From Briefing.com: Weekly Recap - Week ending 06-Nov-09The S&P 500 gained every session this week, with the bulk of the gain coming on Thursday following solid results from Cisco (CSCO) and a surge in nonfarm productivity. The much talked about stock market correction continues to fail to materialize with the S&P 500 just 2.9% from its 2009 highs and up 60% from it's march low.
All ten sectors advanced during the volatile week of trade, though cyclical stocks saw the most buying interest. Industrials surged 6.1%, consumer discretionary advanced 4.7% and materials gained 5.0%. Defensive areas underperformed on a relative basis, with telecom and consumer staples both gaining just 1.0%.
In economic news, third quarter nonfarm productivity surged 9.5% in its preliminary report. That is considerably better than the consensus which called for an increase of 6.5% increase. The surge marked the largest gain in productivity since 2003. It was fueled by the sharp increase in third quarter output and the considerable drop in hours worked. With job conditions still weak, unit labor costs dropped 5.2% in the third quarter. They were expected to fall 4.2%.
October nonfarm payrolls fell 190,000 in October, which was worse than the expected decline of 175,000. Meanwhile, the unemployment rate rose to 10.2% from 9.8%, which was worse than the 9.9% consensus. The rise in unemployment was not due to more workers entering the workforce -- the labor force declined by 31,000 people as 259,000 workers left the workforce over the last month. The jump in unemployment was solely due to an increase in the number of unemployed. and reflects the continued challenges in the labor market
In other economic news, ISM Manufacturing Index for October came in at 55.7 (53.0 consensus), the ISM Services Index for October came in at 50.6 (51.5 consensus), construction spending in September spiked 0.8% (-0.2% consensus), and pending home sales for September made a 6.1% monthly increase (consensus unchanged).
In monetary policy news, the Federal Reserve didn't provide much a surprise in its statement, keeping it's language unchanged that low interest rates are warranted for an extended period of time. The Bank of England and European Central Bank also opted to keep their rates unchanged, as expected.
There were a fewer amount of big names among the 94 S&P 500 companies that reported earnings this week as Q3 earnings season starts to wind down, there was . The trend of better than expected earnings continued (75 beat), with revenue failing to match the EPS performance (45 beat).
Of the larger market cap companies reporting this week -- Cisco, CVS, Kraft (KFT), Qualcomm (QCOM) and Time Warner (TWX) -- all reported better-than-expected results. Kraft, however, came up came up short on revenue, and as a result fell 2.7% for the week. With regard to Cisco, the tech bellwether authorized $10 billion more in share buybacks issued a solid outlook during its conference call, helping its shares rise 4.3% on the week.
In other corporate news, Warren Buffet's Berkshire Hathaway (BRK.A) announced a cash and stock offer for Burlington Northern (BNI) at $100 per share. The news sent BNI up 29% for the week, with peers Union Pacific (UNP) and CSX (CSX) also posting healthy gains of 13%.
In commodity trading, gold gained nearly 6% to hit an all-time nominal intraday high of just over $1100 per ounce. Oil prices also gained in a volatile week of gain, up about 1% as the dollar dropped about 0.8%.
Index Started Week Ended Week Change % Change YTD %
DJIA 9712.73 10023.42 310.69 3.2 14.2
Nasdaq 2045.11 2112.44 67.33 3.3 34.0
S&P 500 1036.19 1069.30 33.11 3.2 18.4
Russell 2000 562.77 580.35 17.58 3.1 16.2
1:30PM Applied Materials acquires the assets of Advent Solar (AMAT) 12.41 +0.01 : Co announces it has acquired substantially all the assets, including the intellectual property, of Advent Solar for an undisclosed cash amount. Advent Solar is a developer of advanced technology for crystalline silicon (c-Si) PVs. This acquisition is expected to complement Applied's portfolio of solar PV technologies and enhance its leadership in the c-Si equipment market.
NVIDIA (NVDA 12.27) reported third quarter earnings results after the close yesterday of $0.19 per share. After excluding non-recurring items, this was $0.09 better than the First Call consensus of $0.10.
Revenue rose 0.6% to $903.2 million, which was well above the $838.1 million consensus. The company's gross margins for the quarter were 41%, also well above consensus, which was 37.3%.
Looking ahead, the company issued upside guidance for the fourth quarter, saying it expects revenue to be up slightly, approximately 2%, from the third quarter, which equates to approximately $921.0 million vs. $868.11 million consensus.
The company said, "Revenue was up from a year ago, with improvement in each of our PC, professional solutions and consumer businesses. It's great to see us shipping orders with our Tegra mobile-computing solution, and growing enthusiasm for our Tesla platform for parallel computing in the server and cloud-computing markets." |
