Sector Investing

[ReturntoSender]

4:30PM Fed raises discount rate to 0.75% from 0.50%-- Bloomberg (ECONX) :

6:25PM Futures are lower after hours with S&P 500 futures 8.95 points below fair value of 1105.05 and Nasdaq 100 futures 14.827 points below value of 1822.82 :

4:35PM Fed Releases Statement on Discount Window (ECONX) : The Federal Reserve Board on Thursday announced that in light of continued improvement in financial market conditions it had unanimously approved several modifications to the terms of its discount window lending programs. Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities. The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy, which remains about as it was at the January meeting of the Federal Open Market Committee (FOMC). At that meeting, the Committee left its target range for the federal funds rate at 0 to 1/4 percent and said it anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The changes to the discount window facilities include Board approval of requests by the boards of directors of the 12 Federal Reserve Banks to increase the primary credit rate (generally referred to as the discount rate) from 1/2 percent to 3/4 percent. This action is effective on February 19. In addition, the Board announced that, effective on March 18, the typical maximum maturity for primary credit loans will be shortened to overnight. Primary credit is provided by Reserve Banks on a fully secured basis to depository institutions that are in generally sound condition as a backup source of funds. Finally, the Board announced that it had raised the minimum bid rate for the Term Auction Facility (TAF) by 1/4 percentage point to 1/2 percent. The final TAF auction will be on March 8, 2010. Easing the terms of primary credit was one of the Federal Reserve's first responses to the financial crisis. The increase in the discount rate announced Thursday widens the spread between the primary credit rate and the top of the FOMC's 0 to 1/4 percent target range for the federal funds rate to 1/2 percentage point. The increase in the spread and reduction in maximum maturity will encourage depository institutions to rely on private funding markets for short-term credit and to use the Federal Reserve's primary credit facility only as a backup source of funds. The Federal Reserve will assess over time whether further increases in the spread are appropriate in view of experience with the 1/2 percentage point spread.

4:19PM Ixia beats by $0.01, beats on revs (XXIA) 8.41 +0.17 : Reports Q4 (Dec) earnings of $0.06 per share, $0.01 better than the First Call consensus of $0.05; revenues rose 36.8% year/year to $56.1 mln vs the $53.2 mln consensus.

4:09PM Dell beats by $0.01, beats on revs (DELL) 14.43 +0.32 : Reports Q4 (Jan) earnings of $0.28 per share, $0.01 better than the First Call consensus of $0.27; revenues rose 11.0% year/year to $14.9 bln vs the $13.85 bln consensus. Dell reports Q4 gross margins of 16.5% vs 18.0% consensus. Michael Dell: "Our solutions portfolio is expanding rapidly, driven by our strong capabilities, ongoing innovation and smart acquisitions. We continue to listen to and engage closely with customers through millions of conversations and interactions each day, enabling Dell to provide more relevant, value-oriented solutions to help meet their unique needs." Dell saw demand in the important commercial business continuing to return during the fourth quarter and is cautiously optimistic that this trend will continue into fiscal-year 2011. The company is confident in its ability to deliver the right technology to commercial customers and believes its extensive and ongoing cost actions position it well for this environment of increased demand. Longer term, the company is confident it can generate growth in revenue, operating-income margin and cash flow from operations.

4:08PM First Solar beats by $0.13, beats on revs; guides FY10 EPS in-line, revs in-line (FSLR) 126.29 +2.07 : Reports Q4 (Dec) earnings of $1.65 per share, $0.13 better than the First Call consensus of $1.52; revenues rose 47.9% year/year to $641.3 mln vs the $581.4 mln consensus. Co issues in-line guidance for FY10, sees EPS of $6.05-6.85, excluding non-recurring items, vs. $6.37 consensus; sees FY10 revs of $2.7-2.9 bln vs. $2.73 bln consensus. Total capital spending is projected to range from $500 to $550 million, including the Malaysian expansion. As a result, the Company expects to generate $730 to $790 million of operating cash flow and $180 to $290 million of free cash flow. T

4:07PM Nanometrics misses by $0.02, misses on revs (NANO) 10.50 +0.40 : Reports Q4 (Dec) earnings of $0.01 per share, $0.02 worse than the First Call consensus of $0.03; revenues rose 28.3% year/year to $26.3 mln vs the $27.8 mln consensus. Co says, "In the near term, we expect the favorable environment for semiconductor capital spending to continue, and we anticipate that our results for the first quarter of 2010 will show significant revenue growth."

4:03PM Anadigics beats by $0.04, beats on revs; guides Q1 EPS above consensus, revs above consensus (ANAD) 4.41 +0.08 : Reports Q4 (Dec) loss of $0.05 per share, $0.04 better than the First Call consensus of ($0.09); revenues fell 7.5% year/year to $41.8 mln vs the $39.6 mln consensus. Co issues upside guidance for Q1, sees EPS of ($0.05)-($0.06) vs. ($0.10) consensus; sees Q1 revs of inline with $41.8 mln reported in Q4 vs. $36.84 mln consensus. Co says "In contrast to normal seasonality, we are seeing very strong growth in our Wireless bookings in the first quarter of 2010. As such, we expect Wireless net sales to increase approximately 20% sequentially. This strength is expected to offset the previously anticipated weakness in WLAN..."

4:30 pm : Broad-based buying helped both the Dow and the Nasdaq Composite close above their 50-day moving averages for the first time in almost one month, but the S&P 500 was met with resistance as it encountered the technical hurdle. Nonetheless, stocks still booked their third straight gain.

Stocks chopped along in a tight trading range for the first part of the session as participants tried to take their cues from fluctuations in the dollar. Relative to a basket of foreign currencies, the greenback oscillated between a gain of 0.4% and a loss of 0.2% before it settled with a fractional loss.

Though the dollar's final pullback brought buyers into the market, there didn't appear to be much conviction behind the move. In fact, fewer than 1 billion shares traded hands on the NYSE this session. It marked the most thinly traded session in one month.

Still, stocks were able to make to make a broad-based advance that saw advancing issues outnumber decliners by 3-to-1 in the S&P 500. Despite such positive market breadth, the S&P 500 couldn't push through its 50-day moving average, which stands at 1108. The line also marks an approximate 60% retracement of the stock market's slide from its January high to its February low. The line will almost certainly come back into play tomorrow.

Materials stocks (+1.2%) were the best performers of the session as gold stocks (+2.5%) bounced on better-than-expected earnings from Barrick Gold (ABX 39.23, +1.37) and Kinross Gold (KGC 18.86, +0.36). Steel stocks (+2.7%) were helped by an upgrade of Nucor (NUE 43.62, +1.18) by analysts at Bank of America's Merrill Lynch.

Hewlett-Packard (HPQ 50.81, +0.69) helped the tech sector make its way to a 0.8% gain, thanks to better-than-expected earnings and upside guidance, but it wasn't much of a leader for the broader market.

Wal-Mart (WMT 53.47, -0.59) also failed to inspire. The retail giant posted better-than-expected earnings for the latest quarter and issued in-line guidance, but its fourth quarter U.S. comparable store sales fell more than expected.

Despite listless action among stocks and lack of conviction among participants, the stock market was still able to shrug off a flurry of disappointing data.

Specifically, weekly jobless claims for the week ended Feb. 13 totaled 473,000. That was up 31,000 from the previous week and worse than the 438,000 claims that had been widely forecast. Continuing claims came in at 4.56 million, which is unchanged from the previous week, but a bit worse than the 4.50 million continuing claims that many had come to expect.

The Producer Price Index for January spiked 1.4% month-over-month, which is sharper than the 0.8% increase that had been expected. Excluding food and energy, producer prices increased 0.3% month-over-month, which is a more rapid clip than the 0.1% monthly increase that had been expected after the core measure of producer prices was flat in the prior month.

Meanwhile, leading indicators increased 0.3% in January, but the pickup wasn't as strong as the 0.5% increase that was expected. It also marked a sharp pullback from the 1.2% increase that was posted in the prior month.

The Philadelphia Fed Index for February was the only economic report that exceeded expectations. It came in at 17.6, which topped the 17.0 that had been expected. It also marked an improvement from the 15.2 that was posted in January.

Amid the disappointing data and the stock market's advance, Treasuries had a tough session, which sent the yield on the benchmark 10-year Note up to 3.80% for the first time in more than one month.

In other trade, commodities had a generally solid session as the CRB Commodity Index advanced 0.8% to a fresh three-week high. It closed at its 50-day moving average.

Crude oil was a primary source of support for the CRB's gain. Prices settled pit trade 2.2% higher at $79.06 per barrel, even though the latest batch of weekly inventory data showed a larger-than-expected build of 3.085 million barrels. DJ30 +83.66 NASDAQ +15.42 NQ100 +0.7% R2K +0.7% SP400 +0.6% SP500 +7.24 NASDAQ Adv/Vol/Dec 1543/2.05 bln/1074 NYSE Adv/Vol/Dec 2107/960 mln/929

7:02AM SMSC announces acquisition of Kleer semiconductor (SMSC) 20.48 : Co announced that it has acquired substantially all the assets and certain liabilities of Kleer Semiconductor Corporation, a designer of high quality, interoperable wireless audio technology addressing headphones and earphones, home audio/theater systems and speakers, portable audio/media players and automotive sound systems. Under terms of the asset purchase agreement, SMSC paid approximately $5.5 mln in cash and additional cash payments of up to $2.0 mln may occur upon achievement of certain performance goals. The acquisition closed on February 16, 2010.