From Briefing.com: 4:30 pm : Renewed selling pressure sent stocks to their second straight loss as $100 oil spooked participants. Technical support helped limit the downturn.
The mood among participants was mixed in the opening minutes of trade, but the tone quickly soured as oil prices extended their climb to new two-year highs amid ongoing concerns related to social and political turmoil in the Middle East and North Africa. At its session high, oil traded at $100 per barrel on the nose. Prices were backed down in afternoon trade so that the energy component settled pit trade with a 2.8% gain at $98.10 per barrel. Weekly oil inventory figures will be released tomorrow morning.
Oil's late morning and early afternoon climb induced renewed selling pressure among stocks. At its session low, the S&P 500 was down 1% to the 1300 line. However, support at that level combined with oil's pullback from the $100 mark so that stocks were able to catch some relief.
Trading volume was up sharply for the second straight session, but the 1.33 billion shares that exchanged hands today on the NYSE was the highest tally in two months.
Although the broad market closed comfortably above its session low, energy was the only major sector to finish with a gain. Higher oil prices helped energy stocks outperform for the entire session and settle with a 2.0% gain. Chesapeake Energy (CHK 34.33, +2.32) was one of the sector's top percentage gainers after it posted a better-than-expected earnings report.
At the other end of the spectrum, industrial stocks endured the sharpest selling. That sector shed 1.8% as FedEx (FDX 89.25, -4.04) fell more than 4% as investors considered the consequence of higher fuel costs on the operations of the global delivery company.
Retailers also had a rough session. They fell 1.8% as a group. TJX Co (TJX 48.81, -0.91) traded in line with the group after its disappointing outlook overshadowed an upside earnings surprise. Saks (SKS 11.86, -0.31) and home improvement retailer Lowe's (LOW 25.73, -0.26) also logged losses, despite their own upside earnings surprises. In contrast, Chico's FAS (CHS 13.15, +1.09) overcame an earnings miss to climb sharply to a six-month high.
Hewlett-Packard (HPQ 43.10, -5.13) tumbled almost 10% after its upside earnings surprise was ignored because of a light revenue figure and a disappointing forecast.
Toll Brothers (TOL 21.20, +0.44) had better-than-expected earnings and scored a gain. The stock will likely come back into focus tomorrow, which is when the latest new home sales report will be posted.
Existing home sales for January were reported today. They increased 2.7% month over month to an annualized rate of 5.36 million units, which is greater than the rate of 5.23 million units that had been expected, on average, among economists polled by Briefing.com.
In the face of further weakness among stocks, Treasuries at the short end of the yield curve lacked support. Pressure in the space picked up after a $35 billion auction of 5-year Notes drew a yield of 2.19%, a bid-to-cover of 2.69, and an indirect bidder participation rate of 34.2%. However, the 30-year Bond was able to advance so that its yield moved down to 4.58%.
Advancing Sectors: Energy (+2.0%)
Declining Sectors: Consumer Staples (-0.2%), Utilities (-0.4%), Financials (-0.4%), Materials (-0.7%), Health Care (-1.0%), Telecom (-1.0%), Tech (-1.3%), Consumer Discretionary (-1.5%), Industrials (-1.8%)DJ30 -107.01 NASDAQ -33.43 NQ100 -0.9% R2K -1.6% SP400 -1.4% SP500 -8.04 NASDAQ Adv/Vol/Dec 629/2.48 bln/1996 NYSE Adv/Vol/Dec 1062/1.33 bln/1959
6:52PM Interdigital Comm misses by $0.03, beats on revs (IDCC) 53.14 -2.68 : Reports Q4 (Dec) earnings of $0.76 per share, $0.03 worse than the Thomson Reuters consensus of $0.79; revenues rose 24.7% year/year to $95.3 mln vs the $93.9 mln consensus. InterDigital expects first quarter 2011 revenue contributions from existing agreements to be in the range of $76 million to $77 million. This range includes an increase in current patent licensing royalties from the same set of patent customers of 5% over fourth quarter 2010 and 15% year over year. The significant increase in current patent licensing royalties is due to increased royalties relating to our customers' sales of smartphone products.
4:56PM MEMC Elec intends to commence a private offering, subject to market and other conditions, of $500 million in aggregate principal amount of senior notes due 2019 (WFR) 13.64 :
4:30PM Conexant agrees to be acquired by Golden Gate Capital for $2.40 per share in chas and terminates merger agreement with SMSC (CNXT) 2.34 -0.18 : The transaction is expected to close in the second quarter of calendar 2011. Conexant also announced that it has terminated its previously announced agreement with Standard Microsystems Corporation and paid to Standard Microsystems Corporation the $7.7 mln termination fee provided for under that agreement.
4:17PM AXT Inc misses by $0.01, misses on revs; guides Q1 EPS, revs below consensus (AXTI) 8.36 -0.36 : Reports Q4 (Dec) earnings of $0.15 per share, $0.01 worse than the Thomson Reuters consensus of $0.16; revenues rose 51.1% year/year to $26.9 mln vs the $28.9 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.11-0.13 vs. $0.14 Thomson Reuters consensus; sees Q1 revs of $24-25 mln vs. $27.37 mln Thomson Reuters consensus. "While we are experiencing some near-term softness in the Taiwanese LED market and expect seasonality in our first quarter semi-insulating gallium arsenide revenues, we believe that we will see sequential growth in our business beginning again in the second quarter, driven by positive secular trends in the demand for wireless devices, LEDs and photovoltaics, as well as gains in our positioning within various customers in our market."
7:03AM Conexant: SMSC announces that it does not plan to increase its offer for Conexant above $2.25 per share (CNXT) 2.52 : SMSC announces that it does not plan to increase its offer for Conexant Systems above $2.25 per share in response to a proposal from Golden Gate Capital. SMSC also announced that it has agreed to waive the "match period" under the merger agreement. On February 21, 2011, the board of directors of Conexant informed SMSC that it had determined that a proposal from Golden Gate Capital to acquire Conexant constituted a "superior proposal" as such term is defined in the existing merger agreement. If Conexant terminates the merger agreement to accept the proposal from Golden Gate Capital, SMSC will be entitled to a termination fee of $7.7 mln.
09:50 am HPQ Lowers FY11 Revs Below Consensus (HPQ)
Hewlett-Packard (HPQ $42.99) reported first quarter earnings of $1.36 per share, excluding non-recurring items, $0.07 better than the Thomson Reuters consensus of $1.29.
Revenues rose 4% year/year to $32.3 billion versus the $32.95 billion consensus.
For the second quarter, the company see earnings of $1.19 to $1.21, excluding non-recurring items, vs. $1.25 Thomson Reuters consensus, and expects revenues to fall in the range of $31.4billion to $31.6 billion versus the $32.59 billion Thomson Reuters consensus.
For the fiscal year 2011 the company raised its earnings guidance to $5.20 to $5.28, excluding non-recurring items, from $5.16 to $5.26 versus the $5.24 Thomson Reuters consensus; lowers fiscal year 2011 revenues to $130 billion to $131.5 billion from $132 billion to $133.5 billion versus the $132.95 billion Thomson Reuters consensus. First quarter non-GAAP operating margin of 12.4% versus 11.7% Thomson Reuters consensus.
HP saw balanced growth in the first quarter across all regions in local currency, with accelerated growth in BRIC countries. Results were largely driven by momentum in the commercial sector as businesses continued to spend on technology. HP experienced uneven consumer performance across its geographies and product categories during the quarter. First quarter revenue was up 6% in the Americas to $14.4 billion.
Revenue was flat in Europe, the Middle East and Africa and up 7% in Asia Pacific to $12.1 billion and $5.8 billion, respectively. When adjusted for the effects of currency, revenue was up 5% in the Americas, up 4% in Europe, the Middle East and Africa and up 2% in Asia Pacific. Revenue from outside of the United States in the first quarter accounted for 65% of total HP revenue, with revenue in the BRIC countries increasing 11% while accounting for 11% of total HP revenue. |
