From Briefing.com: Weekly Recap - Week ending 17-Aug-12
Dow +25.09 at 13280.31, Nasdaq +14.20 at 3076.59, S&P +2.65 at 1418.16
Equities endured a choppy session concentrated mostly around the unchanged level. Today's economic data points and lackluster European trade did not serve as a catalyst for stocks. Options expiration gave a slight boost to volume, but it still finished well below its 50-day average. The S&P 500 traded within a three point intraday range and ended higher by 0.2%. The Nasdaq outperformed and posted a 0.5% gain.
Technology stocks were today's top performer as Oplink Communications (OPLK 16.31, +2.05) surged 14.4% after beating on earnings and reporting in-line revenues. The company issued mixed guidance as they expect earnings for the upcoming quarter to come in near the top of the range. However, management warned that revenues could come up short of estimates. Competitor Finisar (FNSR 15.36, +0.45) gained 3.0% as it benefited from Oplink's strength.
Two companies which began trading publically within the last year marked new all-time lows. Groupon (GRPN 4.75, -0.25) slumped 5.0% as investors continued selling the stock since Monday's disappointing earnings. Average daily volume observed this week has been the highest since the company went public in November. Meanwhile, Facebook (FB 19.05, -0.82) slid 4.1% after partial lock-up expiry took place yesterday.
While domestic financials showed mixed performance, their European counterparts have been rallying off multi-year lows over the past few weeks. Barclays (BCS 12.07, +0.33) and Deutsche Bank (DB 32.92, +0.91) advanced 2.8% each. Meanwhile, Credit Suisse (CS 18.25, +0.35) added 2.0% and UBS (UBS 11.04, +0.16) rose by 1.5%.
Molycorp (MCP 9.84, -1.32) plunged 11.8% on heavy volume. Shares of the company fell after the pricing of new stock and debt totaled more than $480 million. The number was higher than what investors had expected, and the decision to float additional debt and stock was met with a Dahlman Rose & Co. downgrade from ‘buy' to ‘hold.'
Healthcare stocks underperformed the broader market. McKesson (MCK 86.42, -2.25) shed 2.5% after being downgraded by Morgan Stanley from ‘overweight' to ‘equal-weight.' Elsewhere in the space, Spectrum Pharmaceuticals (SPPI 12.05, -0.63) and Perrigo (PRGO 106.93, -2.00) were lower on general sector weakness. The two names finished lower by 5.0% and 1.8%, respectively.
The preliminary University of Michigan Survey for August came in at 73.6, up from the 72.3 that was posted in the prior month, and better than the reading of 72.2 that had been widely expected.
Separately, leading Indicators for July increased by 0.4%, which was better than the 0.2% reading that had been widely forecasted to follow prior month's 0.3% decrease.
The volatility index, or VIX, has been trending lower over the past month. It ended today's session down 5.7% at 13.47 after hitting a session low of 13.32, last seen in June of 2007.
Mired in thin volume, markets finish higher on the week
Looking back on the week, Monday showed little change as equities began on a slightly negative note. After reaching session lows before the European close, stocks staged a slow recovery but were unable to break into positive territory. The S&P 500 ended lower by 0.1%. Sysco (SYY 30.56, +0.16) jumped 4.5% after reporting earnings and revenues ahead of expectations.
Tuesday was quiet as stocks got a lift at the open from strong U.S. retail sales and the mixed Eurozone GDP data. However, the strength did not extend into the afternoon as the major indices slowly came off their highs and settled near session lows. Another day of thin volume contributed to a narrow intraday range as the S&P 500 drifted to a flat finish. Groupon (GRPN 4.75, -0.25) plunged 27.0% after receiving multiple downgrades in the wake of disappointing earnings and guidance.
On Wednesday, the major indices started the day on a down note before mounting a slow climb towards session highs. With thin volume and economic data largely in-line, the day's action was mostly flat. An afternoon push attempted to lift stocks to a higher close but the move lacked conviction. As a result, the Nasdaq ended higher by 0.5% while the S&P 500 and Dow finished flat. Abercrombie & Fitch (ANF 35.93, +0.52) led the session with a 9.0% gain after beating on earnings and revenues.
On Thursday, equities showed indecision during the first hour of the session but were lifted higher as the day went on. A notable increase in housing permits and in-line initial claims data supported the day's advances. The major indices retreated off their highs before the close but still ended firmly in the black. The Nasdaq gained 1.0% and the S&P ended higher by 0.7%. Facebook (FB 19.05, -0.82) plunged 6.3% as the insider lock-up period expired.
A flurry of earnings set for next week
With most of the S&P 500 having already reported earnings, a handful of names remain on the calendar. Lowe's (LOW 27.87, +0.42) will report on Monday, Best Buy (BBY 20.27, -0.14) and Dell (DELL 12.22, -0.01) will deliver results on Tuesday. Hewlett-Packard (HPQ 19.52, 0.00) and Hormel Foods (HRL 28.64, +0.25) will announce results on Wednesday and Thursday, respectively.
| Index | Started Week | Ended Week | Change | % Change | YTD % | | DJIA | 13207.95 | 13275.20 | 67.25 | 0.5 | 8.7 | | Nasdaq | 3020.86 | 3076.59 | 55.73 | 1.8 | 18.1 | | S&P 500 | 1405.87 | 1418.16 | 12.29 | 0.9 | 12.8 | | Russell 2000 | 801.55 | 819.89 | 18.34 | 2.3 | 10.7 |
3:00PM Apple: AAPL +1.55% into new all-time highs takes the co. market cap. to +$600B ( AAPL) 646.40 +10.06 :
10:30AM Marvell hammered after reporting/downgrade, probes its multi-year close low from July at 10.38 -- session low 10.35 ( MRVL) 10.42 -1.86 : Its multi-year intraday low from July is at 10.27.
Applied Materials (AMAT $11.35 -0.45) reported third quarter earnings of $0.24 per share, excluding non-recurring items, $0.02 better than the consensus of $0.22, while revenues fell 15.9% year/year to $2.34 billion versus the $2.32 billion consensus. "Economic uncertainty is weighing on top of a seasonal pullback to produce weaker near-term demand." Backlog decreased by $551 million to $1.82 billion. Gross margin was 41.6 percent on a non-GAAP basis, down from 42.1 percent, in line with the decrease in net sales. The company issued downside guidance for the fourth quarter EPS of $0.00-0.06, excluding non-recurring items, versus the $0.12 consensus and revenues of -25-40% QoQ to approximately $1.40-1.76 billion versus the $1.94 billion consensus.
Cisco Systems (CSCO $18.62 +1.2.7) reported fourth quarter earnings of $0.47 per share, excluding non-recurring items, $0.02 better than the Capital IQ consensus of $0.45, while revenues rose 4.4% year/year to $11.69 billion versus the $11.61 billion consensus. During Q4, Cisco repurchased 108 mln shares of common stock under the stock repurchase program at an average price of $16.62 per share for an aggregate purchase price of $1.8 billion. The remaining authorized amount for stock repurchases under this program is approximately $5.9 billion with no termination date. Cash flows from operations were $3.1 billion for the fourth quarter of fiscal 2012, compared with $3.0 billion for the third quarter of fiscal 2012, and compared with $2.8 billion for the fourth quarter of fiscal 2011. Cash flows from operations were $11.5 bln for fiscal 2012, compared with $10.1 billion for fiscal 2011. Cash and cash equivalents and investments were $48.7 bln at the end of the fourth quarter of fiscal 2012, compared with $48.4 billion at the end of the third quarter of fiscal 2012, and compared with $44.6 bln at the end of 4Q11. The company raised its quarterly dividend 75% to $0.14 (yield 3.2% at closing price). "Cisco has the financial strength and flexibility to effectively invest in our business, pursue strategic opportunities, such as acquisitions, as well as return a minimum of 50% of our free cash flow annually through dividends and share repurchases to our shareholders."
Agilent (A $37.72 -2.76) reported third quarter earnings of $0.79 per share, excluding non-recurring items, $0.04 worse than the Capital IQ consensus of $0.83, while revenues rose 1.9% year/year to $1.72 billion versus the $1.79 billion consensus. The company issued downside guidance for the fourth quarter with EPS of $0.80-0.82, excluding non-recurring items, versus $0.93 consensus and revenues of $1.76-1.78 billion versus $1.88 billion consensus. |
