From Briefing.com: 4:15 pm : Equities began the session on a positive note after the weekly initial claims were reported at their lowest level since January 2008. However, the number may not be entirely comparable to the prior period as one large state was not included in the total. The early bullish sentiment failed to hold as the major averages reversed during the first hour, and headed for the flat line. As a result, the S&P 500 ended flat.
The latest weekly initial claims count totaled 339,000, which was lower than the widely-expected 370,000. The tally was below the revised prior week count of 369,000. As for continuing claims, they fell to 3.273 million from 3.288 million.
With oil adding in excess of 1.3%, the energy sector outperformed all others. Within the space, coal stocks rallied broadly. Alpha Natural Resources (ANR 8.55, +1.24) and Arch Coal (ACI 7.94, +1.08) both surged near 16.0%. Meanwhile, James River Coal (JRCC 3.74, +0.58) and Peabody Energy (BTU 26.18, +2.15) added 18.4% and 9.0%, respectively. The strength in coal is likely related to the recent surge in natural gas prices as more expensive gas makes coal an attractive alternative. It should also be noted that iron ore prices have been on the rise. This is seen as bullish for coal which is used in conjunction with iron ore to make steel.
Other energy names also saw gains, albeit less robust. Oil drilling equipment supplier Schlumberger (SLB 72.42, +1.34) advanced 2.3% after Howard Weil upgraded the shares to ‘focus stock' from ‘outperform.' SLB's peer, Lufkin (LUFK 54.39, +1.84) also saw its shares upgraded by Howard Weil. The company's rating was raised to ‘outperform' from ‘market perform' and its shares settled higher by 3.5%.
The telecom space was the biggest laggard as a couple of sector components appeared in the headlines. Sprint Nextel (S 5.76, +0.72) advanced 14.3% after the company confirmed reports which indicated Softbank is looking to acquire a stake in Sprint.
MetroPCS (PCS 11.64, -0.40) slid 3.3% after separate reports suggested that Sprint has not considered making a bid to rival the one from Deutsche Telekom's T-Mobile USA unit. Other major telecom names were relatively weak as AT&T (T 36.51, -0.41) and Verizon (VZ 45.30, -0.48) ended with respective losses of 1.6% and 1.1%.
The Dow Jones Transportation Average remains in the spotlight as the bellwether group looks to recouple with the broader market. After outperforming the remaining industrials during recent sessions, the transportation average traded in-line with the Dow. Heavy vehicle lessor, Ryder Systems (R 42.40, +0.44) led the 20-stock complex with a 1.1% gain. Meanwhile, shipper Overseas Shipholding Group (OSG 5.88, -0.23) trailed the remaining transportation stocks before ending with a loss of 3.8%.
It should be noted that Overseas Shipholding Group was weaker while other oil tanker shippers like Nordic American Tankers (NAT 9.33, +0.05), Frontline (FRO 3.53, +0.01), and Teekay (TK 31.91, +0.39) all posted gains between 0.3% and 1.2%.
Oshkosh Truck (OSK 28.89, +2.04) spiked 7.6% after Carl Icahn announced his intention to commence a tender offer for "any and all" of the outstanding shares of Oshkosh at $32.50 per share. In addition, Mr. Icahn said he plans to nominate directors to the company's board. Oshkosh responded by saying it will advise shareholders of its positioning regarding the offer and that Carl Icahn was unsuccessful in his prior attempt to elect any of his six director nominees during last year's annual meeting.
Navistar (NAV 22.61, +0.62) also surged on the news as Carl Icahn's plan includes merging the two truck makers. The stock settled higher by 2.8%.
Elsewhere, Cooper Tire (CTB 19.78, +1.09) surged 5.8% after earlier reports indicated India's Apollo Tyres is looking to acquire Cooper. Peer Goodyear Tire (GT 12.44, +0.11) added 0.9% while American Axle & Manufacturing Holdings (AXL 12.07, +0.09) added 0.8%.
The trade deficit widened to $44.2 billion during August after the prior month's reading was revised down to $42.5 billion. Economists polled by Briefing.com had expected that the deficit would come in at $43.6 billion.
Separately, export prices, excluding agriculture, increased by 0.7% in September after they had increased by 0.4% in the prior month. Excluding oil, import prices rose by 0.2%, which follows the 0.2% decrease experienced in the prior month.
Tomorrow, September PPI and core PPI will be reported at 8:30 ET. In addition, the October Michigan Sentiment will be released at 9:55 ET.DJ30 -18.58 NASDAQ -2.40 SP500 +0.28 NASDAQ Adv/Vol/Dec 1465/1.56 bln/971 NYSE Adv/Vol/Dec 1991/646.7 mln/1024
3:30 pm : Crude oil spent pit trade in positive territory as a weaker dollar index and continued tension between Turkey and Syria supported the advance. The energy component traded up to a session high of $92.94 per barrel in morning action but retreated slightly following inventory data that showed a build of 1.672 mln barrels when a build of 1.5 mln barrels was anticipated. Still, it settled with a 1.0% gain at $92.18 per barrel.
Natural gas came off its pit session low of $3.50 per MMBtu and popped to a session high of $3.63 per MMBtu on bullish inventory data that showed a build of 72 bcf when a build of 80 bcf was expected. Despite losing some steam in afternoon action, it settled 4.0% higher at $3.61 per MMBtu and hit a new high for 2012 at $3.63/MMBtu.
Gold also traded higher during today's pit session as the dollar index weakened. The yellow metal fell off its session high of $1776.60 per ounce to a session low of $1766.30 per ounce following initial unemployment data. It eventually settled with a 0.3% gain at $1770.50 per ounce. Silver touched a session high of $34.38 per ounce moments after pit trade opened but gave up gains as the session progressed. It closed 0.1% lower at $34.08 per ounce, or just above its session low of $34.04 per ounce.DJ30 +8.51 NASDAQ +6.68 SP500 +3.86 NASDAQ Adv/Vol/Dec 1536/1304.6 mln/890 NYSE Adv/Vol/Dec 2129/451 mln/892
4:21PM Advanced Micro lowers Q3 rev, gross margin guidance (AMD) 3.20 +0.05 : Co issues downside guidance for Q3 (Sep), sees Q3 (Sep) revs -10% QoQ (down from +2 to -4%) to ~$1.271 bln vs. $1.38 bln Capital IQ Consensus Estimate. The lower than anticipated preliminary revenue results are primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment. The co now expects third quarter gross margin to be ~31%; less than the previous expectation of ~44% primarily due to an inventory write-down of ~$100 million due to lower anticipated future demand for certain products. Third quarter gross margin was also negatively impacted by weaker than expected demand, which contributed to lower than anticipated average selling prices (ASPs) for the co's Computing Solutions Group products and lower than expected utilization of its back-end manufacturing facilities. Operating expenses for the third quarter are expected to decline ~7% QoQ as a result of tightly controlled expenses in the quarter. AMD will report third quarter 2012 results after market close on Thursday, October 18, 2012.
4:20PM Advanced Micro initially drops 6.3% to $3.00 after issues Q3 prelim revs below consensus and lowering Q3 its gross margin outlook; AMD is now at $3.00 after hours (AMD) 3.20 +0.04 :
4:00PM RF Micro Device announces ITC lawsuit withdrawn by plaintiffs (RFMD) 3.67 0.00 : Co announced that Peregrine Semiconductor (PSMI) has filed a motion to voluntarily withdraw the lawsuit it filed against RFMD in the U.S. International Trade Commission (ITC) in February 2012. RFMD believes the decision by Peregrine to terminate the ITC proceeding is in response to developments in the case that have consistently validated RFMD's longstanding position that no infringement of Peregrine's patents occurred and that the validity of the asserted Peregrine patents is clearly in doubt. RFMD respects the intellectual property rights of others and takes care to avoid infringements.
Juniper Networks (JNPR) announced the world's most powerful edge services router and a single, virtualized platform for rapid deployment of multivendor applications.
1:23AM Suntech Power responds to final DOC determination (STP) 0.89 : Co offers statement regarding the U.S. Department of Commerce's final determination to impose countervailing duties (CVD) of 14.78% and anti-dumping duties of effectively 21.19% on Suntech's crystalline silicon photovoltaic cells imported from China. "Unilateral trade barriers will not make any one company more competitive, but will make solar less competitive against other forms of electricity generation. These ill-conceived taxes on solar products were the outcome of an unrealistic analysis...It's unfortunate that the process works this way; however, Suntech is well-prepared for the future and to serve the needs of our customers."
Extreme Networks (EXTR $3.35 +0.05) announced its Board of Directors has authorized the repurchase of common stock worth up to $75 million which may be purchased over the next three years from time to time in the open market or in privately negotiated transactions. Extreme Networks will fund the share repurchases from cash on hand, which was approximately Co announced its Board of Directors has authorized the repurchase of common stock worth up to $75 million which may be purchased over the next three years from time to time in the open market or in privately negotiated transactions. Extreme Networks will fund the share repurchases from cash on hand, which was approximately $200 million as of September 30, 2012. As of August 6, 2012, there were approximately 95 million shares of common stock outstanding.00 million as of September 30, 2012. As of August 6, 2012, there were approximately 95 million shares of common stock outstanding.
FBR Capital Markets are adjusting their Microsoft (MSFT $29.65 +0.16) estimates to reflect the impact of the Office 2013 upgrade program on the company's revenues. While the firm believes the company is in the midst of a healthy product cycle. they remain concerned over headwinds in the PC market in 2012 and beyond in the face of the macro environment, European weakness, consumerization of IT, and supply chain issues. To this point, they are taking a wait-and-see approach on the prospects of the new operating system and its potential impact to growth. THey are lowering their F1Q13 revenue and pro forma EPS estimates from $16.8 billion and $0.60 to $16.7 billion and $0.59, respectively (First Quarter Capital IQ Consensus $0.60/16.56 billion). FBR notes
Research In Motion's (RIMM $7.82 -0.04) August-ending quarter's result was significantly stronger than many investors expected. While a look at RIMM's operating metrics clearly reflected a Co under continued duress, mgmt seemed to ameliorate a tough situation and has slowed RIMM's rate of decline. Overall, mgmt seems to have emphasized revs, ASPs, smartphone units, subscriber net adds, and operating cost controls at the expense of GMs, service ARPU, and tablet sales. FBR expects the same trends to continue through year-end and up to the BB10 launch, when mgmt likely begins emphasizing upgrading corporate customers in its developed markets. FBR reiterates Underperform but raises its target to $6.50 from $6.
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