Sector Investing

[ReturntoSender]

From Briefing.com: 4:10 pm : Equities began the day with a slightly bearish bias after Germany's 2012 GDP was reported below expectations. Though the news weighed at the open, the major averages showed resilience, and spent the remainder of the session climbing off their lows. As a result, the S&P 500 added 0.1% while the Nasdaq underperformed with a loss of 0.2%.

The tech-heavy Nasdaq was pressured by Apple (AAPL 485.92, -15.83), which fell 3.2%. In addition, Apple suppliers continued to show weakness. Broadcom (BRCM 34.19, -0.43) and Skyworks Solutions (SWKS 20.50, -0.51) saw respective losses of 1.2% and 2.4%. Today's selling followed yesterday's 3.6% drop in Apple resulting from reports which indicated the company has cut its orders for iPhone 5 parts.

Facebook (FB 30.10, -0.85) dropped to its session lows after today's highly-anticipated press event disappointed investors. When the company first announced today's presentation on January 9, Facebook responded by rallying nearly 5.0% in less than a week. The rise was attributed to speculation the company may launch a search engine or its own phone brand. However, at today's event, the company revealed a "graph search" feature.

Business software provider SAP (SAP 77.55, -4.33) also contributed to the weakness in technology. The stock lost 5.3% after the company's operating profit missed expectations. Additionally, SAP lowered its fourth quarter guidance, which also contributed to the selling.

The discretionary sector was the top performer after the December retail sales report beat expectations. Retailers rallied on the news and the SPDR S&P Retail ETF (XRT 64.54, +1.32) gained 2.1%.

This morning, Lennar (LEN 40.68, -0.34) was the first homebuilder to report its fourth quarter results. The report was generally positive as the company's earnings and revenue exceeded the Capital IQ consensus estimates. In addition, the company expects its full-year 2013 gross margins to be in-line with analyst estimates. Despite the upbeat earnings, Lennar settled lower by 0.8%. It should be noted the stock has added over 36% over the past five months, thus strong quarterly results have been largely priced-in. Other homebuilders showed intraday strength and finished generally higher as Lennar's results were expected to translate into upbeat earnings from its peers.

Financials outperformed the broader market with ten sector components scheduled to report their quarterly results ahead of tomorrow's open. JPMorgan Chase (JPM 46.35, +0.47) was in the news today as the bank was ordered to improve its risk controls following last year's $6.2 billion derivative trading loss. JPMorgan Chase will report its fourth quarter earnings tomorrow and the Capital IQ consensus expects the financials to show year-over-year bottom line growth of 35%. The market will also receive quarterly results from Goldman Sachs (GS 135.59, -0.54) which are expected to show earnings of $3.40 on $7.67 billion in revenue.

Several economic data points crossed the wires today. During November, business inventories rose by 0.3%, which was in-line with the Briefing.com consensus. Today's reading follows the prior month's uptick of 0.4%.

December retail sales rose by 0.5%, which was better than the 0.2% increase that had been broadly expected. The revised prior month's reading pointed to an increase of 0.4%. Excluding autos, retail sales rose by 0.3%, which was in-line with the Briefing.com consensus.

December producer prices decreased by 0.2%, which was cooler than the unchanged reading that had been widely forecast. Core producer prices rose by 0.1% which was cooler than the uptick of 0.2% expected by the Briefing.com consensus.

The Empire Manufacturing Survey for January registered a reading of -7.8, which was up from the prior month's reading of -8.1. Economists polled by Briefing.com had expected that the Survey would rise to 2.0.

In tomorrow's economic data, the weekly MBA Mortgage Index will be reported at 7:00 ET. December CPI and core CPI will both be released at 8:30 ET. At 9:00 ET, November net long-term TIC flows will hit the wires. December industrial production and capacity utilization will be reported at 9:15 ET while January NAHB Housing Market Index will cross at 10:00 ET. Lastly, the Federal Reserve will release its January Beige Book at 14:00 ET.DJ30 +27.57 NASDAQ -6.72 SP500 +1.66 NASDAQ Adv/Vol/Dec 1314/1.81 bln/1142 NYSE Adv/Vol/Dec 1735/603.2 mln/1272

3:30 pm :

Feb crude oil spent most of pit trade chopping around just below the unchanged level. However, prices slid to a session low of $93.22 per barrel moments before the close as the dollar index popped to a new session high. The last minute sell-off left crude to settle with a 1.0% loss at $93.29 per barrel.
Feb natural gas rose for a fourth consecutive session on this week's colder weather across the nation. Prices briefly dipped into the red and to a session low of $3.35 per MMBtu in morning floor action, but the losses were erased moments later. Natural gas trended higher for the remainder of the session and settled 2.7% higher at $3.46 per MMBtu.
Feb gold extended yesterday's gains as it advanced to a floor session high of $1684.90 per ounce despite the dollar index trading slightly above the break-even line. The yellow metal closed the session 0.9% higher at $1683.80 per ounce.
Mar silver also trended higher during today's pit trade. It listed off its session low of $31.12 per ounce and brushed a session high of $31.61 per ounce before settling with a 1.1% gain at $31.49 per ounce.

DJ30 +26.16 NASDAQ -7.16 SP500 +1.23 NASDAQ Adv/Vol/Dec 1273/1520 mln/1196 NYSE Adv/Vol/Dec 1620/403 mln/1341

5:26PM Linear Tech misses by $0.02, misses on revs (LLTC) 35.55 -0.24 : Reports Q2 (Dec) earnings of $0.38 per share, $0.02 worse than the Capital IQ Consensus Estimate of $0.40; revenues rose 3.7% year/year to $305.3 mln vs the $310.33 mln consensus. During the second quarter the Company's cash, cash equivalents and marketable securities decreased by $20.6 million to $1.299 billion from the first quarter of fiscal year 2013.

Ingram Micro (IM) has earned authorization to market, sell and support IBM (IBM) Power Systems and enterprise-class storage product families to certified IBM Business Partners within the U.S.

PTC (PMTC) announced that SRAM is using the PTC Product Lifecycle Management Solution to optimize product strategy and planning across the organization.

Veeco Instruments (VECO) announced that the Korean Photonics Technology Institute has purchased a GEN20 Molecular Beam Epitaxy system

Atmel (ATML) and Wasion Group have signed a MoU to develop smart electricity meters and data concentrators utilizing integrated power line communication solutions developed by Atmel.

8:04AM Chipmos Technology reports Q4 revs $167.6 mln vs $168.9 mln Capital IQ Consensus Estimate (IMOS) 11.52 :

Co reports reports Q4 revs $167.6 mln vs $168.9 mln Capital IQ Consensus Estimate, down 5.3% from the third quarter of 2012 and an increase of 5.6% from the fourth quarter of 2011.
This compares to guidance for revenue for the fourth quarter of 2012 to be approximately flat to 5% lower, as compared to 3Q12, and reflects further softness in the broader memory market, which impacts the Company's commodity DRAM assembly business, offset by continued growth in its LCD driver and mixed-signal businesses.

HP (HPQ) announced that customers can now print directly from their smartphone or tablet to more than 8,000 U.S. Walgreens (WAG) stores, bringing the HP Public Print Locations network to 30,000 sites worldwide.

Microsemi (MSCC) announced the availability of a new generation of industrial temperature, silicon carbide standard power modules.

Cray (CRAY) has been awarded a $23 mln contract to provide two Cray XC30 supercomputers and two Cray Sonexion 1600 storage systems to Germany's National Meteorological Service - the Deutscher Wetterdienst.

6:30AM Mattson announces plans for Phase IV cost-reduction program (MTSN) 1.21 : Co announced the finalization of plans for Phase IV of its cost-reduction program, which primarily entails a broad reduction in force across all areas of the Company. The total estimated reduction in annual operating expenses for all four phases of the cost-reduction program is expected to be $30 million. Combined with the ongoing gross margin improvement efforts, the Company's cash flow breakeven point is expected to be reduced to the mid to high $20 million quarterly net sales level by the end of Q1 2013.

United Microelectronics (UMC) introduced a Thick Plated Copper process for power management IC applications.

Vishay Intertechnology (VSH) introduced new 8 V and 20 V n-channel and p-channel TrenchFET power MOSFETs with the industry's lowest on-resistance in 1 mm by 1 mm by 0.55 mm and 1.6 mm by 1.6 mm by 0.6 mm CSP MICRO FOOT packages.

1:43AM Apple announces Wi-Fi + Cellular Models of iPad mini & Fourth Generation iPad available in China this Friday (AAPL) 501.75 :

Multi-Fineline (MFLX) issued guidance for the first quarter with raised first quarter revenues to approximately $290 million from $260-280 million versus the $266.90 million consensus; gross margin is expected to be ~8.5%, below the co's 10-12% guidance range, compared to 12.2% for the same period in the prior year. "We had strong operational performance throughout the quarter however toward the end of the quarter, we scaled back production. While this prudent business decision enabled us to successfully manage our working capital, including a reduction in work in process and finished goods inventory and an increase in our cash balance to over $92 million, the idled labor costs and manufacturing capacity were expensed rather than capitalized as inventory. This, coupled with unfavorable product mix, impacted our gross margin. Looking ahead to the second quarter, we expect a seasonal decline in revenue. Although we continue to work on cost improvements, including reduced headcount levels, we also anticipate a sequential decline in gross margin based on the lower anticipated revenues and overhead absorption, resulting in break-even or slightly negative net earnings."
Fiserv (FISV) announced that it has acquired Open Solutions Inc., a provider of collaborative, enterprise core account processing technology for financial institutions. The purchase price was $55 million, and Fiserv assumed approximately $960 million of debt. In conjunction with the acquisition, Fiserv will benefit from an acquired tax asset with a net present value at the time of purchase of approximately $165 million. The company expects to achieve annualized revenue synergies in connection with the acquisition of at least $75 million, and annualized cost synergies in excess of $50 million, over the next several years. The transaction was completed on January 14, 2013. Based on preliminary information, the company anticipates its 2012 adjusted earnings per share to increase approximately 12% over 2011 (vs Capital IQ Consensus Estimate of $5.17 or approx +12.9%). The company also anticipates its 2012 adjusted internal revenue growth to be at 2% for the full year (versus the Capital IQ Consensus Estimate of $4.52 billion or approximately +4.1%). On a preliminary basis for 2013, the company expects adjusted internal revenue growth of 3-4%, and 15-18% adjusted earnings per share growth over 2012. The company will supply its actual results for 2012, and formal guidance for 2013, in its year end conference call on February 5, 2013.

QLogic (QLGC) issued upside guidance for the third quarter with EPS of $0.19-0.20 versus the $0.17 Capital IQ Consensus Estimate and above prior guidance of $0.14-0.19, and the company sees third quarter revenues of approximately $119 million versus the $115.08 million consensus and above prior guidance of $112-118 million. Co states the preliminary results were driven by higher than expected revenue from Host Products and particularly strong performance from Network Products.

GSI Technology (GSIT) issued upside guidance for the third quarter with revenues of $17.5 million versus the $15.50 million consensus, compared to guidance of $15.0 million to $16.0 million that the Company provided early in the third quarter. GSI also reported that direct and indirect sales to its largest customer, Cisco Systems, are expected to be approximately $6.5 million in the third quarter, compared to $4.9 million in the previous quarter. In addition, shipments to military customers were up significantly compared to the prior quarter. The Company cautioned that these results are preliminary and subject to change.

09:22 am Maxim Integrated upgraded to Outperform at Oppenheimer; tgt $38: . Oppenheimer upgrades MXIM to Outperform from Perform and sets target price at $38. In its view, this earnings season sets up as the "last cut," and firm sees MXIM as an early cycle leader. In addition, MXIM offers investors a sustained content increase play on smartphone/tablet-a top semiconductor growth vertical. Mgmt has executed well on its integration-focused wireless strategy, and Mobility now makes up close to 40% of sales, led by ~20% customer Samsung.