Sector Investing

[ReturntoSender]

From Briefing.com: 4:20 pm : After opening higher by 0.5%, stocks maintained their gains throughout the session. Similar to yesterday, low volume kept the markets relatively flat following the opening thrust higher. With no economic data of note being released, stocks maintained their gains and came off their highs towards the end of the session. As the day ended, the S&P 500 faded towards its opening level and the index ended up 0.5%.

Fossil (FOSL 91.77, +21.98) surged by 31.5% after the company increased full-year guidance following an earnings and revenue beat. Today's buying lifted the stock out of a range which has held for three months. Competitor Movado (MOV 25.78, +3.06) benefited from Fossil's strength as investors expect Movado to also surprise to the upside. Shares of the luxury goods producer ended higher by 13.5%.

US Home Systems (USHS 12.53, +3.47) gained 38.3% after Home Depot (HD 52.40, +0.40) agreed to buy the company for $12.50 per share.

Energy was today's strongest performer. Within the group, Overseas Shipholding Group (OSG 6.66, +0.62) leaped 10.3% after a company director purchased 100,000 shares at $5.82. Chesapeake (CHK 19.37, +1.67) jumped 9.4% following a positive earnings report.

Financials showed considerable strength. The SPDR Financial Select Sector ETF (XLF 14.94, +0.06) advanced 0.4%. Within the sector, JPMorgan Chase (JPM 37.01, +0.71) and Citigroup (C 28.89, +0.33) rose by 2.0% and 1.2% respectively. In addition, Morgan Stanley (MS 14.50, +0.36) gained 2.6%.

Telecommunications was one of the weakest sectors. Inteliquent (IQNT 12.14, -1.78) weighed down the group after posting earnings and revenues below-expectations. The company also lowered their full-year forecast. Today's 12.8% decline puts the stock back at its mid-May levels.

Shares of major pharmaceutical producers did not participate in today's advance. Elan (ELN 11.15, -0.10), Pfizer (PFE 23.74, -0.52), and Johnson & Johnson (JNJ 68.29, -0.55) announced that they will stop developing a treatment for Alzheimer's disease because of disappointing clinical results. All three stocks posted losses with Elan and Pfizer losing 0.9% and 2.1% respectively while Johnson & Johnson was off by 0.8%.

The dollar index was virtually unchanged as the dollar's performance against the major currencies was mixed. The reserve currency gained 0.5% against the Japanese yen, and currently trades near 78.60. The British pound advanced 0.2% against the greenback to near 1.5630. The euro came off session highs and ended unchanged versus the dollar. The single currency trades around 1.2400. Also of note, the Australian dollar crossed 1.0600 which was a level not seen in five months. The Aussie has pulled back slightly since, to 1.0555.

As earnings season winds down, a few notable companies have yet to report their quarterly results. Express Scripts (ESRX 56.02, +0.04), Priceline.com (PCLN 679.80, +14.68), and Walt Disney (DIS 49.81, +0.16) will release their earnings following today's close.

In addition, Dean Foods (DF 12.42, +0.20), Dish Network (DISH 30.67, +0.16), and Polo Ralph Lauren (RL 153.03, +2.97) will report tomorrow morning.

Tomorrow's economic data includes the MBA Mortgage Index due out at 7 AM ET.

In addition, preliminary nonfarm productivity and unit labor costs will be released at 8:30 AM ET. Treasury will auction off 10-yr notes.DJ30 +51.09 NASDAQ +25.95 SP500 +7.12 NASDAQ Adv/Vol/Dec 1599/1.85 bln/880 NYSE Adv/Vol/Dec 1949/728.4 mln/1065

3:30 pm : Energy: Sept crude oil ($92.30 +0.90) rallied this morning for over $1/barrel, off its session low of $90.63, which was hit 15 minutes after floor trading began. Crude went on to rise as high as $92.39 right when pit trading was ending.

Aug natural gas ($2.91 +0.03) started the overnight session and the early morning session in negative territory before gaining steam, which began an uptrend that has basically lasted since morning action. After bottoming out in the morning at $2.80, nat gas went on to climb 12 cents of 4.3% to its floor trading high of $2.92/MMBtu. In after hours trade, nat gas has extended those gains are just hit $2.94.

Metals: August gold ($1616.00 +7.20) and Sept silver ($27.87 +0.09) began to move higher this morning and rose to their session highs mid-morning (Gold $1617.90, Silver $27.95). Gold went on to inch lower for the rest of the session and in after hours activity, but has only pulled back $2 per ounce. Silver, in after hours trade, is back neat the unchanged mark. July copper closed 2 cents higher at $3.39.DJ30 +61.27 NASDAQ +27.49 SP500 +8.14 NASDAQ Adv/Vol/Dec 1615/1553.4 mln/855 NYSE Adv/Vol/Dec 1959/491 mln/1037

7:00PM Sigma Designs' Z-Wave approved for use in home control devices in Japan (SIGM) 6.83 +0.02 : Co announced that Japan's Ministry of Public Management, Home Affairs, and Telecommunications, has approved a radio frequency range for low-power RF device usage in Japan. As a direct result, Sigma Z-Wave-based control and automation devices for smart homes and small business can be used in the region without the need for radio station licensing. Z-Wave is one of Sigma Designs' fastest-growing technologies, and the company has seen significant worldwide adoption over the past few years, particularly in the smart home automation and control, security, telecommunications and energy markets.

4:39PM Photronics lowers Q3 guidance (PLAB) 6.14 +0.14 : Co issues downside guidance for Q3 (Jul), lowers EPS to $0.14-0.16 from $0.14-0.18 vs. $0.16 Capital IQ Consensus Estimate; lowers Q3 (Jul) revs to ~$116 mln from $118-123 mln vs. $121.83 mln Capital IQ Consensus Estimate. Third quarter revenue is expected to be lower than previously anticipated due to softening demand during the last few weeks of July for high-end integrated circuit (IC) and flat panel display (FPD) photomasks. "The general worldwide softness in demand for semiconductors and displays began to affect photomask orders especially high-end IC, principally memory, during the past few weeks."

4:18PM Pericom Semi beats by $0.02, beats on revs; guides Q1 revs in-line (PSEM) 8.17 -0.15 : Reports Q4 (Jun) earnings of $0.10 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.08; revenues fell 12.5% year/year to $37.9 mln vs the $36.03 mln consensus. Co issues in-line guidance for Q1, sees Q1 revs of $36-40 mln vs. $37.06 mln Capital IQ Consensus Estimate. The co also sees Q3 non-GAAP gross margins to be in the 36.2% to 38.2% range. Non-GAAP operating expenses are expected to be in the range of $11.4 million to $11.9 million and the effective tax rate is expected to be approximately 24-30% on a non-GAAP basis.

4:13PM STEC misses by $0.01, reports revs in-line; guides Q3 EPS below consensus, revs below consensus (STEC) 7.52 -0.22 : Reports Q2 (Jun) loss of $0.27 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of ($0.26); revenues fell 50.7% year/year to $40.7 mln vs the $41.02 mln consensus. Co issues downside guidance for Q3, sees EPS of $(0.31)-(0.27), excluding non-recurring items, vs. ($0.19) Capital IQ Consensus Estimate; sees Q3 revs of $40-42 mln vs. $48.83 mln Capital IQ Consensus Estimate.

4:05PM Cree beats by $0.02, reports revs in-line; mid-point of SepQ EPS guidance below consensus, revs below consensus (CREE) 26.34 +0.59 : Reports Q4 (Jun) earnings of $0.25 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.23; revenues rose 26.2% year/year to $306.8 mln vs the $306.2 mln consensus. Co issues downside guidance for Q1 (Sep), sees EPS of $0.23-0.28, excluding non-recurring items, vs. $0.28 Capital IQ Consensus Estimate; sees Q1 revs of $305-325 mln vs. $328.7 mln Capital IQ Consensus Estimate.

8:49AM Silicon Labs: MaxLinear (MXL) files claims asserting Silicon Labs infringes MaxLinear patents used in a broad range of Silicon Labs' products (SLAB) 38.33 : MaxLinear (MXL) announced that it has filed counterclaims against Silicon Laboratories (SLAB) in U.S. District Court in the Southern District of California, San Diego Division. The patent counterclaims assert that a broad range of Silicon Laboratories' products spanning TV tuners and receivers, satellite and FM and multiband receivers, and wireless MCUs infringe one or more of three MaxLinear patents: United States Patent Nos. 7,362,178; 8,198,940; and 7,778,613. The counterclaims seek damages and an injunction to stop the sale of the infringing Silicon Laboratories products.

7:47AM RDA Microelectronics beats by $0.01; misses on revs; guides revs below consensus (RDA) 10.18 : Reports Q2 EPS of $0.32 vs $0.31 CIQ est; revs increased 40% YoY to $94.4 mln vs $96.1 mln CIQ est. For the third quarter of 2012, the co expects revenue to be in the range of $100-110 mln vs $$114.1 mln CIQ est. The co expects gross margins to be in the range of 30.8-31.2%.

AMD (AMD) launched its latest line of workstation graphics, leading with the AMD FirePro(TM) W9000 Graphics Processing Unit, according to co, the most powerful workstation graphics card ever created. Co also launched the AMD FirePro A300 Series Accelerated Processing Unit for entry-level and mainstream desktop workstations.

10:36 am S&P Information Technology trading higher today with gains in the broader market

The tech sector is trading higher today, inline with gains in the broader market. Semiconductors are showing relative strength, however, with the SOX trading 1.7% higher. NXPI (+6.9%) is a notable leader in the chip index. Among other major indices, the SPY is trading 0.7% higher today, while the QQQ and the NASDAQ are trading 0.8% higher on the session. Among tech bellwethers, CSCO (+2.2%) is showing notable weakness, while GOOG (-0.8%) is trending lower.

In earnings last night, LEAP (-22.3%) and TWTC (-2.7%) posted a qtrly misses, while JDAS (-1.6%) reported a mixed Q2 and BSFT (+29.5%) posted a beat. This morning, NUAN (-0.6%) reported a Q3 beat. In news, HTCH (+0.8%) named Richard Penn President and CEO and Wayne M. Fortun was appointed Chairman of the board.

Among notable analyst upgrades this morning in the tech space, AMAT (+3.2%), LSI (+4.3%), FLEX (+6.6%) and FSL (+8.8%) were upgraded at Goldman. In downgrades, LEAP (-22.3%) was downgraded at Baird and Hudson Square, while ATML (+3.8%) and SANM (-2.5%) were downgraded to Neutral at Goldman. RAX (+2.5%) is the notable name in tech scheduled to report quarterly results today after the close.