From Briefing.com: 4:25 pm : Buying interest on the back of strong GDP data from China and comments from Fed Chairman Bernanke had the major equity averages up more than 1% today, but that gain was slashed as stocks gradually descended in afternoon trade.
The mood among market participants this morning was much improved from the negativity that permeated trade during the three prior sessions. Participants were partly encouraged by news that China reported second quarter GDP growth of 9.5% over the same period one year ago. The torrid clip proved greater than expected, and suggested that China remains a primary driver of the global economic rebound.
Concerns about the fiscal health of countries in the eurozone's periphery cooled, at least for today, to help the euro rally against the dollar. The dollar dropped another leg lower amid comments from Fed Chairman Bernanke.
During his semiannual testimony on monetary policy to the House Financial Services Committee, Bernanke stated that the Fed remains prepared to adjust monetary policy in the event that economic developments warrant such a move. Bernanke also noted that the Fed has reached a consensus on the steps involved in an exit strategy from current policy. As we expressed yesterday, it is only natural, and should even be expected, that the Fed prudently discuss such scenarios.
Buying interest picked up after participants digested Bernanke's prepared remarks. The stock market's climb was broad based, but natural resource plays staged the strongest gains. In fact, energy stocks were up 2%, as a group. Materials stocks weren't far behind.
The two sectors got an added boost because of a bounce by many underlying commodities. Oil prices had pushed up to a gain of more than 1% on the back of a surprisingly large draw down in weekly oil inventories before an afternoon pullback left it to settle pit trade with a 0.6% gain at $98.05 per barrel. Meanwhile, gold prices rallied to a record high of almost $1589 per ounce before it settled with a 1.5% gain at $1585.30 per ounce.
However, stocks struggled to sustain their gains as action advanced into the afternoon. The loss of support left the major equity averages to drift lower. Only a brief bit of buying interest in the final few minutes kept the stock market from settling at its session low.
Defensive-oriented stocks, which had already lagged all session, suffered the only losses. Specifically, utilities fell 0.2% while telecom closed with a 0.1% loss. Consumer staples stocks collectively closed at the unchanged mark.
A traditional safe haven, the benchmark 10-year Note traded with weakness in the early going, but was able to rebound amid the stock market's afternoon drift. It also got a boost from strong auction results. The 10-year Note sale drew a bid-to-cover of 3.18, dollar demand of $66.7 billion, and an indirect bidder participation rate of 42.0%. For comparison, an average of the past six auctions gives a bid-to-cover of 3.20, dollar demand of $70.4 billion, and an indirect bidder rate of 52.3%.
Advancing Sectors: Materials +0.8%, Energy +0.7%, Consumer Discretionary +0.5%, Industrials +0.4%, Tech +0.3%, Health Care +0.3%, Financials +0.2%
Unchanged: Consumer Staples
Declining Sectors: Telecom -0.1%, Utilities -0.2%DJ30 +44.73 NASDAQ +15.01 NQ100 +0.4% R2K +0.9% SP400 +0.3% SP500 +4.08 NASDAQ Adv/Vol/Dec 1821/1.90 bln/761 NYSE Adv/Vol/Dec 2015/883 mln/987
9:33AM LTX-Credence announces selection of X-Series by ELMOS Semiconductor AG for testing automotive ASICs and ASSPs (LTXC) 8.35 +0.11 :
9:05AM Newport enters into agreement to acquire High Q Technologies (NEWP) 17.87 : Terms of the transaction, which is anticipated to close before the end of the third quarter, were not disclosed. High Q, headquartered in Rankweil, Austria, expects 2011 revenues of approximately $20 million, with three-fourths of its sales to customers in Europe. The company is profitable, and Newport expects the acquisition to be accretive to its earnings immediately after closing.
IXYS Corporation (IXYS) announced the introduction of the PCM-7510 by its IXYSRF division located in Colorado. The PCM-7510 module is an air-cooled, high power pulsed-current source designed to drive diode lasers, bars and arrays in permanent and semi-permanent installations.
Microsemi Corporation (MSCC) announced a new multichip memory product that provides a drop-in replacement for the discontinued Micron memory package used in Texas Instruments (TI) processors.
1:53AM ASML Holding beats by $0.06, beats on revs; guides Q3 revs in-line; reaffirms sales expectations (ex-EUV) (ASML) 34.88 : Reports Q2 (Jun) earnings of $1.00 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.94; revenues rose 5.3% year/year to $1.53 bln vs the $1.51 bln consensus. Co issues in-line guidance for Q3, sees Q3 revs of ~EUR1.4 bln vs. $1.41 bln Capital IQ Consensus Estimate. Co anticipates third quarter orders likely not to exceed EUR500 mln. Co states its 2012 business will be supported by the continuation of the ramp of 2x nm nodes in Logic, 2x nm nodes in NAND memory and 3x nm in DRAM memory, the aggressive and litho-intensive development efforts of sub-20 nm technologies, as well as the introduction of the first EUV volume production systems NXE:3300. Co reiterates sales expectation for all of 2011, to hit a record level clearly above EUR5 bln, not including EUV (no est ex-EUV). Systems backlog, excluding EUV at the end of Q2 was EUR2,756 mln.
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