From Briefing.com: 4:20 pm : Riding a shift in sentiment and better than expected economic data, the stock market started Thursday's session on an upbeat note. Its bullish tune quickly changed, however, when the technology sector got hit with selling interest and oil prices spiked more than $2.00 to trade above $66 per barrel.
When it seemed as if the market was destined to suffer another down day, things changed just as quickly in the final hour as a rush of buying interest pushed the major indices back into positive territory. The Nasdaq for its part was down as much as 20 points at its low for the day.
There wasn't any specific news catalyst for the late surge, but it was emblematic of a market that has had a manic demeanor ever since the global stock market sell-off on Feb. 27.
At the end of the day, nine out of ten economic sectors had recorded a gain. The lone holdout was technology (-0.12%) but its loss is better than it appears considering the sector was down close to 1.0% with less than two hours to go in the session.
One of the "rallying" points for the market was the relative strength of the financial sector (+0.57%) which was a main beneficiary of the late-day buying interest.
Energy (+0.91%) was another notable leader as it drafted off the surge in crude prices that followed reports of the death of a presidential candidate in Nigeria. That news, combined with the growing tension in the Persian Gulf between Iran and the UK, added to the sense of uncertainty for traders with respect to supply lines and drove a speculative rally that saw crude futures for May delivery top out at $66.50 per barrel.
Separately, it was reported that initial claims fell 10,000 to 308,000 in the latest week and that Q4 GDP was revised up to 2.5% from 2.2%. Those indications were well-received (even though the GDP data is dated) as they reinforced the view that labor market conditions remain strong and that economic growth is moderating to a point that should help curb inflation.
The late rally pushed the S&P 500 into positive territory for the year (+0.30%). Friday marks the end of the first quarter for traders and the Personal income and Spending report, which contains the Fed's favored inflation indicator in the form of the core-PCE index, should help determine if the first quarter ends on a positive or negative note for the S&P.DJ30 +48.39 NASDAQ +0.78 SP500 +5.30 NASDAQ Dec/Adv/Vol 1471/1515/1.95 bln NYSE Dec/Adv/Vol 1253/2021/1.41 bln
4:23PM Dell: Follow up (DELL) 23.39 +0.04 : Co also announced "As we move toward the conclusion of our investigation, we are committing the time and resources required to ensure a thorough and comprehensive review and resolution of all identified issues and the implementation of appropriate remedial measures," said Thomas W. Luce III, chair of Dell's Audit Committee. The Audit Committee's investigation has identified a number of accounting errors, evidence of misconduct, and deficiencies in the financial control environment. The Audit Committee is working with management and the co's independent auditors to determine whether the accounting errors necessitate any restatements of prior period financial statements, and to assess whether the control deficiencies constitute a material weakness in Dell's internal control over financial reporting. Mgmt continues to be committed to resolving the issues raised in connection with the investigation, and regaining compliance with all SEC filing requirements and all NASDAQ listing requirements, as soon as possible. (DELL is scheduled to resume trading at 16:30)
4:07PM Solectron reports Q2 results in-line; guides Q3 EPS in-line, revs above consensus (SLR) 3.08 -0.03 : Reports Q2 (Feb) earnings of $0.05 per share, in line with the Reuters Estimates consensus of $0.05; revenues rose 16.1% year/year to $2.9 bln vs the $2.91 bln consensus. Co issues guidance for Q3, sees EPS of $0.04-0.06 vs. $0.06 consensus; sees Q3 revs of $2.9-3.1 bln vs. $2.89 bln consensus. "During the second quarter we made progress in our efforts to drive growth, expand gross margins, and deliver positive free cash flow," said Paul Tufano, interim chief executive officer. "As we begin the second half of fiscal 2007, I believe we are well positioned to deliver continued improvement in profitability, working capital management, and cash generation." Co also announces that it is commencing the next phase of its contemplated restructuring pursuant to its phased approach announced in the first quarter of fiscal 2007. Restructuring and impairment charges related to today's announcement are estimated to be in a range of $35-$45 mln, of which approx 90% will be cash expenditures. These actions will reduce the workforce by approx 1,300 to 1,500 employees
4:06PM PMC-Sierra announces Q1 revs are expected to be between the middle to high end of the range of $98 to $105 mln vs $101.99 mln consensus (PMCS) 6.30 +0.22 : Co announces it is undertaking a corporate restructuring that the co expects will reduce on-going annualized operating expenses by an estimated $20 to $24 mln per year. The program will include the closure of two of PMC-Sierra's R&D centers in Winnipeg, Manitoba and Saskatoon, Saskatchewan. The total work force reduction under this restructuring is expected to be approx 175 positions across the organization. The restructuring will begin immediately and is expected to be substantially complete by the end of the third quarter of 2007. The co ests the total costs and charges associated with the restructuring will be approx $12 - $14 mln. These costs and charges include severance costs related to the workforce reduction as well as costs associated with the planned closure of facilities and other related asset write-offs. The co's revs for 1Q07 are expected to be between the middle to high end of the range that was provided during the co's webcast conference call on January 25, 2007 following its fourth quarter 2006 earnings release. At that time, the rev outlook provided was a range of $98 to $105 mln vs $101.99 mln consensus.
4:04PM Dell will delay form 10-K filing pending completion of investigation (DELL) 23.39 +0.04 : Co announces that it will delay the filing of the Form 10-K for its fiscal year ended February 2, 2007 beyond the prescribed due date of April 3, 2007 and the subsequent extension date of April 18, 2007. The co will delay the 10-K filing because that investigation has not been completed.
9:16AM Semtech completes restatement related to past stock option practices (SMTC) 13.82 :
8:28AM Jabil Circuit announces non-cash charges (JBL) 22.04 : Co announces that as a result of its review of its historical stock option grant practices, it concluded that it needed to restate its 2005 financial statements and related disclosures, and that 2005 statements and related disclosures should no longer be relied upon. Jabil's review of its historical stock option practices confirmed that in almost all instances Jabil used the date on which committees of its Board of Directors met or acted to consider long-term compensation grants for purposes of determining both stock option exercise prices and the accounting measurement dates for purposes of calculating stock-related compensation charges. concluded that the Company needed to restate its 2005 financial statements and related disclosures, and that 2005 statements and related disclosures should no longer be relied upon. In the same filing, Jabil said its review of its historical stock option grant practices was ongoing and not complete. As a result of the ongoing review, Jabil concluded on March 21, 2007 that its 2003 financial statements and related disclosures should also not be relied upon and Jabil plans to adjust its 2004 financial statements by an immaterial amount. Jabil's review of its historical stock option practices confirmed that in almost all instances Jabil used the date on which committees of its Board of Directors met or acted to consider long-term compensation grants for purposes of determining both stock option exercise prices and the accounting measurement dates for purposes of calculating stock-related compensation charges.
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