*PETROFAC MORE BULLISH ON OIL RECOVERY, SEES PRICES ABOUT $75-80
*PETROFAC CEO EXPECTS TO SEE MORE ENERGY-RELATED M&A ACTIVITY
More than $100bn of spending on new projects by the world’s energy companies has been slowed, postponed or axed following the oil price plunge, evidence of the drastic industry action that will curb output in coming years.
Companies including Royal Dutch Shell, BP, ConocoPhillips and Statoil have led moves to curtail capital spending on 26 major projects worldwide, according to analysis commissioned for the Financial Times.
The delays and cancellations, many disclosed quietly in recent weeks and months, come amid a wider retrenchment by the industry that has seen thousands lose their jobs and led to a slowdown in the US shale boom.
The research by consultancy Rystad Energy shows that producers have targeted some of the highest-cost areas as they have trimmed spending, with nine Canadian oil sands projects put back, each ranging from $1bn to $10bn in planned expenditure.
“Things are moving to the right and the particular area that is suffering is western Canada,” said Alastair Syme, energy analyst at Citigroup.
“It is one area of the world outside US shale, where companies are actually stopping investment in train.”
After reaching $115 a barrel last June, the price of oil plummeted to a low of $45 in January, as surging output of US shale oil and softening demand in Asia stoked a glut in the market. The decline accelerated after Opec, led by Saudi Arabia, decided not to cut production to support prices. Crude has since rebounded to around $66.
While the $118bn total expenditure would be spread over several years, the impact of deferring investment on such projects would be to delay future production, with as many as 1.5m barrels a day — nearly 2 per cent of global oil output in 2013 — to come two years later than planned, said Rystad.
The project deferrals that have already been announced could be just the start of a big wave of delays. Goldman Sachs has identified 61 new projects, more than half of those awaiting final approval, as uneconomic at an oil price of $60 a barrel, putting more than $750bn of capital expenditure at risk and 10.5m barrels a day of peak production.
Seventeen countries, including Angola, Nigeria, Australia and Algeria, were likely to see investment in projects fall by more than 50 per cent between now and 2020 assuming prices stayed low, Goldman’s Michele della Vigna said.
Calgary-based Cenovus Energy said it had deferred work on its 130,000 barrels a day Narrows Lake oil sands development “due to the substantial decline in crude oil prices”. It added: “We are taking advantage of the slower pace of development to optimise our engineering and execution strategy.”
Other “heavy” oil projects, where extraction is closer to mining than conventional drilling, have been halted. Carlos Cabrera, executive chairman of Ivanhoe Energy, told the FT that its Pungarayacu project in Ecuador had been suspended in part because “the precipitous drop in the oil price” had rendered uneconomic production of a possible 2bn-3bn barrels.
US-based Conoco, meanwhile, confirmed it had “stopped” developing the Tommeliten Alpha discovery, southwest of the Ekofisk field in the Norwegian North Sea. Nils Andersen, chief executive of Denmark’s Maersk Group, said last week it was “renegotiating” supply deals for its “challenged” deepwater Chissonga project in Angola.
“The oil situation has changed due to low oil price and we aim to reduce the investment level as a result of that,” he said.
One of the biggest developments to be shelved, Shell’s Arrow liquefied natural gas plant in Australia, accounted for almost a quarter of the spending Rystad said had been put back or cut. The consultancy examined projects with reserves of at least 50m barrels of oil equivalent.
Other data illustrate the speed with which oil companies have reacted to the crude price collapse. According to Morgan Stanley, which has looked at capex guidance for 2015 from more than 120 companies, their investment is expected to drop by a quarter this year, from $520bn to $389bn.
The severity of the capex cuts could lead to a substantial rebound in Brent crude. The bank expects oil to rise from $66 a barrel to $85 in 2017. “The longer oil prices remain low, the more prices may rise longer term, given that current weakness discourages future investment.”
*AVEVA CEO SAYS NOTHING TO SAY ON M&A SPECULATION
* Source of opportunity
We reiterate our Buy rating and add Richemont to the Conviction List on 16% underperformance vs. the retail sector ytd. We see concern about slower growth as overdone, and our estimates are above consensus. Richemont remains a luxury goods leader, offering global consumer exposure against a favourable global macro backdrop (low interest rates and inflation), high CROCI (FY14 21% vs. sector avg. 17%) and a strong balance sheet. Cyclical catalysts (global wealth creation) should support a return to growth and a rerating, with the shares on the same sector- and market-relative multiples as during the financial crisis. Our 12-month price target implies 33% upside.
* Catalyst
FY15 results are on May 22, 2015 (headline financials have already been reported). We expect the focus to be on April trading (pre-announcement on April 22, 2015 showed no slowdown in growth for the period up to March) and cost guidance for FY16. We expect management to give a positive update on the business, highlighting the continued growth potential and margin upside from organic opportunities (e.g. channel mix shift to retail), as well as cost control in spite of FX headwinds from Swiss franc appreciation. In our view, this should underline Richemont’s credentials as one of the highest-quality assets in luxury; in addition, delivery of compound top-line, bottom-line and cash flow growth with balance sheet optionality should catalyse upgrades to consensus estimates (our FY16-17 EBIT forecasts are 9/11% above I/B/E/S consensus) and a re-rating
* Valuation
We cut FY15E EPS to reflect losses on financial instruments announced on April 22, and FY16/17E EPS for FX. Our unchanged 12-month price target of SFr111.8 is still based on a lease adj. 12m fwd EV/EBITDAR multiple of 13.5x.
* Key risks
Key risks to our view and price target include slower than expected demand, unfavourable FX moves (Swiss franc strength) and dilutive M&A.
Dow+0,14% S&P+0,30% Nasdaq+0,60% Russell+1,09%
US Market closed slightly higher with tech higher...Dow & S&P registered new records...AAPL (on Icahn letter) & Altera (Intel potential deal) helped the all sector to perform...M&A also helped with ANN offer (21,4% premium) and Endo buying Par Pharma. Volume were below average at 700m shares...S&P500 hit new record highs while Treasuries fell, reversing some of the gains made on Friday. Some of the focus fell on the research paper from the San Francisco Fed, putting the post-adjustment US Q1 GDP around 1.8% rather than 0.2% as reported by the Commerce Dept. SF Fed also indicated that much of the Q1 weakness could be attributed to seasonality of adverse weather, implying the worries about the timing of Fed rate hikes after last week's soft US data may be overdone. VIX @ 12.73 +2,83%...US After Hours GIGA +24.4%, MOMO +21.5%, TTWO +7.4%, URBN -15.3%, AMCN -3.8%, A -3.1% following earnings/guidance...Asia's main indices are higher nearly across the board, tracking a session of modest gains in the US hours. Shanghai Composite was the clear outperformer, rising over 1% in the opening hour and then zooming to 2.7% rise entering its lunch break. Note the index was down for the past 2 sessions, and there's chatter the high-margin speculative buying is behind today's move. Investors are also reacting positively to China State Council unveiling its 2015 economic reform, pledging to focus on economic growth, deregulate central power, promote FX convertibility, loosen control of investment and boost reforms of SOE in key industries such as electricity.
Nikkei +0.84% Hang Seng +0.25% Shanghai +2.46%
Eur$ 1.1318 RUB $49.03 EURCHF 1.0482 GBP 1.5666 CHF 0.9260 WTI $59.52 (+0.52%)
S&P +0.09% EuroStoxx Dax SMI
Macro :
- Greek Bailout Negotiations in Final Stage, PM Tsipras Says
- ECB Wouldn’t Cut ELA If Greece Misses IMF Payment: Handelsblatt
- Oil Price Drop Puts More Than $100b of Projects on Hold, FT Says
- EU Autos Still Show Most Upside Despite YTD Gain as PTs Increase
- EU28 April Car Registrations Rise 6.9% Y/y to 1.166m Units
Keep an eye on :
- ABE FP : Abertis Says Cellnex Greenshoe Option Exercised
- AREVA FP : EDF Wants Control of Areva Reactor Business, Levy Tells Figaro
- AVV LN : Aveva FY15 Adj. Pretax, EPS Beat Estimates; Revenue In Line
- POP SM : Spain’s Banco Popular Seeking Acquisitions Abroad: WSJ
- CLNX SM : Cellnex Wants to Triple Its Size, CEO Martinez Tells Expansion
- CERV IM : CVC Selling 29m Shrs of Cerved in Bookbuilding, Cerved Shr Sale Increased to 32m Shrs: Terms --> Priced @ €6.35/sh.
- CON GY : Elektrobit Sells Automotive Business to Continental for EU600m
- DL NA : Delta Lloyd 1Q Solvency Ratio Rises to 208%; Premiums Increase
- DBK GY : Deutsche Bank Seen Reviewing Moving Part of UK Ops to Germany:FT
- DPW GY : Deutsche Postbank Chairman Neske to Leave, Handelsblatt Reports
- DUFN SW : Dufry Offers Early Conversion of Up to CHF275m Convertible
- EXAE GA : Hellenic Exchanges Posts 1Q Net Income of EU4.1m Vs EU4.8m
- JEN BB : Jensen-Group 1Q Rev. Rises 34% on FX; Profitability Seen In Line
- BAER VX : Julius Baer End-April AUM Falls 1% From End 2014 to CHF289b
- LEAS BB : Leasinvest RE 1Q Adj. EPS Drops to EU1.13; Forecasts Maintained
- MB IM : Bollore Raised Stake Further in Mediobanca, Corriere Reports
- MONY LN : Moneysupermarket.com Founder Nixon Selling Shrs in Bookbuilding
- NOK1V FH : Uber Joins Baidu as Nokia’s Maps Unit Draws Multiple Bidders
- NOVOB DC : Novo Faces U.S. ITC Section 337 Probe After Baxter Request
- ROG VX : Illumina Files Patent Infringement Suit vs Roche’s Ariosa
- ROG VX : Roche Gets FDA CLIA Waiver for Cobas Liat PCR System, Strep A
- S32 LN : South32 Jumps on 2nd Day of Trading; Best Performer on ASX Index
- SAN FP : Regeneron, Sanofi Starting Phase 3 Study of Dupilumab in Asthma
- SEM AV : Semperit 1Q Ebit Rises 8.3% to EU20.1m; Confirms 2015 Targets
- SRP LN : Serco's sale of BPO arm may be delayed over valuation - The Economic Times http://bit.ly/1LfUJKV
- SOON VX : Sonova FY Ebita In Line With Ests., Div. Misses BDVD Forecast
- SRCG SW : Sunrise Communications 1Q Sales, Adj. Ebitda Grow; Posts Loss
- TOM2 NA : Tomtom Extends Global Pact w/ Apple for Maps; No Details Given
- UBER IPO : Dutch Govt Raises Uber Fine Ceiling to EU1m
- UTDI GY : United Internet 1Q Ebitda Misses Ests.; Keeps 2015 Outlook
- VK FP : Vallourec in talks with Ascometal about sale of Saint-Saulve steel mill – Le Echos
- VOD LN : Vodafone 4Q Organic Service Revenue Grows 0.1%
- ZAG AV : Zumtobel 2015 Profit Rises 40% After Revenue Hits Record EU1.3b
>>> Up
*AL NOOR HOSPITALS RAISED TO BUY VS HOLD AT HSBC
*CARLSBERG RAISED TO ACCUMULATE VS NEUTRAL AT MIRABAUD
*EIFFAGE RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*H&R RAISED TO HOLD VS SELL AT BANKHAUS LAMPE
*REED ELSEVIER RAISED TO BUY VS NEUTRAL AT GOLDMAN
*SKANSKA RAISED TO HOLD VS REDUCE AT HSBC
*VINCI RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
>>> Down
*ATLANTIA CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*BHP BILLITON CUT TO REDUCE VS HOLD AT HSBC
*BRENNTAG CUT TO UNDERPERFORM AT CREDIT SUISSE
*HSBC CUT TO MARKET PERFORM AT BERNSTEIN, PT 650P, HK$80
*MITCHELLS & BUTLERS CUT TO HOLD AT JEFFERIES
*XEROS TECHNOLOGY CUT TO UNDERPERFORM VS BUY AT JEFFERIES
>>> PT Change
*CENTRICA PT RAISED from 292 to 305 AT GS
*ITV PT RASIED FROM 294 TO 304 AT GS
*LAGARDERE PT RAISED FROM 26.20 TO 27 AT GS
*MEDISAET ESPANA PT RAISED FROM 11 TO 11.50 AT GS
*REED ELSEVIER PT RAISED FROM 22.90 TO 25.60 AT GS
*SABMILLER CUT TO UNDERPERFORM VS SECTOR PERFORM AT RBC
*SALVATORE FERRAGAMO PT RAISED FROM 34.10 TO 35 AT GS
>>> Initiation
*LENTA RATED NEW OVERWEIGHT AT BARCLAYS, PT $12.43
>>> Call
>> Stock
*FERRAGAMO EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY
*RICHEMONT ADDED TO CONVICTION BUY LIST AT GOLDMAN
Asian Mid-session Update: Shanghai Composite zooms; RBA minutes imply continued easing bias
***Economic Data***
- (NZ) NEW ZEALAND Q2 2-YEAR INFLATION EXPECTATION: 1.85% V 1.80% PRIOR; 1-YEAR EXPECTATION: 1.32% V 1.11% PRIOR
- (NZ) NEW ZEALAND Q1 PPI OUTPUT Q/Q: -0.9% V -0.1% PRIOR; PPI INPUT Q/Q: -1.1% V -0.4% PRIOR
- (NZ) NEW ZEALAND APR ANZ JOB ADVERTISEMENTS M/M: -0.2% V -0.7% PRIOR; 2nd straight decline
- (AU) Australia Mar Conference Board Leading index m/m: -0.1% v 0.5% prior; first decline in 4 months
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 114.6 v 110.6 prior; Highest since Nov 2014
- (KR) South Korea Apr PPI Y/Y: -3.6% v -3.7% prior; 9th consecutive month of decline
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.6%, S&P/ASX -0.1%, Kospi +0.4%, Shanghai Composite +1.9%, Hang Seng +0.2%, Jun S&P500 +0.1% at 2,128
***Commodities/Fixed Income***
- Jun gold -0.5% at $1,221/oz, Jul crude oil -0.1% at $60.21/brl, Jul copper flat at $2.91/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 5.5 tonnes to 718.2 tonnes; lowest since Jan 15th
- SLV: iShares Silver Trust ETF daily holdings fall to 9,888 from 9,925; multi-month lows
- (CN) PBoC won't conduct open market operations (OMO) in today's session (9th consecutive halt)
- JGB: (JP) Japan MoF sells ¥2.30T in 0.1% (0.1% prior) 5-yr bonds; Avg yield: 0.10% v 0.081% prior; Bid-to-cover: 2.80x v 3.38x prior
***Market Focal Points/FX***
- Asia's main indices are higher nearly across the board, tracking a session of modest gains in the US hours. S&P500 hit new record highs while Treasuries fell, reversing some of the gains made on Friday. Some of the focus fell on the research paper from the San Francisco Fed, putting the post-adjustment US Q1 GDP around 1.8% rather than 0.2% as reported by the Commerce Dept. SF Fed also indicated that much of the Q1 weakness could be attributed to seasonality of adverse weather, implying the worries about the timing of Fed rate hikes after last week's soft US data may be overdone.
- Shanghai Composite was the clear outperformer, rising over 1% in the opening hour and then zooming to 2.7% rise entering its lunch break. Note the index was down for the past 2 sessions, and there's chatter the high-margin speculative buying is behind today's move. Investors are also reacting positively to China State Council unveiling its 2015 economic reform, pledging to focus on economic growth, deregulate central power, promote FX convertibility, loosen control of investment and boost reforms of SOE in key industries such as electricity.
- Reserve Bank of Australia unveiled its policy meeting minutes from earlier this month when RBA cut rates to 2% as expected. The minutes were largely dovish, stating the delay in GDP pickup would lead to higher unemployment rate as well as anticipating terms of trade to fall further. RBA also pointed to the timing of recovery in non-mining investment as key to the economy and expressed concern over China property market. Most importantly, RBA said the lack of policy guidance in the statement does not limit scope for further easing - comment that led to selling in AUD and a rebound in S&P/ASX. AUD/USD fell over 30pips on the comments below $0.7960.
- NZD trading was also volatile once again, initially falling 20pips below 0.7360 on PPI data but then spiking on quarterly release from the RBNZ by over 50pips above 0.7420. RBNZ put 2-year inflation expectation at 1.85% V 1.80% prior - the first increase in a year - though 2-year GDP and 90-day bill rate expectations were revised a bit lower.
***Equities***
US equities / ADRs:
- MOMO: Reports Q1 +$0.05 v -$0.06 y/y, R$26.3M v $5.4M y/y; +20.9% afterhours
- TTWO: Reports Q4 $0.49 v $0.26e, R$428M v $461Me; Announces 10M share buyback authorization (about 12% of outstanding); +7.0% afterhours
- A: Reports Q2 $0.38 v $0.39e, R$963M v $993Me; -3.8% afterhours
- URBN: Reports Q1 $0.25 v $0.30e, R$739M v $760Me; -16.4% afterhours
Notable movers by sector:
- Consumer discretionary: Esprit Holdings 330.HK -2.7% (profit warning); Beiqi Foton Motor Co 600166.CN +3.5% (sales tax exemption for new energy vehicle); Bega Cheese BGA.AU -3.1% (lowers guidance); COFCO Tunhe Co 600737.CN +3.1%, China Foods 506.HK +3.7% (clarification on COFCO restructuring)
- Financials: China overseas Land 688.HK +1.9% (Apr result); PICC Group 1339.HK +1.5% (YTD premium income); Huatai Securities 601688.CN +10.0% (Hong Kong IPO)
- Technology: Hangzhou Hikvision Digital Technology Co 002415.CN +4.1% (cooperation with Alibaba); Samsung Electronics 005930.KR +2.3% (speculation on Galaxy S6 Edge Plus release)
- Industrials: GrainCorp GNC.AU +1.1% (to expand malt production capacity)
- Utilities: Sinohydro Group Ltd 601669.CN +3.9% (YTD new contracts)
After Hours Summary: GIGA +24.4%, MOMO +21.5%, TTWO +7.4%, URBN -15.3%, AMCN -3.8%, A -3.1% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings: GIGA +24.4%, MOMO +21.5%, TTWO +7.4%, LAKE +4.2%, DWSN +2.6%
Companies trading higher in after hours in reaction to news: GIGA +21.1% co finalized a $10 mln multi-year production order for high performance YIG filters for a major aerospace company; co also reported earnings), BIOL +7.4% (announced Harold C. Flynn Jr. will become President and Chief Executive Officer, effective July 13, 2015), TTWO +7.4% (increased share repurchase authorization to 10 mln shares; co also reported earnings), TRQ +3.9% (announced Oyu Tolgoi shareholders sign agreement to progress the development of underground mine)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings: URBN -15.3%, AMCN -3.8%, A -3.1%, NOAH -2.6%, CCIH -0.7%
Companies trading lower in after hours in reaction to news: EOX -13.4% (announced common stock offering with aggregate public offering size of $150 mln), RNDY -8.9% (announced a proposed underwritten secondary offering of 3.5 mln shares of its common stock owned by selling shareholders), ARP -5.8% (announced it has agreed to acquire natural gas producing properties in the Arkoma basin, from its parent company, Atlas Energy (ATLS), for $35.5 mln), MBI -5.7% (announced the sale of 27.25 mln shares of common stock, by funds affiliated with Warburg Pincus), LINE -4.8% (announced public offering of 16 mln units), BRG -2.9% (co has commenced a public offering of ~3.85 mln shares of its Class A common stock), SABR -2.3% (confirmed the public offering of 22 mln shares of common stock by existing stockholders affiliated with TPG Global, LLC and Silver Lake Management Company), CDW -1.5% (commenced public offering of 10 mln shares of common stock by selling shareholders)
L’Etat s’est doté d’un instrument de pouvoir avec le droit de vote double
L’Etat peut céder des actions sans réduire son influence. A la clef, un pactole potentiel de plus de 16 milliards d’euros.
l’actionnariat long terme et lutter contre le court-ter- misme de certains investisseurs, jugé néfaste. La généralisation du droit de vote double pour tout actionnaire détenant des titres au nominatif depuis plus de deux ans répond à cet objectif. C’est ainsi que les politiques ont justifié ce volet boursier dans la loi Florange, ins- piré, il est vrai, des traumatismes créés par les OPA sur Pechiney et sur Arcelor – qui ont conduit à la disparition de deux symboles de la France, voire de l’Europe indus- trielle. Voilà pour la théorie.
Dans les faits, cet objectif affiché a déjà fait long feu. Le prétendu « outil de fidélisation des actionnai- res investis dans la durée » s’est transformé en instrument de pou- voir. Le premier gagnant est l’Etat actionnaire. Renault, Air France, Engie (ex-GDF Suez), Orange : le gouvernement a veillé au grain. Il n’a pas hésité à monter au capital quand cela s’avérait nécessaire pour atteindre une minorité de blocage.
Aux limites
du politiquement correct Chez Renault, il a voulu avant tout empêcher que le groupe passe en régime de droits de vote simple. Et de peur de ne pas peser assez à l’assemblée générale avec ses 15 % des droits de vote, il n’a pas hésité à investir jusqu’à 1,2 milliard d’euros pour faire grimper ses parts à 19,7 %. Peu importe le bras de fer avec la direction de Renault ou avec l’allié japonais Nissan, peu importe que cette montée au capital ne soit que temporaire (l’Etat s’est engagé à revendre ses titres après l’assem- blée générale), peu importe que la technique employée soit plutôt celle d’un financier que d’une auto- rité publique. L’enjeu est tel que l’Etat a bravé les foudres du politi- quement correct. Et reproduit la même stratégie.
Chez Air France, aussi, il a acheté des actions avant l’AG, mais la dépense est moindre. Montant de l’acquisition : entre 33,15 et 45,9 millions pour 1,7 % de titres en plus, soit 17,5 % du capital. Grâce aux droits de vote double, le gouver- nement peut vendre des titres, sans réduire son poids dans les groupes dont il est actionnaire.
Concrètement, c’est donc poten- tiellement le jackpot pour l’Etat, dont les participations cotées repré- sentaient, au 31 mars 2015, 80,7 mil- liards d’euros. Habilement utilisée, la loi Florange est un moyen de se constituer une jolie cagnotte. Dans une étude réalisée fin mars, Exane BNP Paribas a évalué la part du capital que le gouvernement pour- rait céder tout en maintenant son
80,7
MILLIARDS D’EUROS
Le montant global
des participations cotées de l’Etat, au 31 mars 2015.
influence. Cela pourrait représen- ter – au maximum – 10 % du capital d’EDF, 11,7 % d’Engie, 10,7 % des actions d’Orange, 3 % d’Areva, 0,5 % d’ADP, 1,4 % de Safran, 6,7 % chez AirFranceetunpeuplusde6%de Renault. Au total, ces cessions de participations cotées lui permet- traient de dégager la bagatelle de 16,45 milliards d’euros (calculé au cours de clôture de mi-avril).
Grâce aux droits de vote double, l’Etat est en mesure de gérer ses par- ticipations de façon plus active. D’ailleurs, pour récompenser l’actionnariat de long terme, il y a d’autres outils : les dividendes majorés, les plans d’attribution d’actions gratuites. On peut aussi encourager l’actionnariat salarié.
L’homme d’affaires breton, Vin- cent Bolloré, premier actionnaire de Vivendi, a usé des mêmes armes que l’Etat pour asseoir son pouvoir dans le groupe de médias avec 14,5 % du capital. Le procédé est tel- lement habile que les Italiens s’en sont inspirés. A l’été 2014, les droits de vote double ont fait leur appari- tion dans la péninsule, alors qu’ils
n’y avaient jamais eu droit de cité. L’Etat a indiqué que c’était pour récompenser l’actionnaire de long terme. Mais lui aussi détient de grosses participations dans de grandes entreprises cotées, comme l’électricien Enel, le pétrolier ENI, Finmeccanica, SNAM ou Terna.
Xavier Huillard, patron de Vinci, n’a pas eu peur de mettre les points sur les « i » dans une interview mi- avril à Bloomberg : « Le seul intérêt des droits de vote est de permettre de prendre le contrôle des sociétés sans avoir à détenir une majorité des
actions », a-t-il indiqué.
Closing Market Summary: Dow and S&P 500 Set New Record Closing Highs
The stock market kicked off the new trading week on an upbeat note. The Nasdaq Composite led the way, climbing 0.6%, while the Dow Jones Industrial Average (+0.1%) and S&P 500 (+0.3%) underperformed, but still registered new record closing highs at 18,298.88 and 2,129.20, respectively.
The first session of the week featured a range-bound opening hour that was followed by a steady advance. Heavily-weighted financials (+0.5%) and health care (+0.5%) displayed relative strength from the start while another influential group—technology (+0.4%)—climbed ahead of the market during the early afternoon.
The afternoon strength in the tech sector was partially due to gains among chipmakers. The PHLX Semiconductor Index advanced 1.0% with Altera (ALTR 46.93, +2.51) climbing 5.7% amid reports the company is once again discussing a potential deal with Intel (INTC 33.40, +0.41). Meanwhile, large cap tech names traded in mixed fashion, but that was masked by Apple's (AAPL 130.19, +1.42) 1.1% gain after activist investor Carl Icahn sent a letter to Apple Chief Executive Officer Tim Cook, pushing for a larger buyback, and saying Apple is worth $240/share at this time.
Elsewhere, the consumer discretionary sector (+0.4%) also outperformed with retailers contributing to the strength after ANN (ANN 46.40, +7.69) agreed to be acquired by Ascena Retail Group (ASNA 14.07, -0.14) for $47.00/share, representing a 21.4% premium to Friday's closing price.
In other M&A news, Endo Health (ENDP 80.77, -4.58) fell 5.4% after announcing the acquisition of Par Pharmaceutical for $8.05 billion. For its part, the health care sector (+0.5%) ended among the leaders with biotechnology making a contribution. The iShares Nasdaq Biotechnology ETF (IBB 360.30, +4.69) advanced 1.3%, helping the Nasdaq climb ahead of the benchmark index.
On the downside, consumer staples (-0.3%) and materials (-0.4%) spent the entire session in the red while the energy sector (-0.1%) recovered the bulk of its loss ahead of the close. The growth-sensitive group traded alongside crude oil, which showed intraday weakness, but returned to unchanged ($59.69/bbl) shortly after the end of the pit session.
It is worth noting that crude oil showed resilience even though the Dollar Index (94.20, +1.06) advanced 1.1% for the day. On a related note, Treasuries spent the session in a steady retreat, pushing the 10-yr yield higher by eight basis points to 2.22%.
Today's participation was well below average with fewer than 700 million shares changing hands at the NYSE floor.
Economic data was limited to the NAHB Housing Market Index for May, which fell to 54 from 56 while the Briefing.com consensus expected an increase to 57.
Tomorrow, April Housing Starts (consensus 1.019 million) and Building Permits (consensus 1.065 million) will be released at 8:30 ET.
- Nasdaq Composite +7.2% YTD
- Russell 2000 +4.4% YTD
- S&P 500 +3.4% YTD
- Dow Jones Industrial Average +2.7% YTD