From Briefing.com: 4:20 pm : U.S. equity markets opened the session sharply lower on renewed European worries. International Monetary Fund officials voiced concerns over Greece being able to continue servicing its debt. In addition, Spain instated a three-month short selling ban on all stocks, while Italy did the same for financial and insurance firms. Despite the early selling pressure and flight to safety, markets recovered more than half of their losses, as sellers lacked a catalyst to push stocks to new lows.
European financials were under severe pressure this morning as sellers attacked the complex on renewed sovereign debt concerns. Traders continued to watch peripheral yields as both the Italian and Spanish 10-yr yields surged to 6.317% and 7.431% respectively. Deutsche Bank (DB 28.76, -1.29) and Barclays (BCS 9.58, -0.33) saw heavy losses of 4.3% and 3.3% respectively.
The ability for U.S. equities to see some safe-haven buying may very well rest on the performance of companies over the next few weeks. Restaurants continued to record poor performances with industry bellwether McDonalds (MCD 88.94, -2.64) missing expectations as headwinds from overseas and on rising costs of food products weighed on results. Industrial goods producer Eaton (ETN 40.57, +1.51) beat on the bottom line but failed to match revenue expectations. Elsewhere, Oil services giant Halliburton (HAL 31.51, +0.74) was one of the few bright spots as it beat on bottom and top line expectations.
The consumer discretionary sector was down 1.3%. Toy maker Hasbro (HAS 35.19, +1.35) bucked the trend today after reporting better than expected second quarter earnings. On the other hand, women's clothing retailer Wet Seal (WTSLA 2.66, -0.30) was lower after the company terminated its Chief Executive Officer and lowered second quarter guidance.
Nexen (NXY 25.90, +8.84) was up 51.8% after announcing it will be acquired by Chinese energy giant CNOOC (CEO 193.96, -8.79) for $27.50 per share in cash. The deal values Nexen at approximately $15.1 billion while keeping the total debt burden of the company at $4.3 billion. Canada’s Industry Minister has recently confirmed the deal is under foreign investment review.
GNC Holdings (GNC 37.40, -0.25) was down 0.6% after announcing the Board of Directors elected Chief Executive Officer Joseph Fortunato to replace Norman Axelrod as Chairperson of the Board. The stock opened on session lows, touching $35.50 before buyers emerged at near support dating back to the middle of June.
Thirty-eight companies are scheduled to report earnings after hours. Texas Instruments (TXN 26.82, -0.43) will be in focus, as technology stocks have been underperforming early in the earnings season. In addition, Steel Dynamics (STLD 12.22, -0.20) may provide a glimpse into the health of the construction and durable goods sectors.
Second quarter earnings continue to flow this week with notables Baidu.com (BIDU 107.10, -3.13), Altria (MO 35.49, -0.42), Apple (AAPL 603.83, -0.47), and Ford Motor Company (F 9.17, -0.04) all scheduled to release their latest quarterly results.
Treasuries saw steady selling over the course of the session after the early morning flight to safety dropped yields into record territory. Early buying saw the benchmark 10-yr yield hit an all-time low of 1.395% before selling ran it back up to its current 1.438%. A flatter yield curve has the 2-10-yr spread trading tighter at 121.5 bps.
After opening the session at 20.41, the Volatility Index, or VIX, eased to 18.62, which was a 14.3% gain for the session.DJ30 -101.11 NASDAQ -35.15 SP500 -12.14 NASDAQ Adv/Vol/Dec 509/1.53 bln/1990 NYSE Adv/Vol/Dec 712/743.1 mln/2344
3:30 pm : Crude oil struggled in negative territory for its entire pit session as the dollar strengthened in response to renewed European sovereign debt concerns. The energy component touched a session low of $87.94 per barrel in morning action and inched to a session high of $89.78 per barrel. However, a sell-off heading into the close left crude to settle with a 4.2% loss as it closed at $88.09 per barrel.
Despite opening pit trade in the red and brushing a session low of $2.99 per MMBtu moments later, natural gas was able to find buying support and pop into positive territory to a session high of $3.13 per MMBtu. After chopping around near the unchanged line in afternoon action, it settled at $3.12 per MMBtu, booking a gain of 1.3%. The stronger dollar also put pressure on precious metals.
Gold dipped to a floor session low of $1562.00 per ounce but was able to recover some losses as it traded up to a session high of $1579.70 per ounce and later settled with a 0.4% loss at $1577.10 per ounce.
Silver fell to a pit session low of $26.61 per ounce in morning action and trended higher for the remainder of its session to close at $27.02 per ounce, or 1.0% lower.DJ30 -86.24 NASDAQ -29.00 SP500 -10.29 NASDAQ Adv/Vol/Dec 564/1286.5 mln/1912 NYSE Adv/Vol/Dec 768/517 mln/2271
4:34PM Texas Instruments beats by $0.04, reports revs in-line; guides Q3 EPS, revs below consensus ( TXN) 26.82 -0.43 : Reports Q2 (Jun) earnings of $0.44 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.40; revenues fell 3.6% year/year to $3.34 bln vs the $3.34 bln consensus. Co issues downside guidance for Q3, sees EPS of $0.41-0.49, excluding non-recurring items, vs. $0.50 Capital IQ Consensus Estimate; sees Q3 revs of $3.21-3.47 bln vs. $3.55 bln Capital IQ Consensus Estimate. Compared with a year ago, lower gross profit in the quarter primarily reflects lower revenue and the associated costs from low levels of factory utilization. Compared with Q1, higher gross profit reflects higher revenue, which more than offset lower insurance proceeds related to the March 2011 earthquake in Japan. "TI revenue in the second quarter was about as we had expected. Our Analog and Embedded Processing segments grew sequentially, while our Wireless segment declined. Although we believe customers and distributors have low inventory levels, the global economic environment is causing both to become increasingly cautious in placing new orders. Our backlog grew last quarter but orders slowed in the month of June and our backlog coverage for September is lower than normal. As a result of this increased uncertainty, we currently estimate that our revenue in the third quarter will be about even with last quarter and below our seasonal average growth rate. If customer demand increases as the quarter progresses, we are ready to support higher shipments with short product lead times, a strong inventory position and available manufacturing capacity.
4:34PM Ultra Clean Holdings reports EPS in-line, revs in-line; guides Q3 EPS below consensus, revs in-line ( UCTT) 6.00 -0.16 : Reports Q2 (Jun) earnings of $0.17 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.17; revenues fell 23.8% year/year to $101.95 mln vs the $102.83 mln consensus. For Q3, co sees EPS of $0.10-0.14 vs. $0.18 Capital IQ Consensus Estimate; sees Q3 revs of $107-112 mln vs. $108.6 mln Capital IQ Consensus Estimate.
4:08PM Volterra Semi misses by $0.02, misses on revs ( VLTR) 25.22 +0.02 : Reports Q2 (Jun) earnings of $0.32 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.34; revenues rose 4.5% year/year to $43.6 mln vs the $44.4 mln consensus.
Ramtron International (RMTR) has entered into a Manufacturing and License Partnering Agreement with ROHM of Japan. Under the long-term agreement, ROHM will manufacture F-RAM-based semiconductor products for Ramtron on ROHM's established F-RAM manufacturing line.
Marvell (MRVL) and Wilocity announced a new partnership to bring tri-band Wi-Fi solutions enabled with 802.11ad to market.
TSMC (TSM) and ARM (ARMH) announced a multi-year agreement extending their collaboration beyond 20-nanometer technology to deliver ARM processors on FinFET transistors.
Research In Motion (RIMM) learned that the International Trade Commission has terminated its investigation after making a determination in favor of RIMM that the only asserted claim of Kodak's (EKDKQ) U.S. Patent No. 6,292,218 for electronic cameras is invalid.
09:21 am Cypress Semi upgraded to Hold at Cantor Fitzgerald: . Cantor Fitzgerald upgrades CY to Hold from Sell. They believe that the downside is probably limited from here and that there is the potential that 4Q12 will be better than they currently project. They believe the acquisition of RMTR would prove to be accretive to CY and would be in the best interests of both cos. However, the shares of Ramtron are trading above the offer price, and it is not clear that Cypress will prevail. They are cutting their ests for 2012 and 2013.
10:34 am S&P Technology sector trading lower as market falls on Spain worries
The tech sector is trading lower today, trailing losses in the broader market. Semiconductors are showing relative weakness with the SOX trading 2.4% lower. CREE (-5.5%) is a notable laggard in the chip index. Among other major indices, the SPY is trading 1.8% lower today, while the QQQ is down 2.3% and the NASDAQ is trading 2.4% lower on the session. Among tech bellwethers, MSFT (-3.4%) is showing notable weakness.
In earnings last night, BAH (-2.9%) lowered its FY13 revenue guidance. There was no significant news in the industry this morning. Among notable analyst upgrades this morning in the tech space, Cantor Fitzgerald upgraded CY (-7.8%) to Hold. In downgrades, VRSN (-4.9%) was downgraded to Neutral at Citigroup, CSRE (-0.3%) was downgraded to Hold at Jefferies, and ATMI (-6.8%) was downgraded to Sell at UBS. BIDU (-4.3%), VMW (-3.3%), WIT (-4.1%), STM (-2.1%), and TXN (-2.3%) are the notable names in tech scheduled to report quarterly results today after the close. |
