From Briefing.com: 4:30 pm : Stocks overcame some choppy trade in the early going to stage a nice advance, but the move eventually lost momentum, leaving the major averages to roll over.
Stocks followed up lackluster action in the prior session with a relatively flat start today. Overseas markets failed to provide a lift as most of the major global averages moved lower following China's 25-basis point rate increase and the latest round of ISM Services readings from Europe. As for domestic data, the ISM Services Index for March came in at 57.3, which is not only down from the 59.7 that had been recorded for the prior month, but it is less than the 59.5 that had been expected among many economists polled by Briefing.com.
Despite mixed interest in the early going, buying interest gradually increased as the session progressed. The buying effort took the Dow to a new 52-week high, but the S&P 500 only came within a few points of its 52-week high.
Tech stocks had been a key source of broad market strength following news that Texas Instruments (TXN 34.69, +0.58) will acquire National Semiconductor (NSM 24.06, +9.99) for $6.5 billion, or $25 per share. The takeover price represents a premium of almost 80% above NSM's prior session closing price.
Interest among tech issues even helped Apple (AAPL 338.89, -2.30) recover from an opening drop that came in response to news that its weight in the Nasdaq 100 will be reduced to about 12% from 20% with the rebalancing of the Index.
Broad market strength began to fade a bit in afternoon trade, and some knee-jerk selling followed the release of minutes from the most recent FOMC meeting.
According to the minutes, a few members noted that evidence of a stronger recovery, or of higher inflation or rising inflation expectations, could make it appropriate to reduce the pace or overall size of the asset purchase program while several others indicated that they did not anticipate making adjustments to the program before its intended completion. Voting members also noted anticipation that recent increases in the prices of energy and other commodities will result in only a transitory increase in headline inflation.
Investor interest in basic commodities and materials plays helped the materials sector remain propped up while the rest of the market drifted lower in afternoon trade. In turn, materials stocks settled with a collective gain of 1.1% while the major equity averages settled mixed.
Advancing Sectors: Materials (+1.1%), Consumer Discretionary (+0.4%), Energy (+0.3%), Consumer Staples (+0.1%)
Declining Sectors: Tech (-0.1%), Financial (-0.1%), Utilities (-0.3%), Industrials (-0.4%), Health Care (-0.5%), Telecom (-0.7%)DJ30 -6.13 NASDAQ +2.00 NQ100 -0.3% R2K +0.5% SP400 +0.4% SP500 -0.24 NASDAQ Adv/Vol/Dec 1328/1.96 bln/1270 NYSE Adv/Vol/Dec 1629/829 mln/1312
5:02PM Applied Materials announced to sell Chamber Cleaning and Coating Services Group to Quantum Global Technologies (AMAT) 15.53 +0.13 : AMAT and Quantum Global Technologies, LLC (QuantumClean) announced a definitive agreement for QuantumClean to acquire the assets of Applied Materials' Chamber Performances Services semiconductor process kit precision cleaning, coating services and associated analytical testing services businesses for an undisclosed cash amount. The deal is expected to close within 30 days.
7:34AM Applied Materials wins second multi-year service contract at TowerJazz (TSEM) (AMAT) 15.40 : Co announced that it signed a multi-year service contract with TowerJazz, to support Applied Materials equipment at its semiconductor manufacturing facility in Newport Beach, California. This is the second service contract TowerJazz has awarded AMAT; the first contract covers all Applied Materials systems at TowerJazz's Fab 2 in Migdal Haemek, Israel. Under the agreement, Applied will service etch, metrology and inspection tools.
4:22PM Verigy wins new business from Networking and Multimedia Group at Continuing Customer Freescale Semiconductor (VRGY) 14.07 +0.04 : Co has won new business with Freescale Semiconductor's Networking and Multimedia Group, which has placed a volume order for Verigy's V93000 scalable test platform to use in testing select QorIQ PowerPC communications microprocessors, based on Power Architecture technology.
SMSC (SMSC) announced the availability of its OS81092 Intelligent Network Interface Controller for MOST.
07:59 am Analog Devices upgraded to Hold at Auriga U.S.A; tgt raised to $39: . Auriga U.S.A upgrades ADI to Hold from Sell and raises their tgt to $39 from $31 based on their review of the impact of the Japanese earthquake on semiconductor fundamentals, and the valuation implications of recent M&A activity. Firm says they remain concerned that consensus is overly optimistic on analog growth rates over the next several years. However firm says, while the full impact of the earthquake across the semi food chain is still not well understood, it is becoming apparent that uncertainty of supply is driving "panic-ordering" of components, which they expect to result in better-than-expected sales of broadline semis in the months of March and April.
09:46 am LEDS Guides Q3 Revs Below Consensus (LEDS)
SemiLEDs (LEDS $11.95 -2.51) reported a second quarter loss of $0.03 per share, excluding non-recurring items, $0.11 worse than the Thomson Reuters consensus of $0.08.
Revenues rose 29.9% year-over-year to $10 million versus the $11.5 million consensus.
Margins were negatively impacted by previously announced pricing pressure, lower capacity utilization, change in product mix, as well as a shortage in metal organic chemical compound.
For the third quarter, the company guided GAAP earnings in the range of ($0.10) to (0.07), not comparable to the $0.14 non-GAAP Thomson Reuters consensus. On the top line, the company is expecting to see revenue of $6.0 million to $7.0 million versus the $13.88 million Thomson Reuters consensus.
The company said, "While we believe the long term market opportunity of LEDs has not changed, the quarter did not meet our expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and our decision to preserve our market share. Efforts to improve our gross margin include taking actions to improve our yield, transition to four inch wafers in our Taiwan facility, as well as ramping volume production of our new high brightness LED chip, I-Do, which delivers up to 135 lumens per watt, enabling us to provide our customers with a very cost effective lighting solution."
09:34 am TXN to Buy NSM for $25/Share (NSM)
Texas Instruments (TXN $33.24 -0.87) and National Semi (NSM $24.10 +10.03) announced they have signed a definitive agreement under which TXN will acquire National for $25 per share in an all-cash transaction of about $6.5 billion.
Under terms of the agreement, National stockholders will receive $25 in cash for each share of National common stock they hold at the time of closing. TXN expects to fund the transaction with a combination of existing cash balances and debt.
The acquisition is subject to customary closing conditions, including review by U.S. and international regulators and approval by National's shareholders. The transaction is expected to close in six to nine months.
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