From Briefing.com: 5:00 pm : Stocks were slammed today with their worst single-session percentate loss since December, 2008. On the surface, the rout came in response to news that analysts at Standard & Poor's cut the US debt rating, but selling was really due mostly to what the downgrade suggested about macro conditions.
In an unprecedented move, analysts at S&P lowered their rating on US debt during the weekend. In turn, US debt is now rated AA+, down from the top-notch rank of AAA. Given that S&P is widely regarded as the most influential rating agency, it mattered little to market participants that Moody's affirmed their AAA rating on the US.
Although many reports may blame this session's precipitous drop on the S&P downgrade, the sell-off really came in response to what the downgrade signified, which is that the US economic outlook isn't as strong as what many had thought. Moreover, any setback in economic activity could further strain US fiscal conditions, which were only recently addressed after weeks of wrangling among legislative leaders. Of course, the threat that the tenuous fiscal and financial conditions of Europe could deteriorate and create contagion have added to concern.
Amid heightened concerns about the macro environment, many traders are dumping stocks in the interest of building liquidity. Of course, their aggressive selling has only begotten additional selling among stocks.
Financials were hit especially hard this session. The sector slumped to a 10% loss so that it is now down 29% from its February high. Bank of America (BAC 6.51, -1.66) was one of the sector's worst performers. It set a two-year low on its way to a 20% loss as some investment funds liquidated their positions in the stock. It didn't help that the bank was hit with a $10 billion mortgage suit by AIG.
Widespread weakness caused the Volatility Index, often euphemistically dubbed the Fear Gauge, to surge 50% to 48.0 for the first time May 2010. Given the fearfulness exhibited by investors, it wasn't such a surprise that gold continued its climb. Still, it was impressive that the yellow metal surged 4% then extended the climb in after-hours trade to a new record high above $1720 per ounce.
Both the dollar and Treasuries benefited from an interest in safety, too. The greenback was up about 0.5% against a basket of major foreign currencies at the end of the trading day. Meanwhile, the yield on the benchmark 10-year Note settled only a couple of basis points above 2.3%.
Advancing Sectors: (None)
Declining Sectors: Consumer Staples -3.8%, Health Care -5.3%, Telecom -5.4%, Utilities -5.5%, Tech -5.8%, Consumer Discretionary -6.7%, Industrials -6.9%, Materials -7.3%, Energy -8.3%, Financials -10.0%DJ30 -634.76 NASDAQ -174.72 NQ100 -6.1% R2K -8.9% SP400 -8.3% SP500 -79.92 NASDAQ Adv/Vol/Dec 114/3.98 bln/2535 NYSE Adv/Vol/Dec 42/2.54 bln/3030
4:17PM TranSwitch misses by $0.01, misses on revs (TXCC) 2.32 -0.10 : Reports Q2 (Jun) loss of $0.10 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of ($0.09); revenues fell 49.6% year/year to $7.1 mln vs the $8 mln consensus. "While we continue to experience near-term softness in demand for our telecom products, we have indications of stabilization and return to growth as we move forward in the second-half of 2011. More importantly, we are making significant progress in our strategy of developing a new growth engine for the fast growing video connectivity market as we move into 2012."
8:15AM TriQuint Semi reports inducement equity grant under NASDAQ marketplace rule 5635 (TQNT) 6.99 : The aggregate grant of 155K shares of TriQuint common stock was made to Klein under the co's 2008 Inducement Award Program. The stock option grant has an effective date of August 5, 2011. The options will vest 25% on August 5, 2012, with the remaining 75% vesting quarterly over the next three years. The stock options have an exercise price of $6.99/share.
8:08AM JA Solar announces $100 mln ADR share repurchase program (JASO) 4.05 :
SMSC (SMSC) announced the USB553x, a family of USB 3.0 hub controllers consisting of 7-port and a 4-port offerings. These new SuperSpeed USB hubs deliver the industry's smallest footprint, "hybrid speed" configuration with an optimized BOM cost for designers of the emerging USB 3.0 ecosystem.
Ixia (XXIA) announced that IxVeriWave, its recent product line acquisition, now supports IPv6 testing over Wi-Fi networks and access points.
Verizon's (VZ) attempts to reach a constructive new contract with two unions representing the company's wireline employees in the Northeast and Mid-Atlantic states were unsuccessful, and union leaders announced a decision to call a strike. In anticipation of this development, Verizon has activated a contingency plan to ensure customers experience limited disruption in service during this time.
NRG Solar, a subsidiary of NRG Energy (NRG), and Eurus Energy America have begun commercial operations at the 45-megawatt Avenal Solar Generating Facility, the largest solar photovoltaic generating facility in California.
AMD (AMD) announced availability of the AMD Accelerated Parallel Processing Software Development Kit v2.5.
Lattice Semiconductor (LSCC) announced that XENTROTEC has chosen the mid-range LatticeECP3 FPGA for use in its digital video recorder solution.
2:08AM Semi Manufacturing appoints Tzu-Yin Chiu as CEO and Executive Director (SMI) 2.72 : Co announces the appointment of Dr. Tzu-Yin Chiu as CEO and Executive Director, effective immediately. Prior to joining co, Chiu was President and CEO of Hua Hong NEC Electronics Company.
Among notable analyst upgrades this morning, INTC (+0.1%) was upgraded to Buy at Standpoint, ATML (-4.0%) was upgraded to Outperform at FBR Capital, EMC (-2.4%) and NTAP (-3.8%) were upgraded to Buy at Auriga, and PAY (-4.4%) and CTL (-3.7%) were upgraded to Strong Buy at Raymond James. In downgrades this morning, TXN (-2.3%) was downgraded to Mkt Perform at FBR Capital, ARW (-4.7%) was downgraded to Neutral at Goldman, and FFIV (-5.7%) was downgraded to Neutral from Buy at Suntrust. |
