From Briefing.com: 4:30 pm : The major indices opened sharply higher on Tuesday without a specific catalyst, but eventually ended the day with modest losses due to weakness in financials and tech as inflation concerns weighed on sentiment. Although the declines are slight, when compared to this session's highs they are more significant. The Dow, Nasdaq and S&P fell 1.3%, 2.0% and 1.0%, respectively, from their session highs to their closing levels.
Financials (-0.8%) once again weighed on the broader market, with investment services posting the largest decline. The Wall Street Journal reported Lehman Brothers (LEH 53.57, -1.20) may face its rockiest quarter since the mortgage crisis began, noting it may face $1.3 billion in additional write-downs. Also adding to the selling pressure was news that Credit Suisse (CS 48.22, -2.66) had overvalued assets by about $2.85 billion, with the company blaming a small number of traders for the write-down.
Tech (-1.0%) was also a laggard. Internet stocks saw the most selling pressure. Google (GOOG 508.95, -20.69) was the main laggard with a 4% decline. Silicon Alley Insider noted Google may face near term pressure on revenues due to "accidental" advertising clicks that were stated in the company's 10-K. Yahoo! (YHOO 29.01, -0.65) declined after Bill Gates said Microsoft (MSFT 28.17, -0.14) won't raise its bid for the company, according to Reuters. Also weighing on Yahoo's stock are reports that Microsoft is preparing for a proxy fight.
Shares of AT&T (T 35.89, -1.99) and Verizon (VZ 35.34, -2.49) got clipped after Verizon announced it is offering a $99.99 per month unlimited wireless plan. AT&T quickly responded with a matching plan of its own. Traders fear a pricing war will crimp profits for both of the Dow components. As a result, telecom (-5.1%) finished the day as the main laggard.
A strong $4.51 gain in crude oil provided a lift to the energy sector. Crude was up on news of an explosion yesterday at a Texas refinery that shut down its operations, unrest in Nigeria and speculation that OPEC may cut output. Crude hit an all-time intraday high of $100.10 per barrel, and settled at an all-time closing high of $100.01.
Likewise, the materials sector (1.9%) was a standout due to a strong advance in commodities price. Agriculture companies Monsanto (MON 117.87, +2.52) and Mosaic (MOS 109.41, +6.41) provided leadership. Gold producer and Briefing.com Active Portfolio holding Newmont Mining (NEM 50.48, +2.59) posted a hefty gain as gold advanced $23.90 to $930.00 per ounce.
The soaring commodities fueled inflation concerns, spurring a sell-off in Treasuries. The 30-year bond shed 47 ticks, sending its yield up to 4.67%. The market will get an inflation reading tomorrow, with January's CPI reading set for release at 8:30 ET.
In earnings news, Wal-Mart (WMT 49.66, +0.22) reported earnings of $1.04 per share, topping expectations by two cents. The company issued conservative guidance for its first quarter and fiscal 2009, which limited the stock's advance.
Also making headlines was news that Fidel Castro will step down as president and commander in chief of Cuba. Due to the country's minuscule economy, this news had a limited effect on the stock market. DJ30 -10.99 NASDAQ -15.60 NQ100 -0.9% R2K +0.1% SP400 +0.1% SP500 -1.21 NASDAQ Dec/Adv/Vol 1528/1392/1.99 bln NYSE Dec/Adv/Vol 1379/1763/1.43 bln
4:35PM Ultra Clean Holdings misses by $0.02, beats on revs; guides Q1 in-line (UCTT) 10.13 -0.08 : Reports Q4 (Dec) earnings of $0.10 per share, $0.02 worse than the First Call consensus of $0.12; revenues fell 13.7% year/year to $92.8 mln vs the $89.9 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.09-0.15, excluding non-recurring items, vs. $0.13 consensus; sees Q1 revs of $90-97 mln vs. $92.2 mln consensus. Co says its results reflect very challenging industry conditions. Though industry demand was down, increased year-end rescheduling actions resulted in inefficiencies which drove higher operating costs.
4:05PM Hewlett-Packard beats by $0.05, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY08 EPS above consensus, revs above consensus (HPQ) 44.34 +0.47 : Reports Q1 (Jan) earnings of $0.86 per share, excluding non-recurring items, $0.05 better than the First Call consensus of $0.81; revenues rose 0.6% year/year to $28.47 bln vs the $27.6 bln consensus. Co issues upside guidance for Q2, sees EPS of $0.83-0.84, excluding non-recurring items, vs. $0.82 consensus; sees Q2 revs of $27.7-27.9 bln vs. $27.43 bln consensus. Co issues upside guidance for FY08, sees EPS of $3.50-3.54, excluding non-recurring items, compared to previous guidance of $3.32-3.37, vs. $3.36 consensus; sees FY08 revs of $113.5-114.0 bln, compared to previous guidance of approx $111.5 bln, vs. $111.7 bln consensus.
LA Times: MOT has sued RIMM, claiming that the Canadian co's BlackBerry wireless e-mail device violates seven U.S. patents covering mobile-communications technology. MOT said RIMM was using the inventions without permission and asked a federal judge in Marshall, Texas, to order a stop. Motorola also is seeking cash compensation for past infringement of the inventions, according to the complaint filed Saturday. Research in Motion "willfully" infringed the patents, causing "irreparable harm," Motorola said in the complaint... WSJ: The British Broadcasting Corp. plans to sell some television shows in the United Kingdom through AAPL's popular iTunes Internet shop, according to a person familiar with the situation. The deal is likely to serve as test as to whether many British viewers are prepared to pay to download TV shows over the Internet. If successful, the BBC might expand the arrangement, the person said... JAVA has picked TSM to build chips that Sun designs, stepping into a role that TXN played for nearly two decades. The shift is an outgrowth of a decision a year ago by Texas Instruments to stop developing processes for fabricating chips. New production processes, which shrink circuitry on chips to improve performance and data-storage capacity, require big investments that fewer companies are willing to make... JPM is dedicating $750 mln to set up a private-equity unit to invest its own capital alongside that of clients in Asia, according to people familiar with the situation... DigiTimes: INTC is planning to rename its brand name for the upcoming notebook Montevina platform to Centrino 2 in order to clear up confusion for consumers, according to sources at notebook makers. Intel is set to launch the Centrino 2 platform in Computex Taipei 2008 along with six 45nm notebook CPUs, all with a 1066MHz FSB. Core speeds will range between 2.26-3.06GHz and prices between $209-851 in 1000-unit tray quantities...
6:22AM Wal-Mart beats by $0.02; guides Q1 EPS in-line; guides FY09 EPS below consensus (WMT) 49.44 : Reports Q4 (Jan) earnings of $1.04 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $1.02; revenues rose 8.3% year/year to $106.27 bln vs the $106.91 bln consensus. Co issues in-line guidance for Q1, sees EPS of $0.70-0.74 vs. $0.74 consensus. Co issues downside guidance for FY09, sees EPS of $3.30-3.43 vs. $3.44 consensus.
3:03AM SanDisk and Toshiba to construct new advanced fabrication facility in Japan (SNDK) 25.37 : Co and Toshiba announce that they have signed a non-binding memorandum of understanding to form a new production joint venture and construct a new 300 millimeter wafer fab in Japan. The two companies will now select the plant site, targeting a production start-up date in 2010.
2:18AM ASML initiates dividend payments, starting with EUR 0.25 per share over 2007 (ASML) 24.73 :
1:35AM Sanmina-SCI to exit personal computing business (SANM) 1.63 : Co announces it has signed a definitive agreement with Foxteq Holdings, a member of Foxconn Technology Group, for the sale of certain assets of its personal computing business and associated logistics services located in Hungary, Mexico and the U.S. Separately, SANM announces that it has entered into a non-binding memorandum of understanding with Lenovo Group Ltd to transition responsibility of its Monterrey, Mexico personal computing operation and to sell certain of its related assets to Lenovo. The Co anticipates that the proceeds from the Foxteq transaction, along with the disposition of certain other related assets associated with, but not included in the Foxteq transaction, will be between $80 and $90 mln, depending upon the book value of the assets at the time of closing.
09:25 am Texas Instruments: UBS reiterates Neutral. Target $36.5 to $33.5. UBS cuts their tgt on TXN to $33.50 from $36.50 folowing the last Mobile World congress, they believe that TXN continues to face competitive threats in its baseband and Apps processor business. The firm says although TXN continues to gain share in the high margin analog business, the wireless pressures should keep the stock range bound.
09:24 am Broadcom: UBS reiterates Buy. Target $39 to $35.5. UBS cuts their tgt to $35.50 from $39 but leave estimates unchanged following recent 3GSM checks reinforcing their prior comments that the Nokia EDGE baseband ramp will more meaningfully impact 2Q09 sales than in late 2008. Samsung 2G/3G design wins should ramp in earnest post 1Q08. Firm believes the co will continue to benefit from Nokia Bluetooth exposure though Tier 2 audio headset wins to date are relatively benign. They also believe it will take time for BRCM to penetrate the Apps processor market given developing technology and increasing mkt competition.
09:21 am Qualcomm: Oppenheimer reiterates Outperform. Target $46 to $52. Oppenheimer raises their tgt on QCOM to $52 from $46. They note three elements that are making firm more positive on the stock: 1) improvement in investor sentiment surrounding the legal proceedings with NOK and BRCM; 2) share gains with its 3G chipsets at key OEMs; and what they see as 3) a higher likelihood of EPS upside based on the pace of 3G adoption and strong growth in the smartphone segment. |
