From Briefing.com: 4:30 pm : Renewed selling pressure caused stocks to slump today. That offset the prior session's climb.
Stocks were under pressure ahead of the open as premarket traders reacted to news that Apple (AAPL 373.72, -2.46) will lose its heralded CEO, Steve Jobs, and that the latest initial jobless claims tally totaled 417,000, which is greater than the 400,000 claims that had been generally anticipated among economists polled by Briefing.com. But then news surfaced that Warren Buffett is investing $5 billion of Berkshire Hathaway's cash in Bank of America (BAC 7.65, +0.66) preferred stock. According to CNBC, Buffett's bid was a vote of confidence in both the company and the U.S.
The idea that the billionaire investment guru sees value in shares of BAC, which has suffered several steep losses in recent weeks, brought about a flurry of buying interest just before the session's start. The effort carried over into the open, such that the financial sector surged more than 3% within the first 10 minutes of trade.
Leadership from the financial sector helped the broad market climb to an early gain of more than 1%, but the market quickly reversed course then spent the rest of the session contending with selling pressure.
Selling interest was partly stoked by speculation that Germany, Europe's most robust and diverse economy, could lose its AAA credit rating, although the major rating agencies were quick to affirm Germany's top-tier rating. Others were interested in locking in the strong gains of the past two sessions, 1.3% and 3.4%, respectively, for fear of how stocks will react to the Fed's statement tomorrow from Jackson Hole, Wyoming.
Pressure persisted into the close. As has been the case in the past couple of sessions, participants leaned in the direction of trade late in the day. That caused stocks to settle at session lows.
Energy stocks slumped more than 2%, which made for the worst performance of any sector. Energy stocks also underperformed in the prior session, but they still head into Friday with a week-to-date gain of about 2%, thanks mostly to a surge of more than 4% on Tuesday.
Gold prices were initially pared this morning, but the stock market's reversal into the red prompted participants to rotate back into the precious metal. In turn, gold prices climbed to close the session with a 0.3% gain at $1762.80 per ounce. Silver was even stronger -- it surged 4.1% to $40.78 per ounce.
Advancing Sectors: (None)
Declining Sectors: Energy (-2.2%), Consumer Discretionary (-2.0%), Industrials (-1.8%), Telecom (-1.7%), Health Care (-1.7%), Tech (-1.6%), Utilities (-1.5%), Consumer Staples (-1.5%), Materials (-1.0%), Financials (-0.5%)DJ30 -170.89 NASDAQ -48.06 NQ100 -1.7% R2K -2.6% SP400 -2.2% SP500 -18.33 NASDAQ Adv/Vol/Dec 504/1.79 bln/2070 NYSE Adv/Vol/Dec 731/1.21 bln/2313
4:49PM Magma Design reports EPS in-line, misses on revs; guides Q2 EPS in-line, revs below consensus; guides FY12 EPS in-line, revs in-line (LAVA) 5.25 -0.05 : Reports Q1 (Jul) earnings of $0.07 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.07; revenues rose 8.3% year/year to $35.3 mln vs the $36.4 mln consensus. Co issues mixed guidance for Q2, sees EPS of $0.08-0.09, excluding non-recurring items, vs. $0.09 Capital IQ Consensus Estimate; sees Q2 revs of $37.5-38.0 mln vs. $38.17 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY12, sees EPS of $0.38-0.40, excluding non-recurring items, vs. $0.39 Capital IQ Consensus Estimate; sees FY12 revs of $158-160 mln vs. $158.97 mln Capital IQ Consensus Estimate.
12:57PM Coherent announces new $50 mln common stock repurchase program (COHR) 39.63 -1.75 : Co announced that it has completed in full its previously announced $75 million stock buyback program and has been authorized by its Board of Directors to begin a new program to repurchase up to $50 mln of its Common Stock in the open market from time to time.
9:44AM Verizon acquires CloudSwitch; terms not disclosed (VZ) 36.30 -0.17 : Co plans to combine CloudSwitch, a privately held company based in Burlington, Mass., with its Terremark IT services subsidiary, further accelerating the company's global cloud strategy by enhancing Verizon's hybrid-cloud and cloud-to-cloud capabilities.
9:25AM Jabil Circuit to Acquire Telmar Network Technology; financial terms not disclosed; indicated that the acquisition will be accretive to earnings (JBL) 15.03 : Co announced that it has entered into an agreement to acquire Telmar Network Technology, a provider of complex reverse logistics, repair services worldwide. Specializing in the communications and networking markets, Telmar recorded fiscal 2010 revenue of approximately $145 million. The Telmar business will be incorporated within Jabil's Diversified Manufacturing Services segment.
Research In Motion (RIMM) announced BBM Music, a new BBM cloud-based service for socially connected music fans.
Nokia (NOK) announced the launch of the Nokia 101 and Nokia 100 phones, which co states is its most affordable phones to date.
09:26 am Oracle target lowered to $36 at Macquarie: . Macquarie lowers their ORCL tgt to $36 from $38. Firm states they recognize IT budgets are at risk amidst broader macro volatility, but they believe Oracle is better positioned than most to protect and deliver earnings into 2012. They note target price reduction reflects a more conservative free cash flow growth scenario.
09:26 am Hewlett-Packard downgraded to Sector Perform at RBC: . RBC Capital Mkts downgraded HPQ to Sector Perform from Outperform and lowers their tgt to $30 from $35. RBC believe HP's roadmap for transformation will accelerate the deterioration of HP's brand and asset value (in PC's) given the extended timeline to evaluate its options. By announcing it's going to take 12-18 months to assess if they want to sell, divest or KEEP their PC business, the co is essentially opening the door for competitors to take share. In RBC's view, it's unlikely customers would look to buy HP PCs given the lack of clarity. Furthermore, RBC believes shutting down TouchPad is going to impede the valuation of their potential PC sale (no tablet offering).
10:52 am S&P Tech Sector Down Over One Percent; F5 Networks Upgraded (FFIV)
The tech sector is trading slightly lower today, inline with losses the broader market. Semiconductors are showing slight relative weakness in the tech space with the Philly Semi Index trading 0.6% lower. Among chips in the index, AMAT (-3.4%) is a notable laggard, while AMD (+1.1%) and MU (+3.2%) are outperforming. Among other major indices, the S&P 500 is trading 1.5% lower, while the NASDAQ is off 1.6%. QQQ is trading 1.4% lower. Among tech bellwethers, GOOG (+0.3%) is showing relative strength, while AAPL (-1.7%) is under pressure.
In earnings last night, AMAT (-3.9%) posted a beat, but guided lower. In news, AAPL's (-1.7%) CEO Steve Jobs announced his retirement. Current COO Tim Cook is set to take over Jobs' role and Jobs was elected the company's Chairman. Elsewhere, RLRN (+5.7%) announced that it received an unsolicited, non-binding proposal from Plato Learning for $15.50 per share in cash. Also ACIW (-2.2%) increased its offer for SONE (+1.9%) to $6.20/share plus 0.1064 ACI shares, up from $5.70 per share plus 0.1064 ACI shares. AMD (+1.1%) named Rory Read President and CEO.
Among notable analyst upgrades this morning, SNCR (-1.1%) was upgraded to Outperform at Robert W. Baird, GAME (+10.5%) was upgraded to Buy at Deutsche Bank, and Stifel Nicolaus upgraded FFIV (+0.9%) to Buy. In downgrades, HPQ (-2.4%) was downgraded to Sector Perform from Outperform at RBC Capital Markets.
There are no notable tech names set to report results today after the close.
10:10 am Applied Materials Guides Fourth Quarter Below Consensus (AMAT)
Applied Materials (AMAT $10.94 -0.42) reported third quarter earnings of $0.35 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.33.
Revenues fell 2.4% year/year to $2.79 billion versus the $2.68 billion consensus.
For the fourth quarter, the company expects earnings to fall in the range of $0.16 to $0.24, excluding non-recurring items, versus the $0.30 Capital IQ Consensus Estimate. On the top line, the company sees revenues falling 15% to 30% sequentially, which equates to approx. $1.95 billion to $2.37 billion versus the $2.55 billion Capital IQ Consensus Estimate.
10:04 am Apple's CEO Steve Jobs Resigns (AAPL)
Apple's (AAPL $369.34 -6.84) Board of Directors announced that Steve Jobs has resigned as Chief Executive Officer, and the Board has named Tim Cook, previously Apple's Chief Operating Officer, as the company's new CEO.
Jobs has been elected Chairman of the Board and Cook will join the Board, effective immediately.
09:59 am Verizon Communications Labor Dispute Pushes Initial Claims to their Highest Point Since July 2
The initial claims level increased from an upwardly revised 412,000 (from 408,000) for the week ending August 13 to 417,000 for the week ending August 20. This is the highest level of initial claims since the week ending July 2. The Briefing.com Consensus expected the initial claims level to fall to 400,000.
The Department of Labor announced that a labor dispute at Verizon Communications (VZ) accounted for at least 12,500 claims for the week ending August 13 and at least 8,500 claims for the week ending August 20. These claimants are a temporary outlier in the data and do not represent the overall trend in the labor sector.
Excluding the one-time increase from the Verizon workers, the initial claims level remained below the upper bound (410,000) of our "Recovery Zone" for the fifth consecutive week. At this level, we expect payroll gains to exceed the 100,000 necessary to maintain a stable unemployment rate.
The continuing claims level declined from 3.721 million for the week ending August 6 to 3.641 million for the week ending August 13. That is the lowest continuing claims level since the week ending Aug. 20, 2008. The consensus expected the continuing claims level to fall to 3.700 million. |
