From Briefing.com: 4:30 pm : Renewed worries about the health and fate of the eurozone brought about a negative tone that permeated trade for the entire session.
The possibility of European bank recapitalizations offered only temporary relief to market participants focused on the precarious fiscal, financial, and economic conditions in the eurozone periphery, where debt yields were forced higher. Selling among the region’s major bourses resulted in sizable losses, including a 1.4% loss for the EuroStoxx 50. The euro also took a tumble, such that it set a near two-year low of less than $1.24. As of the closing bell it had fallen 0.9% against the greenback.
An interest in safety spurred demand for Japan's yen, which pulled down the yen-dollar exchange rate to a new multi-month low of less than 78.9 yen per dollar.
Gold garnered buying interest after it had spent early pit trade in negative territory. The yellow metal set a session low of $1530.40 per ounce, but the appeal of its safety features helped propel the precious metal to $1563.90 per ounce for a 1.0% gain in the face of a stronger dollar. In contrast, the greenback’s gain seemed to make oil’s slide a little easier. Oil prices fell to a 2012 low of $87.46 per barrel before they settled with a 3.2% loss at $87.84 per barrel.
The combination of sharply lower oil prices and broad weakness among equities resulted in outsized losses for Energy stocks. The sector slumped to a 3.0% loss, which is worse than what any other sector suffered. Oil and gas equipment, exploration, drilling, and services stocks were all caught up in the sell-off.
Financials also fell hard. The sector’s 2.2% loss was driven by weakness among banking plays and diversified financial services issues. SLM Corp (SLM 14.04, +0.36) was one of the few Financial plays to attract buying interest – the stock’s gain followed news that the company has earmarked an additional $400 million for share repurchases.
Monsanto (MON 76.41, +1.66) also managed to muster an impressive gain following the firm’s latest financial forecast. The rest of the Materials sector suffered a 1.7% loss.
Telecom stocks did the best job of resisting selling pressure. The sector’s 0.6% loss was less than what any other sector suffered. The sector’s relative strength is consistent with its performance in 2012 – Telecom stocks are up nearly 7% this year, whereas the broad market is up little more than 4%.
Amid such widespread weakness the Volatility Index made a double-digit percentage spike that took it up near 24. The Fear Gauge’s multi-month high remains at 25, which was set a couple of weeks ago when stocks were at multi-month lows.
A want for safety sent Treasuries up sharply, such that the yield on the benchmark 10-year Note dropped to a record low narrowly above 1.60%.
The only item on the economic calendar featured pending home sales, which dropped during April by 5.5% when a 0.6% increase had been broadly expected.
The flow of economic data picks up tomorrow with the release of the second reading on first quarter GDP, weekly initial jobless claims, and the latest monthly ADP Employment Change. Friday will bring the official monthly payrolls report.
Advancing Sectors: None
Declining Sectors: Telecom -0.6%, Health Care -0.7%, Tech -0.7%, Utilities -0.8%, Consumer Staples -0.9%, Consumer Discretionary -1.6%, Materials -1.7%, Industrials -1.7%, Financials -2.2%, Energy -3.0%DJ30 -160.83 NASDAQ -33.63 NQ100 -0.8% R2K -2.0% SP400 -1.9% SP500 -19.10 NASDAQ Adv/Vol/Dec 536/1.64 bln/2004 NYSE Adv/Vol/Dec 396/766 mln/2627
5:22PM Rudolph Tech issues Q2 guidance in presentation slides (RTEC) 8.70 -0.03 : Co issues mixed guidance for Q2 (Jun), sees EPS of $0.16-0.17, excluding non-recurring items, vs. $0.18 Capital IQ Consensus Estimate; sees Q2 (Jun) revs of $52.6-54.7 mln vs. $53.33 mln Capital IQ Consensus Estimate.
LTX-Credence Corp. (LTXC) announced that Global Mixed-Mode Technology has selected the ASLx as its test platform.
Skyworks Solutions (SWKS) has commenced volume production of several RF solutions supporting Broadcom (BRCM) 5G WiFi chips - including minicards for access points, routers and customer premise equipment.
7:30AM Vishay prices offering of $150 million of 2.25% convertible senior debentures (VSH) 10.39 : Co announced the pricing of its offering of $150 million principal amount of 2.25% convertible senior debentures due 2042. The sale is expected to close May 31, 2012. Interest will be payable on the debentures semi-annually at a rate of 2.25% per annum. In addition to ordinary interest, beginning on June 1, 2022, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances.
Xilinx (XLNX) announced initial shipments of the Virtex-7 H580T FPGA, a 3D heterogeneous all programmable product.
Research In Motion (RIMM $10.19 -1.06) provided a business update. The company's CEO Thorsten Heins stated "In terms of challenges, as I mentioned on the March financial results conference call, RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters. The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter. We are continuing to be aggressive as we compete for our customers' business - both enterprise and consumer - around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base. On the positive side, we expect to further increase our cash position in Q1 from the approximately $2.1 billion we had at the end of fiscal 2012." "The CORE (cost optimization and resource efficiency) program we told you about previously is focused on delivering key operational savings through various initiatives. The financial objectives for the CORE program are targeted to drive $1 billion in savings by the end of fiscal 2013, based on our Q4 run rate...While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community. We will share more details regarding our progress throughout the year as programs are implemented or changes are completed." "To further enhance our commitment to successfully completing our transformation, after the release of our year-end financial results, we engaged J.P. Morgan Securities LLC and RBC Capital Markets to assist the Company and our Board of Directors in reviewing RIM's business and financial performance."
FormFactor (FORM $6.21 +0.45) issues upside guidance for the second quarter with revenues of $50-54 million versus the $44.93 million consensus, higher than the company's previous revenue guidance of $43 to $47 mln. Customer demand across the DRAM and Flash memory segments are the main drivers for the increase to the company's expected revenue results. "Industry conditions in Q2 are more favorable than we anticipated and our improved lead times are enabling us to meet customer requests to accelerate certain product deliveries," said Tom St. Dennis, CEO. "While we are encouraged by the marketplace momentum for our Matrix architecture memory solutions, our outlook for the second half of the year is tempered by concerns about softness in the personal computer markets and the potential impact of macroeconomic forces."
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