From Briefing.com: 4:30 pm : Stocks slid to a 1% loss amid a lack of leadership today. Financials were a considerable source of weakness.
Following a near 3% surge in the prior session, stocks came under pressure this morning. The shift in sentiment came largely in response to mixed action abroad after analysts at Fitch stated that there is potential for both China and Japan to be hit with a debt rating downgrade. The decision by the European Central Bank (ECB) to keep its target rate at 1.50%, without the mention or introduction of any new monetary policy instrument, also dampened the tone of early trade. ECB President Trichet further dampened the mood by announcing a downward revision to the region's GDP forecast.
The latest weekly initial jobless claims count also proved displeasing. Initial claims climbed 2,000 from the prior week to 414,000, which is greater than the 400,000 claims that had been expected, on average, among economists surveyed by Briefing.com.
Little attention was paid to the July trade deficit, which totaled $44.8 billion after it had been at $53.0 billion the month before. A deficit of $51.5 billion had been expected.
Stocks managed to overcome the early weakness, however. The upturn was helped along by tech stocks, which ultimately faltered to finish with a 0.4% loss after they had been up more than 1% at their session high.
Since the start, financials hampered the broad market. Their weakness eventually dragged down the rest of the market and gave sector a 2.3% loss.
Broad market selling pressure picked up around the same time that Fed Chairman Bernanke delivered a speech to the Minnesota Economic Club. Bernanke offered no new clues about the Fed's plans for monetary policy and the economic outlook, but reminded market participants that a range of tools remain available to the Fed.
Advancing Sectors: (None)
Declining Sectors: Utilities -0.1%, Consumer Staples -0.2%, Tech -0.4%, Telecom -0.6%, Health Care -1.1%, Materials -1.2%, Energy -1.2%, Consumer Discretionary -1.3%, Industrials -1.5%, Financials -2.3%DJ30 -119.05 NASDAQ -19.80 NQ100 -0.4% R2K -2.1% SP400 -1.4% SP500 -12.72 NASDAQ Adv/Vol/Dec 616/1.98 bln/1933 NYSE Adv/Vol/Dec 665/947 mln/2359
5:26PM Applied Materials: IRS recommended that co receive a cash refund in the amount of approx $240 mln plus interest - 8-K (AMAT) 10.85 -0.24 : Co disclosed in its quarterly report on Form 10-Q filed on August 26, 2011, it previously had requested a refund of a portion of the U.S. federal income tax paid in fiscal years 2006 and 2007. Following an audit, the IRS recommended that Applied receive a cash refund in the amount of approximately Co disclosed in its quarterly report on Form 10-Q filed on August 26, 2011, it previously had requested a refund of a portion of the U.S. federal income tax paid in fiscal years 2006 and 2007. Following an audit, the IRS recommended that Applied receive a cash refund in the amount of approximately $240 million plus interest, which recommendation was subject to approval by the Joint Committee on Taxation of the U.S. Congress. 40 million plus interest, which recommendation was subject to approval by the Joint Committee on Taxation of the U.S. Congress.
4:38PM Lam Research announces Martin Anstice to succeed Stephen Newberry as President and CEO effective January 1, 2012; Newberry to continue as Vice Chairman (LRCX) 36.80 -0.43 : Co announced that the company's Board of Directors has appointed Martin B. Anstice to chief executive officer (CEO), effective January 1, 2012. Anstice succeeds Stephen G. Newberry, who will continue serving as vice chairman, an executive position with the company, after his transition as CEO. Anstice will also maintain his current role as president and chief operating officer.
4:31PM Texas Instruments issues 3Q mid quarter update; narrows EPS (more so to the downside) and lowers revenue guidance (TXN) 25.80 -0.09 : Co sees Q3 EPS of $0.56-$0.60 vs. $0.55-0.65 previously and the $0.60 Capital IQ Consensus; with rev of $3.23-3.37 bln vs. $3.4-3.7 bln previously and the $3.54 bln consensus. Call begins at 5:00pm EST.
Xilinx (XLNX) announced that longtime customer, SIGMA Corp has designed Spartan-6 FPGAs into its flagship digital single lens reflex camera, the SIGMA SD1, for professional and enthusiast photographers.
HP (HPQ) introduced the updated HP Pavilion dm1, a consumer notebook PC featuring HP Soft-touch Imprint design, Beats Audio and an exclusive set of innovations designed to improve on the Microsoft Windows experience.
1:26 pm Technology Sector Trading Higher Today With Broader Market (CSCO)
The tech sector is trading just higher today, ahead of slight losses in the broader market. Semiconductors are showing relative strength in the tech space with the Philly Semi Index trading 0.3% higher. Among chips in the index, MU (+5.9%) is a notable leader. Among other major indices, the S&P 500 is trading 0.2% lower, while the NASDAQ is trading relatively flat. The QQQ, meanwhile, is trading 0.2% higher. Among tech bellwethers, ORCL (-3.3%) is under notable pressure, while CSCO (+2.4%) is outperforming.
In earnings last night, SEAC (+2.0%) posted a miss and guided lower.
In news, DRIV (+6.7%) authorized a $100 million share repurchase program. Also, GOOG (+0.5%) acquired Zagat, which is pressuring OPEN (-8.6%).
In rumors, we are hearing ORCL (-3.3%) for HPQ (-0.3%) takeover chatter making the rounds.
Among notable analyst upgrades this morning, CSCO (+2.4%) and JNPR (+1.7%) were upgraded to Buy at Auriga, NCR (+3.2%) was upgraded to Overweight at JP Morgan and SNDK (+4.6%) was upgraded to Positive at Avian. In downgrades, Morgan Keegan downgraded TZOO (-5..2%) to Mkt Perform.
There are no notable names in tech set to report results today after the close. However, TXN (+0.7%) is anticipated to post its mid-qtr update.
Corning (GLW $14.42 -0.11) revised its LCD volume expectations for the third quarter based on lower panel maker utilization rates. The company reaffirmed $10 billion in sales by 2014 ahead of Citi Tech Conference. The company will describe the behavior of the LCD supply chain as "cautious." "Utilization rates remain low as the industry anticipates softer retail demand in the second half of this year. This is somewhat contrary to how retail demand has been acting to date."
Digital River (DRIV $20.21 +1.21) announced that its Board of Directors authorized a share repurchase program of up to $100 million of its outstanding common shares. The shares may be repurchased in the open market or in privately negotiated transactions. "This stock buyback plan reaffirms our confidence in the company's strategy and long-term growth potential and demonstrates our ongoing commitment to increasing shareholder value," said Joel Ronning, Digital River's CEO.
Cisco (CSCO $16.27 +0.39) was upgraded to Buy from Hold at Auriga and its target was raised to $20 from $16. Firm expects the company to regain momentum through a combination of improving product cycles, aggressive pricing and superior execution. Their analysis shows that company is now well positioned to gain market share in key segments like switching, routing and servers in both enterprise and service provider segments from competitors. While they expect continued gross margin erosion due to aggressive pricing from company and competitors, operating expenses restraint should still lead to stable/rising operating margins. They recommend aggressive buying at current levels ahead of the upcoming analyst day.
Juniper Networks (JNPR $21.61 +0.07) was upgraded to Buy from Hold at Auriga and its target was lowered to $26 from $28 as the firm views the stock as attractively valued at current levels which offsets their near-term concerns around intensifying competition and share losses. The firm expects JNPR to face near-term headwinds as nearest competitor CSCO catches up in edge routing, macro trends remain weak and the company bleeds market share in security. |
