From Briefing.com: 4:25 pm : Stocks managed to reverse modest losses in the first few minutes of trading to spend the rest of the day trading with impressive gains. There was some fleeting selling pressure heading into the close, but the effort was resisted and stocks finished near session highs.
Thanks to strength among retailers, consumer discretionary stocks(+2.9%) led most of the buying in the broader market. Retailers tacked on 3.8% after Bed Bath & Beyond (BBBY 31.08, +2.69) reported better-than-expected first quarter earnings.
Home builder Lennar (LEN 9.19, +1.37) provided leadership to consumer discretionary stocks despite reporting a worse-than-expected quarterly loss.
Meanwhile, Nike (NKE 51.28, -1.74) was a laggard in the group, though it beat quarterly earnings expectations. However, the company indicated that global futures orders dropped 12% from the prior year.
All 10 major sectors in the S&P 500 were able to log gains of 1.0% or more. Financials had lagged for most of the session and even traded with a modest loss early on, but spiked into the close to finish with a 1.7% gain.
Bond markets also saw plenty of buying this session after a $27 billion auction of 7-year Notes saw better-than-expected results. The auction drew a yield of 3.33% and a bid-to-cover ratio of 2.82. Buying at the long-end of the yield curve pushed the benchmark 10-year Note up more than one full point, sending its yield more than 10 basis points lower to just above 3.5%. The 30-year Bond was bid almost two points higher, which dropped its yield 11 basis points to roughly 4.3%.
This session's broad-based buying also extended into commodities, which helped the CRB Commodity Index climb 1.4%. Energy-based commodities saw particularly strong gains as crude oil prices advanced 2.2% to $70.15 per barrel in pit trading. Natural gas prices settled at $3.84 per contract, up 2.2% after weekly inventory data showed a smaller-than-expected build.
In economic data, initial jobless claims for the week ending June 13 totaled 627,000, which is more than expected and up from the previous week. Continuing claims crept up to 6.74 million. Though that is still off of its record high, it exceeded forecasts.
The final reading for first quarter GDP showed a 5.5% annualized decline, which is a slight improvement from the 5.7% annualized decline that was previously reported. The revision came from a smaller decline in inventories than previously reported, but personal consumption expenditures were revised downward to show a 1.4% increase.DJ30 +172.54 NASDAQ +37.20 NQ100 +2.0% R2K +2.9% SP400 +2.5% SP500 +19.32 NASDAQ Adv/Vol/Dec 2172/2.25 bln/517 NYSE Adv/Vol/Dec 2460/1.23 bln/571
4:08PM Palm beats by $0.22, beats on revs (PALM) 14.02 +0.08 : Reports Q4 (May) loss of $0.40 per share, $0.22 better than the First Call consensus of ($0.62); revenues fell 70.7% year/year to $86.8 mln vs the $80.6 mln consensus. "The launch of Palm webOS and Palm Pre was a major milestone in Palm's transformation; we have now officially reentered the race... We have more to accomplish, but the groundwork is laid for a very promising future here at Palm. Our senior management team is capable, motivated and focused on execution; there is a large group of developers waiting to build great applications for Palm webOS; and we have a new product pipeline that we think will set a standard for the industry." The company shipped a total of 351,000 smartphone units during the quarter, representing a 6 percent increase from the third quarter of fiscal year 2009 and a year-over-year decline of 62 percent. Smartphone sell-through for the quarter was 460,000 units, down 5 percent vs. the third quarter of fiscal year 2009 and down 52 percent year-over-year.
4:04PM Micron beats by $0.07, misses on revs (MU) 5.30 : Reports Q3 (May) loss of $0.36 per share, $0.07 better than the First Call consensus of ($0.43); revenues fell 26.2% year/year to $1.11 bln vs the $1.18 bln consensus. The company's gross margin on sales of memory products improved from negative 30 percent in the second quarter of fiscal 2009 to positive 11 percent in the third quarter, resulting from significant decreases in per gigabit manufacturing costs and the benefit in the third quarter from sales of products previously written down. As a result of these decreases in per gigabit manufacturing costs and increases in average selling prices, there was no lower of cost or market write-down of memory inventories during the third quarter. Cost of goods sold in the third quarter includes approximately $30 million of charges for unused production capacity at the company's Inotera and IM Flash joint ventures and an estimated benefit of $242 million from sales in the third quarter of products written down in previous periods.
4:03PM SMSC beats by $0.08, beats on revs; guides Q2 EPS in-line, revs above consensus (SMSC) 19.16 +1.04 : Reports Q1 (May) loss of $0.15 per share, excluding non-recurring items, $0.08 better than the First Call consensus of ($0.23); revenues fell 32.7% year/year to $62.5 mln vs the $56.9 mln consensus. Co issues in-line EPS guidance for Q2, sees EPS of $(0.08)-0.00, excluding non-recurring items, vs. ($0.08) consensus; sees Q2 revs of $68-72 mln vs. $59.67 mln consensus.
9:16AM Microsoft outlines revenue recognition for the Windows 7 upgrade option program (MSFT) 23.47 : Co announces the start of the Windows 7 Upgrade Option program enabling consumers and small businesses to receive Windows 7 when they purchase a qualifying Windows Vista personal computer starting June 26, 2009. Under the program, designated PCs pre-installed with premium versions of Windows Vista will qualify for licenses of the equivalent Windows 7 product. In association with the Windows 7 Upgrade Option program, Microsoft will defer approximately 50% of the revenue from eligible sales under the program to the earlier of the program fulfillment date or the program's expiration. For the fourth quarter fiscal year 2009, Microsoft will defer an estimated $200 to $300 million of revenue. The deferral only impacts the timing of revenue recognition and will not impact cash flows from operations. The Company made a similar revenue deferral for the Windows Vista Technology Guarantee program during the 2007 fiscal year.
8:02AM Trina Solar secures $57 mln credit facilities; total credit facilities now stand at approximately $520 mln (TSL) 24.30 :
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