Sector Investing

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From Briefing.com: 4:30 pm : Strength among natural resource plays helped the stock market put together a low-volume advance that concluded at session highs with all 10 major sectors in positive ground.

Materials stocks spiked 3.7% as participants pushed back into precious metals and metals stocks. After recording sizable losses in recent weeks, gold prices closed pit trade 1.9% higher at $1105 per ounce, while silver prices settled 2.9% higher at $16.66 per ounce. That helped Freeport McMoRan (FCX 71.59, +4.90) to put together its best single-session percentage advance in approximately six months. The stock was also helped by the notion that it had been oversold after it fell in seven of the eight previous sessions, which cost the stock one-fifth of its market cap.

Diversified metals and miners settled the session with a 7.3% gain, while gold stocks gained 6.3%, and steel stocks were sent 5.3% higher.

All 39 components in the S&P 500 energy sector finished the session in higher ground to give the sector a 3.0% gain. Integrated energy giant Exxon Mobil (XOM 66.18, +1.75) was a primary leader in the group, due to its better-than-expected earnings and a 2.1% rise in crude oil prices, which settled the session at $74.13 per barrel.

The Philadelphia Semiconductor Index put together a 3.1% gain after it had dropped 6.3% during the course of the two previous sessions. Support for the space was helped by news from the Semiconductor Industry Association that global chip sales in December surged 29% year-over-year.

Health care stocks finished with a solid 0.5% gain, but they struggled to keep up with the broader market this session. That was largely due to relative weakness in managed care names in the wake of in-line earnings and a tepid 2010 forecast from Humana (HUM 48.71, +0.09).

This morning's economic data was generally mixed. The ISM Manufacturing Index for January hit a five-year high of 58.4, which topped the consensus call of 55.5, but enthusiasm for the report was tempered by news that construction spending during December made a month-over-month 1.2% decline, which is worse than the 0.5% decline that many had forecast.

Personal income during December climbed 0.4%, which is a slightly sharper increase than the 0.3% increase that had been expected. Spending during December increased 0.2%, which was softer than the 0.3% increase that was widely forecast. Core personal consumption expenditures increased a tepid 0.1% month-over-month, but that was in-line with the consensus.

Advancing Sectors: Materials (+3.7%), Energy (+3.0%), Financials (+1.6%), Tech (+1.5%), Industrials (+1.5%), Consumer Discretionary (+1.1%), Consumer Staples (+0.8%), Utilities (+0.7%), Health Care (+0.5%), Telecom (+0.4%)
Declining Sectors: (None)DJ30 +118.20 NASDAQ +23.85 NQ100 +1.1% R2K +1.2% SP400 +1.5% SP500 +15.32 NASDAQ Adv/Vol/Dec 1709/2.22 bln/972 NYSE Adv/Vol/Dec 2411/1.04 bln/642

6:08PM Silicon Motion misses by $0.26, misses on revs; guides Q1 revs in-line (SIMO) 3.20 +0.04 : Reports Q4 (Dec) loss of $0.28 per share, excluding excluding stock-based compensation, acquisition-related charges, foreign exchange gain, and other items, $0.26 worse than the First Call consensus of ($0.02); revenues fell 29.3% year/year to $22.8 mln vs the $24.8 mln consensus. Co issues in-line guidance for Q1, sees Q1 revs of down 5% to up 5% sequentially, which equates to ~$21.7-23.9 mln vs. $22.38 mln consensus. Co says, "Although we are entering the seasonally slow part of the year especially relating to our mobile storage business, we are seeing continued signs of improvement in our business and design pipeline and are confident that our business will improve as the year progresses."

4:44PM Rudolph Tech misses by $0.13, beats on revs; co announced record bookings (RTEC) 6.77 +0.50 : Reports Q4 (Dec) loss of $0.20 per share, which includes includes the restructuring charge, litigation, and stock-based compensation, $0.13 worse than the First Call consensus of ($0.07); revenues rose 76.8% year/year to $29 mln vs the $26.6 mln consensus. Co reported record book-to-bill ratio of 2.6 exceeded industry averages by more than 2X.

4:17PM TranSwitch announces a workforce reduction and other cost savings initiatives (TXCC) 1.82 +0.27 : Co announces it recently effected a restructuring to be implemented and concluded during the first quarter of 2010. This workforce reduction primarily affects personnel based in Fremont, California, New Delhi and Bangalore, India and Shelton, Connecticut. TranSwitch expects that these restructuring actions and other cost reduction initiatives will result in annual savings of approx $4.0 mln, and that these savings will begin to be recognized in first quarter of 2010. Of this amount, TranSwitch expects annual savings of approximately $2.4 mln in reduced employee related costs including base salary reductions and $1.6 mln from other cost savings initiatives. In connection with the restructuring, TranSwitch expects to incur pre-tax restructuring charges of approx $1.4 mln which will be cash expenditures primarily for employee related costs. The Company expects these charges to be recorded in the first quarter of 2010.

Mattson Technology (MTSN) announces that it has received multiple orders for the company's Suprema photoresist strip system and the Helios XP rapid thermal processing system from one of the leading memory customers based in Asia...

7:30AM Am Superconductor receives $70 mln order for wind turbine electrical control systems from China's Shenyang blower works (AMSC) 38.02 : Co announces that it has received an initial order for full wind turbine electrical control systems from China's Shenyang Blower Works that is worth approximately $70 mln. The systems will be deployed in the 2 megawatt doubly fed induction wind turbines that were co-developed with AMSC Windtec, a wholly owned subsidiary of AMSC. This is the largest initial electrical control system order that AMSC has received to date from any wind turbine customer.

7:19AM SIA says global chip sales decline in 2009 : The Semiconductor Industry Association (SIA) reports that worldwide semiconductor sales in 2009 were $226.3 billion, a decline of 9 percent from 2008 when sales were $248.6 billion. Total sales for 2009 surpassed the SIA forecast of $219.7 billion. December sales were $22.4 billion, an increase of 29 percent from December 2008, when sales were $17.4 billion. December sales declined by 1.2 percent from November when sales were $22.7 billion. All monthly sales numbers represent a three-month moving average. "2009 turned out to be a better year for the global semiconductor industry than expected," said SIA President George Scalise. "A strong focus on inventories throughout the supply chain mitigated the impact of the worldwide economic downturn and positioned the industry for growth as the global economy recovers. "Sales in the final quarter of 2009 were supported by healthy demand in a variety of end markets including PCs, cell phones, and consumer electronics. In 2010, unit sales of personal computers and cell phones - which account for approximately 60 percent of total semiconductor consumption - will grow in the low-to-mid teens, providing a solid platform for chip sales. Consumer electronics are expected to grow in the mid-single digits," Scalise continued. "We are also seeing the effects of recovery in the enterprise sector and we believe this trend will continue," Scalise noted. SIA expects a return to normal seasonal patterns, which suggests a modest slowdown in the first quarter.

6:14AM UTStarcom announces it has entered into agreements for a strategic relationship with Beijing E-town International Investment and Development (UTSI) 2.16 : Co announces it has entered into agreements for a strategic relationship with Beijing E-town International Investment and Development, an investment company established by the Beijing Municipality which includes an investment of $48.5 mln by BEIID and two unrelated investment funds, Ram Max Group Limited and Shah Capital Management. The three investment parties are advised by Yellowstone Capital. As part of the investment, UTStarcom will issue approx 22 mln shares of common stock at a price of $2.20 per share, with BEIID investing $25 mln, Ram Max Group Limited investing $12.5 mln and Shah Capital investing $11 mln. In connection with the transaction and in furtherance of UTStarcom's strategic goals in China, Mr. Jack Lu has been appointed the new Chief Executive Officer and President of the Company effective the later date of three months after the closing of the investment or June 30, 2010. From the closing of the transaction until he assumes the CEO position, he will be the Company's Chief Operations Officer. Mr. Peter Blackmore will retire as CEO and President of UTStarcom upon Mr. Lu's assumption of the CEO position.