From Briefing.com: 4:30 pm : A lack of catalysts left the Dow and S&P 500 to chop their way to a flat finish, but the tech-rich Nasdaq logged a sizable loss as it lagged its counterparts once again.
Corporate news for today was limited to only a handful of earnings announcements. None of them was of concern for the broad market. Similarly, data was limited to a January wholesale inventory report that showed a slightly stronger-than-expected 1.1% increase, but that had no real impact on trade.
Market participants primarily took their early cues from oil, which opened pit trade at session highs then drifted down to $104.38 per barrel so that it closed with a 0.6% loss. Selling after the close has the commodity near $104 per barrel in electronic trade.
Weekly oil inventory data posted a bigger-than-expected build, but for the second week in a row the inventory report was met with a muted response. That suggests that the energy component is currently most concerned with the social and political events in the Middle East and North Africa.
Oil's early strength put stocks on the defensive, but as oil moved lower the major averages moved higher. However, every attempt by the S&P 500 to turn positive was repeatedly refused by lingering selling interest.
The broad market's inability to turn positive stemmed partly from a lack of leadership. Defensive-oriented stocks like telecom (+0.8%) and utilities (+1.1%) had the strongest gains, but make up the smallest share of market weight. Tech stocks (-0.6%), which represent the largest sector by market weight, retreated to a loss as semiconductor stocks slumped again.
The Philadelphia Semiconductor Index dropped 3.0% to close below its 50-day moving average for the first time since September. Ongoing weakness in the semiconductor space has the Index down 5.5% this week and the Nasdaq Composite trailing its counterparts.
A successful Treasury auction helped drive buying so that the yield on the 10-year Note fell to a five-session low of 3.45% before easing up a bit. The auction of 10-year Notes drew a bid-to-cover ratio of 3.32 for dollar demand of $69.7 billion. The indirect bidder participation rate came in at 53.0%. For comparison, the prior auction had a bid-to-cover of 3.23 and dollar demand of $77.5 billion with an indirect bidder participation rate of 71.3%.
Advancing Sectors: Utilities (+1.1%), Telecom (+0.8%), Consumer Staples (+0.5%), Consumer Discretionary (+0.2%), Health Care (+0.2%)
Declining Sectors: Financial (-0.1%), Industrials (-0.2%), Tech (-0.6%), Energy (-0.6%), Materials (-1.5%)DJ30 -1.29 NASDAQ -14.05 NQ100 -0.6% R2K -0.4% SP400 -0.2% SP500 -1.80 NASDAQ Adv/Vol/Dec 1079/2.00 bln/1536 NYSE Adv/Vol/Dec 1417/869 mln/1560
4:33PM Semtech beats by $0.06, beats on revs; guides Q1 EPS above consensus, revs above consensus (SMTC) 22.50 -1.42 : Reports Q4 (Jan) earnings of $0.47 per share, excluding non-recurring items, $0.06 better than the Thomson Reuters consensus of $0.41; revenues rose 36.0% year/year to $116.3 mln vs the $113.3 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.41-0.44, excluding non-recurring items, vs. $0.40 Thomson Reuters consensus; sees Q1 revs of $117-121 vs. $114.40 mln Thomson Reuters consensus.
4:05PM LSI Logic to sell external storage systems business to NetApp for $480 mln (see 16:01); Board authorizes new $750 mln stock repurchase program (LSI) 6.13 -0.12 : Co announced that it has signed a definitive agreement to sell its external storage systems business to NetApp (NTAP) for $480 million in cash. The company also announced today that its board of directors has authorized a new stock repurchase program of up to $750 mln. Under terms of the agreement, NetApp will purchase substantially all the assets of the LSI external storage systems business. The business being purchased generated revenues of $705 mln in 2010. As a result of the sale, LSI expects to eliminate $35-40 mln per quarter of operating expenses upon closing of the transaction.
3:11PM Intel displays some relative strength in recent trade, pushes 1% higher over last 25 min amid pickup in volume (INTC) 21.32 +0.20 : Stock set a new six week low this morning but has rebounded as much as 1.9% off the low to test its 50 sma at 21.35 (session high 21.34).
Nanometrics (NANO) announced that a leading Japanese semiconductor company has selected its IMPULSE integrated metrology solution for process control of advanced chemical mechanical polishing applications to be deployed as part of its new fab build-out.
9:05AM Cisco Systems intends to offer, subject to market and other conditions, senior notes under an automatic shelf registration (CSCO) 18.22 : Cisco intends to use the net proceeds from this offering for general corporate purposes. BofA Merrill Lynch, Goldman, Sachs & Co., J.P. Morgan, Citi, Morgan Stanley and Wells Fargo Securities are acting as joint book-running managers.
8:02AM Sunpower signs 48-megawatt solar power supply agreement with Toshiba (SPWRA) 15.71 : Co announces under a strategic supply agreement, Toshiba will order 48 megawatts of high-efficiency solar panels from SunPower during the 2011 Japanese fiscal year ending March 31, 2012. Toshiba will use the panels to support the company's residential solar offering in Japan, which was launched last year with a supply agreement for 32 megawatts of SunPower panels.
Microsemi (MSCC) announced the immediate availability of its LXMG1645 quad-lamp CCFL backlight inverters with the proven StayLITTM fault-management feature.
Nokia (NOK) plan to construct a $276 mln manufacturing facility near Hanoi.
Mattson Technology (MTSN) announced that a leading semiconductor manufacturer has placed a follow-on multi-system paradigmE order, the largest etch order in the Company's history.
Semiconductor Manufacturing International (SMI) and RDA Microelectronics (RDA) announced that RDA5802N, an FM receiver chip using SMIC's 55nm Low Leakage logic process and adopting Innopower's IP solution, is now in risk-production.
3:56AM Nokia Siemens Networks clarifies status on Motorola (MMI) transaction; closing will not be completed as previously targeted (NOK) 8.51 : Co announces the acquisition by Nokia Siemens Networks of Motorola's (MMI) wireless networks infrastructure assets is still pending anti-trust approval from the Chinese regulatory authorities. Closing activities will not be completed in the first quarter of 2011 as previously targeted. Nokia Siemens Networks remains committed to the acquisition but will provide no further guidance on when it is likely to be completed.
09:54 am FNSR Guides Q4 Below Estimates (FNSR)
Finisar (FNSR 25.80 -14.23) reported third quarter earnings of $0.47 per share, in-line with the consensus of $0.47.
Revenues rose 57.6% year-over-year to $263 million, above the $257.9 million consensus. Non-GAAP gross margin decreased to 34.7% of revenues from 35.5% in the preceding quarter but increased from 32.2% in the third quarter of the prior year.
The company issued downside guidance for the fourth quarter, seeing earnings of $0.31-0.35 per share, below the $0.48 consensus. The company sees fourth quarter revenues of $235-250 million, below the $268.55 million consensus.
For some background, FNSR supplies optical subsystems and components used to interconnect equipment in local area networks (LANs) and storage area networks (SANs) as well as longer distance metropolitan area networks (MANs), fiber-to-the-home networks (FTTx), cable television networks (CATV), and wide area networks (WANs). The stock has been a big momentum name over the past three months (rising over 100% since the end of Nov), as it is a play on the explosion in the demand for bandwidth due to the data-intensive nature of smartphone devices. Cisco (CSCO) is FNSR's largest customer at 16% of revenue in FY10 (ended April 2010).
09:19 am IBM tgt raised to $176 at RBC following Analyst Day: . RBC is raising their tgt to $176 from $165 after IBM provided a positive and upbeat assessment of the co's prospects at its analyst day. As expected, there were no major changes to the 2015 roadmap. However, progress has been faster than anticipated in some key areas, notably acquisitions. Additionally, mgmt possesses a number of clear options to drive upside beyond $20/shr if no cushion to the roadmap were needed to offset unanticipated macro pressures. While the continue to view shares as an attractive defensive oppty, they nonetheless prefer more pro-cyclical exposure at this stage of the expansion. |
