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T3's Take 3: Housing Stocks Skyrocket on Earnings


Today's financial recap and tomorrow's financial outlook.

Rotten Apple

Apple (AAPL) took a big hit today on a negative report out of the Wall Street research complex.

Credit Suisse said that its channel checks indicate that AAPL has cut its component orders by as much as 10%.

As a result, Credit Suisse cut its calendar year earnings estimate on Apple by 6%. It also lowered its iPhone unit sales estimate by 8%.

Curiously, the Swiss bank did not change its 'Outperform' rating or its $140 price target. Nonetheless, Apple shares fell 3.2% today, closing at $116.73.

Apple suppliers also sold off on the report, with chipmakers Cirrus Logic (CRUS) and Skyworks Solutions (SWKS) seeing very larger drops.

US Market Round-Up

Today, the S&P 500 shook off early morning lows to finish in the green for the first time in 5 days.

The index closed at 2081.72, up 0-.2%

The NASDAQ Composite fell 0.2%, suffering from the aforementioned drop in Apple. Semiconductor stocks were also weak.

The strongest sector today was Home Construction (ITB), which finished the day up over 2%. Homebuilder D.R. Horton (DHI) stole the show after it reported better than expected earnings, and finishing the day up more than 8.00%.

Smaller homebuilder Beazer Homes (BZH) managed to rally 5.6% despite missing earnings expectations.

Other rate sensitive sectors like real estate and utilities performed well. Small caps also outperformed, with the Russell 2000 rising 0.3%.

However, from a bigger-picture perspective, the Russell is still lagging the major indices. It's 10% off its all-time high, while the S&P is just 2% from its record high.

Hack Attack

US prosecutors announced charges against three men who led cyber attacks against financial institutions including JP Morgan (JPM), and news publishers including Dow Jones.

However, the news did not help the cyber security sector.

The Purefunds ISE Cyber Security ETF (HACK) fell 1.3%, leading the decliners' column today.

The main culprit was CyberArk Software (CYBR), which fell 9.6% on a downgrade from Bank of America (BAC). Other security names like Palo Alto Networks (PANW) and FireEye (FEYE) fell in sympathy.

Earlier in the year, cyber security stocks performed well due to hacks at major retailers, but they've declined since then on mixed earnings.

Wednesday Preview

In US economics, MBA Mortgage Applications will be released tomorrow morning.

Overseas, Chinese industrial production and retail sales and the Australian employment report will be released. 

In earnings, ADT (ADT), Macy's (M), and (WUBA) will deliver results tomorrow.
No positions in stocks mentioned.
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