From Briefing.com: 4:20 pm : Declining issues outnumbered advancers by 4-to-1 in the S&P 500 as profit-takers pressured stocks for the entire session. Financials felt the brunt of the selling effort, but strength in large-cap tech helped the Nasdaq outperform its counterparts.
There weren't any major earnings announcements or economic reports to act as positive catalysts for the stock market Monday. The dearth of data seemed to encourage a round of profit taking by participants who had watched stocks climb nearly 6% last week.
As has been the recent trend, financials were the best performers last week, which made them an easy target for sellers looking to lock in gains. In turn, the financial sector shed 6.8%, cutting into last week's 23% gain.
Diversified banks slipped 6.7% and regional banks dropped 8.5% after several companies announced plans to raise capital.
In a common equity offering, Wells Fargo (WFC 26.53, -1.65) announced it raised $8.6 billion, which is more than it originally set out to raise. The bank was told by regulators last week that it needs to come up with $13.7 billion in capital. Wells Fargo indicated future earnings will help plug the company's capital shortfall.
Meanwhile, Bank of America (BAC 12.94, -1.23) was told last week that it needs more Tier 1 capital, but the company didn't offer any immediate plans to satisfy the measure during a conference call today.
Despite the weakness in bank stocks, multiline insurers (-7.5%) and life and health insurers (-10.5%) saw some of the steepest losses. Their weakness comes as debate over health care reform is set to intensify during coming days. The threat of reform also weighed on managed health care providers, which finished 4.7% lower.
Sellers intensified their efforts against the financial sector into the close, which exacerbated weakness in the broader market and caused the S&P 500 to finish near session lows.
The Nasdaq was able to limit its losses, thanks to the relative strength of large-cap tech stocks. Large-cap tech rebounded from hefty losses in the early going as participants considered the early gap down to be an opportunity to rotate into the sector, which didn't see the trend chasing that financials saw the week before.
Despite the strength of large-cap tech, the broader tech sector finished just above the unchanged mark.
Telecom was the only sector to log a respectable gain, thanks to leadership from AT&T (T 25.36, +0.11), which will pay Verizon (VZ 29.82, -0.03) $2.35 billion for certain wireless assets. Meanwhile, AT&T has also agreed to sell certain wireless assets to Verizon for $240 million.
With equities under pressure, Treasuries were able to snap back after contending with weakness last week. The benchmark 10-year Note regained a full point, which lowered its yield to 3.17%.
There are only a few earnings announcements scheduled for Tuesday morning, none of which are expected to act as catalysts for the broader market. In terms of tomorrow's economic data, the March trade balance (8:30 a.m. ET) is expected to show continued contraction as countries contend with ongoing economic headwinds. The Treasury's budget statement for April is expected to be released later (2:00 p.m. ET). DJ30 -155.88 NASDAQ -7.76 NQ100 +0.1% R2K -1.9% SP400 -2.3% SP500 -19.99 NASDAQ Adv/Vol/Dec 1087/2.49 bln/1637 NYSE Adv/Vol/Dec 862/1.49 bln/2179
6:10PM Silicon Motion beats by $0.03, misses on revs; guides Q2 revs in-line (SIMO) 3.54 -0.02 : Reports Q1 (Mar) loss of $0.03 per share, excluding non-recurring items, $0.03 better than the First Call consensus of ($0.06); revenues fell 33.0% year/year to $21.5 mln vs the $22.2 mln consensus. Co issues in-line guidance for Q2, sees Q2 sequential revs growth of 10-15%, which equate to ~$22.6-24.7 mln vs. $23.42 mln consensus.
QLogic Corp (QLGC) announces that it continues to strengthen its number one position in storage area network Fibre Channel adapters and take significant market share from its nearest competitor, according to new data published by the Dell'Oro Group in its Q1 2009 SAN Report.
4:09PM Nuance Communications beats by $0.02, misses on revs (NUAN) 13.08 -0.26 : Reports Q2 (Mar) earnings of $0.24 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.22; revenues rose 17.5% year/year to $238.8 mln vs the $243.7 mln consensus. Non-GAAP operating margins rose to 31.3%, compared to 24.0% in the second quarter 2008. Nuance achieved non-GAAP gross margins of 68.2% in the second quarter 2009, compared to 66.8% in the same period last year
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