Sector Investing

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From Briefing.com: 4:25 pm : The stock market overcame a lackluster start and some underwhelming data from the eurozone to score a solid gain by settling near its session high.

A mixed batch of Services PMI readings from Europe and a downturn in eurozone retail sales made many participants cautious this morning. It had been hoped that a teleconference between G-7 finance ministers would provide progress in addressing the persistently precarious conditions facing the eurozone, or especially Spain, given the country’s recent struggles. Reports indicated that macro developments in and potential policy responses were discussed, but nothing monumental came of it. That has left many looking to the European Central Bank, which will make its latest announcement tomorrow morning.

The latest ISM Services Index, which improved incrementally in May to 53.7 from 53.5 in the prior month to best the Briefing.com consensus call of 53.1, was released after the open and met with a positive response. However, the broad market had a hard time extending the move.

Financials ran up to an early lead with help from regional lenders, investment banks, diversified financial services players, and insurance outfits. The sector settled with a 1.7% gain, which helped it recoup some of the outsized losses that it had suffered in the previous two sessions.

Most other stocks were reluctant to follow Financials higher, but an afternoon advance by Tech – the largest sector by market weight – provided the necessary push to drive the broad market higher. Tech settled the session with a 0.7% gain.

Telecom stocks were at the opposite end of things. The defensive-oriented sector outperformed in the past couple of sessions, but today it slid to a 0.2% loss. Consumer Staples, the only other sector that suffered a loss, also fell 0.2%, collectively.

While limited weakness helped the broad market book a solid gain, the performances of small-caps and mid-cap stocks were even more impressive. A willingness to take on their risk helped both the Russell 2000 and S&P 400 book gains greater than 1%.

For the second straight session little regard seemed to be given to the euro, which was a key catalyst for stocks in recent weeks. The currency dropped to a 0.4% loss against the greenback after it had scored a strong gain in the prior session.

Advancing Sectors: Industrials +0.2%, Utilities +0.4%, Consumer Discretionary +0.4%, Health Care +0.5%, Energy +0.6%, Tech +0.7%, Materials +0.8%, Financials +1.7%
Declining Sectors: Consumer Staples -0.2%, Telecom -0.2%DJ30 +26.49 NASDAQ +18.10 SP500 +7.32 NASDAQ Adv/Vol/Dec 1610/1.58 bln/875 NYSE Adv/Vol/Dec 2231/680 mln/764

4:32PM RF Micro Device to outsource manufacturing of wafer starting material; expected to result in non-cash GAAP charge of ~$0.02-0.03 related to equipment and invetory write-offs (RFMD) 4.03 +0.47 : Co announced it has entered into a definitive agreement to transfer its molecular beam epitaxy (MBE) wafer growth facility to IQE plc., a global supplier of advanced semiconductor wafers. RFMD's MBE growth facility supplies MBE wafer starting material to RFMD's wafer manufacturing facilities, which RFMD will continue to own and operate in Greensboro, NC, and Newton Aycliffe, UK. RFMD's GaAs semiconductor products incorporate transistor layers grown on either an MBE or metal organic chemical vapor deposition (MOCVD) process. RFMD outsources all MOCVD-based starting material, and RFMD will outsource MBE-based starting material with the completion of the transfer. In conjunction with the transfer, RFMD and IQE have entered into a supply agreement under which IQE will supply RFMD MBE- and MOCVD-based starting material. The transfer and supply agreement will lower RFMD's manufacturing costs, beginning in the September 2012 quarter. In the June 2012 quarter, RFMD currently estimates the transaction will result in a non-cash GAAP charge of approximately $0.02 to $0.03 related to equipment and inventory write-offs and will be approximately neutral to non-GAAP operating results.

2:02PM Hewlett-Packard confirms it expanded Converged Cloud portfolio (HPQ) 21.67 +0.61 : Today's announcements include solutions for: Delivering converged cloud services for the airline industry; Building hybrid cloud environments; Managing the next generation of cloud applications; Increasing office productivity with cloud print solution; and Closing the IT cloud expertise skills gap.

O2Micro International (OIIM) was issued 20 claims under U.S. patent for its Battery Charging System invention with Trickle Charging/Discharging control.

8:13AM Freescale Semi names Gregg Lowe as President and CEO (FSL) 8.74 : Lowe comes to Freescale from Texas Instruments where he served as senior vice president and manager of the Analog business. As part of the transition, the board has appointed J. Daniel McCranie as non-executive chairman of the board of directors. McCranie currently serves on Freescale's board of directors.