From Briefing.com: 4:30 pm : Better-than-expected economic data helped the S&P 500 ascend to a 1.5% gain, but a bout of selling and technical resistance sent stocks to a 0.7% loss before buyers stepped back in to drive stocks to a positive finish.
News that the ISM Manufacturing Index for October came in at 55.7, construction spending in September spiked 0.8%, and pending home sales for September made a 6.1% monthly increase helped bring about some early, broad-based buying, which sent all 10 major S&P 500 sectors into the green.
Financials were a standout as the sector climbed to a 2.5% gain. Investors in the sector paid little attention to news that regional lender CIT Group will enter bankruptcy after weeks of struggling to secure financing and put together a plan for sustainability.
However, financial stocks soon saw their gains reverse as weakness among insurers spread to the rest of the sector. That took the financial sector to a 1.7% loss before buyers stepped back in and helped it finish with a 0.8% gain.
Midsession weakness among financials undercut the broader S&P 500, which was having trouble extending its gains past its 50-day moving average of 1052. Such technical resistance combined with weakness in one of the stock market's leading sectors eventually caused the broader market to roll over and surrender all of its gains.
Stocks were able to garner some support as an underlying bid limited the stock market's move to the downside. That support inevitably helped it settle the session with a gain.
Materials stocks finished the session with some of the strongest gains. The sector closed 1.0% higher, partly helped by a weaker dollar, which oscillated for the entire session before settling roughly 0.1% lower. The greenback's move lower helped the CRB Commodity Index climb 1.2%.
Other solid gains were made by consumer staples stocks (+1.0%) and consumer discretionary stocks (+0.9%), which were helped by strength in shares of Ford (F 7.58, +0.58). The automaker posted this morning better-than-expected earnings and also announced an increase in market share.
In other earnings news, Humana (HUM 37.01, -0.57) posted better-than-expected earnings of its own, but offered a mixed forecast that weighed on the stock. Managed care providers still advanced 1.5% as a group, though.
Advancing Sectors: Consumer Staples (+1.0%), Materials (+1.0%), Industrials (+1.0%), Consumer Discretionary (+0.9%), Financials (+0.8%), Health Care (+0.6%), Energy (+0.5%), Tech (+0.4%)
Declining Sectors: Telecom (-0.4%), Utilities (-0.3%)DJ30 +76.71 NASDAQ +4.09 SP500 +6.69 NASDAQ Adv/Vol/Dec 1277/2.43 bln/1414 NYSE Adv/Vol/Dec 1627/1.55 bln/1411
6:30PM Cisco Announces agreement to acquire DVN Set-Top Box Business (CSCO) 23.00 +0.19 : Co announced a definitive agreement to acquire the set-top box business of DVN (Holdings) Limited (SEHK: 0500). Listed in Hong Kong with major operations in China, DVN is a market and technology leader in digital cable solutions in China and shares Cisco's vision of a high-performance, scalable and services-rich cable interactive platform extending into every home. Under the terms of the agreement, CSCO will pay up to $44.5 mln for the set-top box business of DVN. Of this amount, ~$17.5 mln will be paid upfront, with an additional maximum amount of $27 mln to be paid over four years based on the achievement of specific sales milestones. The acquisition is expected to close in the first half of calendar year 2010.
4:40PM Nanometrics announces a multi-system order (NANO) 7.47 -0.73 : Co announced a multi-system order from a semiconductor foundry for its Integrated Metrology and NanoCD suite solutions. The systems will be delivered in the fourth quarter of this year for optical critical dimension metrology on 22nm gate etch applications.
4:07PM Rudolph Tech beats by $0.10, beats on revs (RTEC) 5.92 -0.42 : Reports Q3 (Sep) loss of $0.07 per share, ex-items, $0.10 better than the First Call consensus of ($0.17); revenues fell 40.1% year/year to $23.3 mln vs the $18.9 mln consensus. Third quarter gross margin was 41% and was negatively impacted by under-utilized manufacturing facilities costs and acquired inventory sold in the quarter that was written up to fair value in purchase accounting. Excluding these items, gross margins would have been approximately 44% in the 2009 third quarter.
4:04PM Diodes beats by $0.02, beats on revs; guides Q4 revs above consensus (DIOD) 16.63 +0.25 : Reports Q3 (Sep) earnings of $0.21 per share, ex-items, $0.02 better than the First Call consensus of $0.19; revenues fell 8.9% year/year to $122.1 mln vs the $120.2 mln consensus. Co issues upside guidance for Q4, sees Q4 revs of $126-$130 mln vs. $123.01 mln consensus. Co states, "Our fourth quarter revenue guidance represents an increase of nearly 50% over 4Q08. Additionally, we expect further improvements in utilization at our wafer fabrication facilities with fourth quarter gross margin expected to range between 31-33%. Fourth quarter operating expenses are anticipated to remain comparable to third quarter levels on a percent of revenue basis. In terms of capital expenditures, we will resume our more normalized range of between 10-12% of revenues, primarily due to equipment lead times and our preliminary forecast of demand growth in the seasonally higher quarters of 2010."
9:01AM GT Solar sees Q2 EPS of $0.06-0.07 vs $0.06 First Call consensus; revs $100-105 mln vs $86.84 mln First Call consensus; announces CEO transition (SOLR) 5.25 : Co sees Q2 EPS of $0.06-0.07 vs $0.06 First Call consensus; revs $100-105 mln vs $86.84 mln First Call consensus. The company also reaffirmed its revenue and EPS guidance for the fiscal year ending April 3, 2010 in the ranges of $450-550 mln and $0.45-0.60, respectively (consensus is for $505.7 mln and $0.50). The co also announced a chief executive officer transition: Tom Gutierrez has been elected president, chief executive officer and a member of the board of directors, succeeding Tom Zarrella, who served as GT Solar President, CEO and a director since 2007 and in a senior management role since 2004. The changes were effective on October 28, 2009.
Altera Corporation (ALTR) announces the new Cyclone IV FPGA family...
7:07AM Tessera Tech provides update on legal actions (TSRA) 22.11 : Co announces on Oct. 30, 2009, the International Trade Commission announced that it will review portions of the Initial Determination by the Administrative Law Judge in the ITC action brought by Tessera against certain DRAM manufacturers and sellers. The Commission will review, among other things, whether the respondents infringed the Tessera patents asserted in the action. The Commission's Final Determination is scheduled to be issued by Dec. 29, 2009. Tessera expects to file its Answer and Counter Complaint today in the International Chamber of Commerce arbitration proceedings it has with Amkor. Amkor filed for arbitration with Tessera on Aug. 7, 2009.
09:42 am Juniper Networks upgraded to Buy at Stifel Nicolaus; tgt $31: . Stifel Nicolaus upgrades JNPR to Buy from Hold and sets target price at $31. The firm notes that they came away from Juniper's analyst day less concerned about share losses to Cisco due to the new Trio chipset/MX-3D products and with better visibility on Juniper's plan for a wireless packet core product. The firm notes Cisco's new edge router, the ASR, has gained limited traction over the past 6 months, and while the ASR could certainly start delivering meaningful customer additions over the next 12 months, the firm believes that JNPR's MX-3D products have leapfrogged the ASR in scale and bandwidth capabilities. Furthermore, the firm notes that checks show that there is pent up demand for the MX-3D products, particularly at AT&T.
09:38 am Apple: Caris raises Dec qtr ests; believes powerful Dec-qtr is brewing at Apple: . Caris notes the market's sell-off has returned AAPL to pre-earnings levels, and while they certainly don't mean to fight market sentiment, their confidence in AAPL's outlook is boosted by sales/production momentum to date. Indeed, inputs already reinforce their expectation that AAPL is tracking to a big Dec-qtr, driven by iPhone supply now catching up to demand (their 10 mln unit est unchanged) and Macs running even hotter than plan (they raise our Mac units to 3.4 mln from 3.2 mln w/ less-than-expected ASP decline), driven by recent MacBook/iMac refresh. Firm raising their Dec-qtr revs/EPS to $12.5 bln/$2.13 (from $12.0 bln/$2.00; vs. consensus of $11.9 bln/$2.05).
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