From Briefing.com: 4:30 pm : A deluge of data and concern regarding tomorrow's jobs report pushed buyers to the sidelines. That left stocks to drop sharply in broad-based fashion, resulting in the stock market's worst single-session percentage loss since July.
The dour mood among participants was evident from the start. Stocks started in the red as the previous session's lackluster finish carried over into morning trade and foreign markets faltered. News that the International Monetary Fund raised its forecast for 2010 global economic growth to 3.1% from 2.5% had no real positive impact.
Though the IMF forecast was widely disregarded, market participants were focused on several other reports, including another disappointing jobless claims tally. Initial claims climbed 17,000 to 551,000, which is a higher count than had been expected. Continuing claims came in at 6.09 million, which is below the consensus estimate and down 70,000 from the previous week, but that is largely due to the expiration of jobless benefits. The ugly claims numbers and the disappointing ADP report on Wednesday serve as salient reminders that the government's nonfarm payrolls report for September could be disappointing. The official payrolls report is due Friday morning.
Personal income and spending for August were up 0.2% and 1.3%, respectively. Both exceeded expectations, while core personal consumption climbed a mere 0.1%, as expected.
The ISM Manufacturing Index for September came in at 52.6, which is below what was expected, but the figure still indicates growth in the manufacturing sector.
Construction spending during August made a surprise 0.8% increase, while pending home sales for August surprised some by increasing 6.4% in August.
Stocks were also dogged by a stronger U.S. dollar, which was helped partly by supportive comments from Fed Chairman Bernanke, who said that there is no immediate risk to the dollar. With the Dollar Index up nearly 0.7%, basic materials stocks and commodities showed weakness for the entire session. Materials stocks finished 3.9%, while the CRB Commodity Index dropped 1.5%.
Financials were the worst performers for the session, though. The sector dropped 4.4%. Banks were some of the worst performers as regional banks dropped 5.5%, diversified financial services fell 5.2%, and diversified banks dropped 5.1%. Bank of America (BAC 16.21, -0.71) was one of the few companies to make headlines this session. The company's Chief Executive, Ken Lewis, announced that he will retire by year's end. No successor has been named, though.
With 95% of the companies listed in the S&P 500 logging losses, many participants pursued Treasuries. That helped send the benchmark 10-year Note more than one full point higher. In turn, its yield fell to fresh multimonth lows below 3.2%.
Trading volume made a considerable pullback from the previous session, now that quarter-end window dressing and portfolio rebalancing has come to an end. Only 1 billion shares traded hands on the NYSE this session. DJ30 -156.44 NASDAQ -54.41 NQ100 -3.1% R2K -3.4% SP400 -3.1% SP500 -22.21 NASDAQ Adv/Vol/Dec 498/2.19 bln/2181 NYSE Adv/Vol/Dec 533/1.04 bln/2475
5:39PM First Solar: News Corp will replace Wyeth in the S&P 100 and First Solar will replace Wyeth in the S&P 500 (FSLR) : S&P 500 constituent News Corp. (NWSA) will replace Wyeth Corp. (WYE) in the S&P 100, and First Solar (FSLR) will replace Wyeth in the S&P 500 on a date to be announced. Wyeth is being acquired by S&P 100 & 500 constituent Pfizer Inc. (PFE) in a deal expected to close soon pending final approvals.
4:02PM SMSC beats by $0.08, beats on revs; guides Q3 EPS in-line, revs above consensus (SMSC) 22.84 -0.37 : Reports Q2 (Aug) earnings of $0.08 per share, excluding non-recurring items, $0.08 better than the First Call consensus of ($0.00); revenues fell 22.7% year/year to $75.1 mln vs the $72 mln consensus. Co issues guidance for Q3, sees EPS of $0.19-0.24, excluding non-recurring items, vs. $0.20 consensus; sees Q3 revs of $82-86 mln vs. $81.50 mln consensus.
9:20AM Ascent Solar announces that it prices its 4.6 mln share offering of common stock at $6.50/share (ASTI) 7.54 :
8:04AM Teradyne raises guidance above consensus; sees Q3 EPS of $0.10-0.13 vs $0.01 First Call consensus (TER) 9.25 : Co raises Q3 guidance, now sees Q3 EPS of $0.10-0.13 vs $0.01 First Call consensus, up from prior guidance of ($0.02)-$0.02; sees Q3 revs $250-260 mln vs $201.49 mln First Call consensus, up from prior guidance of $190-205 mln. The gross margin and operating expenses by business segment are expected to be consistent with their models. Although both segments reflect greater than expected revenue, forecasted profitability will reflect a greater proportion of revenue from Systems Test Group than expected. In light of the expected return to profitability and generally improving conditions, the temporary salary reductions implemented in late 2008 and 2009 will be eliminated in the fourth quarter. "We continue to see improving demand within our Systems Test and Semiconductor Test businesses.
09:43 am Apple ests and tgt increased to $210 at Oppenheimer on increasing recognized iPhone revs: . Oppenheimer is raising ests across the board (F4Q09 to $1.50 from $1.37 and F2010 to $7.76 from $6.49 (consensus $1.38/$6.90)) to better reflect the increasing proportion of recognized, high-margin iPhone revenue. Incredibly, despite all the ink spilled over iPhone accounting, firm thinks the Street continues to highly underestimate Apple's GAAP earnings. Firm notes this will likely become a moot point within six months, as co incorporates new FASB accounting rules and recognizes more iPhone sales at time of sale. But until then, Apple's EPS will continue to surprise to the upside, even if rev comes merely in line with Street expectations. Tgt to $210 from $185.
09:45 am Cisco Systems (CSCO)
Cisco Systems (CSCO 23.46, -0.08) said Thursday that it will acquire Tandberg, a Norway-based video communications company, for approximately $3 billion.
Under the terms of the agreement, Cisco will commence a cash tender offer to purchase all the outstanding shares of Tandberg for 153.5 Norwegian kroner per share for an aggregate purchase price of approximately $3.0 billion. This represents an 11.0% premium to the previous day closing price of Tanberg's stock.
Cisco said it expects the acquisition to be accretive to its non-GAAP earnings in fiscal year 2011.
09:08 am Teradyne (TER)
Shares of Teradyne (TER 9.25), a maker of automatic test equipment used to test complex electronics, are moving higher Thursday morning after the company substantially raised its third quarter guidance based on improved demand for its products.
Teradyne said it now sees third quarter earnings of $0.10 to $0.13 per share, well ahead of the $0.01 First Call consensus and up from prior guidance that expected a loss of $0.02 to a profit of $0.02 per share.
Teradyne expects third quarter revenues to range from $250 million to $260 million, easily topping the $201.49 million consensus and up from the company's prior guidance of $190 million to $205 million.
"We continue to see improving demand within our Systems Test and Semiconductor Test businesses," said CEO Mike Bradley. "Our supply chain is responding well to this step-up in demand in what remains a short lead time environment."
Shares of TER are nearly 6% higher about 30 minutes ahead of Thursday's opening bell.
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