From Briefing.com: 4:30 pm : Aggressive, broad-based selling drove the stock market lower for its worst single-session loss since December, eating into the heady gains that had been scored during the course of the four sessions leading up to a series of Fed announcements made yesterday.
Only one day ago did the Fed announce its intent to extend “Operation Twist” into the end of the year and unveil a reduced economic forecast, playing a part in the prior session's lackluster finish. Market participants were given little reassurance about prospects abroad today, though. China posted another decline in its PMI manufacturing report, which pointed to the eighth consecutive month of contraction. Germany, Europe’s most diverse and robust economy, also posted a disappointing number that pointed to tighter activity, but activity in France proved stronger than what had been anticipated.
Domestic data featured a Flash PMI Manufacturing of 52.9 – the worst reading in 11 months. Worse still, the Philadelphia Fed Survey fell unexpectedly to -16.6 for June, registering its worst reading since August 2011.
Existing home sales were less jarring. They set an annualized rate of 4.55 million units during May. That is in stride with the rate of 4.56 million units that had been generally expected among economists surveyed by Briefing.com. However, the pace for May is down from the prior month rate of 4.62 million units.
Leading Indicators for May proved pleasing. They increased by 0.3%, which is better than the flat reading that had been widely forecasted to follow the 0.1% decline in the prior month.
No sector was able to avoid the sell-off. Losses ranged from a 0.7% slide by the defensive-oriented Telecom sector to the Energy sector’s 4.0% tumble.
Energy’s outsized loss was owed to a combination of broad market weakness and a sharp drop in oil prices amid demand concerns. Crude oil notched a new 2012 low of $77.96 per barrel for the August contract before it settled with a 3.9% loss at $78.26 per barrel.
While stocks settled at session lows with steep losses, the Volatility Index ended the day near its high with a gain of about 15.5%. It only recently registered a monthly low.
Treasuries traded with relatively limited gains, despite such pronounced weakness among stocks. Buying in the benchmark 10-year Note took its yield back near 1.6%. As an aside, Spain also saw its debt yields ease back so that its 10-year issue carried a yield of a little more than 6.5%.
The greenback garnered strong interest. By session’s end it was up almost 1.0% against a basket of major foreign currencies, namely the euro and the sterling pound.
The dollar’s advance likely exacerbated selling among precious metals. Gold closed with a 3.1% loss at $1565.90 per ounce, just above its session low of $1564.80 per ounce. Silver tumbled to a new multi-month low of $26.80 per ounce for the July contract before it settled pit trade at $26.86 per ounce for a 5.4% loss.
Advancing Sectors: None
Declining Sectors: Energy -4.0%, Materials -3.3%, Tech -2.6%, Financials -2.3%, Consumer Discretionary -2.2%, Industrials -2.1%, Health Care -1.4%, Consumer Staples -1.2%, Utilities -1.0%, Telecom -0.7%DJ30 -250.82 NASDAQ -71.36 NQ100 -2.5% R2K -2.5% SP400 -2.7% SP500 -30.18 NASDAQ Adv/Vol/Dec 516/1.77 bln/1973 NYSE Adv/Vol/Dec 571/865 mln/2470
3:30 pm : Soured sentiment in the stock market and a series of economic reports that included weak PMI manufacturing numbers from abroad and a disappointing Philadelphia Fed Survey weighed heavily on most of the commodity complex today. The resulting 2.1% drop for the CRB Index was its worst one-day loss since December.
In particular, crude oil extended its descent to a new 2012 low of $77.96 per barrel for the August contract before it settled with a 3.9% loss at $78.26 per barrel. Natural gas, however, popped to a floor session high of $2.63 per MMBtu and settled with a 2.4% gain at $2.58 per MMBtu, despite a weekly inventory build that was greater than what had been widely expected.
Precious metals were under stiff selling pressure during their pit sessions. Efforts were likely exacerbated by a stronger dollar, which was recently up as 0.9% against a basket of major foreign currencies. Gold extended its overnight slide as it fell deeper into negative territory, closing with a 3.1% loss at $1565.90 per ounce, just above its session low of $1564.80 per ounce. Silver tumbled to a new multi-month low of $26.80 per ounce for the July contract before it settled pit trade at $26.86 per ounce for a 5.4% loss.DJ30 -221.06 NASDAQ -65.31 SP500 -26.23 NASDAQ Adv/Vol/Dec 520/1.29 bln/1940 NYSE Adv/Vol/Dec 595/495 mln/2400
1:02PM Rudolph Tech acquires NanoPhotonics; acquisition is expected to be accretive within first 12 months (RTEC) 8.61 -0.20 : Co announced that it has acquired the assets of NanoPhotonics GmbH, Mainz, Germany. The addition of NanoPhotonics' inspection technology and its substantial intellectual property portfolio will strengthen Rudolph's established presence in the high-growth advanced packaging market. "NanoPhotonics is profitable and the acquisition is expected to be accretive within the first 12 months. It will add approximately $2 million per quarter to our overall revenues and will not have a material effect on our second quarter results." While terms were not disclosed, Rudolph noted that this all-cash transaction used less than five percent of the Company's overall cash. Rudolph plans to maintain and expand a technology center in Mainz, Germany as operations are integrated into the Company.
11:45AM Methode Electronics and AgileSwitch announce marketing and technology partnership (MEI) 7.81 -0.17 : Co and AgileSwitch announced a marketing and technology partnership. As part of this agreement, AgileSwitch will provide IGBT gate drives which provide the highest performance for energy conversion inverters and systems. Methode Electronics' Power Solution Group will supply bus bar architectures and thermal management solutions in combination with local design capabilities and global manufacturing. Together, the two companies are creating fully integrated sub-system solutions for the power electronics industry.
Applied Micro Circuits (AMCC) announced the opening of its new Bangalore design center.
7:05AM Ramtron: Cypress Semiconductor (CY) commences tender offer for Ramtron International for $2.68 per share in cash (RMTR) 2.75 : Co announced that it has commenced a tender offer to acquire all of the outstanding common stock of Ramtron International (RMTR) for $2.68 per share in cash. This represents a 48% premium over Ramtron's closing price of $1.81 per share on June 11, 2012, the day before Cypress (CY) publicly disclosed its offer for Ramtron, and a significant increase to Cypress's prior offer. The offer and withdrawal rights will expire at 12:00 midnight, New York City time, on July 19, 2012, unless the offer is extended
Micron (MU $5.86 -0.27) reported a third quarter loss of $0.32 per share, $0.12 worse than the Capital IQ Consensus of ($0.20), while revenues rose 1.5% year/year to $2.17 billion versus the $2.01 bln consensus. Revenues from sales of DRAM products in the third quarter of fiscal 2012 were 20% higher due primarily to a 12% increase in sales volume and a 7% increase in average selling prices compared to the second quarter of fiscal 2012, which included the adverse impact of a $58 million charge to revenue. Revenues from sales of NAND Flash products were slightly higher in the third quarter of fiscal 2012 compared to the second quarter of fiscal 2012, due primarily to an approximate 40% increase in sales volume offset by decreases in average selling prices. Sales of NOR Flash products were approximately 10% of total net sales for the third quarter of fiscal 2012. The company's consolidated gross margin of 11% in the third quarter of fiscal 2012 was slightly higher than the second quarter of fiscal 2012. Improvements in margins from sales of DRAM and NOR Flash products were partially offset by declines in margins from sales of NAND Flash products.
Red Hat (RHT $52.48 -3.96) reported first quarter earnings of $0.30 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.27, while revenues rose 18.9% year/year to $314.7 million versus the $310.74 million consensus. Subscription revenue for the quarter was $272.6 million, up 21% year-over-year.
Argus initiated Facebook (FB $32.31 +0.71) with a Hold saying while the company has become the giant of the social networking business, its botched IPO has raised a number of concerns about its business model. Management has begun to address questions regarding the efficacy of advertising on Facebook, though it is still unclear how it will monetize the fast growth in mobile access.
09:40 am RedHat shares fall over 5% following disappointing earnings
Red Hat (RHT $52.81 -3.71) reported first quarter earnings of $0.30 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.27, while revenues rose 18.9% year/year to $314.7 million versus the $310.74 million consensus. Subscription revenue for the quarter was $272.6 million, up 21% year-over-year.
09:38 am Micron shares fall 3% following disappointing earnings
Micron (MU $5.93 -0.19) reported a third quarter loss of $0.32 per share, $0.12 worse than the Capital IQ Consensus of ($0.20), while revenues rose 1.5% year/year to $2.17 billion versus the $2.01 bln consensus. Revenues from sales of DRAM products in the third quarter of fiscal 2012 were 20% higher due primarily to a 12% increase in sales volume and a 7% increase in average selling prices compared to the second quarter of fiscal 2012, which included the adverse impact of a $58 million charge to revenue.
Revenues from sales of NAND Flash products were slightly higher in the third quarter of fiscal 2012 compared to the second quarter of fiscal 2012, due primarily to an approximate 40% increase in sales volume offset by decreases in average selling prices. Sales of NOR Flash products were approximately 10% of total net sales for the third quarter of fiscal 2012. The company's consolidated gross margin of 11% in the third quarter of fiscal 2012 was slightly higher than the second quarter of fiscal 2012. Improvements in margins from sales of DRAM and NOR Flash products were partially offset by declines in margins from sales of NAND Flash products.
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