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From Briefing.com: Weekly Recap - Week ending 26-Jun-09

The stock market had some swings this week, but eventually settled essentially unchanged as early losses were offset by gains later in the week. Trading was highlighted by corporate news from some widely-held names, economic data and the FOMC policy announcement.

Stocks got off to a rough start, with the S&P 500 falling 3.1% on Monday. Although there was no particular catalyst for the sell off, the World Bank cutting GDP forecasts on the U.S. and other major economies did not help sentiment.

But the S&P 500 managed to regain ground, with most of the advance coming on Thursday. In the end, the stock market fell 0.3%, with the telecom (+3.7%) and healthcare (+1.4%) sectors outperforming. The energy (-2.3%) and financial (-1.1%) sectors were the main laggards.

Although only a handful of companies reported earnings, there were several big names announcing, which kept corporate news in focus.

Walgreen (WAG) tumbled after missing its consensus estimate on lower margins, sending the stock down 5.2% for week. Oracle (ORCL) topped estimates and issued upside guidance, settling with a weekly gain of 2.8%.

Nike (NKE) shares fell 10.3% for the week. Although the company beat expectations for its latest quarter, investors were disappointed that future orders fell 12% year-over-year.

In other corporate news, Boeing (BA) pushed back the first flight date of its long anticipated and much delayed 787 Dreamliner. Shares fell 13.5%..

In economic news, new home sales data showed an annualized rate of 342,000 units, below the 360,000 unit consensus. Given the revisions to the prior month, new home sales were down 0.6% month-over-month versus an expected increase of 2.3%.

Meanwhile, existing home sales increased 2.4% from April to an annualized rate of 4.77 million units. According to the National Association of Realtors. Despite the gain, the reading was slightly below the consensus estimate of 4.82 million.

Initial jobless claims for the week ended June 13 totaled 627,000, which was worse 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 was worse-than-expected.

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.

The FOMC left the benchmark rates unchanged (fed funds at range of 0.00% and 0.25%), noting that there is a slowdown in the economic contraction. But the committee also stated that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period of time

Bond markets saw plenty of action during the week. A $27 billion auction of 7-year Notes had better-than-expected demand. 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 yield down to 3.55% from 3.79%.

 
 Index      Started Week Ended Week Change % Change YTD % 
 DJIA	      8539.73	 8438.39  -101.34   -1.2  -3.9 
 Nasdaq	      1827.47    1838.22    10.75    0.6  16.6 
 S&P 500	       921.23	  918.90    -2.33   -0.3   1.7 
 Russell 2000   512.72	  513.22     0.50    0.1   2.8

10:08 am Micron Technology (MU)

Micron Technology (MU 5.22, -0.08) reported third quarter results that beat consensus on the bottom line, but missed on the top line.

The company reported a loss after the close yesterday of $0.36, which came in $0.07 higher than the First Call consensus. However, revenue for the quarter of $1.11 billion declined 26.2% from the prior year's quarter and fell short of expectations of $1.18 billion.

Gross margins on sales of memory products improved from negative 30% in the second quarter of fiscal 2009 to positive 11% 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.

The company also said that memory production in the third quarter was significantly higher compared to the preceding quarter. Increases in bit production resulted from the company's continued transition to higher density 34 nanometer (nm) NAND Flash products and 50nm DRAM products.

10:00 am Palm (PALM)

Palm (PALM 15.32, +1.30) reported fourth quarter results after the close yesterday that were well above consensus estimates.

The company reported a loss of $0.40 per share, which came in $0.22 better than the First Call consensus of a loss of $0.62. Also, the company reported GAAP revenue of $86.8 million; First Call consensus was $80.6 million.

The company shipped a total of 351,000 smartphone units during the quarter, representing a 6% increase from the third quarter of fiscal year 2009 and a year-over-year decline of 62%. Smartphone sell-through for the quarter was 460,000 units, down 5% vs. the third quarter of fiscal year 2009 and down 52% year-over-year.

The company said, "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."