From Briefing.com: 4:10 pm : The S&P 500 settled higher by 0.6%, notching its first advance of 2014. Despite today's gain, the index remains lower by 0.6% through the first four sessions of the year.
The benchmark index notched its high during the initial 90 minutes before spending the remainder of the session in a narrow range. Meanwhile, the Nasdaq (+1.0%) inched to a fresh high during the late afternoon.
Nine of ten sectors registered gains while materials (-0.2%) spent the day in negative territory. The sector was pressured by steelmakers with Market Vectors Steel ETF (SLX 47.63, -0.21) falling 0.4%.
Outside of materials, most of the remaining cyclical groups posted solid gains. The financial sector was an exception as Bank of America (BAC 16.50, -0.16), Goldman Sachs (GS 178.29, -1.08), and JPMorgan Chase (JPM 58.32, -0.68) weighed. Bank of America lost 1.0% after spiking 7.0% over the past three sessions while JPMorgan Chase fell 1.2% after announcing its settlement stemming from the Madoff case will reduce fourth quarter net income by roughly $850 million. For its part, Goldman Sachs settled lower by 0.6% after Societe Generale initiated the stock with a 'Sell' rating.
Elsewhere, the technology sector (+0.9%) finished among the leaders even as its top component, Apple (AAPL 540.04, -3.89), lost 0.7%, ending below its 50-day moving average. Other large-cap names picked up the slack as Google (GOOG 1138.86, +21.54) and Oracle (ORCL 37.85, +0.38) advanced 1.9% and 1.0%, respectively.
The outperformance of technology gave a boost to the Nasdaq, which also drew strength from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 226.93, +3.11) jumped 1.4%. In turn, the health care sector (+1.0%) settled in the lead.
Other countercyclical groups held up fairly well as utilities (+0.9%) outperformed while consumer staples (+0.5%) and telecom services (+0.5%) settled just behind the S&P 500.
Treasuries registered modest gains as the 10-yr yield slipped one basis point to 2.95%.
Today's economic data was limited to the November trade deficit, which narrowed to $34.3 billion from a downwardly revised $39.30 billion (from $40.60 billion) while the Briefing.com consensus expected the deficit to come in at $40.40 billion. The decline in the trade deficit in November combined with the downward revision to the October data will likely boost our fourth quarter GDP estimates.
Unfortunately, most of the decline in the trade deficit was likely temporary. A large drop in petroleum-based demand was a catalyst for a significant contraction in imports. Meanwhile, a significant portion of export growth came from the unstable sales of civilian aircraft and aircraft engines.
Among news of note, the U.S. Senate approved Janet Yellen's nomination to lead the Federal Reserve with a 56.26 vote.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while December ADP Employment Change will be reported at 8:15 ET. The FOMC minutes from the December meeting will be released at 14:00 ET and the day's data will be topped off with the Consumer Credit report, which will cross the wires at 15:00 ET.
DJIA -0.3% YTD
S&P 500 -0.6% YTD
Russell 2000 -0.6% YTD
Nasdaq -0.6% YTD
DJ30 +105.84 NASDAQ +39.50 SP500 +11.11 NASDAQ Adv/Vol/Dec 1813/2.12 bln/776 NYSE Adv/Vol/Dec 2032/685.7 mln/1004 3:35 pm : Commodities ended the day mixed with oil gaining modestly, precious metals declining and corn rising slightly. At the end of today's session, Feb crude oil rose $0.21 to $93.67/barrel, while Feb natural gas settled unchanged at $4.30/MMBtu. Feb gold lost $9.20 to $1229.20/oz and Mar silver declined $0.41 to $19.79/oz.
4:27PM Rubicon Tech announces sale of $28.2 mln of common stock (RBCN) 11.44 0.00 : Co announced the sale of $28.2 million of its common stock pursuant to an underwriting agreement with Canaccord Genuity Inc. The last reported sale price of Rubicon's common stock as reported by the NASDAQ Global Market on January 7, 2014 was $11.44 per share. Rubicon intends to use the net proceeds to fund research and development of new products, for capacity expansion and for general corporate purposes. Closing of the offering is expected to occur on or about January 14, 2014, subject to customary closing conditions. In addition, Rubicon has granted the underwriter a 30-day option to purchase additional shares of common stock equal to up to 15% of the number of shares of common stock sold in the offering.
Canaccord Genuity Inc. is acting as sole book-running manager for the offering.
4:27PM Pericom Semi appoints James B. Boyd to the position of Chief Financial Officer (PSEM) 8.82 -0.07 : Co announced that it has appointed James B. Boyd to the position of Senior Vice President and Chief Financial Officer. Mr. Boyd has over thirty years of finance experience, including twelve years as a public company CFO in the semiconductor industry.
4:08PM Micron beats by $0.26, beats on revs (MU) 21.73 +1.06 : Reports Q1 (Nov) earnings of $0.77 per share, $0.26 better than the Capital IQ Consensus Estimate of $0.51; revenues rose 120.4% year/year to $4.04 bln vs the $3.71 bln consensus.
Revenues from sales of DRAM products were 69 percent higher q/q due primarily to an increase in sales volume resulting from the acquisition of Elpida.
Revenues from sales of NAND Flash products were 8 percent higher q/q primarily due to an 11 percent increase in sales volume offset by a slight decrease in average selling prices.
The company's consolidated gross margin improved to 32 percent in the first quarter of fiscal 2014 compared to 25 percent in the fourth quarter of fiscal 2013 primarily due to an increase in volume of products resulting from the acquisition of Elpida and to product mix.
Cash flows from operations for the first quarter of fiscal 2014 were $1.51 billion, while investments in capital expenditures were $669 million. The company ended the first fiscal quarter with cash and marketable investments of $4.41 billion.
Large Cap Gainers
VRX (122.81 +9.05%): Co reaffirmed Q4 guidance; guided FY14 EPS towards the low end of expectations; FY14 rev above.
MGM (24.57 +4.64%): Upgraded to Overweight from Equal-Weight at Morgan Stanley.
WDAY (88.19 +4.26%): Upgraded to Buy from Neutral at UBS.
Large Cap Losers
NFLX (342.12 -4.85%): Downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $310 from $333; Sony (SNE) has teamed up with NFLX in video content deal, according to reports.
KORS (79.63 -2.94%): Downgraded to Neutral from Buy at Citigroup.
TWTR (63.55 -4.13%): Fidelity funds bought 2.4 mln shares in days after going public, according to Reuters report.
Mid Cap Gainers
PCYC (125.09 +19.07%): Independent Data Monitoring Committee recommended Phase III study of IMBRUVICA (ibrutinib) vs. ofatumumab be stopped early based on statistically significant improvement in progression free survival and overall survival.
FDML (21.37 +10.61%): Honeywell (HON) reached agreement to sell friction materials business to FDML for ~ $155 mln.
CVG (22.44 +7.57%): Co to acquire Stream Global Services for $820 mln; reaffirmed 2013 EPS and rev guidance.
Mid Cap Losers
GPOR (56 -5.42%): Announced 2013 exit rate and provided update on production: achieved record daily production of ~27,780 BOEPD on Dec 31, 2013; downgraded to Sector Perform at RBC Capital Mkts; tgt lowered to $61; downgraded to Hold from Buy at KLR Group.
SPN (24.91 -2.35%): Downgraded to Market Perform from Outperform at Cowen.
STM (7.68 -1.79%): Downgraded to Underweight from Equal Weight at Barclays.
OmniVision Technologies (OVTI) announced the immediate availability of OV480, an electronic distortion correction solution for wide field-of-view automotive applications
3D Systems (DDD) introduced the ChefJet series of 3D printers, launching an entirely new 3D printer category of professionally-certified, kitchen-ready 3D printers for edibles.
3D Systems (DDD) announced the debut of the first-ever haptic-based, consumer 3D mouse for intuitive 3D sculpting and design, the Touch, with instant force feedback that mimics the sense of physical sculpting.
3D Systems (DDD) revealed its 3DMe Photobooth, the first compact, integrated physical photography pod that brings the entire 3DMe experience directly to the retail floor and event space.
3D Systems (DDD) announced a preview of its new CubeJet 3D printer.
3D Systems (DDD) showcased its new CeraJet 3D printer, extending its 3D printing portfolio to the ancient artisanal craft of pottery and ceramics.
Corning (GLW) announced Corning Gorilla Glass NBT, designed to help protect touch notebook displays from scratches and damage, has been adopted by Dell for several of its touch-enabled PCs, including the XPS, Inspiron, and Latitude series.
Corning (GLW) announced that Corning Gorilla Glass has been chosen by Pebble as the cover glass for the newly launched Pebble Steel smartwatch.
Ixia (XXIA) announced the expansion of its Xcellon-Multis portfolio of products with a native 12-port 40GbE load module, which is the highest 40GbE port density in the industry.
Marvell (MRVL) unveiled the ARMADA 1500 PRO a quad-core platform optimized to support Google (GOOG) services for Smart TV and complete IP-hybrid service security from Verimatrix. Co also announced a partnership with Skyworth, a global TV maker, to deploy Smart TVs and set-top boxes with Google services for Smart TV.
RFMD (RFMD) expanded its broad portfolio of Wi-Fi products to include two new front end modules for automotive Wi-Fi applications.
8:34AM Apple announces App store sales topped $10 billion in 2013 (AAPL) 543.93 : Co announced that customers spent over $10 billion on the App Store in 2013, including over $1 billion in December alone. App Store customers downloaded almost three billion apps in December making it the most successful month in App Store history. Apple's developers have now earned $15 billion on the App Store.
Broadcom (BRCM) announced two new system-on-a-chip devices for entry-level satellite set-top boxes.
Analog Devices (ADI) unveiled a high-precision, low-power meter-on-a-chip for a range of portable health applications such as point-of-care diagnostics, home/self-test health devices, and wearable vital signs monitors, including those for sports and fitness.
Integrated Device Technology (IDTI) announced the industry's first Qi-compliant single-chip wireless power transmitter solution supporting a 5V input.
6:04AM Advanced Semi reports Q4 revs above consensus; Dec net revs increased 12.8% YoY to NT$21.43 bln, down 2.5% sequentially (ASX) 4.50 : Co also reports Q4 net revs increased 13.3% YoY to NT$64.16 bln vs NT$60.85 bln CIQ est. This represented a sequential increase of 14.8%.
United Microelectronics (UMC) announced that it has surpassed 15 million shipments for customer small display driver ICs manufactured using the foundry's 55nm embedded high voltage technology.
AMD (AMD) announced a new milestone in their collaboration with BlueStacks, a joint solution that brings the complete Google (GOOG) Android OS experience to Microsoft (MSFT) Windows-based tablets, 2-in-1s, notebooks and desktops. Optimizations for the fourth generation AMD APU in BlueStacks provide a complete, Android user interface and extensive support for Android apps for entertainment and productivity.
iRobot Corp (IRBT) announced that the iRobot Scooba 450 is available in North America at www.irobot.com starting Tuesday, January 7 and introduced the new Roomba 800 Series.
Intel (INTC), Barneys New York, the Council of Fashion Designers of America and Opening Ceremony announced strategic collaborations to explore and bring to market smart wearable technology, and to increase dialogue and cooperation between the fashion and technology industries.
Palo Alto Networks (PANW) announced it has acquired Morta Security, a Silicon Valley-based cybersecurity company operating in stealth mode since 2012. Financial terms of the acquisition were not disclosed.
Ericsson (ERIC) announced an agreement with AT&T (T) to improve connectivity for products and applications that are powered by the Ericsson Connected Vehicle Cloud. The agreement creates a better consumer experience and helps advance the automotive cloud ecosystem by making it easier to connect in- vehicle technology and provide a path for the next generation consumer experience.
Cyan (CYNI) lowered guidance for the fourth quarter $20-$21 million, below prior guidance range of $30-$33 million which is below expectations. The decrease in guidance is largely a result of revenue from its largest customer decreasing by approximately 88% from $19 million in our third fiscal quarter to $2 million in the fourth quarter. Co states: "We are very disappointed with our preliminary fourth quarter 2013 revenue results, which were significantly impacted by a sharp decline in orders from our largest customer. Although we expect revenue from this customer to represent a meaningful portion of our revenue in future periods, we expect that it will continue to fluctuate from quarter-to-quarter. As we previously noted, our business in the near term is substantially dependent on this customer while we ramp revenue from new accounts and expand our customer base." In early February 2014, the company expects to announce the full results for the fourth quarter and year ended December 31, 2013, guidance for the first quarter of 2014, and an updated outlook for the full 2014 year.
Convergys (CVG) announced entry into a definitive merger agreement under which Convergys will acquire Stream for a total enterprise value of $820 mln in cash, subject to certain adjustments, from funds managed by Ares Management and Providence Equity Partners, as well as from LiveIt, the BPO investment arm of Ayala Corp. The company also announced the transaction is expected to add ~$0.35 in diluted earnings per share (EPS) in the first 12 months after close, excluding one-time charges, intangible amortization and integration costs. Convergys expects transaction to be accretive to EPS and to strengthen long-term revenue and earnings growth potential. Transaction and Integration Details The transaction is expected to close in Q1 of 2014, subject to the satisfaction of customary closing conditions, including applicable regulatory requirements. The company also announced its intention to finance the transaction through $400 mln of cash on hand, a new $350 mln term loan for which co has received a commitment letter from Citigroup Global Markets Inc. and BofA Merrill Lynch, and existing credit facilities for the balance, although obtaining such financing is not a condition to the closing of the transaction. The company expects to extend its accounts receivable securitization and revolving credit facilities, and upon closing, to have at least $550 mln in available liquidity including undrawn credit facilities, cash and short term investments. Not included in this guidance is the impact of strategic acquisition activity or results classified within discontinued operations related to the sale of Convergys' Information Management business as well as other impacts from corporate simplification actions initiated in prior years such as non-cash pension settlement charges.
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