From Briefing.com: 4:30 pm : Despite stumbling in the early going, stocks worked their way higher to log their seventh gain in eight sessions as buyers chased materials stocks and basic commodities.
The major indices started the session in higher ground with help from the August Producer Price Index, which came in with a greater-than-expected 1.7% month-over-month increase, and a stronger-than-expected 0.2% month-over-month increase in core prices. The Empire State Manufacturing Survey for September climbed more than expected to 18.9, which is a new best for 2009, but the advance retail sales report for August was the headliner after it made the sharpest monthly jump in more than three years by climbing a better-than-expected 2.7%. Sales less autos were also better than expected; they increased 1.1%.
Despite the overall positive nature of the data, stocks ran into a flurry of selling pressure midmorning. However, the dip was shallow and short-lived, which led to some short covering that complemented a broader market rebound.
Participants paid little attention to news that July business inventories fell a slightly steeper-than-expected 1.0% and Fed Chairman Bernanke's statement that the recession is very likely over.
Materials stocks attracted plenty of interest, however. The sector climbed 2.3% to finish with the best gains of any major sector. Steel stocks (+3.0%) were the sector's primary leaders, but a run up in commodities prices helped stir interest in the rest of the sector as well.
Strong gains among commodities helped the CRB Commodity Index climb 2.2%, which is its best single-session percentage advance in more than one month. The move was helped along by a 3.0% gain in crude oil prices, which settled at $70.93 per barrel. Gold also continued to garner support -- it finished the session 0.5% higher at $1006.30 per ounce. The case for commodities was partly helped by continued deterioration in the U.S. dollar, which took the Dollar Index down to fresh 11-month lows before easing up to settle with a 0.2% loss.
Health care stocks closed 0.8% lower. They were the worst performing sector in the S&P 500. However, consumer staples stocks (-0.6%) weren't far behind, due to weakness in Kroger (KR 20.46, -1.65). The grocer disappointed by posting an earnings miss and lowered guidance.
Best Buy (BBY 38.32, -2.09) also posted worse-than-expected earnings, but it noted that it successfully captured a record market share increase last quarter.
Citigroup (C 4.12, -0.40) was a drag on the financial sector, which finished with a 0.1% gain. Reports indicated that the company is reportedly considering raising capital through a share issuance to help it reduce the government's stake. Conversely, Regions Financial (RF 6.06, +0.55) won favor after its CEO said at a Barclays conference that the company absolutely will not need to raise additional capital.
Trading volume was solid as 1.5 billion shares exchanged hands on the NYSE. Longer-term averages stand closer to 1.4 billion shares.DJ30 +56.61 NASDAQ +10.86 NQ100 +0.3% R2K +0.8% SP400 +0.8% SP500 +3.29 NASDAQ Adv/Vol/Dec 1566/2.39 bln/1098 NYSE Adv/Vol/Dec 2142/1.50 bln/893
4:09PM Adobe Systems beats by $0.01, beats on revs; guides Q4 EPS in-line, revs in-line (ADBE) 35.62 +0.43 : Reports Q3 (Aug) earnings of $0.35 per share, $0.01 better than the First Call consensus of $0.34. As a percent of revenue, GAAP operating income in 3Q09 was 24.0%, compared to 24.7% in 3Q08 and 22.9% in 2Q09. Co issues in-line guidance for Q4, sees EPS of $0.33-0.39 vs. $0.37 consensus; sees Q4 revs of $690-740 mln vs. $719.23 mln consensus. "We are pleased with the solid revenue and earnings results we were able to deliver in Q3," said Shantanu Narayen, president and CEO of Adobe. "Our focus remains on driving growth in our core businesses, as well as investing in promising new opportunities."
2:38PM Virage Logic declares offer to acquire ARC International unconditional (VIRL) 5.00 0.00 : Co announcesthat it has declared its recommended cash offer to acquire publicly held ARC International, provider of consumer IP to OEM and semiconductor companies globally, unconditional in all respects. With 84.68% of the ARC shares already tendered into the offer, Virage Logic will proceed to consummate the purchase of this ownership interest in ARC and will have ARC immediately apply to the UK Listing Authority and the London Stock Exchange for the delisting of ARC's shares. This all-cash transaction values ARC at 16.25 pence per share, or an equity value of ~$42.0 million on a fully-diluted basis. Furthermore, if it receives sufficient valid acceptances of the offer (being not less than 90% of the ARC shares), Virage Logic intends to exercise its rights to acquire compulsorily the remaining ARC shares on the same terms as the offer.
9:32AM S&P 500 stock buybacks hit record low : Standard & Poor's announced that S&P 500 stock buybacks have fallen to their lowest level since the first quarter of 1998 - when Standard & Poor's began tracking the data. According to Standard & Poor's Index Services, preliminary results show that S&P 500 issues spent $24.2 bln on stock repurchases during the second quarter of 2009, representing a 72% decline from the $87.9 bln spent during the second quarter of 2008, and an 86% decline from the record $172.0 billion spent on stock buybacks during the third quarter of 2007.
8:44AM Tower Semicon announces co-development of 700V power platform (TSEM) 0.93 : The co announces co-development of a 700V power platform to address next-generation industrial LED lighting requirements. The collaboration will combine GrandTek's 700V technology capability with Tower's advanced power management process and leading design kits to deliver the industry's most complete 700V foundry solution. An ultra low mask layer count will be achieved to provide the most cost-effective solution in a voltage regime with very few foundry providers. As an indication of strong market demand for 700V, SemiHow, a Korean-based fabless company has already signed on as an early adopter to use Tower's 700V power platform for AC to DC conversion targeting the industrial LED market. Tower expects to realize product revenue from SemiHow in the second quarter of 2010.
Canadian Solar (CSIQ) announces that it has signed a joint technology development and transfer agreement with Energy Research Center of the Netherlands to apply the technology for metal wrap-through cells to Canadian Solar's production lines... JA Solar Holdings (JASO) announces that it is working to commercialize a new generation of high-performance solar products using silicon ink technology from Innovalight.
6:25AM Emulex comments on patent complaint rfom BRCM (ELX) 10.53 : Co issued the following statement regarding the complaint alleging patent infringement filed today by Broadcom (BRCM) against the co. "Emulex is reviewing the patents associated with the complaint filed today by Broadcom. Emulex has a policy of vigorously defending the co against assertions of this kind. Due to the pending litigation, we are unable to comment further."
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