From Briefing.com: 4:30 pm : A late bout of buying helped stocks settle above session lows, but the broad market still booked a sizable loss as participants focused on the formidable challenges facing eurozone officials and a disappointing forecast from Intel.
Concerns about the macro picture were revived early this morning. Market participants digested data that indicated China experienced during November a slowdown in export growth, which many regarded as a sign of deceleration in the country that has helped prop up the global economy.
Sentiment in Europe soured as traders shifted their focus from the agreements struck during the eurozone summit to the difficult task of efficiently implementing plans and reaching a consensus on those topics that eluded officials last week. Responding to worries that such processes will continue to slog along without real results, yields on the debt of countries in the eurozone periphery were sent higher. The region's major bourses were also punished by sellers, such that the EuroStoxx 50 fell about 1.6%.
Weakness was exacerbated ahead of the open by a disappointing outlook from Dow component and semiconductor bellwether Intel (INTC 24.00, -1.01). The stock's 4% loss was its worst single-session slide in about 4% and dragged down the rest of the semiconductor space so that the Philadelphia Semiconductor Index shed nearly 3%.
In the face of widespread weakness telecom stocks were able to limit their losses to a collective decline of only 0.3%, which is about one-fifth of what the broad market suffered. In times of volatility, many analysts favor the sector for its stable businesses, strong balance sheets, and hefty dividends. That said, consumer discretionary plays also limited their losses to a collective decline of 0.3%.
Trading volume was paltry this session, coming in below 800 million on the NYSE. That makes for a more muddled picture when trying to assess sentiment since low share volume suggests less participation.
Favor for safety also compelled traders to rotate into the dollar, which gained about 1.2% against a basket of competing currencies by session's end.
Treasuries also traded higher, but the yield on the benchmark 10-year Note had difficulty breaking below 2.00%. Treasuries even had trouble adding to gains after results from an auction of 3-year Notes proved exceptionally strong. The auction drew a bid-to-cover of 3.62, dollar demand of $115.8 billion, and an indirect bidder participation rate of 39.1%. For comparison, an average of the past six auctions results in a bid-to-cover of 3.28, dollar demand of $104.8 billion, and an indirect bidder rate of 38.4%.
Advancing Sectors: (None)
Declining Sectors: Telecom -0.3%, Consumer Discretionary -0.3%, Consumer Staples -0.8%, Utilities -1.0%, Health Care -1.2%, Tech -1.5%, Industrials -1.8%, Materials -2.2%, Energy -2.4%, Financials -2.6%DJ30 -162.87 NASDAQ -34.59 NQ100 -1.1% R2K -1.9% SP400 -1.7% SP500 -18.72 NASDAQ Adv/Vol/Dec 635/1.54 bln/1922 NYSE Adv/Vol/Dec 616/775 mln/2418
4:37PM Cypress Semi announces that Avago Technologies (AVGO) dropped patent lawsuit regarding Optical Navigation Technology (CY) 17.36 -1.10 : Cypress paid no damages and admitted to no infringement in the case.
9:42AM Semiconductor Hldrs ETF weak in early trade thanks to INTC (SMH) 29.97 -0.90 : Thus far, it has been able to stabilize at last week's low the the 50% retracement of the Nov-Dec sprint at 29.81/29.82 (session low 29.82).
Cree (CREE) announced a nonexclusive worldwide license agreement with RFHIC Corporation that provides access to Cree's pioneering Doherty amplifier-related patents.
Apple (AAPL) announced that over 100 million apps have been downloaded from the Mac App Store in less than one year.
Lattice Semiconductor (LSCC) announced release 6.2 of its PAC-Designer mixed signal design software, with updated support for Lattice's Platform Manager, Power Manager II and ispClock devices.
09:39 am Intel Trading Lower After Issuing Downside Guidance This Morning
Intel (INTC $24.14 -0.87) is down 3.6% after reporting that its fourth quarter revenue is expected to be below expectations due to hard disk drive supply shortages.
This morning, the company announced that it's forecasting fourth quarter revenues to be $13.4 billion to $14.0 billion versus the $14.67 billion Capital IQ Consensus Estimate and below prior guidance of $14.7 billion due to hard disk drive supply shortages.
The company states sales of personal computers are expected to be up sequentially in the fourth quarter. However, the worldwide PC supply chain is reducing inventories and microprocessor purchases as a result of hard disk drive supply shortages. The company expects hard disk drive supply shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012.
The company now expects the fourth-quarter gross margin to be 64.5%, plus or minus a couple of percentage points, lower than the previous expectation of 65 percent, plus or minus a couple of percentage points. The expectation for a non-GAAP gross margin is 65.5%, plus or minus a couple of percentage points, lower than the previous expectation of 66%, plus or minus a couple of percentage points.
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