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From Briefing.com: 4:15 pm : The major averages ended today's session with modest gains. The Dow added less than two points while the S&P 500 rose 0.2% to mark its twelfth advance in thirteen sessions.

Last week, the first round of second quarter earnings brought a fair share of top line misses. This week started on a similar note after Dow component McDonald's (MCD 97.58, -2.69) reported an earnings miss on below-consensus revenue. The fast food giant observed a decline in Asian and European same store sales while blaming the disappointing results on consumer uncertainty regarding the economic outlook.

Although McDonald's fell 2.7%, other quick service restaurants held up relatively well. However, the relative weakness of home builders coupled with the underperformance of the largest fast food stock kept the discretionary sector in the red throughout the day.

June existing home sales fell 1.2% from a downwardly revised 5.14 million in May to 5.08 million. The Briefing.com consensus expected existing home sales to increase to 5.28 million.

The drop in home sales does not bode well for the future. It was expected that rising mortgage rates would accelerate demand in the near term as potential buyers aimed to lock in mortgages before rates went even higher. That was supposed to pull sales forward into May, June and July, before a payback period developed in the future. However, that surge has not materialized in the June report.

In addition to discretionary shares, the consumer staples sector lagged, slipping 0.2% after Kimberly-Clark (KMB 97.68, -1.81) reported an earnings beat on below-consensus revenue.

The broader market was kept from registering larger gains by the underperformance of the energy sector, which shed 0.3% while crude oil fell 1.1% to $106.69 per barrel.

However, another commodity-linked sector, materials, finished among the leaders as industrial and precious metals displayed strength. Copper futures added 1.3% to $3.182 per pound and gold futures jumped 3.1% to $1333.00 per troy ounce. The yellow metal returned to its 50-day moving average while gold miners also registered solid gains. The Market Vectors Gold Miners ETF (GDX 27.44, +1.58) spiked 6.1%.

Elsewhere, the outperformance of major bank shares helped the financial sector settle higher by 0.7%.

Also of note, the technology sector rose 0.4% and Google (GOOG 910.54, +13.94) climbed 1.6% to erase its Friday slide caused by disappointing earnings.

Today's participation was limited as only 585 million shares changed hands on the floor of the New York Stock Exchange.

Tomorrow's economic data will be limited to the May FHFA Housing Price Index, which will be released at 9:00 ET.

The U.S. Treasury will auction $35 billion in 2-yr notes.DJ30 +1.81 NASDAQ +12.77 SP500 +3.44 NASDAQ Adv/Vol/Dec 1476/1.46 bln/994 NYSE Adv/Vol/Dec 1715/584.6 mln/1278

3:30 pm :

Sep crude oil fell for the first time in four sessions despite weakness in the dollar index. The energy component pulled back from its session high of $108.60 per barrel and retreated into negative territory. It brushed a session low of $106.55 per barrel and booked a 1.0% loss as it settled at $106.84 per barrel.
Aug natural gas spent its entire floor session in the red. It slipped from a session high of $3.70 per MMBtu to a session low of $3.64 per MBMtu in early morning pit trade and eventually settled with a 2.9% loss at $3.68 per MMBtu.
Aug gold rose for a third consecutive session as it gained support from the weaker dollar index. The yellow metal came off its session low of $1317.90 per ounce and steadily trended higher as the session progressed. It touched a high of $1339.10 per ounce in late afternoon floor trade, its highest level since June 20, and settled with a 3.3% gain at $1335.90 per ounce.
Sep silver also trended higher today, rising as high as $20.58 per ounce. It lifted off its session low of $20.03 per ounce set at pit trade open and settled with a solid 5.4% gain at $20.51 per ounce.

4:33PM Ultra Clean Holdings reports EPS in-line, beats on revs; guides Q3 EPS in-line, revs in-line (UCTT) 6.12 -0.16 : Reports Q2 (Jun) earnings of $0.08 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.08; revenues rose 8.0% year/year to $110.1 mln vs the $107.6 mln consensus.

Co issues in-line guidance for Q3, sees EPS of $0.06-0.12, excluding non-recurring items, vs. $0.09 Capital IQ Consensus Estimate; sees Q3 revs of $103-110 mln vs. $109.22 mln Capital IQ Consensus Estimate.

4:20PM Netflix beats by $0.10, reports revs in-line; guides Q3 EPS in-line (NFLX) 261.96 -2.61 : Reports Q2 (Jun) earnings of $0.49 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.39; revenues rose 20.2% year/year to $1.07 bln vs the $1.07 bln consensus. Co issues in-line guidance for Q3, sees EPS of $0.30-0.56 vs. $0.41 Capital IQ Consensus Estimate.

Netflix: Q2 Performance vs Guidance

Domestic Streaming
Total Subscriptions: 30.9 mln, Guidance 29.40-30.05 mln
Revenue: $697 mln, Guidance $665-673 mln
Contribution Profit: $166 mln, Guidance $139-149 mln
International Streaming
Total Subscriptions: 8.65 mln, Guidance 7.3 to 7.9 mln
Revenue: $177 mln, Guidance $156-170 mln
Contribtution Profit (Loss): ($78 mln), Guidance ($81 mln)-($65 mln)
Domestic DVD
Contribution Profit: $102 mln, Guidance$100-112 mln
Consolidated
Global
Net Income (Loss): $26 mln, Guidance $14-29 mln
EPS: $0.43, Guidance $0.23-0.48

Netflix Q3 Guidance

Domestic Streaming
Total Subscriptions: Guidance 30.50-31.3 mln
Revenue: Guidance $693-701 mln
Contribution Profit: Guidance $161-171 mln
International Streaming
Total Subscriptions: Guidance 8.3-9.0 mln
Revenue: Guidance $170-184 mln
Contribtution Profit (Loss): Guidance ($86 mln)-($70 mln)
Domestic DVD
Contribution Profit: Guidance$96-98 mln
Global
Net Income (Loss): Guidance $18-24 mln
EPS: Guidance $0.30-0.56...

Key Comments from Newsletter

"In Q3, our guidance midpoint implies 130 bps of further margin expansion as we continue to run above our target. For Q4, we anticipate stepping up content spending even more, getting us closer to our 400 bps per year target. We'll keep targeting about 400 basis points of annual improvement into 2014 if we keep growing net additions at 2012/2013 levels".
"Q2 international contribution loss was lower than expected due to slightly higher member growth and lower than anticipated growth in content spending across multiple markets. We plan to grow our international content investments in Q3 slightly ahead of revenues. This growth combined with the losses associated with the launch of the Netherlands results in our guidance reflecting a q/q increase in our combined international contribution loss".
"Free cash flow was +$13 million in Q2, a swing to positive reflecting the relatively fewer content payments in the quarter and strong global profit growth. Our investments in content, including Originals, will continue to weigh on FCF relative to net income and thus our FCF trends".

4:11PM General Electric announces redemption of all of its 6.5% GE Capital InterNotes due August 15, 2048 (GE) 24.86 +0.14 : GE Capital announced that it is calling for redemption all of its outstanding 6.50% GE Capital InterNotes Due August 15, 2048. The redeemed notes will be redeemed on August 22, 2013 at a redemption price of $25.00 per note together with accrued but unpaid interest to but excluding August 22, 2013 of $0.0315972 per note. The trustee for the notes, The Bank of New York Mellon, will act as redemption and paying agent.

4:07PM Volterra Semi misses by $0.03, misses on revs (VLTR) 16.21 +0.09 : Reports Q2 (Jun) earnings of $0.13 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.16; revenues fell 21.1% year/year to $34.4 mln vs the $35.57 mln consensus.

"Revenue came in at the low end of guidance as our notebook business declined as expected and we experienced a one quarter inventory correction with a server customer. Q3 orders are stronger at this point than this time last quarter and we are therefore encouraged about our short term outlook and longer term growth opportunities in our server storage, communications and energy businesses."

4:05PM Sanmina beats by $0.05, reports revs in-line; guides Q4 EPS in-line, revs in-line (SANM) 15.26 +0.06 : Reports Q3 (Jun) earnings of $0.40 per share, $0.05 better than the Capital IQ Consensus Estimate of $0.35; revenues fell 3.9% year/year to $1.49 bln vs the $1.47 bln consensus.

Non-GAAP operating income in the third quarter was $49.7 million or 3.3 percent of revenue, compared to $44.1 million or 2.8 percent of revenue in the third quarter fiscal 2012. Cash flow from operations was $66.1 million for the quarter. Inventory turns were 6.9. Cash cycle days were 48.3 days.

Guidance: Co issues in-line guidance for Q4, sees EPS of $0.37-0.43 vs. $0.38 Capital IQ Consensus Estimate; sees Q4 revs of $1.475-1.525 bln vs. $1.51 bln Capital IQ Consensus Estimate.

Large Cap Gainers

ABX (17.77 +7.43%): Strength in gold companies: GG, NEM also higher
UBS (19.22 +3.11%): Reported Q2 operating profit before tax was ~CHF 1,020 and net profit attributable to shareholders was ~CHF 690 mln; co also settled RMBS claims with the FHFA
EMR (60.42 +2.76%): Reported June adjusted trailing 3-month orders growth of 0 to +5%; said comparisons eased and weaker markets began to stabilize, though economic conditions remain uncertain overall

Large Cap Losers

YHOO (27.84 -4.36%): Announced repurchase of 40 mln shares held by Third Point at $29.11 per share; lowers Third Point's stake to ~20 mln shares, representing less than 2% of outstanding common stock; three Third Point affiliated directors to resign
ATVI (14.99 -3.48%): Wall St. Journal reporting that ~61% owner Vivendi is seeking to push the company to declare a $3 bln special dividend
MCD (97.52 -2.74%): Missed quarterly EPS by $0.02 ($1.38 vs $1.40 estimate), revs rose 2.4% yoy to $7.08 bln vs $7.09 bln estimate; global comparable sales increased 1%; global comparable sales for July are expected to be relatively flat

Mid Cap Gainers

KGC (5.55 +8.07%): Strength in gold companies: EGO, RGLD, AUY, AU, GOLD, BVN, GFI, AEM also higher
LII (72.76 +3.94%): Beat quarterly EPS by $0.12 ($1.31 ex items vs $1.19 estimate), revs rose 8.7% yoy to $913.1 mln vs $886.56 mln estimate; raised FY13 EPS guidance to $3.45-3.75 from $3.25-3.55 ex items vs $3.43 estimate, raised FY13 rev guidance to +6-8% (~$3.126-3.214 bln) from +3-6% vs $3.14 bln estimate
TRMB (28.38 +3.20%): Initiated with a Buy at Craig Hallum

Mid Cap Losers

DWA (23.2 -6.83%): Hearing Lazard lowered estimates following disappointing performance of new movie 'Turbo'
ALV (80.55 -1.92%): Downgraded to Neutral from Buy at Buckingham Research; downgraded to Sell from Buy at Danske Bank
PHM (19.02 -1.76%): Weakness in homebuilders following lower than expected June Existing Home Sales: DHI, LEN also lower

12:04PM Microsoft to acquire warehouse and transportation management solutions for Dynamics AX from Blue Horseshoe (MSFT) 31.79 +0.39 : Blue Horseshoe announced a collaboration agreement with Microsoft (MSFT) that includes the acquisition of Blue Horseshoe's Warehousing for AX (WAX) and Transportation for AX (TRAX) solutions. This technology will help Microsoft accelerate its Microsoft Dynamics AX supply chain management roadmap with plans to make the functionality available to the broader Dynamics AX channel partner and customer community.

ARM (ARMH) announced that Entropic (ENTR) has licensed the ARM Mali-400 and Mali-450 Graphics Processing Unit technology and has also entered into a new license agreement for the Cortex-R5 processor.

07:29 am Nokia downgraded to Underperform at Oppenheimer: . Oppenheimer downgraded NOK to Underperform from Perform, reflecting accelerating smartphone competition, potential moderating NSN margins, and rising interest expenses. Mgm't has done well to stabilize NOK's overall business, but this has been more through effective cost cutting (mobile and NSN) than transformative smartphone breakthroughs. More cost cuts are possible, but incremental bottom-line gains will increasingly have to come from meaningful and sustainable smartphone momentum. They believe this will be difficult to achieve with smartphone competition accelerating in 2H13 (new iPhone/Android devices) and mix shifting to value. With smartphones remaining a persistent drag, they expect investors to lose confidence.

Himax Tech (HIMX) announced that it has entered into an agreement with Google (GOOG) pursuant to which Google has agreed to invest in the Company's subsidiary, Himax Display. The purpose of the investment is to fund production upgrades, expand capacity and further enhance production capabilities at HDI's facilities that produce liquid crystal on silicon chips and modules used in applications including head-mounted display such as Google Glass, head-up display and pico-projector products. Under the Agreement, Himax will also invest additional amount in HDI to fund its ongoing capacity expansion. HDI will also use a portion of the proceeds to substantially reduce its loan from Himax. The transaction is expected to close in the third quarter of 2013 subject to regulatory approvals and other closing conditions. Under the Agreement, Google will purchase certain amount of preferred shares in HDI. Upon closing, Google will hold a 6.3% interest in HDI. Google also has an option to make additional investment of preferred shares at the same price within one year from closing. If the option is exercised in full, Google will own a total of up to 14.8% in HDI. Himax Technologies, Inc. holds 81.5% of HDI at present and will remain the major shareholder of HDI after the transaction. Google will join the core group of HDI shareholders including KPCB Holdings, Inc., Khosla Ventures I, L.P. and Intel Capital Corporation.

Smart Tech (SMT) announced that its wholly-owned subsidiary, SMART Technologies ULC, has priced a new four-and-a-half-year senior secured term loan in an aggregate principal amount of $125 million and has received a significant portion of the commitments for a new four-year asset-based loan facility in an aggregate principal amount of $50 million. The proceeds from the financings are intended to be used to refinance certain existing indebtedness, fund transaction costs and for other corporate purposes.Needham lowers their

JDS Uniphase (JDSU) target raised to $18 from $20 at Needham. The firm expects a Tepid Quarter and Guide Out of JDSU. While they think JDSU is executing well on the new product and competitive front, they are concerned about the tepid Telecom spending environment. Accordingly, they are worried that JDSU could post results at the lower end of guidance and offer a tepid conservative guide into the CY3QFY1Q quarter.