From Briefing.com: 4:30 pm : A late session squeeze helped the major indices recover from sizable losses, but the move lost steam in the final few minutes of trading, leaving the major indices to pull back from positive ground and settle flat to modestly lower.
Stocks had been under pressure for nearly the entire session as many participants began to question whether the run up by stocks in recent weeks has become overextended and whether positive economic news has already been priced into stock prices. That line of thought was supported by the recognition that stocks have rallied more than 40% from their March lows amid better-than-feared data, but failed to hold gains last Friday despite what was conclusively an encouraging jobs report.
Catalysts will be lacking during the next several weeks, which could make for a slow start to the summer, but could also prove challenging for recent gains. Amid a lack of clear catalysts or headlines this session, most of the action was driven by traders' emotions.
Participants showed favor for financial stocks ahead of the Fed's official announcement regarding which companies will be allowed to repay TARP funds. Financials spent most of the session as the only major sector in positive ground, but saw their gains compound as buying intensified after the broader market moved past its afternoon highs. That prompted many short-sellers to quickly cover their positions. Financial stocks finished 1.1% higher as the best performing sector in the S&P 500.
Shares of large-cap tech weighed on the Nasdaq Composite. Apple (AAPL 143.85, -0.82) lagged after revealing a new iPhone and reducing prices on other products. Meanwhile, shares of Palm (PALM 12.16, -0.84) sunk after releasing this last weekend a highly anticipated mobile phone meant to rival Apple's iPhone.
Semiconductor giant Cisco (CSCO 19.87, +0.00) mostly showed weakness, but managed to close at the unchanged mark in its debut session on the Dow. Monday also marked the first session that Travelers (TRV 43.92, +0.47) traded in the blue chip index. The two stocks replaced shares of General Motors and Citigroup (C 3.42, -0.04) in the Dow.
Treasuries continue to grapple with sellers. In turn, the benchmark 10-year Note was knocked roughly 17 ticks lower, which pushed its yield to 3.89% from 3.86% Friday. Treasuries will remain in focus tomorrow as participants prepare for a $35 billion auction of 3-year Notes.DJ30 +1.36 NASDAQ -7.02 NQ100 -0.3% R2K -1.1% SP400 -0.7% SP500 -0.95 NASDAQ Adv/Vol/Dec 1026/1.99 bln/1657 NYSE Adv/Vol/Dec 1106/1.08 bln/1890
4:30PM Texas Instruments raises Q2 outlook (TXN) : The company currently expects its financial results to fall within the following ranges: Revenue: $2.30 - $2.50 billion, First Call consensus is $2.21 bln, prior guidance was in the range of $1.95 - $2.40 billion; EPS: $0.14 - $0.22, First call consensus is $0.10, prior guidance was in the range of $0.01 - $0.15.
5:36PM Plexus to host investor day on June; during the meeting co will reaffirm Q3 revs and earnings guidance in-line with consensus (PLXS) 20.59 -0.03 : Co is hosting a meeting on June 11, 2009 in New York, NY to update investors on the co and its strategy, growth initiatives and financial performance. During the meeting, PLXS will confirm its prior fiscal Q3 guidance of revenue from $355-385 mln vs $373 mln First Call consensus and EPS, excluding any restructuring or similar charges, of $0.18-0.25, including ~$0.04 per share of stock-based compensation expense, vs $0.23 consensus.
9:04AM NVIDIA: Rambus Moves to Withdraw Patents From ITC Proceedings Against NVIDIA (NVDA) 10.83 : Co announced that Rambus (RMBS) has asked an administrative law judge at the International Trade Commission to terminate the investigation of NVDA relating to four patents stemming from a complaint filed in November 2008. Rambus has conceded that NVDA products do not infringe on its four patents before the ITC, and has also asked for termination of several claims from a fifth patent in the ITC action. "We are pleased Rambus has recognized the weakness of these patents and claims... These withdrawals represent essentially half of the patents and one third of the claims asserted against us, and we look forward to addressing the remainder of the case."
8:40AM Diodes raises Q2 guidance due to continued improvement in demand and order rates (DIOD) 15.68 : Co raises Q2 guidance due to continued improvement in demand and order rates, primarily in Asia, the Company is raising its previous guidance and now expects Q2 revenue to increase 22-30% over Q1 revenue (which calc to revs ~$95.22-101.47 mln vs $93.47 mln First Call consensus), up from prior guidance of 14-22%. Co is also raising its guidance for gross margin and now expects Q2 gross margin to be ~24 to 28% versus the prior guidance of 20 to 24%. The revenue increase is driven primarily by demand for the products utilized in equipment such as LCD televisions and panels, set-top boxes, mobile handsets and netbooks as well as the production ramp up of previous design wins, which are leading to market share gains. Co continues to expect operating expenses to be in line with Q1 2009 levels. In accordance with FSP APB 14-1, GAAP results will include ~$2.2 million of non-cash interest expense from the amortization of debt discount related to the Company's Convertible Senior Notes. In addition, the Company expects income tax expense to be ~$2.0 to 2.5 million as the effective tax rate for Q2 of 2009 is based on improved profitability from Q1 of 2009 and will include non-cash U.S. income tax expense associated with repatriating earnings of foreign subsidiaries to the U.S. parent during Q1 of 2009.
8:11AM SunPower Announces Multi-Year Manufacturing Agreement With Jabil Circuit, Inc. (JBL) 8.58 : Co announced that it has signed a multi-year solar panel manufacturing agreement with Jabil Circuit, Inc., to build panels for SunPower's North American solar market. Jabil will begin manufacturing panels for SunPower in Mexico in the second half of 2009. SPWRA is also continuing to evaluate establishing localized manufacturing facilities in large solar markets in the U.S. Separately, Jabil will collaborate with SunPower in the company's participation in the Solar America Initiative (SAI), a U.S. Department of Energy effort to accelerate the development of advanced solar energy technologies. SunPower has participated in the initiative since September 2007. SunPower and Jabil intend to evaluate establishing world-class panel and system manufacturing locations in the U.S., which would result in the creation of highly skilled jobs.
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