From Briefing.com: 4:30 pm : The stock market staged an aggressive advance that resulted in its best single-session performance of 2012 and marked new multi-year highs. A positive tone permeated trade for the entire session, but buying didn't really ramp up until after the FOMC released its latest Policy Statement and financial giant JPMorgan Chase made an encouraging announcement.
To little surprise the FOMC opted to keep its fed funds target rate at 0.00% to 0.25% and maintained its outlook that low rates of resource utilization and subdued inflation are likely to warrant exceptionally low levels for the fed funds rate at least through late 2014. However, the idea that a steadily improving economy means that the Fed is less likely to offer additional monetary stimulus was met with some indecision, resulting in choppy trade for stocks. In contrast, the dollar pushed up to a nice gain against a collection of competing currencies while gold prices took a dive in electronic trade so that futures prices for the yellow metal were near $1670 per ounce.
Financials were steady leaders throughout the session, but the sector bounded to a gain of almost 4% after JPMorgan Chase (JPM 43.39, +2.85) announced that it has increased its quarterly dividend to $0.30 per share from $0.25 per share and also authorized $15 billion for repurchasing stocks. The announcement was taken as a sign of financial health ahead of results from the latest round of government stress tests, which will be released at 4:30 PM ET. Test results had been previously scheduled for release later this week.
The bullish bias to trade took the Volatility Index another leg lower. In fact, the euphemistically labeled Fear Gauge set a new multi-year low this morning.
With stocks looking so strong and volatility down, Treasuries encountered concerted selling. The action caused the yield on the benchmark 10-year Note to climb above 2.12% for a three-month high. Results from an auction of 10-year Notes failed to provide support. The offering drew a bid-to-cover ratio of 3.24, dollar demand of $68.0 billion, and an indirect bidder participation rate of 38.6%. For comparison, an average of the past six auctions results in a bid-to-cover ratio of 3.07, dollar demand of $67.2 billion, and an indirect bidder participation rate of 44.0%.
Retail sales results for February were released earlier today. They provided a positive backdrop to the action. Overall sales climbed by 1.1%, which is greater than the upwardly revised 0.6% increase booked in the prior month and narrowly better than the 1.0% increase that had been generally expected. Excluding autos, retail sales were up 0.9%, which bested the Briefing.com consensus call for a 0.6% increase, but it isn't quite as strong as the 1.1% increase experienced in the prior month.
Advancing Sectors: Financials +3.9%, Industrials +2.1%, Tech +2.0%, Materials +1.7%, Consumer Discretionary +1.5%, Health Care +1.4%, Energy +1.3%, Consumer Staples +0.6%, Telecom +0.6%, Utilities +0.2%
Declining Sectors: (None)DJ30 +217.97 NASDAQ +5622 NQ100 +1.9% R2K +2.1% SP400 +2.0% SP500 +24.87 NASDAQ Adv/Vol/Dec 1976/1.69 bln/569 NYSE Adv/Vol/Dec 2496/907 mln/569
4:06PM PMC-Sierra announces $275 mln stock repurchase program (PMCS) 7.00 +0.11 : PMC expects to fund the repurchases through the use of available cash resources.
4:01PM Analog Devices will move to NASDAQ from NYSE effective April 2, 2012 (ADI) 39.42 +0.78 :
8:02AM Xilinx raises quarterly dividend 15.8% to $0.22 from $0.19 per share (XLNX) 36.16 : The quarterly dividend will be payable on June 6, 2012 to all stockholders of record at the close of business on May 16, 2012.
8:01AM Dell announces intent to acquire SonicWALL, a network security and data protection co; expected to close in the second quarter of Dell's FY13; financial terms not disclosed (DELL) 16.96 : Centerview Partners LLC served as an advisor to SonicWALL. The transaction is expected to close within 45 days.
HP (HPQ) announced that IDC Frontier has selected HP Networking solutions to enhance its network infrastructure to meet increasing demand for cloud services.
11:01 am S&P Tech Sector Up 1%, Outperforming Broader Market
The tech sector is trading higher today, just ahead of gains in the broader market. Semiconductors are showing slight relative strength in the tech space with the Philly Semi Index trading 1.1% higher. MU (+4.3%) is a notable leader in the chip index, while CREE (-0.8%) is showing weakness. Among other major indices, the SPY is trading 0.7% higher, while the QQQ, and the NASDAQ are trading 0.8% higher on the session. Among tech bellwethers, ORCL (+1.2%) is showing notable strength today.
In earnings last night, COOL (-13.8%) posted a mixed qtr and offered in line guidance. In news, YHOO (+0.1%) has filed a lawsuit against Facebook (FB) over 10 patents. Elsewhere, DELL (+0.7%) acquired SonicWall from private equity and XLNX (+1.3%) raised its quarterly dividend 15.8% to $0.22.
Among rumors, INTC (+1.5%) is moving into streaming home video market which could be a windfall for ENTR (+3.5%). Also, we are hearing T (+0.4%) for RAX (+2.4%) chatter making the rounds.
There were no notable analyst upgrades this morning, however, FXCM (+3.0%) was added to the Focus List at JP Morgan.
Among downgrades, CSOD (-2.3%) was downgraded to Neutral from Buy at Goldman and MANT (-3.9%) and BAH (-2.6%) were downgraded to Underperform at Wells Fargo.
There are no notable names in tech scheduled to report results today after the close.
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