From Briefing.com: 4:20 pm : The S&P 500 welcomed the New Year with a 2.5% rally after the United States Congress approved measures to avoid the fiscal cliff. According to the budget agreement, individuals earning below $400,000 will see an extension of their recent tax rates while those earning above $400,000 will see their top rate rise to 39.6%. However, the payroll tax will revert back to 6.2% from 4.2%, and the increase will affect most workers. Finally, the $109 billion sequester has been delayed for two months. The focus will now turn to raising the debt ceiling as another lengthy debate is likely to follow.
Technology stocks were among today's top performers, and the SPDR Technology Select Sector ETF (XLK 29.81, +0.96) settled higher by 3.3%. Apple (AAPL 549.03, +16.86) added 3.2% as the largest tech company traded in-line with the remainder of the sector.
Elsewhere, semiconductor manufacturers outperformed the broader market and the PHLX Semiconductor Average rose by 4.1%. All 30 names which comprise the complex advanced, and today's strength lifted the average to its best level since late September. Among individual producers, Taiwan Semiconductor (TSM 18.10, +0.94) and Veeco Instruments (VECO 31.17, +1.68) both gained near 5.5%.
As expected, financials saw broad strength after Congress passed a budget package to avoid the fiscal cliff. The SPDR Financial Select Sector ETF (XLF 16.86, +0.48) settled higher by 2.9%, and was among the top performing sector ETFs. Among the majors, Citigroup (C 41.25, +1.69) surged 4.3%, and outperformed its peers.
The materials sector was also a notable beneficiary of the market rally, and the SPDR Materials Select Sector ETF (XLB 38.48, +0.94) gained 2.5%. The strength resulted from yesterday's budget pact as well as recent Chinese economic data, which has allayed some fears regarding a possible slowdown in the Middle Kingdom. An increase in the country's economic activity would bode well for materials demand—especially steel. As such, steelmakers outperformed the sector. Mechel Steel (MTL 7.33, +0.40) and United States Steel (X 25.89, +2.04) saw respective gains of 5.9% and 8.6%.
Despite the market-wide rally, retailers lagged ahead of tomorrow's December same store sales reports. Early indications have suggested consumers showed more caution with regards to their spending habits during the recent holiday season. As such, the SPDR S&P Retail ETF (XRT 62.85, +0.47) added 0.8% after being up as much as 2.2% at the open. Among individual retailers, Kohl's (KSS 42.21, -0.77) and Macy's (M 38.31, -0.71) lost 1.8% each. Earlier, Buckingham downgraded Kohl's to ‘Neutral' from ‘Buy.' Elsewhere, American Eagle Outfitters (AEO 20.08, -0.43) slipped 2.1% after Jefferies downgraded the stock to ‘Hold' from ‘Buy.'
In M&A news, Zipcar (ZIP 12.18, +3.94) soared 47.8% after the company agreed to be acquired by Avis Budget Group (CAR 20.77, +0.95) for $12.25 per share. The total transaction value is estimated at $500 million and the purchase price represents a 49.0% premium to Zipcar's December 31 close. Following the acquisition announcement, Avis reaffirmed its full-year 2012 earnings and revenue guidance.
Today's market-wide rally pushed the volatility index, or VIX, down to 14.74. Last week, the VIX crossed above 20.00 for the first time since late July. As uncertainty surrounded the budget debate, investors had bid up near-term downside protection, which was reflected by an uptick in the volatility measure. With the uncertainty removed from the immediate term, the VIX plunged nearly 20.0% to levels last seen in late November.
The December ISM Index was reported at 50.7, while the Briefing.com consensus expected the reading to come in at 50.5, ahead of November's reading of 49.5. Meanwhile, November construction spending decreased by 0.3% month-over-month, against the expected increase of 0.5%.
In tomorrow's economic data, the weekly MBA Mortgage Index and December Challenger Job Cuts will be reported at 7:00 ET and 7:30 ET respectively. December ADP Employment Change will be released at 8:15 ET. Weekly initial and continuing claims will be announced at 8:30 ET and the Federal Reserve will release the minutes from its December 12 policy meeting at 14:00 ET. Lastly, automakers will be reporting their sales throughout the day.DJ30 +308.41 NASDAQ +92.75 SP500 +36.23 NASDAQ Adv/Vol/Dec 2206/2.05 bln/337 NYSE Adv/Vol/Dec 2840/859.1 mln/280
3:30 pm : Crude oil rose along with the equities market following news that the U.S. Congress reached a deal yesterday, thus averting going over the "fiscal cliff". The energy component brushed a session high of $93.87 per barrel moments after pit trade opened but retreated slightly as the session went on. It eventually closed at $93.10 per barrel, or 1.4% higher.
Precious metals also traded higher today. Gold advanced to a pit session high of $1695.40 per ounce but pulled-back as the dollar index recovered into positive territory. It eventually settled 0.7% higher at $1688.20 per ounce. Silver traded up as high as $31.53 per ounce in morning floor action and settled with a 2.4% gain at $30.99 per ounce.
Natural gas, on the other hand, extended its losses as it fell to a session low of $3.18 per MMBtu on forecasts calling for above-average temperatures across the nation. It managed to inch slightly higher as it headed into the close and settled at $3.23 per MMBtu, or 3.6% lower.DJ30 +243.38 NASDAQ +79.64 SP500 +28.61 NASDAQ Adv/Vol/Dec 2195/1.64 bln/350 NYSE Adv/Vol/Dec 2805/545.1 mln/299
4:12PM Advanced Micro names Devinder Kumar Chief Financial Officer ( AMD) 2.53 +0.13 : Co today announced that after a thorough internal and external search the company has appointed Devinder Kumar as senior vice president and chief financial officer, effective Jan. 2, 2013. Kumar, 57, will report to Rory Read, AMD president and chief executive officer, and will have responsibility for leading the company's global finance organization. Kumar has been interim CFO since September 2012. He served as corporate controller of the company since 2001 and as senior vice president since 2006.
4:06PM Mellanox Tech lowers Q4 revenue guidance..stock halted ( MLNX) 61.19 +1.81 : Co lowers its Q4 guidance, now expects revenue of $119-121 mln, below the co's previous guidance of $145-150 mln and vs consensus of $148.6 mln. The shortfall is primarily the result of a weaker demand environment, challenging macroeconomic conditions, and a technical issue associated with FDR 56Gb/s InfiniBand cabling which caused approximately $20 million of FDR deployments to be delayed. The cabling issue has been resolved and is not expected to impact revenue in the future. The co continues to expect its Q4 non-GAAP gross margin to be in the range of 68.5-69.5%.
11:26AM Interdigital Comm files new complaint against Huawei, Nokia (NOK), Samsung (SSNLF) and ZTE (ZTCOF) with U.S. International Trade Commission ( IDCC) 42.21 +1.12 : Co announced that its wholly owned subsidiaries InterDigital Communications, InterDigital Technology, IPR Licensing, and InterDigital Holdings, filed a complaint with the U.S. International Trade Commission against Huawei Technologies, Futurewei Technologies, d/b/a Huawei Technologies (USA), Huawei Device USA, Nokia Corp. (NOK), Nokia, Inc., Samsung Electronics (SSNLF) Samsung Electronics America, Samsung Telecommunications America, ZTE (ZTCOF) and ZTE (USA), alleging that they engaged in unfair trade practices by selling for importation into the United States, importing into the United States and/or selling after importation into the United States certain 3G and 4G wireless devices that infringe up to seven of InterDigital's U.S. patents. The action also extends to certain WCDMA and cdma2000 devices incorporating WiFi functionality.
9:56AM Qualcomm tests its Dec/previous three month high at 64.72 and pauses -- session high 64.75 ( QCOM) 64.45 +2.59 : Relatively limited range trade after the early run to 64.75. Its nine month close high from Sep is at 65.08 with the Sep/nine month intraday peak at 65.45
Cypress Semiconductor (CY) announced that I-Rocks Technology has selected Cypress's PRoC-UI solution for its RF6496 wireless keyboard with built-in trackpad
KEMET (KEM) announced that its wholly-owned subsidiary, KEMET Electronics, received regulatory clearance from the Anti-monopoly Bureau of the Ministry of Commerce of the People's Republic of China for KEC's proposed acquisition of a 34% interest in NEC Tokin.
Vitesse Semiconductor (VTSS) announced that Martin Nuss, chief technology officer at Vitesse, will join the board of directors for the Alliance for Telecommunications Industry Solutions.
8:05AM SunPower: MidAmerican Solar acquires solar development from SPWR; financial terms not disclosed ( SPWR) 5.64 : Co announced MidAmerican Solar's acquisition from SunPower of the 579-megawatt Antelope Valley Solar Projects, two co-located projects in Kern and Los Angeles Counties in Calif. Together, the two combined projects will form the largest permitted solar photovoltaic power development in the world and will create an estimated 650 jobs during construction.
DSP Group (DSPG) and Grandstream Networks announced that Internet Telephony's "Best Product of the Year 2012," the Grandstream GXP2200 Android Enterprise IP Phone, is powered by DSP Group's XpandR III Media Phone SoC. Co also announced that its VoIP chipset solution has been selected to power the next generation of IP telephones offered by Cetis Group.
Tessera Technologies (TSRA) announced that its Tessera and Invensas subsidiaries each entered into new eight-year patent license agreements with SK hynix. The agreement will result in an increase in the co's recurring royalty revs from SK hynix beginning in Q2 2013. The co and SK hynix also agreed to dismiss the antitrust lawsuit pending in California state court. The co is neither updating its financial guidance nor providing additional financial guidance
5:51AM LDK Solar announced purchase Agreement for LDK Anhui for RMB 25 mln ( LDK) 1.41 : Co announced that it has signed a purchase agreement with Shanghai Qianjiang Group in which Qianjiang Group has agreed to purchase all shares of LDK Anhui, located in Hefei City, for ~RMB 25 mln. According to the terms of the agreement, Qianjiang Group will release the guarantee LDK Solar provided to LDK Anhui and its subsidiaries within 12 months, as well as compensate LDK Solar for any loss associated with such guarantee, prior to its release.
DA Davidson initiated Lam Research (LRCX) with a Buy and price target of $56. Over the past decade Lam's technology prowess has enabled it to become the premier Etch player. Today, Lam's extensive etch, clean and deposition product portfolio is positioned to benefit from a number of industry trends that should drive share gains and earnings growth over the next few years. Novellus acquisition adds scale and cost synergy opportunities.
10:42 am S&P technology sector trading higher by 1.5% following broad market rally
The tech sector is trading higher today, just ahead of gains in the broader market. Semiconductors are showing relative strength as well with the SOX trading 3.5% higher. Within the chip index, WFR (+6.2%) is a notable standout. Among other major indices, the SPY is trading 2.0% higher today, while the QQQ is up 2.6% and the NASDAQ is trading 2.5% higher on the session. Among tech bellwethers, FB (+4.2%) is showing notable strength.
There were no earnings of note in tech this morning. In news, IDCC (+3.0%) announced that its patent holding subsidiaries have entered into an agreement which extends the term of their worldwide, non-exclusive, royalty-bearing patent license agreement with RIMM (+2.1%). Among rumors, INTC's (+2.8%) Web TV service is taking longer than expected to introduce, according to reports. Among notable analyst upgrades this morning in the tech space, FLIR (+5.3%) was upgraded to Buy at Needham. Also, QCOM (+3.7%) was added to Top Picks Live list at Citigroup, while BRCM (+3.4%) was removed, and B. Riley Caris is adding RLD (+2.4%) to the Focus List. Among downgrades, LNKD (-1.7%) was downgraded to Equal Weight at Barclays, NTLS (-3.0%) was downgraded to Neutral at JP Morgan and UMC (+2.1%) was downgraded to Neutral at Citigroup. There are no notable names in tech scheduled to report quarterly results today after the close. |
