From Briefing.com: 4:25 pm : Stocks traded without clear direction as market participants were left uninspired by the absence of market-moving headlines. In turn, the major indices swung back and forth before closing lower for the fifth straight session.
Consequently, the mounting losses have taken the S&P 500 and the Dow to new multiyear lows. The S&P 500 is now down almost 56% from its bull market high, which was reached in late 2007. The Dow is down roughly 53% from its 2007 high.
With stocks looking oversold, market participants actually bid the stock market up as much as 1.5% in the early going. The advance was broad-based, but eventually fell apart. Only the energy (+0.3%), technology (+0.3%), and materials (+0.6%) sectors were able to finish the session higher.
Treasury and the Federal Reserve are launching the Term Asset-Backed Securities Loan Facility (TALF), which will lend up to $200 billion to eligible owners of certain AAA-rated asset-backed securities. The effort has the potential to generate up to $1 trillion of lending for businesses and households.
The program will hold monthly fundings through December 2009 or longer if the Federal Reserve chooses to extend the facility.
By creating a facility that will purchase certain asset-backed securities, the Fed is aiming to improve liquidity and credit conditions in the financial system. According to Fed Chairman Bernanke the effectiveness of actions in restoring financial stability will be critical in the timing and strength of a broader economic recovery.
Still, Bernanke indicated the near-term outlook for the economy remains weak. Economists at Goldman Sachs concur; they expect the U.S. economy will fall 7.0% in the first quarter, according to Dow Jones.
Despite housing stimulus provisions, pending home sales in January declined 7.7%. The consensus estimate called for a 3.5% decline. The data reflect the effects of ongoing job losses, lost wealth, and weak consumer confidence.
Similar forces continue weighing heavily on auto sales. Ford Motor (F 1.81, -0.07) reported February sales in North America fell roughly 48%, which is steeper than the 42% drop that was expected. General Motors (GM 1.99, -0.02) reported February sales sank nearly 53%, exceeding the 45% fall that was widely forecast. Separate reports indicated GM's chief operating officer said that without government funds the company's European unit would run out of cash in the second quarter.
On a similar note, reports indicate Toyota Motor (TM 61.01, +0.35) may ask the Japanese government for aid, which would help offset expected losses.
Despite the lack of market-moving news this session, tomorrow's trade should get its cues early in the morning. The ADP Employment Report for February is due first thing (8:15 AM ET). The report will provide a glimpse of the government's official jobs report, which is due Friday. The February ISM Services Index is due later in the morning (10:00 AM ET).DJ30 -37.27 NASDAQ -1.84 NQ100 +0.4% R2K -1.9% SP400 -0.7% SP500 -4.49 NASDAQ Dec/Adv/Vol 1730/942/2.15 bln NYSE Dec/Adv/Vol 2109/1003/1.90 bln
4:30PM Palm sees Q3 revs $85-90 mln vs $157.83 mln First Call consensus; co intends to strengthen its working capital position (PALM) 7.38 : Co sees Q3 revs $85-90 mln vs $157.83 mln First Call consensus. The revenue declines vs. the co's second quarter of fiscal year 2009 and third quarter of fiscal year 2008 are the result of reduced demand for Palm's maturing legacy smartphone products, the challenging economic environment and later-than-expected shipments of the Treo Pro in the United States. The co expects declining revenues and continued margin pressure from its legacy product lines in the fiscal fourth quarter. "The much-anticipated launch of the Palm Pre remains on track for the first half of calendar year 2009, but as expected we've got a difficult transition period to work through. Despite the challenging market environment, the extraordinary response to the Palm Pre and the new Palm webOS reaffirms our confidence in our long-term prospects and our ability to reestablish Palm as the leading innovator in the growing smartphone market." Palm stated that cash used in operations for the quarter is expected to be between $95 million and $100 million. The company's cash, cash equivalents and short-term investments balance is expected to be between $215 million and $220 million at the end of the third quarter... Although Palm believes it has sufficient cash, cash equivalents and short-term investments to meet its working capital needs under its current operating plan, the company intends to strengthen its working capital position given the challenging economic environment and the opportunity to drive both the launch of the Palm Pre and future product-development efforts. The company is currently evaluating options in this regard, including the exercise of its right to direct the remarketing of a portion of the common shares underlying the Series C preferred stock and warrant units owned by Elevation Partners. Palm is entitled to retain any net profits realized from such remarketing. (Stock is halted)
9:02AM Qualcomm increases quarterly dividend to $0.17/share from $0.16/share (QCOM) 32.79 : Co states, "Despite the uncertain global economic environment, we continue to execute on our strategic objectives, driving strong operating cash flows, enabling us to return capital to stockholders through stock repurchases and dividends..."
8:32AM Apple updates consumer desktop line; introduces new Mac Pro (AAPL) 87.94 : Co announced updates to its iMac and Mac mini desktop lines, including a 24-inch iMac that is priced more affordably than ever before and a Mac mini with powerful new integrated graphics. For the same $1,499 price as the previous generation 20-inch iMac, the new 24-inch iMac delivers a 30 percent larger display, twice the memory and twice the storage. Co also introduced the new Mac Pro using Intel "Nehalem" Xeon processors and a next-generation system architecture to deliver up to twice the performance of the previous generation system. The new Mac Pro starts at $2,499 and features the latest graphics technology and an updated interior that makes expansion even easier than before.
8:02AM LSI Logic announces it is included as part of DoD $40 mln TI-09 contract (LSI) 2.51 :
7:39AM Advanced Micro: Bruce Claflin appointed AMD Chairman of the Board (AMD) 2.01 : The co announces that Bruce Claflin has been appointed Chairman of its Board of Directors. Mr. Claflin replaces Hector Ruiz, who retired from AMD's Board in conjunction with assuming the position of Chairman of the Board of "The Foundry Company." Mr. Claflin has been a member of AMD's Board of Directors since August, 2003.
7:34AM Xilinx raises March qtr guidance (XLNX) 16.71 : March quarter sales are now expected to be down 13% to 18% sequentially, an upward revision to previous sales guidance of down 15% to 25% sequentially, due primarily to better than expected wireless communications sales (this new guidance equates to ~$375.9-398.8 mln vs $365.72 mln consensus). Gross margin guidance of 61% to 63% and operating expense guidance of flat to slightly down sequentially remain unchanged.
7:04AM Trina Solar beats by $0.01, beats on revs (TSL) 5.96 : Reports Q4 (Dec) loss of $0.03 per share, $0.01 better than the First Call consensus of ($0.04); revenues rose 113.3% year/year to $216.3 mln vs the $201.3 mln consensus. While the co typically provides a range of guidance for future performance, the current global economic and financial climate makes such predictions difficult. For the first quarter of 2009, the co expects to ship between 50 MW to 55 MW of PV modules. The co believes gross margin for the first quarter will likely be between 15% and 17%. For the full year of 2009 the co expects total PV module shipments between 350 MW to 400 MW, representing an increase of 74% to 99% from 2008. |
