From Briefing.com: 4:30 pm : The major equity averages surrendered early gains to trade flat in early afternoon action, but leadership from the financial sector helped the broader market settle in positive territory.
Early support was helped by gains abroad, where participants in China took yesterday's news of another 25-basis point rate hike in stride upon their return from holiday. News of a successful debt offering by Portugal also helped perpetuate a positive tone. Much later in the day Portugal announced plans to request foreign financial aid.
The generally positive tone to morning trade benefited both blue chips and riskier small-cap stocks. In fact, the Dow extended its two-year high with help from Cisco (CSCO 18.07, +0.85), which scored its best single-session gain in nearly nine months. Meanwhile, the Russell 2000 Small-Cap Index achieved a record high with help from La-Z-Boy (LZB 10.92, +1.08) following an analyst upgrade, but fellow small-cap issue American Superconductor (AMSC 14.47, -10.41) plummeted more than 40% after the company cut guidance and announced that a key customer refused product delivery from the firm.
However, broad market buying interest wasn't strong enough to take the S&P 500 back through resistance at the 1340 line. That left stocks to drift lower before securing support near the neutral line.
Financials proved pivotal in lifting the broader market up from the flat line in afternoon trade. The sector achieved a 1.1% gain. NYSE Euronext (NYX 39.81, +0.83) was a top performer in the sector after it was reported that the firm has no interest a counter bid for Nasdaq OMX Group (NDAQ 28.83, +0.83), but gains among diversified financial plays had the most impact, due to their collective weight.
Even amid leadership from the highly influential financial sector, the overall market still achieved only a modest gain for the session. As a result, action this week continues to be largely range bound.
Despite the broader market's drift, Treasuries continue to come under pressure. In turn, the yield on the benchmark 10-year Note is nearly at a one-month high of 3.55%.
Advancing Sectors: Financials (+1.1%), Utilities (+0.8%), Tech (+0.7%), Consumer Staples (+0.4%), Health Care (+0.2%), Industrials (+0.2%)
Declining Sectors: Consumer Discretionary (-0.2%), Telecom (-0.6%), Materials (-0.8%), Energy (-0.9%)DJ30 +32.85 NASDAQ +8.63 NQ100 +0.2% R2K +0.1% SP400 +0.0% SP500 +2.91 NASDAQ Adv/Vol/Dec 1520/2.00 bln/1094 NYSE Adv/Vol/Dec 1690/884 mln/1270
5:03PM Advanced Analogic Tech CFO resigns (AATI) 3.80 : Co announced that Brian McDonald has resigned from his position as Vice President of Worldwide Finance, Chief Financial Officer, and Secretary to pursue other interests. Ashok Chandran, who has been with the co for more than six years, most recently as Vice President and Chief Accounting Officer, will become interim Chief Financial Officer, effective immediately.
5:01PM Power-One lowers Q1 revs guidance, below consensus (PWER) 8.29 -0.30 : Co lowers Q1 revs to $240-245 mln vs. $275.5 mln Thomson Reuters consensus, below its previously announced range of $260-290 mln, due to market conditions and near-term feed-in-tariff uncertainty in Italy and Germany. Co said, "Although we expect to post a nearly 60% increase in revenue in Q1 of 2011 compared to 2010, we've revised our guidance for the quarter due to recent adverse conditions in the European solar market. Based on current developments, we still anticipate European countries such as Italy and Germany will continue to support solar adoption to reduce reliance on non-renewable sources of power. Further, for the remainder of 2011 and 2012, we believe we are better positioned to handle similar regional anomalies due to our expanded product line and focus on developing new markets, including the United States, China and India."
4:05PM Tessera Tech announces strategic reorganization initiatives; exploring a possible separation of its Imaging & Optics business (TSRA) 18.20 +0.50 : Co has formed new group charged with developing, acquiring and monetizing semiconductor technologies beyond packaging. The group, which will be responsible for an initial portfolio of ~280 patents and patent applications, will consist of ~40 current employees. Their focus will be on circuitry design, memory modules, 3-D architecture, and advanced interconnect technologies, among other areas. Tessera also announced that it is exploring a possible separation of its Imaging & Optics business. As part of this initiative, Tessera has retained GCA Savvian Advisors as its financial advisor to assist in the evaluation of multiple alternatives, including, among others, a spin-off transaction. Tessera has not set a definitive timetable for completing its exploration of alternatives for the Imaging & Optics business and there can be no assurance that the process will result in any transaction. Co does not expect to make further public comment regarding these matters unless a definitive agreement or other commitment for any transaction is reached.
9:01AM Cypress Semi announces that it will vigorously defend itself in a patent lawsuit filed by Avago Technologies (AVGO) (CY) 19.21 : Co announces that it will vigorously defend itself in a patent lawsuit filed by Avago Technologies (AVGO). The lawsuit, filed on January 21 in the Federal District Court of Delaware, alleges that CY's well-received OvationONS optical navigation technology infringes on Avago's intellectual property. "Cypress will show at trial that its technology is fundamentally different than the technology covered in Avago's patents. In fact, Cypress's solution is based on an entirely distinct method of tracking. Avago's patents are based on image correlation techniques where a series of images are taken and compared to detect movement. Cypress instead uses its own, patented OptiCheck technology, which the company has invested tens of millions of dollars to develop. OptiCheck is a proprietary, speckle-based two-dimensional comb array technology."
Building on its plans to accelerate its software strategy, HP (HPQ) announced that it has signed a leasing agreement for Moffett Towers in Sunnyvale, Calif., to create a state-of-the-art software innovation cent
10:59 am AMSC Sees Q4 EPS, Revs Well Below Consensus (AMSC)
Am Superconductor (AMSC $13.25 -11.63) sees fourth quarter non-GAAP net loss versus $0.33 Thomson Reuters consensus; revs less than $42 million versus the $119.13 million Thomson Reuters consensus.
On March 31, 2011, Sinovel refused to accept contracted shipments of 1.5 megawatt (MW) and 3 MW wind turbine core electrical components and spare parts that AMSC was prepared to deliver. AMSC believes that Sinovel intends to reduce its level of inventory before accepting further shipments. AMSC estimates that its balance of cash, cash equivalents, marketable securities and restricted cash as of March 31, 2011 was ~$240 million.
This is down from $260.5 mln as of December 31, 2010. AMSC's cash balance was negatively impacted by an increased inventory level related to the refusal of shipments by Sinovel, and Sinovel's failure to pay AMSC for certain contracted shipments made in fiscal year 2010. As a result of both accumulated aged accounts receivable due to payment delays and Sinovel's recent refusal to accept March deliveries, AMSC is reviewing the appropriateness of the timing of its rev recognition on ~$56 million of unpaid shipments in Q2, Q3 and Q4.
AMSC continues to have active discussions with Sinovel to determine when Sinovel will accept further shipments and when it will pay for past shipments. In the meantime, AMSC has taken certain actions to reduce expenses, and the co is in the process of implementing plans to better align spending with near-term revs while continuing to maintain a high level of service and support for its global Wind and Grid customers.
09:48 am Am Superconductor downgraded to Hold at Ardour Capital; tgt lowered to $22.50: . Ardour Capital downgrades AMSC to Hold from Buy and lowers their tgt to $22.50 from $50 noting the co's principal customer Sinovel, refuses to accept new shipments of core electrical components in March and the co lowered guidance. Firm says as they combed though Sinovel's 2010 annual report that was released today, they found that this largest turbine producer in China was able to sell every turbine it made in 2H10. Even though Sinovel's overall inventory level increased during 2H10, the work in progress/finished products portion only increased to RMB7,398m from RMB7,391m at the end of 1H10. They est this level of WIP corresponding to about 2.4GW finished turbines. Moreover, Sinovel had a backlog of 14.4GW and RMB5.7b cash on hand at the end of 2010. Firm says it did not report any payables older than a year with AMSC. They therefore determine that the Sinovel's explanation for the rejection of shipment to be unreasonable. |
