Sector Investing

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From Briefing.com: 4:30 pm : Choppy, listless trade today kept the stock market near the neutral line, but a late flurry of selling resulted in a modest loss.

Amid a dearth of headlines and directional cues this morning stocks started the session essentially unchanged. Financials had offered some support, but the sector soon faltered. Although it failed to recover, the Financial sector was able to limit downward movement. It settled with a 0.4% loss.

Energy stocks had a more adverse influence over broad market trade, though. Since the open Energy had to wrestle with stiff selling, making it the worst performing sector for virtually the entire session. As a group Energy stocks shed 1.0%, but oil and gas equipment and services plays encountered the most pronounced pressure. Their weakness came despite a marked push by oil prices up above $107 per barrel.

Earnings were limited to only a handful of companies. Oracle (ORCL 29.41, -0.69) was among them. Shares initially benefited from a positive response to better-than-expected bottom line results, but enthusiasm died and the stock descended steadily into the close, settling with a sizable loss only narrowly above session lows. The rest of the Tech sector, which finished with a 0.1% loss, saw gains evaporate in response to selling in the final stretch of trade.

Volatility was down sharply amid the stock market's lackluster action, but some late selling pressure caused the Volatility Index to move back above 15. By the closing bell it was still down more than 3% for the day, though.

The dollar didn't do much today. It made a couple of modest moves up from the flat line, but by session's end it led a basket of competing currencies by less than 0.1%.

While oil had a strong session, most other commodities staged varied gains after suffering from aggressive selling pressure in the prior session. Still, the CRB Index only eked out a gain of 0.1%.

Treasuries attracted buyers after the yield on the 10-year Note traded near a multi-month high near 2.40% yesterday. The advance today took the yield on the benchmark Note back down to about 2.30%.

Economic data was limited in scope. It featured monthly existing home sales numbers, which showed that unit sales hit an annualized pace of 4.59 million units in February. That's on the order of the 4.60 million units that had been broadly expected. As an aside, the prior month's pace was revised upward to 4.63 million. Comments from Fed Chairman Bernanke and Treasury Secretary Geithner in a testimony on Europe's economic crisis did nothing to swing stocks or other assets.

Advancing Sectors: Telecom +0.3%, Consumer Staples +0.1%, Consumer Discretionary +0.1%
Unchanged: Industrials, Materials
Declining Sectors: Tech -0.1%, Health Care -0.1%, Utilities -0.2%, Financials -0.4%, Energy -1.0%DJ30 -45.57 NASDAQ +1.17 NQ100 +0.0% R2K +0.1% SP400 -0.1% SP500 -2.63 NASDAQ Adv/Vol/Dec 1275/1.53 bln/1216 NYSE Adv/Vol/Dec 1469/726 mln/1498

4:05PM SunPower appoints Charles D. Boynton CFO (SPWR) 6.86 -0.45 : Co announced that Charles (Chuck) D. Boynton has been named SunPower's new executive vice president and chief financial officer (CFO). He will lead the co's global finance, planning and accounting organizations. Boynton joined SunPower in June of 2010, serving as the company's vice president of corporate finance and corporate development, with global responsibility for finance, planning and analysis and leading strategic investments, joint ventures, and mergers and acquisitions.

10:35AM JDS Uniphase jumps to the highs on a pick up in opening volume as it lifts back up toward its March high of $14.45 (JDSU) 14.30 +0.20 : FNSR is a peer.

O2Micro International (OIIM) was issued 22 claims under a US patent for its Battery Cell Balancing System.

8:45AM Hewlett-Packard confirms it will combine its HP's Imaging and Printing Group and its Personal Systems Group (HPQ) 23.98 : As part of this realignment, HP's Imaging and Printing Group and its Personal Systems Group are joining forces to create the Printing and Personal Systems Group. The combined entity will be led by Todd Bradley, who has served as the executive vice president of PSG since 2005. In addition to combining PSG and IPG, HP also is taking steps to unify and streamline certain key business functions. (See our 13:20 comment from yesterday and our 5:49 comment from today)

8:01AM Broadcom to acquire privately held Broadlight, Inc. for ~$195 mln (BRCM) 38.39 : Co announced it has signed a definitive agreement to acquire BroadLight, Inc., a Delaware corporation with an Israel-based subsidiary. BroadLight is a privately held provider of highly integrated networking and fiber access Passive Optical Network processors. In connection with the acquisition, Broadcom currently expects to pay approximately $195 million, net of cash assumed, to acquire all of the outstanding shares of capital stock and other equity rights of BroadLight. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom expects the acquisition of BroadLight to be roughly neutral to earnings per share in 2012.

6:49AM Trina Solar executives comment on preliminary determination of countervailing duty in the U.S. (TSL) 8.38 : On March 20, 2012, a preliminary determination was announced by the Department of Commerce in Washington, DC regarding the exportation of Crystalline Silicon Photovoltaic Cells and Modules from China. The ruling establishes a preliminary rate of 4.73% for Trina Solar applicable to the importation of solar cells and modules/panels produced in China. Last night Jifan Gao, Chairman and Chief Executive Officer, said in a press release, "Trina Solar is committed to providing high-quality modules and services to the United States market for the long term, where we value our customer base and supply chain business partners." Mark Kingsley, Chief Commercial Officer, added, "We are working to ensure that our U.S. team will continue to grow our North American business in order to meet our customers' expanding service needs. As applicable to the rest of the solar industry, this preliminary determination is only the first step, and is subject to further examination and final determination later this year by the DOC. Moreover, the determination of whether injury has been found or not is dependent upon the International Trade Commission's subsequent ruling."

Jabil Circuit (JBL $26.57 +0.08) reported second quarter earnings of $0.58 per share, excluding non-recurring items, $0.01 better than the Capital IQ consensus of $0.57, while revenues rose 7.8% year/year to $4.24 billion versus the $4.09 bln consensus. The company issued in-line guidance for the third quarter with EPS of $0.60-0.70, excluding non-recurring items, versus the $0.64 consensus and revenues of $4.2-4.4 billion versus the $4.34 billion consensus.

FSI Intl (FSII $50.09 +0.48) reported second quarter earnings of $0.09 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.05, while revenues rose 25.0% year/year to $38.5 million versus the $32.09 million consensus. The company issued upside guidance for third quarter with revenues that should exceed $50 million versus the $36.34 million consensus.

Oracle (ORCL $30.57 +0.48) reported third quarter earnings of $0.62 per share, $0.06 better than the consensus of $0.56, while revenues rose 3.4% year/year to $9.06 billion versus the $9.03 bln consensus. Oracle reported new software license revenue growth of +8% in constant currency vs +2-12% guidance. "Oracle is on track to deliver the highest operating margins in our history this year... Oracle can achieve these record margins as an integrated hardware and software company because we are focusing on high margin systems where hardware and software are engineered to work together... Hardware revenue for our engineered systems grew 139% this quarter and going into Q4, we have a record pipeline... In applications, Fusion in the Cloud is winning with great success against niche HCM cloud vendors in the US and worldwide. Our modular, integrated platform of 100 apps available in the cloud or on-premise is a key differentiator."

11:48 am Technology Sector Trading lower today ahead of market

The tech sector is trading just higher today, outpacing marginal losses in the broader market. Semiconductors are showing slight relative strength in the tech space with the Philly Semi Index trading 0.3% higher. MU (+3.3%) is a notable leader in the chip index, while WFR (-2.8%) is showing weakness. Among other major indices, the SPY is trading 0.1% lower, while the the QQQ and the NASDAQ are trading 0.1% higher on the session. Among tech bellwethers, OGG (+0.5%) is showing notable strength today, whereas TXN (-0.7%) is under pressure.

In earnings last night, ORCL (+0.2%) posted a modest Q3 beat and offered Q4 EPS guidance at high end of expectations, while Q4 rev guidance came in a little light of expectations. Elsewhere, JBL (-0.5%) also posted a slight quarterly beat and guided the following qtr in line with consensus. SAI (+5.4%), on the other hand, posted a miss and issued mixed guidance. SAI did announced a buyback, however. In news, MU (+3.4%) has offered $1.5 bln for Japan based Elpida Memory, according to reports. Also, HPQ (-2.0%) confirmed it will combine its HP's Imaging and Printing Group and its Personal Systems Group.

Among notable analyst upgrades this morning, LNKD (+8.5%) was upgraded to Buy at Goldman, The Benchmark Company upgraded OPEN (+4.8%) to Buy, SAI (+5.4%) was upgraded to Sector Perform at RBC Capital and OSUR (+4.7%) was upgraded to Buy at MLV. Among downgrades, PWRD (-2.1%) was downgraded to Neutral at Nomura and CHA (-4.1%) was downgraded to Neutral at JP Morgan.

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