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From Briefing.com: 4:30 pm : Disregard for a large batch of better-than-expected earnings reports gave way to a stiff bout of selling pressure that put stocks on track for their worst loss in more than two months. However, financials were able to garner support into the close and help the broader market trim its losses.

Stocks set fractionally improved 52-week highs in the previous session, but momentum failed to carry over as global participants reacted negatively to news that China's authorities reportedly ordered some banks to curb lending in a move suggestive of tighter monetary policy. The order precedes the release of China's fourth quarter GDP numbers, so many have inferred that the report will feature a strong upside reading.

Concern about a forced slowdown of China's economy led some to consider the implications for the global economy's recovery. That weighed on both stocks and commodities and even led some to seek safety in the U.S. dollar. Support for the dollar helped the greenback gain 1.1% against a basket of foreign currencies, but it only exacerbated the burden on stocks and commodities.

Broad-based weakness pushed the stock market down as much as 1.8% and momentarily below its July to January trendline even though there were plenty of positive earnings surprises. IBM (IBM 130.25, -3.89), Coach (COH 35.35, -2.10), Wells Fargo (WFC 27.82, -0.46), U.S. Bancorp (USB 25.01, +0.52) and State Street (STT 46.28, +3.08) were among the more widely-held companies to top expectations. However, Morgan Stanley (MS 30.63, -0.53) came short of the consensus earnings estimate and Bank of America (BAC 16.49, +0.17) had a deeper-than-expected loss. Bank of America redeemed itself with news of more stable credit costs, particularly at the consumer level.

Amid the many earnings reports from financial players, several banking issues were able to garner support. Diversified banks buckled and gave up an early gain to finish with a 0.7% loss, but regional banks gained 1.7%. Their strength helped the broader financial sector climb from a 1.2% loss to finish the session just 0.1% to the downside.

Despite relative leadership from the financial sector, weakness remained widespread. As such, eight of the 10 sectors logged losses of 1% or more.

Health care held up relatively well. It finished the session just 0.5% lower. It had been up in early action amid continued support from those that speculate that health care reform could be stalled or stymied with the election of a Republican to the Massachusetts Senate seat.

Energy stocks suffered the most this session. They dropped 1.7% as a group. The sector's weakness was worsened by softer oil prices. February crude oil contracts, which expired at the close of pit trade, settled with oil quoted 1.8% lower at $77.62 per barrel, while March contracts closed with oil priced 2.2% lower at $77.55 per barrel.

Economic data was mixed overall and didn't do anything for market participants this session. More specifically, the December Producer Price Index increased 0.2% month-over-month, which was higher than the consensus call for a flat reading. Monthly producer prices had spiked 1.8% in November. Excluding food and energy, producer prices for December were flat from the previous month. An increase of 0.1% had been widely forecast following the 0.5% monthly increase that was posted in November.

Housing starts for December hit an annualized rate of 557,000, which is a slower clip than the expected rate of 572,000 units. It also marked a pullback from the annualized rate of 580,000 that was registered in November.

However, building permits hit an annualized rate of 653,000 in December. That was far higher than the annualized rate of 580,000 permits that the consensus had predicted and up from the previous month's annualized rate of 589,000 permits.

Advancing Sectors: (None)
Declining Sectors: Energy (-1.7%), Materials (-1.5%), Tech (-1.5%), Telecom (-1.4%), Industrials (-1.3%), Consumer Discretionary (-1.2%), Utilities (-1.1%), Consumer Staples (-1.0%), Health Care (-0.5%), Financials (-0.1%)DJ30 -122.28 NASDAQ -29.15 NQ100 -1.5% R2K -1.5% SP400 -0.8% SP500 -12.19 NASDAQ Adv/Vol/Dec 729/2.38 bln/1968 NYSE Adv/Vol/Dec 787/1.05 bln/2249

4:33PM Skyworks beats by $0.02, beats on revs; guides Q2 EPS above consensus, revs above consensus (SWKS) 14.71 -0.15 : Reports Q1 (Dec) earnings of $0.27 per share, $0.02 better than the First Call consensus of $0.25; revenues rose 16.6% year/year to $245.1 mln vs the $240.9 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.21 vs. $0.19 consensus; sees Q2 revs of $225 mln vs. $214.56 mln consensus. Co states, "Skyworks' strong performance is being driven by several key trends including the exploding demand for mobile Internet applications, increasingly diversified linear products and the rapid adoption of smart grid technologies. More importantly, as our improving gross and operating margins demonstrate, our innovative solutions are allowing us to further differentiate Skyworks, positioning us to create even greater competitive advantages and shareholder."

4:26PM Xilinx beats by $0.05, beats on revs; guides Q4 revs above consensus (XLNX) 23.94 +0.06 : Reports Q3 (Dec) earnings of $0.40 per share, excluding $0.02 in non-recurring items, $0.05 better than the First Call consensus of $0.35; revenues rose 12.0% year/year to $513.3 mln vs the $491.7 mln consensus. Co issues upside guidance for Q4, sees Q4 revs of down 1% sequentially to up 3% sequentially, which equates to ~$508-528.7 mln vs. $492.79 mln consensus. XLNX sees Mar qtr gross margin of 64-65%, vs. 63.3% consensus.

4:09PM F5 Networks beats by $0.03, beats on revs; guides Q2 EPS above consensus, revs above consensus (FFIV) 52.92 +0.59 : Reports Q1 (Dec) earnings of $0.52 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.49; revenues rose 15.5% year/year to $191.2 mln vs the $185.7 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.52-0.54, excluding non-recurring items, vs. $0.48 consensus; sees Q2 revs of $195-200 vs. $186.81 mln consensus. Co says, "While seasonal factors typically make Q2 our most challenging quarter, customer buying patterns continue to stabilize and our near-term business outlook remains strong."

4:08PM Plexus beats by $0.02, beats on revs; guides Q2 EPS above consensus, revs above consensus (PLXS) 28.98 +0.25 : Reports Q1 (Dec) earnings of $0.36 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.34; revenues fell 5.6% year/year to $430.4 mln vs the $422.3 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.42-0.52 vs. $0.31 consensus; sees Q2 revs of $470-495 mln vs. $423.90 mln consensus.

California Micro Devices (CAMD) announces it and the other named defendants in the three purported class action lawsuits that were filed in connection with the proposed acquisition of California Micro Devices by ON Semiconductor (ONNN) have entered into a memorandum of understanding with counsel for the plaintiffs. Under the terms of the memorandum of understanding, the parties have agreed to settle the lawsuits, subject to court approval.

1:17AM ASML Holding beats by EUR 0.02, beats on revs; issues downside Q110 revenue guidance and upside Q210 revenue guidance (ASML) 32.75 : Reports Q4 (Dec) earnings of EUR 0.12 per share, EUR 0.02 better than the First Call consensus of EUR 0.10; revenues rose 17.6% year/year to EUR 581 mln vs the EUR 573.7 mln consensus. Q4 2009 net bookings were valued at EUR 956 mln with 40 systems including 35 new and 5 used systems, leading to an order backlog valued at EUR 1.853 bln as of December 31, 2009. ASML's backlog as of September 27, 2009 was valued at EUR 1.353 bln, totaling 54 systems with an average selling price of EUR 25.1 mln. Q409 gross margin was 38.0%. This margin is the result of an improvement of co's cost structure and stronger service and field option sales and compares with the Q309 gross margin of 34.4%. "We booked EUR 956 million of systems in the fourth quarter of 2009 and expect bookings of the same order of magnitude for the first quarter of 2010, confirming an upturn of the semiconductor industry," CEO Eric Meurice said. Co issues downside guidance for Q110; sees revenue of approx EUR 700 mln vs EUR 770 mln First Call consensus. Co issues upside guidance for Q210; sees revenue of approx EUR 950 mln vs EUR 815.38 mln. Co expects gross margin of approx 40% in Q110, in line with 40% consensus. CEO comments that first quarter will be "somewhat restricted, due to standard - long - equipment industry production lead times and new product introduction challenges, followed by a much higher second quarter."

08:35 am IBM (IBM)

IBM (IBM 134.14) reported fourth quarter earnings that topped the consensus estimate, capping off what CEO Samuel J. Palmisano called "a strong year with a solid performance in the fourth quarter in which we again delivered growth in margins, profit and earnings."

IBM reported fourth quarter earnings of $3.59 per share, $0.12 better than the First Call consensus of $3.47. Net income of $4.8 billion was up 9%.

Revenues rose 0.7% year-over-year to $27.2 billion; the consensus estimate stood at $26.96 billion. Gross margins came in at 48.3%; the consensus estimate called for 48.4%.

IBM said that it expects fiscal 2010 earnings of at least $11.00 per share, ahead of the current consensus estimate of $10.88.

Shares of IBM are about 1.5% lower an hour ahead of Wednesday's opening bell but are about 2.5% higher year-to-date.