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From Briefing.com: Weekly Recap - Week ending 11-Jan-13

Dow +17.21 at 13488.43, Nasdaq +3.87 at 3125.63, S&P -0.07 at 1472.05

The major averages saw little change during today's session, and the S&P 500 remained at its five-year high. However, equities slipped out of the gate as data out of China indicated the country's consumer price index rose by 2.5% year-over-year. The news put a damper on expectations for future stimulus and China's Shanghai Composite lost 1.8%. Domestically, traders looked to Wells Fargo (WFC 35.10, -0.30), which was the first financial to report its fourth quarter results.

The financial sector was the weakest performer and Wells Fargo lost 0.9%. The bank's quarterly report topped the Capital IQ earnings and revenue forecast, but turned out to be less upbeat below the surface. During the fourth quarter, Wells Fargo saw its margins compress to a multi-year low. In addition, mortgage originations dropped from $139 billion in the third quarter to $125 billion during the most-recent reporting period.

Elsewhere, American Express (AXP 61.24, +0.45) added 0.7% after the company pre-announced better-than-expected fourth quarter earnings. Additionally, American Express has announced plans to cut over 5,000 jobs.

The materials sector lagged due to underperformance from miners and steelmakers following hotter-than-expected Chinese inflation data. Earlier, BHP Billiton (BHP 76.66, -2.03) and Rio Tinto (RIO 55.65, -1.64) were both downgraded to ‘Neutral' from ‘Outperform' at Macquarie. The two miners settled lower by 2.6% and 2.9% respectively.

The consumer staples space was the top performing sector and the SPDR Consumer Staples Select Sector ETF (XLP 35.92, +0.16) ended higher by 0.5%. Though most components were mixed, tobacco stocks led the sector higher. Philip Morris (PM 89.23, +1.94) was the top industry performer after Goldman Sachs added the stock to its Conviction Buy List. Philip Morris gained 2.2% and other cigarette producers saw strength as well. Reynolds American (RAI 42.62, +0.36) and Lorillard (LO 117.02, +0.93) both gained near 0.9%.

With the holiday shopping season in the rearview mirror, the market has been receiving early reports concerned with holiday spending. Yesterday, Aeropostale (ARO 12.38, -0.86) lowered its earnings guidance which weighed on rival teen retailers. Though the stock proved to be resilient during yesterday's session, it ended lower by 6.5% today. Earlier, Piper Jaffray downgraded the stock to ‘Neutral' from ‘Overweight.' Additionally, Imperial Capital has cut its price target for Aeropostale to $15 from $18. Looking at peers, American Eagle Outfitters (AEO 19.14, -0.80) and Buckle (BKE 43.85, -0.33) lost 4.0% and 0.8% respectively.

Elsewhere, Best Buy (BBY 14.21, +2.00) surged 16.4%. This morning, the electronics retailer reported flat domestic comparable store sales while international sales declined by 6.4% year-over-year. With lowered expectations going into the holiday period, the market is receiving today's update as better-than-feared.

Overnight, aircraft manufacturer Boeing (BA 75.16, -1.93) returned to the headlines. Overnight reports from Reuters indicated that two more Dreamliner 787 jets have experienced structural issues. In response to the rash of recent issues, the United States Federal Aviation Administration has ordered a review of the aircraft's electrical systems.

A handful of economic data points were reported today. The trade deficit widened to $48.7 billion during November after a downwardly revised prior month deficit of $42.1 billion. Economists polled by Briefing.com had expected that the deficit would come in at $41.8 billion.

Export prices, excluding agriculture, decreased by 0.2% in December after they had decreased by 0.7% during the prior month. Excluding oil, import prices decreased by 0.1%, which follows the 0.2% decrease experienced in the prior month.

The December Treasury Budget showed a deficit of $260 million, which was narrower than the deficit of $1.0 billion expected by the Briefing.com consensus. The report has mattered little to market participants as equity indices did not respond to the news.

Week in Review: S&P 500 Inches to its Five-Year High

On Monday, stocks registered modest losses. With no economic data or notable earnings to dictate the tone, the major averages were trapped in a relatively narrow range. The S&P 500 opened in the red, and traded near its opening levels for the duration of the session. As a result, the benchmark index finished lower by 0.3%. Bank of America (BAC 11.63, -0.15) announced it has reached a settlement with Fannie Mae to resolve agency mortgage repurchase claims on loans originated and sold directly to Fannie Mae through December 31, 2008. The settlement is expected to reduce Bank of America's fourth quarter pretax income by about $2.7 billion.

Tuesday's session saw the S&P 500 end lower by 0.3% after spending the duration of the day in the red. With little economic data of note and below-average volume, the key indices traded in range bound fashion. Consumer discretionary stocks were in focus after Yum! Brands (YUM 66.87, -0.62) reaffirmed its full-year 2012 earnings guidance, but lowered the same-store sales estimates for its China division. As a result of the disappointing outlook, Yum! Brands slid 4.2% and other quick service restaurants traded lower as well.

On Wednesday, equities began the day on a positive note after Alcoa (AA 8.94, -0.03) kicked off the fourth quarter earnings season with a top line result which exceeded estimates. With no notable economic data, the remainder of the session was largely uneventful as the key indices retreated off their respective highs, ending with just a portion of their early gains. The S&P 500 added 0.3%. For-profit education names saw general weakness after Apollo Group (APOL 19.21, -0.02) reported its quarterly results. Although Apollo beat on earnings and revenue, its full-year revenue guidance was a disappointment. Shares of APOL lost 7.8% as a result.

Thursday started on a positive note after China's trade surplus expanded to $31.6 billion due to strong export growth. The upbeat open was followed by a late-morning stumble, but the S&P 500 showed resilience and climbed to fresh highs. The benchmark index ended with a gain of 0.8%. The financial sector paced the advance, and the SPDR Financial Select Sector ETF (XLF 17.11, -0.04) settled higher by 1.3%. The financial sector proxy ETF ended at a fresh 52-week high with most majors scheduled to announce their fourth quarter earnings next week.

2:23PM Brocade awarded permanent injunction in intellectual property theft case against A10 Networks (BRCD) 5.58 +0.11 : Co announced that a San Jose federal court confirmed a $60 million damages verdict against A10 Networks and entered an order permanently enjoining A10 from infringing on Brocade's patents involving technologies for Global Server Load Balancing and High Availability. The Court enjoined A10 from "making, using, selling, or offering to sell in the United States, or importing into the United States any AX series application delivery controller that includes features that infringe" on these asserted claims. Further, A10 has been ordered to "notify all distributors, customers, or third-parties who have ordered, received, or purchased any AX series application delivery controller from A10 or any affiliated entity" about the issuance of this order within 10 business days.

08:53 am Cree target raised to $36 at Needham: . Needham raises their CREE tgt to $36 from $32. They expect initial adoption of LED will be in the high-end commercial and outdoor segments, where they believe Cree's chip performance and integration are crucial to achieving strong adoption. They believe Cree's technical advantage allows it to charge premium prices over even other tier-one peers, driving strong margins. While they are slightly more defensive going into the F2Q13 earnings call on January 22, 2013, they believe the buy-side already have lower expectations for the seasonally weaker March quarter outlook than the current sell-side estimates.

Xyratex (XRTX) reported fourth quarter loss of $0.24 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of ($0.32), while revenues fell 31.5% year/year to $265.4 million versus the $255.18 mln consensus. The company issued in-line EPS guidance for Q1, sees EPS of $(0.21)-(0.01), excluding non-recurring items, versus the ($0.20) consensus and sees Q1 revs below consensus, while co sees revenues at $159-189 million versus the $207.16 million consensus.

Synnex (SNX) reported fourth quarter earnings of $1.16 per share, excluding non-recurring items, $0.12 better than the Capital IQ consensus of $1.04, while revenues fell 2.7% year/year to $2.77 billion versus the $2.76 bln consensus. The company issued guidance for the first quarter with EPS of $0.85-0.89, excluding non-recurring items, versus the . $0.89 consensus, with revenues of $2.38-2.48 billion versus the $2.51 bln consensus. Distribution: Revenue was $2.72 billion, down 3% from the prior fiscal year quarter, due in part to a previously reported customer business transition starting within Q4 2011 from gross revenue to net fee for services, resulting in lower reported revenue in Q4 2012. Global Business Services (GBS): Revenue grew to $54.9 million, an increase of 22.2% over the prior fiscal year quarter. "I am pleased to report solid quarterly earnings even as compared to the prior year's exceptional profits from the hard disk drive shortage. Strong operational execution within the core Distribution Segment aligned well with rapid expansion into adjacent, higher margin service and solution businesses."

JDSU (JDSU) announced two executive appointments, naming Rex Jackson as executive vice president and chief financial officer, and Susan Spradley as senior vice president with responsibility for the development and management of the company's communications test and measurement product portfolio. Jackson reports to Tom Waechter, JDSU's president and chief executive officer, and has served as acting CFO since September 2012. He joined JDSU two years ago as senior vice president, Business Services, with responsibility for several corporate functions, including Information Technology, where he has driven significant operational improvements. Jackson brings strong financial management experience to the company. Prior to JDSU, he served as executive vice president and chief financial officer at Symyx Technologies, where he led the company's acquisition of MDL Information Systems and subsequent merger with Accelrys. Jackson also served as acting CFO at Synopsys and held executive positions with Avago, AdForce and Read-Rite.

AOL (AOL) was initiated with a Hold at Cantor Fitzgerald; tgt $32. Firm notes while they believe management has done a remarkable job creating shareholder value since the spin-off through asset sale, operational turnaround is still a work-in-progress, which if successful, could put the company back on a growth path and make AOL a major player again. At current valuation, they find the upside from "low-hanging fruit" already picked; management now needs to demonstrate that core O&O display ad revenue can grow at/near industry rates for further stock upside.

OCZ (OCZ) filed to delay its 10-Q. The company stated in a filing, "As previously reported, OCZ Technology Group delayed the filing of its Form 10-Q for the quarter ended August 31, 2012 as the Company requires additional time for compilation and review to insure adequate disclosure of certain information. The Company's Audit Committee had also concluded that the Company should restate the results for the first quarter of fiscal 2013, as well as the results for certain quarters of fiscal 2012 and for the fiscal year 2012. The Board and management are in discussions with Crowe Horwath LLP, the Company's independent auditors regarding the matters identified in the investigation. As such, the Company is unable to file its Form 10-Q for the quarter ended November 30, 2012."

10:55 am S&P Tech Sector trading lower by -0.1% today; near flat line
The tech sector is trading lower today, just ahead of larger losses in the broader market. Semiconductors are showing relative strength as well with the SOX trading nearly flat on the session. Within the chip index, SNDK (+2.4%) is a notable standout. Among other major indices, the SPY is trading 0.3% lower today, while the QQQ and the NASDAQ are trading 0.2% lower on the session. Among tech bellwethers, FB (+1.7%) is showing notable strength, while AAPL (-0.8%) is under pressure.

In tech earnings last night, XRTX (-3.7%) and SNX (-2.5%) posted quarterly beats, but guided lower. In news, XRX (-0.4%) announced that CFO Luca Maestri is leaving the company to assume the role of corporate controller at AAPL (-0.5%). Among rumors, we are hearing IBM (+0.8%) for SPLK (+5.8%) takeover chatter making the rounds. Among notable analyst upgrades this morning in the tech space, MXIM (+0.4%) was upgraded to Overweight at JP Morgan and NOK (+1.0%) was upgraded to Buy from Sell at Societe Generale. Among downgrades, GLW (-3.7%) was downgraded to Neutral at Goldman, RIMM (-0.1%) was downgraded to Underperform at BMO, FISV (-0.8%) was downgraded to Neutral at JP Morgan and EA (+0.4%) was downgraded to Neutral at Piper Jaffray. There are no notable names in tech scheduled to report quarterly results today after the close.