From Briefing.com: 4:05 pm : Equities were stuck in negative territory all day long, with initial weakness following the announcement that China would target 7.5% growth in 2012, its lowest target since 2004. Also weighing on global equities were disappointing data points out of Europe. Here in the U.S., both ISM Services and factory orders numbers were above expectations, however, they were unable to provoke buying. Stocks hit their lows around mid-day, with the Nasdaq Composite (-0.9%) underperforming the broader S&P 500 (-0.4%) as Apple (AAPL 533.16, -12.02) showed notable intraday weakness, on no apparent news. Some buying interest lifted stocks off their lows this afternoon, finishing their day approximately 0.4% off the lows.
Today's economic data included the February ISM Service reading and January Factory Orders. The ISM Service Index jumped to 57.3 in February from 56.8 in the prior month, surpassing the 57.0 Briefing.com consensus. Factory orders were less exciting. During January they decreased by 1.0%, which is better than the 1.9% decrease that had been widely expected.
Corporate news was relatively light today, but there were a few items worth noting. Shares of American International Group (AIG 30.41, +0.61) finished higher by 1.9% after the company announced it has sold $6 billion worth of ordinary shares of its Asia subsidiary AIA in an effort to repay its federal government bailout. The U.S. Treasury owns 77% of American International Group after its massive $182 billion bailout of the company during the heart of the 2008 financial crisis.
BP (BP 47.96, +0.46) traded higher by 1.0% after the company indicated it has reached a settlement agreement related to Gulf oil spill claims for $7.8 billion. The agreement will compensate individuals and businesses for economic loss and medical claims resulting from the 2010 oil spill. The payment will be made from the $20 billion compensation fund set aside by the company.
Archipelago Learning (ARCL 11.09, +2.05) jumped 22.5% after the company announced it would be acquired for approximately $291 million, or $11.10 per share. The purchase price represents a 23% premium to Friday’s close.
Walgreen (WAG 33.33, +0.64) finished higher by 2.0% despite announcing February same store sales fell 4.6% (-1.4% Retail Metrics Consensus). Total sales for the second quarter of fiscal year 2012 were $18.63 billion, slightly above the $18.53 billion Capital IQ Consensus Estimate).
Treasuries saw modest selling pressure all session long as a loss of 24/32 had the long bond leading the way lower. Meanwhile, a more modest decline of 8/32 dropped the 10-yr to 99 29/32 while its yield flirted with the 2.00% threshold. Despite today’s selling, the yield curve ended the day unchanged at 170 basis points.
There is no economic data scheduled for tomorrow. There are approximately 15 companies scheduled to report earnings tomorrow morning, although, none are market moving reports. Major events to be aware of later this week include the Greek debt swap deadline (Thursday) and the February employment report (Friday), both of which could be broad market volatility catalysts.DJ30 -14.76 NASDAQ -25.71 SP500 -5.30 NASDAQ Adv/Vol/Dec 1140/1.64 bln/1370 NYSE Adv/Vol/Dec 1231/701.1 mln/1816
2:04PM Semiconductor Hldrs ETF slides to new session low of 33.38 in recent trade to probe its 50 ema at 33.34 (SMH) 33.40 -0.83 : The SMH lagged last week as it did not confirm new highs with the market averages. Today it has broken below its Feb range lows with the recent dip flirting with its 50 ema. It has not probed this average as support since the late Dec bull breakout -- INTC -1.8% has probed its Feb range lows at 26.36/26.35 (session low 26.36).
Rambus (RMBS) announced it has signed a five year patent license agreement with MediaTek covering the use of Rambus patented innovations in a broad range of integrated circuit products offered by MediaTek Inc. In addition, the two cos have settled all outstanding claims, including resolution of past use of Rambus' patented innovations. Other terms are confidential.
6:07AM Advanced Micro amends Wafer Supply agreement with Globalfoundries; to record one time charge of $703 mln in Q1 2012 (AMD) 7.46 : Co announced that it entered into an amendment to its Wafer Supply Agreement with GLOBALFOUNDRIES Inc. In this amendment, AMD and GLOBALFOUNDRIES agreed to a negotiated wafer price mechanism for 2012. AMD also agreed to transfer its remaining ownership interest in GLOBALFOUNDRIES to GLOBALFOUNDRIES and, as a result, AMD will no longer hold an equity stake in GLOBALFOUNDRIES. Under the amended agreement GLOBALFOUNDRIES waived the exclusivity arrangement for AMD to manufacture certain 28nm APU products at GLOBALFOUNDRIES for a specified period. As a result, AMD agreed to pay GLOBALFOUNDRIES a cash payment of $425 mln. In addition, AMD issued a promissory note to GLOBALFOUNDRIES for the payments due by October 2, 2012 and first quarter 2013. AMD expects to record a one-time charge of $703 mln in Q1 2012 consisting of the above-mentioned $425 mln cash payment and the remainder will be a non-cash charge. AMD's Q1 2012 non-GAAP gross margin guidance of approximately 45% and the 2012 non-GAAP gross margin guidance of 44% - 48% remain unchanged.
Advanced Micro (AMD $7.35 -0.11) announced that it entered into an amendment to its Wafer Supply Agreement with Global Foundries. In this amendment, AMD and Global Foundries agreed to a negotiated wafer price mechanism for 2012. AMD agreed to pay Global Foundries a cash payment of $425 mln. In addition, AMD issued a promissory note to Global Foundries for the payments due by October 2, 2012 and first quarter 2013. AMD expects to record a one-time charge of $703 million in Q1 2012 consisting of the above-mentioned $425 million cash payment and the remainder will be a non-cash charge. AMD's Q1 2012 non-GAAP gross margin guidance of approximately 45% and the 2012 non-GAAP gross margin guidance of 44% - 48% remain unchanged.
Canaccord Genuity says checks indicated strong global share gains continue with the Apple (AAPL $545.96 +0.68) iPhone 4S selling well in international markets including Brazil, Russia, and China. While Android tablets were a primary focus at last year's MWC, most Android OEMs offered tablets but focused meetings on new smartphone offerings. Firm says with the iPad 3 expected to be announced on March 7, they believe Apple will likely dominate tablet market share for the remainder of 2012.
09:19 am Jabil Circuit downgraded to Buy at Needham: . Needham downgrades JBL to Buy from Strong Buy and raises their tgt to $29 from $26, citing valuation. Firm notes that YTD, JBL's stock has improved 32.8% and reached their prior price target. They believe JBL still warrants a Buy rating at a multiple of ~12x. Overall, they believe JBL's execution and positive mix momentum should continue to drive the model in 2012.
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