Sector Investing

[ReturntoSender]

From Briefing.com:4:30 pm : The stock market attempted to fight off early selling interest, but it ultimately rolled over to log another loss.

The mood among market participants continues to sour. As such, the stock market fell for the fourth time in as many sessions. Prior to that losing streak, the stock market had advanced in seven out of eight sessions.

The inclination to sell increased with news that initial jobless claims for the week ended April 30 spiked to 474,000, which is the highest level in the series since August 2010. The spike in initial claims proved much sharper than what had been expected, given that the Briefing.com consensus had called for an initial claims count closer to 400,000. Additionally, the underestimated increases in jobless claims during the past few weeks, coupled with a disappointing ADP Employment Change report for April, has caused some concern about what tomorrow morning's official jobs report might look like.

Little attention was paid to news that first quarter productivity increased by 1.6%, which is better than the 1.0% gain that had been broadly expected. That was helped by a a 1.0% decline in unit labor costs, which had been expected to increase by 0.8%.

Stocks started to fight back after a few hours of selling. Semiconductor issues and other assorted tech plays helped the Nasdaq find higher ground. Electronic Arts (ERTS 21.68, +1.76) actually hit a 52-week high after it posted an upside earnings surprise for the latest quarter.

The S&P 500 couldn't quite follow its tech-rich counterpart into positive territory, though. Its failure to attract enough buying interest to sustain a rally allowed sellers to redouble their efforts in afternoon action. Aggressive selling took the stock market down to its lowest level in two weeks.

Retailers helped the consumer discretionary sector limit its loss to only 0.2%. The group's performance followed a round of stronger-than-expected same-store sales reports for April. Hott Topic (HOTT 7.30, +0.78) surged 12% so that it is now narrowly below its 52-week high. Automaker General Motors (GM 32.02, -1.02) posted a better-than-expected earnings report, but its shares were shunned.

Energy stocks continued to feel the brunt of sellers' efforts. Today the sector dropped another 2.3%, which leaves it down almost 7% week to date. Transocean (RIG 68.77, +0.31) was one of the few energy issues that managed to put together a gain; its performance came in the wake of an upside earnings surprise.

Outsized losses among energy stocks have come amid considerable weakness in oil prices, which dove 8.6% to settle at $99.80 per barrel. That marked their first close below $100 per barrel since mid-March.

Silver suffered another dramatic drop. Its 7.9% dive to $36.30 per ounce has left the precious metal more than 20% below the near 31-year high that was recorded at the end of last week's trade. Silver's slide has been exacerbated by several margin increases.

General weakness among commodities dropped the CRB Commodity Index for a 4.9% loss.

Sudden buying in the greenback certainly didn't help the commodities complex. The dollar's 1.4% advance against a basket of major foreign currencies was owed to a combination of short covering and disappointment over comments from European Central Bank President Trichet regarding plans to watch prices for the next few periods before making any monetary policy changes.

Treasuries were spurred higher, too. Buying interest in the traditional safe haven took the yield on the benchmark 10-year Note down to a 2011 low at 3.15%.

Advancing Sectors: (None)
Declining Sectors: Energy (-2.3%), Telecom (-1.3%), Materials (-1.2%), Financials (-1.1%), Consumer Staples (-0.8%), Utilities (-0.7%), Industrials (-0.6%), Tech (-0.5%), Health Care (-0.6%), Consumer Discretionary (-0.2%)DJ30 -139.41 NASDAQ -13.51 NQ100 -0.5% R2K -0.4% SP400 -0.4% SP500 -12.22 NASDAQ Adv/Vol/Dec 989/2.24 bln/1567 NYSE Adv/Vol/Dec 1133/1.12 bln/1859

5:09PM SMTC Corp reports Q1 revenue of $56.3 mln, down 8% y/y, single analyst estimate $72.3 mln; net income $0.05 per share, single analyst estimate $0.08 (SMTX) 2.52 -0.08 :

4:35PM QLogic beats by $0.03, reports revs in-line (QLGC) 18.00 +0.44 : Reports Q4 (Mar) earnings of $0.37 per share, $0.03 better than the Thomson Reuters consensus of $0.34; revenues rose 4.5% year/year to $152.3 mln vs the $150.8 mln consensus.

4:34PM Multi-Fineline misses by $0.02, misses on revs; guides Q3 revs below consensus (MFLX) 23.37 -0.33 : Reports Q2 (Mar) GAAP earnings of $0.48 per share, $0.02 worse than the Thomson Reuters consensus of $0.50; revenues rose 34.4% year/year to $207.1 mln vs the $223 mln consensus. Co issues downside guidance for Q3, sees Q3 revs of $200-220 mln vs. $231.14 mln Thomson Reuters consensus.

4:18PM Microchip beats by $0.02, beats on revs; guides Q1 EPS in-line, revs in-line (MCHP) 40.54 -0.11 : Reports Q4 (Mar) earnings of $0.59 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of $0.57; revenues rose 36.7% year/year to $380 mln vs the $373.7 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.58-0.62, excluding non-recurring items, vs. $0.60 Thomson Reuters consensus; sees Q1 revs of $383.8-402.8 mln vs. $385.88 mln Thomson Reuters consensus.

4:17PM Microchip increases dividend to $0.346 per share from $0.345 per share (MCHP) 40.54 -0.11 :

4:10PM TTM Tech beats by $0.01, misses on revs; guides Q2 EPS in-line, revs in-line (TTMI) 17.71 +0.21 : Reports Q1 (Mar) earnings of $0.40 per share, $0.01 better than the Thomson Reuters consensus of $0.39; revenues fell 8.2% year/year to $342.8 mln vs the $350.5 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.36-0.45 vs. $0.42 Thomson Reuters consensus; sees Q2 revs of $350-370 mln vs. $365.13 mln Thomson Reuters consensus.

4:10PM Vitesse Semi announces retirement of Chief Financial Officer Rich Yonker (VTSS) 5.06 +0.04 : Mr. Yonker will remain as CFO until his successor is appointed and an orderly transition is completed. Co has initiated a search to fill this position.

4:03PM Rubicon Tech beats by $0.14, beats on revs (RBCN) : Reports Q1 (Mar) earnings of $0.80 per share, $0.14 better than the Thomson Reuters consensus of $0.66.

4:02PM Emcore enters into a long-term supply agreement With Space Systems/Loral, terms not disclosed (EMKR) 2.48 -0.01 :

8:31AM Cisco Systems announces significant changes to its business structure and operations (CSCO) 17.47 : The company will streamline its sales, services and engineering organizations as it focuses on the five areas driving the growth of networks and the Internet: core -- routing, switching, and services; collaboration; data center virtualization and cloud; video; and architectures for business transformation. The changes announced today include: -- Worldwide Field Operations will now be organized into three geographic regions, to drive faster decision making with greater accountability and alignment. These regions include the Americas -- Cisco Engineering will organize functionally to drive technology innovation, accountability and alignment across all five company priority areas. Senior vice president Pankaj Patel and senior vic -- Cisco will refine its cross-functional Council structure to three councils that reinforce consistent and globally-aligned customer focus and speed to market across major areas of the business.

7:14AM Lam Research announces intention to offer $700 million of convertible notes (LRCX) 47.37 : Co intends to use a portion of the net proceeds of the offering to repurchase, depending on interest, a minimum of 1,000,000 shares of its common stock and may repurchase up to 3,000,000 shares of its common stock from purchasers of notes in privately negotiated transactions effected through one of the initial purchasers.

2:55AM ON Semiconductor beats by $0.07, beats on revs; guides Q2 revs above consensus (ONNN) 10.28 : Reports Q1 (Mar) earnings of $0.27 per share, $0.07 better than the Thomson Reuters consensus of $0.20; revenues rose 50.3% year/year to $870.6 mln vs the $830.1 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $860-900 mln vs. $850.12 mln Thomson Reuters consensus. Co states: "Backlog levels for the second quarter of 2011 represent over 90% of our anticipated second quarter 2011 revenues. We expect that average selling prices for the second quarter of 2011 will be flat to down ~1% when compared to the first quarter of 2011.

2:23AM Novellus prices $600 mln 2.625% Senior Convertible Notes due 2041 (NVLS) 32.92 : CO intends to use ~$350 mln of the net proceeds of this offering to repurchase shares of co's common stock from purchasers of notes in this offering in privately negotiated transactions effected through one of the initial purchasers as co's agent.