From Briefing.com: 4:30 pm : The Nasdaq Composite led its counterparts lower as participants dumped semiconductor stocks and other tech related issues. However, the ability of the S&P 500 to hold steady above last week's lows helped pull the Nasdaq back above its 50-day moving average.
The major U.S. averages logged losses last Friday, but they all made a strong upward push in the final minutes of that session. That and a pullback by oil prices from a two-year high of almost $107 per barrel at the start of pit trade helped stocks start the new week on a positive note. It didn't take long for sellers to step in, though.
At first, sellers were focused on tech stocks. Their effort took the Nasdaq down to a 2.0% loss so that it traded below its 50-day moving average once again. As selling spread, the broader S&P 500 flirted with last week's low, but its ability to hold steady above that mark caused selling pressure to ease a bit so that it could slowly pare its loss. That helped lift the tech-rich Nasdaq back above the key trend line.
Semiconductor stocks still finished with a collective loss of 2.7%, but Ciena (CIEN 25.98, -2.83) suffered a near 10% loss after it issued disappointing guidance. Its upside earnings surprise for the latest quarter was completely ignored.
Consumer credit data made up the only item on the economic calendar, but the figures were of little consequence to the broader market. Consumer credit for January increased by $5.0 billion, which is greater than the $3.3 billion increase that had been expected among economists surveyed by Briefing.com. December's consumer credit was revised downward to reflect an increase of about $4.1 billion.
Advancing Sectors: Utilities (+0.4%)
Declining Sectors: Materials (-1.8%), Tech (-1.4%), Consumer Discretionary (-1.0%), Health Care (-0.9%), Industrials (-0.8%), Financial (-0.7%), Energy (-0.7%), Consumer Staples (-0.3%), Telecom (-0.1%)DJ30 -79.85 NASDAQ -39.04 NQ100 -1.4% R2K -1.5% SP400 -1.3% SP500 -11.02 NASDAQ Adv/Vol/Dec 610/2.19 bln/2050 NYSE Adv/Vol/Dec 702/1.04 bln/2315
3:15PM Semtech reports grants of inducement awards (SMTC) 23.64 -0.52 : Co announced that as an inducement to enter into employment with Semtech, it has made awards effective March 1, 2011 of restricted stock units ("Inducement Awards") to two recently hired employees under the Semtech 2009 Long-Term Equity Incentive.
11:35AM Semi continues to be a drag on underperforming Nasdaq, XSD, XLK and Nasdaq Comp near their 50 day averages (TECHX) : The Semi sector has been a drag throughout the session with the XSD slipping under its 50 day ema/sma for the first time since last Sep (held on intraday basis in late Feb). The SMH is off 3.1% but is holding above last week's low at 35.16 (session low 35.26). The Semi declines also leaves the XLK back near its 50 sma/ema at 26.16/26.09 (session low 26.08). As noted earlier the Nasdaq Comp -38 is just above its 50 day sma at 2750.
8:30AM O2Micro confirms Patent for EEFL Protection System Granted to O2Micro (OIIM) 8.26 : Co announces it was issued 20 claims under United States patent number 7,888,889 for its External Electrode Fluorescent Lamp System Protection architecture; a continuation of the invention issued June 2009 under United States patent number 7,554,273.
7:06AM Hitachi: Western Digital (WDC) to acquire Hitachi Global Storage Technologies in transaction valued at ~$4.3 bln (HIT) 61.24 : Western Digital and Hitachi entered into a definitive agreement whereby Western Digital will acquire Hitachi Global Storage Technologies in a cash and stock transaction valued at ~$4.3 billion. Under the terms of the agreement, WD will acquire Hitachi GST for $3.5 billion in cash and 25 million WD common shares valued at $750 million, based on a WD closing stock price of $30.01 as of March 4, 2011. Hitachi will own ~10% of Western Digital shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at closing. The transaction has been approved by the board of directors of each company and is expected to close during the third calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals. WD plans to fund the transaction with a combination of existing cash and total debt of approximately $2.5 billion. Western Digital expects the transaction to be immediately accretive to its earnings per share on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges and amortization of intangibles.
7:04AM GT Solar settle two putative securities class-action lawsuits related to co's IPO for $10.5 Million (SOLR) 10.97 : Co anounces announced that it has reached an agreement in principle to settle two putative securities class-action lawsuits related to the Company's initial public offering on July 24, 2008. The terms of the proposed settlement, which includes no admission of liability or wrongdoing by the co or by any other defendant, provide for a full and complete release of all claims that were or could have been brought against all defendants in both the federal and state securities actions. The Company will pay $10.5 million into a settlement fund. Of this amount, the co will contribute $1 million and the co's liability insurers will contribute the remaining $9.5 million. The co's contribution represents its contractual indemnification obligation to its underwriters. Both the terms of the proposed settlement and the plan of distribution for the settlement fund are subject to further documentation and Court approval.
7:03AM Ciena beats by $0.02, beats on revs; guides Q2 revs below consensus (CIEN) 28.81 : Reports Q1 (Jan) loss of $0.14 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of ($0.16); revenues rose 146.3% year/year to $433.3 mln vs the $421.9 mln consensus. Co issues downside guidance for Q2, sees Q2 revs of $415-435 mln vs. $438.54 mln Thomson Reuters consensus, with an adj. gross margin on the low 40s ragne. "We continue to be encouraged by strong end user demand and recent customer awards that validate our technology and solutions and leave us well positioned for growth. In the short term, however, we are mindful of the effects of our back office integration activity, which -- while extremely well-executed -- resulted in some revenue acceleration into the first quarter and minor ERP-related supply chain constraints at the beginning of our second quarter."
PMC-Sierra (PMCS) announced 10G-EPON OLT devices with industry-leading traffic management, packet processing, on-chip redundancy and the industry's most advanced optical diagnostic technologies.
2:54AM NXP Semi issues $500 mln covenant light term loan transaction (NXPI) 30.75 : Co announces that its subsidiary, NXP B.V., together with NXP Funding, has concluded a new $500 mln Senior Secured Term Loan Facility due in 2017. The transaction is scheduled to close within a month. The new loan has a margin of 3.25% above LIBOR, combined with a LIBOR floor of 1.25%, and was priced at 99.5%. Co separately announced that it intends to issue redemption notices for all $362 mln outstanding of its 7.875% Senior Secured Notes due 2014, together with $100 mln of its US dollar-denominated Floating Rate Notes due 2013 and $200 mln of its Euro-denominated Floating Rate Notes due 2013.
07:37 am OmniVision tgt raised to $50 at Oppenheimer: . Oppenheimer is raising their tgt to $50 from $40 as they note channel checks indicate that recent chatter about competitive share losses and BSI2 yield problems are a lot of hooey. It's true (as they've previously reported) that a surge in demand has left OVTI capacity constrained, and that this has made it difficult to fully support lower priority customers and markets. But according to our checks OVTI is winning the business it wants to win and retaining the customers that have been the cornerstone of its success in recent years. They're increasingly confident that the strong underlying growth trends and design win momentum will translate into another step-function rev increase in late 1Q12, as incremental capacity (all BSI2) ramps.
09:56 am JASO & WFR Announce Joint Venture
JA Solar (JASO 7.05 +0.05) and MEMC (WFR 12.84 -0.11) announced a joint venture agreement between JA Solar and MEMC's affiliate, MEMC Singapore, to build and operate a solar cell production facility in China.
The companies reported that in Phase One of the project, the joint venture will build a production facility with a capacity of 250 megawatts of photovoltaic cells. The companies also reported that the phase one production facility will be located at JA Solar's Yangzhou site, and is expected to begin commercial production in the second half of 2011. In later phases, total production capacity may be expanded up to 1GW.
The joint venture will be a 50/50 partnership between JA Solar and MEMC Singapore.
09:29 am CIEN Reports Q1 Results Above Expectations (CIEN)
Ciena (CIEN 28.81) reported a first quarter loss of $0.14 per share, $0.02 better than the consensus of ($0.16).
Revenues rose 146.3% year-over-year to $433.3 million, above the $421.9 million consensus.
The company issued downside guidance for the second quarter, sees second quarter revenues of $415-435 million, below the $438.54 million consensus.
The company stated "We continue to be encouraged by strong end user demand and recent customer awards that validate our technology and solutions and leave us well positioned for growth. In the short term, however, we are mindful of the effects of our back office integration activity, which -- while extremely well-executed -- resulted in some revenue acceleration into the first quarter and minor ERP-related supply chain constraints at the beginning of our second quarter." |
