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From Briefing.com: Weekly Recap - Week ending 29-Jul-11The major indices tumbled on concerns regarding the inability of Congress to reach a deal on raising the debt ceiling and sluggish second quarter GDP growth. Roughly one third of S&P 500 companies reported earnings this week, though the market's focus was on the debt situation.

All 10 sectors within the S&P 500 ended in the red. Industrials tumbled 6%, materials gave up 5% and energy shed 4.6%.

Despite the lack of debt deal, selling pressure in the equity market and risk of a debt downgrade, the 10-year Treasury surprisingly rallied, with the yield ending the week at 2.80%, a decrease of 18 bps. Equities have been taking the brunt of the punishment on the uncertainty regarding the U.S. debt situation.

Prediction market InTrade places only a 7% chance the debt ceiling will be raised prior to July 31. There is an 82% chance for the ceiling to be increased by the end of August, so the market is pricing in a chance that the deal could be reached prior to the Aug. 2 deadline.

In economic news, second quarter GDP rose just 1.3% (Briefing.com consensus +1.7%) on the heels of a downwardly revised and scant 0.4% increase in the first quarter.

With respect to second quarter GDP, the growth scales were tipped higher by positive contributions from exports, nonresidential fixed investment, private inventory investment, and federal government spending that was offset partly by negative contributions from state and local government spending.

Real PCE was up just 0.1% after a 2.1% increase in the first quarter and contributed 0.07 percentage points to the overall change in real GDP. Real final sales of domestic product, however, were up 1.1% after increasing less than 0.1% in the first quarter. Real final sales is GDP less the change in inventories.

The latest initial claims report brought a measure of good news. Claims for the week ending July 23 dropped by 24,000 to 398,000. That is the first week below 400,000 since early April; importantly, there were no special factors behind the improvement.

In corporate news, it was a busy week in terms of earnings reports. Roughly one third of S&P 500 posted their quarterly results and now about 70% of companies have reported. About 68% of companies have posted earnings ahead of analyst expectations.

 
 Index     Started Week  Ended Week  Change  % Change  YTD % 
 DJIA	    12681.10	 12143.20  -537.90    -4.2    4.9 
 Nasdaq	     2858.83	  2756.38  -102.45    -3.6    3.9 
 S&P 500	     1345.02	  1292.28   -52.74    -3.9    2.8 
 Russell 2000  841.82	   797.03   -44.79    -5.3    1.7

12:41PM NXP Semi announced 5 mln share stock repurchase program (NXPI) 19.08 -1.46 :

KEMET Corporation (KEM) announced its KEMET Power Solutions High Voltage SM Series capacitors. Designed to meet robust performance standards required in higher reliability industrial applications, the KPS family of devices utilizes leadframe technology to isolate the multilayer ceramic component from the printed circuit board.

6:51AM Silicon Motion earnings correction: Beats by $0.09 (SIMO) 10.84 : Last night we compared GAAP EPS to the non-GAAP consensus; the comment should have read: Reports Q2 (Jun) non-GAAP EPS of $0.29 per share, $0.09 better than the Capital IQ Consensus Estimate of $0.20; revenues rose 16.4% year/year to $50.5 mln vs the $45.6 mln consensus. Co issues upside guidance for Q3, sees Q3 rev down 5% to up 5% QoQ, which calculates to ~$48.0-53.0 mln, vs. $47.5 mln Capital IQ Consensus Estimate. Co raises guidance for FY11, sees FY11 rev growth of 40-50% (up from 30-40%), which calculates to ~$185.4-198.6 mln vs. $184.26 mln Capital IQ Consensus Estimate... the prior comment has been removed.

09:27 am Novatel Wireless upgraded to Buy at Brigantine; tgt $6: . Brigantine upgrades NVTL to Buy from Hold and sets target price at $6 ahead of its scheduled June quarter earnings report on Thursday, August 4, while making modest adjustments to their estimates. The firm expects the company to meet or beat their $117 mln 2Q11 sales estimate, the mid-point of the company's $112-122 mln guidance. Firm notes Verizon noted the sale of 1.2M 4G LTE devices in 2Q11, and they suspect Novatel's MiFi represented the plurality with smartphones and USB modems sharing, but none with simple majority share. In conjunction with expected increase in device sales, they believe Novatel should see improved sales of embedded modems to PC OEMs.