From Briefing.com: 4:30 pm : Stocks spent the first half of the session seeking direction, but they were able to move markedly higher after a 7-year Treasury Note auction went off without any surprises.
Concern that economic recovery efforts could by complicated by higher borrowing costs stemming from rising yields had market participants closely watching today's 7-year Treasury Note auction. The auction's bid-to-cover ratio came in just below 2.3, which was in-line with the past three auctions.
The lack of surprise helped take the benchmark 10-year Note 28 ticks higher after it had oscillated in the early going. The yield on the 10-year Note reached 2009 highs during the prior session; it currently stands at 3.64%, just shy of the 3.7% to 4.0% range that bond guru Bill Gross stated would mark an attractive entry point during a CNBC interview.
With Treasury yields moving off of their highs, stocks were able to put together a sustainable advance and nearly reverse the prior session's losses.
Gains were broad-based, but financials scored the best gains by advancing 3.6%.
Meanwhile, tech giant Microsoft (MSFT 20.45, +0.32) was a primary leader in the Nasdaq amid reports that the company is no longer in serious discussions with Yahoo! (YHOO 15.09, +0.15) to combine search efforts.
General Motors (GM 1.12, -0.03) made gains early on after the company announced that its bondholders accepted an amended debt-for-equity offering. However, it finished with a loss as investors continue to question whether the company will be able to avoid bankruptcy.
Shares of retailers (-1.3%) underperformed the broader market for the entire session. Home improvement retailers Home Depot (HD 22.70, -0.63) and Lowe's (LOW 19.02, -0.61) were primary laggards in the group after first quarter mortgage delinquencies clicked higher to 9.1%, threatening to add to housing inventory and depress building activity.
To that point, annualized new home sales for April came in near expectations, but the monthly change fell short of expectations.
In other economic news, April durable goods orders, both including and excluding transportation, topped expectations. However, March orders were revised markedly lower.
Continuing jobless claims continue climbing to record levels, most recently coming in close to 6.8 million. However, initial weekly claims came in at 623,000, suggesting that the pace of layoffs is slowing.
In commodities trading, oil prices settled 2.5% higher above $65 per barrel for the first time since November. The advance was helped along by bullish inventory data, which followed news that OPEC will hold production steady, as expected.
Gold prices closed at $960.80 per ounce, up 0.7%. Gold prices are now up more than 10% since hitting their 2009 lows in mid-April.DJ30 +103.78 NASDAQ +20.71 NQ100 +1.3% R2K +0.5% SP400 +0.8% SP500 +13.77 NASDAQ Adv/Vol/Dec 1475/2.24 bln/1177 NYSE Adv/Vol/Dec 2001/1.37 bln/1042
4:46PM OmniVision beats by $0.03, beats on revs; guides Q1 EPS above consensus, revs above consensus (OVTI) 10.58 -0.04 : Reports Q4 (Apr) loss of $0.30 per share, excluding non-recurring items, $0.03 better than the First Call consensus of ($0.33); revenues fell 47.3% year/year to $89.1 mln vs the $68.2 mln consensus. Co issues upside guidance for Q1, sees EPS of ($0.16)-(0.07), excluding non-recurring items, vs. ($0.23) consensus; sees Q1 revs of $90-100 mln vs. $74.37 mln consensus.
4:26PM Xilinx receives an adverse judicial ruling from the U.S. Court of Appeal for the Ninth Circuit (XLNX) 20.51 +0.32 : The co announces that on May 27, 2009, it received an adverse judicial ruling from the U.S. Court of Appeal for the Ninth Circuit regarding a previously-disclosed dispute with the Internal Revenue Service concerning the co's cost sharing agreement with its wholly owned subsidiary, Xilinx Ireland. As the Company has previously disclosed, on August 30, 2005, the U.S. Tax Court issued an opinion where the Court agreed with the Company that no amount for stock options was to be included in the Company's cost sharing agreement with Xilinx Ireland. The IRS appealed the decision to the U.S. Court of Appeals for the Ninth Circuit. Although the Company opposed that appeal, believing that the Tax Court decided the case correctly, the Ninth Circuit has now ruled against the Company in a 2-1 majority decision. The Ninth Circuit decision does not impact the operational direction of the Company. Considering the reserves that the Company has already recorded, the Company does not believe this decision will have a material impact on the future earnings of the Company. While the Company does not agree with the Appeals Court decision, it is premature at this time to comment on the Company's next steps as a result of the decision.
4:08PM Marvell reports EPS in-line, revs above consensus (MRVL) 11.69 +0.19 : Reports Q1 (Apr) earnings of $0.05 per share, excluding non-recurring items, in-line with the First Call consensus of $0.05; revenues rose 1.7% year/year to $521.4 mln vs the $517.4 mln consensus. Non-GAAP gross margin for the first quarter of fiscal 2010 increased to 51.6%, compared to 51.3% for the fourth quarter of fiscal 2009 and 52.0% for the first quarter of fiscal 2009. Free cash flow, defined as cash flow from operations less capital expenditures and purchases of IP licenses, was $131.8 mln, up 42% sequentially from $92.7 mln in the fourth quarter of fiscal 2009 and up 32% from $99.7 mln in the first quarter of fiscal 2009. "We also delivered improved profitability and cash flow during the first quarter, a positive reflection of the actions we undertook in recent quarters to control costs and expenses as well as tightly managing our working capital. We are continuing to monitor the changing economic environment and will manage our business accordingly. However, recent trends indicate an improvement in near term order patterns."
4:05PM Dell beats by $0.01, misses on revs (DELL) 11.48 +0.36 : Reports Q1 (Apr) earnings of $0.24 per share, excluding $0.09 charge for for organizational effectiveness actions, $0.01 better than the First Call consensus of $0.23; revenues fell 23.2% year/year to $12.34 bln vs the $12.66 bln consensus. Co said, "Along with generating strong cash flow, we maintained solid operating margins and made further progress toward reducing annualized costs by $4 billion by the end of fiscal 2011". Indicators of global IT demand remain mixed, and the broader environment is still challenging. The company is positioning itself for improvement in IT spending by focusing on customer requirements and their experience with Dell, along with internal operating efficiency and costs.
8:33AM Corning raises 2Q LCD volume expectations (GLW) 14.62 : Stronger-than-expected demand for LCD glass has caused GLW to raise its expectation for second-quarter sequential volume growth. "Our recent checks indicate the LCD supply chain is in full recovery mode. The LCD supply chain continues to replenish; glass supply and demand is very tight right now, much stronger than we anticipated. This has led to an imbalance in glass supply and demand that will likely last through the end of the third quarter. As a result, we are raising our second-quarter glass volume expectations." The company now expects glass volume at its wholly owned business to grow by more than 75% sequentially in the second quarter, compared to its original guidance of more than 50%. At Samsung Corning Precision Glass Co., Ltd. (SCP), the company's equity venture, second-quarter volume is now expected to be up more than 40% sequentially, versus previous expectations of 25%. However, the company is taking a conservative approach to relighting idled glass capacity. The company expects second-quarter glass price declines to be in line with its previous guidance. Given current market conditions, the company now believes that its sequential price declines in the third quarter will be very minor and consistent with customer agreements.
8:06AM Trina Solar beats by $0.10, misses on revs (TSL) : Reports Q1 (Mar) earnings of $0.02 per share, excluding non-recurring items, $0.10 better than the First Call consensus of ($0.08); revenues rose 9.5% year/year to $132.1 mln vs the $142.5 mln consensus. Gross margin was 17.2%, exceeding the Company's previous guidance of between 15% and 17%, compared to 9.6% in the fourth quarter of 2008 For the second quarter of 2009, the Company expects to ship between 60 MW to 65 MW of PV modules. The Company believes gross margin for the second quarter will likely be between 18% and 20%. For the full year of 2009 the Company reiterates the guidance for total PV module shipments between 350 MW to 400 MW, representing an increase of 74% to 99% from 2008. As of March 31, 2009, the Company had $194.1 million in cash and cash equivalents, and restricted cash. The Company's working capital balance was $81.8 million. Total bank borrowings stood at $320.2 million, of which $14.6 million were long-term borrowings. Shareholders' equity was $423.4 million, compared to $433.1 million as of December 31, 2008. As of April 30, 2009 the Company's total short term credit lines increased to approximately $523 million, which includes approximately $183 million of unused available credit line. The Company increased its foreign currency hedging program during the first quarter of 2009 using foreign currency forward contracts between the Euro and the US dollar, with the goal of mitigating, to some extent, the effects of exchange rate volatility.
09:33 am FEI Company initiated with a Buy at Stifel Nicolaus; tgt $28: . Stifel Nicolaus initiates FEIC with a Buy and price target of $28 as the firm believes that with the relatively new management team on board at the co, it is now properly focused in terms of its business and its financial goals. Additionally, the firm notes that the company has rationalized its vast product and technology portfolio in key market segments, and with share gain opportunities, should grow faster than the respective growth rates in the market segments it participates.
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