Sector Investing

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From Briefing.com: 4:20 pm : The stock market lacked direction during the first half of the trading day, but the financial sector ultimately helped lead the broader market to a modest gain.

Stocks started the day in positive territory, but they retreated into the red as the dollar fought off selling efforts to secure support at the neutral line. The dollar oscillated thereafter and finished the day with fractional gain.

Buyers were slow to respond to the stock market's morning slide, but their gradual move back into the market helped stocks muster gains. Financials attracted the most support. The sector swung to a 1.8% gain. Banks were some of the best performers in the space as the KBW Bank Index climbed 2.9%. Banks have had a strong start to December; the KBW is already up 10.0% in the first six sessions of this month. For comparison, the S&P 500 is up 4.0% in that same time span.

Two IPO's out of China accounted for some of today's best individual performances. Dangdang (DANG 29.91, +13.91), labeled by many as China's Amazon.com (AMZN 176.29, -0.48), almost doubled in price. Youku.com (YOKU 33.44, +20.64), which is conceptually similar to YouTube, more than doubled in price.

Home Depot (HD 34.08, +0.53) had a strong session of its own, but it couldn't keep the Dow from trailing its counterparts. The stock challenged six-month highs after it issued an improved outlook.

Fellow Dow component McDonald's (MCD 78.74, -1.60) reported this morning global comparable sales growth of 4.8% for November, but that could not help the stock from extending its record high. MCD was the worst performing stock in the Dow.

Treasury prices continued to turn lower, such that the yield on the 10-year Note hit a six-month high of almost 3.33% before it eased back to 3.24% around the close of trade. A $21 billion reopening of 10-year Notes attracted a yield 3.34% and produced a bid-to-cover ratio of 2.92. Dollar demand was the weakest in a year; it came in at $61.3 billion.

The sell-off in precious metals continued as silver prices plummeted 5.1% to settle at $28.25 per ounce and gold dropped 1.9% to $1383.20 per ounce. In contrast, natural gas prices climbed 4.5% to $4.60 per MMBtu, a four-month closing high. Weekly natural gas inventory data are due tomorrow morning. Today's larger-than-expected draw of 3.82 million barrels of crude oil initially pressured oil prices, but the commodity pared its loss to settle the day down 0.5% at $88.28 per barrel.

Advancing Sectors: Financials (+1.8%), Tech (+0.9%), Consumer Staples (+0.3%), Health Care (+0.1%)
Declining Sectors: Materials (-0.9%), Utilities (-0.5%), Energy (-0.3%), Industrials (-0.3%), Consumer Discretionary (-0.1%)
Unchanged: TelecomDJ30 +13.32 NASDAQ +10.67 NQ100 +0.5% R2K -0.1% SP400 -0.1% SP500 +4.53 NASDAQ Adv/Vol/Dec 1316/1.77 bln/1321 NYSE Adv/Vol/Dec 1160/1.11 bln/1844

4:43PM Seagate Tech has increased the size of its previously announced offering of $500 million aggregate principal amount of senior notes due 2018 to $750 mln (STX) 15.07 -0.09 : Co announces that it has increased the size of its previously announced offering of $500 million aggregate principal amount of senior notes due 2018 (the "Notes") to $750 million. The Notes were priced at 100% of the aggregate principal amount and will bear interest at a rate of 7.75% per annum.

4:37PM Semtech enters agreement in principle to settle class action securities litigation (SMTC) 24.06 +0.16 : Co entered into an agreement in principle to settle all claims asserted against all defendants in the putative class action concerning the Company's stock option accounting practices captioned In re Semtech Corporation Securities Litigation. The agreement in principle provides for the payment of $20 million by the Company. The agreement in principle contemplates the negotiation and execution of a final settlement agreement. The proposed settlement would fully resolve all claims against the Company, all current officers and directors of the Company named in the lawsuit, and certain former officers and directors of the Company named in the lawsuit. No parties admit any wrongdoing as part of the proposed settlement. The settlement also is subject to preliminary approval by the Court, notice to the putative class and subsequent final approval by the Court.

# Semtech (SMTC) is working with IBM Corp (IBM) and its 3D through-silicon via technology to develop a platform that has applications in fiber optic telecommunications, RF sampling and filtering, test equipment and instrumentation, and sub-array processing for phased array radar systems.
# The Motorola Solutions business of Motorola (MOT) and Janam Technologies announced that Motorola - together with its subsidiary, Symbol Technologies - and Janam have reached an agreement that settles all outstanding intellectual property disputes between the two companies.
# Voltaire (VOLT) signed an agreement with Atlantik Systeme to distribute its products in Germany. Atlantik Systeme has also joined Voltaire's adVantage Partner Program.

3:28AM LDK Solar signs multi-year wafer and polysilicon supply contract with Lu'an Group (LDK) 10.08 : Co announces it has entered into a multi-year wafer and polysilicon supply contract with Shanxi Lu'an Photovoltaic Technology, a subsidiary of Lu'an Group. Under terms of the contract, co will provide 120 MW of solar wafers commencing in January 2011 through December 2012 and 2,000 metric tons of polysilicon commencing in January 2011 through February 2013. No financial terms were disclosed.

09:18 am Novellus tgt raised to $36 at RBC following guidance: . RBC is raising their tgt to $36 from $34 (Top Pick) following last night's guidance; mgmt raised the lower end of 4Q10 order guidance from -14% to -5% while maintaining the upper end at +10%, implying one of the two uncertain orders discussed during 3Q10 earnings call have come in. Co raised Q4 EPS guidance to $0.88-1.00 from $0.85-1.00 and reaffirmed sales of $367-385 mln (cons: $0.92, $377.8 mln). The call was in-line with an incrementally bullish tone compared to the 3Q10 earnings call. They are raising their FY10 and FY11 EPS slightly.

08:52 am Apple FY11 ests and tgt raised to $390 at Stifel Nicolaus: . Stifel Nicolaus is raising its FY11 EPS estimate from $18.84 to an above-Street $19.23 and increasing its target price from $360 to $390. The increase in its FY11 EPS estimate reflects higher iPad, iPhone and mac units assumptions and slightly lower assumptions iPod estimates, as well as a slight increase in its gross margin assumption for FY11 (from 37.2% to 37.3%). On increased confidence of an iPhone launch on VZ in mid F2Q11 (i.e. mid-Feb. vs its prior est of March) it's raising its iPhone units estimates for FY11 from 57.9mn to 58.8mn. Firm is also raising its FY11 ASP assumptions for iPhone from $571 to $580 based on its assumption that Apple will secure higher ASPs following a VZ deal made with semi-exclusivity in the U.S. (i.e. no T-Mobile (DT)).

09:49 am TXN Narrows Guidance (TXN)

Texas Instruments (TXN 33.36 -0.05) expects to see fourth quarter earnings of $0.61 to $0.65, in-line with the $0.63 Thomson Reuters consensus, compared to prior guidance of $0.59 to $0.67.

Revenues are now expected to be $3.43 billion to $3.57 billion, in-line with the $3.50 billion Thomson Reuters consensus, prior guidance of $3.36 billion to $3.64 billion.