From Briefing.com: Weekly Recap - Week ending 02-Sep-11Aggressive selling on Friday extended a slide that started on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss.
An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. Stocks even overcame an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009.
Stocks climbed in seven out of eight sessions for a cumulative gain of more than 8% before becoming winded on Thursday, when the stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. The move failed to hold when the S&P 500 encountered resistance near the 1230 zone, which marks the 50% retracement level between the July high and August low. Some conceived that the better-than-expected ISM reading, though relatively neutral on its own, could stand as evidence against the case for further monetary policy.
Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.
Still, talk of further easing resurfaced again on Friday, when stocks slumped 2.5% -- their worst one-day percentage drop in two weeks -- in response to a disappointing monthly payrolls report. According to official data, no nonfarm payroll additions were made during August. That contrasted with the consensus call for an increase of 70,000. Even nonfarm private payrolls increased by a mere 17,000, which is far less than the 110,000 that had been generally expected among economists polled by Briefing.com.
Concern that the disappointing employment data reflected weakness in the broader economy sent oil prices 2.9% lower to $86.33 per barrel, but the want for safety bolstered buying among precious metals, such that gold prices spiked 2.6% to $1877.20 per ounce and silver prices surged 3.8% to $43.12 per ounce on Friday. Treasuries climbed sharply, too, such that the yield on the benchmark 10-year Note returned to 2.0%.
Financials suffered the worst fate during the back-to-back losses. The sector shed 2.4% on Thursday then surrendered another 4.0% on Friday. The latest leg of losses was exacerbated by news that a dozen banks are the target of federal accusations regarding mortgage securities misrepresentation.
There wasn't a great deal of share volume at week's end, but that's mostly because many trading desks were thinly staffed ahead of the three-day weekend -- U.S. markets are closed on Monday in observance of Labor Day.
..Nasdaq 100 -2.3%. ..S&P Midcap 400 -3.2%. ..Russell 2000 -3.6%. ..NYSE Adv/Dec 443/2595. ..NASDAQ Adv/Dec 380/2186.
Index Started Week Ended Week Change % Change YTD %
DJIA 11284.21 11240.26 -43.95 -0.4 -2.9
Nasdaq 2479.80 2480.33 0.53 0.0 -6.5
S&P 500 1176.80 1173.97 -2.83 -0.2 -6.7
Russell 2000 691.79 683.36 -8.43 -1.2 -12.8
11:24 am S&P Tech Sector In The Red, In-line With The Broader Market
The tech sector is trading lower today, inline with losses the broader market. Semiconductors are also trading in line with weakness in the tech space with the Philly Semi Index trading 1.8% lower. Among chips in the index, AMD (-4.2%) and WFR (-4.2%) are notable laggards. Among other major indices, the S&P 500 is trading 1.7% lower, while the NASDAQ is trading 1.6% lower. The QQQ, meanwhile, is trading 1.7% lower. Among tech bellwethers, ORCL (-2.7%) is showing relative weakness.
In earnings, FNSR (+15.3%) reported a slightly better than expected quarter and guidance.
Among notable analyst upgrades this morning, Oppenheimer upgrades LQDT (-1.7%) to Outperform, WIT (-0.1%) was upgraded to Overweight at Morgan Stanley, and BCSI (-4.7%) was upgraded to Neutral from Sell at Lazard.
There are no notable tech names set to report results today after the close.
09:59 am Finisar Tops First Quarter Earnings Expectations (FNSR)
Finisar (FNSR $20.45 +1.86) reported first quarter earnings of $0.21 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.18.
Revenues rose 9.8% year/year to $228.2 million versus the $228.5 million consensus.
For the second quarter, the company expects to see earnings of $0.20 to $0.24, excluding non-recurring items, versus the $0.20 Capital IQ Consensus Estimate; sees second quarter revenue in the range of $235 million to $$250 million versus the $236.27 million Capital IQ Consensus Estimate.
Gross margin decreased to 29.1% of revenues from 34.1% in the first quarter of the prior year and from 31.6% in the preceding quarter.
The company stated, "We expect production of this product to start to ramp during the second quarter of fiscal 2012. In addition, on June 29, 2011, we successfully closed our previously announced cash tender offer for the remaining outstanding shares of Ignis ASA and now hold 100% of the outstanding shares of Ignis." |
