Sector Investing

[ReturntoSender]

From Briefing.com: 4:15 pm : Participants pared risk for the first part of the session, but a downturn by the dollar and strength among financials gradually boosted the broader market. Stocks were snared at the neutral line, though.

Selling pressure took stocks down markedly at midday. The drop actually put all three major equity averages at lowest level in almost a month. That stirred interest in Treasuries, such that the yield on the benchmark 10-year Note fell to a 2011 low around 3.10%.

Tech stocks were hit with some of the hardest selling interest. The sector slid to a loss of more than 1% as shares of Hewlett-Packard (HPQ 36.85, -2.94) dropped precipitously to a new 52-week low following a disappointing forecast, which completely overshadowed the company's upside earnings surprise for the latest quarter. The tech sector later cut its loss in afternoon trade; it finished just 0.2% lower for the day.

HP shares also took a heavy toll on the Dow, which lagged its counterparts for just about the entire day. Wal-Mart (WMT 55.54, -0.52) also weighed to the Blue Chip Index, although the company reported better-than-expected earnings for the latest quarter.

Data didn't do anything to motivate buying interest. April Industrial production was just posted. It was flat in the face of calls for a 0.5% increase. Capacity Utilization came in at 76.9%, which is less than the 77.7% that had been expected, on average, among economists surveyed by Briefing.com.

Housing starts for April hit an annualized rate of 523,000, but that is less than the rate of 563,000 units that had been expected, on average, among economists polled by Briefing.com. The April rate is also down from the prior month's rate of 585,000 units. Building permits fell to an annualized rate of 551,000 from 574,000 permits, but economists polled by Briefing.com had expected a rate closer to 590,000 permits.

The news hurt shares of homebuilders, which collectively fell to a 1.3% loss, according to the PHLX Housing Sector Index. However, home improvement retailer Home Depot (HD 37.40, +0.42) put together a strong gain following its latest quarterly report, which featured a better-than-expected bottom line.

Stocks gradually worked their way higher in afternoon action. The advance was helped along by a downturn the dollar, which fell to a 0.3% loss against a basket of major foreign currencies.

Financials were a source of leadership late in the day. The sector's 0.7% gain was largely owed to a bounce by bank stocks, which lifted the KBW Bank Index a 1.5% gain. Strength among financials comes after the sector had lagged last week.

Even though financials offered to lead the market higher and the dollar ended the day at its session low, buying lost momentum once the Nasdaq and S&P 500 came in contact with the neutral line. That left the two averages to trade sideways for the final hour of the day.

Advancing Sectors: Financials (+0.7%), Utilities (+0.7%), Consumer Staples (+0.3%), Telecom (+0.3%), Consumer Discretionary (+0.1%)
Unchanged: Health Care
Declining Sectors: Energy (-0.2%), Tech (-0.2%), Materials (-1.1%), Industrials (-1.3%)DJ30 -68.79 NASDAQ +0.90 NQ100 +0.2% R2K -0.3% SP400 -0.7% SP500 -0.49 NASDAQ Adv/Vol/Dec 1063/2.20 bln/1538 NYSE Adv/Vol/Dec 1306/930 mln/1772

4:31PM Skyworks to acquire SiGe Semiconductor for $210 million in cash, plus an additional $65 million if certain performance targets are met over next 12 months (SWKS) 26.64 -0.62 : Co announces it will acquire SiGe Semiconductor for $210 million in cash, plus an additional $65 million if certain performance targets are met over next 12 months. transaction has been approved by Skyworks' and SiGe's boards of directors and is anticipated to close in June, subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals. Excluding any non-recurring acquisition related charges and amortization of acquired intangibles, Skyworks expects the acquisition to be immediately accretive to non-GAAP earnings and will finalize estimates of the transaction's financial impact, as well as the accounting for the transaction, upon deal close.

4:09PM Dell beats by $0.11, misses on revs; reaffirms FY12 revs guidance, raises FY12 operating income guidance; sees mid-single digit Q2 revs growth -- DELL will resume trading at 16:20 (DELL) 15.90 -0.10 : Reports Q1 (Apr) earnings of $0.55 per share, ex-items, $0.11 better than the Thomson Reuters consensus of $0.44; revenues rose 1.0% year/year to $15.02 bln vs the $15.41 bln consensus; non-GAAP operating margin of 9.2% vs. the 7.5% consensus. The strong first quarter results also reflect Dell's improved profitability in end-user-computing, particularly Dell's client desktop and laptop offerings. This improved performance is the result of a higher-value product portfolio, good cost management, better sales execution and a significantly improved supply chain. Co reaffirms rev guidance for FY12, sees FY12 revs of +5-9% YoY to ~$64.56-67.0 bln vs. $64.56 bln Thomson Reuters consensus, co raises non-GAAP operating income growth guidance to 12-18% from +6-12% previously, vs. the +9.3% consensus. DELL expects mid-single digit revenue growth in Q2, which is slightly above its normal, sequential seasonal growth of 2-3% vs. consensus of 6.5%.

4:03PM Analog Devices beats by $0.07, beats on revs; guides Q3 EPS above consensus, revs above consensus (ADI) 40.23 -0.32 : Reports Q2 (Apr) earnings of $0.75 per share, excluding non-recurring items, $0.07 better than the Thomson Reuters consensus of $0.68; revenues rose 8.6% year/year to $791 mln vs the $746.2 mln consensus; 2Q11 gross margin increased to a record 67.6% of revenue Co issues upside guidance for Q3, sees EPS of $0.70-0.75 vs. $0.69 Thomson Reuters consensus; sees Q3 revs of $765-795 mln vs. $758.94 mln Thomson Reuters consensus; Gross margin: 67.0% to 68.0% of sales.

9:16AM TranSwitch priced a 5.4 mln share common stock offeirng at $2.80/share (TXCC) 3.30

Analog Devices (ADI) introduced the ADM2682E and ADM2687E, the industry's first single-chip 5-kVrms signal- and power-isolated RS-485 data transceivers that meet the safety isolation requirements of high voltage systems in motor, power and energy control systems.

8:05AM Amkor to offer $400 million aggregate principal amount of senior notes; announces tender offer for its 9.25% senior notes due 2016 (AMKR) 6.74

7:38AM Hewlett-Packard beats by $0.03, reports revs in-line; guides Q3 EPS, revs below consensus; lowers FY11 EPS, revs below consensus (HPQ) 39.80 : Reports Q2 (Apr) earnings of $1.24 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $1.21; revenues rose 2.5% year/year to $31.63 bln vs the $31.53 bln consensus. Co issues downside guidance for Q3, sees EPS of ~$1.08, excluding non-recurring items, vs. $1.23 Thomson Reuters consensus; sees Q3 revs of $31.1-31.3 bln vs. $31.78 bln Thomson Reuters consensus. Co lowers guidance for FY11, sees EPS of at least $5.00, excluding non-recurring items, vs. $5.24 Thomson Reuters consensus, down from $5.20-5.28; sees FY11 revs of $129-130 bln vs. $130.22 bln Thomson Reuters consensus, down from $130-131.5 bln, reflecting an expected near-term impact from the Japan earthquake and related events, continued softness in sales of consumer PCs, and reduced operating profit expectations for Services. Results were largely driven by performance in the commercial sector as businesses continued to spend on technology. HP experienced uneven consumer performance across its product categories during the quarter with continued softness in consumer PCs across all geographies. Co cites continued strength in commercial businesses resulted in commercial revenue increasing 8% year over year, with Enterprise Servers, Storage and Networking revenue up 15%, Software revenue up 17%, and commercial PC Clients and Printers revenue up 13% and 7%, respectively.

7:10AM Trina Solar misses by $0.41, misses on revs (TSL) 24.79 : Reports Q1 (Mar) earnings of $0.63 per share, $0.41 worse than the Thomson Reuters consensus of $1.04, FX had a ($0.30) impact; revenues rose 63.6% year/year to $550.9 mln vs the $579.4 mln consensus. Gross margin was 27.5%, compared to the co's previous guidance of mid to high 20s in percentage terms, compared to 31.4% in the fourth quarter of 2010 and 30.9% in the first quarter of 2010 As of April 30, 2011, the co's annualized in-house ingot and wafer production capacity was ~750 MW and its PV cell and module production capacities was ~1.6 GW. To meet expected demand for its PV solar modules, the co expects to raise its annualized in-house ingot and wafer production capacity and PV cell and module production capacity to ~1.2 GW and 1.9 GW, respectively, in the second half of 2011, based on actual manufacturing yield. "Amidst a challenging macro environment and winter season conditions, we maintained relatively strong shipment volumes in the first quarter. Despite decreased sequential demand linked to Italy's solar regulatory revisions, we realized notable market share gains in Germany, the rest of Europe and on a global basis."

Veeco Instruments Inc. (VECO) announced that Elec-Tech International has placed a multi-unit order for Veeco's recently released TurboDisc MaxBright MOCVD System for production of high-brightness light-emitting diodes at their facility in Wuhu, China.

# Trina Solar Limited (TSL) announced through its subsidiary, Trina Solar GmbH, that it has signed a sales agreement with Mohring Energie GmbH, a well-established German-based project developer and engineering, procurement and construction services company.

# Xilinx (XLNX) announced its acquisition of Sarance Technologies, completing its industry-leading technology portfolio for addressing next generation line card applications by adding premier connectivity communications capabilities. No terms were disclosed.

6:22AM Tower Semicon misses by $0.02, misses on revs (TSEM) 1.20 : Reports Q1 (Mar) GAAP EPS, loss of $0.02 per share, $0.02 worse than the Thomson Reuters consensus of ($0.00); revenues rose 6.0% year/year to $120.6 mln vs the $123.7 mln consensus.

# Power Integrations (POWI) introduced two new members of its LinkZero-AX product family, along with a PI University introductory video course that explains how designers can achieve 0.00 watts of standby energy consumption.

08:22 am PMC-Sierra resumed with a Hold at Auriga U.S.A; tgt $8: . Auriga U.S.A resumes coverage of PMCS with a Hold and sets target price at $8 saying they expect strong sequential growth over the course of this year due to strength in storage, the Wintegra contribution, and recovering transport segment. However, firm says their ests are lower than consensus for 2012 as they do not expect OTN to become meaningful before 2013, and their analysis also shows that growth in Wintegra and SAS in 2012 could be partially offset by declining Fiber Channel, SONET, T/E and Processor businesses.

09:53 am HPW Guides Q3 Below Consensus, Lowers FY11 Guidance (HPQ)

Hewlett-Packard (HPQ $37.28 -2.52) reported second quarter earnings of $1.24 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $1.21.

Revenues rose 2.5% year/year to $31.63 billion versus the $31.53 billion consensus.

For the third quarter, the company expects to see earnings of ~$1.08, excluding non-recurring items, well below the $1.23 Thomson Reuters consensus and sees revenues of $31.1 billion to $31.3 billion versus the $31.78 billion Thomson Reuters consensus.

For its fiscal year 2011, the company lowered its earnings to at least $5.00, excluding non-recurring items, versus $5.24 Thomson Reuters consensus, down from $5.20 to $5.28 and sees revenues of $129 billion to $130 billion versus the $130.22 billion Thomson Reuters consensus, down from $130 billion to $131.5 billion, reflecting an expected near-term impact from the Japan earthquake and related events, continued softness in sales of consumer PCs, and reduced operating profit expectations for Services.

Results were largely driven by performance in the commercial sector as businesses continued to spend on technology. HP experienced uneven consumer performance across its product categories during the quarter with continued softness in consumer PCs across all geographies. Co cites continued strength in commercial businesses resulted in commercial revenue increasing 8% year over year, with Enterprise Servers, Storage and Networking revenue up 15%, Software revenue up 17%, and commercial PC Clients and Printers revenue up 13% and 7%, respectively.