From Briefing.com: 1:05 pm : After starting the day flat, a bullish bias intraday left stocks to close with decent gains ahead of the holiday. The S&P 500 finished the shortened session up by 0.6%.
The early bid was helped by a better-than-expected Factor Orders report, which came in at +0.7% vs. the +0.4% Briefing.com consensus. Equities moved to session highs on the data, after drifting higher off the open.
The energy sector was the biggest outperformer today, gaining 2.4% alongside strength in crude oil, which surged 4.6%. Crude oil is now up roughly 13% since last week's low of $77.20 per barrel that was set during Thursday's pit action. The move began on Friday in response to stronger sentiment and a drop in the dollar following the agreement between EU leaders to provide relief fund access to sovereign debt and Spanish banks. Oil saw continued strength yesterday on headlines suggesting that Iranian lawmakers are drafting a bill to propose blocking the Strait of Hormuz for oil tankers. Strength continues today as buyers act on more reports stating that delivery of millions of barrels of crude oil from Iran to China may be at risk following freight disputes, and as the U.S. sends additional military units to the Persian Gulf in order to deter Iran from blocking the Strait of Hormuz.
European markets gained for third consecutive session. Resource-related companies outperformed today alongside the strength in commodities. The current theme in the marketplace is central bank action, and investors are looking ahead to Thursday's ECB meeting, where expectations of a 25-bp cut are being priced in. Germany's DAX finished higher by 1.3% and the UK's FTSE gained 0.8%.
In Asia, China's non-manufacturing PMI came in at a 3-month high, and there were reports suggesting the potential for more reserve requirement cuts in China before the end of 2012. China's Shanghai Composite showed a slight gain of +0.1%, while Japan's Nikkei was +0.7%. Hong Kong's Hang Seng index finished +1.5%, after it was closed for a holiday yesterday.
U.S. corporate news was light. Microsoft (MSFT 30.76, +0.20) recouped initial losses and finished the day higher by 0.7% after announcing it would write down its Online Services Division goodwill by $6.2 billion. The non-cash charge is mostly related to its 2007 aQuantive acquisition. After a busy day of M&A news yesterday, there was another deal announced today. MModal (MODL 14.02, +1.09) will be acquired by One Equity Partners, the private investment arm of JP Morgan Chase (JPM 35.88, -0.10) for $14.00 per share in an all-cash transaction. The transaction is valued at approximately $1.1 billion and the purchase price represents an 8% premium to yesterday's closing price for MModal.
U.S. markets will be closed tomorrow for the 4th of July holiday.DJ30 72.43 NASDAQ 24.85 SP500 8.51 NASDAQ Adv/Vol/Dec 1763/993 mln/657 NYSE Adv/Vol/Dec 2374/458 mln/633
12:30 pm : August crude oil has been on a steady climb during today's pit trade as buyers reacted to strong factory orders data and reports suggesting that delivery of millions of barrels of crude oil from Iran to China may be at risk following freight disputes. The energy component touched a session high of $88.04 per barrel and is now just below that level, sporting a gain of over 4%.
Natural gas also has been in positive territory, trading as high as $2.87 per MMBtu in morning floor action. It has since slightly pulled-back but is still up over 1%.
Precious metals have been advancing gains in their pit sessions. Gold recently touched a floor session high of $1625.70 per ounce and is currently up about 1.5%. Silver climbed to a pit session high of $28.44 and is now just below that level, up 2.9%.
Briefing.com note: Despite an early close in U.S. equity markets today, trading in oil, nat gas, gold, silver and copper will all close at their normal times today.DJ30 +47.49 NASDAQ +19.9 SP500 +6.35 NASDAQ Adv/Vol/Dec 2253/767.4 mln/761 NYSE Adv/Vol/Dec 2223/283 mln/727
8:01AM Finisar agrees to acquire RED-C optical networks for ~ $23.8 mln in cash in initial consideration for all of RED-C's outstanding equity (FNSR) 14.36 : Co announced today that it has entered into an agreement to acquire all of the outstanding equity interests in RED-C Optical Networks, Inc., a Delaware corporation, with subsidiary operations in Tel Aviv, Israel. The acquisition will broaden Finisar's product lines primarily for telecom applications by adding key amplification technologies, including Erbium Doped Fiber Amplification, Raman amplification and dynamic Hybrid amplification. These technologies are considered critical for ROADM line cards and are increasingly important in cost-effectively extending the reach of transceivers and transponders especially for 100 Gb/s and 40 Gb/s coherent transmission, ultra-long repeaterless links, and low latency networks.
Microsoft (MSFT $30.28 -0.28) announced that it will take a non-cash, non-tax-deductible income statement charge for Q4 of FY12 for the impairment of goodwill in its Online Services Division segment, mostly related to its 2007 aQuantive, acquisition. Under accounting guidelines, company's are required to conduct an annual goodwill impairment test for each business unit. Goodwill arises in an acquisition when the fair value paid for a business exceeds the value of the identifiable net assets. The goodwill in the Online Services Division was substantially the result of the 2007 acquisition of aQuantive. As a result of its 2012 impairment review, co has determined that a write down of its Online Services Division goodwill of approximately $6.2 billion is required. Bing search share in the U.S. has been increasing, revenue per search has been growing, MSN is the No. 1 portal in 29 markets worldwide and the company's partnership with Yahoo! has continued to expand geographically. While the Online Services Division business has been improving, the company's expectations for future growth and profitability are lower than previous estimates. The company completed its acquisition of aQuantive on Aug. 13, 2007, in an all-cash transaction valued at just over $6.3 billion, While the aQuantive acquisition continues to provide tools for Microsoft's online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write down. Co does not expect this accounting write down to affect its ongoing business or financial performance.
TranSwitch (TXCC $1.13 0.04) issued in line guidance for the second quarter with revenues of $3.5-4.0 million versus the $3.58 million consensus, The Company also announced that it immediately plans to implement a restructuring which will result in annual savings of ~$8.0 mln and that these savings will begin to be recognized in the third quarter of 2012. Of this amount, TranSwitch expects approximately $4.6 million in annual savings from reduced employee-related costs and the remaining $3.4 mln from other cost savings initiatives.
09:10 am Microsoft shares fell 1% following news of Q4 charge
Microsoft (MSFT $30.15 -0.41) announced that it will take a non-cash, non-tax-deductible income statement charge for Q4 of FY12 for the impairment of goodwill in its Online Services Division segment, mostly related to its 2007 aQuantive, acquisition. Under accounting guidelines, company's are required to conduct an annual goodwill impairment test for each business unit. Goodwill arises in an acquisition when the fair value paid for a business exceeds the value of the identifiable net assets. The goodwill in the Online Services Division was substantially the result of the 2007 acquisition of aQuantive.
As a result of its 2012 impairment review, co has determined that a write down of its Online Services Division goodwill of approxmately $6.2 billion is required. Bing search share in the U.S. has been increasing, revenue per search has been growing, MSN is the No. 1 portal in 29 markets worldwide and the company's partnership with Yahoo! has continued to expand geographically. While the Online Services Division business has been improving, the company's expectations for future growth and profitability are lower than previous estimates. The company completed its acquisition of aQuantive on Aug. 13, 2007, in an all-cash transaction valued at just over $6.3 billion, While the aQuantive acquisition continues to provide tools for Microsoft's online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write down. Co does not expect this accounting write down to affect its ongoing business or financial performance. |
