From Briefing.com: 4:30 pm : Word that the Obama administration is working on a plan to subsidize mortgage payments for troubled homeowners spurred a late rebound in the major indices. That helped the stock market turn a 3% loss into a modest gain.
Stocks traded with broad-based weakness for much of the session. The downbeat tone was an extension of the stock market's inability to sustain an advance since tumbling Tuesday in the wake of Treasury's disappointing bank rescue plan.
The Dow actually fell to its lowest level since registering a bear market low on Nov. 21, while the S&P 500 approached its January lows.
Declines were led by financial stocks, which remain central to the concerns for the broader stock market. Financials were down more than 7% at their session low, but finished the session with a 1.3% loss.
Stocks put together a rebound after Reuters reported the Obama administration is working on a plan to subsidize mortgage payments for troubled homeowners that pass certain tests. Fannie Mae and Freddie Mac would reportedly play a supporting role. Market participants cheered the news since stemming foreclosures is considered central to restoring the mortgage market, which will help stop bank write-downs.
Meanwhile, investors remain largely unimpressed by the $789.5 billion economic stimulus bill, which is expected to come to a vote by this weekend. Critics contend the bill is unlikely to lead a recovery in the short-term.
Investors looked past the latest batch of quarterly announcements. Coca-Cola (KO 44.39, +3.12) led the way by announcing better-than-expected results. Its rival, Pepsico (PEP 52.00, +1.39), announces tomorrow. Waste Management (WMI 29.26, +0.81) and Aetna (AET 33.06, +0.82) both topped expectations as well. Network Appliances (NTAP 16.40, +1.20) performed in-line with estimates, while Las Vegas Sands (LVS 3.49, -0.49) disappointed with a loss. Overall, the announcement failed to have much influence in the broader market.
Market participants found little inspiration from a better-than-expected January retail sales report. The report showed January retail sales jumped 1%, which is the first increase since a 0.1% gain in July.
However, the report is being treated with skepticism amid ongoing reminders of poor macro conditions. Jobless claims for the week ending Feb. 7 totaled 623,000, which is a bit more than expected, but down slightly from the prior week. Initial claims are at their highest level in more than 25 years.
Meanwhile, 4.81 million continuing claims were filed. That is the highest level recorded since records began in 1967.
Separately, businesses inventories dropped a larger-than-expected 1.3% in December. That is the largest drop since 2001. DJ30 -6.77 NASDAQ +11.21 NQ100 +1.3% R2K +0.6% SP400 +0.5% SP500 +1.45 NASDAQ Adv/Vol/Dec 1328/2.15 bln/1276 NYSE Adv/Vol/Dec 1414/1.48 bln/1609
4:06PM JA Solar announces update on strategic alliance with BP Solar (JASO) 2.53 -0.48 : Co announced that it has signed a supply contract with BP Solar International, Inc., pursuant to the broader strategic cooperation agreement signed with BP Alternative Energy Holdings Limited, announced last November. Under this new agreement, JA Solar will supply monocrystalline and multicrystalline solar cells to BP Solar in 2009, with an initial volume of 175 MW and with the potential to expand to 360 MW. JA Solar is already delivering product under its existing supply agreement with BP.
4:02PM Monolithic Power beats by $0.04, reports revs in-line; guides Q1 revs in-line (MPWR) 12.93 +0.10 : Reports Q4 (Dec) earnings of $0.16 per share, ex-items, $0.04 better than the First Call consensus of $0.12; revenues fell 9.9% year/year to $34.7 mln vs the $34.5 mln consensus. Co issues in-line guidance for Q1, sees Q1 revs of $24-$29 mln vs. $28.74 mln consensus. Co sees gross margin below the lower end of the company's target range of 60-63%.
8:05AM Aehr Test Systems announces expense reduction actions; reduction in total headcount ot nearly 20% (AEHR) 1.29 : Co announces that it has taken a series of actions designed to substantially reduce the company's operating expenses. The restructuring actions include a reduction in total headcount of nearly 20%, reductions in compensation for salaried employees and a shutdown for one week each qtr. The cumulative effect of these and other actions is expected to reduce total operating expenses by 20% starting in the qtr ended May 31, 2009.
7:33AM Juniper Networks and Nokia Siemens networks enhance partnership to address worldwide carrier ethernet market (JNPR) 15.55 : Co announces an enhancement to their partnership with plans to deliver a fully interoperable Carrier Ethernet solution intended to provide resilient access and aggregation for service providers worldwide. The enhanced partnership is intended to bring the vision of a unified Carrier Ethernet solution supporting all services on a single network. Current plans are for the new Carrier Ethernet solution to be sold by the respective parties or qualified resellers. The targeted availability date is the second half of 2009 subject to compliance with applicable laws.
09:33 am Network Appliance downgraded to Neutral at MKM Partners: . MKM Partners downgrades NTAP to Neutral from Buy. The firm notes that NTAP is cutting 6% of its workforce as it awakens to the adverse economic climate after several quarters of over-investment. The cost reductions should result in pro forma operating margin expansion in FY10. However, the firm notes that mgmt has yet to achieve its 16% margin tgt, and they now project cash flow to grow only 2% in FY10. Therefore, despite strong technology and market share gains, the firm is reluctant to assign premium multiples. |
