From Briefing.com: 4:30 pm : The major indices began the session with solid gains, helped by ongoing efforts to bolster the financial system, but choppy trading and more negative headlines eventually took their toll on stocks, sending them into the red.
Stocks climbed as much as 2% in the early going after participants reacted positively to reports the United Kingdom government will help protect banks against future losses by insuring assets.
To address potential future challenges to the U.S. financial system, President Obama is proposing to add a $250 billion placeholder in this year's budget. The money would come on top of funds already allocated to stemming the financial crisis, and would push the proposed deficit to $1.75 trillion.
The planning in Europe and at home marked another step in overcoming financial calamity.
At its session high, the financial sector was up almost 7%, while banks were up more than 13%, according to the KBW Banking Index. Those gains were eventually pared, though.
FDIC reported that at the end of the fourth quarter its list of troubled institutions grew to 252 from 171 at the end of the third quarter. News that there is a larger number of institutions challenged by dour economic conditions didn't necessarily tell investors anything new. However, the report still accounts for one more negative headline.
Financials finished the session 2% higher. The KBW Banking Index finished almost 5% higher. JPMorgan Chase (JPM 23.05, +1.32) provided leadership after it indicated first quarter results are solidly profitable thus far, and the company's outlook is roughly in-line with analysts' expectations.
Though the broader market has followed the lead of financial stocks in recent weeks, financials were unable to induce buying in the broader market. All three major indices gradually surrendered their early gains and finished the session with a loss.
Health care stocks lagged for the entire session. The sector closed with a 5.1% loss. Particular weakness was seen in managed care companies, which dropped amid concern that health care reform will reduce Medicare spending.
Bleak economic data did little to support stock buying.
The latest data indicated January durable goods orders fell a more-than-expected 5.2%. Excluding transportation, durable goods fell 2.5%, which was also steeper than expected.
January new home sales fell more than expected to an annualized rate of 309,000 units, which is a record low.
Jobless claims continue to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Continuing claims came in just below 5.03 million, up from nearly 5.00 million in the prior reading.
Earnings news had little impact on trading. General Motors (GM 2.38, -0.17) missed expectations, as did Safeway (SWY 18.37, -2.75). Fluor (FLR 34.90, +1.95) posted better-than-expected results and issued upside guidance. Express Scripts (ESRX 52.79, -4.67) reported in-line results. DJ30 -88.81 NASDAQ -33.96 NQ100 -2.9% R2K -2.1% SP400 -1.8% SP500 -12.07 NASDAQ Dec/Adv/Vol 1675/956/2.15 bln NYSE Dec/Adv/Vol 1674/1412/1.49 bln
4:24PM Magma Design beats by $0.06, beats on revs; guides Q4 EPS above consensus, revs in-line; guides FY09 EPS in-line, revs above consensus (LAVA) : Reports Q3 (Dec) loss of $0.09 per share, excluding non-recurring items, $0.06 better than the First Call consensus of ($0.15); revenues fell 44.9% year/year to $30.7 mln vs the $28.5 mln consensus. Co issues mixed guidance for Q4, sees EPS of $0.01-0.03 vs. ($0.01) consensus; sees Q4 revs of $33-34 mln vs. $33.43 mln consensus. Co issues mixed guidance for FY09, sees EPS of (0.21)-(0.19) vs. ($0.30) consensus; sees FY09 revs of $146-147 mln vs. $144.17 mln consensus.
4:20PM UTStarcom misses by $0.12, beats on revs (UTSI) 1.09 -0.04 : Reports Q4 (Dec) loss of $0.65 per share, $0.12 worse than the First Call consensus of ($0.53); revenues fell 70.1% year/year to $241 mln vs the $224.7 mln consensus. Gross margins for the fourth quarter 2008 were 12.4% as compared to 12.7% in the fourth quarter of 2007.
4:10PM OmniVision misses by $0.08, misses on revs; guides AprQ below consensus (OVTI) 7.10 -0.60 : Reports Q3 (Jan) loss of $0.24 per share, excluding non-recurring items, $0.08 worse than the First Call consensus of ($0.16); revenues fell 64.4% year/year to $80.0 mln vs the $89.8 mln consensus. Co issues downside guidance for Q4 (Apr), sees EPS of $(0.40)-(0.31), excluding non-recurring items, vs. ($0.14) consensus; sees Q4 revs of $60-70 mln vs. $89.2 mln consensus.
4:03PM Anadigics beats by $0.05, beats on revs; guides Q1 EPS below consensus, revs below consensus (ANAD) 1.81 -0.29 : Reports Q4 (Dec) loss of $0.08 per share, excluding non-recurring items, $0.05 better than the First Call consensus of ($0.13); revenues fell 33.1% year/year to $45.2 mln vs the $43.9 mln consensus. Co issues downside guidance for Q1, sees EPS of ($0.28), excluding non-recurring items, vs. ($0.09) consensus; sees Q1 revs down ~35%, which equates to ~$29.4 mln vs. $40.30 mln consensus.
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