Sector Investing

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks scored their strongest single-session surge in more than two weeks amid hopes that a plan to stabilize Europe's flagging financial system is in the works. Banks and other financial issues led the advance.

In the absence of any meaningful data or market-moving corporate news market participants kept their focus on Europe, which saw its major bourses rally during its latest session. Buying there was backed by the belief that officials are finally arranging a coordinated effort to shore up the eurozone's ailing banks and fiscal conditions after months of grappling with precarious conditions.

Stocks were subjected to some afternoon selling after an official from Germany reportedly remarked that there is no intention to increase the eurozone emergency funding plan, but it was later learned from CNBC that eurozone officials are planning for an European investment bank already in existence to use special purpose vehicles to issue bonds that would help finance the purchase of debt. The EFSF would also be used to shore up bank capital.

The major equity averages rallied in response to the CNBC story. Buying remained steady into the close, helping stocks settle at session highs.

Financials, especially banks, led the afternoon advance. They were fueled by the notion that efforts to restore Europe's financial conditions would effectively reduce risk related to their presence in the continent. Overall, the financial sector advanced 4.4%, but the KBW Bank Index bounced 5.2%.

Tech stocks trailed all session, but the sector managed to join in the broad market's late rally to settle with a 1.3% gain. Due to the relative weakness of large-cap tech issues, the Nasdaq was never able to match the performance of its counterparts.

Strength among stocks put pressure on Treasuries, causing the yield on the benchmark 10-year Note to return to 1.90%, which is more than 20 basis points above the record low that it set late last week.

The dollar oscillated for most of the day, but ultimately finished with a slight loss against a collection of competing currencies. The euro ended the day down narrowly against the dollar; its loss was reduced in the wake of the eurozone headlines.

Advancing Sectors: Financials +4.4%, Energy +3.6%, Materials +3.1%, Industrials +2.5%, Consumer Discretionary +2.2%, Consumer Staples +1.8%, Health Care +1.6%, Telecom +1.5%, Tech +1.3%, Utilities +0.8%
Declining Sectors: (None) DJ30 +272.38 NASDAQ +33.46 NQ100 +1.2% R2K +2.0% SP400 +2.0% SP500 +26.52

5:34PM Integrated Device lowers Q2 revs guidance below consensus (IDTI) 5.69 -0.03 : Co lowered revenue guidance for Q2 to $138-141 mln vs. $149.4 mln Capital IQ Consensus Estimate, down 7-9% sequentially and down from $147-153 mln. "The broad-based weakness in customer orders we experienced in the latter half of the June quarter has continued through September," said Dr. Ted Tewksbury, president and CEO of IDT. "In the face of weaker macro-economic growth and shorter component lead times, many of our customers have focused on controlling inventory and remain cautious about placing new orders. This has resulted in lower than anticipated turns-fill for the September quarter."

4:02PM Nanometrics wins multi-system order for integrated metrology (NANO) 15.36 +0.30 : Co announced that its IMPULSE integrated metrology optical critical dimension (OCD) and film analysis system has been selected by a major Korean memory manufacturer for chemical mechanical planarization (CMP) process control. The decision makes the Nanometrics IMPULSE system "tool-of-record" for CMP control of NAND Flash memory in high-volume manufacturing at the 2x nm node. The IMPULSE was selected over competitive offerings following an extended technical evaluation.

8:31AM Freescale Semi lowers Q3 rev guidance below consensus due to weakness in its industrial and networking businesses (FSL) 12.24 : Co lowers Q3 rev guidance to -6 to -8% QoQ to ~$1.13-1.15 bln from flat to -3% QoQ vs. $1.19 bln consensus. The sales decline is attributable primarily to weakness in the co's industrial and networking businesses; Gross margins to show modest sequential improvement despite the sequential decline in sales.

8:02AM Trident Microsystems to reduce workforce to lower EBITDA breakeven point; expects to realize $40-48 mln in savings (TRID) 0.60 : Co announces it will lower its breakeven point through a realignment of its workforce, from ~1,275 employees worldwide to ~1,000 employees by early 2012. As a result of the reductions in labor and other cost saving initiatives, by the first quarter of 2012 the co expects to realize annual operating expense savings of ~$40-48 mln compared with the annualized run rate as of the second quarter of 2011 and to reduce its EBITDA breakeven level (ex-items) to ~$340-360 mln in annual revenues. The co expects to incur total cash restructuring charges of ~$8-10 mln , including ~$2-3 mln in the current quarter ending Sept. 30, 2011.

AMD (AMD) introduced the AMD Radeon E6460 discrete graphics processor as AMD's next generation entry-level embedded graphics processor, complementing the previously announced AMD Radeon E6760.

09:38 am First Solar upgraded to Hold at Maxim Group: . Maxim Group upgrades FSLR to Hold from Sell saying while FSLR's earnings prospects have deteriorated along with industry pricing and the Topaz DOE loan loss, the firm believes the stock's steep decline since July balances risk/reward. While their long term secular concerns about organic demand remain, they expect FSLR to trade within a new range of $55-$80, pending proof of sustainability of its project business.

1:24 pm S&P Tech Sector is Showing Modest Losses; AMD Upgraded, CSCO Downgraded (AMD)

The tech sector is trading just lower today, trailing gains in the broader market. Semiconductors are showing relative weakness in the tech space with the Philly Semi Index trading 1.8% lower. Among chips in the index, VECO (-4.4%) is a notable laggard. Among other major indices, the S&P 500 is trading 0.4% higher, while the NASDAQ is trading 0.7% lower.

The QQQ, meanwhile, is trading 1.1% lower. Among tech bellwethers, IBM (+0.8%) is showing strength while AAPL (-2.1%) is under pressure. In earnings this morning, FSL (-1.0%) lowered its Q3 guidance. In news, TRID (+2.5%) announced it will lower its breakeven point through a realignment of its workforce, from ~1,275 employees worldwide to ~1,000 employees by early 2012.

Among notable analyst upgrades this morning, AMD (-0.3%) was upgraded to Buy at UBS, NVLS (-2.2%) was upgraded to Neutral and KLAC (+1.4%) was upgraded to Positive at Susquehanna, and ABVT (+3.2%) was upgraded to Strong Buy at Raymond James. Among downgrades, CSCO (+0.3%) was downgraded to Hold at Miller Tabak.

There are no notable names in tech set to report results today after the close.

Freescale Semi (FSL $12.10 -0.14) lowered third quarter revenue guidance to minus 6 to 8% quarter over quarter to approximately $1.13-1.15 billion from flat to minus 3% quarter over quarter versus the $1.19 billion consensus. The sales decline is attributable primarily to weakness in the company's industrial and networking businesses. The company said gross margins to show modest sequential improvement despite the sequential decline in sales.

Trident Microsystems (TRID $0.61 +0.01) announced it will lower its breakeven point through a realignment of its workforce, from approximately 1,275 employees worldwide to approximately 1,000 employees by early 2012. As a result of the reductions in labor and other cost saving initiatives, by the first quarter of 2012 the company expects to realize annual operating expense savings of approximately $40-48 million compared with the annualized run rate as of the second quarter of 2011 and to reduce its EBITDA breakeven level (ex-items) to approximately $340-360 million in annual revenues. The company expects to incur total cash restructuring charges of approximately $8-10 million, including approximately $2-3 million in the current quarter ending Sept. 30, 2011.

Advanced Micro (AMD $6.14 -0.03) was upgraded to Buy from Neutral at UBS and the firm raised their target to $9 from $7 saying their Asia trip checks show a resilient desktop market which should benefit the company and based on the track record of new CEO, Rory Read, they believe he will improve AMD's go-to-market execution.