From Briefing.com: Weekly Recap - Week ending 09-Sep-11Stocks slumped to a 2.7% loss on Friday. Tenuous fiscal and financial conditions in Europe continue to be blamed.
Weakness among Europe's major bourses weighed on sentiment even before U.S. markets opened on Friday. In turn, stocks slid at the start of the session, extending the prior session's slide.
From the start, selling interest was broad based. Pressure intensified in response to headlines that suggested Germany is planning to support certain banks if Greece defaults on its debt. The headline was circulated before trade in Europe closed; it led Germany's DAX to drop to a 4% loss. The euro also sold off in response to the headline. It sank to a 1.6% loss, as of the closing bell.
Weakness in the euro fueled increased demand for the dollar, such that the Dollar Index rallied 1.2% to a five-month high above its 200-day average.
Skittishness among investors stoked volatility, such that the Volatility Index, often euphemistically labeled the Fear Gauge, climbed more than 16% back toward 40. The VIX hasn't been that high since concerns about Europe's stability had last escalated in mid-August.
In response to broad market weakness and heightened volatility, Treasuries scored strong gains. In fact, buyers drove the yield on the benchmark 10-year Note to a new record low near 1.90% after it had been near 2.30% only a couple of weeks ago.
Friday's drop left the S&P 500 to log its fifth loss in six sessions. It also caused the stock market settle the holiday-shortened week 1.7% lower than where it began, giving stocks their sixth weekly decline in seven weeks. The downtrend has left the S&P 500 almost 16% below its 2011 high, but more than 4% above its 2011 low.
Friday's drop made for a discouraging follow-up to the 1% loss logged in the prior session. Stocks were pressured on Thursday in response to a lack of leadership, another weekly initial jobless claims tally above 400,000, and the failure of European Central Bank President Trichet to offer up any kind of plans intended to stimulate growth in the region, despite a downward revision to his GDP forecast for the region.
Stocks scored their only gains of the week on Wednesday, when market participants applauded news that a German court rejected a lawsuit intended to prevent the country from participating in bailouts for the European Union.
The observance of Labor Day kept U.S. markets closed on Monday, but rather than a rested return to the markets on Tuesday, traders were anxious sell. Soured sentiment in Europe underpinned the action. A better-than-expected August ISM Service Index of 53.3 mattered little to market participants.
Index Started Week Ended Week Change % Change YTD %
DJIA 11240.26 10992.13 -248.13 -2.2 -5.1
Nasdaq 2480.33 2467.99 -12.34 -0.5 -7.0
S&P 500 1173.97 1154.23 -19.74 -1.7 -8.2
Russell 2000 683.36 673.96 -9.40 -1.4 -14.0
6:30AM Amtech Systems announces withdrawal of $60 mln shelf registration (ASYS) 9.89 : Co announced that its Board of Directors has approved the company's application to the SEC for an order granting the immediate withdrawal of its $60 mln shelf registration statement on Form S-3.
EMC (EMC) announced a collaboration with Adobe Systems Incorporated to deliver the Adobe (ADBE) Creative Suite 5.5 Production Premium video production software with EMC Isilon scale-out NAS storage capabilities.
Texas Instruments (TXN $26.16 -0.36) sees third quarter EPS of $0.56-$0.60 versus $0.55-0.65 previously and the $0.60 consensus, with revenues of $3.23-3.37 billion versus $3.4-3.7 billion previously and the $3.54 billion consensus. The reductions are due to broadly lower demand across a wide range of products, markets and customers.
Tessera Tech (TSRA $12.48 -1.09) sees third quarter revenues of approximately $60 million versus the $74.30 million Capital IQ two estimate average. Third quarter Micro-electronics revenues, which come entirely from Tessera, Inc., a wholly owned subsidiary of Tessera Technologies, Inc., are expected to be approximately $50 million. As a comparison, second quarter 2011 royalties and license fees were $60.5 million and third quarter 2010 royalties and license fees were $72.0 million.
Cisco (CSCO $15.94 -0.35) was upgraded to Sector Perform from Underperform at RBC Capital and the firm raised their target to $17 from $14 saying the situation may have stopped getting worse for Cisco and most of the disruptions (some self inflicted) may now be behind it. With cost cutting to cushion the earnings outlook in the current challenging macro environment, their rating is now Sector Perform.
12:03 pm Technology Sector Trading Higher Today Along With Broader Market (RIMM)
The S&P Technology sector (-1.88%) is lower in the final session of trade in the shortened week and is currently outperforming the losses seen in the broader market (-2.5%).
Sector News: TXN (+1.1%) shares are trading to the upside following its mid-qtr update, where the co guided Q3 EPS to the range of $0.56-$0.60 (vs. $0.60 Capital IQ Consensus), compared to the previous range of $0.55-0.65; co sees revs of $3.23-3.37 billion versus. $3.4-3.7 billion previously and the $3.54 billion consensus. TSRA (-7.1%) shares are weaker after the co guided Q3 revenues of approximately $60 million versus $74.30 million Capital IQ two estimates averages. AAPL (-1.2%), according to reports, won its court battle on sales ban of Samsung's Galaxy tablet in Germany. TZOO (+2.9%) shares got a boost early in the session following a press release that a firm called ChaPaVe Partners planned to commence a tactical tender offer for up to 1.5 mln shares of the outstanding shares of TZOO. Since then, the TZOO CEO has come out to say that they have had no contact with the co claiming the tender offer.
Broker Calls: RIMM (-2%) was downgraded to Underperform from Hold at Jefferies. YOKU (-2.3%) was upgraded to Hold from Sell at Maxim Group. ThinkEquity initiated AXTI (-1.4%) and GTAT (-2.3%) with Buys. Firm initiated CREE (-1.2%), AIXG (-4.7%), and LEDS (+0.2%) with Holds. Finally, the firm initiated RBCN (-4.5%) with a Sell. SYNT (-9.2%) was initiated with a Negative at Susquehanna. CSCO (-1.2%) was upgraded to Sector Perform from Underperform at RBC.
Don, terrific work as always. Thanks for getting the analyst rating in tables. Just great all the improvements you have made over the past few years.
RtS |
