From Briefing.com: 4:30 pm : The major indices closed near session highs in a broad-based advance. Some better-than-expected corporate earnings and a satisfactory Treasury auction helped participants build on the prior session's gains. The latest batch of economic data was met with a muted response.
The major indices spent the entire session in positive territory, undeterred by choppy trading. Gains were widespread as all 10 major sectors in the S&P 500 closed the session higher.
Contrary to recent form, the gains came without leadership from the financial sector. Financials lagged for the entire session, frequently trading in the red. Financials were able to close 1.0% higher, though.
Tech (+4.0%) was one of the session's strongest performers. Large-cap tech names underpinned strength in the Nasdaq Composite, which outperformed the other headline indices for the entire session.
A better-than-expected earnings announcement and upbeat forecast from Best Buy (BBY 37.67, +4.21) breathed fresh air into investors, helping to further improve spirits ahead of the opening bell. Retailers responded by advancing 4.4%, supporting a 4.0% gain in the consumer discretionary sector.
Stocks spiked in early afternoon trading following the results from a 7-year Treasury Note auction. The satisfactory turnout helped moderate concern regarding the government's cost of capital and investors' risk appetites which stemmed from Wednesday's weaker 5-year Note auction.
Economic data did little to disrupt trading. The final fourth quarter GDP reading showed a 6.3% annualized rate of contraction, which wasn't as bad as the 6.6% decline that was expected.
Weekly initial jobless claims climbed 8,000 from the prior week to 652,000. However, that was essentially in-line with expectations. Continuing claims climbed more than expected to a record high of 5.56 million, though.
Several Regional Fed Presidents gave speeches today. The speeches covered a range of topics, but many believe the economic malaise will last for a few more months.
Treasury Secretary Geithner testified before the House Financial Services Committee that an overhaul of financial regulation is needed. The changes would aim to limit risk in order to prevent future financial crises. DJ30 +174.75 NASDAQ +58.05 NQ100 +3.6% R2K +4.4% SP400 +3.9% SP500 +18.98 NASDAQ Adv/Vol/Dec 2206/2.15 bln/509 NYSE Adv/Vol/Dec 2435/1.81 bln/615
4:52PM NVIDIA files countersuit against Intel for breach of contract (NVDA) 10.56 +0.62 : The co announces that it has filed a countersuit in the Court of Chancery in the State of Delaware against Intel (INTC) for breach of contract. The action also seeks to terminate Intel's license to NVIDIA's valuable patent portfolio. NVIDIA's countersuit was brought in response to a filing by Intel last month in the Delaware court, alleging that the four-year-old chipset license agreement does not extend to Intel's future generation CPUs with "integrated" memory controllers, such as its Nehalem processor. "NVIDIA did not initiate this legal dispute," said Jen-Hsun Huang, president and CEO of NVIDIA. "But we must defend ourselves and the rights we negotiated for when we provided Intel access to our valuable patents. Intel's actions are intended to block us from making use of the very license rights that they agreed to provide."
12:00PM Fairchild Semi announces plans to streamline and consolidate wafer manufacturing (FCS) 3.90 +0.07 : Co announces plans to streamline and consolidate wafer manufacturing. Co will close its wafer fabrication plant in Mountaintop, PA leading to a closure of the site, and one of its wafer fabs in Bucheon, South Korea. Co anticipates the consolidation of the South Korea fabrication processes and the closure of the Mountaintop facility will be completed by June, 2010. Fairchild expects to incur ~$18 to $23 mln of cash charges, primarily for severance and other costs associated with transfer activities beginning in the second quarter. The company will also take additional non-cash charges of approximately $25 to $30 mln for impairments and accelerated depreciation over the course of the next six quarters. In addition, roughly 200 jobs will be eliminated at the Mountaintop site. Once completed, the company expects to realize annual savings ranging from $20-25 mln as a result of these closures.
8:35AM Agilent restructures electronic measurement businesses (A) 15.96 : The co announces a major restructuring of its Electronic Measurement businesses in response to the most severe global downturn in the company's history. Fiscal 2009 revenue in the company's Electronic Measurement Segment is expected to be down roughly 30% from 2008 to the lowest level in the company's 10-year history. Revenue in the Semiconductor & Board Test Segment is expected to be down over 50% from last year and off 65% from its peak volume... The co announces it would reduce costs in its Electronic Measurement Segment by an annualized $300 million over the course of the next four quarters, sizing the Segment to achieve a 12% operating margin and a 21% ROIC at annualized revenues of $2.3 billion. It also announced a further restructuring of its Semiconductor & Board Test Segment to reduce annual costs by an additional $10 million. This restructuring will affect approximately 2,700 employees and have a cash cost of about $160 million... In order to fully fund the restructuring and conserve cash in an environment of severely constrained financial markets, the company also announced it was temporarily suspending its share repurchase program until the end of its 2009 fiscal year.
08:39 am Best Buy (BBY)
Best Buy (BBY 33.46) easily topped fourth quarter earnings estimates and issued upside guidance for the full year, sending shares of the consumer electronics retailer more than 8% higher in Thursday's premarket trade.
For the fourth quarter, Best Buy reported earnings of $1.61 per share, excluding nonrecurring items, $0.21 better than the First Call consensus of $1.40.
Revenues rose 9.7% year-over-year to $14.72 billion; the consensus expected $14.82 billion.
Best Buy said the revenue increase reflected the inclusion of Best Buy Europe's revenue and gains from the net addition of 213 new stores in the past 12 months. Revenue gains were offset by a same-store sales decline of 4.9% and the unfavorable impact of foreign currency fluctuations. Excluding foreign currency effects and the impact of adding Best Buy Europe, total fiscal fourth quarter revenue declined 2% versus the prior-year period.
While same-store sales declined, Best Buy noted that the majority of the drop off was in December, when same-store sales plunged 6.8%, compared to a 2.5% decline in the combined January-February period.
Best Buy estimates that its domestic market share grew 1.2 percentage points year-over-year to nearly 22%, driven by strength in key product categories such as notebook computers and flat-panel TVs and aided by the demise of Circuit City.
The company issued upside earnings guidance for the full year, expecting earnings between $2.50 and $2.90 per share, ahead of the $2.47 consensus with plenty of room for an upside surprise. Best Buy expects full year revenues to range from $46.5 billion to $48.5 billion; the consensus stands at $48.05 billion. |
