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From Briefing.com: 4:15 pm : The S&P 500 settled lower by 0.3%, registering its fourth consecutive loss. Small caps outperformed the benchmark average as the Russell 2000 added 0.2%.

Stocks slipped during the opening hour in reaction to a below-consensus consumer confidence report for September. Gains in the stock market were unable to thwart pessimism in the labor market as the September Consumer Confidence Index fell to 79.7 from an upwardly revised 81.8 (from 81.4) in August. The Briefing.com consensus expected the Consumer Confidence Index to drop to 80.0.

Consumer confidence typically follows changes in equity prices, labor market conditions, gasoline prices, and media reports. While the equity market had a banner month for most of September, concerns about future labor growth weighed more heavily on consumer attitudes.

Despite the opening slip, the S&P recovered swiftly, but was unable to hold the 1,700 level into the close as financials and technology weighed.

The financial sector (-0.6%) underperformed for a second consecutive day with JPMorgan Chase (JPM 50.32, -1.14) leading to the downside. The stock fell 2.2% after The New York Times revealed the Department of Housing and Urban Development sought a $20 billion settlement in a mortgage-backed securities issuance case against the bank. This followed yesterday's reports, which said prosecutors in California are set to announce charges against JPMorgan Chase in this case.

Elsewhere, the technology sector ended lower by 0.3% as many top components lagged while chipmakers rallied. Oracle (ORCL 33.64, -0.30), Microsoft (MSFT 32.46, -0.29), and Visa (V 193.34, -2.90) lost between 0.9% and 1.5% while the PHLX Semiconductor Index advanced 0.7% after Applied Materials (AMAT 17.44, +1.45) announced plans to merge with Tokyo Electron.

Even though the S&P ended in the red, there were some pockets of strength among cyclical sectors like industrials and consumer discretionary.

Industrials (+0.3%) finished in the lead thanks to all-around support. The largest sector component, General Electric (GE 24.32, +0.04) advanced 0.2% and transportation companies also outperformed. The Dow Jones Transportation Average added 0.1%.

Meanwhile, the discretionary sector (+0.1%) saw homebuilders rally after KB Home (KBH 17.76, +0.73) and Lennar (LEN 36.01, +1.47) reported bottom-line beats. Housing stocks also drew strength from continued gains in home prices as the July Case-Shiller 20-city Index rose 12.4% (Briefing.com consensus 12.0%) and the FHFA Housing Price Index improved by 1.0%. The iShares Dow Jones US Home Construction ETF (ITB 22.66, +0.41) gained 1.8%.

Also aiding homebuilders was indirect support from the continued retreat in yields. Treasuries ended near their highs with the 10-yr yield down six basis points at 2.65%. This marked the lowest level for the benchmark yield since mid-August.

Trading volume was a bit below average as 674 million shares changed hands on the floor of the New York Stock Exchange.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET; August durable orders will be released at 8:30 ET; and August new home sales will cross at 10:00 ET.

The U.S. Treasury will auction $35 billion in 5-yr notes.DJ30 -66.79 NASDAQ +2.97 SP500 -4.42 NASDAQ Adv/Vol/Dec 1391/1.73 bln/1115 NYSE Adv/Vol/Dec 1644/673.8 mln/1360

3:35 pm :

Nov crude oil fell for a fourth consecutive session as tension eased in the Middle East. Iran has agreed to talks on Thursday over its nuclear program with representatives from six word powers, including the U.S. The energy component fell as low as $103.30 per barrel in morning floor trade and settled with a 0.5% loss at $103.11 per barrel, slightly below its session high of $103.22 per barrel
Oct natural gas registered a third consecutive session of losses as it trended lower in negative territory. It pulled back from its session high of $3.58 per MMBtu and closed 3.1% lower at its session low of $3.49 per MMBtu
Precious metals also struggled in negative territory today as the dollar index traded in the black
Dec gold fell for a third consecutive session, slipping to a session low of $1305.50 per ounce. It managed to erase some of the loss and settled at $1316.70 per ounce, or 0.8% lower
Dec silver slipped to a session low of $21.33 per ounce in morning pit trade and inched slightly higher as the session progressed. It eventually settled at $21.58 per ounce, booking a loss of 1.3%

4:05PM Microsoft to webcast conference call to discuss new reporting segments on Thursday, September 26, 2013 at 9:00 a.m. Pacific Time (MSFT) 32.46 -0.29 :

Large Cap Gainers

AMAT (17.16 +7.32%): Co and Tokyo Electron (TOELY) to merge, creating a new co as a merger of equals with combined market capitalization of ~$29 bln.
FB (49.13 +4.12%): Upgraded to Buy from Neutral at Citigroup.
KMX (51.62 +3.21%): Beat on EPS by $0.06, beat on revs.

Large Cap Losers

RHT (46.99 -11.22%): Beat on EPS by $0.02, reported revs in-line; guided FY14 EPS, revs in-line, Q3 EPS in-line, Q3 revs below ests; billings came in below expectations; target lowered to $58 from $65 at Mizuho; target lowered to $60 at Stifel; downgraded to Neutral from Overweight at Piper Jaffray; downgraded to Sector Perform at Pacific Crest.
CCL (34.96 -6.52%): Beat on EPS by $0.06, reported revs in-line; narrowed FY13 EPS in-line.
ABBV (46.37 -1.55%): Co and Galapagos to co-develop cystic fibrosis therapies.

Mid Cap Gainers

LEN (36.31 +5.12%): Beat on EPS by $0.08, beat on revs.
THG (54.71 +4.41%): Upgraded to Mkt Outperform from Mkt Perform at JMP Securities.
GPOR (63.84 +3.79%): Initiated with a Buy at Goldman.

Mid Cap Losers

ATHN (108.18 -4.91%): Downgraded to Mkt Perform from Outperform at Leerink Swann.
FFIV (86.26 -3.26%): Downgraded to Neutral from Buy at Goldman.
CLMT (28.95 -3.18%): Downgraded to Underperform from Neutral at Credit Suisse; tgt lowered to $31 from $33.

8:03AM Brocade and Aruba (ARUN) collaborate to eliminate Cisco (CSCO) campus lock-in (BRCD) 8.21 : BRCD and ARUN announced a strategic relationship to deliver an open-standards based unified campus network to support secure mobility, the proliferation of mobile devices within campus environments, Bring Your Own Device (BYOD) initiatives and emerging technologies, such as Software-Defined Networking (SDN). The resulting integrated wired and wireless solution provides a best-of-breed approach that enables customers to eliminate vendor lock-in and reduce total cost of ownership by nearly half as compared to equivalent offerings.

Through this relationship, Brocade and Aruba will jointly develop and bring to market solutions across multiple industries, including U.S. federal government. With integrated solutions already deployed worldwide, Brocade and Aruba will collaborate on R&D to bring tighter integration for a simplified and agile wired and wireless campus network.

Brocade and Aruba will also embark on a broader technology initiative to apply SDN principles to campus networks. Utilizing open standards to replace legacy multi-tier network architectures, Brocade and Aruba engineers will work to develop a campus network virtualization solution designed to bring unprecedented performance and operational efficiencies, including: Automated IT operations with zero-touch network expansion Enriched peer-to-peer application experiences, such as MSFT Lync and AAPL AirPlay Reduced acquisition costs compared to premiums associated with CSCO lock-in.

8:03AM Cypress Semi lowers Q3 guidance; seeing greater than expected weakness in mobile handset revenues (CY) 11.44 : Co states, "We are seeing greater than expected weakness in our mobile handset revenues, mainly within Asia, due to a customer push out of certain new handset programs to Q1, as well as order reductions at various end customers in China to balance inventory levels. Unfortunately this is resulting in a negative impact to Q3 revenue that was not anticipated in our original guidance.

"By geography, the weakness is mainly in Asia. By end market, the majority of the weakness is in mobile handsets and to a lesser degree in the PC market. Greater than 70% of our revenue traditionally has come from distributors and the final week of September is our largest week of the quarter, and, as such, our revised revenue estimates could vary significantly.

Lead-times also continue to be near historical lows, reducing revenue visibility for Cypress and our distribution partners.

Consolidated revenue of $184 million to $187 million, lower than prior guidance, Capital IQ consensus $204.7 mln
Non-GAAP gross margins of 53.5% to 54.0%, higher than prior guidance
Non-GAAP operating expenses of $77 million to $78 million, lower than prior guidance
Non-GAAP fully diluted earnings per share of $0.10 to $0.12, lower than prior guidance, Capital IQ consensus $0.18
GAAP loss per basic share of ($0.11) to ($0.09), lower than our prior guidance

7:01AM Xilinx and Analog Devices (ADI) achieve JEDEC JESD204B interoperability (XLNX) 46.60 : Co announced that they have achieved JESD204B interoperability between Xilinx JESD204 LogiCORE IP in the Kintex-7 FPGA and the ADI AD9250 analog-to-digital high-speed data converter. Achieving JESD204B interoperability between logic and data converter devices is a significant milestone in promoting the widespread adoption of this new technology.

6:10AM Applied Materials and Tokyo Electron (TOELY) to merge; creating a new company as a merger of equals with combined market capitalization of ~$29 bln (AMAT) 15.99 : Applied Materials (AMAT) and Tokyo Electron (TOELY) announce a definitive agreement to create a global innovator in semiconductor and display manufacturing technology via an all-stock combination which values the new combined company at ~$29 bln. This combination, which has been unanimously approved by the Boards of both companies, brings together complementary leading technologies and products to create an expanded set of capabilities in precision materials engineering and patterning that are strategically important for customers.

Under the terms of the agreement, Tokyo Electron shareholders will receive 3.25 shares of the new company for every Tokyo Electron share held. Applied Materials shareholders will receive 1 share of the new company for every Applied Materials share held. After the close, Applied Materials shareholders will own ~68% of the new company and Tokyo Electron shareholders ~32%.

The companies expect to achieve $250 mln in annualized run-rate operating synergies by the end of the first full fiscal year and $500 mln in run-rate operating synergies realized in the third full fiscal year. In addition, the new co expects to realize meaningful savings as a result of the new corporate structure. The new company intends to commence a $3.0 bln stock repurchase program targeted to be executed within 12 months following the close of the transaction. On a non-GAAP basis, taking into account the buyback, the transaction is expected to be EPS accretive at the end of the first full fiscal year after transaction close.

Additional highlights of transaction:

Accelerates development of breakthrough products to address future technology inflections and create greater value for shareholders, customers and employees
Tetsuro Higashi to be chairman; Gary Dickerson to be CEO
Combined company to maintain dual listing on NASDAQ and Tokyo Stock Exchange and dual headquarters in Santa Clara, California and Tokyo, Japan

Maxim Integrated Products (MXIM) announced that it has extended by one day the expiration date of the tender offer by its wholly owned subsidiary, Victory Merger Sub, to purchase all of the outstanding shares of Volterra Semiconductor (VLTR) for a price of $23 per share in cash

07:28 am Red Hat shares fall 9% following Q3 revenue guidance that was below expectations
Red Hat (RHT $48.06 -4.87) reported second quarter earnings of $0.35 per share, which is better than expected, while revenues rose 16.1% year/year to $374.4 million which is higher than expected. "These results were driven in particular by strong subscription revenue growth, up 17% in U.S. dollars and 18% in constant currency. The billing proxy, which we define as total revenue plus the change in deferred revenue found on the Statement of Cash Flows, was $376 million, up 8% in U.S. dollars and 9% in constant currency. This billings growth reflects modest IT spending in Europe and the impact of large deal arrangements." The company sees fiscal year 2014 adjusted EPS of $1.36-1.38 and revenues of $1.51-1.52 billion which are both in line with expectations. The company also sees third quarter adjusted EPS of $0.34-0.35 which is in line with estimates with revenues of $381-384 million which is below expectations.

Rambus Inc. (RMBS) announced it has signed an agreement with Freescale Semiconductor (FSL) that expands the relationship between the companies. The agreement extends Freescale's access to Rambus' innovations for memory controllers and serial links. Additionally, the expanded agreement provides Freescale with the ability to collaborate on Rambus' resistive memory technology for embedded applications. The expanded agreement extends the terms of the existing license agreement until 2018. Other terms of the agreement are confidential.

DealerTrack (TRAK) announced an agreement to acquire VINtek, a provider of automotive collateral management, electronic lien and title (ELT) and consumer automotive finance processing services. Total consideration for the transaction is expected to be approximately $53.4 million in cash, subject to standard purchase price adjustments. This transaction is expected to close in the fourth quarter of this year, subject to customary closing conditions. Details of the financial impact of the transaction are expected to be discussed as part of the Dealertrack's third-quarter earnings conference call in early November.

08:09 am Red Hat downgraded to Sector Perform at Pacific Crest following earnings: . Pacific Crest downgrades RHT to Sector Perform from Outperform. Despite better revenue, subscription revenue, operating margin and EPS results, billings suffered due to a weaker European macro and more large deals being off-balance-sheet. Additionally, total revenue guidance disappointed as the company is outsourcing more of its services to partners. The recent declines in billings, while explainable due to the off-balance-sheet component, are likely to weigh on investor confidence in the near to medium term.

08:09 am P.A.M. Transport target raised to $20 at Wunderlich: . Wunderlich raised their PTSI tgt to $20 from $15. Despite regulatory headwinds and a choppy freight environment, PAM Transportation (PTSI) appears primed to deliver strong results again in 3Q13. The co is bucking soft industry trends via improved freight mix and internal execution. The co adroitly sidestepped the negative utilization impact of the new HOS rule and monthly tonnage comps continue to improve as the co diversifies its customer exposure and reduces so-called random freight. With the secular tailwind of a strong automotive sector at its back, they expect PAM to continue outperforming broader TL in the near-term.

08:08 am Catalyst Pharma initiated with a Buy at Maxim Group; tgt $4: . Maxim initiates CPRX with a Buy and price target of $4. The co's lead drug, Firdapse (amifampridine), is in a phase III trial as a first-line treatment for an orphan disease-Lambert-Eaton myasthenic syndrome (LEMS)-with top-line results expected in 2Q14 and an NDA (new drug application) to follow in 2H14. Firm expects the pivotal trial to complete enrollment by 4Q13 and report data in 2Q14. Firdapse is currently approved and used in Europe. Patient experience and multiple prior investigator trials all point to safety and efficacy. Firdapse is a potassium channel blocker. Its active ingredient, amifampridine, is available for LEMS treatment in the United States today through a few compounding pharmacies.