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From Briefing.com: Weekly Recap - Week ending 25-Jan-13

Dow +70.65 at 13895.98, Nasdaq +19.33 at 3149.71, S&P +8.14 at 1502.96

Stocks began the final session of the week on a strong note as upbeat European trade supported U.S. equity futures. The positive sentiment across the old continent resulted from a strong German Ifo Business Climate Index, which beat expectations on both components-business expectations and the current assessment. Meanwhile, a disappointing preliminary GDP report out of the United Kingdom did little to cool investor optimism. The key averages climbed throughout the session and ended near their respective highs. The S&P 500 added 0.5%, and settled above the 1500 level for the first time since December 10, 2007.

The Nasdaq was the top performing index despite the relative weakness in the shares of Apple (AAPL 439.88, -10.62). The largest tech stock slipped 2.4% to extend yesterday's 12.4% decline, which followed a disappointing earnings report. Note that today's slide caused Apple to slip below Exxon Mobil's (XOM 91.73, +0.38) market cap. This occurred exactly one year after Apple surpassed Exxon Mobil to claim the title of most valuable company.

Sans Apple, the tech sector fared well thanks in part to strength among microprocessor manufacturers. KLA-Tencor (KLAC 56.34, +4.37) surged 8.4% after the company beat on earnings and revenue. Elsewhere, Cirrus Logic (CRUS 29.42, +2.71) soared 10.2% after investors welcomed its quarterly report. The two names contributed to the gains registered by the PHLX Semiconductor Index, which settled higher by 1.3%.

Several large cap technology stocks garnered interest as the recent slide in the shares of Apple caused some investors to look elsewhere. Amazon.com (AMZN 283.99, +10.37), eBay (EBAY 56.53, +1.34), and Priceline.com (PCLN 718.82, +39.27) all gained between 2.4% and 5.8%.

While Amazon.com and Priceline.com are both part of the Nasdaq, the two stocks are also a component of the S&P 500 consumer discretionary space. The sector was the day's top performer after gaining 1.0%.

Discretionary stocks saw general strength, and Starbucks (SBUX 56.81, +2.24) jumped 4.1% after its quarterly earnings indicated same store sales remain healthy. Elsewhere, Netflix (NFLX 169.56, +22.70) spiked 15.5% to follow yesterday's earnings-driven 42.2% jump. Since Tuesday, shares of Netflix have been on fire, gaining nearly 70%.

However, there was a pocket of weakness within the discretionary sector. Hasbro (HAS 37.31, -1.14) slipped 3.0% after warning that its fourth quarter revenue will come in below the Capital IQ consensus estimate. Peer Mattel (MAT 37.15, -0.89) lost 2.3% in sympathy.

The discretionary sector was closely followed by energy stocks, which climbed higher despite little change in crude oil. Halliburton (HAL 39.72, +1.91) was a notable gainer after the stock advanced 5.1% on the back of a strong quarterly report.

Looking at the relative performance of S&P 500 sectors, discretionary (+1.0%) stocks led while energy (+0.9%), and health care (+0.8%) followed closely. On the downside, technology (+0.1%), telecoms (+0.4%), and materials (+0.4%) lagged.

It should be noted that while the key indices ended near their highs, the CBOE Volatility Index (VIX 12.89, +0.20) settled in positive territory as well. The move indicates that despite today's advance, near-term downside protection received notable interest during the session.

Volume was slightly above its 20-day average with just under 700 million shares changing hands on the floor of the New York Stock Exchange.

Looking at today's economic data, the headline number for the December new home sales report was a disappointment. The Department of Housing and Urban Development indicated sales were at a seasonally adjusted annual rate of 369,000 units, while the Briefing.com consensus estimate was pegged at 385,000. In actuality, though, the report was better than expected when taking into account the upward revision to November.

Specifically, sales in November were revised up to 398,000 from 377,000. Combined with the sales in December, the average for the two-month period was 384,000 versus an average of 381,000 that was expected prior to the revision.

Three out of four regions saw new home sales slip in December. The Northeast led the decline with a 29.4% drop. The Midwest was the standout, enjoying a 21.3% jump in new home sales.

Median prices edged up 1.3% to $248,900. For 2012, the median sales price of a new home increased 7.2% from 2011 to $243,600.

At the current pace of sales, there is a 4.9 month supply of inventory, which is up from 4.5 months in November and the highest level since April 2012.

On Monday, December durable goods and durable goods ex-transportation will be reported at 8:30 ET. In addition, December pending home sales will be announced at 10:00 ET. Among notable earnings, Caterpillar (CAT 95.58, -1.02) is scheduled to announce its quarterly results ahead of the opening bell.

The U.S. Treasury will auction off $35 billion in 2-yr notes.

Week in Review: Stocks Climb Despite Mixed Earnings Picture

On Monday, equity and bond markets were closed in observance of Martin Luther King Day.

Tuesday's session ended with slim gains despite a mid-morning stumble. The S&P 500 and Dow were able to overcome the early weakness thanks in part to upbeat earnings from major sector components. The 30-stock Dow Jones led the way as earnings from DuPont (DD 48.33, +0.26), Travelers (TRV 78.35, +0.26), and Verizon Communications (VZ 42.67, +0.08) contributed to the outperformance. Though Verizon missed on the bottom line, its stock added 0.9%. Elsewhere, Caterpillar saw little change following the discovery of accounting misconduct at its Chinese subsidiary. As a result of the discovery, Caterpillar will take a fourth quarter non-cash charge of approximately $580 million.

Wednesday saw the major averages finish on a positive note despite early weakness in the S&P 500. The day's sentiment was driven by earnings as technology heavyweights Google (GOOG 753.67, -0.16) and International Business Machines (IBM 204.97, +0.55) reported bottom line beats. Revenues were mixed as Google's top line grew 50% year-over-year, but the reported $12.16 billion fell short of analyst expectations. Meanwhile, IBM's revenue slipped 0.6% to $29.30 billion, in-line with expectations. Google and IBM saw respective gains of 5.5% and 4.4%.

On Thursday, the major averages ended the session near their opening levels. The Dow was an exception as the blue chip index finished higher by 0.3%. The Nasdaq slid 0.7% as Apple's 12.4% fall weighed on the tech-heavy index. Shares of Apple plunged after the company fell short of revenue expectations, and issued downside second quarter gross margin and revenue guidance. On the flip side, Netflix was a notable standout as the stock soared 42.2% after its fourth quarter results handily beat the Capital IQ earnings and revenue estimate. In addition, the video streaming service guided first quarter top and bottom line above consensus.

 
 Index	  Started Week	 Ended Week   Change	%Change	 YTD % 
 DJIA	    13649.70	  13895.98    246.28	  1.8	 6.0 
 Nasdaq	     3134.71	   3149.71     15.00	  0.5	 4.3 
 S&P 500	1485.98	   1502.96     16.98	  1.1	 5.4 
 Russell 2000  892.80	    905.24     12.44	  1.4	 6.6

8:30AM First Solar recommends stockholders reject mini-tender offer by TRC Capital Corp (FSLR) 30.30 : Co has been notified of an unsolicited "mini-tender" offer by TRC Capital Corp (TRC) to purchase up to 2,000,000 shares, or ~2.3 percent, of the outstanding First Solar common stock at a price of $30.00 per share in cash. TRC's offer price is ~5% less than the $31.58 closing price of First Solar's common stock on Jan 22, 2013, the day before the mini-tender offer commenced.

First Solar does not endorse TRC's mini-tender offer and recommends that First Solar stockholders do not tender their shares in response to the offer because it is a mini-tender offer at a price below the market price for First Solar shares (as of the date First Solar received notice of the offer) and is subject to numerous conditions

Microsoft (MSFT) reported second quarter earnings of $0.76 per share, $0.01 better than the Capital IQ consensus of $0.75, while revenues rose 2.7% year/year to $21.46 billion versus the $21.5 bln consensus; gross margin 73.5% vs. ests of ~73%. The Windows Division posted revenue of $5.88 billion, a 24% increase from the prior year period. Adjusting for the net deferral of revenue for the Windows Upgrade Offer and the recognition of the previously deferred revenue from Windows 8 Pre-sales, Windows Division non-GAAP revenue increased 11% for the second quarter. Microsoft has sold over 60 million Windows 8 licenses to date. The Server & Tools business reported $5.19 billion of revenue, a 9% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center. The Microsoft Business Division posted $5.69 billion of revenue, a 10% decrease from the prior year period. Adjusting for the impact of the Office Upgrade Offer and Pre-sales, Microsoft Business Division non-GAAP revenue increased 3% for the second quarter. Revenue from Microsoft's productivity server offerings -- collectively includingLync, SharePoint, and Exchange -- continued double-digit percentage growth. The Entertainment and Devices Division posted revenue of $3.77 billion, a decrease of 11% from the prior year period. Adjusting for the Video Game Deferral, the division's non-GAAP revenue decreased 2% for the second quarter. Xbox continues to be the top-selling console in the United States. During the quarter, Microsoft launched Windows Phone 8 with a broad array of carriers and devices. Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.

Juniper Networks (JNPR) reported fourth quarter earnings of $0.28 per share, $0.06 better than the Capital IQ consensus of $0.22, while revenues rose 1.8% year/year to $1.14 bln versus the $1.13 bln consensus. Co issues in-line guidance for Q1, sees EPS of $0.18-0.22 versus the $0.20 Capital IQ Consensus Estimate; sees Q1 revs of $1.050-1.070 billion versus the $1.07 bln Capital IQ Consensus Estimate. "For the fourth quarter we delivered sequential and year-over-year revenue growth and expanded operating margins. We have largely completed our announced workforce actions and are well underway with our facility and supply chain efforts to reduce our cost structure..."

Rambus (RMBS) reported fourth quarter loss of $0.14 per share, excluding non-recurring items, $0.02 worse than the Capital IQ single est of ($0.12), while revenues fell 31.2% year/year to $57.4 million versus the $60.25 million consensus, primarily due to recognition of one-time royalty revenue during the fourth quarter of 2011 from a patent license agreement with Broadcom and lower royalties reported by other customers. Rev nearly flat on a sequential basis from the third quarter of 2012 primarily due to recognition of one-time royalty revenue during the third quarter of 2012 from a patent license agreement with Fujitsu, offset by higher royalties reported by other customers. As compared to Q4, revenue was down 31%.

QLogic (QLGC) reported third quarter earnings of $0.20 per share, $0.03 better than the Capital IQ consensus of $0.17, while revenues fell 16.4% year/year to $11 9.4 million versus the $115.77 mln consensus. "We are seeing stabilization in our business and I believe our investments in innovative technologies for new market opportunities position us well to deliver future growth."

KLA-Tencor (KLAC) reported second quarter earnings of $0.63 per share, $0.06 better than the Capital IQ consensus of $0.57, while revenues rose 4.7% year/year to $673 million versus the $634.52 mln consensus. "In the second quarter, KLA-Tencor delivered revenue and earnings per share at or above the upper end of our range of guidance in the face of a challenging demand environment."