From Briefing.com: 4:25 pm : The major indices overcame broad losses to finish incrementally higher as the U.S. dollar handed back a portion of its gains this session. The greenback's pullback helped materials stocks offset weakness among retailers.
After falling to a fresh 52-week low in the previous session, the Dollar Index rebounded as much as 1% before easing back to a 0.5% gain. The greenback's bounce gave the equity market an excuse to take a breather after setting new 2009 highs in the previous session. However, stocks showed a willingness to push even higher as the dollar pared its gains; in turn, stocks trimmed their losses to find higher ground late in the session.
Materials stocks garnered particular support late. The sector settled with a 0.9% gain after being down nearly 1%. The sector's turnaround stemmed from a rebound in commodity prices, which took the CRB Commodity Index to a 0.2% gain, and news from a regulatory filing that showed George Soros added 1 million shares of Potash (POT 110.60, +6.42) to his existing stake.
Though the materials sector showed strength, it didn't hold much sway with the broader market; the sector represents a mere 3.6% of the S&P 500's overall market weight. Still, the advance by materials stocks helped mitigate weakness among retailers. Shares of retailers slid 1.4%, even though Home Depot (HD 26.99, -0.66), TJX Companies (TJX 38.91, -0.61), Saks (SKS 6.67, +0.26), and Pacific Sunwear (PSUN 3.88, -1.13) all bested earnings expectations. TJX even went on to raise its earnings outlook, while Home Depot delivered an upside forecast. Pacific Sunwear's outlook proved displeasing, though; that resulted in the stock's sharpest single-session percentage slide of the year.
Though stocks settled the session with fractional gains, each of the three major indices was able to book new 2009 closing highs. The Nasdaq Composite was led by large-cap tech issues, while wireless services stocks provided leadership to the S&P 500. The Dow was led by Exxon Mobil (XOM 75.03, +0.60), which was upgraded by analysts at Barclays.
Data did little for stocks for the second straight session. Producer prices increased 0.3% in October, but that is a slower pace than the 0.5% increase that had been expected. Core producer prices fell 0.6% in October. A 0.1% increase had been expected.
Meanwhile, industrial production for October increased 0.1%, which is weaker than the 0.4% that had been expected. Capacity utilization came in at 70.7%, which is essentially in step with the consensus.
Among the day's economic speakers, Reuters reported that Richmond Fed President Lacker said that sluggishness in pockets of the economy should not deter the Fed from beginning to remove its extraordinary level of support. Though not a new observation, Lacker said he expects the economy to grow at a reasonable rate next year. He did indicate, though, that he won't look at the removal of monetary stimulus until economic growth is strong enough and well-enough established.
Advancing Sectors: Materials (+0.9%), Telecom (+0.6%), Tech (+0.5%), Consumer Staples (+0.2%), Financials (+0.1%), Health Care (+0.1%)
Declining Sectors: Consumer Discretionary (-0.7%), Utilities (-0.4%)
Unchanged: Industrials, EnergyDJ30 +30.46 NASDAQ +5.93 NQ100 +0.3% R2K -0.1% SP400 -0.2% SP500 +1.02 NASDAQ Adv/Vol/Dec 1.23 bln/1.90 bln/1416 NYSE Adv/Vol/Dec 1347/971 mln/1653
4:31PM LDK Solar sells 15% ownership stake in its 15,000 MT polysilicon plant (LDK) 6.71 -0.27 : The co announces that it has entered into an agreement to sell a 15% ownership stake in its 15,000 metric ton annualized capacity polysilicon plant in Xinyu City, China. Jiangxi International Trust and Investment has agreed to purchase this interest for approximately RMB1.5 billion (equivalent to approximately $219 million).
3:32PM Intel confirms seven new Intel Capital investments that total ~$25 mln (INTC) 20.32 +0.09 : Intel Capital, Intel Corporation's global investment organization, confirms seven new investments, which span three continents and total ~$25 million. The new investments, almost all led by Intel Capital, include U.S.-based Joyent (cloud computing) and Active Storage (RAID storage systems for Apple users), Korea-based Crucialtec (optical modulation technology), Taiwan-based Gudeng Precision Industrial Co (semiconductor front-end equipment manufacturing), Japan-based V-cube (Web-based videoconferencing systems), China-based Phoenix New Media (Web information portal) and United Arab Emirates-based NeuString (telco pricing analytics software).
7:31AM Semitool to be acquired by Applied Materials for $11/share in cash (SMTL) 8.40 : Applied Materials (AMAT) and SMTL announced a definitive agreement for AMAT to acquire the outstanding shares of SMTL for $11 per share in an all-cash tender offer. Under terms of an agreement approved by the boards of directors of both companies, AMAT Materials will pay an aggregate purchase price of approximately $364 million based on the fully diluted capitalization of SMTL. The acquisition will be conducted pursuant to a tender offer for all of the outstanding shares of SMTL and is conditioned on the tender of at least 66 2/3 percent of SMTL's outstanding stock on a fully-diluted basis and other customary closing conditions including regulatory approval. Directors and executive officers of SMTL holding approximately 32 percent of SMTL's outstanding common stock have entered into agreements to tender their shares. AMAT expects to commence the tender offer promptly and expects the offer to close by the end of calendar 2009. Following completion of the tender offer, AMAT will acquire any remaining shares of SMTL through a second-step merger at the same price paid in the tender offer. SMTL will be operated as a business unit of AMAT's Silicon Systems Group.
7:30AM Am Superconductor receives $10 mln order for wind turbine core eectrical cmponents from China's CSR-ZELRI (AMSC) 32.17 : Co announces that it has received a follow-on order for $10 mln worth of wind turbine core electrical components from China's CSR Zhuzhou Electric Locomotive Research Institute Co. CSR-ZELRI will use the components in the 1.65 megawatt wind turbines designed by AMSC's wholly owned AMSC Windtec subsidiary. This is the largest order AMSC has received from CSR-ZELRI. To date, CSR-ZELRI has ordered more than $20 mln of core electrical components from AMSC.
7:05AM Canadian Solar beats by $0.15, beats on revs (CSIQ) 19.70 : Reports Q3 (Sep) earnings of $0.69 per share, $0.15 better than the First Call consensus of $0.54; revenues fell 15.6% year/year to $213.1 mln vs the $210.9 mln consensus. "We are reiterating our fourth quarter 2009 guidance of shipments of approximately 128 MW to 138 MW, with gross margin expected to be in the high- teens on a percentage basis vs the 17.5% consensus. We expect shipments of approximately 295 MW to 305 MW for FY09. For FY10, we believe our shipments will be in the range of 600 MW to 700 MW. We believe that the demand for our high quality solar modules will come from all major markets, including Germany, Italy, the U.S., the Czech Republic, South Korea and Spain. We also expect strong growth from our newer markets, such as Canada, Japan and China. Given the demand forecast, the co plans to increase our solar module production capacity from today's 820 MW to 1 GW by the end of April 2010, and to increase our internal cell production capacity from 420 MW to 700 MW by June 2010. We also intend to slightly increase our internal ingot and wafer capacity in 2010." Shipments for 3Q09 were 102.6 MW, compared to shipments of 48.2 MW for 2Q09 and 60 MW for 3Q08. Q3 sales came from all geographic markets important to the solar industry, with Europe continuing to be the Company's largest contributing geographic market. Sales in that region grew strongly in the quarter, increasing 179% from 2Q09. Gross margin of 16.3% vs the 16.7% consensus, compared to Q209 gross margin of 20.2% and Q308 gross margin of 15.5%.
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