From Briefing.com: 4:30 pm : Although the effort encountered resistance, the stock market was able to build on an early gain and overcome resistance to put itself back in positive territory for the year.
Early market participants provided a modest bid in the face of muddled action abroad and a new 11-month low for the euro following a mixed debt auction in Italy. The euro eventually worked its way higher and, in turn, bolstered broad market buying interest; the currency climbed out of the red to end the trading day with a 0.4% gain against the greenback. The euro is still down more than 3% this year, though.
Financials helped boost the broad market by providing leadership. The sector fully recovered from their prior session slump by bouncing to a 1.6% gain. Banks proved to be a primary driver of that move. However, bank stocks remain the reason for the sector's poor performance this year -- the KBW Bank Index is down 23% this year while the broader financial sector is off by 18% year to date.
Defensive-oriented stocks have generally outperformed in 2011. Year to date, utilities stocks are up more than 15%, consumer staples stocks are collectively up 11%, and the health care sector is up more than 10%.
All 10 major sectors scored strong gains today, though. Despite such broad-based strength, the S&P 500 had a hard time moving more than a couple of points above the 1258 zone, which contains its 2011 starting point and its 200-day moving average. Still, stocks never retreated and ultimately prevailed in overcoming resistance. The lack of share volume likely helped the move -- with only a half billion shares traded on the NYSE share volume was only about half of its average daily volume. Nonetheless, the S&P 500 is now fractionally positive for the year.
Economic data had little sway with the broad market, but shares of homebuilders were helped by a surprisingly strong pending home sales report. Pending home sales for November increased by 7.3%, which is greater than the 0.6% increase that had been generally expected among economists polled by Briefing.com, but less than the 10.4% increase recorded in the prior month.
The Chicago PMI for December also exceeded expectations. Although it eased down to 62.5 from 62.6 in the prior month, it was better than the reading of 60.1 that had been generally expected.
Weekly initial jobless claims jumped to 381,000 from the multi-month low of 366,000 posted for the previous week. Economists polled by Briefing.com had expected, on average that initial claims would be closer to 368,000.
The commodities complex failed to benefit from the positive tone displayed in the stock market and the dollar's decline from a multi-month high. That left the CRB Index to suffer a 0.2% loss. That said, several commodities were able to recover from new or near multi-month lows. The CRB is positioned for a year-to-date loss of about 8.5%.
Advancing Sectors: Financials +1.6%, Industrials +1.3%, Energy +1.2%, Materials +1.1%, Consumer Discretionary +1.1%, Health Care +1.0%, Tech +0.9%, Telecom +0.9%, Utilities +0.8%, Consumer Staples +0.7%
Declining Sectors: (None)DJ30 +135.63 NASDAQ +23.76 NQ100 +0.8% R2K +1.3% SP400 +1.4% SP500 +13.38 NASDAQ Adv/Vol/Dec 1888/1.03 bln/724 NYSE Adv/Vol/Dec 2381/531 mln/637
4:49PM EMCORE announces one for four reverse stock split (EMKR) 1.26 +0.03 : Co announced that its Board of Directors has approved a one for four reverse stock split (the "Reverse Stock Split") of EMCORE common stock. The Reverse Stock Split was approved by EMCORE's shareholders at its June 14, 2011 annual meeting. The Reverse Stock Split will become effective following the filing of an amendment to EMCORE's corporate charter.
1:22PM Riverbed Technology: Following earnings, stock climbs modestly higher intraday as buyers begin to take it back up into its gap down highs near $24.00 (RVBD) 24.00 -5.91 :
10:57AM Riverbed Technology: Following earnings, stock sinks to fresh gap down lows as it begins to probe the $22.00-23.00 support zone (RVBD) 23.05 -6.87
Seagate Tech (STX $20.88 +1.08) increased quarterly cash dividend from $0.18 to $0.25 per share, an increase of 39%. The increase is effective with the dividend payable on March 1 to shareholders of record as of the close of business on Feb 15. Additionally, the Board has authorized the repurchase an additional $1 billion of its outstanding common shares. The January 2012 authorization extends Seagate's commitment to enhancing shareholder value by utilizing the robust cash generation ability of its business. To date, Seagate has utilized approximately $1.1 billion against the existing $2 billion share repurchase authorization approved by the Board on Nov 29, 2010 to repurchase 67.8 mln shares. The remaining balance of the November 2010 authorization ($0.9 billion) is expected to be utilized by the end of fiscal year 2012 (June 29, 2012), market and other economic conditions permitting.
Microsemi (MSCC $19.06 -1.32) reported first quarter earnings of $0.39 per share, in-line with the Capital IQ Consensus consensus of $0.39, while revenues rose 30.6% year/year to $240.9 million versus the $240.8 million consensus. The company issued in-line guidance for the second quarter with EPS of $0.43-$0.48 versus the $0.46 consensus.
Cirrus Logic (CRUS $20.90 -1.17) reported third quarter earnings of $0.43 per share, $0.01 better than the Capital IQ Consensus of $0.42, while revenues rose 28.0% year/year to $122.4 million versus the $121.96 million consensus. The company issued upside guidance for the fourth quarter with revenues of $108-122 million versus the $103.92 million consensus. Fourth Quarter gross margin is expected to be between 54 percent and 56 percent.
Juniper Networks (JNPR $20.31 -2.07) reported fourth quarter earnings of $0.28 per share, $0.01 better than the Capital IQ Consensus of $0.27, while revenues fell 5.7% year/year to $1.12 billion versus the $1.12 bln consensus. The company issued downside guidance for the first quarter with EPS of $0.11-0.14 versus the $0.27 consensus with revenues of $960-990 million versus the 1.1 billion consensus and the company sees gross margin in the range of 63-64%.
Riverbed Technology (RVBD $23.59 -6.33) reported fourth quarter earnings of $0.25 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.24, while revenues rose 22.6% year/year to $202.8 million versus the $201.04 million consensus. "The business has been executing well and fourth quarter revenue growth was fueled by strong enterprise sales in both the U.S. and EMEA. Despite higher disk drive costs resulting from recent Thai floods, we reported strong gross and operating margins in the fourth quarter. We believe our past investments in our core and new products will continue to yield solid revenue and profit growth in 2012."
09:23 am Seagate Tech target raised to $26 at Brean Murray: . Brean Murray raises their STX tgt to $26 from $23 as STX is meaningfully increasing both its share repurchase plans and its dividend. The firm notes that STX reports Dec Q results Tues Jan 31 and they would be buying the stock at current levels, as they believe minimally the share repurchase suggests another $0.55 to CY12 EPS (worth at least $2 in stock) and they would argue at least 0.5x -- 1.0x in P/E expansion from the dividend increase.
11:00 am KLA-Tencor Up 5% On Earnings/Guidance (KLAC)
KLA-Tencor (KLAC $52.56 +2.30) reported second quarter earnings of $0.72 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus Estimate of $0.65.
Revenues fell 16.2% year/year to $642.5 million versus the $629.45 million consensus.
"A resurgence in demand from foundry customers drove strong order growth in the second quarter and has given KLA-Tencor excellent momentum as we begin calendar 2012."
10:54 am S&P Tech Sector Just Under Unchanged Levels
The tech sector is trading slightly higher today, ahead of losses in the broader market. Semiconductors are showing relative strength in the tech space, however, with the Philly Semi Index trading 0.4% higher. KLAC (+4.6%) is a standout, while CRUS (-5.5%) is a notable laggard in the chip index. Among other major indices, the S&P 500 is trading 0.3% lower, while the NASDAQ is trading 0.1% higher and the QQQ is 0.05% higher on the session. Among tech bellwethers, GOOG (+1.0%) is showing strength, while CSCO (-1.5%) is a notable underperformer.
In earnings last night, JNPR (-8.4%), SYNA (+3.6%), and RVBD (-21.5%) posted slight quarterly beats, but offered downside guidance. CRUS (-5.5%) and KLAC (+4.8%) posted beat and raises. VRSN (0.1%) reported a slight miss, but issued upside guidance. Elsewhere, FSL (+2.0%) reported a mixed quarter, QLGC (+4.3%) posted a beat, CLS (+6.0%) posted a mixed quarter with slightly downside guidance, and FICO (-10.7%) posted a beat and reaffirm.
Among notable analyst upgrades this morning, LOGI (+2.1%) was upgraded to Neutral at Citigroup, Needham upgraded SYNA (+3.6%) to Buy. Among downgrades, JNPR (-8.4%) was downgraded at Morgan Keegan, Auriga, and Stifel Nicolaus.
10:27 am Juniper Down 9% On Earnings/Guidance (JNPR)
Late yesterday, Juniper (JNPR $20.35 -2.02) reported fourth quarter earnings of $0.28 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.27.
Revenues fell 5.7% year/year to $1.12 bln vs the $1.12 bln consensus.
For the first quarter, the company expects to see earnings in the range of $0.11 to $0.14 versus $0.27 Capital IQ Consensus Estimate; sees first quarter revenue of $960 million to $990 million versus the $1.1 billion Capital IQ Consensus Estimate; sees gross margin in the range of 63% to 64%. |
