From Briefing.com: 4:10 pm : Markets closed lower for a fourth consecutive session as a drop of 1.0% saw the Nasdaq pace the decline. Stocks shrugged off the disappointing import/export data from China and opened with solid gains after EU finance ministers announced a plan to expedite EUR30 billion for the recapitalization of Spanish banks. The major averages gave up those gains in the first hour of trading, and then dropped precipitously after engine maker Cummins lowered its full-year 2012 revenue outlook.
Shares of Cummins (CMI 86.91, -8.53) fell sharply after the company announced it expects its full-year revenue outlook for 2012 to match 2011 despite prior guidance suggesting an increase of 10%. The company also announced it anticipates second quarter revenues will come in at around $4.45 billion, well short of the Capital IQ Consensus Estimate which is calling for $5.08 billion. Not to go unnoticed was the company increasing its quarterly dividend 25% to $0.50 per share. Today’s weakness dropped the stock to levels not seen since December. Caterpillar (CAT 80.27, -2.87) moved lower in reaction to the announcement.
Alcoa (AA 8.40) slid 4.1% despite announcing in-line earnings per share results, and a revenue beat that was accompanied by the company reaffirming its aluminum outlook for the remainder of 2012.
Applied Materials (AMAT 10.71, -0.30) shed 2.7% after the company lowered its fiscal year 2012 sales guidance, and announced it expects both third quarter earnings per share and revenues to come in at the lower end of the their expected ranges.
Patriot Coal (PCXCQ.PK 0.21, -0.10) plunged more than 50% after the company confirmed plans to file for Chapter 11 reorganization. Those who follow the stock should note the ticker change from ‘PCX’ to ‘PCXCQ.PK.’ Peabody Energy (BTU 22.44, -0.87) and Arch Coal (ACI 6.11, -0.56) are names that have some exposure to the company.
Coca-Cola (KO 77.98, +0.00) finished flat after the company announced a two-for-one stock split which will increase its shares outstanding to 11.2 billion from 5.6 billion.
Miners were under pressure as the underlying metals saw heavy selling. Gold lost more than $20 at $1568 per ounce while the selling pressure in silver has dropped it $0.65 to near $26.75 per ounce. Agnico Eagle Mines (AEM 38.74, -1.67) was one of the worst performing gold miners while pure play silver miner Silver Wheaton (SLW 26.12, -1.19) slipped 4.4% on the session. Both underperformed the broad-based Market Vectors Gold Miners ETF (GDX 42.87, -1.38).
Treasuries ended on session highs as an afternoon selloff in equities sparked a safety bid. The long bond ended the day up close to half a point as its yield slid 2.6 bps to 2.594%. A less aggressive bid in the 10-yr note lowered its yield by 1.5 bps to 1.498%. Flattening along the yield curve caused the 2-10-yr spread to narrow to 122 bps.
Data picks up tomorrow as the weekly MBA Mortgage Index, the trade balance, wholesale inventories, and the FOMC minutes are all released. Treasury will hold a $21 bln 10-yr note reopening. DJ30 -83.17 NASDAQ -29.44 SP500 -10.99 NASDAQ Adv/Vol/Dec 817/1.65 bln/1653 NYSE Adv/Vol/Dec 1024/727.3 mln/2010
3:30 pm : Crude oil struggled in the red for its entire floor session as the dollar advanced. The energy component set a session high of $85.79 per barrel in early morning action but quickly pulled-back and fell lower. The decline accelerated in afternoon pit trade as crude plummeted to a session low of $83.68 per barrel and settled with a 2.3% loss at $83.92 per barrel.
Natural gas also fell deeper into negative territory as its pit session progressed. Despite efforts to consolidate losses and brushing a session high of $2.83 per MMBtu in late morning action, nat gas slid further and closed with a 4.9% loss at $2.74 per MMBtu.
Gold rose to a pit session high of $1602.00 per ounce in early morning action on EU finance ministers' announcement that Spain would be given EUR 30 bln by the end of July to help recapitalize banks. However, the enthusiasm faded and sellers stepped in as the dollar regained strength. The yellow metal erased all of its earlier gains and slid to a session low of $1578.70 per ounce before settling floor trade with a 0.6% loss at $1579.40 per ounce.
Silver briefly broke into positive territory and brushed a pit session high of $27.53 per ounce before trending lower for the remainder of the session. It dropped as low as $26.82 per ounce before closing the session at $26.89 per ounce, or 2.0% lower.DJ30 -116.09 NASDAQ -38.69 SP500 -15.00 NASDAQ Adv/Vol/Dec 737/1358.4 mln/1722 NYSE Adv/Vol/Dec 880/485 mln/2137
4:06PM Rambus and Discretix announce they have entered into an agreement enabling Discretix to develop products incorporating Differential Power Analysis (RMBS) 5.07 -0.26 : Cryptography Research, a division of Rambus (RMBS), and Discretix announced they have entered into an agreement enabling Discretix to develop products incorporating Differential Power Analysis countermeasures for use by licensees of CRI's DPA patents.
4:06PM SMSC stockholders approve merger with Microchip (MCHP) (SMSC) 36.81 -0.01 : The acquisition is expected to be completed in the third quarter of calendar 2012, subject to antitrust clearance in China and other customary closing conditions.
9:11AM Applied Materials sees Q3 EPS, rev at low end of piror guidance; sees FY12 EPS, rev below prior guidance (AMAT) 11.01 : Co issues downside guidance for Q3 (Jul), sees EPS of lower half of $0.21-0.29 vs. $0.25 Capital IQ Consensus Estimate; sees Q3 (Jul) revs of low end of $2.286-2.54 bln vs. $2.43 bln Capital IQ Consensus Estimate. Co issues downside guidance for FY12 (Oct), sees EPS of below $0.85-0.95 vs. $0.94 Capital IQ Consensus Estimate; sees FY12 (Oct) revs of below $9.1-9.5 bln vs. $9.5 bln Capital IQ Consensus Estimate. The co will provide a new target range during its August 15 earnings call, however it expects that the demand changes could have a $0.15 to $0.20 impact on full-year non-GAAP EPS results. The co also revised its calendar year 2012 industry forecast for wafer fab equipment spending to $30 to $33 billion, compared to its previous expectation of $32 to $35 billion, in line with the market changes.
8:32AM KLA-Tencor increases quarterly dividend 14% to $0.40/share (KLAC) 45.62 :
Verizon Wireless (VZ, VOD) and Research In Motion (RIMM) confirmed the BlackBerry Curve 9310 smartphone details.
Socket Mobile (SCKT) announced a partnership with LightSpeed. The collaboration pairs the Socket Bluetooth Cordless Hand Scanner Series 7 barcode scanners with the LightSpeed for Apple's (AAPL) iPad application.
6:33AM GSI Technology announces that court issued a decision upholding the sufficiency of the antitrust claims asserted by GSI in its Complaint against Cypress Semiconductor (CY) (GSIT) 4.95 : Co announced that on Friday, July 6, the United States District Court for the Northern District of California in San Jose issued a decision upholding the sufficiency of the antitrust claims asserted by GSI in its Complaint against Cypress Semiconductor (CY). The Complaint, filed on July 22, 2011, charges Cypress with conducting an unlawful combination and conspiracy, by and through the QDR Consortium, to exclude GSI and other competitors from the market for high-performance static random access memory (SRAM) devices known as fast synchronous Quad Data Rate (or QDR) SRAMs and Double Data Rate (or DDR) SRAMs. Cypress had moved to dismiss the Complaint arguing that the claims asserted by GSI failed to state a claim under federal or state antitrust laws. In its decision, the Court rejected virtually all of Cypress' arguments. The Court held that GSI's Complaint adequately alleges that the anti-competitive, collusive and conspiratorial conduct of Cypress and certain co-conspirators violates Section 1 of the Sherman Act and also constitutes unlawful restraints of trade and unfair competition under applicable provisions of California law. The Complaint seeks treble damages, in an amount to be determined at trial, a preliminary and permanent injunction prohibiting the continuation of the unfair and illegal business practices and recovery of GSI's attorneys' fees and costs. The decision in GSI's favor will allow GSI to pursue pre-trial discovery on all of the claims alleged.
6:31AM Mattson lowers Q2 revenue guidance below consensus; sees Q2 EPS at lower end of prior range (full range in line with consensus); Co does not expect net sales to exceed Q2 2012 levels until early 2013 (MTSN) 1.68 : Co sees Q2 EPS guidance at lower end of previous range of ($0.06) - $0.02, excluding non-recurring items, vs. $0.00 Capital IQ Consensus Estimate. Co also lowers Q2 revenue guidance to $33-35 mln from prior guidance of $40-50 mln vs. $47.12 mln Capital IQ Consensus Estimate. The Company does not expect the majority of the delayed strip system shipments to this foundry customer to occur until early 2013. In addition, as previously noted by the Company, the Company had been expecting a softening in the NAND business during the second quarter of 2012 and this softness now appears likely to extend beyond the second quarter of 2012. For these reasons, net sales are expected to be significantly lower in the third quarter of 2012 than the second quarter. In the absence of an increase in demand for delivery of equipment during the fourth quarter, the Company does not expect net sales to exceed second quarter 2012 levels until early 2013.
Analog Devices (ADI) introduced a two-channel, high-performance 14-bit, 125-MSPS A/D converter that reduces total power consumption by 22 percent over competing solutions.
09:36 am Applied Materials shares fall 3% following downside third quarter and fiscal year 2012 guidance
Applied Materials (AMAT $10.62 -0.38) issued downside guidance for the third quarter with EPS of lower half of $0.21-0.29 versus the $0.25 consensus and revenues at the low end of $2.286-2.54 billion versus the $2.43 billion consensus. The company issued downside guidance for fiscal year 2012 with EPS of below $0.85-0.95 versus the $0.94 consensus and revenues below $9.1-9.5 billion versus the $9.5 bln consensus. The company will provide a new target range during its August 15 earnings call, however it expects that the demand changes could have a $0.15 to $0.20 impact on full-year non-GAAP EPS results. The co also revised its calendar year 2012 industry forecast for wafer fab equipment spending to $30 to $33 billion, compared to its previous expectation of $32 to $35 billion, in line with the market changes.
09:34 am ASML shares rise 8% following agreement with Intel and equity investment
Intel (INTC $25.98 -0.18) announced it has entered into a series of agreements with ASML (ASML $52.22 +3.72) intended to accelerate the development of 450-millimeter wafer technology and extreme ultra-violet lithography totaling EUR 3.3 billion (approximately $4.1 bln). The objective is to shorten the schedule for deploying the lithography equipment supporting these technologies by as much as two years, resulting in significant cost savings and other productivity improvements for semiconductor manufacturers. INTC to also initially purchase 10% of pre-transaction issued shares of ASML for EUR 1.7 billion ($2.1 billion) and commit to purchase an additional 5% of post-transaction issued shares as part of ASML's program to enable minority investments of up to a 25% equity stake to its largest customers INTC will then hold a total of 15% of ASML's issued shares.
The total equity investment will be EUR 2.5 billion (approximately $3.1 billion). As part of these agreements, Intel is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML. ASML has stated its intention to sell up to a 25% aggregate stake in the company to Intel and other semiconductor manufacturers in this program. ASML is currently in discussions with other customers and has publicly indicated it expects others in the industry to participate in the R&D and equity program. Regardless of the outcome of ASML's discussions with other customers and upon completion of this two-phase program, Intel's ownership stake in ASML will not exceed 15 % of ASML's post-transaction issued shares and will be subject to lock-up and voting restrictions. ASML has stated its intention to sell up to a 25 % aggregate stake in the company (on a post-transaction basis) to Intel and other semiconductor manufacturers in this program. ASML is currently in discussions with other customers and has publicly indicated it expects others in the industry to participate in the R&D and equity program.
Advanced Micro (AMD $5.29 -0.33) issued downside guidance for the second quarter with revenue to approximately 11% QoQ (from flat to +6% QoQ) to approximately $1.41 billion versus the $1.63 billion consensus Estimate. The lower preliminary rev results are primarily due to business conditions that materialized late in Q2, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the co's Original Equipment Manufacturer business. The company expects second quarter gross margin to be ~in line with prior guidance. Operating expenses for the second quarter are expected to improve and to be approximately 8 percent less than prior guidance of approximately $605 million, a result of tightly controlled expenses in the quarter. The company will report in July 19.
Intel (INTC $26.15 +0.00) announced it has entered into a series of agreements with ASML (ASML $52.19 +3.74) intended to accelerate the development of 450-millimeter wafer technology and extreme ultra-violet lithography totaling EUR 3.3 billion (approximately $4.1 bln). The objective is to shorten the schedule for deploying the lithography equipment supporting these technologies by as much as two years, resulting in significant cost savings and other productivity improvements for semiconductor manufacturers. INTC to also initially purchase 10% of pre-transaction issued shares of ASML for EUR 1.7 billion ($2.1 billion) and commit to purchase an additional 5% of post-transaction issued shares as part of ASML's program to enable minority investments of up to a 25% equity stake to its largest customers INTC will then hold a total of 15% of ASML's issued shares. The total equity investment will be EUR 2.5 bln (~$3.1 bln). As part of these agreements, Intel is also committing to advanced purchase orders for 450-m and EUV development and production tools from ASML. ASML has stated its intention to sell up to a 25% aggregate stake in the company to Intel and other semiconductor manufacturers in this program. ASML is currently in discussions with other customers and has publicly indicated it expects others in the industry to participate in the R&D and equity program. Regardless of the outcome of ASML's discussions with other customers and upon completion of this two-phase program, Intel's ownership stake in ASML will not exceed 15 % of ASML's post-transaction issued shares and will be subject to lock-up and voting restrictions. ASML has stated its intention to sell up to a 25 % aggregate stake in the company (on a post-transaction basis) to Intel and other semiconductor manufacturers in this program. ASML is currently in discussions with other customers and has publicly indicated it expects others in the industry to participate in the R&D and equity program.
Applied Materials (AMAT $10.74 -0.27) issued downside guidance for the third quarter with EPS of lower half of $0.21-0.29 versus the $0.25 consensus and revenues at the low end of $2.286-2.54 billion versus the $2.43 billion consensus. The company issued downside guidance for fiscal year 2012 with EPS of below $0.85-0.95 versus the $0.94 consensus amd revenues below $9.1-9.5 billion versus the $9.5 bln consensus. The company will provide a new target range during its August 15 earnings call, however it expects that the demand changes could have a $0.15 to $0.20 impact on full-year non-GAAP EPS results. The company also revised its calendar year 2012 industry forecast for wafer fab equipment spending to $30 to $33 billion, compared to its previous expectation of $32 to $35 billion, in line with the market changes.
When market conditions are right we will have lots of choices for what to buy among the oversold stocks. At that time not many charts will look good at all. RtS |
