From Briefing.com: 4:30 pm : Better-than-expected earnings and upside guidance from tech bellwether Intel drove the Dow and Nasdaq higher for the seventh straight session, but the S&P 500 settled fractionally below the neutral line for an anticlimactic end to its recent streak of gains.
A stellar report from Dow component Intel (INTC 21.36, +0.35) provided investors with a picture of an improved business environment and sent tech stocks to a 0.8% gain, collectively. The tech sector couldn't quite extend its gain above its 200-day moving average, though.
Meanwhile, the tech-rich Nasdaq outperformed the broader market for almost all of the session as the S&P 500 was mired in choppy, mixed trade. Broader market participants failed to rally around Intel's announcement. Their lack of interest was partly owed to the notion that the stock market had become overbought after it had advanced in six straight sessions for a cumulative gain of more than 7%.
Financials weighed on the broader market for the entire session. As a group they fell to a 0.9% loss as bank stocks showed weakness ahead of a quarterly report from Dow component and banking bellwether JPMorgan (JPM 40.35, -0.13) Thursday morning. The KBW Bank Index dropped 1.6%.
Economic data did little to help extend the recent buying effort. After all, the latest FOMC meeting minutes indicated that real GDP for 2010 is now expected to range from 3.0% to 3.5%, which is down from the previous range of 3.2% to 3.7%, while the projection for 2011 GDP ranges from 3.5% to 4.2% after it had previously ranged from 3.4% to 4.5%.
As for unemployment, the 2010 projection rate ranges from 9.2% to 9.5% after it had ranged from 9.1% to 9.5%. The expected unemployment rate for 2011 ranges from 8.3% to 8.7% after it had ranged from 8.0% to 8.5% before.
FOMC members agreed that it would be appropriate to keep the target federal funds rate at a range of 0.00% to 0.25%.
Advance Retail Sales for June fell a sharper-than-expected 0.5% and sales less autos slipped 0.1% when no change had been expected.
Import prices for June fell 1.3% month-over-month after a 0.5% monthly decline in May.
Business inventory data for May increased by 0.1%, which is slightly softer than the 0.2% increase that had been widely expected.
Results from the latest 30-year Treasury Bond auction saw strong dollar demand of $37.6 billion and a bid-to-cover ratio of 2.9. Indirect bidder participation was 37%. The prior auction saw dollar demand of $37.3 billion and a bid-to-cover of 2.9 and indirect bidder participation of 36%.
Treasuries didn't make much of an immediate response to the numbers, but they were able to settle with strong gains, such that the yield on the benchmark 10-year Note moved below 3.05% and the yield on the 30-year Bond moved closer to 4.00%.
The euro managed to swing from a loss to fractionally improved two-month high against the greenback, but it eased back a bit to settle the session with a 0.1% gain.
Participation was underwhelming as hardly 1 billion shares traded hands on the NYSE. The 50-day moving average stands between 1.4 billion and 1.5 billion shares per session.
Advancing Sectors: Tech (+0.8%), Industrials (+0.2%), Consumer Staples (+0.2%), Health Care (+0.1%), Materials (+0.1%), Telecom (+0.1%), Utilities (+0.1%)
Declining Sectors: Financials (-0.9%), Consumer Discretionary (-0.5%), Energy (-0.3%) DJ30 +3.70 NASDAQ +7.81 NQ100 +0.5% R2K -0.4% SP400 -0.2% SP500 -0.17 NASDAQ Adv/Vol/Dec 1092/2.16 bln/1505 NYSE Adv/Vol/Dec 1331/1.06 bln/1629
8:01AM National Semi declared a cash dividend of $0.10 per outstanding share of common stock, up from $0.08 per common share (NSM) 14.54 :
7:03AM Microsemi receives $22 million production order for products used in GPS defense systems (MSCC) 16.05 : Co announces that it has received a production order of approximately $22 million for customized GPS modules that utilize the proprietary anti-tamper process technology Microsemi added with its acquisition of White Electronic Designs Corporation in May.
2:19AM Cabot Micro estimates 3Q10 revenue of $101.7 mln vs $102.48 mln consensus; reports higher 3Q10 operating expenses due to litigation costs (CCMP) 36.65 : Co issues downside guidance for Q3 (Jun), sees Q3 (Jun) revs of $101.7 mln vs. $102.48 mln Thomson Reuters consensus. Operating expenses increased significantly in the third fiscal quarter, ended June 30, 2010, due to higher litigation costs. The co expects to report operating expenses of approx $34.5 mln in the third fiscal quarter, or $2.4 mln higher than the $32.1 mln reported in the previous quarter. The increase from the prior period was primarily driven by higher expenses related to the co's ongoing patent enforcement litigation with DuPont Air Products NanoMaterials, LLC during the third fiscal quarter. Following completion of the jury trial on July 8, in which the co's patents at issue were upheld, the co expects litigation costs to decrease significantly. Given the increase in operating expenses in the third fiscal quarter, the co now expects to exceed its previous guidance range for full year operating expenses of $120.0-125.0 mln for FY10. In addition, the co expects to report a gross profit margin of approx 49.0% of revenue in the third fiscal quarter.
1:52AM Toshiba starts construction of Fab 5 for NAND flash memory at Yokkaichi; Toshiba and SanDisk sign joint venture agreement (SNDK) 45.71 : Toshiba announces that it has started construction of a state-of-the-art fabrication facility, Fab 5, at Yokkaichi Operations, its memory production facility in Mie Prefecture, with construction work scheduled for completion in Spring 2011. Toshiba and SanDisk announce that they have signed primary agreements for a new joint venture to operate in the Fab 5 facility.
1:45AM ASML Holding beats by EUR 0.08, beats on revs (ASML) 31.27 : Reports Q2 (Jun) earnings of EUR 0.54 per share, EUR 0.08 better than the Thomson Reuters consensus of EUR 0.46; revenues rose 286.4% year/year to EUR 1.07 bln vs the EUR 0.99 bln consensus. 2Q10 gross margin was 43.0% compared with the 1Q10 gross margin of 40.3%. Co anticipates bookings levels of around EUR 1.3 bln in the third quarter; co expects FY10 sales to grow 10-15% above historical peak sales of EUR 3.8 bln.
09:39 am INTC Guides Q3 Revs and Margins Above Consensus (INTC)
Intel (INTC 22.05 +1.04) reported second quarter earnings after the close yesterday of $0.51 per share, $0.08 better than the Thomson Reuters consensus of $0.43.
On the top line, revenues rose 34.6% year-over-year to $10.8 billion, above the $10.25 billion consensus. The company reported second quarter gross margins of 67% versus the 64.0% Thomson Reuters consensus.
For its third quarter, the company expects to see revenue in the range of $11.2 billion to $12.0 billion, above the current $10.92 Thomson Reuters consensus and gross margins of 67% plus or minus a couple % pts versus the 64.4% consensus.
Intel guided fiscal year 2010 gross margins to 66%, + or - a couple pts, up from previous guidance of 64% + or - a couple pts, versus the 64.2% Thomson Reuters consensus. Intel sees fiscal year 2010 capital spending in the range of $5.0 billion to $5.4 billion; previous guidance $4.7 billion to $4.9 billion.
The company said, "Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company's 42-year history... Our process technology lead plus compelling architectural designs increasingly differentiate Intel-based products in the marketplace. The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future."
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