From Briefing.com: Weekly Recap - Week ending 23-Nov-12
finance.yahoo.com
Dow +172.79 at 13009.68, Nasdaq +40.30 at 2966.85, S&P +18.12 at 1409.15
Equities began today's abbreviated session with a bullish bias. The sentiment was maintained into the close as the S&P 500 reached its high during the first hour of trade, and hovered near that area until the close. The markets were unfazed by headlines from overseas which indicated the Eurozone Summit has been postponed and will likely take place early next year. Today's volume was well below-average and trade was trapped in a narrow range. As a result, the S&P 500 advanced 1.3%.
Technology stocks led the broader market. Shares of Apple (AAPL 571.50, +9.80) added 1.7% as the stock attempts to halt its recent slide.
Semiconductor manufacturers outperformed and the PHLX Semiconductor index gained 1.8%. Among individual stocks which comprise the index, Taiwan Semiconductor (TSM 16.84, +0.58) advanced 3.6% after Taiwan's finance minister called on the government to begin purchasing individual equities.
Looking at other outperformers within the semiconductor average, Advanced Micro Devices (AMD 1.95, +0.08) and Lam Research (LRCX 35.34, +0.84) saw respective gains of 4.3% and 2.4%.
Also of note, OCZ Technology (OCZ 1.16, -0.03) slid 2.5% after the company received a Securities and Exchange Commission inquiry and a subpoena requesting certain company documents. The investigation pertains to financial reporting of customer incentive programs among other matters.
Elsewhere, Research in Motion (RIMM 11.66, +1.40) surged 13.7% after National Bank Financial raised its estimates for Blackberry 10 sales. In addition, National Bank Financial raised the price target to $15 from $12.
Utility stocks continued their recent slide. The space was the only decliner among S&P sectors as settled lower by 0.3%. The biggest relative weakness was observed among electricity providers as Exelon (EXC 28.57, -0.28), Edison International (EIX 43.49, -0.33), and Southern Company (SO 42.03, -0.25) all lost between 0.6% and 1.0%.
The extended weakness in utility stocks comes as investors prepare for the possibility of a dividend tax hike. In addition, electricity providers are expected to face tougher regulation after Superstorm Sandy caused considerable damage to east coast infrastructure. Earlier in the week, the investigative panel appointed by New York Governor Andrew Cuomo named Regina Calcaterra as the director. The newly-established panel will investigate utilities' preparation and response to Superstorm Sandy.
The Dow Jones Transportation Average advanced 1.1% and railroad stocks saw relative strength. Kansas City Southern (KSU 77.61, +1.28) gained 1.7% and Union Pacific (UNP 121.98, +1.94) advanced 1.6%.
There are no economic data points scheduled for a Monday release.
Week in Review: Stocks Register Gains During Abbreviated Week
On Monday, equities opened amid optimism regarding a potential fiscal cliff compromise. In addition, headlines out of Europe indicated the next tranche of Greek aid will likely come through before December 5. The positive sentiment supported the S&P 500 throughout the day and the benchmark average gained 2.0% after a final round of buying ran it to a session high close. Meanwhile, the Nasdaq outperformed with a gain of 2.2%. Apple (AAPL 571.50, +9.80) spiked 7.2% in an attempt to establish support and put a stop to its recent softness.
Tuesday began on a down note after Moody's cut France's sovereign rating to ‘Aa1' from ‘Aaa.' In addition, disappointing earnings from Hewlett-Packard (HPQ 12.44, +0.50) contributed to the cautious sentiment. The major averages managed to break into positive territory by midday, but tumbled to fresh lows as Federal Reserve Chairman Ben Bernanke spoke in front of the Economic Club of New York. During his remarks, Mr. Bernanke commented on the fiscal cliff by saying that if a resolution is not reached, the economy would slide into recession. In such case, the Federal Reserve would be powerless as the Chairman does not believe the Fed has the tools necessary to deal with that eventuality. The S&P 500 followed the early afternoon slide with another climb towards the unchanged level before ending with a gain of 0.1%. Hewlett-Packard slumped 12.0% after reporting mixed results. In addition to the results, investors were drawn to another point of interest in the quarterly report. The report included an $8.8 billion charge related to serious accounting improprieties and misrepresentations by Autonomy Corporation before it came under Hewlett-Packard's control. Following the earnings release, ISI Group downgraded HPQ to ‘neutral' from ‘buy.'
On Wednesday, the S&P 500 endured choppy trade during the first two hours of action. The index followed the early indecision with a run to session highs where it spent the majority of the afternoon. The market received some encouraging news from the Middle East where Israel and Hamas have reached a cease-fire agreement. However, the Eurozone remains a concern into the holiday as the next tranche of Greek aid was yet to be approved. The day's trade was confined to a tight range and volume was well below average. As a result, the S&P 500 ended higher by 0.2%. Salesforce.com (CRM 159.45, +0.67) spiked 8.8% after beating on the top and bottom lines. In addition to the quarterly beat, the cloud computing company issued in-line fourth quarter and full-year earnings and revenue guidance.
Equity and bond markets were closed on Thursday in observance of Thanksgiving.
11:04 am Industrial Sector trading higher by 0.9% and in line with the S&P
Sector news: DSTI (+12.4%) DayStar Technologies received NASDAQ notice regarding late form 10-Q filing, ASTC (+9.3%) Astrotech: Boone Pickens disclosed 19.4% stake in 13D filing out Wednesday after the close, RLGT (+3.5%) Radiant Logistics announced 3 mln share stock buy back program, GFF (+2.2%) Griffon: GAMCO Investors disclosed 7.4% stake in 13D filing out Wednesday after the close, OSK (+2.1%) Oshkosh CEO bought 12K shares at $30.23-30.25, worth ~$400K, KSU (+1.3%) KC Southern Director bought 67.3K shares at $72.94-74.80 on 11/16, worth ~$11.5 mln, FAST (+1.1%) Fastenal Director sold 100K shares at $41.03, worth ~$4.1 mln, NAV (+1.1%) Navistar Director/10% owner MHR Holdings bought 127K shares at $19.59-19.67, worth ~$2.5 mln. In Broker Research, Hexcel (HXL +0.3%) tgt was lowered to $32 from $33 at Needham. 10:17 am S&P Information Tech Sector trading higher by 0.7% today
The tech sector is trading higher today, along with gains in the broader market. Semiconductors are showing relative strength with the SOX trading 1.4% higher. Within the chip index, TSM (+3.9%) is a notable standout. Among other major indices, the SPY is trading 0.7% higher today, while the QQQ is up 0.8% and the NASDAQ is trading 0.7% higher on the session. Among tech bellwethers, MSFT (+1.8%) is a leader, while FB (-1.2%) is showing notable weakness. There were no earnings of note in the tech space. In news out Wednesday night, OCZ (-5.0%) announced that on November 15, 2012, it received a letter from the SEC indicating that they are conducting an investigation. Also, KITD (-61.8%) announced restatement of prior period financial statements and postponement of third quarter 2012 results. This morning, KITD's former Chairman/CEO urged company to discuss acquisition offer and conduct open and transparent sale process. Among rumors, ALU (+14.0%) is in discussions with GS (+1.5%) over financing, according to reports.
In notable analyst upgrades this morning in the tech space, TI (+2.6%) was upgraded to Neutral at HSBC. Also, National Bank Financial was out with positive comments on RIMM (+12.4%). Among downgrades, AUO (+5.3%) was downgraded to Mkt Perform at Bernstein and KITD (-61.8%) was downgraded to Market Perform at Northland. There are no notable names in tech scheduled to report quarterly results today after the close.
09:59 am S&P Energy trading higher and underperfoming the S&P
The S&P Energy Sector +0.4% is trading just below the broader market at +0.5%. Jan crude oil is +0.3% at $87.67/barrel, Dec natural gas is -0.3% at $3.89/MMBtu, Jan RBOB is -0.4% at $2.71/gallon, and Jan heating oil is -0.1% at $3.08/gallon.
Sector news: BBEP (+0.8%) Breitburn Energy to acquire Principally Oil properties in Kern County, California for ~ $40 mln in cash and ~3.013 mln common units representing limited partner interests in the Partnership, NTI (+0.7%) Northern Tier Energy filed for a common unit offering representing limited partner interests by a selling unitholder, ENB (+0.5%) Enbridge to undertake $1.8 bln Edmonton to Hardisty mainline expansion program, BBG (+0.1%) ill Barrett provided an update on the fire at West Tavaputs compressor station: fire extinguished, damage limited. Broker calls: PQ (+2.8%) PetroQuest Energy upgraded at Stifel Nicolaus, E (+1.8%) ENI S.p.A upgraded at Macquarie. 08:23 am Mapp Pharma shares rise by 8% following FDA acceptance of NDA resubmission for Levadex
MAP Pharma (MAPP $13.89 +1.07) announced that its New Drug Application (NDA) resubmission for LEVADEX orally inhaled migraine drug for the potential acute treatment of migraine in adults has been accepted for filing by the FDA, The FDA has classified the resubmission as a complete, Class 2 response to the FDA's March 26, 2012 action letter and has set a goal date of April 15, 2013 under the Prescription Drug User Fee Act. 08:18 am GM shares little changed following news that Ally will sell its Europe operations to GM Financial
Ally Financial announced that it has reached an agreement to sell its operations in Europe and Latin America, as well as its share in a joint venture in China to GM Financial), a wholly-owned subsidiary of General Motors (GM $24.60 +0.00). The transaction is subject to regulatory approvals and is expected to close in stages during 2013. Ally will receive an approximately $550 million USD premium to tangible book value, which for the third quarter of 2012 was approximately $3.7 billion. Based on the third quarter tangible book value for the combined operations, Ally would receive approximately $4.2 billion USD in proceeds from this transaction. The transaction includes auto finance operations in Germany, the U.K., Austria, France, Italy, Switzerland, Sweden, Belgium, the Netherlands, Luxembourg, Brazil, Mexico, Colombia and Chile, as well as a 40 percent equity stake in a joint venture in China. The combined operations in Europe and Latin America represented approximately $16.1 billion in assets at the end of the third quarter 2012. 08:16 am KIT Digital shares plunge 57% following restatement of results
KIT digital (KITD $0.87 -1.20) announced that, because of errors and irregularities identified by the Company in its historical financial statements, the financial statements for (1) the years ended December 31, 2009, 2010 and 2011 and (2) each of the three quarters in 2009, 2010 and 2011 will be restated. As a result of the restatement of these prior periods, the Company will also restate the quarters ended March 31, 2012 and June 30, 2012. Accordingly, investors should no longer rely upon the Company's previously issued financial statements for these periods, any earnings releases or other communications relating to these periods, or projections or estimates for any future periods. As a result, the Company will not timely file its Quarterly Report on Form 10-Q for the three months ended September 30, 2012 and will not issue an earnings release or host an earnings conference call. The accounting errors and irregularities giving rise to the restatement relate primarily to recognition of revenue related to certain perpetual software license agreements entered into by the prior management team in 2010 and 2011. As of today, the Company has approximately $10.6 million of cash and cash equivalents, of which approximately $4.0 million is restricted cash. The Company also has approximately $11.0 million outstanding under a secured loan facility and $2.5 million under an unsecured related party note. The Company is currently up to date with the principal and interest payments due under those loans, however, as a result of the restatement discussed above, there is an Event of Default under the secured loan facility and the Company is in discussions with the lenders. As previously disclosed, the Company has also experienced substantial losses this year, including costs related to previously disclosed litigations and restructuring expenses and will also incur additional costs related to the restatement discussed above. As a result of these circumstances, and based on the Company's forecast, the Company expects to continue to incur significant cash expenditures. As a result of these challenges, the Company is considering a broad set of strategic alternatives including financing transactions as well as other strategic transactions including a sale of the Company or its assets. The Company continues to examine the reduction of working capital requirements to further conserve cash and may need to take additional actions in the near-term, which may include additional personnel reductions and suspension of certain development activities. 08:13 am OCZ Tech shares lower by 8% following SEC inquiry
OCZ (OCZ $1.09 -0.10) announced that on November 15, 2012, it received a letter from the SEC indicating that they are conducting an investigation. As part of this notification, the Company also received a subpoena requesting certain documents and information generally related to its press releases on September 5, 2012 and October 10, 2012, and the financial reporting for customer incentive programs, among other matters. Ralph Schmitt, president and chief executive officer, noted that, "Since we delayed the filing of our second quarter 10-Q, we had proactively contacted the Commission and have been expecting them to conduct an investigation. We intend to cooperate fully regarding this non-public, fact-finding inquiry and are also continuing with our own internal investigation as previously announced." The SEC has informed the Company that this inquiry should not be construed as an indication that any violations of law have occurred or that the SEC has any negative opinion of any person, entity or security. The Company is unable to predict what action, if any, might be taken in the future by the SEC as a result of the matters that are the subject of the subpoena. The Company does not intend to comment further on this matter unless and until this matter is closed or further action is taken by the SEC which, in the Company's judgment, merits further comment or public disclosure.
Take a FREE TRIAL of Briefing.com's complete Live market analysis of the U.S. stock and bond markets, technology stocks, economic releases, earnings reports, and day trading highlights |
