(CS) Small & Mid Caps Switzerland : High Convictions Ideas

■ We add Outperform-rated Santhera Pharmaceutical, Tecan, Rieter and Valora to our new high-conviction calls in the Swiss Small & Mid-Cap space.
■ We retain previous conviction calls of Outperform-rated Autoneum and Underperform-rated DKSH Holdings in our new list.
■ We remove, however, Outperform-rated Cosmo Pharmaceutical, OC Oerlikon and Straumann, as well as Not Rated EFG International.

>>> US After Hours Summary: CSC +23%, HPE +10% following announcem

After Hours Summary: CSC +23%, HPE +10% following announcement of HPE's spinoff of its Enterprise Services business with CSC as well as earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CSC +23.4% (HPE announces spinoff of Enterprise Services business with CSC), DY +11.1%, NMBL +10.9%, HPE +9.8% (announces spinoff of Enterprise Services business with CSC)

Companies trading higher in after hours in reaction to news: PDLI +4.7% ( to make initial $107 mln equity investment in Noden Pharma), MON +1.6% (Bayer (BAYRY) issues statement on MON proposal; remains 'confident' in completing a transaction)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SPWH -4.5%, VMEM -2.7%, INTU -2.1%

Companies trading lower in after hours in reaction to news: TMST -13.6% (announces intention to offer $75 mln convertible senior notes due 2021 in a registered public offering)

>>> Asian Update

Asian Market Update: PBoC weakens Yuan fix to 5-year low; Japan govt still mulling sales tax hike timing; NZ trade recovers


***Economic Data***
- (AU) AUSTRALIA Q1 CONSTRUCTION WORK DONE Q/Q: -2.6% V -1.5%E (3rd consecutive decline)
- (AU) AUSTRALIA APR SKILLED VACANCIES M/M: 0.6% V -0.1% PRIOR
- (NZ) NEW ZEALAND APR TRADE BALANCE (NZ$): 292M (4th straight surplus) V 25ME; ANNUALIZED: -3.66B V -3.97BE
- (SG) SINGAPORE Q1 FINAL GDP Q/Q: 0.2% V 0.6%E; Y/Y: 1.8% V 1.9%E
- (PH) Philippines Mar Trade Balance: -$1.75B v -$1.36Be
- (KR) South Korea Q1 Short-Term External Debt: $102.8B v $107.1B prior
- (CN) China Assets Supervision and Administration Commission (SASAC): China JAN-APR SOE profit -8.4% y/y, revenue -1.7% y/y
- (US) NORTH AMERICA APR SEMI BOOK/BILL RATIO: 1.10 V 1.15 PRIOR; 4th straight month above parity

***Index Snapshot (as of 04:00 GMT)***
- Nikkei225 +1.7%, S&P/ASX +1.8%, Kospi +1.2%, Shanghai Composite +0.3%, Hang Seng +2.5%, Jun S&P500 +0.4% at 2,079

***Commodities/Fixed Income***
- June gold flat at $1,229/oz, June crude oil +1.4% at $49.28/brl, Jul copper +1.0% at $2.09/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 3.8 tonnes to 868.7 tonnes; first decline since Apr 25 after 12 straight increases
- (US) Weekly API Oil Inventories: Crude: -5.1M v -1.1M prior; 2nd straight draw; largest draw since Jan 5th
- (CN) China MoF sells 3-yr bonds at 2.54%
- (CN) PBOC SETS YUAN MID POINT AT 6.5693 V 6.5468 PRIOR; Weakest Yuan fix since Mar 2011
- (CN) PBOC to inject CNY70B in 7-day reverse repos
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥440B in 3-5yr JGBs, ¥450B in 5-10yr JGBs
- (AU) Australia MoF (AOFM) sells A$900M in 2.75% 2027 Bonds; avg yield: 2.43%; bid-to-cover: 2.50x

***Market Focal Points/FX***
- Asian equity markets are up strongly, tracking the biggest rise in US indices in weeks. The rally was sparked by a very impressive set of US home sales, where volume was the highest since early 2008 and median prices reached a record high. Investors are interpreting the figures as indication that US economy may be healthy enough to withstand higher interest rates and thus no longer seem to fear hawkish Fed comments or the accompanying stronger USD. Hawkish FOMC voter Bullard in remarks to CNBC today also expressed that the Fed is still data dependent, but does not necessarily have to move in a meeting accompanied by press conference, suggesting July is also on the table. Steadily rising oil prices are also supporting bullish sentiment. Today's API inventories saw the largest draw since early January, sending July WTI contract up about 1% to $49.30 in electronic trade. In FX majors, USD/JPY consolidated US session gains around ¥110, while AUD/USD and NZD/USD rose about 30pips off their lows above $0.7210 and $0.6760 respectively. GBP/USD came in about 30pips toward $1.46 after a much closer YouGov poll on Brexit after a recent spate of widening surveys in favor of Stay camp. PBoC also took note of upside USD pressure, setting Yuan fix at the weakest level in 5 years.

- There was another Japanese press report stating PM Abe will announce a delay to the sales tax hike after the conclusion of the Diet session on June 1st, deferring to call an election to the Lower House to accompany that of the Upper house of parliament. Govt spokesperson Suga again denied those reports, noting a decision will be made at appropriate time. Vocal proponent of the tax being raised on schedule - Fin Min Aso - said he already expressed to G7 leaders that Japan will raise sales tax as planned.

- In China, SASAC announced April YTD revenue for SOEs down 1.7% and profits down 8.4% y/y. A local press report also stated regulators are concerned about high-valuation M&A targets in A-share market and may tighten regulations. PBoC adviser Huang called for reduced leverage for non-financial companies, particularly in overcapacity sectors.

- Australia's construction data saw its 3rd straight quarter of sequential declines, driven by outsized reduction in Non-Residential sector of the economy. A research note from Morgan Stanley saw RBA cut rates another 75bps to 1.00%, warning that household leverage boom is ending and commodity super-cycle continues to unwind. In New Zealand, April Trade was relatively stronger with a 4th straight month of surplus. Exports to US rose 8% after a 15% decline prior, and shipments to China were up 11% after a 4% slide prior.

- After Greek lawmakers voted in favor of added fiscal reform measures in exchange for continued relief, Eurogroup announced it has reached a deal with Athens that offers €10.3B in several disbursements. IMF will also remain a part of the deal after some recent tensions with the Tsipras govt, and creditors declared that Greek program is now fully back on track.

***Equities***
US equities / ADRs:
- HPE: Reports Q2 $0.42 v $0.42e, R$12.7B v $12.4Be; Announces plans for tax-free spin-off and merger of enterprise services business with CSC; HPE +11.9%, CSC +27.8% afterhours
- DY: Reports Q3 $1.08 v $0.75e, R$664.6M v $598Me; +11.4% afterhours
- INTU: Reports Q3 $3.43 (adj) v $3.19e, R$2.30B v $2.25Be; -2.2% afterhours
- SPWH: Reports Q1 +$0.01 v -$0.02e, R$151.6M v $158Me; -4.5% afterhours

Notable movers by sector:
- Consumer discretionary: Tian Ge Interactive Holdings 1980.HK +0.6% (Q1 result); Peak Sports Products Co 1968.HK +13.5% (considers privatization)
- Consumer staples: Australian Agricultural Company AAC.AU +9.7% (FY16 result)
- Financials: Poly Real Estate Group Co 600048.CN -1.0% (plans to set up brokerage JV); Programmed Maintenance Services PRG.AU +12.3% (FY15/16 result); WesFarmers WES.AU -0.8% (impairment); Suncorp-Metway SUN.AU +1.1% (guidance)
- Technology: Forgame 484.HK -2.4% (H1 guidance); Sony Corp 6758.JP +5.8% (guidance)
- Materials: Adelaide Brighton ABC.AU +2.2% (AGM comments)
- Energy: China Coal Energy 1898.HK +9.6%, China Shenhua Energy Co 1088.HK +5.6% (China coal companies said to raise prices)
- Healthcare: Pulse Health PHG.AU -23.0% (guidance); Primary Healthcare PRY.AU +2.3% (speculation of interest from China's Jangho Group)

WSJ : Eurozone and IMF Strike Deal on Greek Debt


Eurozone and IMF Strike Deal on Greek Debt
Agreement after months of delays sets a road map for debt relief but pushes back action until 2018

BRUSSELS—Eurozone finance ministers and the International Monetary Fund patched together a deal in the early hours of Wednesday that clears the way for fresh loans for Greece and sets out how the country could get debt relief in the future.

The ministers, who held an 11-hour meeting in Brussels, said Greece had done what was necessary to unlock the next slice of financial aid, concluding a review of its bailout that was delayed for months. The new payouts will save Greece from defaulting on big debt redemptions to the IMF and European Central Bank in July.

“On the package of reforms Greece had committed to last summer, we now have full agreement,” said Jeroen Dijsselbloem, the Dutch finance minister who presided over the meeting of finance ministers.

Once all 19 eurozone countries have formally signed off on the new deal, Greece will get €10.3 billion ($11.48 billion) in fresh loans, starting with a €7.5 billion installment in the second half of June.

The ministers also agreed on a road map to ease Greece’s mountain of debt, moving to end a long-standing standoff with the IMF over the type and scale of relief Athens needs.

“It is an important moment for Greece after so much time,” said Greek Finance Minister Euclid Tsakalotos.


Wednesday’s deal required all key parties in the negotiations to let go of some of their demands and go further on other elements than they had said was possible: Greece had to adopt more austerity than it had signed up for last summer; Germany had to promise more measures to ease Greece’s payment burden; and the IMF had to accept that the most important debt-relief measures wouldn’t be enacted until at least 2018, when Greece’s current bailout deal ends.

Among the steps that will be considered in 2018 are caps and deferrals on interest rates as well as the return to Athens of profits from Greek government bonds held by eurozone central banks, Mr. Dijsselbloem said. The eurozone may also use leftover funds from its own bailout to repay earlier other official loans, for instance from the IMF.

“This is stretching what I thought would have been possible not so long ago,” Mr. Dijsselbloem said.

Postponement of these steps had been a key condition by Germany and other eurozone hawks, which are reluctant to debate Greek debt relief in their parliaments at the moment. Crucially, the deal delays a vote on debt relief in Germany’s Bundestag until after general elections in 2017.

Mr. Dijsselbloem said the agreement on debt relief, along with a promise to look at further action if necessary, should be enough to bring the IMF back on board by the end of the year. But a few obstacles remain until Greece can actually expect fresh money from the Washington-based fund.

Poul Thomsen, the director of the IMF’s European department, said the deal shows that the eurozone is willing to consider the kind of measures needed to make Greece’s debt sustainable. However, he stressed that the fund would only provide more loans once it has assessed the actual impact of the promised moves.

“There are some measures that still need to be calibrated,” he said.

Mr. Thomsen said that the fund had made “a major concession” in allowing the majority of the debt relief to be implemented only years from now.

“We have shown flexibility,” he said.

The IMF, which has co-financed Greece’s first two bailouts, had so far declined to contribute to the third loan package—agreed upon in August—claiming that the country’s debt is too high to ever be paid off.

During the late-night talks, ministers went through several drafts of their decisions, discarding earlier versions that were deemed too weak. Much of the actual negotiation happened in meetings between German Finance Minister Wolfgang Schäuble, the IMF’s Mr. Thomsen and Mr. Dijsselbloem, while the other ministers waited in a separate room, according to officials familiar with the talks.

At one point, progress was delayed because Mr. Thomsen couldn’t reach IMF Managing Director Christine Lagarde, who was at a conference in Kazakhstan, the officials said.

“It was a complicated birth tonight. It’s probably about as good as it gets,” Slovakia’s finance minister, Peter Kazimir, said in a tweet.

The deal comes two days after Greek lawmakers approved new taxes and austerity measures demanded by its creditors. That package also included a mechanism that will force some €3.6 billion in automatic spending cuts should the government fail to meet budget targets.

Greece’s Mr. Tsakalotos said the deal finally gave his country some light at the end of the tunnel.

“This can be the beginning of turning Greece’s vicious cycle of recession into one where investors have a clear runway to invest in Greece,” he said.

>>> ANHEUSER-BUSCH INBEV WELCOMES CLEARANCE IN EU FOR PROPOSED COMBINATION WITH

(EDG) Anheuser-Busch InBev S.A.: 6-K 2016-05-24

http://www.sec.gov/Archives/edgar/data/1140467/00011931251660069
5/0001193125-16-600695-index.htm

AB InBev has now obtained approval in 14 jurisdictions.
Clearance decisions, with or without conditions, have now been
obtained: in Asia-Pacific (Australia, India and South Korea);
in Africa (Botswana, Kenya, Namibia, Swaziland, and Zambia); in
Europe (the EU, Albania and Ukraine); and in Latin America
(Chile, Colombia and Mexico). Approval in Ecuador is subject to
certain conditions.

In the remaining jurisdictions where regulatory clearance is still pending, AB InBev will continue to engage proactively with the relevant authorities to obtain the necessary clearances as quickly as possible.

WSJ : Debt Standoff Hobbles Greek Bailout Talks

Debt Standoff Hobbles Greek Bailout Talks

Differences between IMF, eurozone governments over Greece’s debt relief remain stark

BRUSSELS—Eurozone finance ministers and the International Monetary Fund tried again to resolve a standoff over Greece’s bailout—including how to reduce the country’s mountain of debt—which has held up new aid payments for the country.

But seven hours into a meeting here on Tuesday, differences between Greece’s creditors on the type and extent of debt relief needed remained stark, underscoring the political difficulties many eurozone governments face in signing up to a debt deal and raising doubts about the IMF’s participation in Greece’s €86 billion ($96.1 billion) bailout.

The question of how and when to ease Greece’s mountain of debt has pitted the most influential creditors—Germany and the IMF—against each other, in a standoff that could risk derailing Greece’s international bailout.

Athens has completed the bulk of economic overhauls prescribed by its international creditors, officials say, leaving the politically contentious issue of debt relief as the one thing standing between the cash-strapped Mediterranean state and much-needed fresh loans.

A deal that either bridges the IMF-German divide or leaves the IMF outside the bailout is needed soon. Athens must get fresh funds by July to repay large debts to the IMF and the European Central Bank that fall due then, and to start clearing its pile of arrears—money the government owes domestic suppliers.

But Germany and other eurozone countries have insisted on IMF participation before they can give fresh loans to Greece, claiming the presence of the fund as a co-creditor makes the bailout more credible.

“It’s not an option to go on without the IMF,” said Jeroen Dijsselbloem, the Dutch finance minister who presides over eurozone ministers’ meetings.

But the IMF, which has co-financed Greece’s first two bailouts, has so far declined to contribute to the third loan package agreed upon in August, claiming the country’s debt is too high to ever be paid off. It has repeatedly called for a generous, upfront deal that would ease Greece’s debt burden, arguing it is a necessary precondition before it can resume lending to Athens.

Greece’s European creditors—led by Germany—have challenged the need for any debt relief and instead want any decision on the matter to be addressed at the end of the bailout in 2018, and only if the Athens has implemented all the economic overhauls on to which it has signed.

Pushing the decision later into the future would allow the government in Berlin to put off getting parliamentary approval for any such measures until after 2017 general elections.

But such a delay would be unacceptable to the IMF, which has told Greece’s European creditors that they should give the country substantial, upfront debt relief.

Wolfgang Schäuble, Germany’s finance minister, nevertheless said he was quite optimistic Greece’s creditors could resolve the standoff.

On his way into Tuesday’s meeting, he said a review of whether Greece has implemented all of the overhauls and austerity measures its creditors demand was mostly concluded, and played down disagreements with the IMF over whether Greece’s debt is sustainable.

But he also said any decisions on debt relief should be implemented only once Greece has enacted its bailout program in full, in a sign that Germany was digging in its heels.

Slovakia’s finance minister, Peter Kazimir, meanwhile, said the eurozone should focus on getting Greece its next aid slice—and leave the questions of debt relief and the IMF’s role in the bailout for later.

He nevertheless expected Tuesday’s talks to drag on. “I’m afraid that we are going to spend the whole night,” he said.

Their comments came after a late-night meeting of senior officials from eurozone finance ministries on Monday failed to yield much progress. After eight hours of inconclusive talks, the officials didn’t agree on a concrete way forward on debt relief or on the size and timing of the next slice of financial aid for Athens.

Several officials said Greece could get around €10.3 billion in fresh loans, which it would receive in several installments starting in June, but only after it has completed economic overhauls that include privatizations and the treatment of bad loans on bank balance sheets.

Monday’s discussion was further complicated by the publication of the IMF’s analysis of Greece’s debt trajectory, which was at odds with Europe’s rosier outlook. The IMF challenged Europe’s forecast growth rate and budget goals for Greece, saying that the targeted primary surplus, which strips out interest payments, of 3.5% of gross domestic product was unrealistic.

Crucially, the assessment raised doubts over whether the IMF would ultimately compromise on its increasingly strict line that Greece needs concrete, realistic and upfront debt relief to win fund support.

Athens says it has done what is needed to get fresh financial aid. On Sunday, Greek lawmakers approved austerity measures its creditors demanded, in the hope it would speed up the process of getting fresh loans.

The measures, which were back by 153 lawmakers from the ruling leftist coalition, secured the majority in the 300-seat parliament late Sunday.

The overhauls included a framework to free up the sale of bad loans owned by Greek banks, as well as a controversial fiscal-brake mechanism that would automatically cut state spending if Greece misses budget targets.

>>> Hewlett Packard to spin off Enterprise Services unit and merge it with CSC

Hewlett Packard to spin off Enterprise Services unit and merge it with CSC

CSC (NYSE: CSC) has agreed to merge with the Enterprise Services segment of Hewlett Packard Enterprise (NYSE:HPE).

Following the transaction, CSC and HPE shareholders each will own approximately 50% of the new company’s shares. The transaction is intended to be tax-free to CSC and HPE and their respective shareholders for federal income tax purposes.

The transaction is expected to deliver approximately USD 8.5bn to HPE’s shareholders on an after-tax basis. This includes an equity stake in the newly combined company valued at more than USD 4.5bn, a cash dividend of USD 1.5bn, and the assumption of USD 2.5bn of debt and other liabilities related to the HPE Enterprise Services segment.

The merger of the two businesses is expected to produce first-year synergies of approximately USD 1bn post-close, with a run rate of USD 1.5b by the end of year one. There is an opportunity for additional synergies in subsequent years.

RBC Capital Markets is serving as financial advisor to CSC, and Allen & Overy LLP is serving as legal advisor.

The merger is expected to be completed by the end of March 2017, subject to shareholder and regulatory reviews and approvals.

Press release:

CSC (NYSE: CSC) today announced that its Board of Directors has unanimously approved a plan to merge the company with the Enterprise Services segment of Hewlett Packard Enterprise (HPE).

The strategic combination of the two complementary businesses will create one of the world’s largest pure-play IT services companies, uniquely positioned to lead clients on their digital transformations. The new company is expected to have annual revenues of $26 billion and more than 5,000 clients in 70 countries.

The merger is expected to be completed by the end of March 2017, subject to shareholder and regulatory reviews and approvals. Following the transaction, CSC and HPE shareholders each will own approximately 50 percent of the new company’s shares. The transaction is intended to be tax-free to CSC and HPE and their respective shareholders for federal income tax purposes.

Today’s announcement comes six months after CSC separated into two publicly traded companies: CSC, to serve commercial and government clients globally, and CSRA, which serves public sector clients in the United States. Both CSC and HPE’s Enterprise Services segments have been on upward trajectories, showing significant improvements in financial performance and client satisfaction scores.

Following completion of the transaction, Mike Lawrie, who currently serves as chairman, president and CEO of CSC, will become chairman, president and CEO of the new company. Meg Whitman, HPE’s president and CEO, will join the new company’s Board of Directors, which will be split equally between nominees of CSC and HPE. CSC’s current CFO, Paul Saleh, will continue in that role after the transaction closes. Mike Nefkens, the current EVP and GM of HPE Enterprise Services, will report to Lawrie and will become a key part of the new company’s executive team. Other executives and directors, as well as the name of the company, will be announced at a later date.

“Our proposed merger with HPE Enterprise Services is a logical next step in CSC’s transformation,” Lawrie said. “As a more powerful and versatile global technology services business, the new company will be well positioned to innovate, compete and serve clients in a rapidly changing marketplace. We are excited by the great potential this merger brings to our people, clients, partners and investors, and by the opportunity to strengthen our relationship and collaboration with HPE.”

“The ‘spin-merger’ of HPE Enterprise Services with CSC is the right next step for HPE and our customers,” said Whitman. “Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape. As two companies with global scale, strong balance sheets and a focus on innovation, both HPE and the new company will be well positioned as leaders in their respective markets.”

Creating a Global IT Services Leader

The combination of CSC and HPE’s Enterprise Services segment will create a new company with substantial scale to serve clients more efficiently and effectively worldwide. By combining, both companies can more rapidly accelerate their already-improved financial and operational performance.

For clients, the new company will offer enhanced global access to world-class, next-generation offerings – combined with deep industry experience in key industry sectors.

The merging of these businesses will offer:

World-class strength in customer service and IT operations – among the safest pair of hands in the industry, deploying a broader set of resources and expertise to benefit clients;
Market-leading industry and technology expertise – industry leading experience and IP in areas such as financial services, healthcare and life sciences, transportation, consumer products, and insurance, helping customers transform faster;
Global scale – operating 85 delivery centers and 95 data centers across 70 countries, providing access to the most efficient IT services in the world;
Technology independence and best-in-class capabilities in next-generation cloud, security, application development and modernization, big data and analytics, mobility, workplace, and sophisticated business process and IT services;
Combined leadership bringing deep turnaround experience and transformation capabilities, customer relationships, sales/GTM, industry and functional expertise;
Expanded best-of-breed technology partnerships that provide greater choice of solutions; and
Enhanced innovation, R&D, and investment opportunities for new services and solutions.
CSC’s Go-Forward Strategy Post-Separation

Today’s announcement represents a major step in the post-separation strategy outlined by CSC’s leadership last fall. At that time, the company positioned itself as a next-generation IT services company built specifically to respond to a changing market – one that is driving clients to move rapidly toward digital transformation.

In just the six months since separation, CSC has taken decisive steps to equip the company to take clients on this digital journey, positioning itself as a true next-generation leader in the markets, industries and practice areas it serves. CSC has:

Stood up vertically integrated businesses in healthcare and insurance to take full advantage of its IP and existing market leadership;
Created CeleritiFinTech, a joint venture with HCL, to do the same in banking;
Acquired UXC, making CSC one of the largest IT services companies in the Australia-New Zealand region;
Acquired Xchanging Plc, a UK-based provider of insurance software and business process services, creating the number one provider of core insurance solutions globally; and
Acquired Fixnetix and Fruition Partners to bolster its leadership in banking and capital markets and service management, respectively. Together, Fruition and UXC make CSC the world leader in service management solutions. Yesterday, the company also announced its acquisition of Aspediens, Europe’s leading provider of technology-enabled solutions for the service-management sector.
“Clients are feeling the pressure to digitally transform their enterprises to meet new business demands and customer expectations,” Lawrie noted. “They need a partner with the innovation, scale, leadership and dependability to answer the challenge.

“As a pure play, the combined company will be built to lead digital transformations using next-generation technology solutions from both companies,” Lawrie continued. “It will be able to operate independent of any single hardware provider, while partnering with the world’s leading technology providers, including HPE.”

About the Transaction

The transaction between CSC and HPE is expected to deliver approximately $8.5 billion to HPE’s shareholders on an after-tax basis. This includes an equity stake in the newly combined company valued at more than $4.5 billion, a cash dividend of $1.5 billion, and the assumption of $2.5 billion of debt and other liabilities related to the HPE Enterprise Services segment.

The merger of the two businesses is expected to produce first-year synergies of approximately $1 billion post-close, with a run rate of $1.5 billion by the end of year one. There is an opportunity for additional synergies in subsequent years. As owners of approximately 50 percent of the merged company, HPE shareholders will share in the value of the synergies, as well as future growth in earnings.

RBC Capital Markets is serving as financial advisor to CSC, and Allen & Overy LLP is serving as legal advisor.

For More Information

For more insights into today’s announcement, watch this video message from Mike Lawrie and Meg Whitman. Download the infographic for additional information.

HPE Investment Community Conference Call

HPE will extend its conference call to discuss its fiscal second quarter financial results today and to elaborate on the transaction; the call will start at 4:30 p.m. Eastern Daylight Time (EDT). Mike Lawrie, CSC chairman, president and CEO, will participate in the call to discuss this transaction along with HPE management. For webcast details, go to www.investors.hpe.com.

CSC Fourth Quarter 2016 Results Analyst Call Rescheduled for 5:30 p.m. EDT Today

The CSC senior management conference call and webcast, originally scheduled for 5 p.m. EDT today, will now begin at 5:30 p.m. EDT. The dial-in number for domestic callers is 888-244-2416. Callers who reside outside of the United States or Canada should dial 913-312-1384. The passcode for all participants is 3124172. The webcast audio and any presentation slides will be available on CSC’s Investor Relations website.

A replay of the conference call will be available from approximately two hours after the conclusion of the call until May 31, 2016. The replay dial-in number is 888-203-1112 for domestic callers and 719-457-0820 for callers who reside outside of the United States and Canada. The replay passcode is also 3124172. A replay of this webcast will also be available on CSC’s website.

CSC will release financial results for the fourth quarter and fiscal year 2016 today at approximately 4:30 p.m. EDT.

>>> US Close Dow+1.22% S&P+1.37% Nasdaq+2% Russell+2.15%

Closing Market Summary: Nasdaq Outperforms as Technology Leads

The S&P 500 (+1.4%) ended the Tuesday session above its 50-day simple moving average (2062) as stocks rallied in the wake of a positive reading of April New Home Sales (619,000; consensus 521,000). Other contributing factors for today's gain included support from the oil pit and the outperformance of the heavyweight technology (+2.1%), financial (+1.6%), and health care (+1.5%) spaces. The tech-heavy Nasdaq (+2.0%) finished ahead of both the S&P 500 (+1.4%) and the Dow Jones Industrial Average (+1.2%

The major averages gapped up to begin the day as a positive bias in European markets helped boost U.S. equities at the open. Separately, the broader market found support from a reversal in oil as the energy component erased a 0.9% ($46.64/bbl) loss, ending the pit session higher by 1.1% ($48.65/bbl).

Equity indices climbed through the morning as positive quarterly results from Toll Brothers (TOL 29.46, +2.36) and an above-consensus reading of April New Home Sales helped extend the rally in the broader market. The positive housing reading can be added to the myriad of recent reports, which could lend themselves supportive to the Fed's argument to continue hiking interest rates. On that note, the fed funds futures market calculates the probability of an interest rate hike at the June meeting at 34.0%, compared to yesterday's 30.0% likelihood.

The benchmark index climbed to a fresh high in the final hour, ending above resistance at the 2073/2074 price level. All ten sectors finished in the green with heavily-weighted technology (+2.1%), financials (+1.5%), health care (+1.5%) and consumer discretionary (+1.3%) leading the advance.

The high-beta chipmakers outperformed in the technology space (+2.1%), evidenced by the 2.4% gain in the PHLX Semiconductor Index. In the index, Xilinx (XLNX 47.45, +2.56) gained 5.7% as investors speculated that the name is an M&A target for Qualcomm (QCOM 55.59, +1.41). Elsewhere, Microsoft (MSFT 51.59, +1.56) jumped 3.1% after receiving an upgrade to "Outperform" at Cowen. The tech giant also received a positive mention in Barron's during the afternoon.

In the financial sector (+1.5%), asset management names and investment brokerages outperformed. Charles Schwab (SCHW 30.22, +0.94) ended the day higher by 3.2% while Affiliated Managers (AMG 170.66, +5.77) gained 3.5%. Conversely, rate sensitive real estate investment trusts ended behind the broader sector.

Biotechnology demonstrated relative strength in the health care space (+1.5%). The iShares Nasdaq Biotechnology ETF (IBB 272.04, +6.01) gained 2.3% today, erasing its May loss. On the flipside, Anthem (ANTM 128.48, -4.70) lost 3.5% after being downgraded to "Neutral" from "Buy" at Sterne Agee CRT. CIGNA (CI 124.81, -1.34) fell 1.1% on headwinds to the company's proposed merger with Anthem. For the month, Anthem and CIGNA have lost 8.7% and 9.9%, respectively.

In the consumer discretionary space (+1.3%), Netflix (NFLX 97.89, +3.00) gained 3.2% after Stifel provided bullish commentary on the name. The firm cited a new timeline for film releases and the company's output deal with Disney (DIS 99.51, +0.33).

The U.S. Dollar Index (95.60, +0.37) finished higher with the greenback gaining ground against the euro and the yen. The euro/dollar pair ended lower by 0.7% (1.1143) while the dollar gained 0.7% against the yen (109.98).

Treasuries retreated today as the yield on the 10-yr note rose three basis points to 1.86%.

Today's participation was below the recent average as fewer than 867 million shares changed hands on the NYSE floor.

Today's economic data was limited to the April New Home Sales Report:

  • New home sales surpassed estimates in April, running at a seasonally adjusted annual rate of 619,000 (consensus 521,000).
    • That represented a 16.6% increase from March, which saw an upward revision to 531,000 from a previously reported 511,000.
    • Not only did the April reading come in well ahead of expectations, but the upward revision to the March figure vaulted that reading past last month's consensus estimate, which stood at 521,000.
    • New home sales in April were up 22.8% versus the same month a year ago and today's report pointed to the best month of new home sales since January 2008.
    • Thanks to the pick-up in activity, the April rate was above the prior 3-month average of 531,667.
    • Median sales price increased 9.7% year-over-year to $321,100.
    • At the current sales pace, the inventory of unsold new homes stands at a 4.7 months' supply, which is down from 5.8-months' supply in March and below the 6.0-months' supply that is typically associated with normal periods of buying selling.

Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index. The day's data will be capped off with the advance reading of the April International Trade in Goods and the March FHFA Housing Price Index, which will cross the wires at 8:30 ET and 9:00 ET, respectively. 

  • Nasdaq Composite -2.9% YTD
  • Russell 2000 -0.1% YTD
  • S&P 500 +1.6% YTD
  • Dow Jones +1.6% YTD