Sector Investing

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From Briefing.com: 4:35 pm : Despite a sluggish start and a lack of concerted leadership, the stock market made its way back above 1100 as buyers offered broad-based support for the second straight session.

For fear that the previous session's low-volume rally was anything more than a reflex bounce that followed last week's losses, participants showed reservation in the early going. That made for listless, choppy trade.

However, buyers stepped back in after a couple of early dips failed to gain momentum. Broad buying ensued, but stocks paused to consolidate their gains at a couple of near-term resistance levels in the S&P 500 -- last week's closing highs and the psychologically-significant 1100.

Though the S&P 500 was able to make its way back above 1100, it remains 4% below its January high. Nonetheless, all 10 major sectors finished the latest session in higher ground; seven of them gained in excess of 1%.

Materials stocks consistently lagged. The sector still gained 0.4%, but Dow Chemical (DOW 27.57, -1.06) proved to be a drag as participants dismissed its better-than-expected earnings.

Some materials stocks sported strong gains, though. Particularly, an upgrade of Alcoa (AA 13.67, +0.31) and Freeport McMoRan (FCX 72.51, +0.92) by analysts at Citigroup won support for aluminum and diversified metals plays, while an upgrade of Schnitzer Steel (SCHN 45.51, +3.09) by analysts at UBS helped steel stocks.

Higher commodity prices also offered support to the sector. With a 1.9% gain, the CRB Commodity Index made its best single-session percentage gain in nearly one month.

A modest 0.2% decline by the Dollar Index played a minor role in the CRB's move, but oil prices were a primary underpinning of the gain. Pit trade closed with crude oil priced 3.7% higher at $77.17 per barrel. That played a part in the energy sector's 1.4% bounce. Of the 39 components listed in the S&P 500 Energy Sector, only Baker Hughes (BHI 47.26, -0.07) failed to log a gain.

Energy names topped this session's list of most actively traded stocks by volume. Overall volume was slightly above average as almost 1.2 billion shares exchanged hands on the NSYE this session.

Still, participants don't seem to be reacting much to earnings. UPS (UPS 58.62, +0.23) posted an upside surprise that helped its shares climb, but the broader market was generally unfazed. Whirlpool (WHR 82.23, +6.17) missed Wall Street's consensus, but its strong outlook won it favor.

There wasn't much reaction to the latest economic data or economic commentary as an in-line 1.0% month-over-month increase in December pending home sales was generally dismissed by market participants.

Treasury Secretary Geithner's testimony about the government's fiscal 2011 budget was also generally disregarded, while former Fed Chairman and current Chair of the President's Economic Recovery Advisory Board Paul Volcker gave a testimony on reining in risk taking at commercial banks that offered little additional detail.

Advancing Sectors: Health Care (+1.9%), Industrials (+1.9%), Consumer Discretionary (+1.5%), Energy (+1.4%), Telecom (+1.3%), Consumer Staples (+1.3%), Financials (+1.1%), Tech (+0.8%), Utilities (+0.8%), Materials (+0.4%)
Declining Sectors: (None)DJ30 +111.32 NASDAQ +18.86 NQ100 +0.9% R2K +0.8% SP400 +1.4% SP500 +14.13 NASDAQ Adv/Vol/Dec 1479/2.50 bln/1164 NYSE Adv/Vol/Dec 2341/1.18 bln/695

4:50PM TTM Tech provides update on regulatory status of proposed acquisition (TTMI) 10.65 +0.19 : Co announced that the Committee on Foreign Investment in the United States ("CFIUS") has completed its review of the proposed acquisition by TTM Hong Kong, a subsidiary of the Company, of certain indirect wholly owned subsidiaries of Meadville Holdings that are engaged in PCB operations. CFIUS has informed the Company that there are no unresolved national security concerns for this acquisition. The Company and Meadville had previously voluntarily filed a notice for CFIUS's review.... Co received a letter from the U.S. Federal Trade Commission in January 2010 indicating that its request for early termination of the Hart-Scott-Rodino review process had been granted. The Company's application previously submitted to antitrust regulators in the People's Republic of China is currently under review.

4:17PM GT Solar beats by $0.10, beats on revs; guides FY10 EPS above consensus, revs above consensus (SOLR) 6.00 +0.22 : Reports Q3 (Dec) earnings of $0.25 per share, $0.10 better than the First Call consensus of $0.15; revenues rose 66.6% year/year to $173.6 mln vs the $145.4 mln consensus. Co issues upside guidance for FY10, sees EPS of $0.52-$0.60 vs. $0.49 consensus; sees FY10 revs of $500-$550 mln vs. $502.12 mln consensus. The company reiterated its gross margin guidance for the fiscal year of approximately 39%. Co states, "We have seen an increase in business activity over the last four months from our key customers in Asia, indicating that their utilization rates are climbing and, as a result, the supply environment for low cost, high quality wafers is expected to tighten. We believe recent orders, including some from new customers, provide further evidence that GT Solar remains the technology leader in the market and that our systems continue to be the choice of leading PV manufacturers."

4:07PM JDS Uniphase beats by $0.03, beats on revs; guides Q3 revs above consensus (JDSU) 8.37 +0.21 : Reports Q2 (Dec) earnings of $0.12 per share, $0.03 better than the First Call consensus of $0.09; revenues rose 15.1% year/year to $343.8 mln vs the $334.2 mln consensus. Non-GAAP gross margin was 44.6% compared to 44.0% in the prior quarter and 43.5% in second quarter of fiscal 2009. Co issues upside guidance for Q3, sees Q3 revs of $325-$350 mln vs. $322.68 mln consensus.

10:45AM Motorola announced an investment in Scanbuy; terms of the investment were not disclosed (MOT) 6.34 +0.01 : Co announced an investment in Scanbuy. Motorola acted as lead investor and was joined by Masthead Venture Partners, Hudson Ventures and select private investors. Financial terms of the investment were not disclosed.

8:47AM Tower Semicon and Soitec sign agreement to offer backside illumination platform for high-end image sensors (TSEM) 1.15 : The co and Soitec Group (Euronext Paris) announce that they have signed an agreement that will enable a turn-key solution for high-end backside illuminated (BSI) CMOS image sensors (CIS) for industrial, medical and automotive applications. "The market for BSI CMOS image sensors replacing current Front Side Illumination (FSI) technology is expected to reach $800M in 2013," according to Jerome Baron, principal analyst at Yole Developpement. "The BSI image sensor market will be mainly driven by digital cameras and cell-phone applications, but high performance imaging applications such as medical, industrial and automotive vision sensors are also an important segment. We estimate the market for high-end BSI image sensors to reach $120M in the same time frame."

7:38AM Am Superconductor beats by $0.06, beats on revs; guides FY10 EPS above consensus, revs above consensus (AMSC) 39.75 : Reports Q3 (Dec) earnings of $0.20 per share, $0.06 better than the First Call consensus of $0.14; revenues rose 95.4% year/year to $80.7 mln vs the $76.7 mln consensus. Co issues upside guidance for FY10, sees EPS of $0.65-$0.67 vs. $0.58 consensus; sees FY10 revs of $312-$315 mln vs. $306.90 mln consensus. Co also states, We delivered better-than-expected financial results for the third fiscal quarter as wind-related revenues continued to grow and our cost management initiatives provided additional bottom-line benefits. With several wind turbine manufacturing customers in volume production, many others set to begin production over the next 12 months and new power grid orders continuing to be closed, the foundation has been set for further growth in fiscal 2010 and beyond..." As co detailed at its Analysts' Day in Nov 2009, co expects growth to continue in FY11. Co expects revenue to exceed $400 mln (vs consensus of $419.5 mln) and non-GAAP net income to exceed $54 mln, or $1.15 per diluted share (vs consensus of $1.15) for FY11.

2:23AM ARM Holdings reports 4Q09 results (ARMH) : Reports Q4 (Dec) earnings of 1.79 pence/share vs 1.94 pence/share in 4Q08; revenue declined 6% year/year to $140.0 mln vs $130.85 mln consensus. Co expects group dollar revenues for the full-year to be at least in line with current market expectations.