From Briefing.com: 4:30 pm : Stocks traded in seesaw fashion this session, but ultimately scored a strong gain as the broad market settled at its high for the second straight day.
The stock market mounted an early advance that took it from a narrow loss to a gain of more than 1% in the early going. The move came without any clear catalyst or headline, but it was led largely by the financial sector. The financial sector's bounce was backed by diversified banks and financial services stocks, which rallied after suffering aggressive selling in recent sessions. Financials ultimately finished the day with a 2.8% gain.
The financial sector's impressive finish came only after the stock market had rolled over then drifted to a narrow loss by early afternoon trade. However, the broad market's refusal to extend its downturn encouraged buyers to return with another bid. The buying effort held steady into the finish of trade.
Energy stocks pulled back more than 1% before following the broad market into positive territory. Energy sectors were weighed down for most of the session as participants pared positions in oil and gas services names and integrated plays after watching the overall energy sector score a gain of more than 4% yesterday. As a group, energy stocks gained 0.4% today.
The latest weekly oil inventory numbers showed a net draw, which contrasts with the build that had been broadly expected. That helped oil prices climb as high as $86.59 per barrel, but the energy component inevitably closed pit trade with a 0.3% loss at $85.16 per barrel.
Elsewhere in the commodity complex, gold prices dropped 5.5% to $1757.30 per ounce after they had traded to almost $1920 per ounce earlier this week. The suddenness and steepness of gold's decline has some wondering whether the precious metal is merely seeing some profit taking or if its ascent to record levels has run its course. In the backdrop, though, is speculation about additional monetary policy tools that may come out of the Fed's meeting this week at Jackson Hole, Wyoming.
Treasuries were also hit with aggressive selling pressure this session. That took the benchmark 10-year Note down more than a full point, pushing its yield closer to 2.30%. Selling accelerated in the wake of the latest Treasury auction, which featured the 5-year Note. The auction drew a bid-to-cover of 2.71, dollar demand of $94.9 billion, and an indirect bidder participation rate of 42.1%. For comparison, an average of the past six auctions resulted in a bid-to-cover of 2.78, dollar demand of $97.2 billion, and an indirect bidder rate of 39.8%.
Even though gold and Treasuries -- two traditional safe havens -- were clipped today, a 2.0% gain by utilities (second only to financials) suggests that many market participants are still attracted to the sector's relative safety and rich dividend yield.
Amid concerns about the global economy and fiscal practices, analysts at Moody's announced a single-notch downgrade in Japan's debt rating to Aa3. As an aside, Japan has planned to make $100 billion available to firms impacted by the yen's inflation.
The latest dose of economic data featured a 0.7% decline in New Industrials Orders from the Eurozone. However, domestic durable goods orders for July spiked by 4.0%, which is more than double the 1.9% clip that had been expected among economists polled by Briefing.com. Durable goods orders less transportation increased by 0.7%, which contrasts with the 0.6% decline that had been commonly expected.
Advancing Sectors: Financials +2.8%, Utilities +2.0%, Industrials +2.0%, Consumer Discretionary +1.7%, Materials +1.3%, Telecom +1.3%, Health Care +1.2%, Tech +0.8%, Consumer Staples +0.4%, Energy +0.4%
Declining Sectors: (None)DJ30 +143.95 NASDAQ +21.63 NQ100 +0.7% R2K +1.4% SP400 +1.4% SP500 +15.25 NASDAQ Adv/Vol/Dec 1698/1.89 bln/859 NYSE Adv/Vol/Dec 2105/1.11 bln/924
6:55PM Apple resumes trading ~$22 lower at $354 following news that Steve Jobs resigned (AAPL) 376.18 +2.58 :
6:40PM Apple (AAPL) CEO Steve jobs resigns (TOPNX) 376.18 +2.58 : Jobs said, "To the Apple Board of Directors and the Apple Community: I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple."
4:34PM Semtech beats by $0.03, beats on revs; guides Q3 EPS in-line, revs in-line (SMTC) 20.40 -0.27 : Reports Q2 (Jul) earnings of $0.49 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.46; revenues rose 15.1% year/year to $130.3 mln vs the $128.7 mln consensus. Co issues in-line guidance for Q3, sees EPS of $0.45-0.49, excluding non-recurring items, vs. $0.48 Capital IQ Consensus Estimate; sees Q3 revs of $120-128 mln vs. $132.39 mln Capital IQ Consensus Estimate.
4:14PM Applied Materials beats by $0.02, beats on revs; guides Q4 EPS below consensus, revs below consensus (AMAT) 11.36 -0.08 : Reports Q3 (Jul) earnings of $0.35 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.33; revenues fell 2.4% year/year to $2.79 bln vs the $2.68 bln consensus. Co issues downside guidance for Q4, sees EPS of $0.16-0.24, excluding non-recurring items, vs. $0.30 Capital IQ Consensus Estimate; sees Q4 revs down 15-30% sequentially, which equates to ~$1.95-2.37 bln vs. $2.55 bln Capital IQ Consensus Estimate.
SanDisk Corporation (SNDK) introduced the Sansa Clip Zip MP3 player, the latest addition to the popular Sansa Clip family. The Sansa Clip Zip MP3 player is perfect for active music fans looking for a feature-rich, easy-to-use player at a great value.
Altera Corporation (ALTR) announced it has started shipping the world's first FPGA featuring 28-Gbps transceivers. Stratix V GT devices are the industry's highest bandwidth and highest performance FPGAs available today.
Freescale Semiconductor (FSL) and the Bosch Group's Automotive Electronics division have combined their leading positions in automotive electronics and systems expertise to create an automotive airbag reference platform for the growing automotive safety segment in emerging markets such as India and China.
11:38 am S&P Tech Sector Trades Modestly Lower; Applied Materials Reports After the Close (AMAT)
The tech sector is trading lower today, trailing gains in the broader market. Semiconductors are showing relative weakness in the tech space with the Philly Semi Index trading 1.1% lower. Among chips in the index, MU (-5.8%) is a notable laggard, while AVGO (+9.2%) is outperforming. Among other major indices, the S&P 500 is trading 0.2% higher, while the NASDAQ is trading 0.3% lower. The QQQ, meanwhile, is trading 0.3% lower. Among tech bellwethers, CSCO (-1.2%) is showing relative weakness, while GOOG (+0.9%) is outperforming.
In earnings last night, AVGO (+9.2%) posted a beat with inline guidance.
In news, RENN (+0.7%) and MSN China (MSFT -1.0%) announced a strategic partnership. In rumors, we are hearing SNE (-3.7%) for OVTI (-2.0%) takeover chatter making the rounds.
Among notable analyst upgrades this morning, CACI (+0.9%) was upgraded to Hold at Jefferies. In downgrades, FIS (-2.0%) was downgraded to Underweight at JP Morgan and SANM (-5.7%) & BHE (-5.8%) were downgraded at RBC.
AMAT (-1.7%) is the notable tech name set to report results today after the close.
Avago Tech (AVGO $32.18 +2.92) reported third quarter GAAP earnings of $0.57 per share, $0.02 better than the Capital IQ GAAP consensus of $0.55, while revenues rose 9.6% year/year to $603 million versus the $592.8 million consensus. The company issued in-line guidance for the fourth quarter with revenues +2-5% year over year to approximately $615.1-633.2 million versus the $623.07 million consensus, with GAAP gross margin of 48.25-49.75%. During the quarter the company repurchased and cancelled approximately 1.9 million ordinary shares for an aggregate $68 million and spent $24 million on capital expenditures.
Google (GOOG $520.08 +1.26) has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the United States.
Sanmina-SCI (SANM $7.14 -0.46) was downgraded to Underperform from Sector Perform at RBC Capital Markets. The firm also lowered their target to $5 from $12 given a slowing demand environment, as highlighted by disappointing results from DELL, NTAP and HPQ. |
