From Briefing.com: 4:30 pm : Stocks spent the entire session mired in weakness as cautionary comments about the U.S. debt rating and strength in the U.S. dollar weighed on the minds of participants. Broader sentiment remains mixed, though, as participants continue to assess the market's near-term direction.
Sellers were stirred to action amid word from The Wall Street Journal that Moody's Investors Service believes the U.S. and U.K. need to trim their respective deficits in order to help protect against a downgrade to their triple-A ratings. Meanwhile, analysts at Fitch stripped Greece of its A-rated status. It wasn't apparent whether Greece's downgrade was referenced by European Central Bank member Stark when he suggested that there may be more surprises beyond the debt debacle in Dubai, but the comment raised eyebrows nonetheless.
Despite concerns for a mounting U.S. deficit, President Obama suggested that the U.S. needs to continue to spend its way out of recession as he called for new infrastructure projects and tax breaks for small businesses that will help temper unemployment. Concerns for the financial health of the U.S. have weighed on the U.S. dollar for many months, but support for the greenback this session lifted the Dollar Index 0.7% to a fresh one-month high.
Per usual, the greenback's gain weighed on the broader stock market, but its impact was most considerable against energy and materials stocks. Broad-market pressure and lower commodity prices conspired to take both sectors to losses of 1.7%.
Commodity prices, as measured by the CRB Commodity Index, fell 0.8% -- its fourth loss in five sessions. Oil prices were a primary detractor of the CRB; crude oil futures finished at $72.74 per barrel as they fell 1.6% in their fifth straight loss.
There were a handful of corporate announcements from some relatively widely held names, but they didn't cause much of a stir among participants.
Dow component 3M (MMM 77.11, -0.80) reaffirmed that it expects adjusted earnings for fiscal 2009 to range from $4.50 to $4.55 per share, but that remains below the consensus forecast for $4.57 per share. The company expects earnings in fiscal 2010 to range from $4.85 to $5.00 per share, which brackets the $4.94 per share consensus estimate.
FedEx (FDX 89.88, +2.36) issued last evening a forecast for earnings of $1.10 per share in the second quarter. That is below the $1.58 per share that it earned in the same period of the previous year, but up markedly from the company's previous guidance, which called for earnings to range from $0.65 to $0.95 per share. It also exceeds the consensus call of $0.85 per share for the quarter.
McDonald's (MCD 60.61, -1.32) recorded a 0.6% dip in U.S. same-store sales during November. That undercut global comparable sales, which increased a modest 0.7% during the month.
Though stocks were mired in weakness for the entire session, Treasuries garnered moderate support as the benchmark 10-year Note climbed just seven ticks. Treasuries came under closer focus midsession as news that a $40 billion auction of 3-year Notes produced a bid-to-cover ratio of nearly 3.0, which is better than the 2009 average ratio of 2.7, but not as strong as the ratio of 3.3 that came about in the previous auction.
Weakness in the broader market handed the S&P 500 its second straight loss and its fourth decline in eight sessions. The split between advancing sessions and declining sessions comes as participants try to determine the near-term direction of trade after stocks repeatedly failed to hold new 2009 highs last week. The most notable rollover came as stocks faltered after an impressive monthly payrolls report. That move suggested that the positive economic news had already been priced into the stock market and that something more was needed to help stocks hold gains amid a simultaneous advance by the dollar.
Advancing Sectors: (None)
Declining Sectors: Energy (-1.7%), Materials (-1.7%), Industrials (-1.3%), Consumer Staples (-1.2%), Telecom (-1.0%), Financials (-0.9%), Consumer Discretionary (-0.8%), Tech (-0.8%), Health Care (-0.8%), Utilities (-0.4%)DJ30 -104.14 NASDAQ -16.62 SP500 -11.31 NASDAQ Adv/Vol/Dec 856/2.00 bln/1836 NYSE Adv/Vol/Dec 920/1.18 bln/2066
5:31PM Actel announces Q4 revs guidance of 2-6%; sees gross margin to be above the previous guidance of 59-60% (ACTL) 11.74 -0.06 : Co reaffirms Q4 revs growth of 2-6% sequentially, which equates to ~$48.2-50.1 mln vs. the $49.1 mln First Call consensus. Co announced operating expenses are anticipated to come in at ~$26.6 mln, which excludes an estimated $2.0 mln of stock-based compensation expense. The previous guidance was ~$26.9 mln. The guidance for operating expenses does not include the ongoing amortization of intangibles and deferred compensation for the Pigeon Point Systems acquisition of ~$0.6 mln or an estimated $1.2 mln charge for Q4 reduction in force, which is unchanged from the previous guidance.
4:32PM TXN raises Q4 revs guidance to $2.9-3.02 bln vs $2.93 bln consensus, up from $2.78-3.02 bln :
4:31PM TXN raises Q4 EPS to $0.47-0.51 vs 0.47 consensus, up from $0.42-0.50 :
4:31PM Photronics reports Q4 EPS of ($0.07) vs ($0.07) First Call consensus; revs $94.7 mln vs $97.23 mln First Call consensus (PLAB) 4.91 -0.09 : "During the fourth quarter we successfully recapitalized our balance sheet and paid down $65 million in debt. We also benefited from continued traction at the nanoFab where we gained additional market share with new qualified and volume production customers, while sequentially improving its operating cash flow. For the year Photronics significantly reduced fixed operating costs and realigned its global manufacturing network to better match customer demand. We enter 2010 in a solid position to capitalize on market improvement."
Rudolph Technologies (RTEC) announces the receipt of multiple orders for its latest Explorer Inspection Cluster from a "major Taiwanese foundry." The orders include new systems as well as upgrades for previously installed equipment...
8:05AM Xilinx sees raises Q3 sales and gross margin outlook; sees revs up 16-20% QoQ vs the 8.6% consensus; up from 6-10% previously (XLNX) 23.24 : Co has raised its Q3 sequential sales outlook to be up 16-20% from 6-10% previously, consensus calls for a 8.6% increase in sales. We calculate this to be revs of $481-498 mln vs the $450 mln consensus. The increased sales guidance is primarily due to broad-based strength across all our end market categories and geographies. Gross margin is expected to be approximately 64% vs the 62.5% consensus, up from prior guidance of approximately 62-63%.
Flextronics (FLEX) announced that it has signed an agreement with Lenovo to expand the scope of its existing Electronics Manufacturing Services relationship. As part of the arrangement, Flextronics enlarges its geographic service area for Lenovo products to include Europe and increases the number of EMS services it delivers for Lenovo...
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