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From Briefing.com: Weekly Recap - Week ending 22-May-09

The stock market kicked off the week with a strong start, but gave up a substantial portion of the advance throughout the week, eventually settling with modest 0.5% gain. Economic data did not help matters with the number housing starts falling to a record low, and the number of continuing unemployment claims hitting a fresh record high.

Stocks surged on Monday, led by a 7.2% gain in financials as Bank of America (BAC) rallied after being added to Goldman Sachs' Conviction Buy List. Goldman cited "another solid mortgage and capital markets quarter, given observable activity levels since March." Lowe's (LOW) also added to the bullish sentiment after the home improvement retailer posted better-than-expected earnings and issued upside guidance.

But the positive bias was short-lived.

Economic data were poor. The housing industry remains weak, with both housing starts and building permits falling to record laws. Starts fell -12.8% from March to an annualized rate of 458,000 units (consensus 520,000) while permits dropped -3.3% to an annualized rate of 494,000 (consensus 530,000).

Meanwhile, initial unemployment claims for the week ended May 16 totaled 631,000 (consensus 625,000), which was down from an upwardly revised reading of 643,000 (from 637,000) in the prior week. Continuing claims jumped by 75,000 to a record 6.662 million, which brought the four-week moving average for this series to 6.48 million from 6.35 million. This reflects the weak U.S. labor market.

The Fed released the minutes from the April FOMC meeting, which didn't bring much in terms of surprises. The Fed did, however, lower its real GDP projections for 2009, 2010, and 2011. The FOMC also discussed increasing purchases of agency and Treasury securities, but all members felt it was appropriate to wait further to see how policy actions implemented to date influence the economy and financial conditions before adjusting the size and timing of such purchases.

The U.K. had its sovereign debt rating outlook downgraded to negative from stable at Standard & Poor's, which cited an increasing debt-to-GDP ratio. In turn, this spurred a sharp decline in the dollar and Treasuries on concern that the U.S. may also face a negative outlook on its AAA rating. For the week, the dollar fell 3.6%.

The drop in the dollar gave commodities a boost, with crude prices surging 9.4% and the CRB Index advancing 3.3%

In corporate news, earnings flow was on the slow side, although there were a larger number of retailers announcing their quarterly results. For the most part, earnings were better than expected, with Target (TGT), Saks (SKS), TJX (TJX), Lowe's (LOW), Home Depot (HD), Sears (SHLD), and Gap (GPS) beating estimates.

Outside of retail, Hewlett-Packard (HPQ) reported in-line earnings, while Deere (DE) beat but provided downside guidance.

There was some action on Capitol Hill, with Treasury Secretary Geithner testifying before the Senate Banking Committee and House Financial Services regarding the state of the financial market. In addition, the Senate passed a bill increasing restrictions on the credit card industry, which was subsequently signed into law by President Obama.

Meanwhile, General Motors (GM) was back in the news on word it reached an agreement with the UAW, though it still has to reach a deal with bondholders.

In the end, six of the 10 sectors advanced. Materials (+2.6%) led the way thanks gains in commodities. The telecom sector (-3.2%) was the main laggard.

The U.S. stock and bond markets are closed Monday in observance of Memorial Day.

  
 Index        Started Week Ended Week Change % Change  YTD % 
 DJIA	       8268.64	   8277.32    8.68	0.1  -5.7 
 Nasdaq	       1680.14	   1692.01   11.87	0.7   7.3 
 S&P 500	        882.88	    887.00    4.12	0.5  -1.8 
 Russell 2000	475.84	    477.62    1.78	0.4  -4.4

9:02AM Advanced Analogic Tech comments on United States Court of Appeals ruling (AATI) 4.38 -0.11 : Co commented on the ruling by the United States Court of Appeals for the Federal Circuit. "The ruling affirmed-in-part, reversed-in-part and vacated-in-part the Final Determination of the United States International Trade Commission's relating to U.S. Patent No. 6,580,258 ('258 Patent) owned by Linear Technology Corporation (LLTC). The case is now remanded to the ITC for proceedings consistent with yesterday's ruling. Importantly, AATI's earlier victory in its dispute with Linear over U.S. Patent No. 6,411,531 was completely unaffected by this decision... The effect on the Company remains consistent, in that the products affected by today's ruling constitute only a tiny and declining percentage of the Company's total revenue, and AnalogicTech has several newer generations of switching regulators that remain unaffected by this decision. It is, and has been, our plan to focus our efforts on these newer designs."

7:24AM Linear Tech announces Federal Circuit validates its BurstMode technolgy (LLTC) 21.71 : Linear Technology Corporation (LLTC) announced that the United States Court of Appeals for the Federal Circuit has issued its opinion in Linear's and Advanced Analogic Technologies (AATI) cross appeals from the investigation that Linear brought against AATI at the United States International Trade Commission directed to infringement of one of Linear's power and battery saving patented technologies. The Federal Circuit found that AATI's 1143 and 1146 family of parts infringe Linear's U.S. Patent No. 6580,258 ('258 patent) and that Linear's litigated claims 2, 3, and 34 are valid. The Federal Circuit also reversed the Commission's finding that AATI's 1151 and 1265 family of parts do not infringe Linear's asserted method claim 34. Similarly, the Federal Circuit reversed the Commission's finding that Linear's claim 35 was invalid and not infringed. The Federal Circuit's decision expands the scope of the exclusion order from the United States that the Commission issued against AATI to encompass their 1146 family of products and raises the possibility that the Commission might find the remaining accused AATI products infringe Linear's patent as well.

3:09AM Suntech Power prices 20.0 mln ADS follow-on offering at $12.50 per ADS (STP) 13.47 :

09:34 am Suntech Power upgraded to Hold at Ardour Capital; tgt raised to $12: . Ardour Capital upgrades STP to Hold from Reduce and raises their tgt to $12 from $8 as the firm is encouraged by the co's solid gross margin performance. The firm notes that gross margins in Q1 came in at 17.8% exceeding mgmt guidance of 12 to 15%. The uptick was mainly due to a 25% sequential decline in polysilicon costs, a trend the firm believes will likely continue in 2009