From Briefing.com: 4:35 pm : Leading up to the opening bell, financial stocks had surged almost 40% from last week's multiyear low. The sector showed continued strength in the early going and even drove the broader market higher, but with conditions looking overbought, participants decided to take some money out of the game.
British banking giant Barclays (BCS 5.31, +0.89) spurred financial stocks higher across foreign indices when it stated it has had a strong start to the year, and it is shopping its iShares business, which could pad its balance sheet with new capital.
Meanwhile, global financial giant HSBC (HBC 26.91, +0.93) indicated it does not need more capital. That proclamation followed a recent rights offering.
With confidence building, diversified banks and financial services outfits Citigroup (C 2.33, +0.55), Bank of America (BAC 6.18, +0.42), and JPMorgan Chase (JPM 23.09, -0.66) were able to provide further support to the financial sector.
Financial stocks were up 6.0% at their session high, carrying the broader market up as much as 2.4%. Despite what was shaping up to be another strong session of broad-based gains, sellers emerged in afternoon trading push financial stocks into the red. With financials back under pressure, the broader market was unable to hold its gains. Financials finished the session with a 1.9% loss, while the stock market closed with a modest loss at its session lows.
The downturn snapped the stock market's four-session run of gains. Despite the move to take profits, participants continue to anticipate positive headlines.
Reuters reports the Financial Accounting Standards Board proposed allowing companies more judgment in determining distressed markets for accounting purposes by the first-quarter reporting period. That could help boost mark-to-market values.
Fed Chairman Bernanke stated in a weekend interview with 60 Minutes that the economy could recover by next year with support from lawmakers and the public. That wasn't anything different than Bernanke has said before, but this time traders reacted more positively, suggesting the emergence of a more positive bias in the overall market.
An improved tone has led participants to pick up beaten down stocks, but that has meant many are rotating out of the sectors that had held up against selling pressure during recent weeks. Particularly, tech stocks were sent markedly lower this session. Technology shares showed relative weakness throughout the entire session, and closed with a 1.7% loss. The weakness in large-cap tech stocks caused the Nasdaq to lag its counterparts since the opening bell.
Energy stocks showed weakness early on, but managed to close with a 0.8% gain. That came as crude oil prices rebounded from early weakness to close pit trading modestly higher at $46.30 per barrel. Oil's gyrations came after OPEC decided during its weekend meeting to leave production levels unchanged.
Economic data was light this session. February industrial production declined 1.4%, which is essentially in-line with the consensus 1.3% decline. Capacity utilization dipped to 70.9% from 71.9%, as generally expected. The February report continues to reflect a weak demand environment that will ultimately drag on GDP.
The Fed's policy-setting Federal Open Market Committee begins its two-day meeting tomorrow. Since the FOMC is expected to leave the target lending rate at a range of 0.00% to 0.25%, most attention will be paid to the wording of Wednesday's statement.DJ30 -7.01 NASDAQ -27.48 NQ100 -2.0% R2K -1.7% SP400 -1.4% SP500 -2.66 NASDAQ Adv/Vol/Dec 1165/2.15 bln/1506 NYSE Adv/Vol/Dec 1768/1.90 bln/1303
10:36AM Intel notifies AMD of cross-license breach, efforts to resolve dispute continuing (INTC) : Co disclosed that it has notified Advanced Micro Devices (AMD) that it believes AMD has breached a 2001 patent cross-license agreement with Intel. Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement. Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so. AMD's breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement.
7:30AM Broadcom: Federal Court dismisses Broadcom complaint against Qualcomm (BRCM) 19.11 : Qualcomm (QCOM) announces that the United States District Court for the Southern District of California granted QCOM's motion to dismiss a lawsuit brought by Broadcom seeking a declaration that QCOM's patents are exhausted and unenforceable. U.S. District Court Judge William Hayes held that BRCM failed to show it was entitled to declaratory relief because it did not identify any specific patents which were allegedly exhausted, or an exhaustion triggering sale or license. The court also ruled that BRCM's purported injuries were too speculative to support the claims alleged.
09:33 am Intel upgraded to Buy at Caris & Company; tgt raised to $18: . Caris & Company upgrades INTC to Buy from Below Average and raises their tgt to $18 from $11.50, as they believe the semiconductor industry is close to the bottom of a downturn. Firm expects INTC's utilization rates to improve in 2H09E driven by moderate improvement to PC demand. Caris's checks indicate that there haven't been any meaningful push-outs or cancellations to Intel's Q1 backlog and thus far Q1 is tracking above their consensus low estimate fo $6.8 bln. They see INTC achieving its "healthy" gross margin profile in 1H09E and firm estimate for above 50% gross margin in 2H09E due to aggressive transition to 32nm process technology and improving utilization rates. Firm raises Q1 revenue estimate to $7 bln and leaves EPS estimate unchanged at $0.01.
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