From Briefing.com: 4:30 pm : A mixed batch of corporate headlines led to listless and choppy trading in the early going, but concerns that higher Treasury yields could complicate an economic recovery effort drove a flurry of selling pressure.
Downside guidance from Monsanto (MON 79.88, -5.37) and news that a $27 billion bond exchange offer from General Motors (GM 1.15, -0.29) proved unsuccessful led to some early weakness in stocks. Better-than-expected earnings and forecasts from several retailers (-2.2%) helped temper the tone, making for mixed trading in the early going.
The broader market did make a temporary move into positive territory in a knee-jerk reaction to news that existing home sales for April made a stronger-than-expected month-over-month increase. Overall sales were in-line with expectations.
Stocks moved markedly lower following an auction of 5-year government Notes carrying a 2.3% yield. Though the auction itself was solid, bid-to-cover ratio hit 2.3, mortgage origination sellers moved to hedge their positions and pressured the long-end of the yield curve. That sent the benchmark 10-year Note more than one point lower, which pushed its yield above 3.7% to a fresh 2009 high.
The higher borrowing costs associated with higher yields undermine the government's efforts to keep rates down in order to help along an economic recovery. With that, stocks went on the retreat.
Their descent stalled as the S&P 500 hit the 900 level, but sellers redoubled their efforts and pushed stocks down another leg to finish near session lows. The downturn has taken the S&P 500 back into negative territory for the year (-1.1%).
With the exception of technology, every major sector in the S&P 500 finished with a loss of at least 1%. Strength in large-cap technology holdings limited losses in the tech sector to 0.7%.
Energy stocks showed periodic strength by climbing more than 1% as oil prices reached fresh six-month highs. However, the sector faltered and finished 1.3% lower amid the broader market's sell off.
Meanwhile, crude oil prices logged multimonth closing highs by settling $63.45 per barrel, up 1.6% for the session. Oil prices remain in focus Thursday as weekly inventory data hits news wires midmorning and the latest OPEC meeting gets underway. DJ30 -173.47 NASDAQ -19.35 NQ100 -0.8% R2K -2.1% SP400 -1.8% SP500 -17.27 NASDAQ Adv/Vol/Dec 935/2.16 bln/1768 NYSE Adv/Vol/Dec 925/1.33 bln/2120
4:05PM Sigma Designs beats by $0.07, beats on revs (SIGM) 16.63 -0.02 : Reports Q1 (Apr) earnings of $0.30 per share, excluding non-recurring items, $0.07 better than the First Call consensus of $0.23; revenues fell 10.0% year/year to $51.2 mln vs the $47.8 mln consensus. "We are pleased to report a sequential increase in our revenue for the first quarter, which we feel provides continued signs of stabilization and strength in our primary markets. We are continuing to place heavy efforts on bolstering sales as well as expanding the breadth of our market opportunities. The IPTV market is continuing to show resilience to current economic issues and we are confident that it will continue to demonstrate some level of growth for this year. We are also pursuing design activity in the cable industry and helping to drive the transition to Tru2way IP cable solutions, which will substantially increase our addressable market. We are also pushing forward with our consumer products agenda by working with a widening range of vendors for Blu-ray player designs, digital media adapter products and home entertainment connectivity devices. Additionally, we are encouraged about the potential opportunities addressed by our recent acquisition of the Z-Wave brand home control products and anticipate a growing synergy within the set-top box market."
10:46AM RF Micro Device updates investors at conference, says demand for products in the June 2009 quarter is better than expected (RFMD) 2.76 +0.03 : Bob Bruggeworth, president and CEO, said during the conference that demand for RFMD's products in the June 2009 quarter is better than expected, and the co's factory utilization rate in the June quarter is currently above 75%, versus ~25% in the March 2009 quarter. Co also commented that RFMD's new, higher-margin products are representing an increasing percentage of total revenue. As a result, RFMD's gross margin is trending above plan. The expenses are on plan, and co is executing on its free cash flow projections of ~$80-120 million in RFMD's fiscal 2010. RFMD's capital expenditures were ~$4 million in the March 2009 quarter, and co expects capital expenditures to be ~$3-5 million in the June 2009 quarter. RFMD currently expects to decrease its net debt during the June 2009 quarter.
7:13AM Microsoft announces the expansion of the Zune entertainment service to new platform and markets; confirms new Zune HD portable media player (MSFT) : Co announces that Zune will extend its video service to Xbox LIVE internationally this fall. In addition, Microsoft confirmed the next generation of the Zune portable media player, Zune HD. Available in the U.S. this fall, Zune HD is the first portable media player that combines a built-in HD Radio receiver, high-definition video output capabilities, organic light-emitting diode touch screen, Wi-Fi and an Internet browser.
7:09AM On The Wires : Lexicon Pharmaceuticals (LXRX) announces that the it will be giving oral presentations on two of its clinical-stage drug development programs: LX103 and LX1032...The Alameda-Contra Costa Transit announces the signing of a contract with EnerDel, Ener1 (HEV) lithium-ion battery subsidiary, to produce batteries for 16 new, next-generation, hybrid-electric fuel cell buses..
7:06AM Suntech Power and National Semi collaborate on SolarMagic technology for PV systems (STP) 13.93 : Co and National Semiconductor (NSM) have signed a memorandum of understanding to evaluate NSM's SolarMagic technology with the intention of jointly promoting the technology and developing future solutions.
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