From Briefing.com: 4:30 pm : Stocks rallied sharply in response to a strong batch of earnings reports, pleasing economic data, and presumed progress in talks about raising the U.S. debt ceiling.
A positive tone permeated trade for the entire session. It was first spurred by renewed buying interest among Europe's major bourses after they had suffered another slide in the prior session. Earnings also stoked early buying interest, given that the vast majority of reports exceeded what had been expected.
Dow components Johnson & Johnson (JNJ 66.72, -0.37), Coca-Cola (KO 69.32, +2.20), and IBM (IBM 185.21, +9.93) all posted upside surprises. Shares of JNJ and KO actually climbed to record highs.
Bank of America (BAC 9.57, -0.15) also beat, but the stock had a different reaction -- it extended its descent to a fresh two-year low. Fellow financial giant Goldman Sachs (GS 128.49, -0.84) also dropped to a two-year low after it broke character to post earnings that failed to come anywhere close to the consensus estimate.
Of all things, housing data also offered encouragement to early traders. Housing starts for June reportedly hit an annualized rate of 629,000 units, which is greater than the clip of 570,000 units that had been anticipated, on average, among economists polled by Briefing.com. The annualized clip posted for June was the most robust rate recorded since January. As for building permits, they improved to a rate of 624,000 from 609,000 in the prior month. The consensus had called for permits to remain at a rate of 609,000.
The stock market traded with an impressive gain for most of the session, but the S&P 500 was restricted to a range between near-term support around 1315 and near-term resistance around 1320 until President Obama provided a mid-afternoon update on the debt ceiling dealings. Obama indicated a bipartisan group of Senators has agreed to a plan that features tough spending cuts and a revenue component.
The stock market responded by extending its advance beyond the upper boundary of its morning range. Buying was broad, but tech stocks offered the most leadership. The sector ascended to a 2.7% gain. Apple (AAPL 376.85, +3.05) was actually a relative laggard ahead of its quarterly report.
Treasuries also responded positively to Obama's update. In turn, the yield on the benchmark 10-year Note dropped back below 2.90%.
As for the dollar, it ended the day with a 0.3% loss against competing currencies. That's about half of what it had endured during the early going.
Advancing Sectors: Tech +2.7%, Consumer Discretionary +2.0%, Energy +1.7%, Consumer Staples +1.5%, Financials +1.4%, Materials +1.4%, Industrials +1.3%, Health Care +0.9%, Telecom +0.8%, Utilities +0.8%
Declining Sectors: (None)DJ30 +202.26 NASDAQ +61.41 NQ100 +2.3% R2K +2.3% SP400 +2.0% SP500 +21.29 NASDAQ Adv/Vol/Dec 2036/1.90 bln/548 NYSE Adv/Vol/Dec 2417/870 mln/632
5:03PM Apple component suppliers Cirrus Logic (CRUS), OmniVision (OVTI ), and Skyworks (SWKS) trading higher in after hours following another blow out qtr from AAPL (AAPL) 376.85 +3.05 :
4:36PM Apple beats by $1.95, beats on revs; guides Q4 conservatively (AAPL) 376.85 +3.05 : Reports Q3 (Jun) earnings of $7.79 per share, $1.95 better than the Capital IQ Consensus Estimate of $5.84; revenues rose 82.0% year/year to $28.57 bln vs the $24.98 bln consensus. Apple reports Q3 gross margins of 41.7% vs Street est of 39.2% and 38.0% guidance. Apple reports 3.95 mln Macs sold in Q3 vs Street est of ~4.2 mln. Apple reports 20.34 mln iPhones sold in Q3 vs Street est of ~16.8 mln. Apple reports 9.25 mln iPads sold in Q3 vs Street est of ~7.9 mln... Co issues guidance for Q4 (Sep), sees EPS of $5.50 vs. $6.44 Capital IQ Consensus Estimate; sees Q4 (Sep) revs of $25 bln vs. $27.65 bln Capital IQ Consensus Estimate... "We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," said Steve Jobs, Apple's CEO. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall... We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year." (Briefing.com note: AAPL is known for giving conservative guidance)
4:19PM Altera beats by $0.01, reports revs in-line; guides Q3 revs above consensus; raises qrtrly dividend 33% to $0.08 (ALTR) 43.56 +1.01 : Reports Q2 (Jun) earnings of $0.65 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.64; revenues rose 16.9% year/year to $548.4 mln vs the $549.1 mln consensus. Co issues upside guidance for Q3, sees Q3 revs +2-6% QoQ to ~$559.4-581.3 vs. $549.06 mln Capital IQ Consensus Estimate. Co raises quarterly dividend 33% to $0.08. "This quarter marks a return to sequential growth following the mild correction we experienced in the first quarter. We expect more sales gains in the third quarter," said John Daane, president, chief executive officer, and chairman of the board. "Early in the quarter we began shipping our Stratix V FPGA family, the industry's first high-end 28-nm FPGA. Our 28-nm FPGA families combine a tailored architecture, an optimal manufacturing process, and specific product features to give us continuing technology leadership that builds on the technology leadership and strong competitive position we established at 40 nm."
4:15PM LDK Solar signed a 15 Megawatt supply contract with juwi Solar in Germany (LDK) 6.45 : Under the terms of the agreement, LDK Solar will provide 15 MW of polycrystalline PV modules from August 2011 to November 2011, with an option to deliver an additional 15 MW immediately, until the end of the year
4:09PM Riverbed Technology reports EPS in-line, misses on revs (RVBD) 41.40 +2.63 : Reports Q2 (Jun) earnings of $0.21 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.21; revenues rose 34.9% year/year to $170.3 mln vs the $172.7 mln consensus. "Overall it was a solid second quarter, with sales in the U.S. increasing 50% over the prior year... We experienced softness in the EMEA region, which we attribute to both the regional economy and our own execution. Looking ahead, we have confidence in our ability to improve our execution in this region with new EMEA sales leadership announced last week. Our top-line growth was led by a 38% year-over-year increase in product sales. Non-GAAP product gross margin reached an all-time high of 81.5%, and we achieved a record non-GAAP operating margin of 29.6%. Our competitive position is stronger than ever, our product portfolio is even more robust with the acquisitions announced today, and our market opportunity is growing. We expect a strong second half of 2011." Separately, Riverbed announced today the acquisition of two companies, Zeus Technology and Aptimize. See 16:05 comment for details.
11:00AM Intel to acquire Fulcrum Microsystems, privately held fabless semiconductor company (INTC) 22.74 +0.46 : Additional terms of the transaction were not disclosed. It is expected to close in the third quarter of 2011.
9:03AM Rudolph Tech announced it intends to offer $50 million in aggregate principal amount of convertible senior notes due 2016 (RTEC) : Co announced it intends to offer, subject to market and other conditions, $50 mln in aggregate principal amount of convertible senior notes due 2016. The notes will be sold only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The co also intends to grant to the initial purchaser of the notes an option to purchase up to an additional $10 mln aggregate principal amount of the notes.
RF Micro Devices (RFMD) announced its Foundry Services business unit has expanded its portfolio of process technologies to include two additional GaAs process technologies - RFMD's FD25 low noise pHEMT process and RFMD's FET1H switching pHEMT process.
ARM (ARMH) selected for its low power credentials and comprehensive ARM Partner ecosystem to address low- and high-end applications, such as smartphones, tablets and smart TV's.
7:01AM Microsemi acquires the technology and related assets from Brijot Imaging Systems (MSCC) 19.17 : The acqusition strengthens Microsemi's millimeterwave technology offering in the 70-100GHz range.
10:42 am Sunpower downgraded to Sell at Collins Stewart; tgt $15: . Collins Stewart downgrades SPWRA to Sell from Neutral; tgt $15. Sunpower's A shares have rallied 14.5% last week, possibly due to technical factors related to the short position in the A shares and limited float. The float in SPWRA's shares was reduced by ~60% due to Total's June 14 tender. Conditions in the solar market have deteriorated in recent weeks, with module prices falling faster than expected. While Sunpower has a unique product and efficiency advantages, its modules are still priced in reference to the price of traditional modules. Due to the decline, they view SPWRA's earnings as vulnerable in the quarters ahead. They have lowered ests below consensus.
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