From Briefing.com: 4:15 pm : The U.S. markets started the day with substantial gains and held steady for most of the day, but afternoon headlines regarding the potential for negative European outlook revisions from Standard & Poors knocked the wind out of stocks.
This morning, stocks began the day with gains alongside strength in European markets as borrowing costs declined sharply in Italy and Spain. This activity followed news Italy unveiled a new austerity plan and reports that the ECB is preparing an injection of EUR1 trillion for the EU through additional bond buying. Then encouraging headlines about agreement between Germany's Merkel and France's Sarkozy helped markets add to their gains after the open.
However, this afternoon the major market averages pared their gains after headlines indicated that S&P was placing Germany and France on ‘creditwatch negative.' This knocked equities back from their highs, and then another headline that S&P will place all 17 Euro nations on ratings downgrade watch sent markets to fresh lows.
Outside of the macro headlines, today's news flow was relatively light. Before the open, it was announced that SuccessFactors (SFSF 29.44, +1.66) would be acquired by SAP for $40.00 per share in cash, representing a 52% premium over its Dec 2 closing price and an enterprise value of ~$3.4 bln.
In economic news, the ISM Services Index for November came in at 52.0, which is down slightly from the 52.9 that was posted in the prior month. It also failed to meet the Briefing.com consensus estimate of 53.4. Factory orders fell 0.4% during October, just as had been expected by those economists surveyed by Briefing.com. Orders for the prior month were revised downward to reflect a 0.1% decline.DJ30 +78.41 NASDAQ +28.83 SP500 +12.80 NASDAQ Adv/Vol/Dec 1754/1.75 bln/778 NYSE Adv/Vol/Dec 2377/893 mln/686
8:33AM O2Micro approved an additional $30 mln under its current program to repurchase its ordinary shares, including ordinary shares represented by ADS (OIIM) 4.42 :
8:29AM Emcore awarded solar panel manufacturing contract by ATK for Orbital's Commercial Resupply Services missions (EMKR) 0.96 : Co announced that it has been awarded a solar panel manufacturing contract by ATK (ATK) to utilize ZTJ solar cells in the new lightweight and highly-efficient ATK Ultraflex solar arrays. The solar panels will be used to power cargo delivery spacecraft for Orbital Sciences Corporation's Commercial Resupply Services missions to the International Space Station. Under contract with NASA, Orbital will provide cargo logistics support services to the ISS, beginning in 2012. EMCORE's solar panels will be assembled into deployable solar arrays by ATK's Solar Arrays and Deployables business based in Goleta, California. The arrays will then be delivered to Orbital Sciences Corporation for integration into their Cygnus space vehicles.
7:03AM DSP Group announces $10 mln acquisition of BoneTone Communications (DSPG) 31.25 : Co announced the exercising of its option to acquire BoneTone Communications, a provider of innovative chip solutions that redefine audio quality and voice intelligibility in mobile devices and headsets. BoneTone's products are expected to generate revenues already in 2012.
SAP AG (SAP $59.29 -0.25) and SuccessFactors (SFSF $39.71 +13.46) announced that SAP's subsidiary, SAP America, has entered into a definitive merger agreement with SuccessFactors in SAP would offer to acquire all outstanding shares of common stock of SuccessFactors for $40.00 per share in cash, representing a 52% premium over its Dec 2 closing price and an enterprise value of approxmately $3.4 billion. The transaction is expected to close in the first quarter of 2012 and be slightly dilutive to SAP's Non-IFRS earnings per share in 2012 and accretive in subsequent years.
Research In Motion (RIMM $16.76 +0.01)'s target was lowered to $16 from $24 at Wunderlich. The firm notes niche differentiation with customers that desire private network security might be preserved by sustaining the BlackBerry Network, but scaling the private network derived business model to compete with the broader industry is impractical in their view. They highlight that Friday's pre-announcement obliterated the prospects of an exit strategy based on 3Q12 earnings from BlackBerry 7 channel sell-in and feel an indefinite period of decline has now begun.
11:12 am Technology Secotr Trading Higher Today Ahead Of Broader Market Slightly (SFSF)
The tech sector is trading higher today, just outpacing gains in the broader market. Semiconductors are trading inline with strength in the tech space with the Philly Semi Index trading 1.7% higher. RBCN (+6.8%) is a notable leader in the chip index. Among other major indices, the S&P 500, the NASDAQ, and the QQQ are all trading 1.6% higher. Among tech bellwethers, ORCL (+3.0%) is showing notable strength.
There were no notable earnings in the tech space. In news, SFSF (+51.3%) announced it was to be acquired by SAP (-1.2%) for $40 per share. TLEO (+19.1%) is trading higher in sympathy.
Among notable analyst upgrades this morning, TLEO (+19.1%) was upgraded to Outperform at BMO Capital Markets and TEL (+2.9%) was upgraded to Buy at Goldman. Among downgrades, MOLX (+0.8%) and ADSK (+0.4%) were downgraded at Goldman.
There are no notable names in tech scheduled to report results today after the close.
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