From Briefing.com: 4:30 pm : Trade on Tuesday was quite volatile. The S&P 500 quickly tumbled in excess of 2%, but retraced the downturn into midday. The struggle to extend the move into anything more than an incremental gain invited renewed selling in the afternoon, but a late rally helped the market close with a gain of more than 2%.
Ongoing concerns about financial conditions in Europe and Greece's ability to pay its debts, let alone meet deficit reduction targets, prompted overseas markets to suffer steep losses in schizophrenic-like trade. The negative sentiment permeated premarket trade and prompted domestic participants to push stocks sharply lower in the first few minutes.
Few stocks were sparred from the sell-off as the S&P 500 dropped to the 1075 line for the first time in about 13 months. At that point, the stock market was more than 20% below its early May high, bringing about the undesirable distinction of bear market territory.
Tech stocks provided support in the face of the broad market's dive. The sector rallied to a gain of more than 1% with help from semiconductor-related plays. Tech's strength took the Nasdaq up to a nice midsession gain and helped the S&P 500 reverse its loss, but the broad market measure was unable to move up from the neutral line while the Dow remained mired in the red.
Tech's strength was challenged in the afternoon, though. Loss of leadership from the sector, which is the largest by market weight, invited sellers to redouble their efforts and drive stocks back into negative territory.
Reports that officials in the European Union are considering plans to recapitalize banks coincided with a barrage of buying in the final hour. The move by the S&P 500 from its afternoon low to its close spanned 4%. At the same time, the Dow bounded by more than 350 points with barely a pause along the way. The Nasdaq settled with a 3% gain, the strongest of the trio.
Although the Nasdaq outpaced its counterparts, primary component Apple (AAPL 372.50, -2.01) was unable to find positive territory. The stock's loss came amid a rather negative response to the unveiling of the company's latest iPhone.
Comments from Fed Chairman Bernanke to the Joint Economic Committee were consistent with recent policy statements in that the Fed remains prepared to provide additional support as necessary. The absence of surprises essentially made the speech a non-event for the market.
The market's reversal into the close caused the dollar to take a late dive. It ended the day about 0.7% behind a basket of major foreign currencies after it had worked its way out of the red during afternoon trade. The downturn was largely owed to newfound support for the euro, which settled with a 1.4% gain at $1.337.
Treasuries also sold off. Their downturn wasn't terribly steep, but it was still enough to take the yield on the benchmark 10-year Note back above 1.80%.
A dour mood during pit trade kept pressure on oil prices, which closed the day with a 2.5% loss at $75.67 per barrel. That marked their lowest close in more than a year, but futures prices climbed in conjunction with the equity market after pit trade had closed. As for gold, the precious metal slumped during pit trade to $1616 per ounce for a 2.2% loss, unable to attract even safety seekers.
Advancing Sectors: Financials +4.1%, Materials +3.7%, Energy +3.2%, Consumer Discretionary +3.1%, Industrials +2.6%, Tech +2.1%, Health Care +1.0%, Consumer Staples +0.7%, Telecom +0.6%
Declining Sectors: Utilities -0.5%DJ30 +153.41 NASDAQ +68.99 NQ100 +2.1% R2K +6.4% SP400 +4.1% SP500 +24.72 NASDAQ Adv/Vol/Dec 1903/3.04 bln/691 NYSE Adv/Vol/Dec 1866/1.66 bln/1233
4:56PM TranSwitch announces a business re-organization and restructuring, in-line with co's Growth Strategy; narrows Q3 revs guidance to $6.5-7.0 mln vs. $7.17 mln Capital IQ Consensus Estimates, from $!~$7.0 mln (TXCC) 2.15 -0.10 : Co reported that as part of its ongoing strategy to focus resources on high-growth opportunities, today announced a business re-organization and restructuring to better align the Company's R&D resources and other operating expenses towards its stated goals. The reorganization and restructuring will be concluded during Q4 ending Dec 31, 2011. Co expects that these restructuring actions and other cost reduction initiatives will result in annual savings of ~$3.6 mln and that these savings will begin to be recognized in Q4 of 2011. Of this amount, co expects annual savings of ~$3.2 mln in reduced employee related costs including base salary reductions and $0.4 mln from other cost savings initiatives. In connection with the restructuring, co expects to incur pre-tax restructuring charges of ~$0.9 mln which will be cash expenditures primarily for employee related costs. Co expects these charges to be recorded in Q3 of 2011. Co said, The objective of the corporate reorganization is to ensure that our operations are aligned with high growth opportunities and I believe that these changes announced today will go a long way toward that goal. Once these actions are completed, our quarterly operating expenses should be around $6.6 mln on a non-GAAP basis excluding one-time expenses related to product tooling." Co narrows guidance; The co also expects its fiscal Q3 2011 revenue to be in the range of $6.5 mln to $7 mln compared to the guidance provided on August 8, 2011 of roughly $7 mln.
2:54PM Apple issued press release confirming launch details for the iPhone 4S, iOS 5 & iCloud (AAPL) 360.67 -13.92 : iPhone 4S will be available in the US for a suggested retail price of $199 for the 16GB model and $299for the 32GB model and $399 for the new 64GB model. iPhone 4S will be available from the Apple Online Store, Apple's retail stores and through AT&T (T), Sprint (S), Verizon Wireless (VZ) and select Apple Authorized Resellers. iPhone 4S will be available in the US, Australia, Canada, France, Germany, Japan and the UK on Friday, October 14 and customers can pre-order their iPhone 4S beginning October 7. iPhone 4 will also be available for just $99 and iPhone 3GS will be available for free with a two year contract. iPhone 4S will roll out worldwide to 22 more countries by the end of October including Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Mexico, Netherlands, Norway, Singapore, Slovakia, Slovenia, Spain, Sweden and Switzerland.
8:32AM IBM to acquire privately held Q1 Labs; Financial terms were not disclosed (IBM) 173.29 : Following the close of the acquisition, Q1 Labs will join the newly-formed IBM Security Systems division, representing the world's most comprehensive security portfolio. After the close, IBM intends the new division to be led by Brendan Hannigan, CEO of Q1 Labs.
8:03AM Intel's McAfee to acquire NitroSecurity; terms are not disclosed (INTC) 20.62 : McAfee announced a definitive agreement to acquire privately owned NitroSecurity. Co anticipates that the acquisition will close by the fourth quarter of 2011.
7:31AM Qualcomm announces Steve Altman will become vice chairman and Steve Mollenkopf has been promoted to President and COO (QCOM) 47.65 : The changes will be effective November 12, 2011. Altman has served as president of QTL and has been a member of the executive committee since 1992. Altman joined Qualcomm in 1989 and is the chief architect of the Company's licensing business model.
Freescale Semiconductor (FSL) announced that VIKO Electric and Electronic has selected the Freescale MC9S08LH64 microcontroller (MCU) for its single-phase residential electricity meters. These meters are expected to be available early next year.
11:56 am S&P Tech Sector Showing Nice Gains, Outperforming the S&P 500
The tech sector is trading higher today, ahead of losses in the broader market. Semiconductors are showing relative strength in the tech space with the Philly Semi Index trading 2.0% higher. WFR (+5.3%) is a notable leader in that index. Among other major indices, the S&P 500 is trading 0.4% lower, while the NASDAQ is trading 0.8% higher. The QQQ, meanwhile, is trading 0.5% higher. Among tech bellwethers, CSCO (+1.1%) is showing notable strength.
In earnings, MSPD (+3.7%) lowered its Q4 guidance. In news, AAPL (+0.9%) is expected to unveiled its newest iPhone today at 1 ET.
Among rumors, there's renewed YHOO (+5.0%) takeover chatter making the rounds. There are also rumors of RIMM (+2.9%) exploring strategic alternatives.
Among notable analyst upgrades this morning, ERIC (+1.3%) was upgraded to Buy at Citigroup and PLCM (+10.8%) and SHOR (+8.3%) were upgraded to Overweight at Barclays. In downgrades, QSII (-3.1%) was downgraded to Neutral at Piper Jaffray and RVBD (-4.4%) was downgraded to Equal Weight at Barclays.
No notable names in tech set to report results today after the close.
Mindspeed (MSPD $5.04 +0.11) issued downside guidance for the fourth quarter with revenues of $40.5 million versus the $43.14 million Capital IQ Consensus and below prior guidance of $42.2-43.9 million. The company expects preliminary fiscal fourth quarter of 2011 non-GAAP gross margin percentage range and non-GAAP operating expenses to be consistent with the previous outlook. Additionally, the company states: "We experienced a weaker demand environment in the fiscal fourth quarter of 2011, primarily impacting our high-performance analog and legacy wide area networking business, as a result of weakening demand in the communications infrastructure market."
Polycom (PLCM $18.72 +1.04) was upgraded to Overweight from Equal Weight at Barclays. The firm says given a range of checks through the quarter, they revisited their networking names and prioritize those which they think are likely to lead through a difficult economy 2nd half 2011 and into 2012. They conclude healthy videoconferencing and unified communications trends should allow PLCM and SHOR to lead their networking peers. They think Riverbed's underlying drivers are intact, but demand may be slower to recover in a downturn, particularly in Europe.
Red Hat (RHT $38.39 -2.10) has agreed to acquire Gluster, a privately-held company, for approximately $136 million in cash. As part of the transaction, Red Hat will also assume unvested Gluster equity outstanding on the closing date and issue certain equity retention incentives. The transaction is expected to close in October, subject to customary closing conditions. The acquisition is expected to have no material impact to Red Hat's revenue this fiscal year but should begin to grow next year based on a subscription revenue model. The company reaffirmed its third quarter EPS guidance of $0.25-0.26 versus the $0.26 Capital IQ Consensus Estimate with revenues of $288-290 million versus the $289 million consensus. The company also reaffirmed its fiscal year 2012 EPS guidance of $1.03-1.05 versus the $1.05 consensus with revenues of $1.12-1.13 billion versus the $1.128 billion consensus.
Apple (AAPL $362.54 -12.05) held a media event where they announced the iPhone 4S, which will have a duel core A5 processor. It will be able to work on both GSM and CDMA networks. It also announced that iCloud, including iTunes in the Cloud, that will work seamlessly with AAPL devices will be available on October 12. The iPhone will available on October 14th.
Zeev was right here on this thread at the 2002 bottom I believe. RtS |
