From Briefing.com: 4:10 pm : Equities saw heavy selling today as European sovereign debt worries moved back into the forefront. Selling of peripheral debt caused the Italian and Spanish 10-yr yields to spike as much as 30 basis points to 5.67% and 5.99% respectively. The rise in yields sparked a flight into the safety of German Bunds with the 2-, 5-, and 10-yr yields falling to record lows. Here in the U.S., equities opened flat, and held their early levels until whole inventories came in with a larger than expected 0.9% gain. Sellers piled on after a few minutes of choppy trade and remained in control all session long as the Nasdaq paced today’s decline with a loss of 1.8%.
European financials saw significant selling pressure on the rise of peripheral yields. Numerous financial stocks were halted across Italy, and that weighed on Barclays (BCS 13.01, -0.73), Deutsche Bank (DB 43.50, -1.48), and Societe Generale (SCGLY.PK 4.85, -0.32).
Best Buy (BBY 21.32, -1.33) lost 5.9% after the resignation of Chief Executive Officer Brian Dunn. The company named Director Mike Mikan interim CEO until a permanent replacement is hired. Shares surged more than 4.0% in initial reaction to Mr. Dunn’s resignation, but the stock rolled over as equities sold off.
ViroPharma (VPHM 22.44, -6.17) finished down 21.6% on word that Akorn launched the generic version of the company’s Vancocin after the Food & Drug Administration denied its citizen petition regarding bioequivalence and exclusivity. Today’s weakness dropped the stock to its worst levels since November 28.
Shares of SuperValue (SVU 6.13, +0.81) gained 15.2% following the company’s better than expected fourth quarter earnings. The company announced earnings per share of $0.38 which topped Capital IQ Consensus Estimate of $0.36 per share. Revenues missed expectations, coming in at $8.23 billion on expectations of $8.32 billion.
Grain ETFs fell despite today’s bullish grains report. The USDA World Agricultural Supply and Demand report (WASDE) indicated global corn ending stocks (inventory) fell 1.82 million metric tons (mmt), or 1.5%, to 122.71 mmt, driven by inventory declines outside of the U.S. Also, South American crop production is expected to drop as estimates for Argentina (to 22 mmt from 21.5) and Brazil (to 11.5 mmt from 12) declined. Select grain ETFs Powershares DB Agriculture Fund (DBA 27.51, -0.37), iPath Dow Jones-UBS Gains Sub-Index (JJG 46.75, -0.75), and Teucrium Corn (CORN 38.79, -0.62) are moved lower on broad-based market weakness.
Treasuries saw strong gains as today’s flight to safety dropped the 10-yr yield below 2.00% for the first time in a month. Curve flattening continued with the 2-10-yr spread tightening to 169.5 basis points. Meanwhile, corporate bonds underperformed with iShares iBoxx $ Investment Grade ETF (LQD 115.52, -0.07) down 0.1%, and SPDR Barclays Capital High Yield ETF (JNK 38.69, -0.14) sliding 0.4% to see a seventh consecutive session of losses.
Wednesday’s data slate includes the weekly MBA Mortgage Index, import/export prices, the Treasury budget, and the Fed’s Beige Book. Treasury will hold a 10-yr note reopening.DJ30 -213.66 NASDAQ -55.86 SP500 -23.61 NASDAQ Adv/Vol/Dec 464/1.90 bln/2049 NYSE Adv/Vol/Dec 463/970.7 mln/2610
4:18PM LDK Solar has changed the Q4 release date to April 30 from April 12; mgmt needs additional time to finalize certain items (LDK) 3.23 -0.07 : Co says mgmt needs additional time to finalize certain items, including an impairment analysis of long-lived assets and an assessment of inventory write-downs and provisions for certain receivables. These provisions and the previously provided outlook for the fourth quarter 2011 are preliminary estimates and the Company has yet to complete its preliminary review and compilation of its financial information for the quarter. Results are subject to change based on further review by management.
4:09PM Alcoa beats by $0.13, beats on revs; reaffirms FY12 global alumina demand +7% (AA) 9.32 -0.28 : Reports Q1 (Mar) adj. earnings of $0.10 per share, $0.13 better than the Capital IQ Consensus Estimate of ($0.03); revenues rose 0.8% year/year to $6.01 bln vs the $5.75 bln consensus. The improvement over 4Q11 results was driven by strong productivity improvements across all businesses, higher realized prices for aluminum, and improved volume and mix. These were offset somewhat by a lower realized alumina price and higher input costs. Alcoa recorded revenue growth in Q1 across global end markets, including industrial products (14%), automotive (13%), packaging (11%), and commercial transportation (11%), compared to fourth quarter 2011. Compared to first quarter 2011, revenues were up in commercial transportation (32%), aerospace (15%), and automotive (7%), while revenues were down in industrial products (14%) and building and construction (5%). Alcoa is raising its 2012 global growth forecast for the aerospace market 3 percentage points (13-14%), and expects global growth in the automotive (3-7%), commercial transportation (1-5%), packaging (2-3%), building and construction (2.5 - 3.5%), and industrial gas turbine (1-2%) markets. Alcoa continues to project a global aluminum supply deficit in 2012 and reaffirmed its forecast that global aluminum demand would grow 7% in 2012, on top of the 10% growth seen in 2011.
4:06PM Applied Micro lowers Q4 guidance (AMCC) 6.26 -0.08 : Co issues downside guidance for Q4 (Mar), sees EPS of ($0.10)-($0.12) vs. ($0.08) Capital IQ Consensus Estimate; sees Q4 (Mar) revs of $48.9 mln vs. $52.04 mln Capital IQ Consensus Estimate. "The overall shortfall of $3.1M was spread across both the Transport and Processor product families. Our OTN revenue and sequential ramp came through as expected and did not contribute to the revenue shortfall. The revenue shortfall is related to slowness in the service provider space and the overall wire line market weakness."
4:06PM SMSC beats by $0.22, misses on revs; guides Q1 EPS above consensus, revs above consensus (SMSC) 24.23 -0.08 : Reports Q4 (Feb) earnings of $0.05 per share, excluding non-recurring items, $0.22 better than the Capital IQ Consensus Estimate of ($0.17); revenues fell 11.2% year/year to $89.9 mln vs the $90.95 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.29-0.38, excluding non-recurring items, vs. $0.27 Capital IQ Consensus Estimate; sees Q1 revs of $98-102 mln vs. $97.70 mln Capital IQ Consensus Estimate.
4:00PM RF Micro Device announced that Jerry Neal, co-founder and executive vice president of marketing, is retiring from RFMD, effective May 31, 2012 (RFMD) 4.38 -0.07 :
O2Micro International (OIIM) was issued 28 claims under a U.S. patent for its Power System invention. Co was also issued 16 claims for its Light Source Driving Circuit methodology.
Sanmina-SCI (SANM) announced it has redeemed $100.0 mln in aggregate principal amount of its 8.125% Senior Subordinated Notes due 2016.
Dell (DELL $16.59 -0.01) announced it has signed a definitive agreement to acquire Wyse Technology to extend its desktop virtualization offerings. The addition of Wyse will expand Dell's desktop virtualization capabilities and provide new solutions and services opportunities for the full range of Dell's enterprise offerings. The transaction was approved by the board of directors of each company and is expected to be accretive to Dell non-GAAP earnings in the second half of its Fiscal Year 2013. Additional terms of the transaction were not disclosed. The transaction remains subject to customary conditions and is expected to close in the second quarter of Dell's fiscal year 2013.
Canaccord's monthly channel checks indicated strong sales trends for Apple's (AAPL $607.09 +7.72) iPhone 4S at all three U.S. carriers and strong overall iPhone sales in international markets, with particular strength driven by the iPhone 4S launch at China Telecom (CHA) and Unicom (CHU). Firm maintains belief Apple is well positioned for strong C2012/13 sales and earnings growth driven by new product introductions, including the new iPad, the pending refresh of MacBook Air/Pro, an LTE iPhone likely in Q3/C2012, and potentially Apple TV exiting C2012.
09:28 am Qualcomm target raised to $75 at Oppenheimer: . Oppenheimer raises their QCOM tgt to $75 from $70 as they expect a good March quarter from QCOM spurred by Apple (AAPL) and Samsung. They are also incrementally more comfortable QCOM will gain share in 2012-13 due to its favorable vendor mix as the iPhone 5 and new Galaxy phones launch and with increased 4G LTE adoption. They are raising their estimates accordingly and see the potential for upside as normal chipset ASP declines could be muted by accelerating LTE adoption (2012 EPS raised to $3.81 from $3.71 vs $3.86 CIQ consensus).
10:50 am Technology sector trading just ahead of broader market
The tech sector is trading slightly higher today, just ahead of losses in the broader market. Semiconductors are showing relative strength in the tech space, however, with the Philly Semi Index trading 0.4% higher. CREE (+7.0%) is a notable leader in the chip index, while STM (-3.8%) is bucking the trend. Among other major indices, the SPY is trading 0.3% lower today, while the QQQ is 0.1% lower and the NASDAQ is trading 0.2% lower on the session. Among tech bellwethers, AAPL (+1.0%) is showing notable strength.
In earnings last night, HLIT (-3.1%) lowered its Q1 guidance. This morning, SMI (+4.9%) raised its Q1 guidance, while SNE (-7.7%) lowered its guidance. In news, XRIT (+38.5%) announced an agreement that DHR (-1.0%) would acquire the company for $5.55 per share. Among rumors, we are hearing renewed MSFT (-0.4%) for RIMM (-1.2%) takeover chatter making the rounds.
Among notable analyst upgrades this morning, DELL (+1.5%), CALX (+4.2%), and INFN (+3.6%) were upgraded to Equal Weight from Underweight at Morgan Stanley. While in downgrades, APH (-1.2%) was downgraded at Keybanc to Hold.
There are no notable names in tech scheduled to report results today after the close. |
