From Briefing.com: 4:30 pm : A rebound by the U.S. dollar and some technical resistance caused stocks to make an early pullback from 2009 highs and spend the rest of the session trading in lackluster fashion.
Broad-based buying in overseas markets amid strong economic data from Asia and solid earnings from some major industry players in Europe helped inspire a positive tone among U.S. participants in the early going. That combined with renewed weakness in the U.S. dollar to send the S&P 500 1.1% higher to a fractionally better 2009 high in the first hour of trade.
However, the dollar managed to garner support and swing the Dollar Index from a 0.3% loss and a fresh 52-week low to a gain of 0.3% at its session high. It settled with a gain closer to 0.1%, but that was enough to keep stocks from extending their earlier gains.
Stocks were also stymied by technical resistance as the 500 S&P flirted with the trend line for 2007-2008 highs, while the Dow tested its 50% retracement of the bear market decline. Despite the resistance, the Dow was able to log its sixth straight gain and register a new intraday high and closing high for 2009. The S&P 500 also set a fractionally better 2009 closing high, but a close above 1100 continues to elude the broader market index.
Technical resistance and a firmer dollar kept the financial sector from providing the broader market with much leadership, even though the sector spent virtually the entire session showing strength. After being up more than 2%, financials settled with a 1.4% gain.
Materials stocks also finished solidly higher. The sector settled with a 0.9% gain, helped by strength among commodities prices, which were generally higher in the face of the firmer dollar. Before settling pit trade 1.1% higher at $1114.50 per ounce, gold hit another record high of $1119.10 per ounce. That gave gold stocks a gain of 1.6% and the SPDR Gold Trust (GLD 109.60, +1.21) a new record high.
Gains were generally broad based as nine of the 10 major sectors finished with a gain. Utilities were the only sector to post a loss; they settled 0.3% lower.
Retailers also had a weak session after Macy's (M 17.86, -1.57) issued downside guidance, but the group's 0.3% decline wasn't enough to derail the consumer discretionary sector (+0.5%).
Advancing Sectors: Financials (+1.4%), Materials (+0.9%), Tech (+0.6%), Consumer Discretionary (+0.5%), Industrials (+0.5%), Consumer Staples (+0.3%), Telecom (+0.2%), Health Care (+0.2%), Energy (+0.1%)
Declining Sectors: Utilities (-0.3%)DJ30 +44.29 NASDAQ +15.82 SP500 +5.50 NASDAQ Adv/Vol/Dec 1672/1.87 bln/1006 NYSE Adv/Vol/Dec 1875/1.05 bln/1129
4:58PM Applied Materials: During call, sees 1Q10 EPS in range of $0.04 - $0.08 vs First Call consensus of $0.07 (AMAT) 13.25 +0.25 :
4:10PM Applied Materials beats by $0.08, beats on revs; guides FY10 revs in-line (AMAT) 13.21 +0.21 : Reports Q4 (Oct) earnings of $0.11 per share, excluding non-recurring items, but includes stock-based comp expense, $0.08 better than the First Call consensus of $0.03; revenues fell 25.3% year/year to $1.53 bln vs the $1.32 bln consensus. Co reports Q4 gross margin of 36.5% vs First Call consensus of 33.2%. Co issues in-line guidance for FY10, sees FY10 revs growth of more than 30%, which equates to more than $6.52 bln in revs vs. $6.2 bln consensus... In fiscal 2010, co is implementing various cost reduction initiatives and a restructuring plan expected to achieve total annualized cost savings of ~$450 mln when completed. Under the restructuring plan, AMAT expects to reduce its global workforce by ~1,300-1,500 positions, or 10-12%, over a period of 18 months. The co anticipates the pre-tax cost of the plan to be between $100-125 mln, most of which is expected to be recognized in Q1 of FY10. The anticipated savings of $450 mln are in addition to the structural cost reductions of $460 mln achieved in FY09.
4:13PM Hewlett-Packard announces preliminary Q4 results; raises fiscal year 2010 earnings and revenue outlook (HPQ) 50.00 +0.04 : Co issues upside guidance for Q4 (Oct), sees EPS of $1.14 vs. $1.12 First Call consensus; sees Q4 (Oct) revs of $30.8 bln vs. $29.79 bln consensus. Co raises guidance for FY10 (Oct), sees EPS of $4.25-4.35 from its previous estimate of $4.20 to $4.30 vs. $4.28 consensus; sees FY10 (Oct) revs of $118-119 bln up from its previous estimate of $117.0 to $118 bln vs. $118.1 bln consensus. These estimates for both the first fiscal quarter and full fiscal year of 2010 do not reflect the potential impact of the acquisition of 3Com Corporation that HP announced today. (stock is halted)
4:12PM 3Com to be acquired by HPQ for $7.90 per share in cash (COMS) 5.69 +0.28 : HP (HPQ) and COMS announced that they have entered into a definitive agreement under which HPQ will purchase COMS at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 bln. The terms of the transaction have been approved by the HP and 3Com boards of directors. The transaction is expected to close in the first half of calendar 2010. HPQ anticipates that the transaction will be slightly dilutive to fiscal 2010 non-GAAP earnings. (Both stocks are halted)
3:59PM QLogic increases its lead in market share during Q3 (QLGC) 18.87 +0.20 : Co announces that it continues to strengthen its position in storage area network (SAN) Fibre Channel adapters as it increased market share, according to new data published by the Dell'Oro Group in its Q3 2009 SAN Report. QLogic increased its overall Fibre Channel adapter revenue share and strengthened its number one position in Q3 to 54.4%. QLogic also boosted its lead over its nearest rival by 1.9 percentage points, achieving a lead of 17.9 percentage points for Q3.
4:00AM LDK Solar announces People Rep. of China court injunction against guarantee banks from payments to Q-Cells (LDK) 5.81 : Co announces that, upon its motion, the Superior People's Court in Jiangxi Province has issued a civil order freezing any payment that may be made by the relevant guarantor/counter-guarantor banks pursuant to the guarantee and/or counter-guarantee issued in connection with the prepayments made by Q-Cells SE. Q-Cells made prepayments in the aggregate amount of $244.5 mln under the solar wafer supply agreement with LDK Solar. The injunctive relief also takes certain other asset preservation actions in aid of execution and will remain effective for a period of six months until May 8, 2010. Separately, LDK Solar has appealed the decision of the Regional Court of Berlin that lifted its preliminary injunction on the drawdown by Q-Cells under the German bank guarantee. LDK is also making arrangements to speed up the ICC arbitration process as permitted and required under the supply agreement for a fair determination on the substance of the dispute over the supply agreement.
09:39 am Sigma Designs downgraded to Sell at Collins Stewart; tgt $9: . Collins Stewart downgrades SIGM to Sell from Hold and sets target price at $9 on concerns of greater than anticipated share loss to BRCM. Their checks indicate that CSCO/MOT will move exclusively to BRCM SOCs for next-gen MSFT Mediaroom IPTV STBs in 2H CY'10. Their previous estimates had anticipated a dual-source scenario with more modest share loss assumptions. They believe that a motivating factor in SIGM's acquisition of Coppergate was to mitigate the revenue impact of share loss to BRCM on MSFT Mediaroom platforms especially at AT&T.
08:54 am Adobe Systems (ADBE)
Adobe Systems (ADBE 36.60) said in a regulatory filing Tuesday that it will cut approximately 9% of its workforce in an effort to reduce costs.
Adobe said it will eliminate approximately 680 full-time positions worldwide.
The company expects to record approximately $65 million to $71.0 million in pretax restructuring charges associated with the plan.
Included in the charges are $17.0 million to $19.0 million primarily related to the consolidation of leased facilities and $48.0 million to $52.0 million related to employee severance arrangements.
Adobe said it expects to record approximately $18.0 million to $20.0 million in charges in its fourth fiscal quarter and will complete the restructuring by the end of fiscal 2010.
Shares of ADBE are 71.9% higher year-to-date.
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