Sector Investing

[ReturntoSender]

From Briefing.com: 4:20 pm : The S&P 500 endured choppy trade during the first two hours of action. The index followed the early indecision with a run to session highs where it spent the majority of the afternoon. The market received some encouraging news from the Middle East where Israel and Hamas have reached a cease-fire agreement. However, the Eurozone remains a concern into the holiday as the next tranche of Greek aid is yet to be approved. Today's trade was confined to a tight range and volume was well below average. As a result, the S&P 500 ended higher by 0.2%.

The technology sector outperformed the broader market and the SPDR Technology Select Sector ETF (XLK 28.39, +0.09) settled higher by 0.3%. Apple (AAPL 561.70, +0.78) has been in focus recently due to the extended weakness observed in the stock during the past two months. Today, the biggest tech component tacked on 0.1% as the shares attempt to establish support in the $550 area.

In notable tech earnings, Salesforce.com (CRM 158.66, +12.76) spiked 8.8% after beating on the top and bottom lines. In addition to the quarterly beat, the cloud computing company issued in-line fourth quarter and full-year earnings and revenue guidance. Peer SAP (SAP 75.23, +0.87) added 1.2%.

Elsewhere, NCI (NCIT 4.58, +0.24) surged 5.5% after the company was awarded multiple task orders as part of its contract with the U.S. Army. The total value of the orders was reported at $27.1 million.

Also of note, Cirrus Logic (CRUS 31.16, +0.82) advanced 2.7% after the company's Board of Directors authorized the repurchase of up to $200 million of the company's common stock.

Industrial bellwether Deere (DE 82.83, -3.16) fell 3.7% after reporting mixed results. During the fourth quarter, the machinery manufacturer earned $1.75, which was $0.13 short of the Capital IQ consensus estimate. However, the company's revenue of $9.05 billion represented a 14.5% year-over-year increase, and beat expectations. Deere's outlook was mostly positive as the company expects full-year 2013 revenue above consensus and net income in-line with expectations.

The Dow Jones Transportation Average added 0.3%. Railroads saw relative weakness yesterday, but displayed strength today. Kansas City Southern (KSU 76.33, +0.69) and Norfolk Southern (NSC 57.03, +0.12) finished higher by 0.9% and 0.2%, respectively.

On the other hand, airlines which outperformed yesterday were among the biggest laggards. JetBlue Airways (JBLU 5.07, +0.05) and Southwest Airlines (LUV 9.24, +0.13) saw respective gains of 1.0% and 1.4%.

Today's choppy price action was reflected in the performance of individual sectors. However, utilities opened as the weakest performing group, and remained there for the duration of the session. Electrical companies have been pressured since Hurricane Sandy, and their shares felt the brunt of today's weakness. The SPDR Utilities Select Sector (XLU 34.18, -0.15) slid 0.4%. Among individual electricity producers, Duke Energy (DUK 60.23, -0.55) and NextEra Energy (NEE 67.25, -0.46) both lost near 0.7%.

The weekly MBA Mortgage Index pointed to a 2.2% decrease in mortgage applications during the past week. Today's reading followed prior week's increase of 12.6%.

The latest weekly initial jobless claims count totaled 410,000, which was lower than the 423,000 that had been expected by the Briefing.com consensus. The tally was below the revised prior week count of 451,000. As for continuing claims, they fell to 3.337 million from 3.367 million.

The University of Michigan's final Consumer Sentiment Survey for November fell to 82.7 from the 84.9 that was posted in the preliminary Survey. The Briefing.com consensus expected the reading to slip to 84.5.

Lastly, leading indicators for October increased by 0.2%, which was in-line with the forecast. Today's reading followed prior month's increase of 0.6%.

Note that equity and bond markets will be closed tomorrow in observance of Thanksgiving. Trading will resume on Friday, but the final session of the week will end at 13:00 ET.DJ30 +48.38 NASDAQ +9.87 SP500 +3.22 NASDAQ Adv/Vol/Dec 1556/1.36 bln/857 NYSE Adv/Vol/Dec 2016/521.9 mln/969

3:30 pm : Commodities displayed some notable volatility today, especially in the oil market. Inventory data came out for oil and for natural gas today. Oil data didn't cause the commodity to do much initially, but sellers began to step in later, cause the Dec contract to fall below the $86.50 mark. Crude recovers those losses with an afternoon rally, to end the day 0.7% higher at $87.41/barrel.

Natural gas futures spiked following inventory, which pushed the December contract as high as $3.91. At the end of today's floor trading session, nat gas closed 2.3% higher at $3.91/MMBtu.

Precious metals ended the day higher, while copper (base metal) slid modest lower. In morning action, gold and silver rallied higher, allowing Dec gold to ended the day up 0.3% at $1723.70/oz and Dec silver up 1% at $33.29. Dec copper lost 2 cents to finish at $3.50/lb.DJ30 +42.82 NASDAQ +7.67 SP500 +1.93 NASDAQ Adv/Vol/Dec 1402/1162.3 mln/994 NYSE Adv/Vol/Dec 1829/370 mln/1144

12:21PM Arch Coal completes senior note and term loan offerings, amends credit facility (ACI) 6.46 +0.06 : Co closed on its previously announced $375 mln senior unsecured notes and $250 mln incremental secured term loan. Under the terms of the credit agreement, the $250 mln incremental term loan will reduce the size of Arch's revolving credit facility to $350 mln from $600 mln. The company intends to use the net proceeds from these financings for general corporate purposes. Following these transactions, Arch has cash and investments of $1.2 bln and total available liquidity of approximately $1.4 bln, on a pro forma basis as of Sept. 30. Co has successfully amended its senior secured revolving credit facility, relaxing the financial maintenance covenants until Dec. 31, 2015. Among other revisions, Arch must adhere to a minimum liquidity covenant that requires the company to maintain available liquidity of at least $450 mln through Dec. 30, 2015.

9:15AM Benchmark Elec appoints Peter Dorflinger as Non-Executive Chairman of the Board (BHE) 15.09 : Co announced its succession plan for Chairman of the Board, appointing current board member Peter G. Dorflinger to serve as non-executive chairman, subject to his re-election as a Company director by shareholders at its annual meeting in May 2013. Mr. Dorflinger, general partner of MAD Capital Partners, has been a director of Benchmark since its initial public offering in 1990. Mr. Dorflinger succeeds Company founder Cary T. Fu, who plans to retire from the Company's Board of Directors on Dec 31, 2012.

7:03AM NXP Semi announces extension of the tender offer for 9 3/4% senior secured notes due 2018 (NXPI) 23.29 : Co announced the extension of the expiration time (of the previously announced tender offer by NXP B.V. for up to $500 mln in cash of outstanding U.S. dollar-denominated 9 3/4% Senior Secured Notes due 2018, jointly and severally issued by NXP B.V. and NXP Funding.

United Microelectronics (UMC) introduced an 80nm SDDI foundry process with the most competitive SDDI SRAM bitcell in the foundry industry.

1:36AM ASM Intl NV reports update on share buy back program; purchased 1 mln of its shares at an average price of EUR27.15 per share. The total number of shares repurchased under this program to date is 1.5 mln shares for a total EUR40.6 mln (ASMI) 34.91 :

Salesforce (CRM) reported third quarter earnings of $0.33 per share, $0.01 better than the Capital IQ consensus of $0.32, while revenues rose 34.9% year/year to $788 million versus the $776.52 mln consensus. The company's non-GAAP results exclude the effects of the $149 million charge related to the establishment of the tax valuation allowance, $26 million related to the quarterly change in the tax valuation allowance, $105 million in stock-based compensation expense, $26 million in amortization of purchased intangibles, and $6 million in net non-cash interest expense related to the company's convertible senior notes. GAAP EPS calculations are based on a basic share count of approximately 142 million shares. The company issued in-line guidance for the fourth quarter with EPS of $0.38-0.40 versus the $0.40 consensus and revenues of $825-830 versus the $829.97 million consensus. The company issued in-line guidance for fiscal year 2013 with EPS of $1.50-1.52 versus the $1.50 consensus and revenues of $3.041-3.046 billion versus the $3.03 billion consensus. The company in-line guidance for fiscal year 2014 sees FY14 revs of $3.80-3.85 bln vs. $3.83 bln Capital IQ Consensus Estimate. Deferred Revenue: Deferred revenue on the balance sheet as of October 31, 2012 was $1.29 billion, an increase of 41% on a year-over-year basis. Current deferred revenue increased by 35% year-over-year to $1.23 billion, benefited in part by longer invoice durations. Non-current deferred revenue increased by 414% year-over-year to $66 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the third quarter at approximately $3 billion, up from approximately $2.8 billion at the end of the fiscal second quarter. Revenues by Geography: Americas $547 million, up 37% y/y; Europe $133 million, up 29% y/y; Asia Pacific $107 million, up 29% year over year.

Cirrus Logic (CRUS) announced that its Board of Directors has authorized the repurchase of up to $200 million of the company's common stock. The repurchases will be funded from working capital and anticipated cash from operations.

ReneSola (SOL) issued in-line guidance for the third quarter with revenues of $200-220 million versus $210.87 million consensus. The company estimates its total solar wafer and module shipments to be in its previously guided range of 510 MW to 530 MW, solar module shipments to be slightly below its previously guided range of 150 MW to 170 MW. The co expects its gross profit margin for the third quarter of 2012 to be in the range of negative 17.5% to negative 18.5% after an inventory write-down of approximately US$31.6 million to reflect current selling prices. For FY12, the co estimates its total solar wafer and module shipments to be close to 2.2 GW, compared to the Company's previously guided range of 2.2 GW to 2.4 GW. The co expects its solar module shipments to increase in the fourth quarter of 2012. The company will report Q3 results this Friday morning.

10:11 am Best Buy target lowered to $14 at RBC: . RBC Capital Mkts lowers their BBY tgt to $14 from $17. They note that in a relatively thin margin business, such as Consumer Electronic Retailing, the business model comes under significant strain when gross margins are falling by 160 bps YoY, like they did this quarter. While they would not buy the stock here as material pricing/competitive issues remain and the co's margin deterioration is of grave concern, they do expect vendors to remain supportive of the co given Best Buy's size and believe that there are a lot of costs that can come out of the operation, especially as their new CFO takes the reigns.

10:29 am Tech sector trading higher today and ahead of overall market

The tech sector is trading higher today, outpacing a flat broader market. Semiconductors are showing relative strength as well with the SOX trading 0.1% higher today. Within the chip index, CRUS (+4.3%) is a notable standout. Among other major indices, the SPY is trading flat, while the QQQ and the NASDAQ are trading 0.1% higher on the session. Among tech bellwethers, GOOG (-1.2%) is showing notable weakness, while FB (+2.9%) is a leader.

In tech earnings last night, CRM (+6.6%) reported a Q3 beat and offered inline guidance. In news, CRUS (+4.2%) announced a $200 mln share repurchase program. Also, MIPS (+5.1%) announced the receipt of unsolicited proposal from CEVA (-3.0%). There were no notable analyst upgrades this morning in the tech space. Among downgrades, HPQ (-0.2%) was downgraded at RBC and Mizuho. There are no notable names in tech scheduled to report quarterly results today after the close.