From Briefing.com: 4:30 pm : The major equity averages were up with big gains before broad selling pressure cut down stocks in afternoon action. A late bounce made for a better looking finish, though.
Stocks ended the prior session in weak fashion, but buyers came rushing back in this morning. Their interest was stirred by news that Germany gave its support to the expansion of the European Financial Stability Facility, which is aimed at shaping up the otherwise precarious financial conditions of the region.
For the first time in a few weeks data also proved encouraging. The latest weekly initial jobless claims count dropped by 37,000 from the prior week to 391,000, which is the first time in more than a month that initial claims fell below 400,000. The consensus among economists polled by Brieifng.com had been pegged at 419,000 initial claims.
What's more, the final reading for second quarter GDP showed growth of 1.3%, which not only marks an increase from the 1.0% growth rate posted in the prior reading, but it also exceeds the 1.2% growth that had been broadly expected.
Both the Dow and S&P 500 pushed ahead to gains in excess of 2% in the early going. Financials led the advance, but tech stocks had a harder time attracting buyers.
Tech's sluggishness eventually gave way to outright weakness, which weighed heavily on the Nasdaq. In fact, the Nasdaq descended all the way to a 2.3% loss after it had been up with a gain of almost 2% in the opening minutes of the session. A bounce in the final hour helped the tech-rich Index recover, however.
Several Chinese stocks also sold off in aggressive fashion, but never really rebounded. Youku.com (YOKU 16.24, -3.64), SINA Corp (SINA 73.23, -7.87), and Baidu.com (BIDU 110.29, -11.13) all tumbled amid reports that suggested authorities are investigating accounting irregularities at many US-listed Chinese companies. Also in the backdrop, China's stock market underperformed other global averages in overnight action by falling 1% to a new 15-month low.
Tomorrow marks the final session of the week and of the third quarter. The S&P 500, up 2% during the course of the past four sessions, is trying to score its third weekly gain in 10 weeks, but such a lengthy stretch of losses has the market down 12% this quarter. That's the worst quarterly performance since the fourth quarter of 2008.
Advancing Sectors: Financials +2.8%, Utilities +1.5%, Energy +1.4%, Industrials +1.4%, Consumer Staples +1.0%, Health Care +0.8%, Telecom +0.8%
Unchanged: Materials
Declining Sectors: Tech -0.4%, Consumer Discretionary -0.9%DJ30 +143.08 NASDAQ -10.82 NQ100 -1.0% R2K +1.7% SP400 +1.0% SP500 +9.34 NASDAQ Adv/Vol/Dec 1580/2.29 bln/957 NYSE Adv/Vol/Dec 2164/1.12 bln/855
4:09PM Micron misses by $0.14, beats on revs (MU) 5.87 -0.25 : Reports Q4 (Aug) loss of $0.14 per share, $0.14 worse than the Capital IQ Consensus Estimate of ($0.00); revenues fell 14.2% year/year to $2.14 bln vs the $2.11 bln consensus. The trial phase of the Rambus (RMBS) antitrust case that was heard in the San Francisco Superior Court ended on September 21, 2011 and the jury is currently deliberating the verdict. The company is unable to predict the outcome of this suit and is unable to reasonably estimate the range of possible loss. An unfavorable outcome could have a material adverse impact on the co's results of operations for the fourth quarter of fiscal 2011.
4:02PM BCD Semiconductor lowers Q3 rev guidance below consensus; lowers Q3 gross margin guidance (BCDS) 5.60 +0.17 : Co lowers Q3 rev guidance to ~$39 mln from $43-45 mln vs $41.83 mln Capital IQ Consensus Estimate. Gross margins are now expected to be ~27% vs. previous guidance of 30%. "The typical seasonal demand increase that we expected to see in the third quarter did not materialize this year. Demand from our Asia customers was soft in all three of our core end markets including computing, consumer and communications. Similar to many other analog semiconductor suppliers, we believe this is attributable to broad-based economic weakness. The change in our gross margin guidance is primarily due to a write-down of inventory in the third quarter that resulted from a decline in expected demand for some of our linear products."
4:01PM Universal Display signs OLED technology license agreement with Pioneer Corporation for lighting (PANL) 48.66 -2.00 : Co announces it has entered into an OLED technology license agreement with Pioneer Corporation. Under the arrangement, Pioneer will be licensed to access and use Universal Display's proprietary UniversalPHOLED phosphorescent and other OLED technologies and materials for the manufacture and sale of OLED lighting products.
3:08AM Nokia continues to align its workforce and operations; to shut down factory in Romania, cutting ~3500 jobs (NOK) 5.55 : Co announces plans to take additional actions to align its workforce and operations. The measures support both the execution of the co's strategy and the savings target the co announced earlier this year, and also target to bring efficiencies and speed to the organization. plans to close its manufacturing facility in Cluj, Romania by the end of 2011, as co's high- volume Asian factories provide greater scale and proximity benefits. The planned closure of the Cluj factory combined with adjustments to supply chain operations is estimated to impact ~2,200 employees. The planned changes in the Location & Commerce business are estimated to impact ~1,300 employees. These personnel reductions are in addition to the measures announced in April and are expected to take effect by the end of 2012.
1:00AM Oracle issues statement regarding 'shopping' of Autonomy prior to HP (HPQ) acquisition (ORCL) 29.46 : Co issues the following statement: "After HP agreed to acquire Autonomy for over $11.7 billion dollars, Oracle commented that Autonomy had been 'shopped' to Oracle as well, but Oracle wasn't interested because the price was way too high. Mike Lynch, Autonomy CEO, then publically denied that his company had been shopped to Oracle. Specifically, Mr. Lynch said, 'If some bank happened to come with us on a list, that is nothing to do with us.' Mr. Lynch then accused of Oracle of being 'inaccurate.' Either Mr. Lynch has a very poor memory or he's lying. 'Some bank' did not just happen to come to Oracle with Autonomy 'on a list.' The truth is that Mr. Lynch came to Oracle, along with his investment banker, Frank Quattrone, and met with Oracle's head of M&A, Douglas Kehring and Oracle President Mark Hurd at 11 am on April 1, 2011. After listening to Mr. Lynch's PowerPoint slide sales pitch to sell Autonomy to Oracle, Mr. Kehring and Mr. Hurd told Mr. Lynch that with a current market value of $6 billion, Autonomy was already extremely over-priced. The Lynch shopping visit to Oracle is easy to verify. We still have his PowerPoint slides."
09:31 am MIPS Tech downgraded to Hold at The Benchmark Company: . The Benchmark Company downgrades MIPS to Hold from Buy. Firm sites 3 reasons for downgrade. These include: 1) The impact Google's pending acquisition of Motorola Mobility is having on the Android ecosystem 2) Their more conservative royalty revenue forecast for co in light of recent semiconductor sales trends and 3) The negative impact consolidation and weak semiconductor industry sales will have on MIPS' license pipeline. Lastly, firm notes in light of the recent rally and their estimate cuts, the shares are not as attractive.
2:22 pm S&P Tech Sector Showing Modest Gains; AMD Lowers Guidance, Gets Downgraded (AMD)
The tech sector is trading higher today, trailing gains in the broader market. Semiconductors are showing relative weakness in the tech space with the Philly Semi Index trading 0.2% lower. AMD (-12.6%) is dragging in index lower. Among other major indices, the S&P 500 is trading 1.0% higher, while the NASDAQ is trading 0.1% higher. The QQQ, meanwhile, is trading 0.3% lower. Among tech bellwethers, ORCL (+2.1%) is showing notable strength.
In earnings last night, AMD (-12.6%) lowered its Q3 revenue guidance. Also, TXI (+0.9%) reported a relatively inline quarter.
In news, SYNA (+1.0%) appointed Rick Bergman as President and CEO. NOK (+4.3%) shut down a factory in Romania and cut ~3500 jobs. Also, HPQ (+3.4%) reportedly hired GS (+3.2%) to fight possible activist investors.
Among notable analyst upgrades this morning, MSI (+1.4%) was upgraded to Positive at Avian. In downgrades, The Benchmark Company downgraded MIPS (-5.0%) to Hold. AMD (-12.6%) was also downgraded at BofA/Merrill, Macquarie, Longbow, and ThinkEquity.
MU (-3.7%) is the notable name in tech set to report results today after the close. |
