From Briefing.com: 4:15 pm : Recovering from losses last week, a bullish bias has supported buying in recent sessions, which helped participants begin Wednesday with strong gains. The upbeat tone was supported by continuing gains among commodities and an early advance by financial stocks. However, stocks began drifting lower midway through the session and ultimately closed with a loss as participants turned against financials.
Early gains were helped along by investors that chased commodities and materials stocks, which have benefited from the assumption that stronger economic conditions in the back half of the year will rekindle commodity demand. A weaker dollar has also helped bolster commodity prices.
The minutes from the April FOMC meeting indicated that participants project a contraction for real GDP this year, and that committee members believe the near-term economic outlook has weakened relative to the projections made in January. However, a recovery in sales and production is still expected to begin in the second half of this year.
With the dollar dropping more than 1% against a basket of major foreign currencies, gold prices advanced 1.2% to settle pit trading at seven-week high of $937.40 per ounce. Gold stocks like Newmont Mining (NEM 45.55, +1.98) provided leadership to the materials sector (0.5%), which had spent most of the session trading with gains exceeding 2%. Meanwhile, metals and mining stocks climbed 1.0%.
Oil prices built on the prior session's advance to register fresh six-month intraday highs and closing highs. The advance was helped along by bullish inventory data, which showed a 2.1 million barrel draw for the week ending May 15 while a draw of 400,000 barrels was expected. Crude contracts settled more than 3% higher just above $62 per barrel.
Financials proved to be a weak link during the session. The financial sector spiked to a near 3% gain in the early going, helping drive the broader market higher, but the move ultimately collapsed. Financial stocks closed the session with a 2.4% loss.
Though Bank of America (BAC 11.50, +0.25) showed strength after announcing that it raised $13.5 billion through a previously announced share offering following government stress tests, banks were among the sectors weakest performers. The KBW Banking Index slid 2.8%.
Consumer finance companies (-3.5%) also showed considerable weakness amid continued concern that new rules are in order for credit card companies. Following the Senate's approval yesterday, the House of Representatives approved a bill imposing changes for the credit card industry.
Retailers had a seesaw session, which saw the sector trade with a 3.0% gain before settling with a 1.6% loss. Despite the disappointing finish, Target (TGT 42.95, +1.01) still logged an impressive gain following better-than-expected earnings.
Dow component Hewlett-Packard (HPQ 34.63, -1.95) generated in-line earnings for its latest quarter and issued an in-line forecast for the current quarter. The company's upside outlook for fiscal 2009 wasn't enough to win it favor, though. The stock traded as a laggard among tech issues (-0.7%). DJ30 -52.81 NASDAQ -6.70 NQ100 -0.3% R2K -0.7% SP400 -0.6% SP500 -4.66 NASDAQ Adv/Vol/Dec 1239/2.23 bln/1453 NYSE Adv/Vol/Dec 1591/1.65 bln/1452
5:54PM Qualcomm disagrees with ITC determination in Tessera Matter (QCOM) 42.57 +0.23 : Co stated that it is disappointed with the U.S. International Trade Commission's (ITC) final determination that QCOM's accused chip packages infringe two patents asserted by Tessera (patents '326 and '419), which it also found valid. The ITC also issued a limited exclusion order banning QCOM and other respondents from importing into the United States the accused chip packages except to the extent those products are licensed.
5:32PM Tessera Tech: ITC rules Tessera patents valid and infringed (TSRA) 16.61 +1.00 : Co announced that the International Trade Commission (ITC) issued a final determination in the action brought by Tessera against certain wireless manufacturers, Investigation No. 337-TA-605 (Wireless ITC action), finding Tessera's asserted patents are valid and infringed. The ITC issued a Limited Exclusion Order that prohibits the importation of certain infringing electronic devices that use Tessera's patented technology, which are imported by or on behalf of the named respondents. The Commission also issued a Cease and Desist Order against Motorola, Qualcomm, Freescale and Spansion, directing them to cease their unfair acts including selling infringing articles out of their US inventories.
4:29PM Emcore announces long term supply agreement with Space Systems/Loral (EMKR) 1.19 +0.08 : Co announces that Space Systems Loral (SS/L) has awarded a long term supply agreement contract to EMCORE's Photovoltaics Division to manufacture and deliver high-efficiency, multi-junction solar cells for Space Systems/Loral's spacecraft programs. The period of performance for the contract is 2009 through 2014.
8:38AM Photronics to enter into new lease agreement (PLAB) 2.45 : The co announces that it has reached agreement with Micron Technology to enter into a new operating lease agreement for the NanoFab and terminate its original capital lease agreement. Under the terms of the agreement, quarterly lease payments will be reduced from $3.8 million to $2.0 million, and the lease term will be extended from December 31, 2012 to December 31, 2014. In connection therewith, the outstanding debt and assets associated with the NanoFab will be reduced by approximately $30 million.
8:31AM Axcelis Tech announces workforce reduction; estimated to yield savings of $25 mln annually (ACLS) 0.38 :
8:04AM Atmel and ARM expand strategic relationship with subscription license agreement (ATML) 3.78 : Co and ARM (ARMH) announce an extension to their strategic relationship with a new subscription license agreement. Under the terms of the agreement, Atmel gains access to a number of existing and future ARM Cortex processors for use in products aimed at a broad variety of applications and markets.
08:04 am Hewlett-Packard (HPQ)
Profits and sales both dropped at Hewlett-Packard (HPQ 36.58), but the company was able to meet analyst expectations for its fiscal second quarter.
The Palo Alto, Calif.-based company reported second quarter earnings of $0.86 per share, excluding nonrecurring items, in-line with the First Call consensus of $0.86.
Revenues fell 5.0% year-over-year to $27.35 billion; the consensus expected $27.42 billion.
By region, revenues were down 9% in the Americas to $12.1 billion. Revenue declined 11% in Europe, the Middle East and Africa and 10% in Asia Pacific to $10.6 billion and $4.7 billion respectively. Revenues from outside of the U.S. accounted for 64% of total revenue.
Looking ahead, HP said it expects fiscal third quarter earnings to range from $0.88 to $0.90 per share, in-line with the $0.89 consensus. The company expects revenues in the quarter to be flat to down 2%; the consensus expects roughly flat sequential revenues.
For the full year, HP sees earnings from $3.76 to $3.88 per share, above the current consensus of $3.71. Full year revenues are expected to fall between 4% and 5%; the consensus currently expects a decline of approximately 4%.
Shares of HPQ are down 3.3% in premarket trading.
09:35 am Analog Devices upgraded to Buy at Caris & Company; tgt raised to $28: . Caris & Company upgrades ADI to Buy from Above Average and raises their tgt to $28 from $26. The firm notes that the positives that they have expected from the co are coming sooner and more significantly, contributing to a strong F2Q09 beat down the income statement and a positive round of Street estimate changes. Most significantly, the firm notes that industrials revenue is troughing at a structurally higher-than-feared level while depreciation and opex drop to structurally lower-than-hoped levels -- a potent positive for operating margin leverage, which the firm believes is the key ADI stock price driver.
09:34 am JA Solar upgraded to Buy at AmTech Research; tgt raised to $5: . AmTech Research upgrades JASO to Buy from Neutral and raises their tgt to $5 from $4 noting JASO reported worse than expected revenue and pro-forma EPS results of $33.9 mln and ($0.18), respectively. The firm says weak results were due to extreme under-utilization, inventory write-downs, and declining ASPs. The firm says they would expect a significant sequential improvement in Q3 as BP ramps more core-cell business and utilization rates improve to 70%+ from ~15% in 1Q09. They also believe that margins for JASO are set to improve dramatically through the balance of the year as utilization rates improve and high-cost poly inventory is worked through. Firm believes module pricing is beginning to stabilize as financing shows initial signs of improvement.
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