From Briefing.com: The S&P 500 climbed 1.4% to its best level since mid-June following a barrage of economic reports, which didn't really offer much inspiration to market participants.
The ADP Employment Change report isn't always a precise indicator of what is in store with the official nonfarm payrolls report, but the ADP report does do a good job of handicapping the government's figure. So, with the latest ADP report showing a higher-than-expected the 473,000 job losses for June, many believe job losses in tomorrow's report could exceed the 363,000 that is currently being forecast.
Many economists are worried that continued weakness in labor markets and recent increases in Treasury yields could stymie a recovery in housing. According to the latest data, pending home sales for May increased just 0.1% month-over-month. They were expected to be flat after spiking 7.1% the month before.
Meanwhile, construction spending during May fell 0.9% month-over-month and missed expectations.
The June ISM Manufacturing Index came in at an in-line 44.8, which means manufacturing activity continues to contract since the Index is below 50. The monthly reading was last above 50 in February 2008. However, the pace of contraction continues to slow as the ISM has now increased six consecutive times.
Despite the generally mixed bag of economic reports, stocks were able to log broad-based gains. Consumer staples (+1.7%) were the strongest performers, thanks to General Mills (GIS 58.18, +2.16). Better-than-expected earnings and an upbeat forecast earned shares of GIS their best single-session advance by percent in nearly one month. The consumer staples sector made its best percentage gain in roughly two weeks.
Financial stocks were some of the session's worst performers. The sector shed 0.5% and finished at session lows as diversified banks (-0.8%) and regional banks (-1.0%) came under pressure.
Energy stocks struggled to remain in positive territory as sellers pressured the sector amid falling oil prices. The energy sector was up more than 2% at its session high, but finished with a modest 0.2% gain. Crude oil prices were also up more than 2% at their session high, but finished 0.8% lower at $69.35 per barrel. The reversal in oil prices came in the face of a larger-than-expected draw in weekly inventories.
Despite weakness in energy-related commodities, precious metals were able to advance amid a weaker U.S. dollar. Amid reports that China would like to debate proposals for a new global reserve currency at next week's G8 meeting, the Dollar Index dropped 0.6%. That helped gold prices climb 1.5% to $941.30 per ounce. The broader CRB Commodity Index climbed 0.5%.
Participation was lacking again this session as less than 1 billion shares traded hands on the NYSE. That's the least amount of trading volume in nearly three weeks. Volume is also expected to be light tomorrow since it is the week's final trading session ahead of the long weekend. U.S. markets will be closed on Friday in observance of Independence Day.DJ30 +57.06 NASDAQ +10.68 NQ100 +0.3% R2K +1.8% SP400 +1.1% SP500 +4.01 NASDAQ Adv/Vol/Dec 1776/2.09 bln/865 NYSE Adv/Vol/Dec 2211/950 mln/767
9:13AM FormFactor: ITC issues initial determination in FormFactor's wafer probecard ITC Action, declining to find a violation of Section 337 (FORM) 17.37 : Co announces the Administrative Law Judge assigned to the International Trade Commission's investigation of probecard manufacturers Phicom Corporation and Micronics Japan Company issued an Initial Determination declining to find a violation of Section 337. The Initial Determination is directed to four FormFactor patents: U.S. Patent Nos. 5,994,152, entitled "Fabricating Interconnects and Tips Using Sacrificial Substrates," 6,509,751, entitled "Planarizer for a Semiconductor Contactor," 6,615,485, entitled "Probe Card Assembly and Kit, And Methods of Making Same," and 7,225,538, entitled "Resilient Contact Structures Formed and Then Attached to a Substrate." The Initial Determination found all of the asserted claims of U.S. Patent Nos. 6,509,751, 6,615,485 and 7,225,538 not invalid, and all but one of the asserted claims of U.S. Patent No. 5,994,152 not invalid, but declined to find infringement of any of the asserted claims.
8:00AM Corning announces improved Q2 LCD volume performance (GLW) 16.27 : Co updates guidance of sequential Q2 LCD glass volume growth, citing significant improvement in demand for LCD glass. "Second-quarter glass demand is much stronger than we anticipated even a few weeks ago. As a result, we now expect Q2 sequential volume to be up ~100% at our wholly owned business." Co pointed out that it has met much of the improved demand by drawing down its existing inventory. Additionally, co has begun shipping glass from melting tanks that were restarted earlier in the quarter. Corning originally forecasted a Q2 volume increase of more than 50%, and at the end of May revised volume growth expectations to more than 75%. Samsung Corning Precision Glass Q2 sequential glass volume is expected to be up about 50%, an increase from both the more than 40% figure announced May 28 and the original expectation of more than 25% growth. Co pointed out that Samsung Corning Precision volume did not decline as steeply as Corning's wholly owned business did in the first quarter. Regarding LCD glass pricing, Flaws said that second-quarter prices were moderate and substantially below the first-quarter price declines.
2:04AM Broadcom raises all-cash tender offer for Emulex to $11.00/share (ELX) 10.88 : Broadcom (BRCM) announces that it raised its tender offer for all of the currently outstanding shares of common stock (including the associated preferred stock purchase rights) of Emulex from $9.25 to $11.00 per share in cash, representing a total equity value of approx $912 mln. As required by law, Broadcom will extend its tender offer for an additional 10 business days, until 12:00 AM EST, July 14, 2009.
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