From Briefing.com: In a change of pace, Asia and Europe set the tone for Tuesday's market action. After moving higher on positive U.S. earnings momentum, markets across Asia and Europe generally erased earlier gains to close down or, at best, modestly higher. U.S. stocks weakened at the opening bell but managed to push ahead by 1:30pm ET. The Dow closed at 9812.60, up 48.60, the S&P at 1049.48, up 4.13, and the Nasdaq at 1943.19, up 9.66. Tech stocks tracked the broader markets, closing generally modestly higher. Top gainers included optical components manufacturers Bookham (BKHM 2.84 +0.40) and MRV Communications (MRVC 3.73 +0.41), up 16.4% and 12.4% respectively, content management software makers iManage (IMAN 9.90 +1.10) and Interwoven (IWOV 4.18 +0.48), up 12.5% and 13.0% respectively, and ChipPac (CHPC 6.89 +0.73), up 11.9%. All of the moves appear to be technical rebounds off lows.
Looking ahead, strong results from Intel (INTC 31.08 +0.28) coupled with comments from management that older fabs are running at near capacity, and upbeat outlook from Novellus Systems (NVLS 37.42 +0.47) regarding capital spending provides the much-needed confirmation of future growth that investors are seeking to sustain valuation within technology shares. With fab capacity utilization, across regions, at almost 90%, according to VLSI Research, it is a matter of time before capital spending ramps up. Additionally, China, with great amibitions to be a major player in semiconductor manufacturing, is a potential source of capital investment. Based on all of these factors, we expect semiconductor capital equipment stocks, led by industry leaders, to trade well in the weeks ahead. One often overlooked name that we think is particularly well positioned for a strong recovery in capital spending is:
ASM International (ASMI, 17.13 +0.13): ASM International boasts one of the broadest product portfolios covering both front- and back-end equipment. Trading at 1.4x Reuters Research consensus C03E revenues of $613.9 and 1.1x C04E revenue of $778.5. This compares favorably against an industry average, respectively, of 10.3x and 13.7x. Consensus EPS is at ($0.59) for C03 and $0.61 for C04.--Ping Yu, Briefing.com
6:59PM After Market Movers : Trading higher in reaction to earnings/guidance are INTC (+2.61%), IDPH (+1.96%), NVLS (+1.42%) and TER (+0.77%). In response to quarterly results from INTC as well as NVLS and TER, shares of TMTA (+3.29%) and AMAT (+1.24%) surged, respectively. Losing ground in extended-hours action are shares of CGNX (-2.03%).
6:42PM Teradyne reports in line, ex items, issues Q4 guidance (TER) 19.59 +0.74: Reports Q3 (Sep) pro forma loss of $0.14 per share, before special charges, in line with the Reuters Research consensus of ($0.14); revenues fell 0.5% year/year to $329.2 mln vs the $323.6 mln consensus. Co also issues Q4 guidance, sees pro forma breakeven results, vs the R.R. consensus of ($0.02) and revenues of $335-340 mln vs an estimate of $340.7 mln.
5:02PM Linear Tech beats by $0.01 (LLTC) 42.00 +1.04: Reports Q1 (Sep) earnings of $0.22 per share, $0.01 better than the Reuters Research consensus of $0.21; revenues rose 23.1% year/year to $174.8 mln vs the $170.8 mln consensus.
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