From Briefing.com: 4:25 pm : The major indices managed to finish Tuesday mixed after spending the majority of the day in negative territory following a disappointing pending home sales report. The Dow and the S&P 500 suffered negligible losses given the scope of Monday's gains while the Nasdaq tacked on another six points.
The National Association of Realtors reported that annualized pending home sales for August dropped 6.5% from July and declined 21.5% compared to last year. The consensus estimate called for a drop of 2.0% in August.
The big news before the open was that TD Bank Financial Group (TD 72.65, -4.29) plans to acquire Commerce Bancorp (CBH 39.47, -0.14) for $8.5 billion. At 13:20 ET the companies confirmed TD Bank Financial Group has signed a definitive agreement to purchase Commerce Bancorp in a 75% stock and 25% cash transaction.
On a related note, J.C. Flowers made mid-day headlines after making a revised offer for student lender SLM Corp (SLM 50.09, +0.19), otherwise know as Sallie Mae. The offer is now for $50 per share plus warrants with a potential payout of up to $10 per share.
Last week, J.C. Flowers, Bank of America (BAC 51.72, +1.08) and JPMorgan Chase (JPM 47.16, +0.35) pulled out of their planned $60 per share buyout offer citing a changed economic environment. Sallie Mae scoffed at today's offering, stating in a press release that they, "expect Bank of America and JPMorgan Chase to honor their contract, not breach the contract."
The major sectors finished the day mixed, with five of the ten sectors in the green. Continuing yesterday's leadership role, the financial sector (+0.8%) paced the market today. Consumer discretionary (+0.3%) finished second.
The energy sector was down as much as 2.0% earlier in the session, but recovered some lost ground to finish the day down 1.3%. Materials (-0.5%), a leader yesterday, was also a notable laggard.
Small-cap and mid-cap stocks performed much better than their large-cap counterparts on Tuesday. The Russell 2000 finished the day up 0.9% while the S&P 400 Mid-Cap index finished up 0.5%.
The dollar index made some decent gains today and finished up 0.46%. The strengthening dollar weighed on commodities today, as evidenced by the 1.0% decline in the CRB index. Crude oil futures for November delivery were down as much 1.0%, but managed to rebound to the unchanged mark by market close.
Tomorrow, the Institute for Supply Management will release its September services report. Briefing.com expects the reading to come in at 54.0 versus 55.8 in the prior month. Per usual, the Department of Energy will release its weekly inventory report at 10:30 ET. DJ30 -40.24 NASDAQ +6.12 R2K +0.9% SP400 +0.5% SP500 -0.41 NASDAQ Dec/Adv/Vol 1204/1745/1.77 bln NYSE Dec/Adv/Vol 1371/1896/1.27 bln
4:13PM Micron beats by $0.01, beats on revs (MU) 11.75 +0.40 : Reports Q4 (Aug) loss of $0.21 per share, $0.01 better than the Reuters Estimates consensus of ($0.22); revenues rose 4.7% year/year to $1.44 bln vs the $1.41 bln consensus. Q4 and Y07 results were heavily influenced by industry supply/demand dynamics that depressed average selling prices for memory products. Co's net sales for Q4 were up 11% q/q due to higher megabit sales of memory products. Co's Q4 megabit sales were up approx 25% and 60% q/q for DRAM and NAND Flash memory products, respectively, while average selling prices for both DRAM and NAND Flash memory products were approx -15%. In Q4, co began executing initiatives to drive greater cost efficiency and revenue growth. Co recorded a restructure charge in the Q4 of $19 mln comprised primarily of employee severance and related costs resulting from a reduction in the company's workforce in the quarter. Co continues to pursue opportunities to lower its overhead costs through the utilization of partnerships and other outside relationships. Selling, general and administrative expenses in Q4 include increased costs associated with the company's outstanding legal matters.
3:59PM Market View: Mixed start, mixed finish as market averages consolidate (TECHX) : The stock market opened on mixed note following Monday's solid, broad based gains with sideways to slightly weaker trade dominating into the afternoon. Overall the decline/profit taking was minor considering the extent of the recent run with some improvement noted during the afternoon allowing the Nasdaq Comp to set a minor new multi-year high. Home Construction was the top performing sector on the day. While it did falter after another round of weaker than expected data (Pending Home Sales -6.5% vs. consensus of -2.0) it is finishing with a solid gain +4.8% and near the mid-point of the afternoon range. Other strong performing sectors included: Airline +3.2%, Broker +1.4%, Bank +1%, Casino +1%, REITs +0.9%. Groups on the defensive were led by Gold/Silver -3.2%, Oil -1.4%, Energy (XLE -1.1%), Biotech HOLDRs -1.1% and Defense -1%. Technically the action conforms to a typical short term consolidation as long as afternoon lows remain intact. The focus for the S&P 500 on a break above yesterday's high of 1549.02 is at its 52-wk close/intraday highs at 1553/1555.
9:03AM Linear Tech announces that SEC has terminated its inquiry regarding historical stock option grant practices (LLTC) 35.34 : Co announces independent manufacturer of high performance linear integrated circuits, announced today that it received notice from the SEC that the investigation concerning the co's historical stock option grant practices had been completed and that no enforcement action was recommended.
09:07 am Palm (PALM)
Palm (PALM 16.00) shares traded lower on Tuesday, losing nearly 5% in pre-market activity, after the mobile device maker posted a loss in its fiscal first quarter and offered a disappointing outlook for the current period as it faces increasing competition from the likes of Apple (AAPL 156.34) and Research In Motion (RIMM 98.66). The stock is off about 18% since reaching a 52-week high in mid-March.
For the latest quarter, Palm reported a net loss of $841,000, or ($0.01) per share, compared with a year ago profit of $16.5 million, or $0.16 per share. Excluding stock options expense and other one-time items, the company earned $0.09 per share. Revenue, meanwhile, edged up 1.4% year/year to $360.8 million, with smart-phone sell through up 21% to 689,000 units.
The latest results were slightly ahead of Wall Street's expectations and in line with a pre-announcement by the company last month. Analysts on average were expecting earnings of $0.08 per share on revenue of $360.2 million.
Palm also issued a weak forecast for the current second quarter, amid increasing competition for its smart-phones. The company expects adjusted earnings of $0.06 to $0.08 per share on revenue between $370 to $380 million. Analysts, however, were looking for earnings of $0.10 per share on revenue of $396.82 million.
--Richard Jahnke, Briefing.com |
