From Briefing.com: 4:35 pm : Strong earnings from a couple of industry bellwethers and a weaker U.S. dollar brought about a concerted buying effort that sent all three major indices to new 2009 highs. Stocks lost a bit of their upward momentum as they headed into the close, but the Dow was still able to settle above 10,000 for the first time in one year.
Stocks traded solidly higher in broad-based fashion for the entire session. Their advance came on the heels of better-than-expected third quarter earnings from chipmaker Intel (INTC 20.83, +0.34) and diversified financial services outfit JPMorgan Chase (JPM 47.16, +1.50). For its part, Intel brought in $0.33 per share and also issued upside revenue guidance. JPMorgan brought in $0.82 per share for its latest quarter, even though it added $2.0 billion to consumer credit reserves, and said during its conference call that it hopes to raise its dividend back to $0.75 per share in the first half of 2010.
JPMorgan's report sent the broader financial sector to a 3.4% gain, which was better than any other sector this session. However, the bank's report set a high bar for peers like Bank of America (BAC 18.59, +0.78), which reports Friday.
Pharmaceuticals company Abbott Labs (ABT 51.20, +1.55) announced better-than-expected third quarter adjusted earnings of its own by bringing in $0.92 per share and went on to raise its fiscal 2009 guidance. That helped pharmaceutical stocks overcome continued weakness in shares of Johnson & Johnson (JNJ 60.55, -0.46) and drive the health care sector 1.5% higher.
Rail company CSX (CSX 47.06, +2.78) was one of this session's best performers following its upside earnings surprise of $0.74 per share. Fellow rail stocks shared in its strength and sent the industrial sector to a 2.6% gain, second only to financials.
Telecom was the only sector that failed to post a gain. Though its loss was fractional, this session marked the fifth time in the past six sessions that telecom underperformed.
Still, broad-based buying sent stocks to fresh highs for 2009. Since registering March lows, the Dow has climbed roughly 55%, the S&P 500 has jumped approximately 64%, and the Nasdaq has surged almost 72%.
Continued weakness in the U.S. dollar sent the Dollar Index down 0.7%. It registered new 52-week lows in afternoon trade. Though the dollar wasn't in focus this session, its doldrums continue to provide a boon for the stock market.
The positive mood among participants this session was reinforced by pleasing September retail sales data, which showed a softer-than-expected decline of 1.5%. Excluding autos, retail sales increased a better-than-expected 0.5%.
Import prices for September were up 0.1% month-over-month, which is largely in-line with what had been expected, while business inventories for August fell a sharper-than-expected 1.5%. Those reports were overshadowed, though.
In other economic news, minutes from the September 23 FOMC meeting indicated that policymakers feel that the economic outlook has improved and that job losses are slowing. In turn, most members have upwardly revised economic projections, though overall activity is still quite weak.
The minutes supported the stock market's bullish trend, but Treasuries didn't respond so well to them. Comments that increasing the scale of asset purchases could aid in the economy's recovery caused the benchmark 10-year Note to drop roughly 20 ticks and the 30-year Bond to surrender more than one full point.
Advancing Sectors: Financials (+3.4%), Industrials (+2.6%), Materials (+2.0%), Energy (+1.2%), Consumer Discretionary (+1.5%), Tech (+1.5%), Health Care (+1.5%), Consumer Staples (+0.5%), Utilities (+0.4%)
Declining Sectors: (None)
Neutral: Telecom DJ30 +144.80 NASDAQ +32.34 NQ100 +1.4% R2K +2.0% SP400 +1.8% SP500 +18.83 NASDAQ Adv/Vol/Dec 2048/2.39 bln/698 NYSE Adv/Vol/Dec 2278/1.35 bln/769
4:31PM Conexant announces over-allotment exercise on recent common stock offering (CNXT) 3.18 +0.03 : Co announces that the underwriter of its recently concluded public offering of 7,000,000 shares of common stock exercised its over-allotment option to purchase an additional 1,050,000 shares of the company's common stock, bringing the total shares sold to 8,050,000 at a price of $2.85 per share. The offering of 7,000,000 shares closed on September 29, 2009.
4:25PM Xilinx beats by $0.03, beats on revs; guides Q3 revs above consensus (XLNX) 24.00 +0.07 : Reports Q2 (Sep) earnings of $0.25 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.22; revenues fell 14.2% year/year to $415 mln vs the $410.2 mln consensus. Co reports gross margin 61.9% vs 61.04% consensus and previous guidance of 61%. Co issues upside guidance for Q3, sees Q3 sequential revs growth of 6-10%, which equates to ~$439.9-456.5 vs. $422.45 mln consensus. Co guides Q3 gross margins of 62-63% vs 62% consensus.
9:27AM Coherent acquires product lines from StockerYale (COHR) 24.88 : Co announces that it has acquired the North American operations of StockerYale in an asset purchase for $15 million dollars in cash. The Company acquired all the assets and certain operating liabilities of the laser module product line in Montreal, Canada and the specialty fiber product line in Salem, New Hampshire.
1:33AM ASML Holding beats by EUR0.06, beats on revs; guides Q4 revs above consensus (ASML) 31.65 : Reports Q3 (Sep) earnings of EUR0.05 per share, EUR0.06 better than the First Call consensus of (EUR0.01); revenues fell 20.3% year/year to EUR555.3 mln vs the EUR454 mln consensus. ASML's order backlog as of September 27, 2009 was EUR1,353 mln, totaling 54 systems with an average selling price of EUR25.1 mln. ASML's backlog as of June 28, 2009 was valued at EUR1,064 mln, totaling 43 systems with an average selling price of EUR24.7 mln. 3Q09 gross margin was 34.4%, compared with the 2Q09 gross margin of 12.5%, reflecting the better coverage of fixed production costs as a result of increased sales. Co issues upside guidance for Q4, sees Q4 revs of EUR550.0 mln vs. EUR472.35 mln consensus. Briefing.com note: Co issued upside 4Q09 revenue guidance on Sept. 10; stated they expected to see revenue of > EUR500 mln. Co expects gross margin in 4Q09 of approx 37%. R&D expenditures are expected to be at EUR115 mln net of credits and SG&A costs are expected at EUR37 mln. Firm expects cash balance in 4Q09 to be at a similar level as per end-Q3, even as they prepare to ramp NXT shipments in the first half of 2010 and to build EUV systems planned for delivery in 2H10.
09:38 am Intel tgt raised to $29 from $25 at Broadpoint Amtech following blowout 3Q results: .
Broadpoint Amtech raises their INTC tgt to $29 from $25 following the co's blowout 3Q results. The firm notes that the co reported a $0.06 EPS beat on stronger than expected revenue of $9.39 bln (above whispers of ~$9.2 bln+) from a continued consumer-led recovery. However, the co's gross margins stole the show at 57.6% this quarter (vs. the firm's 54.8% estimate and the Street's 54.6%), with guidance of 62% +/- 3 for the December quarter (vs. the firm's 57% estimate and the Street's 57.2%). The firm believes that plenty of earnings leverage exists through structural efficiencies, multiple gross margin tailwinds, aggressive PC and non-PC initiatives, and a material improvement in IT Enterprise spending boosting Nehalem. Firm raises their Dec 09 rev ests to $10.1 bln from $9.78 (consensus is $9.5 bln) and raises their Dec 09 EPS est to $0.46 from $0.39, consensus is $0.34.
08:32 am Intel (INTC)
Intel (INTC 20.49) pleased the market Tuesday evening after it posted better-than-expected third quarter earnings and issued upside guidance for its fourth quarter revenues and gross margins.
Intel reported third quarter earnings of $0.33 per share, $0.05 better than the First Call consensus of $0.28.
Revenues fell 8.0% year-over-year to $9.4 billion, topping the $9.04 billion consensus. Intel said sales were particularly strong in China. Strong consumer sales and a back-to-school cycle that exceed the company's expectations drove sales in the U.S.
Intel's third quarter gross margin of 57.6% easily topped the 55.5% consensus and was well ahead of the company's prior guidance in the upper half of the 51-55% range. A statement from Dell's CFO indicated that the company's factories executed "particularly well," with improvements in throughput time and yields.
Looking ahead to the fourth quarter, Intel said it expects revenues to range from $9.7 billion to $10.5 billion, better than the $9.51 billion consensus. Intel expects its fourth quarter gross margins to range from 59-65%, easily topping the current consensus estimate of 56.7%.
Shares of INTC are about 4.2% higher an hour ahead of Wednesday's opening bell.
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