From Briefing.com: 4:20 pm : The stock market started the week on a sharply lower note in the lightest trading volume of the year. Overall it was a slow news day, although there were several negative headlines out of the financial sector.
Trading volume was very light with only 865 million shares exchanging hands on the NYSE, so it is not clear how much conviction was behind this session's move. Still, buyers showed little interest, considering that 95% of stocks within the S&P 500 posted a loss. All ten economic sectors declined at least 1%.
Although weakness was widespread, the financial sector (-3.1%) took the brunt of the selling pressure. Shares of AIG (AIG 18.78, -1.09) fell to their lowest level in 13 years after the company had its third quarter earnings estimate cut to a loss of $0.86 per share at Credit Suisse. The insurance giant also had its credit ratings placed on a negative watch at Fitch Ratings.
Lehman Brothers (LEH 13.54, -0.87) struggled after South Korean regulators told the Korea Development Bank to take a cautious approach before making an acquisition of an overseas bank, according to the Financial Times. The state-run bank expressed interest in Lehman during the previous week.
Regional bank Columbian Bank and Trust Company was closed by banking regulators over the weekend. While the bank only has $752 million in assets, it is still a reminder that more bank failures are a real possibility.
Only three of the financial sector's 89 components posted a gain. Freddie Mac's (FRE 3.32, +0.51) $2 billion debt offering received increased interest from investors, sending shares of the struggling government-sponsored enterprise sharply higher. Fannie Mae (FNM 5.31, +0.31) rose in conjunction with Freddie. Bond insurer MBIA (MBI 10.83, +0.63) rose on no specific news item.
Other sectors that posted large losses include consumer discretionary (-2.4%), materials (-2.3%) and telecom (-2.2%).
The defensive-oriented utilities sector (-1.1%) outperformed on a relative basis, benefiting from a rally in the long end of the Treasury yield curve, with the 10-year note climbing 23 ticks and the 30-year bond gaining 38 ticks.
The energy sector (-1.5%) also outperformed on a relative basis, after crude oil prices posted a modest gain of 0.5% to $115.12 per barrel in volatile trade.
In economic news, the National Association of Realtors existing home sales report for July was mixed, but signals that a bottoming process in housing industry is taking shape. The number of home sales rose by a larger-than-expected amount, while home prices declined and the amount of unsold inventory rose to the highest level since at least 1999.
Specifically, July existing home sales rose 3.1% month-over-month to a seasonally adjusted 5.00 million annual rate, which follows the 2.8% decline in June. This tops the median economist estimate that called for 1.1% growth to 4.91 million.
Existing home sales are down 13.2% year-over-year, and have an inventory supply of 11.2 months, compared to the 2007 average inventory supply of 8.9 months. The inventory of single family homes, however, improved to a 10.6 months supply from 11.0, which indicates that falling prices are helping to stimulate demand.
The median sales price fell 1.3% month-over-month to $212,400, and is down 7.1% compared to last year. DJ30 -241.81 NASDAQ -49.12 NQ100 -2.2% R2K -2.3% SP400 -2.0% SP500 -25.36 NASDAQ Adv/Vol/Dec 603/1.44 bln/2212 NYSE Adv/Vol/Dec 710 mln/865 mln/2424
9:25AM Trina Solar signs supplemental agreement to the long term supply agreement with GCL Silicon Technology (TSL) 33.17 : Co announces that its subsidiary, Changzhou Trina Solar Energy, has signed a supplemental agreement to the long-term polysilicon supply agreement with a subsidiary of GCL Silicon Technology Holdings. Together with the original supply agreement announced in April of this year, GCL Silicon Technology will supply TSL with virgin polysilicon and wafers sufficient to produce approx 4,825 MW of solar modules in aggregate over eight years. Delivery of polysilicon at predetermined prices started in April of 2008. After signing this supplemental agreement and together with other polysilicon supply agreements, the company has now secured approx 95% of its estimated silicon feedstock requirements for 2008, an equivalent of approx 204 MW based on a production target of 210 to 220 MW of module output. The company has also secured sufficient feedstock through its long term contracts to produce approximately 380 MW of solar modules in 2009. Co states, "...For 2009, we intend to leverage on this dynamic strategy to efficiently extend our capacity growth to approximately 700MW for cell and module areas, while expanding ingot and wafer production capacities to approximately 500MW.''
Marvell (MRVL) and Trimble (TRMB) announce that they have entered into a Global Positioning System software technology licensing agreement.
3:33AM LDK Solar provides preliminary outlook for FY09; sees revenue of $2.8-3.0 bln vs $2.43 bln consensus (LDK) 45.82 : Co issues upside guidance for FY09 (Dec), sees FY09 (Dec) revs of $2.8-3.0 bln vs. $2.43 bln First Call consensus. Co also anticipates wafer shipments between 1.45 and 1.55 GW. "We are pleased to achieve one of the fastest capacity ramps within the solar industry as we expand our production capabilities to meet the continued strong demand from our growing global customer base... We are proud to reach this significant milestone and remain confident in our ability to expand to 1.2 GW wafer capacity by the end of 2008. This achievement demonstrates our continued commitment to becoming the largest and lowest cost wafer producer in the solar industry." LDK Solar's 1.0 GW production capacity is in line with the company's publicly announced plans to reach a target annualized wafer production capacity of up to 1.2 GW by the end of 2008, 2.2 GW by the end of 2009 and 3.2 GW by the end of 2010.
08:18 am Broadcom (BRCM)
Semiconductor companies Broadcom (BRCM 27.42) and Advanced Micro Devices (AMD 5.81) announced earlier today they struck a definitive agreement in which Broadcom will acquire AMD's digital television business.
The move by Broadcom is intended to add scale and service to its digital TV business, better positioning it to grow with the industry. Bolstering Broadcom's digital TV business also enhances its overall portfolio, further diversifying its business of providing broadband, mobile, wired, and enterprise communication and networking.
In exchange for the digital TV assets, Broadcom will pay roughly $192.8 million in cash. The deal remains subject to customary closing conditions.
08:08 am LDK Solar (LDK)
Solar wafer manufacturer LDK Solar (LDK 45.82) issued upside guidance for 2009, expecting its revenue to range from $2.8 billion to $3.0 billion as wafer shipments range from 1.45 gigawatts to 1.55 gigawatts.
The company noted it is on pace to expand its current production capacity of 1.0 gigawatts to 1.2 gigawatts by the end of 2008. It plans to expand capacity to 2.2 gigawatts by the end of 2009 and 3.2 gigawatts by the end of 2010. |
