From Briefing.com: 4:30 pm : Market participants were dealt another dose of disappointing data, but stocks worked their way higher and eventually benefited from a late-session squeeze that helped them book their first gain in five sessions.
Stocks fell almost 4% during the course of the four previous sessions, but the early tone among traders suggested that they would continue to trend lower. The interest to sell stemmed partly from renewed weakness overseas. Europe's bourses initially overcame news that Ireland's sovereign debt rating was reduced to AA- from AA at Standard & Poor's, but they eventually rolled over. The Shanghai Composite dropped 2.0% and Japan's Nikkei sank deeper into bear market territory, even though the yen eased off of the 15-year best that it booked in the prior session. Recent export data added to concerns about the implications of the yen's strength. Amid those concerns, it was reported that Japan's Ministry of Finance might consider unilateral yen-selling intervention.
Disappointment over the latest durable goods orders data added to the negative tone of premarket trade. Overall durable goods orders for July increased just 0.3%, which is far less than the 3.0% increase that had been widely expected. Excluding transportation, durable goods orders dropped 3.8%, which contrasts sharply with the 0.5% increase that many had forecasted. The prior month's orders were revised upward to reflect a 0.1% decline in total orders and a 0.2% increase in orders less transportation.
Sellers intensified their efforts when new home sales numbers for July were released shortly after the open. New home sales dropped 12.4% month-over-month to an annualized rate of 276,000 units, which is well below the rate of 334,000 units that had been widely expected.
Near-term support levels were violated and stocks set fresh monthly lows amid the knee-jerk selling that ensued, but the major indices were quick to rebound. That bounce spurred some short covering, which squeezed stocks even higher.
Shares of home improvement retailers and homebuilders saw some of the sharpest moves. They swung to gains of 2.1% and 3.8%, respectively, as big bets against the space ahead of the dour housing data had to be covered.
While the broader market's gain was rather modest, the Nasdaq staged a strong advance. It was led by large-cap tech plays like Apple (AAPL 242.89, +2.96) and Google (GOOG 454.62, +3.23).
Biotech also provided support to the Nasdaq. Biotech stocks advanced 1.5%, but managed care providers were the strongest performers within the health care sector. Managed care stocks climbed 2.5%.
Treasuries were strong in the early going, such that yields on dropped to new annual lows. However, Treasuries retreated as the stock market climbed. Results from an auction of 5-year Notes didn't help. The auction drew a bid-to-cover of 2.8 and dollar demand of $101.9 billion. Both measures were down from the prior auction.
Advancing Sectors: Consumer Discretionary (+1.0%), Health Care (+1.0%), Telecom (+0.6%), Tech (+0.5%), Materials (+0.3%), Financials (+0.3%), Consumer Staples (+0.1%)
Declining Sectors: Energy (-0.3%), Utilities (-0.3%), Industrials (-0.2%)DJ30 +19.61 NASDAQ +17.78 NQ100 +0.9% R2K +1.6% SP400 +0.8% SP500 +3.46 NASDAQ Adv/Vol/Dec 1676/2.02 bln/977 NYSE Adv/Vol/Dec 1832/1.11 bln/1167
4:33PM Semtech beats by $0.03, beats on revs; guides Q3 EPS above consensus, revs above consensus (SMTC) 16.91 +0.06 : Reports Q2 (Jul) earnings of $0.42 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $0.39; revenues rose 70.7% year/year to $113.2 mln vs the $110.8 mln consensus. Co issues upside guidance for Q3, sees EPS of $0.45-0.47, excluding non-recurring items, vs. $0.41 Thomson Reuters consensus; sees Q3 revs growth of ~6-10% sequentially, which calculates to ~$120.0-124.5 mln vs. $116.18 mln Thomson Reuters consensus.
4:09PM JDS Uniphase beats by $0.01, reports revs in-line; guides Q1 revs in-line (JDSU) 10.23 +0.16 : Reports Q4 (Jun) non-GAAP earnings of $0.15 per share, $0.01 better than the Thomson Reuters consensus of $0.14; non-GAAP revenues rose 19.6% year/year to $398.1 mln vs the $398 mln consensus. Co issues in-line guidance for Q1, sees Q1 non-GAAP revs of $410-425 mln vs. $415.90 mln Thomson Reuters consensus. "We enter fiscal 2011 with order momentum and an industry-leading product portfolio."
07:48 am Corning upgraded to Outperform at Oppenheimer: . Oppenheimer upgrades GLW to Outperform from Perform and sets target price at $20 saying their upgrade doesn't mean that they think the inventory correction rattling through the LCD supply chain is over. The most likely scenario is that it will endure another one to three months. Still, firm says if prior inventory corrections are any indicator, this is the time to turn positive on GLW's shares, when fear of downward revisions is peaking and when potential upside scenarios--Gorilla Glass, an accelerated TV replacement cycle, solar, etc.--lie forgotten in the weeds.
07:46 am Trina Solar target raised to $41 at Auriga U.S.A: . Auriga U.S.A raises their TSL tgt to $41 from $24 following earnings. The firm says mgmt did not disappoint investors with a strong beat and raise scenario on the Q2 conference. However, after raising estimates ahead of the call last week, they are increasing both estimates and price target again. Firm fully expected management to raise 2010 shipment guidance, which they did, but the surprise to their model came on the guidance of capacity reaching 1500MW in 2011 vs prior estimate of 1300MW. The firm says the stock was inexpensive heading into the call, and now appears more undervalued at just 8.2x 2011E EPS after the call. |
