Sector Investing

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 13-May-11The stock market traded in a range-bound fashion, ending the week with a slight loss. Commodities posted slight gains and the dollar rallied.

Trading action within the S&P 500 was mixed, with half of the 10 sectors posting a gain. Defensive sectors outperformed, with consumer staples up 2.1% and utilities climbing 1.8%. The financial sector led the way lower, shedding 2.1% with notable weakness in heavyweight banks. The financial sector is now in negative territory for the year.

In corporate news, Cisco's (CSCO) earnings report and guidance once again disappointed investors. Shares of the tech giant gave up 3.9%. Shares of Cisco are down 34% of the past 12 months, making it the third worst performing S&P 500 component.

Microsoft (MSFT) made an $8.5 bln cash offer to acquire Skype in a move to expand the software giant's presence in the VoIP market.

Disney (DIS) shed 3.6% after posting disappointing earnings.

Economic data were in-line to slightly disappointing, though not enough to move expectations.

Initial claims for the week ending May 7 fell 44,000 to 434,000 (Briefing.com consensus 423,000) while continuing claims for the week ending April 30 held fairly flat at 3.756 mln (Briefing.com consensus 3.700 mln).

In brief, the latest claims reading is still on the wrong side of 400,000, yet the market appears to be somewhat patient with the idea that more improvement will be seen as more time expires between the weekly reading and the unusual factors in April that biased things in a negative manner.

Retail sales and inflation data largely met expectations.

 
 Index	  Started Week	Ended Week  Change  % Change  YTD % 
 DJIA	    12638.70	 12595.70  -43.00     -0.3    8.8 
 Nasdaq	     2827.56	  2828.47    0.91      0.0    6.6 
 S&P 500	     1340.20	  1337.77   -2.43     -0.2    6.4 
 Russell 2000  833.34	   835.67    2.33      0.3    6.6

3:10PM Rambus receives decisions from Court of Appeals for the Federal Circuit: In MU case, Court affirmed Rambus spoliated documents, dismissal sanction vacated and case remanded (RMBS) 16.30 -2.97 : Co announced that the Court of Appeals for the Federal Circuit (CAFC) has issued its decisions in cases with Hynix Semiconductor and Micron Technology (MU). In the ruling in the Micron case, the CAFC affirmed the district court's determination that Rambus spoliated documents, but vacated the court's dismissal sanction and remanded the case for further consideration by the U.S. District of Delaware Court. In its ruling in the Hynix case, the CAFC vacated the district court's spoliation findings where it had found that Rambus had not spoliated documents. The CAFC further vacated the court's final judgment, and remanded the case to the U.S. District Court for the Northern District of California (NDCA) for reconsideration. "We are very disappointed with the decisions in these cases... We are hopeful when the district courts reconsider these decisions, they will find, as we believe, there was no bad faith and no prejudice." Rambus management will discuss this decision during a special conference call today at 2:00 p.m. PT.

10:52 am SPWRA Guides Q2 Revs Below Consensus (SPWRA)

Sunpower (SPWRA $21.27 -0.11) reported first quarter earnings of $0.15 per share, $0.02 worse than the Thomson Reuters consensus of $0.17.

Revenues rose 30.0% year/year to $451.4 million versus the $478.6 million consensus.

For the second quarter, the company expects to see revenues at $500 million to $550 million versus the $597.35 million Thomson Reuters consensus.

"Revenues and inventory levels in the first quarter were impacted by the pause in business activity in Italy, as several projects awaited clarity on the new tariffs... Italy's new feed-in-tariff, announced earlier this month, follows the trend across Europe of favoring rooftop solar investment. SunPower's high efficiency systems and flexible dealer/partner network positions us effectively to respond to the uncapped rooftop market in Italy and other countries. As a result, we are in the process of optimizing our portfolio allocation geographically and across our downstream channels for the remainder of 2011. We expect to complete this process in the near future and plan to revise our 2011 guidance before the end of the second quarter to reflect the recent changes in Italy."

09:48 am ESLR Q1 Revs Miss Expectations (ESLR)

Evergreen Solar (ESLR $1.07 -0.34) reported a first quarter loss of $0.93 per share, incl. items and may not be comparable to the Thomson Reuters consensus of ($0.55).

Revenues fell 55.0% year/year to $35.3 million versus the $52.2 million consensus.

09:42 am NVDA Guides Q2 Revs Above Consensus (NVDA)

NVIDIA (NVDA $18.84 -1.66) reported first quarter earnings of $0.27 per share, $0.08 better than the Thomson Reuters consensus of $0.19.

Revenues declined 4% year/year to $962.0 million versus the $947.79 million Thomson Reuters consensus.

Reports first quarter gross margin of 50.4% versus consensus of 49.06%.

For the second quarter, the company expects revenue up 4% to 6% from the first quarter, which equates to $1.00 billion to $1.02 billion versus the $992.46 million Thomson Reuters consensus.

GAAP gross margin is expected to be 50.5 to 51.5 percent. GAAP operating expenses are expected to be between $332 and $336 million. GAAP tax rate is expected to be 14 to 16 percent.

"Our core GPU businesses are solid, with expanding revenues and margins. And this quarter, our Tegra mobile business took off," said Jen-Hsun Huang, NVIDIA president and chief executive officer. "With the Tegra super chip and the Icera wireless communication processor, we will offer our customers the two most important processors of the mobile computing revolution. We look forward to completing the Icera acquisition shortly."