From Briefing.com: 4:10 pm : The major averages settled in the red as the S&P 500 lost 0.5% while Nasdaq shed 0.2%.
The three indices hovered near their respective flat lines for the majority of the day before sellers emerged in the afternoon, and drove equities to their first loss in five days.
Nine of ten sectors ended in the red with technology as the lone standout. The sector gained 0.7% and contributed to the outperformance of the Nasdaq. Better-than-expected earnings from Cisco Systems (CSCO 23.89, +2.68), and the relative strength of large components like Apple (AAPL 434.58, +5.73) and IBM (IBM 204.69, +1.37) provided support for the sector.
While technology boosted the Nasdaq, the index was held back by the weakness of biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 180.23, -3.79) fell 2.1% to trim its week-to-date gain to 0.1%. Although the biotech ETF has been the subject of some profit taking following its recent run, it remains higher by 4.6% in May.
Biotechnology also weighed on the health care space, which was the weakest defensively-oriented sector, shedding 1.0%.
Overall, the discretionary sector was the biggest laggard as homebuilders and retailers underperformed. The SPDR S&P Homebuilders ETF (XHB 31.90, -0.54) lost 1.7% after the April housing starts report missed expectations. Meanwhile, the SPDR S&P Retail ETF (XRT 76.93, -0.84) slid 1.1% after Dow component Wal-Mart (WMT 78.50, -1.36) missed on earnings and revenue.
Also of note, the Dow Jones Transportation Average appeared strong in early action, but the bellwether complex declined through the afternoon before ending with a loss of 0.8%.
In the Treasury market, the 10-yr note received notable interest after today's disappointing economic data. As a result, the 10-yr yield declined six basis points to 1.877%.
The CBOE Volatility Index (VIX 13.25, +0.44) ended higher by 3.5%, suggesting downside protection received some interest.
Today's economic data was plentiful, and largely disappointing.
Housing starts fell 16.5% in April to 853,000 from a downwardly revised 1.021 million (from 1.036 million) in March. That was the smallest number of starts since November 2012. The Briefing.com consensus expected housing starts to fall to 970,000.
Multifamily construction, which tends to be highly volatile, fell to 243,000 in April from 398,000 in March. The drop is likely a reversion to the mean as multifamily construction has been running much hotter than its 12-month average.
The initial claims level jumped to 360,000, the highest level since February (excluding the volatility from the Easter holiday problems), for the week ending May 11 from an upwardly revised 328,000 (from 323,000) for the week ending May 4. The Briefing.com consensus expected the initial claims level to increase to 330,000.
The CPI fell 0.4% in April after declining 0.2% in March. The Briefing.com consensus expected consumer prices to fall 0.2%. Excluding food and energy, core CPI increased 0.1% for a second consecutive month. The consensus expected these prices to increase 0.2%.
The Philadelphia Fed's Business Outlook showed that manufacturing activity in the Philadelphia region contracted in May. The index fell to -5.2 from 1.3 in April. The Briefing.com consensus expected the Philly Fed Index to increase to 2.5.
Tomorrow, the preliminary May Michigan Consumer Sentiment Survey and April leading indicators will be reported at 9:55 ET and 10:00 ET, respectively.DJ30 -42.47 NASDAQ -6.37 SP500 -8.31 NASDAQ Adv/Vol/Dec 1065/1.87 bln/1418 NYSE Adv/Vol/Dec 1191/684.4 mln/1827
3:30 pm :
- June crude oil extended yesterday's gains as the dollar index traded lower. The energy component briefly dipped into the red and to a session low of $94.08 per barrel but quickly recovered. It advanced to a session high of $95.57 per barrel in late morning action and eventually settled at $95.18 per barrel, booking a gain of 1.0%.
- June natural gas on the other hand, slid deeper into negative territory following bearish inventory data that showed a build of 99 bcf when a build of 95 bcf was anticipated. It touched a session low of $3.91 per MMBtu after trading as high as $4.06 per MMBtu in early morning floor trade. Unable to gain momentum, it settled 3.4% lower at $3.93 per MMBtu.
- June gold declined for a sixth consecutive session as the World Gold Council said that first quarter total gold demand fell by 13%. The yellow metal touched a session low of $1373.20 per ounce at floor trade open but managed to inch higher as the session progressed. It settled 0.7% lower at $1387.10 per ounce, slightly below its session high of $1389.10 per ounce.
- July silver lifted off its session low of $22.28 per ounce set at pit trade open and trended higher for most of its session. It spent afternoon action chopping around near the unchanged line and settled just one penny lower at $22.65 per ounce.
4:09PM Applied Materials beats by $0.03, beats on revs; guides Q3 EPS in-line ( AMAT) 14.66 -0.14 : Reports Q2 (Apr) earnings of $0.16 per share, ex items, $0.03 better than the Capital IQ Consensus Estimate of $0.13; revenues fell 22.3% year/year to $1.97 bln vs the $1.92 bln consensus.
Co issues guidance for Q3, sees EPS of $0.16-0.20 vs. $0.19 Capital IQ Consensus Estimate; sees Q3 revs of up slightly QoQ (Q2 Sales $1.97 bln Q3 Capital IQ consensus: $2.12 bln)
Applied generated orders of $2.27 bln, up 7 percent from the prior quarter, with Silicon Systems Group orders up 14 percent from the first quarter and Display orders up 41 percent sequentially. Net sales were $1.97 bln, up 25 percent sequentially. Gross margin was 43.2% on a non-GAAP adjusted basis, up from 39.8 percent in the prior quarter reflecting higher net sales and lower inventory charges. GAAP gross margin was 41.0 percent. For the third quarter of fiscal 2013, Applied expects net sales to be up slightly from the previous quarter.
"For the second quarter in a row, Applied had strong order performance of over $2 bln...We are seeing increasing pull from some of our largest strategic customers for our key enabling technologies. We remain committed to driving profitable growth."
Guidance Details: Applied expects net sales to be up slightly from the previous quarter. The company expects non-GAAP adjusted EPS to be in the range of $0.16 to $0.20. The non-GAAP adjusted EPS outlook excludes known charges related to completed acquisitions of ~$0.04 per share but does not exclude other non-GAAP adjustments that may arise subsequent to this release.
4:05PM Dell misses by $0.14, beats on revs ( DELL) 13.43 -0.02 : Reports Q1 (Apr) earnings of $0.21 per share, excluding non-recurring items, $0.14 worse than the Capital IQ Consensus Estimate of $0.35; revenues fell 2.4% year/year to $14.07 bln vs the $13.49 bln consensus. Note that Dow JOnes on Wednesday reported co would report EPS of $0.20 with rev consistent with expectations.
Given the company's announcement on Feb. 5 of a definitive merger agreement to take Dell private, the co is not providing an outlook for Q2.
Enterprise Solutions Group revenue was $3.1 billion, a 10% increase. Operating income for the quarter was $136 million, a 71% increase. Dell server and networking revenue increased 16% as the company gained share in the calendar first quarter. Dell networking continued to deliver strong growth, with a 24% revenue increase, including a 46% growth in the company's Force10 business. Dell storage revenue declined 10%.
Dell Services revenue grew 2% to $2.1 billion driven by an 11% increase in revenue for infrastructure, cloud and security services. Support and deployment revenue increased 2% and applications and business process services declined 15%. Operating income was $370 million, a 10% increase.
Dell Software revenue was $295 million, resulting in an operating loss. Dell enhanced its software capabilities during the quarter, investing in additional sales capability and research and development. Consistent with the company's business strategy when it acquired Quest Software, this business is on track to be accretive to earnings in the first quarter of fiscal year 2015.
End User Computing revenue was $8.9 billion in the quarter, a 9% decrease. Operating income for the quarter was $224 million, a 65% decrease. Dell desktop and thin-client revenue declined 2%, mobility revenue declined 16%, and software from third parties and peripherals revenue declined 6%.
Large Cap Gainers
- CSCO (23.86 +12.49%): Beat on EPS by $0.02, reported revs in-line; sees Q4 revs +4-7% yoy (~$12.16-12.51 bln) vs $12.48 bln Capital IQ Consensus Estimate, sees Q4 EPS $0.50-0.52 vs $0.51 Capital IQ Consensus Estimate; target raised at Wunderlich, Raymond James, Evercore, Nomura, RBC Capital Mkts, and at MKM Partners.
- NTAP (38.96 +7.56%): Elliot Management's most recent qtrly filing (13F) reveals a ~403K share stake in NTAP (down from ~686K held at the end of 2012), as well as calls (~437K) and puts (~911K) at the end of Q1.
AMD (3.77 -13.93%): Downgraded to Sell from Neutral at Goldman; Bloomberg discussed cautious comments on AMD; Bernstein analyst said 'worried about core business'.
10:29AM Freescale Semi subsidiary plans to offer $750 mln aggregate principal amount of senior secured notes ( FSL) 16.89 +0.39 : Co announced that Freescale Semiconductor, its wholly owned indirect subsidiary, plans to offer, subject to market and other conditions, $750 million aggregate principal amount of senior secured notes to extend a portion of its debt maturities and reduce its interest expense. Freescale intends to use the net proceeds from the offering of the Notes to redeem all of its outstanding 10.125% Senior Secured Notes due 2018 in accordance with the indenture governing those notes, and to pay the related premium and fees. The foregoing does not constitute a notice of redemption for any outstanding notes.
- ANADIGICS (ANAD) announced that its AWL9581 802.11ac front-end IC, AWT6651 ProEficient power amplifier, AWT6624 HELP4 PA, and AWC6323 HELP3E dual-band PA enable wireless connectivity in the Samsung (SSNLF) Galaxy S 4.
- Riverbed Technology (RVBD) announced that its Cascade Profiler 9.6, Cascade Shark 9.6, Cascade Gateway 9.6, and Cascade Pilot 9.6, from its Riverbed Performance Management product family, have achieved an EAL3+ certification under the Common Criteria for Information Technology Security Evaluation and Certification Scheme.
8:03AM Axcelis receives significant order for high performance upgrade from leading chip manufacturer ( ACLS) 1.43 : Co announced that it has received a multiple system upgrade order from a leading semiconductor manufacturer based in Asia for Axcelis' new GSD Series High Performance End Station upgrade, designed to significantly enhance system productivity and process performance. The order is valued over $1.4 million. The foundry deployed the upgrade to increase manufacturing capacity in order to meet customer demand, and immediately realize lower operating costs.
6:00AM JA Solar repays $119 mln of its convertible notes due May 2013 ( JASO) 5.72 : Co announced that it has repaid at maturity a total of $119 million, comprising the principal amount and accrued interest, of its 4.5% convertible notes due May 15, 2013.
Micron Technology (MU) announced the Tokyo High Court's issuance of an order dismissing creditor appeals of the Tokyo District Court's approval of Elpida Memory, Inc.'s reorganization plan. Elpida's reorganization plan calls for Micron to sponsor the reorganization under which Elpida will join the Micron group of companies.
Dell (DELL) announced an expanded and stronger Dell Precision workstation portfolio that includes the smallest tower workstation chassis in its class, the Dell Precision T1700 small form-factor, and the Dell Precision R7610. In addition, the Dell Precision family features a more powerful and reliable Dell Precision T1700 Mini-Tower
Mellanox Tech (MLNX) to acquire Kotura at a total cash purchase price of approximately $82 million; expects transaction to be accretive to full fiscal year 2014 earnings by approximately $0.01 to $0.03 per share on a non-GAAP basis.
Glu Mobile (GLUU) announced immediate support for Google (GOOG) Play game services, a cross-platform game service enabling new in-game features and cross screen gaming. Immediately live in Glu's Eternity Warriors 2, Google Play game services leverages player login through Google+ to connect a global audience of mobile gamers.
Cisco Systems (CSCO) reported third quarter earnings of $0.51 per share, excluding non-recurring items, $0.02 better than the Capital IQ consensus of $0.49, while revenues rose 5.4% year/year to $12.22 billion versus the $12.18 bln consensus. Cash flows from operations were $3.1 bln for the third quarter of fiscal 2013, compared with $3.3 billion for the second quarter of fiscal 2013, and compared with $3.0 bln for the third quarter of fiscal 2012. Cash and cash equivalents and investments were $47.4 billion at the end of the third quarter of fiscal 2013, compared with $46.4 bln at the end of the second quarter of fiscal 2013, and compared with $48.7 billion at the end of fiscal 2012. Cisco repurchased ~41 mln shares of common stock under the stock repurchase program at an average price of $20.85 per share for an aggregate purchase price of $860 mln. As of April 27, 2013, Cisco had repurchased and retired 3.8 bln shares of Cisco common stock at an average price of $20.35 per share for an aggregate purchase price of approximately $77.7 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is ~$4.3 bln with no termination date. "Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the US and other parts of the world which are encouraging. We have the right products, the right solutions and our customers are coming to us to solve their biggest business problems. The pace of change is increasing and Cisco is well positioned."
NQ Mobile (NQ) reported first quarter earnings of $0.19 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.19, while revenues rose 108.0% year/year to $33.24 million versus the $32.98 million consensus. Cumulative registered user accounts were 326.6 million as of March 31, 2013, compared with 172.0 million as of March 31, 2012 and 283.4 million as of December 31, 2012. Average monthly active user accounts for the quarter ended March 31, 2013 were 111.1 million, compared with 60.1 million for the corresponding period of 2012 and 97.7 million for the quarter ended December 31, 2012. Average monthly paying user accounts for the quarter ended March 31, 2013 were 9.2 million, compared with 6.5 million for the corresponding period of 2012 and 8.9 million for the quarter ended December 31, 2012.Co issues upside guidance for Q2, sees Q2 revs of $38.5-38.8 million versus the $38.31 million consensus. The company issued in-line guidance for fiscal year 2013 with revenues of $179-184 million (raised from $178-183 million) versus the $179.19 million consensus.
Acxiom (ACXM) reported fourth quarter earnings of $0.19 per share, excluding non-recurring items, $0.03 better than the Capital IQ consensus of $0.16, while revenues fell 3.5% year/year to $277.13 million versus the $280.14 mln consensus. The company issued downside guidance for fiscal year 2014 with EPS of flat at $0.76 versus the $0.80 consensus and revenues of $1.099 billion versus the $1.12 billion consensus. |
