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From Briefing.com: Weekly Recap - Week ending 21-Dec-12

Dow -120.88 at 13190.84, Nasdaq -29.38 at 3021.01, S&P -13.54 at 1430.15

Equities spent the duration of today's session in the red. The S&P 500 lost 0.9% after House Speaker John Boehner cancelled Thursday's vote on his ‘Plan B' due to a lack of support from his party. In a morning press conference, the Speaker said he is not walking away from negotiations with President Obama. However, an agreement remains distant and the House of Representatives has adjourned until December 27. Upon returning to work, lawmakers will be left with just two business days before the calendar year ends.

The financial sector led yesterday's advance as market participants showed optimism ahead of the scheduled vote on ‘Plan B.' However, the vote never took place, and legislators will be left with just a couple business days when they return to work next Thursday. After adding nearly 4.0% between Monday's open and Thursday's close, The SPDR Financial Select Sector ETF (XLF 16.40, -0.19) lost 1.2%. Among the majors, Bank of America (BAC 11.29, -0.23) and Citigroup (C 39.49, -0.68) were two of the weakest performers as they finished with respective losses of 2.0% and 1.7%.

Looking at tech stocks, the SPDR Technology Select Sector ETF (XLK 28.95, -0.25) settled lower by 1.2% and major sector components registered comparable losses. Apple (AAPL 519.33, -2.40), Google (GOOG 715.63, -6.73), and International Business Machines (IBM 193.42, -1.35) all lost between 0.5% and 0.9%.

In notable earnings, Research In Motion (RIMM 10.91, -3.21) slumped 22.7% after reporting its quarterly results. Although the smartphone maker beat on earnings and revenue, the company's subscriber growth was a point of concern.

Elsewhere, Micron Technology (MU 6.32, -0.47) slid 6.9% after reporting disappointing earnings and revenue.

Utilities traded largely in-line during the first half of the session. However, mid-afternoon buying lifted the SPDR Utilities Select Sector ETF (XLU 35.31, -0.12) well off its lows. The ETF ended with a loss of 0.3% and companies specializing in production of industrial gasses were among the sector leaders. Piedmont (PNY 32.42, +0.25) added 0.8% after reporting earnings and reaffirming guidance in-line with the Capital IQ consensus. Among electricity providers, Entergy (ETR 64.52, +0.11) and FirstEnergy (FE 41.61, +0.07) registered gains following early-session weakness.

Defensive stocks have seen strength throughout the year. As a result, the PHLX Defense Sector Index has gained over 15.0% since January 3. Today, the space shed 0.3%, and registered narrower losses than the broader market. This came after the House of Representatives passed the defense budget bill, which would spare the sector from drastic cuts in the event the country goes over the fiscal cliff. In addition, a late-afternoon report from Reuters indicated the bill was also passed by the Senate, and sent to the President for approval. Looking into the 17-stock defense index, GenCorp (GY 9.00, -0.22) lost 2.4% and was the weakest performer. On the upside, Embraer (ERJ 27.70, +0.15) and Lockheed Martin (LMT 93.13, +0.63) added 0.5% and 0.7%, respectively.

In M&A news, Ameristar Casinos (ASCA 26.50, +4.43) was bought by Pinnacle (PNK 16.20, +2.85) for $26.50 per share, which represents a 20.0% premium to Ameristar's Thursday close. The deal was received well by investors as ASCA and PNK both gained near 20.0%. The strength in shares of Pinnacle was due to expectations of synergies and an improvement in margins.

Today's economic data was plentiful and most figures were reported ahead of expectations. November durable goods orders increased by 0.7%, which was better than the 0.2% increase that had been expected among economists polled by Briefing.com. This comes after the prior month's reading was revised up to reflect an increase of 1.1%. Excluding transportation related items, durable goods orders increased in November by 1.6%, which was better than the 0.2% decrease that had been broadly anticipated. Prior month's reading was revised from +1.8% to +1.9%.

Personal income increased by 0.6% in November, which was ahead of the 0.3% increase expected by the Briefing.com consensus. Personal spending increased by 0.4%, which was ahead of the expected uptick of 0.3%. Core personal consumption expenditures were unchanged, which fell short of the broadly expected reading of +0.1%.

The University of Michigan's final December Consumer Sentiment Survey fell to 72.9 from the 74.5 that was posted in the preliminary Survey. The Briefing.com consensus expected the reading to rise to 74.8.

Week in Review: Stocks Climb Despite Lack of Budget Agreement

On Monday, the major averages registered broad gains during a low-volume session. The S&P 500 followed a modestly higher open with a steady climb to its session high. Shortly before midday, reports out of Washington indicated President Obama and House Speaker Boehner held a 45-minute conversation in an attempt to further the ongoing budget discussions. The developments had little effect on the markets as the key indices continued their upward drift. As a result, the S&P 500 finished higher by 1.2%. Caribou Coffee (CBOU 16.19, -0.08) will be acquired by Joh. A. Benckiser for $16.00 per share. The transaction carries a total value of approximately $340 million, and the purchase price represents a 29.9% premium to Caribou's Friday closing price.

During Tuesday's session, stocks registered broad gains as comments from Washington lawmakers indicated the budget debate is intensifying. Though an agreement remained elusive, the markets welcomed the developments and spent the duration of the day in an upward climb. As a result, the S&P 500 advanced 1.2%. Goldman Sachs (GS 128.44, -1.28) and Morgan Stanley (MS 18.92, -0.35) outperformed their peers as both saw gains over 3.0%.

Wednesday began on a slightly higher note as Tuesday's optimism regarding a fiscal cliff resolution lingered. However, the initial strength quickly faded, and the S&P 500 slipped below its flat line where it spent the remainder of the session. A recurring theme played out in Washington where lawmakers held another round of press conferences with both sides pushing back against the other. Most notably, Speaker Boehner said the House of Representatives will vote on his ‘plan B' on Thursday. The remarks kept the S&P 500 near its lows before a final round of selling dropped the benchmark index to a loss of 0.8%. Oracle (ORCL 33.76, -0.17) gained 3.7% after beating on earnings and revenue.

On Thursday, the major averages finished higher despite showing indecision in the early part of the session. The fiscal cliff remained as the focal point, and investors showed optimism in Washington's ability to get a deal done. Lawmakers from both sides of the aisle continued to exchange jabs, and Speaker Boehner said the President and the Democrats have not done enough to avoid falling off the cliff. Mr. Boehner touted the proposal he put forth, which was expected to face a House of Representatives vote around 19:30 ET. The S&P 500 gained 0.6% ahead of the scheduled vote. NYSE Euronext (NYX 32.25, 0.00) surged 34.1% after agreeing to be acquired by IntercontinentalExchange (ICE 126.25, -3.85) for $33 per share. The transaction price represents a 37.2% premium to NYSE Euronext's Wednesday close.

 
 Index	  Started Week	Ended Week   Change  % Change	YTD % 
 DJIA	    13135.01	 13190.84     55.83     0.4	8.0 
 Nasdaq	     2971.33	  3021.01     49.68     1.7     16.0 
 S&P 500	1413.58	  1430.15     16.57     1.2     13.7 
 Russell 2000  823.75	   847.92     24.17	2.9     14.4

4:04PM O2Micro lowers Q4 rev guidance (OIIM) 3.24 +0.24 : Co issues downside guidance for Q4 (Dec), lowers Q4 (Dec) revs to $16-17 mln from $17-20 mln vs. $18.7 mln Capital IQ Consensus Estimate. The reduction in anticipated revenue for the fourth quarter is primarily the result of broad-based weakness in demand in our end markets, coupled with lower than normal inventories being held in the supply chain.

In addition, gross margin for Q4 is now expected to be 51% to 52% vs. ests just below 52%.

"We believe this is the result of weak global economic conditions, declining global chip sales and excess inventory corrections by our customers at the end of the calendar year. During this difficult period of revenue weakness, the Company will consider expense reduction measures, including our previously announced intentions to evaluate strategic alternatives for our E-Commerce Group."

9:01AM Power Integrations wins patent case filed by Fairchild Semiconductor in China (POWI) 33.73 : Co announced that a Chinese court has ruled in its favor in infringement proceedings filed against it by Fairchild Semiconductor and its System General subsidiary. After more than two years of litigation, the Suzhou Intermediate Court has found that Power Integrations does not infringe any of the patents asserted by Fairchild in the case. The decision follows three previous findings of infringement against Fairchild and its System General (SG) subsidiary in cases brought by Power Integrations.

8:03AM Micron and Elpida announce clearance of transaction by Japan Fair Trade Commission (MU) 6.79 : Co announced that the Japan Fair Trade Commission has cleared Micron's previously announced acquisition of Elpida. Clearance under Japan's Act on Prohibition of Private Monopolization and Maintenance of Fair Trade satisfies one of the conditions necessary for consummation of the transaction. The transaction has also cleared premerger review in the United States, Czech Republic and Korea.

Research In Motion (RIMM) reported a third quarter loss of $0.22 per share, excluding non-recurring items, $0.13 better than the Capital IQ consensus of ($0.35), while revenues fell 47.2% year/year to $2.73 billion versus the $2.67 bln consensus. The revenue breakdown for the quarter was ~60% for hardware, 36% for service and 4% for software and other revenue. During the quarter, RIM shipped ~6.9 million BlackBerry smartphones and ~255,000 BlackBerry PlayBook tablets. Outlook: The company expects that there will be continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter. The co intends to continue to consider using pricing initiatives on BlackBerry 7 devices and service fees in some markets as a way to maintain our subscriber base and drive more BlackBerry users. The timing of the BlackBerry 10 launch event for January 30, 2013 could also impact sales of current BlackBerry 7 products as some customers may defer purchasing decisions and wait for BlackBerry 10 devices. All these factors are expected to impact unit volumes, subscribers, margins and service fees. In addition, the co will be significantly increasing its marketing spending this quarter as expected, to support the global launch of BlackBerry 10, and the co expects to report an operating loss for the fourth quarter. RIM also announced today that Robin Bienfait, Chief Information Officer for RIM has made the decision to retire at the end of this year following 6 years of service to the Company. Robin has committed to continue supporting RIM in an advisory capacity to enable a smooth launch and seamless transition. "During the third quarter, we continued to demonstrate our strong financial position, generating $950 million in cash flow from operations, and increasing our cash position significantly to more than $2.9 billion." "

Red Hat (RHT) reported third quarter earnings of $0.29 per share, in-line with the Capital IQ consensus of $0.29, while revenues rose 18.5% year/year to $343.6 million versus the $337.95 mln consensus. Subscription revenue for the quarter was $294.2 million, up 19% in U.S. dollars year-over-year, or 22% measured in constant currency. Red Hat Q3 billings $378.8 mln vs expectations for ~$372 million. Third quarter total deferred revenue of $988 million, up 21% YoY. Non-GAAP operating margin was 24.0%. The company also announced that it has entered into a definitive agreement to acquire ManageIQ, a provider of enterprise cloud management and automation solutions for ~$104.0 million in cash. The closing of the transaction is subject to customary closing conditions. "Strong execution, industry leading solutions and our ability to deliver a compelling ROI to our customers, all contributed to continued momentum and strong third quarter revenue growth in the face of a challenging global economic environment. Red Hat is benefiting from our position as a trusted vendor for IT" The company sees Q4 non GAAP EPS of $0.29-0.30 versus the $0.30 Capital IQ consensus and revenues of $347-350 million versus the $350.79 million consensus.

Micron (MU) reported first quarter loss of $0.27 per share, $0.07 worse than the Capital IQ consensus of ($0.20). while revenues fell 12.2% year/year to $1.83 billion versus the $2.01 bln consensus. Revenues from sales of NAND Flash products were 4 percent lower in the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012, due to a 9 percent decrease in sales volume, partially offset by a 5 percent increase in average selling prices. Trade NAND Flash sales volume in the first quarter of fiscal 2013 decreased compared to the fourth quarter of fiscal 2012 primarily as a result of lower production of NAND Flash products. Revenues from sales of DRAM products in the first quarter of fiscal 2013 were 9 percent lower compared to the fourth quarter of fiscal 2012 primarily due to an 11 percent decrease in average selling prices. Sales of NOR Flash products were relatively unchanged for the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012. The company's consolidated gross margin of 12 percent in the first quarter of fiscal 2013 was up slightly from 11 percent in the fourth quarter of fiscal 2012. Improvements in margin from sales of NAND Flash and NOR Flash products were offset by slight declines in margins from sales of DRAM products. Cash flows from operations for the first quarter of fiscal 2013 were $236 million. During the first quarter of fiscal 2013, the company invested $538 million in capital expenditures and ended the quarter with cash and investments of $2.8 billion.

TIBCO Software (TIBX) sees revenue of $241-245 million versus $239.99 million consensus. The company sees Q1 non-GAAP EPS of $0.17-0.18 versus the $0.21 consensus. The company did not provide 2013 guidance but is striving to achieve 15-20% EPS expansion in the long term.

FBR Capital initiated F5 Networks (FFIV) with a Outperform and price target of $120. The firm views FFIV as more exposed to the threat of software-defined networking and ASIC-based competitors, but less so than many pure-play networkers. While SDN-based competitors and new ASIC-based solutions could eventually pose serious threats to the communications equipment sector, the ability for new platforms and network solutions to deliver a realistic competitive threat is unclear and likely over-hyped. They expect it will be at least 18 months before SDN- and ASIC-based competitors begin to create a credible threat to F5.

08:56 am F5 Networks initiated with a Outperform at FBR Capital; tgt $120: . FBR Capital initiates FFIV with a Outperform and price target of $120. The firm views FFIV as more exposed to the threat of software-defined networking and ASIC-based competitors, but less so than many pure-play networkers. While SDN-based competitors and new ASIC-based solutions could eventually pose serious threats to the communications equipment sector, the ability for new platforms and network solutions to deliver a realistic competitive threat is unclear and likely over-hyped. They expect it will be at least 18 months before SDN- and ASIC-based competitors begin to create a credible threat to F5.

10:54 am S&P Info Tech sector trading lower along with the overall market today
he tech sector is trading lower today, trailing slightly narrower losses in the broader market. Semiconductors are showing relative weakness as well with the SOX trading 1.5% lower. Within the chip index, MU (-8.5%) is a notable laggard. Among other major indices, the SPY is trading 0.8% lower today, while the QQQ and the NASDAQ are trading 1.1% lower on the session. Among tech bellwethers, FB (-1.9%) and MSFT (-1.8%) are showing notable weakness.

In tech earnings last night, RIMM (-14.5%) reported a narrower-than-expected Q3 loss. Elsewhere, MU (-8.7%) posted a miss, CAMP (-3.5%) reported a slight beat and guided inline, RHT (+3.8%) reported a slight beat and TIBX (+3.7%) posted a beat. In news, PGI (+0.4%), PACT (+2.9%), and SNDK (+0.8%) announced stock repurchase programs. In notable analyst upgrades this morning in the tech space, IFNNY (+0.7%) was upgraded to Overweight at JP Morgan. Among downgrades, ELOQ (-0.3%) was downgraded to Neutral at JP Morgan, RIMM (-14.5%) was downgraded at Credit Agricole and National Bank Financial, and MU (-8.5%) was downgraded to Outperform at Credit Agricole.

07:53 am Tibco Software shares spike 3% following beat on EPS
TIBCO Software (TIBX $21.50 +0.76) reported fourth quarter earnings of $0.42 per share, excluding non-recurring items, $0.05 better than the Capital IQ consensus of $0.37, while revenues rose 2.4% year/year to $296.5 million versus the $293.5 million consensus.