From Briefing.com: 4:10 pm : Stocks ended on their best levels of the session as a Wall Street Journal report suggesting the Fed is “weighing more action amid recovery doubts,” and the strong Australian first quarter GDP print of 1.3% QoQ bolstered investor confidence. The Nasdaq led today’s advance, climbing 2.4% while the S&P 500 and Dow both finished with 2.3% gains.
This morning’s European Central Bank interest rate decision went as expected as the central bank held its benchmark interest rate steady at 1.00% with head Mario Draghi insisting the bank would act if needed.
Economic data disappointed, but had little impact as both productivity and unit labor cost revisions fell short of estimates.
The Fed's latest Beige Book was released this afternoon. but stocks did not see any real reaction. In short, it suggested that overall economic activity in the dozen Fed districts continued to increase at a modest to moderate pace in March and early April. Reports of consumer spending were "unchanged to up moderately."
Shares of Tempur-Pedic (TPX 22.39, -21.28) fell 48.7% after the company lowered its guidance due to new competitive product introductions. The company now expects full year earnings per share of $2.70 which is down from its previous estimate of $3.80-3.95. Also moving lower was the company’s full year revenues guidance which was dropped to $1.43 billion from its previous expectations of $1.60-1.65 billion. Related names Select Comfort (SCSS 20.61, -5.32) and Mattress Firm (MFRM 28.00, -7.30) were also under pressure on the news.
Gold miners gave up this morning’s solid gains with most ending the day in negative territory. The Market Vectors Gold Miners ETF (GDX 47.62, +0.09) eked out a small gain of 0.2% to finish higher for a fourth consecutive session. Individual names such as Barrick Gold (ABX 40.45, -1.60) and Yamana Gold (AUY 16.08, -0.01) both finished in the red.
Ancestry.com (ACOM 25.06, +2.43) jumped 10.7% on reports the company is putting itself up for sale. Today’s surge has the stock contending with both its 100- and 200-day moving averages which come into play near resistance provided by the March lows.
Treasuries were hammered for a third consecutive session as the long bond lost another point and a half. Today’s selling ran the 10-yr yield up to 1.651% at the cash close where it is now more than 20 basis points above last week’s record low. The yield curve swung steeper on the selling as the 2-10-yr spread widened to 140 basis points.
The Volatility Index, or VIX, fell 10.5% to finish at 22.11, its low level since May 29.
Volume picked up as 861 million shares changed hands on the floor of the New York Stock Exchange.DJ30 +286.84 NASDAQ +66.61 SP500 +29.63 NASDAQ Adv/Vol/Dec 2091/1.70 bln/445 NYSE Adv/Vol/Dec 2689/861.6 mln/383
5:03PM Oracle unveils "industry's broadest cloud strategy" and introduced Oracle Cloud Social Services, a broad enterprise social platform offering (ORCL) 27.53 +0.83 : Oracle Cloud delivers a broad set of industry-standards based, integrated services that provide customers with subscription-based access to Oracle Platform Services, Application Services, and Social Services, all completely managed, hosted and supported by Oracle. Offering a wide range of business applications and platform services, the Oracle Cloud is the only cloud to enable customers to avoid the data and business process fragmentation that occurs when using multiple, siloed public clouds. Oracle Cloud is powered by leading enterprise-grade infrastructure, including Oracle Exadata and Oracle Exalogic, providing customers and partners with a high-performance, reliable, and secure infrastructure for running critical business applications. Oracle Cloud enables easy self-service for both business users and developers. Business users can order, configure, extend, and monitor their applications. Developers and administrators can easily develop, deploy, monitor and manage their applications.
4:31PM Microchip announces receipt of antitrust clearance in U.S. and submission of non-U.S. antitrust filings to acquire Standard Microsystems (SMSC) (MCHP) 31.70 +0.91 : Co announced that, in connection with the previously announced definitive agreement under which Microchip will acquire Standard Microsystems (SMSC), Microchip and SMSC were granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on May 18, 2012. Microchip also announced that the required non-U.S. filings for pre-closing antitrust clearance applicable to the merger have been submitted.
4:06PM Tessera Tech sees Q2 revs $59-60 mln vs $58.70 mln Capital IQ Consensus Estimate; sees significantly higher IP litigation expense (TSRA) 13.79 +0.64 : Revenue from the Intellectual Property segment is expected to range between $50.5 million and $51.0 million, which includes one-time payments of approximately $8.0 million, lower reported unit volumes of certain DRAM licensees, and the transitional impact of a renewed contract with a major DRAM licensee... Non-GAAP operating expenses for the second quarter 2012, excluding litigation expenses, are expected to range between $44.0 million and $45.0 million, which compares to $43.4 million in the prior quarter and includes expenses related to our continued investment in MEMS, lens, and camera module designs in our DigitalOptics segment... The Intellectual Property segment's litigation expense in the second quarter of 2012 is expected to be significantly higher than the first quarter 2012 expense of $3.5 million, which was exceptionally low due to the timing of litigation events.
4:05PM Aehr Test Systems announced receipt of a follow-on order for its advanced ABTS high-power burn-in system (AEHR) 1.23 +0.00 : "We expect that this customer will have a need for additional ABTS systems for both production and engineering burn-in requirements, as it ramps up capacity for new higher-power ASICs and wireless and mobile processors."
AMD (AMD) announced the launch of its latest AMD E-Series Accelerated Processing Unit platform. Designed for essential notebook and desktop personal computers which meet basic performance needs at accessible price points.
10:29 am S&P Information Technology
The tech sector is trading higher today, outpacing gains in the broader market. Semiconductors are also showing relative strength with the Philly Semi Index trading 2.5% higher. WFR (+9.0%) is a notable leader in that chip index. Among other major indices, the SPY is trading 1.3% higher today, while the QQQ is up 1.6% and the NASDAQ is trading 1.5% higher on the session. Among tech bellwethers, TXN (+3.0%) is showing notable strength, while FB (-1.2%) is under pressure once again.
In earnings last night, GWRE (+10.4%) posted a Q3 earnings and revenue beat. In news, ACOM (+10.9%) is reportedly considering a sale. Also, LNKD (-0.4%) experienced a security breach leaking passwords, according to reports. Among notable analyst upgrades this morning, GRPN (+8.1%) was upgraded to Hold at Stifel Nicolaus. While in downgrades, SYMC (+0.3%) was downgraded to Mkt Perform at FBR, RAX (-2.5%) was downgraded to Hold at Jefferies, and VSH (+0.6%) was downgraded to Neutral at JP Morgan.
VRNT (+0.8%) is the only notable name in tech scheduled to report quarterly results today after the close.
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