From Briefing.com: 4:30 pm : Stocks got a bid in the early going, but a lack of leadership invited selling pressure, which accelerated in afternoon action, leaving stocks to settle at session lows with sizable losses.
Hope that a plan intended to bring stability fiscal and financial conditions in Europe is close to being presented helped take the stock market more than 3% higher during the course of the past two sessions. That also helped prop up stocks this morning, but early gains ultimately proved fleeting as participants resorted to selling after they failed to receive any details related to the rumored plan. Traders also turned against the euro, which was up about 0.7% at its session high, but finished with a fractional loss against the greenback.
A lack of leadership also made it difficult for stocks to hold off sellers. The listless action initially left stocks to spend most of the morning and early afternoon chopping along near the neutral line before pressure picked up in the final few hours.
Although weakness became widespread, materials stocks had to grapple with some of the most aggressive selling. Pressure, compounded by weakness among commodities, sent the sector to a 4.5% loss.
Broad market weakness imbued shares of Accenture (ACN 53.83, +0.18), which settled with only a modest gain after the stock had set a monthly high in response to an upside earnings surprise. Jabil Circuit (JBL 18.84, +1.46) also posted better-than-expected earnings, but its shares did a far better job of preserving gains.
Amazon.com (AMZN 229.50, +5.29) stretched to a new weekly high amid a positive response to the release of its new family of Kindle products.
Despite the stock market's slide, Treasuries failed to find buyers. Instead, the benchmark 10-year Note moved lower once again, even after results from an auction of 5-year Notes proved solid. The auction drew a bid-to-cover ratio of 3.04, dollar demand of $106.4 billion, and an indirect bidder participation rate of 45.9%.
Data failed to portray an improved picture of economic activity. Total durable goods orders and orders less transportation slipped 0.1% during August. A 0.1% increase and a 0.2% decline, respectively, had been generally expected.
Advancing Sectors: (None)
Declining Sectors: Materials -4.5%, Energy -3.0%, Financials -2.9%, Industrials -2.4%, Health Care -1.7%, Consumer Staples -1.7%, Consumer Discretionary -1.7%, Tech -1.4%, Utilities -0.9%, Telecom -0.6%DJ30 -179.79 NASDAQ -55.25 NQ100 -1.5% R2K -4.2% SP400 -3.4% SP500 -24.32 NASDAQ Adv/Vol/Dec 401/1.93 bln/2116 NYSE Adv/Vol/Dec 522/1.05 bln/2523
4:29PM Advanced Micro lowers Q3 revenue guidance (AMD) 6.15 -0.34 : Co announces that revenue for the third quarter ending Oct. 1, 2011 is expected to increase four to six percent as compared to the second quarter of 2011. The company previously forecasted third quarter 2011 revenue to increase 10 percent, plus or minus two percent, from the second quarter of 2011. Current consensus calls for a 9.1% increase over last qtr. In addition, AMD expects third quarter gross margin to be approx 44 to 45%. The company previously forecasted third quarter 2011 gross margin to be approximately 47 percent. 9.1%
Tomorrow before the open look for the following companies to report:
AZZ, DMAN, MU, and XRTX.
8:32AM Microsoft signs agreement with Samsung Electronics to cross-license the patent portfolios of both companies (MSFT) 25.67 : Co announces it has signed a definitive agreement with Samsung Electronics to cross-license the patent portfolios of both cos, providing broad coverage for each co's products. Under the terms of the agreement, MSFT will receive royalties for Samsung's mobile phones and tablets running the Android mobile platform. In addition, the cos agreed to cooperate in the development and marketing of Windows Phone.
8:32AM Advanced Energy announces restructuring plan as part of globalization strategy; expects annual savings of ~$16-20 mln (AEIS) 9.19 : Co announced that as part of its long-term strategic plan, the company is implementing several initiatives to further its long-term globalization strategy. In order to foster growth and enhance profitability, the company is beginning with the alignment of its manufacturing and R&D resources. The company expects the initial actions will be completed in the third quarter of 2011. Under the plan, Advanced Energy will align its engineering resources with the geographic footprint of its customer base. The first step of this restructuring will be a reduction of the company's workforce, primarily in the thin films business unit, resulting in annual savings of ~$6 mln. The affected employees have been notified and we anticipate a smooth transition. As a result, the company expects to take a charge in the third quarter related to the restructuring of ~$2.5 to $3.5 mln. Secondly, over the next 12 to 18 months, the company will continue to evaluate its cost structure as it closes facilities and relocates certain functions to different regions worldwide. As a result, the company anticipates further charges in the amount of $8 to $12 mln, principally for space consolidation, and another $1 mln in additional severance costs over this timeframe. Consequently, co expects total charges of $12 to $16 mln for the initiatives announced, ~$9 to $13 mln of which will be cash expenditures. The actions taken today as well as other cost savings initiatives and margin improvements are expected to deliver annual savings of ~$16 to $20 mln.
ARM (ARMH) and Open-Silicon announced that the companies have signed a comprehensive multi-year licensing agreement for a broad portfolio of ARM technology.
5:22AM JinkoSolar Holding wins bid for 38 MW of solar module supply and signs agreement for the first 18 MW with China Guangdong Nuclear (JKS) 5.83 : Co announces it has won a bid to supply China Guangdong Nuclear Solar Energy Development with 38 MW of photovoltaic modules for two grid-connected PV power plant projects planned in Dunhuang city, Gansu Province and Qinghe County in the Xinjiang Uighur Autonomous Region of China. Co is the only solar module supplier for the two projects. Additionally, co entered into an agreement with China Guangdong Nuclear to supply 18 MW of PV modules for the PV power plant project in Dunhuang City, pursuant to which co will make the first delivery by October 25, 2011.
Amazon.com (AMZN $234.00 +9.79) announced the new latest generation of Kindles. The Kindle Touch has is priced at $99. They also introduced the $149 New Kindle Touch 3G with free 3G. Amazon pays for the 3G connection so there's no monthly fee or annual contract. The Kindle Fire has movies, TV shows, music, books, magazines, apps, games, and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon's new cloud-accelerated web browser, color touch screen, and dual-core processor and is priced at $199.
10:48 am Action Semi Raises Third Quarter Revenue Guidance (ACTS)
Action Semi (ACTS $2.03 +0.08) raised its third quarter revenue guidance to a range of $15 million to $15.5 million and gross margin of approx 40%.
The company's previous guidance was for the third quarter revenue to be in the range of $12.0 to $13.0 million and gross margin of approximately 40%. Company says "During the third quarter, we experienced stronger than expected demand for our products across a number of end markets, with particular strength in the automotive and boombox and high definition segments."
Last night, Jabil Circuit (JBL $18.80 +1.41) reported fourth quarter earnings of $0.62 per share, excluding non-recurring items, $0.07 better than the Capital IQ consensus of $0.55, while revenues rose 10.3% year/year to $4.3 billion versus the $4.19 billion consensus. The company issued upside EPS guidance for first quarter with EPS of $0.62-0.70, excluding non-recurring items, versus the $0.60 consensus and revenues of $4.3-4.5 billion versus the $4.42 billion consensus.
Last night, SMSC (SMSC $20.01 -0.51) reported second quarter earnings of $0.36 per share, excluding non-recurring items, $0.01 worse than the Capital IQ consensus of $0.37, while revenues rose 8.2% year/year to $112.6 million versus the $112.4 million consensus. The company issued downside guidance for the third quarter with EPS of $0.30-0.37, excluding non-recurring items, versus the $0.45 consensus and revenues of $105-110 million versus the $117.23 million consensus. "Despite a very challenging macro environment, SMSC delivered record revenue in the second quarter of fiscal 2012...We expect modest sequential growth in consumer and automotive sales while PC and industrial sales are anticipated to decline. For the second half of fiscal 2012, while computing and consumer demand is expected to be challenged, we anticipate continued growth in our automotive and wireless audio product sales." |
