From Briefing.com: 4:20 pm : Thanks to leadership from financial stocks, the stock market reversed an early 1.3% decline to finish with a modest gain.
Weakness was widespread and trading was listless in the early going. Financial stocks had been among the session's worst performing sectors in the first few minutes of action, falling as much as 2.7% as traders took profits following the strong gains that financials registered late last week. However, buyers provided support by buying the dip in financials, as has been the case in recent weeks.
Goldman Sachs (GS 130.60, +6.27) provided a strong, positive influence to the financial sector. Goldman announced that it raised $5.5 billion in capital to fund another private equity operation, and while the company previously stated it does not intend to raise any more capital through share offerings, it reneged by announcing after the closing bell a $5 billion public offering of common equity. Goldman used the announcement as an opportunity to report its quarterly results, which were scheduled to be announced Tuesday morning. Goldman posted earnings of $3.39 per share, which is far better than the $1.60 per share that was widely expected. Goldman also trimmed its quarterly dividend to $0.35 per share from almost $0.47 per share.
Financials were able to close with a 4.8% gain, a bit shy of their session high, and are now down 11.0% year-to-date. That means financials are no longer the worst performing sector this year.
Industrials have replaced financials as the year's worst performing sector. Industrials are down 12.9% this year, but they logged a 0.4% gain this session. General Electric (GE 12.12, +0.79) was the primary leader among industrial stocks.
Health care stocks traded with gains for virtually the entire session, but they weren't really a source of leadership for the broader market. Health care gained 0.3% amid support from Express Scripts (ESRX 56.81, +7.64) and WellPoint (WLP 43.62, +3.28). The companies have signed a definitive agreement in which Express Scripts will acquire WellPoint's NetRx subsidiaries for $4.675 billion.
Health care stocks will likely remain in focus tomorrow as Dow component Johnson & Johnson (JNJ 51.10, -0.31) reports quarterly results tomorrow morning.
The energy sector lagged the broader market for the entire session, and closed 1.3% lower. Energy stocks were hampered by news that Chevron (CVX 67.98, -1.25) expects sequential earnings to be down sharply, partly due to lower oil prices.
Crude oil contracts fell under a stiff bout of selling pressure. Contract prices closed 4.2% lower at $50.05 per barrel after the IEA cut its 2009 global oil demand forecast by 1 million barrels per day.
Participants will have plenty to assess tomorrow. In addition to several widely watched earnings announcements the March Producer Price Index, March Advance Retail Sales data, and February Business Inventories are all due tomorrow morning.DJ30 -25.57 NASDAQ +0.77 SP500 +2.17 NASDAQ Adv/Vol/Dec 1353/1.83 bln/1358 NYSE Adv/Vol/Dec 1782/1.48 bln/1264
8:44AM Taiwan Semi discloses March 2009 sales of NT$13.62 bln (TSM) 9.82 : From today's 6-K: "TSMC announced its net sales for March 2009: on an unconsolidated basis, sales were approximately NT$13.62 bln, an increase of 18.4% over February 2009 and a decrease of 48.7% from March 2008. Revenues for January through March 2009 totaled NT$37.56 bln, a decrease of 55.9% compared to the same period in 2008. On a consolidated basis, net sales for March 2009 were approximately NT$ 14.20 bln, an increase of 16.6% over February 2009 and a decrease of 47.7% from March 2008. Revenues for January through March 2009 totaled NT$39.50 bln, a decrease of 54.8% compared to the same period in 2008."
8:36AM MEMC Elec: Color on preannouncement (WFR) 18.94 : Collins Stewart notes that WFR Thursday announced it expects revs of $214 mln vs $225 mln consensus. It further indicated its gross margin would be 9% for the quarter, well below the 20% it had indicated in Jan. They have lowered their forecast to reflect these changes, with their revised forecast calling for a $0.06 LPS in 1Q09 (consensus $0.31). Demand for semiconductor wafers was weak industry wide in 1Q09, limiting WFR's sales; they note gross margins for its wafer division were likely negative for the quarter. In its solar business, wafer sales were likely extremely depressed; The co's bulk polysilicon shipments were negatively impact in 1Q09 due to most potential buyers experiencing weak demand and dealing with excess inventory.
8:35AM TrimTabs ests all equity mutual funds post inflow of $11.9 billion in week ended Wednesday, April 8th : TrimTabs Investment Research estimates that all equity mutual funds posted an inflow of $11.9 billion in the week ended Wednesday, April 8th, versus a revised inflow of $3.0 billion in the previous week. Equity funds that invest primarily in U.S. stocks posted an inflow of $11.1 billion, versus a revised inflow of $2.7 billion in the previous week. Equity funds that invest primarily in non-U.S. stocks had an inflow of $844 million, versus a revised inflow of $287 million in the previous week. In addition, bond funds had an inflow of $1.7 billion, versus a revised inflow of $6.8 billion in the previous week, and hybrid funds had an inflow of $361 million, versus a revised inflow of $409 million in the previous week. Separately, TrimTabs reports that exchange-traded funds that invest in U.S. stocks posted an outflow of $1.4 billion for the second consecutive week. ETFs that invest in non-U.S. stocks had an inflow of $1.9 billion, versus an inflow of $502 million in the previous week.
8:31AM Altera and Zilog settle patent infringement suit; Zilog made a one-time payment of an undisclosed amount (ALTR) 17.75 : Co announces settlement of its patent litigation with Zilog (ZILG). As part of this agreement, Zilog made a one-time payment of an undisclosed amount to Altera and both parties agreed to dismiss their pending patent infringement lawsuits. All other terms of the agreement are confidential.
8:04AM Seagate Tech preannounces revs above consensus for Q3; guides above consensus for Q4 (STX) 6.65 : Co issues upside guidance for Q3 (Mar), sees Q3 (Mar) revs of $2.1 bln vs. $1.88 bln First Call consensus. Co sees Q4 revs of $1.9-2.2 bln vs $1.86 bln consensus.
7:59AM Seagate Tech announces offering of $430 mln of senior secured second-priority notes (STX) 6.65 :
7:59AM SanDisk: ThinkEquity raises their estimates and tgt to $17 due to expected NAND price increases (SNDK) 14.48 : ThinkEquity raises their tgt for SNDK to $17 from $12 and raises their estimates to ($0.43) from ($0.77) (consensus ($0.50). The firm notes that checks in the NAND flash market indicate continued constrained supply, while none of the major NAND OEMs such as Toshiba and Samsung are adding NAND supply. Given a one-month NAND production cycle, the firm believes that any capacity increase in NAND will likely hit the market only in June, virtually ensuring NAND price increases through the June quarter. The firm also believes that SNDK is seeing significant handset orders from Nokia, as suppliers such as Samsung are constrained by AAPL. Given NAND supply cuts in the channel, the firm notes that retail ASPs for lower-density NAND cards are already starting to increase into the June quarter.
1:48AM SanDisk issues statement regarding ITC ruling fo non-infringement of two patents (SNDK) 14.48 : Co was informed that an Administrative Law Judge for the U.S. International Trade Commission issued an Initial Determination which found that certain accused flash memory products did not infringe the remaining two SanDisk U.S. Patents. "SanDisk is disappointed by the Initial Determination of the Administrative Law Judge," said E. Earle Thompson, vice president and chief intellectual property counsel, SanDisk. "We will continue to vigorously pursue actions against companies that use SanDisk's patented technology without a license. SanDisk expects that the Initial Determination will not adversely impact existing licensing agreements or the royalties expected from those agreements."
09:37 am Microsoft initiated with a Neutral at AmTech Research: . AmTech Research initiates MSFT with a Neutral. The firm notes that their checks indicate that while PC end demand has turned somewhat positive in recent weeks, it remains lackluster in markets that benefit MSFT the most. The firm believes the PC market has entered into a mature stage where demand is driven more by consumer spending than by new product releases. The firm also expects MSFT to enter into financially unfavorable exclusive search and other advertising deals, which could have a negative impact on its margins. Nevertheless, the firm believes shares fairly reflect near-term risks regarding lackluster PC demand will likely remain at current valuation levels relative to the industry averages until PC demand rebounds.
09:31 am Microsoft (MSFT)
The long-running courtship of Microsoft (MSFT 19.67) and Yahoo! (YHOO 13.47) appears to be heating up, according to a report from The Wall Street Journal.
According to the Journal, Microsoft and Yahoo have resumed talks about search and advertising partnerships. The paper cited sources who said that Yahoo CEO Carol Bartz met with Microsoft CEO Steve Ballmer last week as part of the discussions.
Some kind of agreement between the two companies has been rumored for more than a year but nothing has advanced past preliminary talks. The recent installation of Bartz as Yahoo's CEO renewed expectations that a deal would be worked out, but the Journal's sources said it is unclear whether the companies will reach a deal.
(Disclosure: Briefing.com has a business relationship with Microsoft and Yahoo.)
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