From Briefing.com: 4:30 pm : The stock market turned a 1% loss into a 1% gain Tuesday. The swing wasn't inspired by any particular piece of news, but came gradually as sellers slowed their efforts in the face of technical support, which eventually gave way to short covering.
Stocks started the session under stiff pressure as another round of earnings results failed to inspire buyers. IBM (IBM 126.55, -3.24) was atop the list of disappointments as the company's top line came in lighter than many had expected and the company made an underwhelming increase to its earnings outlook. Those offenses overshadowed a better-than-expected bottom line.
In-line earnings left fellow tech outfit Texas Instruments (TXN 24.77, -0.78) without any support, though it issued upside guidance. A broadly improved tone among traders helped the rest of the semiconductor space finish flat after it had been down roughly 3% early on.
Health care stocks made up the only sector that failed to find higher ground by the session's end. Instead, the sector settled with a 0.2% loss. The group was dragged down after Dow component Johnson & Johnson (JNJ 58.58, -0.99) posted in-line earnings and issued a downside forecast.
Goldman Sachs (GS 148.91, +3.23) was able to attract renewed support after a weak start that came in response to broader market weakness and a muddled quarterly report that featured a smaller-than-expected revenue figure.
Materials stocks sprinted 2.9% higher to book the best gains. The sector was led by steel stocks and diversified metals and miners names, both of which advanced 5.6%. Such strength came after Moody's said that Japan's steel industry conditions are improving and analysts at UBS upgraded shares of Schnitzer Steel (SCHN 47.15, +4.79).
The broader market's climb spanned nearly the entire session. A base appeared to be made after the S&P 500 had retraced 50% of its move to recent highs and hit a key sloped support line.
Once stocks pushed into positive territory, many bets against the market had to be covered. Such short covering acted as a catalyst for the stock market's last leg higher.
A pullback by the greenback also provided some support to the broader market. It had been up 0.5% before it pulled back to the neutral line. However, it never did dip into negative territory and settled with a 0.2% gain against a basket of competing currencies.
The only data for the day featured a 5.0% month-over-month decline in housing starts for June. That took starts to an annualized rate of 549,000 units, which is below the annualized rate of 575,000 units that had been widely expected. In contrast, building permits for June increased 2.1% month-over-month to an annualized rate of 586,000, which is above the annualized rate of 572,000 units that had been widely expected.
Advancing Sectors: Materials (+2.9%), Energy (+1.9%), Industrials (+1.6%), Consumer Discretionary (+1.5%), Consumer Staples (+1.5%), Financials (+1.2%), Utilities (+0.8%), Tech (+0.8%), Telecom (+0.3%)
Advancing Sectors: Health Care (-0.2%) DJ30 +75.53 NASDAQ +24.26 NQ100 +1.2% R2K +1.8% SP400 +1.5% SP500 +12.23 NASDAQ Adv/Vol/Dec 1841/1.95 bln/765 NYSE Adv/Vol/Dec 2458/1.13 bln/559
4:35PM Apple beats by $0.40, beats on revs; guides Q4 EPS below consensus, revs above consensus (AAPL) 251.89 +6.31 : Reports Q3 (Jun) earnings of $3.51 per share, $0.40 better than the Thomson Reuters consensus of $3.11; revenues rose 61.3% year/year to $15.7 bln vs the $14.75 bln consensus. Apple reports Q3 gross margins of 39.1% vs Street est of 39.0%. Apple reports 3.47 mln Macs sold in Q3 vs Street est of ~3.2 mln. Apple reports 8.4 mln iPhones sold in Q3 vs Street est of ~8.5 mln. Co issues mixed guidance for Q4, sees EPS of ~$3.44 vs. $3.82 Thomson Reuters consensus; sees Q4 revs of ~$18.00 bln vs. $17.03 bln Thomson Reuters consensus (Briefing.com note: Co typically issues conservative guidance). "It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple's history with iPhone 4... iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year."
4:31PM SMTC Corp announces relationship with FEI (SMTX) 2.60 +0.03 : Co announced today a strategic relationship with FEI. SMTC will manufacture integrated control cabinets for FEI's Titan Transmission Electron Microscopes leveraging the internal precision sheet metal fabrication, printed circuit board assembly and cable harness assembly capabilities of its Chihuahua, Mexico campus.
4:18PM Altera beats by $0.05, beats on revs; guides Q3 revs above consensus (ALTR) 28.31 +0.02 : Reports Q2 (Jun) earnings of $0.58 per share, $0.05 better than the Thomson Reuters consensus of $0.53; revenues rose 68.1% year/year to $469.3 mln vs the $447.2 mln consensus. Co reports Q2 gross margin of 71.7% vs. the 71-72% guidance. Co issues upside guidance for Q3, sees Q3 rev growth of 4-8% q/q to ~$488.1-506.8 mln vs. $442.91 mln Thomson Reuters consensus. Altera's board of directors has increased the company's quarterly cash dividend to $0.06 per share, up from the previous dividend of $0.05 per share.
4:08PM Juniper Networks beats by $0.01, beats on revs and gross margin (JNPR) 26.69 +0.09 : Reports Q2 (Jun) earnings of $0.30 per share, $0.01 better than the Thomson Reuters consensus of $0.29; revenues rose 24.4% year/year to $978.3 mln vs the $953.6 mln consensus; Q1 non-GAAP operating margin of 23.9% vs. the 23.2% consensus.
ARM (ARMH) and Taiwan Semiconductor Manufacturing (TSM) announced a long-term agreement that provides TSM with access to a broad range of ARM processors and enables the development of ARM physical IP across TSM technology nodes.
10:07 am TXN Sees Q3 EPS Above Consensus (TXN)
Texas Instruments (TXN 24.25 -1.30) reported second quarter earnings of $0.62 per share, in-line with the Thomson Reuters consensus of $0.62 and guidance of $0.60 to $0.64.
Revenues rose 42.3% year/year to $3.5 billion versus the $3.52 billion consensus and guidance of $3.45 billion to $3.59 billion.
For the third quarter, the company is expecting to see earnings of $0.64 to $0.74 per share versus the $0.64 Thomson Reuters consensus. On the top line, the company expects revenue to be in the range of $3.55 billion to $3.85 billion versus the $3.59 billion Thomson Reuters consensus.
Second quarter gross margins of 54.17% versus the 53.5% consensus. Capital expenditures were raised to $1.2 billion, up from the prior expectation of $0.9 billion
The company said, "Our Analog and Embedded Processing businesses turned in double-digit sequential growth, outpacing their respective markets and again confirming their ability to positively impact the financial performance of TI... Orders were strong in the quarter, backlog increased and we expect to grow revenue again in the third quarter."
09:48 am IBM Raises FY10 EPS Guidance (IBM)
IBM (IBM 124.16 -5.63) reported second earnings of $2.61 per share, $0.03 better than the Thomson Reuters consensus of $2.58.
On the top line, revenues rose 2.0% year-over-year to $23.72 billion, below the $24.17 billion consensus. The company reported second quarter gross profit margins of 45.6% versus Thomson Reuters consensus of 45.8%.
For the fiscal year 2010, the company earnings of "at least $11.25 per share," up from prior guidance of "at least $11.20", and versus the $11.27 consensus. IBM signed services contracts totaling $12.3 billion, decrease of 12%.
The company said, "In the second quarter we again delivered double-digit earnings-per-share growth, increased margins, as well as improving constant-currency revenue performance in our ongoing software, services and hardware businesses, and in all geographies."
07:23 am Corning downgraded to Sell from Neutral with a $12.25 tgt at Ticonderoga: . Corning was downgraded to Sell from Neutral with a $12.25 tgt at Ticonderoga as their recent China trip and field checks highlight continued weakness in the LCD supply chain that they believe will eventually catch up with Corning's LCD glass business (86% of 1Q net income). |
