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From Briefing.com: Weekly Recap - Week ending 26-Oct-12

Dow +3.53 at 13107.26, Nasdaq +1.83 at 2987.95, S&P -1.03 at 1411.93

Equities showed indecision in the early going after Apple (AAPL 604.00, -5.54) and Amazon (AMZN 238.24, +15.32) delivered disappointing results, while the first reading of the third quarter GDP was reported ahead of expectations. The S&P 500 followed the early choppiness with a late-morning slide into the red. After reaching session lows near 1,403, the index reversed and headed for fresh highs. However, the benchmark average could not hold its best level of the day and settled lower by 0.1%.

The advance GDP reading for the third quarter suggested the economy grew at a 2.0% rate in the second quarter when an increase of 1.9% had been expected among economists polled by Briefing.com. The slight beat comes as government spending contributed 0.7% to the number. The third quarter chain deflator reportedly increased by 2.8%, which was ahead of the 2.0% increase that had been broadly anticipated.

Technology stocks were in the spotlight as the market reacted to earnings from major sector components. Apple shed 0.9% after reporting mixed results. During the fourth quarter, the tech giant earned $8.67 which was $0.08 worse than the Capital IQ consensus estimate. Meanwhile, the company's revenue of $35.97 billion was in-line with expectations. The gross margin guidance, however, was a point of concern as the company expects the number to be near 36.0% in the first quarter, versus the 40.0% expected by analysts. Also note that the company lowered its earnings and revenue guidance below consensus.

Amazon gained 6.9% after reporting its earnings. The online retailer lost $0.23 per share. However, the number may not be comparable to the Capital IQ consensus estimate which forecast a loss of $0.10. The company's revenue of $13.81 billion was largely in-line with expectations, but management issued downside fourth quarter guidance.

Comcast (CMCSA 37.56, +1.20) advanced 3.3% after beating on earnings and revenues. The management commented on the reporting period by saying, "The third quarter continues our momentum. Cable's results show real strength in every part of the business, producing sustainable and profitable growth while we expand our product offerings, deliver more innovation and continue to transform the customer experience."

NetSuite (N 65.40, +8.49) surged 14.9% after the maker of ERP software reported earnings of $0.08 on $79.8 million in revenue. Both numbers came in ahead of the Capital IQ consensus estimates.

Coal stocks were broadly higher after Arch Coal (ACI 8.09, +0.78) and Cloud Peak Energy (CLD 21.20, +2.21) beat on earnings and revenues. During the third quarter, Arch Coal earned $0.20, which was $0.35 ahead of the Capital IQ consensus estimate. In addition, the company's revenue of $1.09 billion was also ahead of expectations. ACI settled higher by 10.7% in reaction to earnings.

Meanwhile, Cloud Peak Energy reported earnings of $0.80, which was $0.32 ahead of the Capital IQ consensus estimate. The company's revenue of $425.9 million was well ahead of the $393.57 million expected by the Capital IQ consensus. Cloud Peak stock surged 11.6%.

Arch Coal and Cloud Peak posted notable gains, and other coal stocks moved higher as well. Alpha Natural Resources (ANR 8.71, +0.28) and James River Coal (JRCC 5.09, +0.29) saw respective gains of 3.3% and 6.0%.

The Dow Jones Transportation Average outperformed the broader market, and added 0.3%. Expeditors International of Washington (EXPD 36.43, +0.65) was the top performer among transportation stocks. The delivery service provider advanced 1.8% after Goldman upgraded the stock to ‘conviction buy' from ‘sell' with a $42 price target.

Railroads also outperformed. Kansas City Southern (KSU 81.25, +1.22) rose by 1.5%, while Norfolk Southern (NSC 62.77, +0.20) and Union Pacific (UNP 123.61, +1.97) gained 0.3% and 1.6%, respectively.

Meanwhile, Overseas Shipholding Group (OSG 1.23, -0.09) was the biggest laggard. The oil tanker shipper dipped 6.8% to continue its recent weakness.

Homebuilder stocks saw general weakness and the SPDR S&P Homebuilders ETF (XHB 25.52, -0.10) settled lower by 0.4%. Among individual builders, Standard Pacific (SPF 6.90, -0.85) slid 11.0% after announcing disappointing quarterly results. During the third quarter, Standard Pacific earned $0.05, which was $0.03 worse than the Capital IQ consensus estimates. The company's revenue of $318.5 million also fell short of the $385.02 million expected by analysts. Peers DR Horton (DHI 20.76, -0.35), Lennar (LEN 37.02, -0.49), and Ryland Group (RYL 33.76, -0.30) all lost between 0.9% and 1.7% in sympathy.

The University of Michigan's final Consumer Sentiment Survey for October rose to 82.6 from the 83.1 that was posted in the preliminary Survey. Many had expected the reading to go unrevised.

Weekly Recap: Stocks Stumble Amid Disappointing Earnings

On Monday, stocks got off to a quiet start as mixed quarterly reports continued to pour in. Indecision was apparent in the early going as the major averages traded near their respective unchanged levels. As the day progressed, the S&P 500 and Dow headed lower. However, the final hour brought out bargain-hunters who lifted the major averages near their respective session highs. As a result, the S&P 500 ended unchanged. Meanwhile, the Nasdaq outperformed and settled higher by 0.4%. Caterpillar (CAT 84.25, +0.72) advanced 1.5% after reporting mixed earnings.

Tuesday's session started with an opening sell-off as disappointing earnings combined with Moody's downgrade of five Spanish regions fueled the bearish sentiment. Stocks reached session lows during the first hour before attempting to rebound. The tech-heavy Nasdaq showed intraday resilience, but the attempt to reclaim its early losses was cut short when late-day selling sent the index back near the middle of its range. As a result the Nasdaq ended lower by 0.9% while S&P 500 lost 1.4%. Stocks in the materials space saw the biggest weakness. Among steel producers, AK Steel (AKS 5.19, -0.02) fell 5.8% despite beating on earnings and reporting revenues in-line with the Capital IQ consensus.

On Wednesday, stocks began the session on an upbeat note, but the bullish sentiment was dispelled in the opening minutes. The S&P 500 and Nasdaq marked their respective highs minutes into the trading day, before sliding back towards the unchanged level. The Dow, however, held its gains a bit longer before recoupling with the other two indices. This afternoon's statement from the Federal Open Market Committee was met with mostly muted reaction, and the S&P 500 finished lower by 0.3%. Buffalo Wild Wings (BWLD 75.87, +1.05) fell 10.5% after missing on both earnings and revenues.

Thursday's session began with a bullish bias which failed to hold past the opening minutes. After opening near session highs, the S&P 500 spent the first hour in a steady decline towards the flat line. Once that level was reached, the index spent the remainder of the day trapped in a narrow range before ending with a slim gain of 0.3%. Casino stocks saw broad strength after Wynn Resorts (WYNN 118.97, -1.46) delivered strong third quarter results and surged 7.3%.

 
 Index       Started Week  Ended Week  Change  % Change  YTD % 
 DJIA	      13343.51	   13107.21  -236.30	-1.8	7.3 
 Nasdaq	       3005.62	    2987.95   -17.67	-0.6   14.7 
 S&P 500	1433.19	    1411.94   -21.25	-1.5   12.3 
 Russell 2000    821.00       813.25    -7.75	-0.9	9.8

3:04PM Apple puts together strong recovery off 40 wk average (AAPL) 608.97 -0.57 : Noted in the 12:34 update (chart included) that AAPL was testing support near its 40 wk/200 day averages which had provided important support on several occasions since the 2009 bear market low. The 40 wk average came in at 591 today (session low 591) with it running as high as 610 (last week's low/congest) this afternoon. Initial resistance above the session high (614) is in the 619/620 zone. If some corrective trade develops there is support at 603/602 and 600.

9:26AM Corning announced that it has commenced a cash tender offer for up to $75 million aggregate principal amount of specified series of its outstanding debt (GLW) 12.08 : Tendered debentures will be accepted in the order of the Acceptance Priority Levels set forth in the table above, up to an aggregate principal amount of $75 mln. Under certain circumstances, the Company will accept tendered debentures of one or more of the series on a pro rata basis as further described in the Offer to Purchase.

STMicroelectronics (STM) has collaborated with Microsoft (MSFT) to develop a motion and orientation Human Interface Device sensor solution for the Windows 8 operating system. ST's MEMS sensors and the sensor-hub solution are now ready to ship in high volumes with the release of Windows 8.

9:03AM Cymer beats by $0.24, misses on revs (CYMI) 79.17 : Reports Q3 (Sep) earnings of $0.31 per share, $0.24 better than the Capital IQ Consensus Estimate of $0.07; revenues rose 2.2% year/year to $131.5 mln vs the $148.67 mln consensus. In the third quarter of 2012, the company shipped 27 DUV light sources, of which 17 were ArF immersion and 10 were KrF, and the company installed 24 DUV light sources at chipmaker locations. "Third quarter profitability exceeded our expectations driven by higher gross margin and lower than forecasted operating expenses. Revenue was below our July guidance as deep ultraviolet light source demand softened throughout the quarter. Additionally, customer acceptance of a Display Products Group Gen 4 tool did not occur in the quarter."

8:40AM Chipmos Technology prices underwritten secondary public offering of 2.5 mln of its common shares at $10.10 per share (IMOS) 11.82 : 1.7 mln common shares are being offered by co shareholder ThaiLin Semiconductor, a subsidiary of ChipMOS, and 800K common shares are being offered by co shareholder Siliconware Precision Industries.

7:53AM Arch Coal beats by $0.35, beats on revs (ACI) 7.31 : Reports Q3 (Sep) earnings of $0.20 per share, excluding non-recurring items, $0.35 better than the Capital IQ Consensus Estimate of ($0.15); revenues fell 9.2% year/year to $1.09 bln vs the $1.02 bln consensus.

Arch shipped 37.5 mln tons of coal in Q3 of 2012, a decrease of 6% when compared with Q3 of 2011 but an increase of 19% versus the second quarter of 2012. Looking ahead, we believe global coal markets are in the process of correcting -- with the domestic thermal market building some momentum while metallurgical markets are bottoming out. Because we expect global coal market conditions to remain challenging in 2013, Arch is executing a strategy to successfully navigate this weak market. Our plan is focused on improving operational efficiency, optimizing our asset base and preserving liquidity so we are well positioned to capitalize as the market recovers."

"Strong cost control in the third quarter led to higher cash margins in Arch's western operating regions. In Appalachia, the effect of lower thermal volumes drove third quarter cash costs higher versus the second quarter. In addition, we shipped 2.1 mln tons of metallurgical coal from Appalachia in the third quarter -- 11 percent more than in the second quarter -- and we expect to ship 7.5 mln tons of coal into metallurgical markets during 2012."

7:38AM Multi-Fineline sees Q4 rev towards upper end of guidance; sees EPS below consensus; guides for Q1 rev above consensus with significant QoQ margin rebound (MFLX) 21.40 : Co issues mixed guidance for Q4 (Sep), sees EPS of ~breakeven vs. $0.24 Capital IQ Consensus Estimate; sees Q4 (Sep) revs of ~$200 mln vs. $192.63 mln Capital IQ Consensus Estimate and $180-210 mln prior guidance. Gross margin during the fourth quarter of fiscal 2012 is expected to be ~5.7 percent, below the cp's guidance range, compared to 10.0% for the same period in the prior year.

Co issues upside guidance for Q1 (Dec), sees Q1 (Dec) revs of $260-280 mln vs. $256.70 mln Capital IQ Consensus Estimate, with gross margin to range between 10.0 to 12.0% based on the projected sales volume and anticipated product mix. "Our anticipated fourth quarter revenue results are in line with our expectations reflecting continued solid demand for our flex assemblies for multiple new programs. However, we experienced much lower yields than anticipated due to the complexity of one new program. We also faced tight ramp schedules across the new programs and saw reduced labor efficiency as we continued to expand our headcount to support anticipated future production levels. These factors negatively impacted our gross margin during the quarter. Since quarter-end, yields on this program have recovered, the balance of our new program ramps are proceeding as planned and our labor utilization has improved. We now expect a significant gross margin rebound in 1Q13. In addition, we completed our capacity expansion project in September which positions us to drive record revenues during the first quarter of fiscal 2013, and support the strong demand forecasts we are seeing from our existing and newer customers for the balance of fiscal 2013."

TriQuint Semiconductor (TQNT) is rolling out new processes to more quickly expand its catalog of broad-market products for commercial and defense customers.

Apple (AAPL $611.56 +2.12) reported fourth quarter earnings of $8.67 per share, $0.08 worse than the Capital IQ consensus of $8.75, while revenues rose 27.2% year/year to $35.97 billion versus the $35.78 billion consensus. Key Metrics: 26.9 million iPhones sold in Q4 versus Street estimate of approximately 25 million. 14 million iPads sold in Q4 versus Street estimate of approximately 17 million. 4.9 million Macs sold in Q4 versus Street estimate of approximately 5 million. The company reported Q4 gross margins of 40.0% versus Street estimate of 40.6% and 38.5% guidance. The company issues downside guidance for Q1, sees EPS of approximately $11.75 versus the $15.53 Capital IQ consensus and sees revenues of approximately $52 billion versus the $54.95 bln Capital IQ consensus. THe company typically guides conservatively.

Amazon (AMZN $228.53 +5.61) reported third quarter loss of $0.23 per share, excluding a $0.37 loss due to LivingSocial, which may not compare to the Capital IQ consensus of ($0.10), while revenues rose 26.9% year/year to $13.81 billion versus the $13.91 billion consensus. Company's Q3 operating income ($28) million versus ($350)-($50) million guidance and the ($44) million consensus. The company issued downside guidance for fourth quarter revenues of $20.25-22.75 billion versus $22.85 billion consensus. Amazon (AMZN) sees Q4 operating income of a loss of $490 million to positive $310 million versus the consensus of $368 million.

10:45 am Information Technology Index trading lower today and ahead of the broader market

The tech sector is trading just higher today, ahead of moderate losses in the broader market. Semiconductors are showing relative strength with the SOX trading 0.5% higher. Within the chip index, IDCC (+6.9%) is a notable standout. Among other major indices, the SPY is trading 0.2% lower today, while the QQQ is up 0.2% and the NASDAQ is trading 0.1% lower on the session. Among tech bellwethers, QCOM (+1.9%) is leading the pack, while FB (-1.8%) is once again showing notable weakness. There was another flurry of tech earnings last night, and none were bigger than AAPL (-0.3%), which posted a relatively inline quarter and offered downside guidance. AMZN (+3.2%) was the other big name to report; it reported a slight miss.

Elsewhere, N (+13.4%) posted a beat, IM (+0.7%), CTCT (-24.0%), and FSL (+1.6%) posted beats and lower guides, MXIM (+5.6%) and SYNA (+11.5%) reported beats and guided inline, and KLAC (-0.3%) and CA (-7.8%) reported a miss and issued downside guidance. This morning, ERIC (-5.0%) posted a Q3 revenue shortfall. Among rumors, there was a report out late yesterday that AAPL (-0.3%) was prepping to enter the streaming radio mkt, which would impact P (-2.3%). In notable analyst upgrades this morning in the tech space, SAP (+0.4%) was upgraded to Buy at BofA/Merrill and N (+13.4%) was upgraded to Outperform at Northland. Among downgrades, CTCT (-24.0%) was downgraded at Needham, Lazard and Credit Suisse, FSL (+1.8%) was downgraded to Neutral at Piper, PLXS (-2.1%) was downgraded to Hold at Deutsche Bank, and Feltl & Co. downgraded SYNA (+11.6%) to Sell.