In the consumer discretionary space (+0.9%), auto names displayed relative strength as Ford (F 13.25, +0.31) and General Motor (GM 31.31, +0.75) benefited from some positive commentary from Barron's. Meanwhile, Disney (DIS 101.48, +2.89) climbed 2.9% after receiving an upgrade to "Buy" from "Hold" at Pivotal Research Group. On the flipside, Netflix (NFLX 108.40, -3.11) surrendered 2.8% ahead of this evening's earnings report.  

Conversely, utilities (+0.3%), industrials (+0.3%), technology (+0.4%), and materials (+0.5%) rounded out the board. The technology sector (+0.2%) ended its day with a slim uptick as Dow component Apple (AAPL 107.48, -2.37) weighed. The tech giant was the worst performer in the price-weighted index. Elsewhere, IBM (IBM 152.53, +0.81) gained 0.5% ahead of its first quarter earnings release.

The U.S. Dollar Index (94.49, -0.20) ended above its session lows as the euro gained 0.2% against the greenback (1.1311). Meanwhile, the dollar/yen pair finished flat at 108.78.

The Treasury complex finished off its low as the yield on the 10-yr note climbed two basis points to 1.77%.

Today's participation was below the recent average as fewer than 830 million shares changed hands on the NYSE floor.

Today's economic data was limited to the NAHB Housing Market Index for April: 

  • The NAHB Housing Market Index for April came in at 58 from an unrevised 58 in March while the consensus expected the reading to come in at 59.0.

Tomorrow's economic data will include March Building Permits (consensus 1200k) and Housing Starts (consensus 1170k), which will both cross the wires at 8:30 ET. 

  • Dow Jones +3.3% YTD
  • S&P 500 +2.5% YTD
  • Russell 2000 +0.3% YTD
  • Nasdaq Composite -1.0% YTD

>>> IBM beats by $0.26, beats on revs; reaffirms FY16 EPS guidance

-->+0.75% after hours

IBM beats by $0.26, beats on revs; reaffirms FY16 EPS guidance

* Reports Q1 (Mar) earnings of $2.35 per share, excluding non-recurring items, $0.26 better than the Capital IQ Consensus of $2.09; revenues fell 4.6% year/year to $18.68 bln vs the $18.29 bln Capital IQ Consensus.
- Cognitive Solutions (includes solutions software and transaction processing software) -- revenues of $4.0 billion, down 1.7%, up 0.4% adjusting for currency.
- Global Business Services (includes consulting, global process services, application management) -- revenues of $4.1 billion, down 4.3%, down 2.3% adjusting for currency.
- Technology Services and Cloud Platforms (includes infrastructure services, technical support services, integration software) -- revenues of $8.4 billion, down 1.5%, up 1.9% adjusting for currency.
- Systems (includes systems hardware and operating systems software) -- revenues of $1.7 billion, down 21.8%, down 20.6% adjusting for currency.
- Q1 revs from the company's strategic imperatives --- cloud, analytics and engagement --- increased 14% year to year (up 17% adjusting for currency).Total cloud revenues (public, private and hybrid) for the quarter increased 34% (up 36% adjusting for currency). Cloud revenue over the trailing 12 months was $10.8 billion. The annual exit run rate for cloud delivered as a service -- a subset of the total cloud revenue -- increased to $5.4 billion from $3.8 billion in the first quarter of 2015. Revenues from analytics increased 7% (up 9% adjusting for currency). Revenues from mobile increased 88% (up 93% adjusting for currency) and from security increased 18% (up 20% adjusting for currency).
* Co reaffirms guidance for FY16, sees EPS of at least $13.50, excluding non-recurring items, vs. $13.54 Capital IQ Consensus Estimate. IBM had previously expected a free cash flow realization of GAAP net income which implied a full-year free cash flow range of $11 billion to $12 billion. The company now expects free cash flow to be at the high end of that range at the same base level of operating (non-GAAP) EPS.
* "In the first quarter, we invested $3.6 billion in acquisitions and capital expenditures, and returned $2.2 billion to shareholders through dividends and gross share repurchases."

>>> BHP Billiton likely to hire Goldman Sachs and Barclays for Latin American mi

BHP Billiton likely to hire Goldman Sachs and Barclays for Latin American mining assets sale

BHP Billiton [ASX: BHP, LON: BPL] is likely to select Goldman Sachs and Barclays to evaluate the sale of mining assets worth USD 22.5bn, The Australian reported, citing unnamed sources.

According to the report BHP is believed to be seeking to rework mining ventures over which it or its partners have no operational control. The paper said the move could see up to USD 22.5bn in Latin American mining assets come onto the market.

The paper cited unnamed sources as saying that Goldman Sachs and Barclays are close to BHP and likely to win mandates.

The item said the mandates would include reworking BHP’s three non-operated South American mining joint ventures. The item noted that changes could result in several possible permutations and combinations under which BHP or its partners become operator of the assets.

Talks are centered on three mining assets, Brazil’s Samarco iron ore, Cerrejon thermal coal in Colombia, and Antamina copper/zinc in Peru. Samarco is jointly held by BHP and Vale [BVMF: VALE3, VALE5], Cerrejon is owned by BHP, Glencore [LON: GLEN], and Anglo American [LON: AAL], and Antamina is owned BHP, Glencore, Teck [TSE: TCK.A, TCK.B], and Mitsubishi [TYO: 8058]. The paper noted that Anglo is believed to be interested in exiting Cerrejon. BHP may prefer to operate Antamina, the item noted.

The Australian