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From Briefing.com: 4:06PM MEMC Elec reaffirms Q3 revs guidance in-line with consensus; co cites continued degree of caution in outlook (WFR) 47.10 -1.99 : Co reaffirms Q3 revs of $560-620 mln vs $596.7 mln consensus. Co also reaffirmed gross margins of 54-55% and raised operating expenses to ~$43 mln, up from the prior target of ~$41 mln, primarily due to one-time, non-cash severance related expenses. Co says, "polysilicon production rates at our Pasadena facility have been at levels that, combined with the strength of demand from solar applications customers, could allow us to achieve results in the upper half of our targeted financial range. However, there is increased softness in demand from semiconductor applications customers, primarily due to their inventory reduction initiatives. In addition, there continues to be the potential for unanticipated events to occur, which could affect our polysilicon production output, as we have experienced over the past year. These elements warrant a continued degree of caution in our outlook given the amount of time left in the quarter." Co also announced that all deposits due from Conergy and Tainergy for 2008 have been received. Consequently, MEMC has commenced wafer deliveries to both customers. MEMC will host a conference call today, September 2, 2008, at 5:00 p.m. ET to discuss this update.

4:15 pm : Tuesday was a disappointing session for stock market bulls. Stocks ran out of steam, giving up strong opening gains to finish the day with a loss.

Shortly after the opening bell, the Dow, Nasdaq and S&P 500 rallied 2.1%, 1.9% and 1.6%, respectively, benefiting from a sharp sell-off in commodities and a relief trade after Hurricane Gustav did not cause any major structural damage. But stocks steadily declined throughout the afternoon, with the Dow, Nasdaq and S&P 500 finishing the day with a loss of 0.2%, 0.8% and 0.4%, respectively.

There was no apparent catalyst for the change in sentiment, although the retreat may have been compounded after traders were disappointed that stocks were unable to maintain their opening gains.

With regard to commodities, the CRB Index fell 3.4% after the damage caused by Hurricane Gustav was less than expected. Crude prices were down 8.7% in overnight trading, but recovered some losses to finish with a decline of 4.5% at $110.30 per barrel.

The drop in commodity prices sparked selling interest within commodity producing stocks. The energy sector declined 4.6% and the materials sector fell 2.5%, acting as a major drag on the broader market.

Conversely, commodity-cost sensitive stocks got a boost, although they gave up much of their intraday advance by the end of the session, and were unable to offset the steep declines in the energy and materials sectors. The consumer discretionary sector rose 1.8%, with retailers climbing 3.0%. Airlines advanced 6.6% and automakers gained 3.1%.

The financial sector outperformed with a 1.8% gain. Bank of America (BAC 32.62, +1.48) provided leadership after Goldman Sachs assumed coverage of BofA with a Buy, citing earnings growth potential, according to the AP. Lehman Brothers (LEH 16.06, -0.03) gave up an early gain to finish near the unchanged mark, despite reports that Korea Development Bank confirmed that it is in talks to invest in Lehman Brothers.

In other corporate news, Merck (MRK 34.83, -0.84) and Schering-Plough (SGP 19.08, -0.32) came under selling pressure due to uncertainty regarding cancer risks of the cholesterol drug Vytorin. The healthcare sector still managed to gain 0.1%.

In economic news, the August ISM Index, a national manufacturing survey, indicated a very slight contraction in the manufacturing sector, although it is still indicative of growth in the overall economy. Specifically, the index slipped 0.1 to 49.9, which was nearly in-line with the expected reading of 50.0. A reading below 50 reflects contraction in manufacturing. On a positive note, the prices paid index declined to 77.0 from 88.5, suggesting an easing in inflationary pressures.

Separately, July construction spending showed a continued poor trend. Housing remains the weakest area in the economy, although Briefing.com expects a leveling off in the months ahead. Specifically, construction spending fell a larger-than-expected 0.6%, versus the expected 0.4% decline. However, the current level of spending is actually above estimates after the June change was revised sharply higher to +0.3% from -0.4%. DJ30 -26.63 NASDAQ -18.28 NQ100 -1.2% R2K -0.1% SP400 -1.0% SP500 -5.25 NASDAQ Adv/Vol/Dec 1367/1.95 bln/1510 NYSE Adv/Vol/Dec 1521/967 mln/1450

1:00PM GT Solar signs $173 mln contract With DC Chemical (SOLR) 12.30 -0.30 : Co announces that on July 11, 2008, it signed a $173 mln contract with DC Chemical Co. Under the terms of the agreement, GT Solar will provide DC Chemical with state-of-the-art polysilicon CVD reactors, which are used to manufacture polysilicon, a key raw material utilized to produce solar cells. This latest agreement marks the third contract between the two companies since GT Solar began offering CVD reactors and related equipment in 2006. Details of this contract were publicly disclosed on July 11, 2008, in a filing with the U.S. Securities and Exchange Commission. The agreement contemplates that GT Solar would begin to deliver reactors to DC Chemical in April 2009.

8:03AM Suntech Power signs second polysilicon supply agreement with DC Chemical; total value of ~$750 mln from 2010 to 2016 (STP) 47.81 : Co announces that it has signed a definitive seven-year polysilicon supply agreement with DC Chemical, a multinational chemicals producer headquartered in Seoul, South Korea. Under the terms of the agreement, DC Chemical will supply Suntech specified annual volumes of polysilicon with a total value of ~$750 mln from 2010 to 2016. The agreement follows Suntech's March 2008 announcement of an eight-year polysilicon supply agreement with DC Chemical, which provided for the delivery of polysilicon to Suntech with a total value of ~$631 mln from 2009 to 2016.

7:33AM July chip sales up 7.6% year-on-year, according to SIA : SIA says worldwide sales of semiconductors grew by 7.6% to $22.2 bln in July from July 2007 sales of $20.6 bln. Sales grew by 2.8% from June when sales were $21.6 bln. Year-to-date sales through July were $148.3 bln, an increase of 5% from the same period of 2007 when sales were $141.3 bln. "Growing sales of consumer electronics, personal computers and cell phones - which account for about 80 percent of chip demand - contributed to a healthy 7.6 percent year-on-year increase in worldwide microchip sales," said SIA President George Scalise. "LCD TV units are projected to increase 32% this year, and digital set top boxes and digital still cameras will both be up around 20%. Taking into account PC unit growth of about 13% and cell phone growth of over 10%, we are enjoying the benefits of the strong 3.3% second quarter GDP growth in the U.S, and continued strength in world markets," Scalise continued. "Overall capacity utilization remains high at 89% - with leading edge above 95 percent," said Scalise. SIA reported that sales of DRAMs and NAND flash memory continued to decline as a result of continuing price erosion. "Total semiconductor sales excluding memory products increased by 11.6% year-on-year and by 3.2% sequentially," said Scalise.

09:39 am Semiconductor Sales Rise

Semiconductor chip sales during July increased 7.6% from last year, according to the Semiconductor Industry Association. In turn, total July sales were $22.2 billion.

Sales were also up from the prior month when they totaled $21.6 billion. Year-to-date, sales have totaled $148.3 billion, reflecting a 5% increase over the same period last year.

Chip sales continue to benefit from healthy demand as consumers continue to buy anything from personal computers to increasingly sophisticated cell phones.

However, sales of DRAM and NAND flash memory declined as a result of continuing price erosion.

Overall the news bodes well for industry players, especially those with strong and healthy end markets. Moreover, tougher global financial and economic conditions has yet to cause the industry to contract.

09:46 am GT Solar: . Target $14.5. Credit Suisse initiates SOLR with a Neutral and $14.50 tgt, approximately 15 times firm's calendar 2009 EPS of $0.96, in-line with its peers. Firm's Neutral rating is primarily a reflection of valuation, but it also balances the upside volume potential for solar equipment capex as solar approaches grid parity, and the downside potential from Asian competition.

09:45 am Microsemi: . Target $30 to $33. Wedbush notes they recently hosted meetings with MSCC mgmt and came away with increased conviction in their BUY rating and raised their tgt to $33 from $30. Despite broad economic concerns, they believe MSCC remains largely immune and near-term fundamentals have been strong across the board. Further, they are optimistic regarding the upcoming push into rad-hard ICs and see potential for solid high margin revenue growth. The firm thinks shares are attractive at current levels.

I think we need to see a big rise in volatility before we get a lasting market bottom. Time will tell... RtS