From Briefing.com: Weekly Recap - Week ending 27-May-11U.S. equity markets managed to shake off eurozone debt fears to close little changed on the week. The S&P 500 declined 0.2% while small-cap indices like the Russell 2000 (+0.9%) outperformed.
Seven of the 10 S&P sectors finished negative on the week, with the declines led by defensive sectors such as utilities (-1.7%), health care (-1.2%) and consumer staples (-1.0%). Of the three outperformers, materials (+2.1%) and energy (+2.0%) showed strong gains.
The market ended last week worried about the eurozone debt crisis, and picked up where it left off on Monday. U.S. equity markets fell sharply after Standard & Poor's cut its ratings outlook on Italy from stable to negative and following weaker-than-expected manufacturing PMI data in both China and Europe.
But U.S. markets stabilized on Tuesday and experienced modest rebounds on Wednesday, Thursday and Friday to close around unchanged on the week.
The headlines out of Europe initially sent the euro lower this week, but it also rebounded, albeit in volatile trade. The subsequent weakness in the dollar did not have it usual effect on the commodity market, however. Metals traded higher, but energy and agricultural futures experienced mixed, directionless trade.
Treasuries continued to extend higher, with the exception of some profit-taking on Wednesday, aided by three longer-term auctions that experienced strong demand. The U.S. Treasury sold $99 billion in 2-, 5- and 7-year Notes, with each auction experiencing strong bid-to-cover ratios as the combination of weak U.S. economic data and the eurozone debt crisis has investors piling into the relative safety of Treasuries.
This week's economic calendar was thin ahead of the long weekend. New Home Sales surprised to the upside in April, but that merely offset the weak Existing Home Sales figure. The market shrugged off weak Durable Goods Orders in April due to strong upward revisions in March, but could not look past an increase in the Initial Claims level to 424,000. If claims remain elevated next week, it may suggest that the labor market recovery is weakening.
U.S. markets are closed Monday for Memorial Day. For the remainder of the week, new developments in Europe and employment data in the U.S. will be in focus. In addition to the jobless claims report, the May employment report will be released on June 3. It remains to be seen whether that will be enough to offset the summer doldrums.
Index Started Week Ended Week Change % Change YTD %
DJIA 12512.00 12441.58 -70.42 -0.6 7.5
Nasdaq 2803.32 2796.86 -6.46 -0.2 5.4
S&P 500 1333.27 1331.10 -2.17 -0.2 5.8
Russell 2000 829.06 836.26 7.20 0.9 6.7
7:06AM Tessera Tech announced that its wholly owned subsidiary Tessera, has filed a complaint against Sony Corporation alleging breach of contract (TSRA) 17.40 : Co announced that its wholly owned subsidiary Tessera, Inc. has filed a complaint against Sony Corporation in the California State Court of Santa Clara County alleging breach of contract, breach of the covenant of good faith and fair dealing, and seeking declaratory relief. "Under our Agreement with Sony, we have the right to examine and audit Sony's records regarding amounts due, as we typically have with all our licensees... We are bringing this suit because Sony has not paid all of the royalties owed to us under the contract."
7:02AM Research In Motion says purported class action lawsuit is without merit (RIMM) 43.57 : Co confirmed it intends to vigorously defend against a purported class action lawsuit filed against the Company and certain of its officers in the United States District Court for the Southern District of New York. The lawsuit alleges that during the period from December 16, 2010 through April 28, 2011, the Company and certain of its officers made materially false and misleading statements regarding the Company's financial condition and business prospects, and seeks unspecified damages on behalf of an alleged class of purchasers of the Company's common shares during this period. RIM believes that the allegations are without merit.
07:28 am Skyworks: Oppenheimer is positive on acquisition of power mgm't co AnalogicTech: . Oppenheimer notes, last night, SWKS announced the acquisition of power mgm't company AnalogicTech for $6.13/shr. The AATI announcement is hot on the heels of Skyworks' pending acquisition of SiGe and offers a similar value proposition by adding complementary products and a good growth profile, while immediately accretive. But also like SiGe, there's a need to drive operational improvement to meet Skyworks' levels. Overall OpCo is positive and like the fit and sales leverage, but it'll keep an eye on execution given the close timing of two fixer-upper acquisitions.
07:09 am Broadcom added to Top Picks list at FBR Capital: . FBR Capital is adding BRCM to their Top Picks list as they remove MSCC. Firm says investors remain focused on wireless, specifically baseband growth opportunities and connectivity market share sustainability trends. In short, they believe Broadcom remains positioned to someday be the world's second-largest baseband supplier, behind Qualcomm, with the 3G/4G multi-mode baseband market likely to coalesce around Qualcomm (QCOM), Broadcom, Intel (INTC), and potentially ST-Ericsson (ERIC) or Marvell (MRVL). Cellular represents a large growth opportunity as Broadcom pushes into 4G more aggressively by 2013. Near term, they think baseband shipments seasonally improve in 2H11, and as new GSM customers in China ramp.
09:18 am MRVL Guides Q2 EPS Above Consensus (MRVL)
Marvell (MRVL $14.56) reported first quarter earnings of $0.29 per share, $0.01 worse than the Thomson Reuters consensus of $0.30.
Revenues fell 6.3% year/year to $802 million versus the $825.6 million consensus.
The company reported first quarter non-GAAP gross margins of 58.5% versus the 59% consensus.
"The results for our first quarter reflected the typical seasonality of our consumer centric end markets... Even at this low point in the revenue cycle, we were an industry leader in profitability for both operating and cash flow margins, demonstrating the strength of our long-term business model. We remain confident that the investments we are making such as in TD-SCDMA and SSD will result in improved results throughout the year."
During the conference call, the company issued second quarter non-GAAP earnings of $0.37, give or take a couple of pennies (consensus is $0.34) and expects revenues to be $870 million to $910 million versus the $875.4 million consensus. |
