From Briefing.com: 4:30 pm : Some ugly data sent stocks spiraling lower Thursday. The selloff slowed when the stock market approached its monthly low, though.
The tone on trading floors turned uneasy with this morning's release of initial jobless claims figures for the week ended August 14. Not only did the tally hit a half million for the first time since November, but it also exceeded the 475,000 claims that had been widely expected.
Early weakness was exacerbated by the worst Philadelphia Fed Index in just over a year. The Index's August reading was widely expected to come in at 7.5, but it dropped to -7.7 instead.
A gradual selloff ensued. The breadth of the selling effort took stocks through support levels of the two prior sessions and only eased when the S&P 500 came within reach of the August low that was set this past Monday.
Though technical support helped stocks stem their losses, pressure persisted into the close and stocks failed to squeeze higher in the final hour.
Widespread weakness stoked volatility, such that the Volatility Index spiked back above its 50-day moving average. The VIX was up about 7% at the close.
Heightened volatility coupled with the stock market's selloff sent participants into Treasuries. A preference for safety sent the yield on the 2-year Note to another new low - this time to almost 0.47%. Meanwhile, the yield on the benchmark 10-year Note hit a new 15-month low just under 2.56% and the yield on the 30-year Bond dropped to a 14-month low of 3.62%.
The dollar had started the session in the red as dour data and an improved GDP forecast from Germany's central bank initially led many to the euro. The currencies eventually reversed course so that the euro dropped to a 0.3% loss against the greenback and the Dollar Index settled with a 0.3% gain.
Consistent with the action of recent weeks, corporate news carried little sway with trade.
The latest round of earnings announcements featured a raft of retailers. Their numbers were generally mixed relative to expectations. As a group, shares of retailers gave up 1.5% this session.
Tech stocks, which collectively account for the heaviest sector by market weight, shed 1.3%. That was actually one of the least severe downturns of the day. The sector's story of the day came early, when Intel (INTC 18.90, -0.69) announced that it will acquire McAfee (MFE 47.01, +17.08) for $48 per share in cash, or a 60% premium over the prior session's closing price. News of the buyout spurred a bid for other software companies, which topped today's short list of advancers.
Advancing Sectors: (None)
Declining Sectors: Financials (-2.4%), Materials (-2.2%), Industrials (-2.1%), Consumer Discretionary (-1.8%), Health Care (-1.7%), Energy (-1.5%), Telecom (-1.4%), Utilities (-1.4%), Tech (-1.3%), Consumer Staples (-1.1%)DJ30 -144.33 NASDAQ -36.75 NQ100 -1.5% R2K -2.7% SP400 -1.7% SP500 -18.53 NASDAQ Adv/Vol/Dec 500/2.10 bln/2134 NYSE Adv/Vol/Dec 551/1.07 bln/2452
4:34PM Hewlett-Packard reaffirms EPS in-line, beats on revs; reaffirms Q4 EPS guidance, revs guidance (HPQ) 40.76 : As previously announced, reports Q3 (Jul) earnings of $1.08 per share, excluding non-recurring items, in-line with the Thomson Reuters consensus of $1.08; revenues fell 0.4% year/year to $30.73 bln vs the $30.36 bln consensus. Co reaffirms guidance for Q4, sees EPS of $1.25-1.27, excluding non-recurring items, vs. $1.26 Thomson Reuters consensus; sees Q4 revs of $32.5-32.7 bln vs. $32.68 bln Thomson Reuters consensus.
4:09PM Marvell reports EPS in-line, misses on revs; announces $500 mln buyback (MRVL) 15.20 : Reports Q2 (Jul) earnings of $0.40 per share, excluding non-recurring items, in-line with the Thomson Reuters consensus of $0.40; revenues rose 4.8% year/year to $896.5 mln vs the $911.6 mln consensus. MRVL reports Q2 gross margin 59.3% vs 59.2% Thomson Reuters consensus, Q1 60.6%, prior year 52.2%. Non-GAAP gross margin for Q2 was 59.3 percent vs the 59.3% consensus, compared to 55.3 percent for the second quarter of fiscal 2010 and 60.6 percent for the first quarter of fiscal 2011. Marvell also announces that its Board of Directors has authorized a program to repurchase up to $500 mln of its outstanding common shares.
4:02PM Marvell acquires DS2 Technology (MRVL) 14.91 -0.07 : Co announces it has acquired the intellectual property and assets of Diseno de Sistemas en Silicio S.A. ("DS2"), a supplier of high speed semiconductor products for powerline communications. Powerline technology converts any existing electrical power wiring into an intelligent, high-speed networking medium, enabling consumers to quickly and affordably create a "connected home" that can stream virtually any personal or subscription-based digital content to and from any room at high speeds. Terms of the deal were not disclosed.
4:08PM Dell beats by $0.02, beats on revs; reaffirms FY11 guidance (DELL) 12.04 -0.15 : Reports Q2 (Jul) earnings of $0.32 per share, $0.02 better than the Thomson Reuters consensus of $0.30; revenues rose 21.7% year/year to $15.53 bln vs the $15.2 bln consensus. DELL reports Q2 gross margin 17.2% vs 17.7% Thomson Reuters consensus, Q1 17.6%. Co reaffirms guidance for FY11, sees FY11 revs up 14-19% (consensus +16.8%), which equates to revs of $60.3-63.0 bln vs. $61.78 bln Thomson Reuters consensus, and sees non-GAAP operating income growth between 18-23%... Server and networking revenues increased 35% with rapid growth in blades. Storage revenue improved 13% led by EqualLogic storage products, which grew 63% as it gains wider adoption among customers. Services revenue increased 57% to $1.9 billion with the inclusion of Perot Systems. Dell believes the corporate client refresh is well underway and that demand will continue through the next several quarters. For the third quarter, the company expects seasonal improvements from federal government sales and commercial businesses, resulting in a pick-up in the low single digits.
4:08PM Verigy beats by $0.07, beats on revs; guides Q4 EPS above consensus, revs in-line (VRGY) 8.77 +0.06 : Reports Q3 (Jul) earnings of $0.23 per share, excluding non-recurring items, $0.07 better than the Thomson Reuters consensus of $0.16; revenues rose 77.0% year/year to $154 mln vs the $147.6 mln consensus. Co issues upside EPS guidance for Q4, sees EPS of $0.24-0.29, excluding non-recurring items, vs. $0.22 Thomson Reuters consensus; sees Q4 revs of $157-167 mln vs. $157.00 mln Thomson Reuters consensus.
The German government has selected NXP as the supplier of an inlay solution containing a dedicated SmartMX chip, packaged in an ultra-thin module...HP (HPQ) announces that it has appointed Spencer Stuart to handle activities related to the search for a new chief executive officer of the company. The search will consider both internal and external candidates. The board also appointed John H. Hammergren as Chair of the Search Committee..
10:11 am NTAP Issues In-line Q2 Guidance (NTAP)
NetApp (NTAP 39.95 +0.63) reported first quarter earnings of $0.49 per share, $0.03 better than the Thomson Reuters consensus of $0.46.
Revenues rose 36.0% year-over-year to $1.14 billion versus the $1.13 billion consensus.
For the second quarter, the company expects to earn $0.47 to $0.50 per share, in-line with the $0.47 Thomson Reuters consensus. On the top line, the company expects to see revenues in the range of $1.16 to $1.21 billion, in-line with the $1.17 billion Thomson Reuters consensus.
09:41 am AMAT Guides Q4 Above Consensus (AMAT)
Applied Materials (AMAT 11.56 +0.19) reported third quarter earnings of $0.17 per share, which includes a $0.12 inventory charge from the EES restructuring and may not be comparable to the Thomson Reuters consensus of $0.25.
AMAT's May business outlook was for non-GAAP EPS of between $0.22 and $0.26. At the announcement of the EES restructuring plan on July 21, 2010, the non-GAAP EPS outlook was revised to between $0.10 and $0.14 which the co said was at the high end of the previous guidance if excluding the inventory impact. What is interesting is that the consensus EPS rose to $0.25 from $0.24 which may suggest that analysts were excluding this inventory in their numbers.
It is likely that $0.29 is comparable to the consensus which would represent a $0.04 beat.
On the top line, revenues rose 123.0% year-over-year to $2.52 billion versus the $2.36 billion consensus.
For the fourth quarter, the company expects to see earnings in the range of $0.28 to $0.32 per share, above the $0.26 Thomson Reuters consensus. The company expects fourth quarter revenues to be flat to 5% quarter-over-quarter, which calculates to approx.$2.52 billion to $2.65 billion versus the $2.41 billion Thomson Reuters consensus.
09:42 am Cirrus Logic downgraded to Hold at Stifel Nicolaus: . Stifel Nicolaus downgrades CRUS to Hold from Buy based on the premise that Cirrus Logic's non-portable consumer audio business could face a head-wind in the 2H CY2010 in light of weakening economic recovery and overall consumer spending. |
