From Briefing.com: 4:30 pm : A late surge of buying interest was accompanied by a spike in trading volume, which helped all three major indices finish at their session highs.
The buying effort was largely focused on financial stocks. The sector reversed early weakness to trade with gains for the entire afternoon, but it wasn't until a surge in the final hour that financials were able to climb to their session high. Financials finished with a gain of 5.6% for the session.
JPMorgan Chase (JPM 32.56, +1.86) was a primary leader in the move by financials. Interest in shares of JPM comes ahead of the company's first quarter earnings announcement, which takes place tomorrow morning.
The move by financials helped spur buying in the broader market so that nine of the 10 sectors in the S&P 500 closed in the green.
Technology was the only sector to finish with a loss. It closed 0.7% lower amid weakness in shares of large-cap tech stocks like Intel (INTC 15.62, -0.39). Intel actually announced last evening better-than-expected first quarter earnings results and indicated during its conference call that a bottom has been reached in the personal computer market. Intel went on to say that the worst is behind them from an inventory and demand perspective.
Traders' decision to sell such good news comes in contrast to the trends seen in recent weeks. Nonetheless, Intel's weakness bled into other semiconductor and large-cap tech stocks. As such, the Philadelphia Semiconductor Index fell 1.5%, while the Nasdaq 100 slipped 0.4%.
While most large-cap tech stocks lagged, Google (GOOG 379.50, +10.59) traded with strength ahead of its earnings announcement tomorrow evening. Google's strength helped lift the Nasdaq Composite out of negative territory in the final few minutes of trade, but Google's strength didn't prevent the Nasdaq from lagging its counterparts for the entire session.
Economic data did little to move investors this session. March industrial production fell a more-than-expected 1.5%, while capacity utilization came in at 69.3%.
Consumer prices for March slipped 0.1%, but core prices increased 0.2%. Economists expected a respective increase of 0.1% and an increase of 0.1%.
The Fed released its Beige Book, which didn't contain any real surprises. Though five of 12 districts reported contraction slowed last month, the bigger message is that activity still contracted. Essentially, the report fit Fed Chairman Bernanke's recent pronouncement that there are tentative signs the decline in economic activity may be slowing.DJ30 +109.44 NASDAQ +1.08 NQ100 -0.4% R2K +1.8% SP400 +1.4% SP500 +10.56 NASDAQ Adv/Vol/Dec 1702/2.06 bln/998 NYSE Adv/Vol/Dec 2162/1.48 bln/872
4:30PM Xilinx confirms restructuring plans, expects to generate cost savings and operating expense savings of approx $4-$5 mln per quarter (XLNX) 20.59 -0.12 : Co confirms restructuring measures designed to drive structural operating efficiencies across the company. The company expects to reduce its global workforce by up to 200 positions, or 6%, resulting in a pre-tax charge of approximately $11 to $13 mln in the June quarter primarily related to severance pay expenses. Additionally, Xilinx is implementing other short-term cost savings including executive salary reductions and a broad-based employee salary freeze. As a result, Xilinx expects to generate cost and operating expense savings of approximately $4 to $5 mln per quarter beginning in the June quarter. Restructuring charges will not impact the recently ended March quarter. Over the longer term, the company expects to implement further supply chain efficiencies resulting in additional restructuring charges totaling approximately $10 million over the September, December and March quarters of fiscal 2010.
8:56AM Ultra Clean Holdings announces the departure of Jack Sexton as CFO (UCTT) 1.97 : Co announces the departure of Jack Sexton, its Vice President and Chief Financial Officer. Ultra Clean will immediately begin a search to identify a candidate to fill the position of Chief Financial Officer.
8:03AM Suntech Power and Soleos expand partnership (STP) 15.09 : Co and Soleos announce that they have entered into agreements for Suntech to supply Soleos with at least 6MW of modules in the first half of 2009.
1:23AM ASML Holding misses by EUR 0.01, misses on revs; guides Q2 revs in-line (ASML) 19.59 : Reports Q1 (Mar) loss of EUR 0.27 per share, EUR 0.01 worse than the First Call consensus of EUR (0.26); revenues fell 80.0% year/year to EUR 183.6 mln vs the EUR 191 mln consensus. Co issues in-line guidance for Q2, sees Q2 revs of EUR 210.0-230.0 mln vs. EUR 228.21 mln consensus. Q109 gross margin was 6.7%, the result of extraordinarily low net sales levels. ASML's order backlog as of March 29, 2009 was EUR 853 mln, totaling 38 systems with an average selling price of EUR 22.4 mln. ASML's backlog as of December 31, 2008 was valued at EUR 755 mln. "Although we will continue to be affected by the global economic recession and very limited capacity demand, we are seeing signs of a pick-up in technology purchases from the current low run rate. We estimate a normalized pattern of technology transitions to yield between EUR 400-500 mln quarterly sales for ASML and, in view of the current technology transition activities by our customers, we expect to reach this level some time during the 2H09... yet we remain cautious as to the short-term and mid-term market developments and continue managing the company for cash generation and long term cost structure optimization, while keeping our current aggressive technology development roadmap," CEO Eric Meurice said. Co expects Q209 gross margin of approx 9%. R&D expenditures are expected to be at EUR 118 mln net of credits and SG&A costs are expected at EUR 41 mln. ASML plans for cash from operations and investments to be neutral in 1H09.
1:02AM Cabot Microelectronics provides update on Q209 financial performance, expects to report non-recurring expenses (CCMP) 26.66 : Co issues downside guidance for Q2 (Mar), sees Q2 (Mar) revs of $45.0-46.0 mln vs. $46.80 mln First Call consensus. Revenue declined significantly in Q209, reflecting the impact of the global economic recession on demand for electronics, a correction of excess semiconductor device inventories, and traditional seasonal weakness. Co expects to report gross profit of around 28% of revenue for Q209, and approx 38% of revenue for the fiscal year to date. Based on the performance for the first half of the fiscal year, it no longer expects to achieve gross profit within what had been its full year guidance range of 46-48% of revenue for FY09. In addition, the co also expects to report the following pre-tax, non-recurring expenses; these non-cash items adversely impacted operating expenses for the second fiscal quarter: $1.5 mln write-off of in-process research and development expenses related to its February 2009 acquisition of Epoch Material, as required by purchase accounting rules; $1.1 mln impairment related to certain research and development equipment; and, $1.0 mln increase in reserve for bad debt expense due to of the impact of adverse global economic conditions on customer collections.
09:32 am Zoran downgraded to Hold at Kaufman Bros: . Kaufman Bros downgrades ZRAN to Hold from Buy. The firm notes that while they remain confident in ZRAN's competitive position and ability to come out of the current downturn, the firm expects an unclear path to profitability to warrant a discount valuation for the stock and believe a discount to sales remains warranted until the firm gets greater clarity into profitability. However, the firm believes that the consumer segments ZRAN is exposed to are stabilizing, helped in part by China's stimulus boosting sales of televisions, consumer goods and set-top boxes.
08:05 am Intel (INTC)
Intel (INTC 16.01) reported better-than-expected first quarter earnings, while CEO Paul Otellini said, "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns."
Intel reported earnings of $0.11 per share for its first quarter, $0.08 better than the First Call consensus of $0.03.
Revenues fell 26.1% year-over-year to $7.14 billion, but topped the $6.98 billion consensus.
Intel said its gross margins shrunk to 45.6% in the quarter, down from 53.1% in the fourth quarter, but better than the consensus estimate that expected 43.55%. The company said the decrease was primarily due to higher factory underutilization charges and startup costs.
Intel's results were boosted by a lower-than-expected effective tax rate of 1%; the company had expected 27%.
Looking ahead, Intel said economic uncertainty and limited visibility will keep it from providing specific revenue guidance, but the company is planning for flat revenue sequentially. That equates to second quarter revenues of approximately $7.1 billion; the consensus currently stands at $7.05 billion.
Gross margins for the second quarter are expected to be in the mid-40s, while spending is expected to be flat compared to the first quarter.
Shares of INTC are down 4.5% in premarket trade.
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