From Briefing.com: 4:42PM Zoran will acquire Let It Wave in an all cash transaction valued at up to $27.6 mln; will be accretive on a non-GAAP basis no later than the second half of 2009 (ZRAN) 15.00 +0.23 : Co announces it has signed a definitive agreement to acquire Let It Wave, a fabless semiconductor company based in Paris, France. Under the terms of the agreement, co will acquire Let It Wave in an all cash transaction valued at up to $27.6 mln, which includes earnout provisions. Co believes that the transaction will be accretive on a non-GAAP basis no later than the second half of 2009, with minimal impact to its earnings for the remainder of 2008 on a non-GAAP basis. The acquisition is expected to close on or about June 11, 2008.
4:15 pm : The stock market traded in a volatile manner Wednesday, with the S&P 500 trading in a wide range, from up 0.8% at its peak to down 0.4% at its trough. The stock market eventually settled on the unchanged mark as strength in tech offset weakness in financial and energy.
The financial sector (-0.8%) posted a solid gain of 1.1% in early trade, but tumbled on word that Moody's put bond insurers Ambac (ABK 2.50, -0.50) and MBIA (MBI 5.67, -1.02) on review for a possible credit rating downgrade. Both Ambac and MBIA defended their capital position, but the market took little solace in the remarks.
The market dipped noticeably in midafternoon trading after the news wires ran headlines from a speech on inflation that was given by Fed Chairman Bernanke at Harvard. The chairman noted the Fed's concerns about inflation and inflation expectations. In brief, it was largely an academic discussion.
If Bernanke wanted to make a real splash with inflation commentary, he would have done it in Tuesday's speech to the International Monetary Conference and not to a group of seniors (students we mean, not citizens) at Harvard. The inflation headlines were simply an excuse to apply some added selling pressure to a market that was already showing signs of weakness.
The volatile day ended split down the middle, with five of the ten economic sectors posting a gain. Technology (+1.0%) provided leadership, with significant strength in large-cap names. As a result, the tech-heavy Nasdaq handily outperformed the broader market with a gain of 0.9%.
The energy sector (-1.2%) posted the largest loss, as crude prices fell 1.8% to $122.04 per barrel. The weakness in crude followed the government's weekly energy report. An increase in gasoline and distillates inventories offset an unexpected decrease in crude stockpiles.
Telecom (-0.8%) was also a laggard, with Verizon (VZ 36.99, -0.37) falling after CNBC reported it may buy Alltel for $27 billion.
The session's three economic reports were not especially strong, but they were all better than expected. Importantly, the data are reflective of an economy that is not in a recession.
Private nonfarm employment rose by 40,000 in May, according to employment services firm ADP. This came out ahead of the expected drop of 30,000. However, this report has been spotty compared to the government's jobs report, which includes both public and private nonfarm payrolls and is set for release Friday morning.
First quarter nonfarm productivity was revised to a gain of 2.6% from 2.2% (consensus +2.5%).
May ISM services -- a survey of nonmanufacturing purchasing managers -- was nearly unchanged at 51.7 compared to 52.0 in April. Economists forecast a reading of 51.0. Because the reading is above 50, it indicates growth in the services sector. DJ30 -12.37 NASDAQ +22.66 NQ100 +1.2% R2K +0.6% SP400 +0.3% SP500 -0.45 NASDAQ Dec/Adv/Vol 1211/1633/2.19 bln NYSE Dec/Adv/Vol 1699/1408/1.29 bln
9:03AM Xilinx announces it will eliminate about 7% of global workforce; to record restructuring-related charges of approximately $18-22 mln (XLNX) 26.92 : Co announces a corporate reorganization into functional areas to better serve its customers and improve its operating performance. As a result of the reorganization, co will eliminate ~250 positions, or about 7% of the its global workforce. The workforce reduction is expected to be completed by the end of the next fiscal quarter. Co expects to record restructuring-related charges of ~$18-22 mln in connection with the reorganization. These one-time pre-tax charges are comprised of ~$16-19 mln of severance pay expenses, which will be recorded in the first quarter of fiscal 2009 and ~$2-3 mln of facility and other associated costs, a portion of which will be recorded in the second quarter of fiscal 2009. The restructuring charges will adversely impact Q1 operating expenses, which were forecasted to be approximately flat sequentially for the June ending quarter.
12:41AM FormFactor board appoints Mario Ruscev as Chief Executive Officer (FORM) 20.94 : Co announces that its board of directors has appointed Mario Ruscev, currently president, as its next chief executive officer. Ruscev will succeed Igor Khandros, FormFactor's founder, who will become executive chairman of the FormFactor board of directors.
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