From Briefing.com: 4:31PM Action Semi lowers Q4 guidance (ACTS) 1.70 +0.14 : The Company now expects revenue for the fourth quarter ending December 31, 2008 to be approximately $15-$16 million vs $20.15 mln two analyst estimate. The company's previous guidance was for fourth quarter revenue in the range of $18 million to $22 million. Fourth quarter fully diluted earnings per ADS are now expected to be approximately breakeven vs $0.05 two analyst estimate (previous guidance was for Q4 EPS of $0.04-0.06). The revision in guidance is primarily due to lower sales in the current challenging macroeconomic environment and less-favorable exchange rates against US dollars.
4:25 pm : Stocks staged a solid advance without the help of any major news items or encouraging economic data. Each of the major indices rallied in the final minutes of trading, finishing at session highs.
With news flow slow, participants focused on word that GMAC, the partly-owned financing arm of General Motors (GM 3.80, +0.20), is receiving $5 billion worth of senior preferred equity from the U.S. Treasury. Another $1 billion is expected to make its way into GMACâ??s hands since Treasury is lending General Motors money to participate in GMACâ??s rights offering.
The new funds are expected to help generate new auto loans, aimed at attracting buyers. Such a move would complement recent efforts by Treasury and Federal Reserve to increase the availability of consumer loans.
A lack of buyers and tighter credit conditions continue to weigh on the housing market. According to the S&P/Case-Shiller Composite Index, October home prices were down 18% year-over-year. That is the largest drop on record.
Plummeting home prices and broader economic headwinds are taking their toll on consumer confidence. According to the U.S. Conference Board, consumer confidence dropped more than expected to an all-time low in December.
Stocks fell to session lows at the same time the consumer confidence report was released, but quickly snapped back to spend the entire session in the green.
Financials (+4.1%) led the late charge. JPMorgan Chase (JPM 31.01, +1.23) and Wells Fargo (WFC 28.80, +0.97) were the sector's best performers. The two outfits have found favor among investors since they avoided many of the toxic assets that crippled other banks and financial outfits. The assets have been so toxic that The Wall Street Journal suggested banks may face their first overall quarterly loss since 1990.
Strong gains were also had by the materials sector. Rohm and Haas (ROH 59.37, +6.03) rebounded from the prior sessionâ??s loss after reports indicated the terms of its merger agreement with Dow Chemical (DOW 15.55, +0.23) are unlikely to be renegotiated.
The deal was questioned when a multibillion partnership between Dow and a Kuwaiti petrochemical outfit fell through. That prompted Standard & Poor's and Moody's to lower their credit rating on Dow.
Integrated oil companies (+1.8%) provided leadership to the energy sector for the second straight session. They helped the sector climb from a 0.9% loss to finish 1.8% higher.
Energyâ??s recovery was also helped when oil prices pulled off their session lows. Crude futures were down more than 5%, but finished closer to 2% lower at around $39.20 per barrel.
The session's gains were broad-based with all 10 economic sectors advancing. Nearly 95% of the companies in the S&P 500 closed higher.
The gains came on light trading volume, though, as many investors remain on vacation, and trading desks continue to be lightly staffed. For the fifth straight session less than 1 billion shares traded hands on the NYSE. The trend will likely continue through the week since the U.S. indices will be closed for another holiday on Jan. 1, which is New Year's Day. Tomorrow, Dec. 31, is a full trading day.DJ30 +184.46 NASDAQ +40.38 SP500 +21.22 NASDAQ Dec/Adv/Vol 918/1951/1.44 bln NYSE Dec/Adv/Vol 591/2548/954 mln
08:47 am Advanced Micro Devices (AMD)
Struggling chip maker Advanced Micro Devices (AMD 2.10) said that it implemented a restructuring plan in its fiscal fourth quarter centered around job cuts.
AMD said that approximately 600 employees were laid off in the fourth quarter.
AMD estimates that it will record a $70 million restructuring expense in the fourth quarter. The company said the restructuring charge includes $34 million related to severance and the costs associated with continuation of certain employee benefits, $13 million in contract termination costs, $17 million in asset impairments and $6 million related to exit costs for facilities that have been consolidated or closed.
The latest figures indicate deeper cuts than AMD originally expected. In its third quarter report, AMD said it expected to layoff approximately 500 employees and take a charge of $50 million.
Shares of AMD have been hammered over the past year and are off more than 70% from their 52-week high. |
