From Briefing.com: 4:15 pm : Despite continued strength among financial issues, the major equity averages surrendered some of their recent gains in the wake of a generally unimpressive batch of economic data.
Financials outperformed the broader market with relative ease for the second straight session. They jumped out to an early gain and were able to remain in positive ground for virtually the entire session before closing with a 3.3% gain. Financials are now up more than 8% this week.
Better-than-expected earnings from Marsh & McLennan (MMC 22.62, +1.12) gave insurers a lift and helped drive short-covering in left-for-dead names like AIG (AIG 22.00, +8.48), but bank stocks provided some of the most support to the broader market. Regional banks advanced 2.9%, diversified banks climbed 5.4%, and diversified financial services stocks (+5.4%) like Bank of America (BAC 16.62, +0.98) and JPMorgan Chase (JPM 41.78, +1.57) bounded.
Materials stocks also garnered support and finished 0.8% higher after spending the middle half of the session in the red. Besides financials, it was the only other sector in the S&P 500 to make a gain. The sector benefited from a rebound in commodity prices, which saw oil prices rebound from a loss of more than 2% to close 0.8% higher at nearly $72 per barrel. Oil prices were initially pressured by a larger-than-expected weekly inventory build of 1.67 million barrels.
Steel stocks (+2.6%) also provided support to the materials sector after AK Steel (AKS 21.92, +0.98) said it would raise prices.
The rest of the stock market struggled for most of the session. Losses were broad-based and considerable as most of the major sectors in the S&P 500 traded at least 1% into the red. Their weakness wasn't necessarily caused by the day's economic data, but the data certainly didn't stir up any support for stocks either.
Released before the opening bell, the latest ADP Employment Report indicated that 371,000 jobs were slashed in July, but that was greater than the 350,000 job losses that had been forecast. Meanwhile, job losses for June were revised lower to reflect 463,000 job cuts. The figures come ahead of the government's nonfarm payrolls report, which is expected to show 328,000 job losses when it is released Friday.
The ADP data was followed by some modest selling pressure in premarket trading, but stocks still started the session flat. Selling pressure intensified ahead of the latest ISM Service Index and factory orders data.
The ISM Services Index for July unexpectedly slipped to 46.4 from 47.0 in June. It was expected to come in at 48.0. The disappointing reading caused participants to generally dismiss the third straight monthly increase in factory orders, which most recently turned 0.4% higher in June.
The broader market did attempt another upward push into the close, but this time the advance was rebuffed. Still, the S&P 500 held above the 1000 mark as its decliners outnumbered its advancing issues by 2-to-1 in relatively high volume. Declining issues outnumbered advancers by more than 2-to-1 in the Dow. Procter & Gamble (PG 53.91, -1.55) was a primary laggard among blue chips, even though the company bested the consensus earnings estimate for the latest quarter. Fellow Dow component Kraft (KFT 28.33, -0.01) also lagged, despite posting a positive earnings surprise. DJ30 -39.22 NASDAQ -18.26 NQ100 -0.9% R2K -0.8% SP400 -0.3% SP500 -2.93 NASDAQ Adv/Vol/Dec 969/2.36 bln/1701 NYSE Adv/Vol/Dec 1388/1.88 bln/1640
10:58AM GT Solar: Downgrade details (SOLR) 6.54 +0.63 : As mentioned earlier, Ardour Capital downgraded SOLR to Hold from Reduce and increased their tgt to $6 from $3.50. The firm notes that the co's Q1 results were a mixed bag, as revenues fell short primarily because of revenue recognition timing of large orders. In addition, the firm notes that despite the Chinese govt implementing a series of new solarspecific incentives, order activity is still slow; the firm looks for an up-tick by mid-calendar 2010 as utilization rates return to healthy levels. As such, they view the stock as fairly valued at this time.
8:49AM Tower Semicon: Dongwoon Anatech selects Tower Semiconductor as sole manufacturing partner for high volume LED lighting devices (TSEM) 0.88 : Dongwoon Anatech announces it has selected Tower Semiconductor as its sole manufacturing partner for high volume, energy saving LED lighting devices used in both home and industrial applications. Tower was chosen for its 20V to 60V scalable LDMOS power management process technology which provides design optimization and the lowest die size at any given breakdown voltage. Due to the high market demand for LED drivers, Dongwoon Anatech is expanding from Korea to China, U.S., and Japan markets, introducing four new devices this year... Dongwoon Anatech's major customers are Samsung and Sony to which they have shipped 155 million units since the company was formed in 2006. Their aggressive approach to the LED lighting market enables them to set technical standards such as their DW8520 device, the first driver in Korea that can adopt both AC & DC power. Dongwoon Anatech anticipates customers' needs and invests faster than its competitors. Besides LED lighting, the company has started developing DC/DC (sync, buck, boost) and an AMOLED power driver, which very few companies are able to achieve.
10:18 am Electronic Arts (ERTS)
Electronic Arts (ERTS 20.54, -1.35) reported a second quarter loss of $0.02 per share after the close Tuesday, but the results were $0.11 better than the First Call consensus that expected a loss of $0.13.
Revenue rose 34% to $816 million, far better than the $729.5 million consensus.
Additionally, the company provided fiscal year 2010 earnings guidance of $1.00 per share; the consensus stands at $0.97. Electronic Arts expects revenue of $4.3 billion vs. $4.28 billion consensus.
The company said, "Good execution delivered better-than-expected financial results in the first quarter and we are very pleased with the success of both The Sims 3 and EA SPORTS Active. Our first quarter performance was driven by our previously announced cost-cutting initiatives and a strong frontline slate. Also, we had a solid first quarter both top and bottom line and we are focused on delivering the balance of the year." |
