From Briefing.com: 4:30 pm : Buying tapered off into the close, but stocks still scored strong gains ahead of the monthly payrolls report on Friday. Participants were particularly fond of cyclical plays.
A better-than-expected ADP Employment Report bolstered a bullish bias in today's trade. The report suggested that private payrolls increased in June by 157,000, which is greater than the 60,000 increase that had been expected. That portends a positive reading for the official nonfarm payrolls report on Friday.
Weekly initial jobless claims received less attention. Although they continue to trend at elevated levels above 400,000, the total initial claims count for the week ended July 2 eased to 418,000 from 432,000 in the prior week. The consensus among economists polled by Briefing.com had called for an initial claims count of 425,000.
Strength was relatively broad, but buyers were fondest of financials. The sector offered leadership for virtually the entire session and scored a 1.6% gain for the day. Banks were the primary backers of the sector's bounce.
Materials stocks, energy stocks, and tech stocks complemented the financial sector's leadership. Retailers also staged strong gains. Macy's (M 30.46, +1.59) was a top performer among retailers after it reported a near 7% increase in same-store sales for June. Gap (GPS 19.28, +0.95) staged a strong gain of its own after it posted a surprise 1% increase in same-store sales.
Such strong buying has the stock market up about 7% in just two weeks and sitting at its best level since mid-May.
Defensive-oriented stocks failed to participate in the latest leg of gains. In fact, telecom was mired at the neutral line while health care actually logged a loss.
The dollar dipped, too. It had initially moved higher this morning as traders looked to extend its recent advance. However, that move failed to find traction, so the greenback ended the day with a loss of about 0.2% against competing currencies. Relative to the euro, the dollar declined 0.2% after the European Central Bank decided to raise its target lending rate by 25 basis points to 1.50%. The greenback gained 0.2% against the sterling pound, though. Weakness in the pound came after the Bank of England announced that it would leave its target rate unchanged at 0.50% and keep in place its 200 billion pound asset purchase plan.
Advancing Sectors: Financials +1.6%, Materials +1.5%, Tech +1.4%, Energy +1.4%, Consumer Discretionary +1.3%, Industrials +1.0%, Consumer Staples +0.6%, Utilities +0.4%
Unchanged: Telecom
Declining Sectors: Health Care -0.1%DJ30 +93.47 NASDAQ +38.64 NQ100 +1.4% R2K +1.5% SP400 +1.0% SP500 +14.00 NASDAQ Adv/Vol/Dec 2007/1.90 bln/608 NYSE Adv/Vol/Dec 2372/843 mln/643
4:32PM Multi-Fineline drops 11.1% to $19.31 after lowering Q3 revs guidance (see 16:31 comment) (MFLX) 21.73 -0.03 :
4:31PM Multi-Fineline sees Q3 revs of ~$191 mln vs previous guidance of $200-220 mln and consensus of $209.95 mln (MFLX) 21.73 -0.03 : Co updated its business outlook for the third quarter of fiscal 2011 ended June 30, 2011. The Company expects net sales in the third quarter to be approximately $191 million vs $209.95 mln consensus and gross margin to be approximately 12 percent. This compares to guidance issued on May 5, 2011 that projected third quarter net sales of $200 to $220 million and gross margin of 12 to 13 percent. Co says "Primarily due to a reduction in demand from one key customer in the latter part of June, net sales for the third quarter were lower than expected. Although forecasting in the near term is difficult, we believe we have significant market share with our major customers and we expect net sales to increase on a sequential quarter basis in the fourth quarter due to higher seasonal demand."
4:15PM SemiLEDs is halted and will resume trading at 16:30 (LEDS) : See 16:05 earnings comment.
4:10PM Ixia to resume trading at 16:35 ET (XXIA) 13.01 +0.01 :
4:08PM Ixia lowers Q2 guidance (XXIA) 13.01 +0.01 : Co issues downside guidance for Q2 (Jun), sees EPS of $0.07-0.08 down from $0.14-0.17 previously vs. $0.16 Capital IQ Consensus Estimate; sees Q2 (Jun) revs of $67-69 mln down from $78-82 mln previously vs. $80.16 mln Capital IQ Consensus Estimate. Co says "We are disappointed with our revenue performance this quarter, which was impacted by several factors, including delays and reductions in spending by certain large network equipment makers, a large wireless order received too late in the quarter to ship and soft sales in the Asia Pacific region, while we expected revenue from Japan to decline sequentially from the record first quarter, we experienced unexpected weakness in other parts of Asia Pacific, such as China and India. It is important to note that second quarter sales to our largest customer, Cisco, were strong at approximately $10 million. Additionally, we did see some encouraging trends in the quarter, including an overall book-to-bill ratio in excess of one, and we secured our highest booking quarter to date for our IxCatapult wireless solutions, some of which will be recognized as revenue in future quarters. These indicators give us confidence that we will return to sequential growth in the third quarter although we remain cautious about the overall spending environment..."
4:05PM SemiLEDs misses by $0.12, misses on revs; guides Q4 EPS, revs below consensus (LEDS) 6.20 +0.12 : Reports Q3 (May) GAAP loss of $0.19 per share, $0.12 worse than the Capital IQ Consensus Estimate of ($0.07); revenues fell 43.4% year/year to $5.6 mln vs the $6.3 mln consensus. GAAP gross margin for the third quarter of fiscal 2011 was 9%, compared with 51% in the third quarter of fiscal 2010. Operating margin for the third quarter of fiscal 2011 was negative 70%, compared with 36% in the third quarter of fiscal 2010. Margins were negatively impacted by a charge of $1.1 million for the write-downs of inventory. Co issues downside guidance for Q4, sees GAAP EPS of ($0.25)-(0.23) vs. ($0.03) Capital IQ Consensus Estimate; sees Q4 revs of $5.5-6.5 mln vs. $9.03 mln Capital IQ Consensus Estimate; with a negative GAAP gross margin.
Rudolph Technologies (RTEC) announced the release of Genesis Enterprise version 7.0. Genesis is an offline yield analysis and data mining software with parametric yield management tools designed to maximize factory efficiency and identify causes of yield loss.
4:03AM Tower Semicon sells its holdings in HHSL for $32 mln (TSEM) 1.15 : Co announces it has agreed to sell its holdings in Hua Hong Semiconductor in an HHSL buyback transaction, for $32 mln in cash. Co owns 10% of HHSL'S shares, valued per GAAP in the amount of $17 mln on co's balance sheet. Co expects to record a gross gain in the third quarter of $15 mln as a direct result of this sale, and ~$8 mln of net gain.
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