FromBriefing.com: 4:15 pm : Equities began the week on a cautious note as uncertainty crept back into the markets. Overseas, the Eurogroup continues to discuss the next tranche of Greek aid. Reports from the talks indicate lawmakers remain split over whether or not haircuts should be applied to the outstanding Greek debt. Additionally, elections in the Spanish region of Catalonia resulted in two-thirds of the vote going to parties which support a referendum on independence. The European news combined with some profit-taking following Friday's rally translated into a downbeat session which saw the S&P 500 slip 0.2%.
The telecom space was the biggest laggard as traders rotated out of high-dividend stocks. The sector is likely to see further weakness until a fiscal cliff resolution is agreed upon. Even if a timely compromise is reached, it remains to be seen what impact the agreement will have on high-yielding stocks. Today, AT&T (T 33.97, -0.39) and Verizon (VZ 43.30, -0.36), which generate respective yields of 5.2% and 4.7%, both lost near 1.1%.
Retailers succumbed to the broad market pressure, and the SPDR S&P 500 Retail ETF (XRT 62.59, -0.61) slid 1.0%. An earlier story by MarketWatch pointed to a 1.8% decrease in Black Friday sales despite a 3.5% uptick in foot traffic. However, it should be noted that two major retailers, Target (TGT 62.77, -1.70) and Wal-Mart (WMT 69.91, -0.29) were closed last year, but opened on Thursday evening this year. Because of this, a portion of sales which would have counted towards Friday's total, were registered on Thursday evening.
The weakness was visible across all retailers as no particular group bore sole responsibility for the decline. Grocery store operators SUPERVALU (SVU 2.63, -0.08) and Safeway (SWY 16.41, -0.55) saw seeing respective losses of 3.0% and 3.2%. Looking at apparel retailers, Macy's (M 39.86, -1.87) lost 4.5% and Aeropostale (ARO 13.77, -0.68) ended lower by 4.7% after Janney Montgomery Scott downgraded the stock to ‘neutral' from ‘buy.'
Last week, the SPDR Financial Select Sector ETF (XLF 15.78, -0.06) gained over 4.0% after a brief test of its 200-day moving average in the $15.08 area. Today, the ETF proxy for financial stocks shed 0.4% and most majors underperformed. Wells Fargo (WFC 32.90, -0.30) and Citigroup (C 35.57, -0.46) were among the biggest laggards as the two lost 0.9% and 1.3%, respectively. Meanwhile, Goldman Sachs (GS 120.94, +0.63) and Morgan Stanley (MS 16.61, +0.18) registered gains and outperformed their peers.
Elsewhere, European financials also saw relative weakness. Deutsche Bank (DB 43.30, -0.57) and Barclays (BCS 15.51, -0.77) lost 1.3% and 4.7%, respectively. Barclays slumped after Qatar Holdings, LLC sold the remainder of the bank's warrants held since the onset of the financial crisis. As a result of the sale, a $1.19 billion Barclays stock offering was triggered. In addition, the Financial Times indicated some investors are calling on management to split up the company.
The utilities sector fell over 7.0% in the aftermath of Superstorm Sandy. Today, the space led the broader market with a gain of 1.3%. Exelon (EXC 29.32, +0.75) gained 2.6% after Deutsche Bank upgraded the stock to ‘buy' from ‘hold.' Looking at other electric utilities, FirstEnergy (FE 41.77, +0.70) rose by 1.7% and PPL Corporation (PPL 28.44, +0.36) added 1.3%.
Technology stocks also managed close in the black. Shares of Apple (AAPL 589.53, +18.03) settled higher by 3.2% as the stock remains in focus after tumbling nearly 20% from its all-time high of $705.07. Earlier, Citigroup initiated coverage of the stock with a ‘buy' rating and a $675 price target.
In other analyst action, Facebook (FB 25.94, +1.94) surged 8.1% after BTIG upgraded the stock to ‘neutral' from ‘sell.'
Also of note, 3D Systems (DDD 46.55, +4.81) spiked 11.5% after unveiling the next generation of its ProJet 3D printers.
Looking at tomorrow's economic data, October durable orders and durable orders ex-transportation will be reported at 8:30 ET. In addition, the September Case-Shiller 20-city Index will be released at 9:00 ET. Lastly, November consumer confidence and September FHFA Housing Price Index will both hit the wires at 10:00 ET.DJ30 -42.31 NASDAQ +9.93 SP500 -2.86 NASDAQ Adv/Vol/Dec 1338/1.54 bln/1124 NYSE Adv/Vol/Dec 1309/633.1 mln/1725
3:30 pm : A slightly higher dollar index and concerns over the U.S. budget and the Greek debt crisis put pressure on crude oil during today's pit trade. The energy component dipped as low as $87.27 per barrel in late morning pit action. Despite inching slightly higher for the remainder of the session, it settled with a 0.6% loss at $87.72 per barrel.
Natural gas traded in negative territory in a fairly consolidative pattern near the $3.74 per MMBtu level. It eventually closed with a 4.4% loss at $3.73 per MMBtu.
Precious metals chopped around in negative territory for most of floor trade as the slightly higher dollar index put pressure on prices. Gold eased off its session high of $1752.30 per ounce and dipped to a session low of $1746.90 per ounce. It ultimately erased most of the loss as it settled just 0.1% lower at $1749.60 per ounce.
Silver brushed a session low of $33.93 per ounce but closed with a one cent gain at $34.13 per ounce after inching higher in afternoon pit action.DJ30 -59.36 NASDAQ +5.37 SP500 5.21 NASDAQ Adv/Vol/Dec 1170/1251.4 mln/1274 NYSE Adv/Vol/Dec 1087/398 mln/1940
4:01PM Aehr Test Systems announces $2 mln in orders from automotive IC manufacturers ( AEHR) 0.79 +0.03 : Co announced it has received over $2 million in follow-on production orders for its burn-in and test systems from multiple leading manufacturers of advanced logic integrated circuits (ICs) for automotive applications.
12:46PM Teradyne names Mark Jagiela President ( TER) 15.66 -0.27 : Co announced that Mark E. Jagiela has been appointed President of Teradyne, effective January 1, 2013. Mike Bradley will continue as the Company's Chief Executive Officer. Mr. Jagiela, 52, joined Teradyne in 1982. Since 2003, he has served as the President of the Semiconductor Test Division.
Atmel (ATML) announced Samsung (SSNLF) has selected Atmel's AVR UC3L microcontroller with patented ultra-low power picoPower technology as its sensor hub management solution for the Galaxy Note II.
Xilinx (XLNX) introduced new, All Programmable solutions for meeting the challenges of advanced motion control, real-time industrial networking, machine vision and a host of other next-generation industrial automation applications.
ASM Int (ASMI) announced that after its announcement on October 8, 2012 that it would exercise its right to redeem all outstanding 6.5% senior unsecured convertible bonds on November 27, 2012 at their principal amount, together with accrued but unpaid interest, all bondholders exercised their right to convert their Bonds into ordinary shares. As a result of this conversion, outstanding common shares increased with 9,074,396 shares.
12:58AM IBM report shows early promotions drive record online sales for Thanksgiving, fuels Black Friday retail surge ( IBM) 193.49 : According to IBM, US shoppers once again took advantage of early promotions this holiday season, driving a 17.4% increase in online sales Thanksgiving Day. This increase set the stage for 20.7% growth on Black Friday. The biggest surge came from mobile consumers, with sales reaching 16.3%, led by the iPad. This data is the result of cloud-based analytics findings from IBM. As part of IBM's Smarter Commerce initiative, the IBM Digital Analytics Benchmark revealed the following trends:
- Consumer Spending Increases: Online sales on Thanksgiving grew by 17.4% followed by Black Friday where sales increased 20.7% over last year.
- Mobile Shopping: Mobile purchases soared with 24% of consumers using a mobile device to visit a retailer's site, up from 14.3% in 2011. Mobile sales exceeded 16%, up from 9.8% in 2011.
- The iPad Factor: The iPad generated more traffic than any other tablet or smartphone, reaching nearly 10% of online shopping. This was followed by iPhone at 8.7% and Android 5.5%. The iPad dominated tablet traffic at 88.3% followed by the Barnes and Noble Nook at 3.1%, Amazon Kindle at 2.4% and the Samsung Galaxy at 1.8%.
- Multiscreen Shopping: Consumers shopped in store, online and on mobile devices simultaneously to get the best bargains. Overall 58% of consumers used smartphones compared to 41% who used tablets to surf for bargains on Black Friday.
- The Savvy shopper: While consumers spent more overall, they shopped with greater frequency to take advantage of retailer deals and free shipping. This led to a drop in average order value by 4.7% to $181.22. In addition, the average number of items per order decreased 12% to 5.6.
II-VI (IIVI) announced today that it has signed a definitive agreement to purchase the thin film filter business and interleaver product line from Oclaro (OCLR) for $27 million in cash. The thin film filter business and interleaver product line will report within the Company's Photop Technologies business unit and will be included in the Company's Near-Infrared Optics operating segment for financial reporting purposes. The transactions are expected to close on December 3, 2012. Cantor Fitzgerald says, while consumers remain value sensitive, they appear to be willing to increase their spend despite the macro uncertainty. Over the weekend, they collected multiple data points, all of which show a healthy start to the holiday shopping season, which if sustained could lead to a 15-18% Y/Y growth in e-commerce and support the valuations of several names in the group, particularly Amazon (AMZN) and Google (GOOG).
The Benchmark Company upgraded Broadcom (BRCM) to Buy from Hold. THe firm is taking a more positive stance on the chip group and upgrading Broadcom. The firm says, like most semi device companies, Broadcom is feeling the sluggish global economy. They say while the chip industry should contract ~2% during 2012, BRCM should deliver 3% organic revenue growth despite its large size. They saw as more devices add WiFi, BT, GPS, NFC and/or cellular connectivity, they expect Broadcom's Mobile & Wireless TAM to grow at a 12% CAGR.
09:52 am S&P Information Technology trading near the flat line and ahead of overall market
The tech sector is trading just higher today, outpacing losses in the broader market. Semiconductors are showing relative strength as well with the SOX trading 0.6% higher. Within the chip index, SNDK (+1.9%) is a notable standout. Among other major indices, the SPY is trading 0.4% lower today, while the QQQ and the NASDAQ are trading 0.04% lower on the session. Among tech bellwethers, T (-1.4%) and VZ (-1.4%) are showing notable weakness.
There were no tech earnings of note this morning. In news, SCOR (+0.3%) reported U.S. retail e-commerce spending for the first 23 days of the Nov - Dec holiday season-to-date of $13.7 bln spent online, marking a 16% increase versus the corresponding days last year. In notable analyst upgrades this morning in the tech space, The Benchmark Company upgraded BRCM (+1.0%) to Buy and FB (+4.8%) was upgraded at Bernstein and BTIG. Also, YHOO (+2.3%) was added to Conviction Buy List at Goldman. Among downgrades, VRSN (-1.6%) was downgraded to Equal Weight at First Analysis. There are no notable names in tech scheduled to report quarterly results today after the close. |
