From Briefing.com: 4:30 pm : Stocks spent the session chopping along listlessly as market participants monitored the euro and digested a large batch of BP headlines and a the latest dose of economic data.
Trade was initially guided by action in the euro, which had come under pressure after yield spreads widened on Portugal and Spain's debt. With Spain scheduled to meet with authorities from the European Union and International Monetary Fund there was increased speculation that the country is in need of financial aid. The euro was down as much as 0.6% against the greenback and temporarily reversed that loss, but it still finished with a 0.2% loss at $1.23.
A clear leader never emerged from this session's action. Only the stodgy utilities sector traded with a steady gain. It settled 0.6% higher.
Market participants were hit with a barrage of headlines regarding BP (BP 31.85, +0.45) that stirred volatility in the stock. Shares of BP had been backed down to trade near their lows, but support near those lows resulted in a squeeze higher. The stock saw further support following its decision to suspend its dividend for the rest of this year and also to establish a $20 billion escrow fund for claims that stem from the Gulf oil spill. Those decisions seemed to remove some uncertainty about the company's compliance with government requests as a remedy for the spill is sought. Moreover, reports that bond guru Bill Gross purchased a bundle of BP debt provided a vote of confidence in the company.
In other corporate news, FedEx (FDX 78.07, -4.94) posted better-than-expected earnings of $1.33 per share for the latest quarter, but that was overshadowed by a forecast that called for fiscal 2011 earnings that would range from $4.40 to $5.00 per share, which is below Wall Street's current consensus forecast for earnings of $5.05 per share. The stock suffered its worst single-session slide in six months.
Shares of Nokia (NOK 8.77, -1.05) also slid sharply following a disappointing outlook. The stock dropped more than 10% after the company stated that it expects second quarter net sales for devices and services to be at the lower end or slightly below the previously stated range of 6.7 billion to 7.2 billion euros. The company is suspected of feeling competitive pressures from Apple (AAPL 267.56, +7.56) in the handset market; shares of AAPL outperformed and helped lead the Nasdaq 100 to a 0.4% gain, though the Nasdaq Composite closed flat.
Economic data for the day consisted of the May Producer Price Index, which fell 0.3% month-over-month when a 0.5% monthly decline had been widely expected. Excluding food and energy, producer prices made a 0.2% monthly increase, which is essentially in step with the 0.1% monthly increase that had been expected.
Housing starts and building permits disappointed. Specifically, housing starts for May dropped 10% month-over-month to an annualized rate of 593,000 units, which is well below the rate of 655,000 units that had been widely expected. Building permits for May dropped 5.9% month-over-month to an annualized rate of 574,000, which is well below the expected rate of 631,000.
Industrial production for May increased 1.2%, which bested the 0.9% increase that had been anticipated. Capacity utilization hit 74.7, which is in-line with the 74.5% that was widely forecast.
Advancing Sectors: Utilities (+0.6%), Health Care (+0.3%), Tech (+0.2%)
Declining Sectors: Consumer Discretionary (-0.6%), Consumer Staples (-0.5%), Industrials (-0.2%), Energy (-0.2%), Materials (-0.1%)
Unchanged: Financials, Telecom DJ30 +4.69 NASDAQ +0.05 NQ100 +0.4% R2K -0.4% SP400 -0.4% SP500 -0.62 NASDAQ Adv/Vol/Dec 1063/1.94 bln/1563 NYSE Adv/Vol/Dec 1245/1.17 bln/1796
5:00PM Kulicke & Soffa CEO establishes rule 10b5-1 stock trading plans (KLIC) 8.14 : Co announced that C. Scott Kulicke, Chief Executive Officer, has modified an existing stock trading plan to sell K&S common stock and established a new trading plan to sell certain shares granted to him as equity compensation that are scheduled to vest in October 2010. Mr. Kulicke entered into these plans in connection with his scheduled retirement and as part of his personal long-term strategy for asset diversification.
11:43AM Apple statement on iPhone 4 pre-orders (AAPL) 264.90 +5.25 : Co stated that its carrier partners took pre-orders for more than 600,000 of Apple's new iPhone 4. It was the largest number of pre-orders Apple has ever taken in a single day.
9:02AM Mattson receives multiple Suprema system orders from leading foundry in Asia (MTSN) 4.00 : Co announced that a semiconductor foundry based in Asia has placed multiple orders for its Suprema photoresist strip system. The co noted that the orders come from multiple production fabs from its long standing customer, and the systems would be used for all photoresist strip processes on both front-end-of-line and back-end-of-line applications. The tool shipments will start in the current quarter and continue into 2011.
9:01AM FormFactor announces cost reduction measures (FORM) 11.84 : Co announces cost reduction measures targeted to lower the company's operating expenses. As part of this effort, the company will reduce its total workforce by approximately 8%. FormFactor expects to incur approximately $5 million in restructuring charges related to the plan, which will be recorded in the second quarter of fiscal 2010.
8:03AM Vishay declares spin-off dividend of VPG shares (VSH) 9.03 : Co board of directors has declared a pro rata dividend of the outstanding shares of VPG capital stock owned by co that will result in the complete separation of the two companies. The targeted distribution date will be July 6, 2010, subject to the satisfaction of all conditions to the spin-off, including declaration of effectiveness of VPG's registration statement filed with the Securities and Exchange Commission relating to the spin-off. If the conditions are not satisfied in time for a July 6, 2010 distribution, the distribution date will be scheduled to occur on or before August 24, 2010, and would be expected to be August 2, 2010. On the distribution date, co common stockholders of record as of 5:00 p.m. on June 25, 2010, the record date for the distribution, will receive 1 share of VPG common stock for every 14 shares of co common stock they hold, and co Class B common stockholders of record as of 5:00 p.m. on June 25, 2010 will receive 1 share of VPG Class B common stock for every 14 shares of co Class B common stock they hold. Fractional shares of VPG common stock and VPG Class B common stock will not be distributed to co stockholders. Instead, the fractional shares of VPG common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in the form of cash payments to co stockholders who would otherwise be entitled to receive a fractional share of VPG common stock. Holders of co Class B common stock will be compensated by VPG for fractional shares of VPG Class B common stock they were entitled to receive based upon the same price used to cash out the fractional shares of VPG common stock.
8:02AM Nokia lowers devices & services Q2 outlook and updates the FY10 outlook (NOK) 9.82 : Co now expects Q2 Devices & Services net sales to be at the lower end or slightly below previously expected range of EUR 6.7-7.2 bln primarily due to lower than previously expected average selling prices and mobile device volumes. Co now expects Q2 Devices & Services non-IFRS operating margin to be at the lower end or slightly below previously expected range of 9% to 12% primarily due to a lower than previously expected gross margin. Co continues to expect industry mobile device volumes to be up approximately 10% in 2010, compared to 2009 (based on its revised definition of the industry mobile device market applicable beginning in 2010). Co continues to target its mobile device volume market share to be flat in 2010, compared to 2009. Co now expects Devices & Services non-IFRS operating margin to be at the lower end of, or below, its previously targeted range of 11% to 13% for the full year 2010. Co also expects its mobile device value market share to be slightly lower in 2010 primarily due to the competitive situation at the high-end of the market and shifts in product mix.
8:02AM MEMC Elec: SunEdison acquires two solar PV projects from TransAlta (WFR) 11.69 : The co, a division of WFR, announces its purchase of two ground-mount solar photovoltaic (PV) development projects in Ontario from TransAlta, Canada's largest publicly traded generator and marketer of electricity and renewable power. This acquisition is part of SunEdison's ongoing activities to accelerate the development of solar PV projects in Ontario. Under the terms of the sale, SunEdison acquired more than 300 acres of land across two sites near Sandhurst, Ontario (south of Napanee). The first site will be used to develop and construct a 10-MW Renewable Energy Standard Offer Program (RESOP) project. The second site will be developed for Ontario's Feed-in-Tariff (FIT) program. |
