From Briefing.com: 4:30 pm : Participants put an end to a three session streak of gains by sending stocks 2% lower Tuesday. The downward push came as financial stocks fell out of favor and disappointing retail sales data led some to second guess the prospects of retailers.
Financial stocks weighed on the broader market for the entire session and finished with a 7.7% loss. The sector's weakness was widespread, but investment banks and brokerages (-10.7%) suffered some of the steepest declines after Goldman Sachs (GS 115.92, -14.23) announced a $5 billion common equity offering that was discounted from the prior session's closing price. The offering will also prove dilutive to existing shareholders, but is intended to help repay TARP funds.
Goldman did manage to generate strong trading results, which helped it overcome weakness in its investment banking and consulting arm. That helped the company post better-than-expected earnings results.
A better-than-expected earnings announcement and a reaffirmed outlook from Johnson & Johnson (JNJ 51.37, +0.22) helped health care stocks fend off most of the session's selling effort, though shares of JNJ inevitably closed near their session low. Health care closed 0.3% lower, but was still the best performing sector this session.
Due to widespread weakness, nearly 80% of the companies in the S&P 500 finished lower. Sellers were particularly unkind to small- and mid-cap stocks as the Russell 2000 fell 3.2% and the S&P 400 dropped 2.6%. Both indices posted declines in each of the past two sessions, but are still up 15.3% and 14.3%, respectively, in the past month.
Shares of retailers fell 2.5% this session after data showed retail sales for March declined 1.1%, which is worse than the 0.3% increase that was expected. That caused a number of investors to second guess the recent run seen in retail stocks; retailers climbed more than 4% last week and almost 6% the week before.
In other economic news, producer prices for March declined 1.2% month-over-month. Economists had expected the index to remain flat after a monthly increase of 0.1% in February. Core producer prices were flat month-over-month, which was relatively in-line with the 0.1% increase that was widely expected. February core PPI had increased 0.2% month-over-month.
Meanwhile, February business inventories decreased 1.3%, which is generally in-line with the 1.2% decline that was expected. Inventories also decreased 1.3% in the prior month.DJ30 -137.63 NASDAQ -27.59 NQ100 -1.1% R2K -3.2% SP400 -2.6% SP500 -17.23 NASDAQ Adv/Vol/Dec 867/1.43 bln/1850 NYSE Adv/Vol/Dec 932/1.21 bln/2111
5:01PM Linear Tech beats by $0.03, misses on revs (LLTC) 23.25 +0.00 : Reports Q3 (Mar) earnings of $0.25 per share, $0.03 better than the First Call consensus of $0.22; revenues fell 19.4% year/year to $200.9 mln vs the $203.1 mln consensus.
4:23PM Intel beats by $0.08, beats on revs; plans Q2 revs to be flat sequentially (INTC) 16.01 +0.03 : Reports Q1 (Mar) earnings of $0.11 per share, $0.08 better than the First Call consensus of $0.03; revenues fell 26.1% year/year to $7.14 bln vs the $6.98 bln consensus. Co issues rev outlook for Q2, plans Q2 revs flat from Q1, equates to ~$7.1 bln vs. $7.05 bln consensus. Co reports Q1 gross margins of 45.6% vs 43.55% consensus. Gross margin percentage for Q2 is expected to be in the mid-40s. Spending (R&D plus MG&A) for Q2 is expected to be approximately flat to the first quarter and restructuring and asset impairment charges of approximately $115 million. Co says the effective tax rate was 1%, lower than the expectation of approximately 27%. "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns."
7:02AM Silicon Motion says informed Admin Law Judge issued determination that its flash memory controllers did not infringe the patent of SanDisk (SIMO) 2.81 : Co announces it was informed that the Administrative Law Judge of the United States International Trade Commission had issued an initial determination that Silicon Motion flash memory controllers and products containing these Silicon Motion controllers did not infringe the patent of SanDisk (SNDK).
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