From Briefing.com: 4:20 pm : The stock market kicked off the new trading week on an upbeat note, sending the S&P 500 (+0.6%) to a fresh nominal intraday record high of 1858.71. Despite the rally, selling during the final hour kept the benchmark index from finishing the session above its 2013 closing high of 1848.36.
Although the catalyst for today's buying rush could be debated, some attributed the bullish tone to the resilience of the S&P 500 futures in the face of some disappointing economic data and market performance in China. To clarify, a bearish catalyst was there for the taking, but it wasn't taken. Once the U.S. stock market started with a bullish bias, a fear of missing out on further upside helped fuel some renewed buying interest following Friday's lackluster session.
Seven of ten sectors posted gains with energy (+1.5%) ending in the lead. The sector seized the lead at the open and maintained its outperformance throughout the session. Top sector members factored into the strength as Dow components Chevron (CVX 114.15, +1.47) and ExxonMobil (XOM 96.44, +1.41) both gained near 1.4% while crude oil rose 0.6% to $102.81/bbl.
Staying on the commodity theme, precious metals extended their recent gains while copper sold off. Gold futures climbed 1.1% to $1337.90/ozt while silver futures advanced 1.2% to $22.04/ozt. Today's rally extended gold's monthly gain to 7.5% while silver ended the session with a February increase of 15.1%. For its part, copper slid 0.8% to $3.264/lb amid reports of Chinese banks cutting credit to property developers. On a related note, the materials sector shed 0.5%.
Outside of energy and materials, the remaining four cyclical sectors were mixed with respect to the broader market. Financials (+0.8%) and industrials (+0.8%) outperformed while consumer discretionary (+0.6%) and technology (+0.5%) lagged.
Notably, the tech sector was unable to keep up with the S&P 500 as several large components like Cisco Systems (CSCO 22.12, -0.01), Qualcomm (QCOM 75.43, -0.18), and Microsoft (MSFT 37.69, -0.29) lagged. The sector did see some M&A activity as TriQuint Semiconductor (TQNT 11.64, +2.41) announced a merger with RF Micro Devices (RFMD 7.03, +1.22).
On the countercyclical side, health care (+0.8%) outperformed while consumer staples (+0.4%), telecom services (-1.1%), and utilities (-0.3%) lagged.
Treasuries posted modest gains with the benchmark 10-yr yield slipping one basis point to 2.74%.
Today's participation was above average as just over 830 million shares changed hands on the floor of the NYSE.
Tomorrow, the Case-Shiller 20-city Index and the FHFA Housing Price Index for December will both be released at 9:00 ET while the February Consumer Confidence report will cross the wires at 10:00 ET.
Nasdaq Composite +2.8% YTD
Russell 2000 +1.0% YTD
S&P 500 UNCH YTD
Dow Jones Industrial Average -2.2% YTD
DJ30 +103.84 NASDAQ +29.56 SP500 +11.36 NASDAQ Adv/Vol/Dec 1686/2.01 bln/922 NYSE Adv/Vol/Dec 1893/830.7 mln/1149
3:35 pm :
Apr gold extended Friday's gains, trending higher after lifting from its session low of $1328.70 per ounce. It brushed a session high of $1339.20 per ounce in late morning action and eventually settled at $1337.90 per ounce, or 1.1% higher.
Mar silver also traded higher, advancing to a session high of $22.14 per ounce. It spent afternoon action trading in a consolidative pattern just below that level and settled with a 1.2% gain at $22.04 per ounce.
Apr crude oil rose to a session high of $103.45 per barrel in late morning pit trade. It pulled back slightly in afternoon action and settled at $102.81 per barrel, booking a gain of 0.6%.
Apr natural gas, on the other hand, retreated into negative territory after pulling back from its session high of $5.08 per MMBtu set in early morning floor action. It trended lower for most of the session and settled 6.8% lower at $4.66 per MMBtu, slightly above its session low of $4.59 per MMBtu.
2:30PM Technology Select Sector SPDR retesting last week's multi-year high and this morning's peak at 36.26 (XLK) 36.26 +0.31 :
2:02PM Tessera Tech announces settlement with ASE; cos agree to engage in technical collaboration; ASE agreed to pay Tessera, Inc. a total of $30 mln (TSRA) 19.49 +0.36 :
Co announced that its subsidiary, Tessera, Inc., has entered into an agreement with Advanced Semiconductor Engineering (ASX) and ASE (U.S.) to settle all claims at issue between ASE and Tessera, Inc. in the case styled Tessera, Inc: v. Advanced Micro Devices, Inc., et al.
Under the terms of the agreement ASE agreed to pay Tessera, Inc. a total of $30 mln, comprised of a one-time payment in the first quarter of 2015 and annual recurring payments commencing in the first quarter of 2015 through the first quarter of 2018.
12:14PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
HUM (111.12 +8.07%): CMS proposed 2015 payment and policy updates for Medicare Health and Drug Plans; co now expects updates to result in a funding decline for 2015 of 3.5 to 4.0 percent.
VOD (41.78 +7.13%): Disclosed court approval of scheme of arrangement and the reductions of capital of Vodafone.
NBL (70.47 +5.4%): Initiated with a Buy at KLR Group; tgt $91.
Large Cap Losers
KMP (75.17 -4.17%): Barron's profiled cautious view on Kinder Morgan and its partnerships (KMI also lower).
TSU (24.98 -0.83%): Downgraded to Neutral from Buy at Citigroup.
YNDX (36.21 -1.23%): Tgt lowered to $41 from $48 at Pacific Crest.
Mid Cap Gainers
BBRY (9.90 +8.32%): Ford (F) to switch to BBRY from Microsoft (MSFT) for Sync in cars, according to reports; co announced BBM for Windows Phone and Nokia X platforms.
MW (48.41 +7.32%): Co increased cash offer for Jos. A. Bank (JOSB) to $63.50 per share from $57.50 per share.
ATHM (37.23 +5.26%): Beat on EPS by $0.04, beat on revs; guided Q1 revs above consensus; upgraded to Neutral from Sell at Goldman.
Mid Cap Losers
DDS (84 -5.97%): Missed on EPS by $0.31, missed on revs.
DDD (76.36 -5.42%): Downgraded to Underperform from Buy at BofA/Merrill; announces its ProJet 3510 MP 3D printer and proprietary VisiJet Stoneplast dental materials have been optimized for dental 'drill guide' production.
AWI (56.47 -4.72%): Missed on EPS by $0.08, beat on revs; guided Q1 revs in-line; guided FY14 EPS below consensus, revs in-line.
International Rectifier (IRF) has commenced initial production at its new ultra-thin wafer processing facility in Singapore.
8:58AM Cisco Systems intends to offer senior notes under an automatic shelf registration statement on file with the SEC (CSCO) 22.13 :
Actual terms of the notes, including interest rate, principal amount and maturity will depend on market conditions at the time of pricing.
Co intends to use the net proceeds from this offering for general corporate purposes, including (i) to repay $3.75 billion in aggregate principal amount of its outstanding senior unsecured notes, consisting of $2.0 billion of its 1.625% senior notes and $1.25 billion of its floating rate notes, each due March 2014 and $500 million of its 2.90% senior notes due November 2014 and (ii) to return capital to shareholders pursuant to its previously-announced capital allocation strategy through the repurchase of shares of its common stock and the payment of cash dividends.
Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Wells Fargo Securities, LLC are acting as joint book-running managers.
Atmel (ATML) is expanding its broad wireless product portfolio with a new family of solutions targeting the Internet of Things. The new SmartConnect family combines Atmel's ultra-low power MCUs with its wireless solutions and complementary software into a single package.
Broadcom (BRCM) introduced the 5G WiFi (802.11ac) 2x2 Multiple Input Multiple Output system-on-a-chip for smartphones.
Broadcom (BRCM) introduced the next-generation of near field communication controllers designed to deliver simplified connectivity and drive adoption in mass market smartphones and wearables. -
8:49AM 3D Systems announces its ProJet 3510 MP 3D printer and proprietary VisiJet Stoneplast dental materials have been optimized for dental 'drill guide' production (DDD) 80.74 : The ProJet 3510 MP uses 3DS' Stoneplast dental material that is available in both clear or plaster mode, and is compatible with all leading dental software modules capable of outputting the open .stl file format for automated local or distributed manufacturing.
8:47AM LDK Solar announced it made a filing with the Grand Court of the Cayman Islands for the appointment of joint provisional liquidators in connection with its plans to resolve its offshore liquidity issues; Co has made considerable progress in its discussions (shares halted) (LDK) 1.01 :
Co has made considerable progress in its discussions with its key offshore creditors in line with the terms announced in its press release of December 27, 2013. LDK Solar intends to continue such discussions over the next few days and anticipates a favorable conclusion to those discussions.
The filing and the proposed appointment do not affect any of the LDK Solar-affiliated entities operating in the People's Republic of China and LDK Solar has no intention of initiating any additional debt restructuring proceedings in that jurisdiction.
LDK Solar's bank group for its mainland China operations has expressed unanimous support for LDK Solar's continued discussions with its offshore creditors with a view to resolving its offshore liquidity issues.
(Shares Halted)
Cypress Semiconductor (CY) announced its TrueTouch Gen5 capacitive touchscreen controllers will drive both displays in the next generation YotaPhone, Yota Devices' "always-on" premium Android phone, which was unveiled today at Mobile World Congress.
ZTE (ZTCOF) has selected TrueTouch Gen4 capacitive touchscreen controllers from Cypress Semiconductor (CY) for its nubia Z5S and nubia Z5S Mini smartphones.
8:08AM Canadian Solar to supply 18MW of solar modules to Hitachi in Japan (CSIQ) 37.77 : Co announced that it has been awarded a module supply agreement to provide 18MW of photovoltaic ("PV") modules to Hitachi, Ltd. ("Hitachi") for a solar power project in Japan. The project is owned by Eurus Energy Holdings Corporation with Hitachi as its EPC contractor. This 18MW solar power project, which is expected to be in operation in March 2015, is located in the boundary between Marumori-machit in Miyagi prefecture and Soma city in Fukushima prefecture, covering an area of 80 hectares.
Canadian Solar will supply ~73,556 pieces of its 60 cell high efficiency CS6P255P modules with power output of 255Wp for this project. This solar power plant will power ~5,000 homes and is expected to displace ~9,200 tons of carbon dioxide emissions each year. Electricity to be produced in the next 20 years will be sold to Tohoku Electric Power, Inc
7:37AM Applied Materials and Tokyo Electron Receive CFIUS Clearance for Proposed Combination (AMAT) 19.10 : Co and Tokyo Electron state they have received notice from the Committee on Foreign Investment in the US that there are no unresolved national security issues relating to the cos' proposed business combination announced on September 24, 2013. The clearance by CFIUS was without conditions and terminates CFIUS review of the transaction.
7:31AM TriQuint Semi and RFMD announce merger of equals; represents an implied price of $9.73 for each TriQuint share (TQNT) 9.23 : TQNT and RFMD announced a definitive merger agreement under which the companies will combine in an all-stock transaction. To reflect the nature of this transaction as a merger of equals, the new company will have a new name and shared leadership team. The boards of directors of both RFMD and TriQuint have unanimously approved the transaction.
Former shareholders of RFMD and TQNT will each own approximately 50 percent of the new company post-merger.
The transaction represents an implied price of $9.73 for each TriQuint share, representing a 5.4% premium based on the closing price of $9.23 for TriQuint on February 21, 2014.
The combination is expected to achieve at least $150 million in cost synergies; $75 million in annualized synergies exiting the first year after closing and an additional $75 million exiting the second year.
The transaction is expected to be accretive to non-GAAP EPS in the first full fiscal year following the closing of the transaction.
The transaction is expected to close in the second half of calendar 2014 subject to approval by the shareholders of both companies.
Rudolph Technologies (RTEC) announced completion of record installations in Q4 2013 of its fab-wide yield management software products, Discover Enterprise and Genesis Enterprise. In addition to traditional semiconductor manufacturing, Discover Enterprise Software was installed at a multi-billion dollar OEM in multiple labs, replacing the incumbent technology.
Yubico and NXP Semiconductors N.V. (NXPI) will demonstrate at the RSA Conference USA next-generation YubiKey technology to create awareness of the need for strong two-factor authentication to keep online identities and proprietary business information safe.
LitePoint, a subsidiary of Teradyne (TER), released its LitePoint IQnfc, the first volume production-optimized test system designed to measure and verify the physical layer performance of Near Field Communication enabled devices.
Lattice Semiconductor (LSCC) announced its participation in the "Will FPGAs Crack Mobile?" panel on Feb 27 at the 22nd ACM/SIGDA International Symposium on Field-Programmable Gate Arrays, which takes place in Monterey, Ca. from Feb 26-28, 2014.
7:24AM GT Advanced Tech. beats by $0.10, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY14 EPS in-line, reaffirms FY14 revs guidance (GTAT) 12.11 : Reports Q4 (Dec) loss of $0.26 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus Estimate of ($0.36); revenues fell 68.1% year/year to $32.6 mln vs the $36.76 mln consensus.
Co issues downside guidance for Q1, sees EPS of ($0.25)-($0.20), excluding non-recurring items, vs. ($0.07) Capital IQ Consensus Estimate; sees Q1 revs of $20-30 mln vs. $122.58 mln Capital IQ Consensus Estimate. The company expects that revenue and profitability will be back end loaded, with its sapphire materials business ramping as the year progresses, and with improving financial performance during the second half of 2014.
Co issues guidance for FY14, sees EPS of $0.02-0.18, excluding non-recurring items, vs. $0.07 Capital IQ Consensus Estimate; reaffirms FY14 revs of $600-800 mln vs. $691.79 mln Capital IQ Consensus Estimate.
"Our arrangement to supply sapphire materials to Apple is progressing well and we started to build out the facility in Arizona and staff the operation during the quarter...Although we have significant opportunities in sapphire, the GT story is not only about our emerging sapphire materials business. In fact, our entry into sapphire materials may enable us to expand into other materials segments once we have fully ramped the operation in Arizona. The many diversification and investment seeds we have planted over the last several years in the LED, power electronics, advanced solar and industrial markets are expected to begin to bear fruit over the next 18 months. We are seeing significant interest in our new products and now expect equipment orders from these initiatives to be received during the latter part of 2014, with meaningful revenue recognition beginning in early 2015."
Outlook Details: The company expects that its sapphire segment will account for more than 80% of total revenue in 2014. The sapphire segment includes the company's equipment and materials businesses in the LED, industrial and consumer electronics markets. Consolidated gross margins for 2014 are expected to be in the range of 25% to 27%, reflecting lower margin material shipments during the year, inefficiencies related to the ramp up of the sapphire materials business and underutilization of the company's equipment operations
Verizon (VZ) and McAfee, part of Intel (INTC) announced an extension of their agreement that now offers multi-device security to Verizon's more than 9 million FiOS Internet and High Speed Internet customers. With Verizon Internet Security Suite Multi-Device powered by McAfee, consumers and small businesses can protect all of their PCs, laptops, Macs, and Android smartphones and tablets with one easy-to-use central management console.
Texas Instruments (TXN), and Nokia Solutions and Networks announced their collaboration on NSN's next generation of indoor small cell base stations.
Citrix today announced ByteMobile Insight, a big data analytics solution designed to provide immediate, action Pubnable intelligence for mobile operator monetization, marketing and customer care organizations.
SanDisk (SNDK) announced the new 128GB2 SanDisk Ultra microSDXC UHS-I memory card, the world's largest capacity microSD card.
Silicon Image (SIMG) announced its entry into the small cell wireless backhaul market with the introduction of two high-throughput, single-chip CMOS beam-steering 60GHz RF transceivers designed to address the rapidly growing market for high-capacity wireless backhaul links in urban environments.
F5 Networks (FFIV) announced today that Oi selected the F5 Traffix Signaling Delivery Controller to meet the Diameter signaling management demands of their LTE network.
Sierra Wireless (SWIR) introduced the Legato platform, an open source embedded platform built on Linux and designed to simplify the development of machine-to-machine applications from the device to the cloud.
Qualcomm Incorporated (QCOM) announced that its wholly-owned subsidiary, Qualcomm Technologies, Inc., in cooperation with ZTE, launched the world's first multimode, multiband chip featuring an integrated CMOS power amplifier and antenna switch on ZTE's new flagship smartphone, the Grand S II LTE.
Texas Instruments (TXN) released the 0.3" HD Tilt & Roll Pixel DLP Pico chipset, its smallest, most power-efficient micro-mirror array, which can generate high-definition displays from compact electronics, including tablets, smartphones, accessories, wearable displays, augmented reality displays, interactive surface computing, digital signage and control panels.
1:42AM Microsoft adds nine new Windows Phone hardware partners (MSFT) 37.98 : Co announces nine new hardware partners for Windows Phone and direct access to tools that will broaden the portfolio of devices for consumers and introduce new price points to accelerate growth in key markets. In addition to existing partners - Nokia (NOK), Samsung (SSNLF), HTC and Huawei - Microsoft has announced it is now working with Foxconn, Gionee, Lava (Xolo), Lenovo (LNVGY), LG, Longcheer, JSR, Karbonn and ZTE to develop on the Windows Phone platform.
NQ Mobile (NQ) announced that NQ Mobile has reached an agreement with Samsung Electronics (SSNLF). The new agreement extends the strategic relationship between NQ Mobile and Samsung, enabling NQ Mobile to sell, distribute and promote the Samsung KNOX end-to-end mobile security solution for Samsung devices.
Palo Alto Networks (PANW) reported second quarter earnings of $0.10 per share, excluding non-recurring items, which is higher than expected, while revenues rose 46.2% year/year to $141.1 mln vs the $135.48 mln consensus; billings +50% YoY to $186.7 million. "We reported very good Q2 results, driven by strong customer demand for our integrated and automated enterprise security platform. Enterprises around the world are accelerating their investments in security to enable them to improve their business and protect them against the risks stemming from cyber attacks. We see evidence of this in continued new customer adoption and rapid expansion of our platform among existing customers. Our business model is benefitting from higher attach rates of our SaaS-based subscription services, which, combined with continued strong product growth, contributed to record billings, revenue and deferred revenue. Non-GAAP gross margin, operating margin and free cash flow expanded both sequentially and year-over-year, and we finished the quarter with $501 million in cash, cash equivalents and investments.
GT Advanced Tech (GTAT) reported fourth quarter loss of $0.26 per share, which is higher than expected, while revenues fell 68.1% year/year to $32.6 million which is lower than expected. The company issued guidance for the first quarter with EPS of ($0.25)-($0.20), which is lower than expected with revenues of $20-30 mln vs. $122.58 million which is lower than expected. The company expects that revenue and profitability will be back end loaded, with its sapphire materials business ramping as the year progresses, and with improving financial performance during the second half of 2014. The company issued guidance for fiscal year 2014 with EPS of $0.02-0.18, which is in line with estimates with reaffirmed fiscal year 2014 with revenues of $600-800 million which is line with estimates. "Our arrangement to supply sapphire materials to Apple is progressing well and we started to build out the facility in Arizona and staff the operation during the quarter...Although we have significant opportunities in sapphire, the GT story is not only about our emerging sapphire materials business. In fact, our entry into sapphire materials may enable us to expand into other materials segments once we have fully ramped the operation in Arizona. The many diversification and investment seeds we have planted over the last several years in the LED, power electronics, advanced solar and industrial markets are expected to begin to bear fruit over the next 18 months. We are seeing significant interest in our new products and now expect equipment orders from these initiatives to be received during the latter part of 2014, with meaningful revenue recognition beginning in early 2015."Outlook Details: The company expects that its sapphire segment will account for more than 80% of total revenue in 2014. The sapphire segment includes the company's equipment and materials businesses in the LED, industrial and consumer electronics markets. Consolidated gross margins for 2014 are expected to be in the range of 25% to 27%, reflecting lower margin material shipments during the year, inefficiencies related to the ramp up of the sapphire materials business and underutilization of the company's equipment operations.
TriQuint Semi (TQNT) RF Micro (RFMD) announced a definitive merger agreement under which the companies will combine in an all-stock transaction. To reflect the nature of this transaction as a merger of equals, the new company will have a new name and shared leadership team. The boards of directors of both RFMD and TriQuint have unanimously approved the transaction. Former shareholders of RFMD and TQNT will each own approximately 50 percent of the new company post-merger. The transaction represents an implied price of $9.73 for each TriQuint share, representing a 5.4% premium based on the closing price of $9.23 for TriQuint on February 21, 2014. The combination is expected to achieve at least $150 million in cost synergies; $75 million in annualized synergies exiting the first year after closing and an additional $75 million exiting the second year. The transaction is expected to be accretive to non-GAAP EPS in the first full fiscal year following the closing of the transaction. The transaction is expected to close in the second half of calendar 2014 subject to approval by the shareholders of both companies.
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