From Briefing.com: Weekly Recap - Week ending 23-Sep-11The stock market mustered its first gain of the week on Friday. The gain, although modest, came as participants moved to cover their positions following four days of concerted selling.
Action in the final session of the week was a bit boring, given the volatility of the preceding sessions. Stocks essentially spent the session chopping along in mixed fashion. The action came as participants displayed a sense of uncertainty regarding the market's treatment of headline risk related to tenuous global economic conditions and precarious financial conditions in Europe ahead of the weekend. Just last week traders were feeling more confident about those themes, resulting in five straight gains for stocks.
Following only the second weekly advance in almost two months, the risk trade was abruptly switched off at the start of this week. Traders showed disappointment over the lack of progress by Greece in establishing an austerity plan that would secure it financial assistance from the Troika. Reflecting the deterioration of financial conditions in the Eurozone's periphery, Italy had its debt downgraded by analysts at Moody's, but that decision really wasn't too surprising.
Sentiment really began to sour with the midweek announcement by the FOMC that it will purchase $400 billion of Treasuries with maturities of six years to 30 years, while selling an equal amount of Treasuries with a remaining maturities of three years or less, by the end of June 2012. The plan, labeled "Operation Twist" by traders, was generally in-line with what had been expected on Wall Street, but it seemed less than accommodative in light of the Fed's statement that downside risk to economic growth remain high.
Stocks responded to the Fed's statement by tumbling to a loss of almost 3%. Stocks then fell more than 3% the next day as selling pressure was perpetuated by aggressive selling abroad. Although the bloodletting eased on Friday, the stock market still suffered a weekly loss of 6.5%. That marks the seventh weekly slide in nine weeks time.
The resumption of the stock market's downtrend drove masses of traders into Treasuries. As a result, the yield on the benchmark 10-year Note dropped to a record low of less than 1.70%. It moved back above 1.80% on Friday, though.
The dollar also benefited from a flight to safety. Relative to a basket of major foreign currencies, the greenback climbed to a seven-month high, but wavered a bit in the final session of the week.
Interestingly, gold failed to attract safety seekers. Instead, the precious metal was caught up in the sell-off that slammed other commodities. Gold prices finished pit trade on Friday at $1645 per ounce for a 5.6% loss, but for the week the precious metal fell about 9%. Overall, commodities fell almost 7%, according to the CRB Commodity Index.
..Nasdaq 100 +1.0%. ..S&P Midcap 400 +1.3%. ..Russell 2000 +1.4%. ..NYSE Adv/Dec 1901/1102. ..NASDAQ Adv/Dec 1750/818.
Index Started Week Ended Week Change % Change YTD %
DJIA 11509.09 10771.48 -737.61 -6.4 -7.0
Nasdaq 2622.31 2483.23 -139.08 -5.3 -6.4
S&P 500 1216.01 1136.43 -79.58 -6.5 -9.6
Russell 2000 714.31 652.43 -61.88 -8.7 -16.7
3:15PM Skyworks: AnalogicTech (AATI) files petition to initiate arbitration related to pending acquisition by Skyworks (SWKS) 20.78 +0.47 : Advanced Analogic Technologies announced that it has filed a Petition for Arbitration in the Delaware Chancery Court seeking specific performance of the Company's merger agreement with Skyworks Solutions and to order Skyworks to close the transaction. AnalogicTech is seeking declaratory judgment from the Court that (1) AnalogicTech has not breached the merger agreement, (2) no "material adverse effect" has occurred with respect to AnalogicTech, and (3) Skyworks has breached its obligations under the merger agreement. In accordance with the rules of arbitration in the Delaware Chancery Court, the petition is filed under seal and all proceedings will be confidential. As per the terms of the merger agreement, CO does not intend to comment or provide information regarding this matter until the arbitration process is concluded, unless required by law.
8:13AM Mattson appoints Michael Dodson as CFO; effective October 11, 2011 (MTSN) 1.29 : Co appointed Michael Dodson as executive vice president and CFO effective October 11, 2011. As previously announced, Andrew Moring will transfer the CFO responsibilities to Dodson effective upon the appointment but will remain with the company through the end of 2011. Dodson served as Senior VP and CFO of DDi Corp (DDIC) from 2010 until joining Mattson Technology. From 2006 to 2009, he was SVP and CFO of eTelecare Global Solutions.
7:07AM Am Superconductor announces nearly $100 mln in new contracts across product lines and geographies (AMSC) 4.47 : Co announced its recent successes in the wind power and power grid markets, including nearly $100 mln in new contracts since the start of the co's fiscal year on April 1, 2011. AMSC signed contracts with wind turbine manufacturers in China, India and Korea. Within its Grid segment, AMSC received orders for its grid interconnection and high voltage stability solutions in the U.S. and Europe and made a key high temperature superconductor wire shipment to South Korea.
7:06AM Am Superconductor reports FY10 results and Q1 FY11 results; include previously announced restatements (AMSC) 4.47 : Co reports FY10 EPS of ($3.95) and revenues of $286.6 mln. FY10 includes the impact of applying a cash basis of accounting to recognize revenue for shipments to certain customers in China as of September 1, 2010 and for shipments to Sinovel Wind Group as of October 1, 2010. The FY10 net loss includes $158.5 mln in aggregate one-time asset write-downs, impairments and accrued charges recorded primarily in Q4 FY10 associated with the accounting judgment that its relationship with Sinovel will not continue. Co reports FY10 non-GAAP EPS of ($0.27) vs $0.70 yr ago... Revenues for Q1 FY11 were $9.1 mln. This compares with $97.2 mln for the first quarter of fiscal 2010. The decline is due primarily to a lack of revenue from Sinovel. Co reported a net loss for the quarter of $37.7 mln, $0.74 per diluted share. This compares with net income of $9.2 mln, or $0.20 per diluted share, for the first quarter of fiscal 2010. The company's non-GAAP net loss for the first quarter of fiscal 2011 was $30.8 mln, or $0.61 per diluted share. This compares with non-GAAP net income of $13.0 mln, or $0.28 per diluted share, for the first quarter of fiscal 2010.
3:27AM LDK Solar provides an update on debt repurchase activity (LDK) 3.47 : Co reports it repurchased $10.8 million nominal value of the co's 4.75% convertible senior notes due 2013 in an open market purchase for ~$7.4 million, reflecting a discount from par. The co also repurchased $10.7 mln nominal value RMB USD-settled 10% senior notes due 2014 in an open market purchase for ~$8.2 mln, reflecting a discount from par.
Last night, Cavium Networks (CAVM $28.61 -2.60) reported that it sees third quarter revenue -4 to -6% quarter over quarter to approximately $67.3-68.7 million versus the $73.45 million Capital IQ consensus. The company expects that non-GAAP gross margins and non-GAAP operating expenses in the third quarter will be consistent with previous guidance. "Customer revenues have been weaker than expected this quarter, in the enterprise market as well as recognized software services revenue. Sales into the enterprise market were affected by a much larger than expected impact of a hub transition at one of our major customers as well as lower demand from other enterprise customers as they adjust their supply chain inventory due to the softer demand environment. However, we continue to experience high levels of design win activity across multiple product families and are confident that we are well positioned for the future."
Last night, TriQuint Semi (TQNT $5.46 +0.29) lowered third quarter EPS guidance to $0.09-0.11 versus the $0.16 Capital IQ consensus, down from $0.16-0.18. The company also lowered revenue guidance to $210-215 million versus the $228.6 million consensus, down from $225-235 million. The company said, "The reduction in expected revenue and profitability for the third quarter is primarily the result of reduced demand from the Company's largest customer, weakness in the communications infrastructure market and softening demand from the China market. Product mix and costs associated with ramping new products are the largest drivers of the sequential reduction in non-GAAP gross margins. The co expects a return to strong sequential revenue growth in the fourth quarter of 2011. No conference call will be held in conjunction with this financial outlook update."
Hewlett-Packard (HPQ $21.78 -1.02) has confirmed that its board of directors has appointed Meg Whitman as President and CEO. In addition, Ray Lane has moved from non-executive chairman to executive chairman of the board of directors, and the board intends to appoint a lead independent director promptly. These leadership appointments are effective immediately and follow the decision that Leo Apotheker step down as President and CEO and resign as a director of the company.
11:00 am S&P Tech Sector Up Modestly, About In-line With Broader Markets (HPQ)
The tech sector is trading higher today, just ahead of the broader market. Semiconductors are showing relative strength in the tech space with the Philly Semi Index trading 1.3% higher. Among chips in the index, NVDA (+3.2%) is a notable leader. Among other major indices, the S&P 500 is trading 0.3% higher, while the NASDAQ and the QQQ are trading 0.6% higher. Among tech bellwethers, CSCO (+1.8%) is outperforming, while IBM (-0.6%) is under pressure.
In earnings last night, CAVM (-12.4%) and TQNT (+5.6%) issued downside guidance. Also, TIBX (+2.8%) posted a Q3 beat.
In news, HPQ (-4.1%) confirmed it has named Meg Whitman President and CEO. Also, MOTR (+4.3%) announced it hired an advisor to pursue strategic options.
In rumors, we are hearing renewed YHOO (+3.9%) takeover chatter making the rounds.
Among notable analyst upgrades this morning, The Benchmark Company upgraded OTEX (+1.4%) to Hold, TXN (+2.1%) was upgraded to Above Average at Caris and YOKU (+16.2%) was upgraded to Positive at Susquehanna. In downgrades, CAVM (-12.4%) was downgraded to Hold at Deutsche Bank and TQNT (+5.6%) was downgraded to Sector Perform at Pacific Crest.
10:07 am Cavium Networks Guides Third Quarter Revenue Below Consensus (CAVM)
Cavium Networks (CAVM $26.96- 4.25) expects to see third quarter revenue decline -4% to -6% quarter/quarter to approx. $67.3 million to $68.7 million versus the $73.45 mln Capital IQ Consensus Estimate.
The company expects that non-GAAP gross margins and non-GAAP operating expenses in the third quarter will be consistent with previous guidance.
"Customer revenues have been weaker than expected this quarter, in the enterprise market as well as recognized software services revenue. Sales into the enterprise market were affected by a much larger than expected impact of a hub transition at one of our major customers as well as lower demand from other enterprise customers as they adjust their supply chain inventory due to the softer demand environment. However, we continue to experience high levels of design win activity across multiple product families and are confident that we are well positioned for the future."
Don, thanks for sharing what's happening in your area. It's honestly depressing. All things considered the stock market is doing well. RtS |
