Replies to post #9191 on Sector Investing

[ReturntoSender]

Price of Oil Versus the Nasdaq:





Longer term you can see that the high price of oil has preceded market downturns but how high is too high for the market? Check the S&P 500 on the middle chart versus the price of oil.

[ReturntoSender]

Determining long term market tops and bottoms for the SMH/SOX and the market as a whole:

Cross Overs of the 50 day sma on the SOX along with the number of stocks above the 200 and 50 day sma's of the NASDAQ which are overbought above the top (red) horizontal line and oversold below the lower (green) horizontal line. The horizontal line placement was picked by me somewhat arbitrarily but the point being made is a simple bit of contrarian logic; when too many stocks are above the 200 and 50 day sma's a reversal is in order. By watching for the cross overs in the 50 day sma above or below the longer term 200 day sma we can predict long term moves in the SOX higher or lower as well which may not correct until extremes are reached as shown by the horizontal lines on all the many charts below:





BPNDX and VXO vs the SOX. Sell zones are seen above or below the red lines depending on the chart. The VXO is a volatility index based on the S&P 100. It moves opposite to the SOX and is most useful at extreme reading to help denote enough "fear" in the market for a long term bottom to form. The BPNDX is based on the number of NASDAQ 100 stocks that have generated or lost PnF buy signals. Look for trend reversals to develop over time. It's not the absolute high or low that is important but rather the development of positive or negative divergences. For instance in October 2002 the BPNDX developed a positive divergence by setting a higher low even as the SOX was setting a lower low.





Market breadth indicators. Sell zones are seen above, or below, the red lines depending on the chart. Long term buy zones are shown above, or below, the green horizontal lines depending on the chart.

[ReturntoSender]

From Briefing.com: 4:30 pm : Data helped dissolve a negative tone in early trade, but financials provided the leadership necessary to take the stock market to a fractionally improved two-year high.

Losses among overseas markets weighed on stock futures this morning, but the tone improved with news that the ADP Employment Change reading showed that 300,000 private payrolls were added during December. Many were quick to speculate that since the ADP tally is triple what had been expected, a strong non-farm payrolls report will likely be released this Friday.

Participants didn't respond to the December ISM Services Index, which hit a four-year high of 57.1 to best the Briefing.com consensus call for a reading of 55.7.

Stocks were a bit sluggish in the early going as financials were the only sector to sport a gain in the early going. Financials gradually garnered additional buying and pushed to a 1.2% gain. AIG (AIG 60.95, +4.17) was one of the sector's top performers following news that a $3 billion bid was made for the firm's Taiwan unit.

Strength among financials inspired broader buying, such that utilities (-0.6%) made up the only sector to log a loss. That helped both the S&P 500 and Dow inch past the heights reached earlier this week for fresh two-year highs.

The Nasdaq couldn't quite eclipse the high that it set earlier this week, but it still scored a better gain than either of its counterparts. The Nasdaq was led by a handful of tech plays, namely Apple (AAPL 334.00, +2.71). Qualcomm (QCOM 52.03, +1.06) was also strong after it confirmed plans to acquire Atheros (ATHR 44.64, +0.64) for $45 per share.

Outside of the major averages, the Amex Airline Index ascended to a 1.6% gain following a flurry of monthly traffic reports. The Airline Index is already up 4.0% this year. That only adds to a near 40% annual gain in 2010.

Commodities had a weak start, but were able to rebound. More specifically, the CRB Commodity Index ended the day with a 0.5% gain after it was down 1.0% this morning. Oil was key driver in that bounce; it settled at $90.30 per barrel for a 1.0% gain after it had been down more than 1% even after a larger-than-expected draw from weekly inventories was reported.

The dollar advanced 1.0% against a collection of competing currencies. That was its best percentage gain in three weeks and makes for its third straight advance since settling lower in seven straight sessions.

Treasuries were trounced today. That left the yield on the benchmark 10-year Note to rise above 3.45% to its highest level this week.

Advancing Sectors: Financials (+1.2%), Consumer Discretionary (+0.8%), Tech (+0.7%), Telecom (+0.6%), Industrials (+0.5%), Energy (+0.2%), Consumer Staples (+0.1%), Health Care (+0.1%)
Declining Sectors: Utilities (-0.6%)
Unchanged: MaterialsDJ30 +31.71 NASDAQ +20.95 NQ100 +0.8% R2K +1.2% SP400 +0.6% SP500 +6.36 NASDAQ Adv/Vol/Dec 1879/2.07 bln/777 NYSE Adv/Vol/Dec 1802/1.04 bln/1192

5:01PM Emcore receives notification of deficiency from NASDAQ due to delay in filing form 10-K (EMKR) 1.17 +0.03 : Co intends to file the 2010 Form 10-K as promptly as practicable once Deloitte is able to re-issue its opinion with respect to the prior fiscal years. The Company is required to submit a plan to regain compliance with NASDAQ's requirements for continued listing and the plan must be submitted no later than February 28, 2011.

10:27AM STMicroelectronics and Ericsson (ERIC) jv announced its LTE modem will support Verizon Wireless' 4G LTE Mobile Broadband network (STM) 10.77 +0.04 : ST-Ericsson announced that its LTE modem will support Verizon Wireless', joint venture of Verizon Communications (VZ) and Vodafone (VOD), 4G LTE Mobile Broadband network.

Marvell (MRVL) announced that leading French service provider, Free, a subsidiary of Iliad, will integrate a full suite of Marvell advanced processors, switching and Wi-Fi technologies to power the new Freebox Revolution multi-service gateway.

FEI Company (FEIC) announced that the CANMET Materials Technology Laboratory, a research center funded by the Canadian government, has selected three of FEI's latest electron microscope systems for its new facility at the McMaster Innovation Park, Hamilton, Ontario.

DivX, a division of Sonic Solutions (SNIC), announced that its comprehensive Internet TV service is continuing momentum with new partners across content brands and integrated circuit manufacturers. New DivX TV content sources just announced at CES include: AOL, Amos TV, Automotive Rhythms TV, Ebru TV, New Tang Dynasty, Right Network, Slacker Radio, Wealth TV. In addition to new content partnerships, the following integrated circuit manufacturers are working to implement DivX TV on their platforms: Broadcom Corporation (BRCM), Marvell Semiconductor (MRVL) and Renesas Electronics Corporation.

Glu Mobile (GLUU) announced a strategic partnership with NVIDIA (NVDA). This partnership highlights Glu's leadership in delivering unparalleled gaming experiences to Android-powered tablets and mobile devices.

[ReturntoSender]

KLIC Charts - I'm still long on KLIC Jacob so maybe I am trying to find reasons why it should go up instead of using a more detached eye to read the charts but I don't think so.

Here is why KLIC could run somewhat higher from a technical standpoint using past performance as a guide:

Six Month Daily Chart:



2 Year Weekly Chart:



10 Year Monthly Chart has some Negatives!

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 07-Jan-11Strong gains on Monday to begin the new year helped U.S. equity markets rally this week.

Monday's rally benefitted from the seasonality effect of new funds being put to work on the first day of the month, but strength in overseas trading, a rally in financials after Bank of America (BAC) put more of its public mortgage repurchase claims behind it, and continued momentum buying were also reasons.

Seven of the 10 S&P sectors rose, led by IT (+2.7%), Health Care (+1.8%) and Financials (+1.7%). The latter was in focus again Friday, this time selling off following negative headlines regarding a foreclosure case in Massachusetts, but managed to rebound somewhat.

The economic focus this week was on the employment sector. Wednesday's record ADP Employment figure of 297,000 raised estimates for Friday's Nonfarm Payroll number, but it came in at a weaker-than-expected 103,000 on private payrolls of 113,000.

Upward revisions to Nonfarm Payrolls in October and November, however, created an offset of sorts that tempered some of the headline disappointment. At the same time, December's report followed a familiar form as the labor market is recovering, but not at a fast enough pace for the Federal Reserve to take its foot off of the quantitative easing pedal.

Retailers were also in focus this week, releasing same-store sales figures for December. While 14 of the 25 companies Briefing.com covers missed expectations, meaning growth slowed in December, a weather disruption at the end of the month played a part. An argument could also be made that expectations were inflated following a very strong November, and December still capped off a relatively strong Christmas shopping season.

Looking ahead to next week, the economic calendar includes the Federal Reserve's regional Beige Book economic survey on Tuesday, Retail Sales and Industrial Production on Friday, and PPI/CPI data on both Thursday and Friday. The next round of Treasury auctions will also take place with $66 bln in 3-, 10- and 30-year Notes and Bonds for sale.

While the "unofficial" beginning to fourth quarter earnings reporting season is on Monday with Alcoa's (AA) release, the only big names for the week are Intel (INTC) on Thursday and JPMorgan Chase (JPM) on Friday. The calendar will really pick up the following week.

 
 Index	  Started Week	Ended Week  Change  % Change  YTD % 
 DJIA	    11577.51	 11674.76   97.25      0.8    0.8 
 Nasdaq	     2652.87	  2703.17   50.30      1.9    1.9 
 S&P 500	     1257.64	  1271.50   13.86      1.1    1.1 
 Russell 2000  783.67	   787.83    4.16      0.5    0.5

1:13PM Applied Materials promotes Omkaram Nalamasu to chief technology officer effective Jan 24 (AMAT) 13.86 -0.03 : Mark Pinto, Applied's CTO since 2004, will remain executive vice president and general manager for the company's Energy and Environmental Solutions (EES) and Display groups.

9:20AM GT Solar receives first order for new DSS650 Multicrystalline Ingot Growth Systems from South Korean PV manufacturer Nexolon (SOLR) 9.95 : Co announces it has received the first order for its new DSS650 multicrystalline ingot growth system from Korea-based PV manufacturer Nexolon. The value of the contract totals $37.5 mln and will be included in co's backlog for its current Q4 FY11, which ends on April 2, 2011.

9:16AM Integrated Silicon lowers Q4 guidance below consensus (ISSI) 8.84 : Co has lowered its Q4 guidace; co now sees Q4 EPS of $0.25-0.30 from $0.30-0.36 previously, vs. the $0.33 consensus; rev to $65.5-67.0 mln from $68-72 mln vs. the $68.8 mln consensus. Co experienced weaker than expected end market demand, primarily for its DRAM products. "We previously expected revenue in the December quarter to decline sequentially as some of our end markets are experiencing an inventory correction. However, end market demand for DRAM, particularly in the consumer electronics markets in Asia, has been slightly weaker than we anticipated. We believe that this inventory correction is nearly complete."

8:30AM First Solar acquires RayTracker Inc. (FSLR) 134.53 : Co announces that it has acquired RayTracker, Inc., a tracking technology and photovoltaic balance-of-systems firm that is an operating company of Idealab, a creator and operator of technology companies. Terms of the deal were not disclosed.

Atmel Corporation (ATML) announced that it has achieved ZigBee Certified status for the Atmel Key Remote Controller based on the ZigBee Remote Control standard and the ATmega128RFA1 single-chip wireless device microcontroller.

Entropic Communications (ENTR) and Marvell (MRVL) announced their collaboration to accelerate the development of a new class of industry first MoCA 2.0 enabled consumer electronics and customer premise equipment designed to allow service providers to distribute virtually.

[ReturntoSender]

Monday Morning Outlook: DJIA Extends Winning Streak to Six Weeks
Jobs data continues to cast pall on rally
by Todd Salamone 1/8/2011 10:51 AM

http://www.schaeffersresearch.com/commentary/observations.aspx?ID=104432&trackback=mmoezine

January tends to be one of the weakest months of the year, but the bulls successfully battled through the first trading week of 2011. The Dow Jones Industrial Average advanced for the sixth straight week, toppling the 11,600 mark and making a serious run at 11,700. Looking ahead, Todd Salamone, Senior Vice President of Research, is watching the Russell 2000 Index's advance on the 800 level. Next, Senior Quantitative Analyst Rocky White wonders whether the year's first week of trading offers any clues about the rest of the month. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

Recap of the Previous Week: Monday Rally Tells Tale
Schaeffer's Editorial Staff

The ball dropped on the New Year and ignited a nearly 100-point rally on the Dow Jones Industrial Average on the first trading day of the year. The Dow drifted into the next several days, but Monday's surge was enough to put the first week of 2011 into the "win" column.

The economic news Monday was good, and several developments out of the corporate sector were even more encouraging. Manufacturing in the U.S. expanded for the 17th straight month in December, according to the Institute for Supply Management. Bank of America Corp. (BAC) agreed to pay Fannie Mae and Freddie Mac nearly $3 billion to buy back bad loans that were issued by its Countrywide Financial division, bringing some closure to a particularly ugly episode of the financial crisis. And in seeming confirmation that it is indeed a new year, a Goldman Sachs (GS) investment in Facebook valued the six-year-old social networking site at $50 billion. The Dow leaped out of the gate, climbing above 11,700, before settling back to close at 11,671, for a still respectable gain of 93 points, or 0.81%.

The big news Tuesday came in the afternoon, when the Federal Open Market Committee released the minutes of its December meeting, revealing that Fed officials believe the economy is getting better, in a kinda sorta way, but that we're not out of the woods yet. The Dow yawned, but managed to tack on 0.18% by the end of the day.

Payroll processor ADP reported Wednesday that the private sector added an almost too-good-to-be-true 297,000 jobs during December, the highest one-month increase the firm had ever reported. Meanwhile, Qualcomm (QCOM) said it would buy Atheros Communications (ATHR) for $3.1 billion. The Dow added 0.27%. It was a modest gain, but the close at 11,722.89 represented a two-year high. The Standard & Poor 500 Index (SPX) likewise recorded a two-year high of 1,273.85, while the Nasdaq Composite's (COMP) close at 2,709.89 was its highest in three years.

Following several weeks of generally positive economic and earnings reports, it seems traders were ill-equipped to deal with a round of disappointing headlines Thursday. Retail sales for December came in softer than expected, with Macy's (M), Target (TGT), and The Gap (GPS) all falling short of expectations. It was the first seriously downbeat note from the retail sector since the holiday season kicked off after Thanksgiving. The Labor Department, meanwhile, reported that jobless claims rose in the previous week at a higher-than-expected clip. The Dow slipped 0.22%.

Wednesday's ADP report on private-sector job gains set the bar high for the government's numbers on Friday. According to the Labor Department's count, the U.S. added 103,000 jobs in December, lower than the increase of 175,000 expected by analysts. The unemployment rate fell to 9.4%, a bigger-than-expected drop, but that was chalked up to a smaller pool of job seekers. Meanwhile, the financial sector faltered after a Massachusetts court ruled against Wells Fargo (WFC) and US Bancorp (USB) in a key foreclosure ruling. Finally, Federal Reserve Chairman Ben Bernanke told Congress, "We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold." The Dow fell as low as 11,599 at midday, but eventually pared its loss to 0.19%, finishing at 11,674.76. For the week, the Dow added 0.8%, while the SPX gained 1.1%. The COMP won the weekly battle of the indexes, advancing 1.9%.

What the Trading Desk Is Expecting: Are Hedge Funds Still Sitting Out Rally?
By Todd Salamone, Senior Vice President of Research

"Hedge funds returned 1.7 percent in December... The Standard & Poor's 500 Index climbed 6.7 percent, the most for the U.S. benchmark in December since 1991."
--Bloomberg News, Jan. 7, 2011

After reading the above excerpt from a Bloomberg News article, I thought about comments during the past several weeks in Monday Morning Outlook suggesting that hedge funds are sitting out the stock market rally, based on our analysis of option activity on major exchange-traded funds (ETF). In light of the serious underperformance of hedge funds relative to the S&P 500, as described in the Bloomberg story, it is quite evident that this group is seriously underinvested in U.S. stocks. The implication continues to be that the current rally carries additional short-term risk, as weaker hands have driven stocks higher in recent weeks. These participants will likely be the first to panic sell on any hints of negative news, as we saw at the beginning of 2010.

The fact that unhedged equity buyers are driving stocks is worth acknowledging, as the momentum can change swiftly, if negative headlines hit the newswires and such weaker hands panic. On the other hand, it is nice to know that there are deep-pocketed players sitting on the sidelines, who are capable of scooping up equities on pullbacks. In addition to the fact that hedge fund managers are seriously underinvested in stocks, there is enormous sideline money among retail folks. Retail investors withdrew cash from domestic equity funds from 2008 through 2010, but have recently displayed signs of moving back into equities, albeit slowly. Moving forward, bulls would like to see the broader indexes take out key resistance levels that are situated just overhead, or remain above former areas of resistance, as stronger hands bid the market higher.

On the technical front, for example, it appears a battle has emerged between bulls and bears since the burst higher out of the gate in the first 90 minutes of trading in 2011. A question remains whether or not the 1,250 level on the S&P 500 Index (SPX) -- site of the 61.8% Fibonacci retracement of the 2007 high and 2009 trough -- is really behind us.

Another question revolves around the Russell 2000 Index (RUT) taking out a key overhead level, as a quick run up to the 800 century mark on the first trading day of the year was followed by a sharp dive back below 800 the next morning. Since the first day of trading last week, the RUT has not challenged 800 again. The 800 level has had historical significance, acting as resistance during a tight range for two months in late 2006 and early 2007, and dancing around this century mark in a +50/-50 range from late 2006 into most of 2007. The 850 area, in fact, marked the RUT top in 2007.



Per the chart below, there is a hint of good news for bulls in our analysis of the 20-day buy-to-open put/call volume ratio on the QQQQ, IWM, and SPY, which has stabilized recently at former lows, and is now at its highest level in a month. Admittedly, this ratio has been volatile in recent weeks. But, if it continues to move higher from the current low level amid strength in the market, it would signal hedge fund managers moving back into the U.S. equity market from an underweight position, which would have bullish implications. This is an indicator that we continue to follow closely.



We continue to look favorably upon the intermediate and long term, but short-term risk and reward appears to be more balanced. Momentum, combined with the possibility of underweight hedge fund managers moving back into equities, is countered by the following short-term risks:

1. Exuberance among equity-only option buyers, as call buying has dominated put buying on a relative basis.

2. January weakness during the past 10 years.

3. The CBOE Market Volatility Index still trading at a rich premium to SPX historical volatility.

Our message remains the same. With equity options cheap, buy call options on stocks you favor in lieu of purchasing stock, as calls allow you to commit less to the market, letting you manage risk and use leverage to reap higher returns. If you prefer the equity route, you can use index puts to hedge your long positions.

If you enjoy Monday Morning Outlook...

...we also offer a free Market Recap after the close every day. Did the Dow go up 100 points? Or down? We'll tell you why. We'll also tell you who the big winners and losers were, and we'll share some highlights from our daily articles and blog postings. Market Recap is a quick, but insightful read. Sign up here to have Market Recap delivered straight to your inbox every evening shortly after the close.

Prepare for the investing week ahead. Every week, Bernie Schaeffer and his staff provide you with their insight about what has happened and, more importantly, what will happen in the market. We dig deep and show you what's happening behind the scenes, and tell you which indicators are predicting major market moves. If you enjoyed this week's edition of Monday Morning Outlook, sign up here for free weekly delivery straight to your inbox.

Indicator of the Week: First Five Days of the Year
By Rocky White, Senior Quantitative Analyst

Foreword: We've just had two years in a row with the S&P 500 Index (SPX) up double digits! Hopefully we'll continue that streak in 2011. With one week of the New Year under our belts, we're off to a decent start in 2011. The S&P 500 was up moderately in the first week of trading. This week I'll take a look to see what this tells us about the rest of January and whether it can possibly mean anything for the year.

January: January has actually been a pretty weak month over the last several years. Specifically, over the last 10 years, only two months have averaged a worse return than January (February and June). However, what if we're up after the first five trading days of January? The table below shows that's actually a pretty bad sign going forward. Since 1990, when we are up through the first five days, the rest of January on average loses 1.64% and is higher only 38% of the time. Compare that to if we're down through the first five days. In that case, January is higher 63% of the time, averaging a gain of 2.10%.

S&P 500 Index returns for first five days of the year since 1990


Below is a table that shows the results in each year since 2000. Only twice has January gone higher after the first five trading days (2001 and 2007). In both of those years the market was down after the first five days.

S&P 500 Index returns, by year, for first five days of the year since 1990


Rest of the Year: The price action in the first five days is signaling a pullback in the near term. Can it possibly mean anything for the rest of the year? I don't think I'd ever consider a year-long trade based on five days of price action, but just for fun, let's see what it looks like. Below, we see that the numbers are more encouraging. When the first five days are positive, the market has averaged a gain of over 10% and is higher 77% of the time. If the first five days are negative, the market lags a bit, averaging only a 3% gain for the rest of the year.

S&P 500 Index returns for the rest of the year following first-five-day returns


This Week's Key Events: Alcoa Will Kick Off Earnings Season
Schaeffer's Editorial Staff

Alcoa Inc. (AA) reports fourth-quarter earnings after the close on Monday, marking the start of earnings season. Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday
* There are no major economic reports scheduled for Monday. Alcoa Inc. (AA) and Apollo Group Inc. (APOL) will report earnings.

Tuesday
* The Commerce Department will report on wholesale inventories for November. Scheduled to report earnings are Lennar Corporation (LEN) and Supervalu Inc. (SVU).

Wednesday
* The Fed will release its Beige Book for January. We'll also get the usual weekly report on crude inventories. Clarcor Inc. (CLC) and Infosys Technologies Limited (INFY) plan to report earnings.

Thursday
* The Labor Department will give us its weekly look at jobless claims and producer price index figures for December. The Commerce Department will release trade balance data for November. Intel Corp. (INTC) will report earnings.

Friday
* The Labor Department will report on consumer-level inflation in December in the form of the consumer price index, while the Commerce Department will release December retail sales figures. Industrial production numbers for December are due from the Fed. Finally, the University of Michigan will give us its first peek at consumer sentiment in January. JPMorgan Chase & Co. (JPM) will report earnings.

[ReturntoSender]

From Briefing.com: 4:15 pm : Stocks settled the first session of the new week in mixed fashion after starting on a soft note. Tech helped improve the tone of trade.

Overseas markets moved lower overnight and early this morning. Their losses came in conjunction with a drop in China's trade balance to $13.1 billion in December from $22.9 billion in the prior month and persistent speculation about the possibility of additional bailouts in and around the eurozone.

There was no domestic data this morning. Headlines related to merger and acquisition activity comprised most of the corporate news, but the broader market was generally unenthused about the deal making. Still, Playboy (PLA 6.09, +0.89) got a nice pop after it was learned that the company will be taken private for $6.15 per share. Duke Energy (DUK 17.58, -0.21) announced plans to acquire Progress Energy (PGN 43.99, -0.73) in a stock transaction that values PGN at $46.48 per share, a premium of about 4% over PGN's closing price last week.

Education providers were hit with some of the hardest selling this session. The group gave up more than 7% after Strayer Education (STRA 118.60, -34.64) trimmed expectations for 2011 on Friday after trade had closed for the weekend.

Tech stocks had a choppy start, but a bid for semiconductors (+1.0%) helped the group recover. The sector's gradual grind higher helped push the Nasdaq Composite into positive territory for a modest gain and gave the Nasdaq 100 a 0.3% gain.

An improved tone among traders helped volatility cool after the Volatility Index (VIX) had spiked almost 9% to come within reach of its 50-day moving average and set its highest level in a month.

Oil prices ended 1.4% higher at $89.25 per barrel. Prices were helped by news that the Trans Alaska Pipeline, which carries close to 15% of the United State's oil output, was closed for a leak. The pipeline is partly owned by BP (BP 46.03, -0.05), Exxon Mobil (XOM 75.15, -0.44), ConocoPhillips (COP 66.88, -0.23), and Chevron (CVX 90.41, -0.78).

Earnings season unofficially gets under way with this evening's report from Dow component Alcoa (AA 16.49, +0.07). Reports really don't pick up in earnest until next week, though.

Advancong Sectors: Tech (+0.1%), Industrials (+0.1%), Materials (+0.1%)
Unchanged: Consumer Discretionary, Consumer Staples
Declining Sectors: Financial (-0.3%), Energy (-0.4%), Health Care (-0.4%), Utilities (-0.6%), Telecom (-1.0%)DJ30 -37.41 NASDAQ +4.63 NQ100 +0.3% R2K +0.5% SP400 +0.6% SP500 -1.75 NASDAQ Adv/Vol/Dec 1448/1.87 bln/1179 NYSE Adv/Vol/Dec 1543/953 mln/1458

4:31PM Broadcom and CSR settle all litigation (BRCM) 45.71 +0.82 : Co and CSR plc have agreed to settle all litigation and legal proceedings between the parties and their affiliates, including Broadcom's subsidiary Global Locate and CSR's subsidiary SiRF Technology. The parties will seek to dismiss their various pending actions in U.S. District Court, and the U.S. International Trade Commission (ITC), based in Washington, D.C., and have agreed not to pursue further infringement actions against each other, or against third parties based on use of each others' products, for a period of five years.

4:28PM AMD appoints Thomas Seifert as Interim CEO; Dirk Meyer resigns in mutual agreement with Board of Directors; prelim Q4 revs of $1.65 bln; reaffirms 2011 guidance (AMD) 9.19 +0.36 : Co sees preliminary Q4 revs $1.65 bln vs $1.62 bln Thomson Reuters consensus; Q4 gross margins of approx 45% vs 45.4% Thomson Reuters consensus. Co announced that its Board of Directors has appointed Senior Vice President and CFO Thomas Seifert, 47, as interim CEO following the resignation of Dirk Meyer, 49, as president, CEO and a director of the company effective immediately. A CEO Search Committee has been formed to begin the search for a new CEO. In addition, the company reaffirms its 2011 annual financial guidance as disclosed at its Financial Analyst Day last November.

4:10PM Intel (INTC) to pay NVIDIA Technology licensing fees of $1.5 bln (NVDA) 20.63 +0.76 : NVIDIA announced that it has signed a new six-year cross-licensing agreement with Intel (INTC). For the future use of NVIDIA's technology, Intel will pay NVIDIA an aggregate of $1.5 billion in licensing fees payable in five annual installments, beginning Jan. 18, 2011. NVIDIA and Intel have also agreed to drop all outstanding legal disputes between them. Under the new agreement, Intel will have continued access to NVIDIA's full range of patents. In return, NVIDIA will receive an aggregate of $1.5 billion in licensing fees, to be paid in annual installments, and retain use of Intel's patents, consistent with its existing six-year agreement with Intel. The existing agreement is to expire March 31, 2011. (NVDA is halted)

8:09AM Ramtron expects 2010 revenue and net income results to be at the low end of guidance due to capacity constraints (RMTR) 3.64 : "During the fourth quarter, we continued to advance the IBM foundry transition for select low density products. Because product qualification testing is not yet complete, we now expect the IBM line to come on stream by the middle of this year after which we will begin running production devices to ship to customers for their qualification," said Bill Staunton, Ramtron's CEO. "As mentioned in our third quarter earnings report, the high demand for our products ahead of our foundry transition timetable has put a strain on our capacity. To stay on top of order fulfillment, we have designed and are now sampling and shipping replacement products to be sourced by supplementary products sourced at Texas Instruments and IBM." Based on a review of Ramtron's preliminary results, management now expects full year 2010 total revenue and GAAP net income to be at the low end of the guidance ranges previously provided in the company's third quarter earnings release.

6:08AM Conexant: SMSC to acquire Conexant Systems; expected to be accretive to non-GAAP gross margins, non-GAAP operating margins and non-GAAP earnings per share immediately (CNXT) 1.89 : Co announces the signing of a definitive agreement under which co will purchase all of the outstanding shares of Conexant in a stock and cash transaction valued at ~$284 mln including the assumption of Conexant's net debt. Under the terms of the agreement, for each share of Conexant that they own, Conexant stockholders will receive approximately $2.25 consisting of $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock. The total cash consideration to be paid in the transaction is approximately $98 mln and the total number of shares of SMSC common stock to be issued (including the assumption of outstanding Conexant restricted stock units) is ~2.9-3.6 mln. The transaction is expected to close in the first half of calendar 2011

3:34AM LDK Solar sees Q4 and FY11 revs ahead of consensus and previous guidance (LDK) 10.43 : Co issues upside guidance for Q4 (Dec), sees Q4 (Dec) revs of $870-910 mln vs. $741.85 mln Thomson Reuters consensus and ahead of previously stated guidance of $710-750 mln. Co issues upside guidance for FY11 (Dec), sees FY11 (Dec) revs of $3.5-3.7 bln vs. $2.74 bln Thomson Reuters consensus and above previously stated guidance of $2.9-3.3 bln. For Q4, co inceases outlook of wafer shipments of 615-620MW vs 580-600 MW, module shipments of 160-165 MW vs 120-130 MW, in-house polysilicon production of 1,900-1,910 MT vs 1700-1900 MT, in-house cell production between 26-27 MW vs 20-23 MW, and gross margin between 25.0-27.0% vs 24.0-26.0%. For FY11, co updates outlook of wafer shipments of 2.7 to 2.9 GW vs 2.5-2.8 GW, module shipments of 800-900 MW vs 700-800 MW, in-house polysilicon production of 10,000-11,000 MT vs 9,000-10,000 MT, in-house cell production between 500-600 MW vs 400-500 MW, and gross margin between 23.0-28.0% vs 22.0-28%.

08:45 am NVIDIA ests and target raised to $18 at Wedbush on Tegra's potential: . Wedbush revisits its thesis following a week of frenetic hype and chatter about Tegra 2 and its upcoming superphone and tablet designs at CES, resulting in ~30% gains. Firm has been too pessimistic about Tegra's potential and are now re-adjusting its model to reflect a stronger 2011, with three-quarters of the ~$350mn in Tegra sales from handsets. Its latest checks also indicate lean GPU inventories, healthy F4Q business, and robust F1Q bookings. As such, firm lifts its ests and tgt to $18 from $10 but thinks valuation may be a bit stretched after last week's move.

[ReturntoSender]

From Briefing.com: 4:30 pm : A decent start to earnings season couldn't keep away a mid-session selling effort that threatened to steal gains, but support at the neutral line helped stocks rebound for a modest advance.

Alcoa (AA 16.33, -0.16), the first member of the Dow to post results for the latest quarter, reported last evening better-than-expected earnings. However, the stock was hit with some profit taking. Alcoa's report precedes the latest from fellow blue chips Intel (INTC 21.05, +0.36) and JPMorgan Chase (JPM 43.60, +0.20), both of which are scheduled to report later this week.

A barrage of earnings reports awaits investors next week. Ahead of that, Sears Holding (SHLD 75.03, +4.43), Stryker (SYK 58.00, +3.30), and Tiffany & Co. (TIF 60.56, -0.38) each issued pleasing projections.

While investors will take close note of earnings quality and the optimism underpinning forecasts, a watchful eye will remain on the eurozone and countries in its periphery. Given concerns about the health of sovereign debt there, successful debt auctions from Greece and Italy (Portugal and Germany conduct their own tomorrow) helped lift Europe's major bourses and provide a positive backdrop to domestic trade.

Early buying translated into solid gains, such that the Nasdaq Composite actually set a new two-year high shortly after the open. Sudden selling in afternoon trade undercut stocks, but support at the neutral line helped the broader market make a nice bounce into the close.

Energy stocks steadily outperformed. The sector settled with a 1.6% gain. That was partly owed to a spike in oil prices, which advanced more than 2% to settle above $91 per barrel.

Telecom was at the opposite end of things. Persistent pressure against that space left the sector to lose another 1.5% today.

Advancing Sectors: Energy (+1.6%), Materials (+0.8%), Health Care (+0.6%), Financials (+0.5%), Industrials (+0.3%), Tech (+0.2%), Utilities (+0.1%)
Declining Sectors: Telecom (-1.5%), Consumer Staples (-0.1%), Consumer Discretionary (-0.1%)DJ30 +34.43 NASDAQ +9.03 NQ100 +0.2% R2K +0.4% SP400 +0.4% SP500 +4.73 NASDAQ Adv/Vol/Dec 1647/1.91 bln/972 NYSE Adv/Vol/Dec 1756/940 mln/1213

4:16PM Evergreen Solar (ESLRD) to close Devens manufacturing facility; shipments for Q4 of 2010 increased to ~47% megawatts, a new company record (ESLR) 3.15 -0.09 : Co announced its intent to shut down operations at its Devens manufacturing facility to better position the co to pursue its industry standard size wafer strategy and preserve the co's liquidity. The co also provided updates on its industry standard wafer development activities and selected preliminary results for the quarter ended Dec 31, 2010. The co intends to completely shut down the Devens manufacturing facility by the end of Q1 of 2011. As a result of the closure of the Devens manufacturing facility, the co expects to incur non-cash charges of ~$340 mln associated with the write-off of existing building, facilities and equipment. Furthermore, ~$150 mln of intangible and cash-related prepayments associated with various silicon contracts are under review to determine whether additional non-cash charges will be required. These charges are expected to impact both the Q4 of 2010 and Q1 of 2011, and the amount of the charges will be determined during the co's preparation of its annual financial statements for the year ended December 31, 2010. Co announces selct Q4 results: Shipments for Q4 of 2010 increased to ~47 megawatts, a new co record, at an average selling price of ~$1.90 per watt.

10:42AM FSI Intl receives ANTARES order from Asian Foundry (FSII) 3.96 -0.05 : The system is expected to ship in January 2011

8:41AM Trina Solar signs supplemental long term wafer and polysilicon supply agreement with GCL-Poly (TSL) 25.62 : Co announces through its subsidiary, Changzhou Trina Solar Energy has signed a supplemental long-term wafer and polysilicon product supply agreement with GCL Solar Energy Technology, a subsidiary of GCL-Poly Energy. Under the terms of the supplemental agreement and existing agreements, GCL-Poly is expected to supply Trina Solar with wafers and polysilicon sufficient to produce ~7,500 MW of solar modules in aggregate over five years. Delivery of the wafers and polysilicon at predetermined prices will commence from January 2011 to December 2015. Terms of the agreement also contain a price adjustment clause.

7:40AM Emcore awarded solar panel manufacturing contract by NASA Goddard Space Flight Center for the magnetospheric multiscale mission valued at ~$10 mln (EMKR) 1.24 :

7:01AM Rudolph Tech received multiple orders for its NSX Inspection System from a major European semiconductor manufacturer (RTEC) 8.30 : The equipment will be used in back-end manufacturing for high-throughput inspection of automotive semiconductor devices at key points in the process. Shipments will commence in 1Q11 and continue through 2Q11.

08:16 am Advanced Micro Advanced Micro: CEO departure reflects ongoing difficulties - Auriga: . Auriga maintain their Sell rating and $5 tgt on Advanced Micro Devices (AMD) following the resignation of president and CEO Dirk Meyer and the announcement of preliminary CQ410 results that were slightly above prior guidance and in line with their ests. Consensus is clearly negative on AMD's ability to execute, but our work (and Mr. Meyer's resignation) suggests these concerns might even be worse than many fear. With the 32nm ramp at GlobalFoundries delayed, and the ability to value-price Fusion products in some doubt, they see no reason to move off their negative bias.

09:50 am AMD CEO Resigns, Reaffirms 2011 Guidance (AMD)

Advanced Micro (AMD $8.64 -0.55) sees preliminary fourth quarter revs $1.65 billion versus the $1.62 billion Thomson Reuters consensus>

Fourth quarter gross margins of approx 45% versus 45.4% Thomson Reuters consensus.

The company announced that its Board of Directors has appointed Senior Vice President and CFO Thomas Seifert, 47, as interim CEO following the resignation of Dirk Meyer, 49, as president, CEO and a director of the company effective immediately.

A CEO Search Committee has been formed to begin the search for a new CEO. In addition, the company reaffirms its 2011 annual financial guidance as disclosed at its Financial Analyst Day last November.

[ReturntoSender]

From Briefing.com: 4:30 pm : Broad-based buying sent stocks to their best levels in more than two years. The move began with help from strong action overseas, where a couple of more sovereign debt offerings helped perpetuate a positive tone.

Greece and Italy both had successful debt auctions yesterday, but today's successful offerings from Germany and Portugal provided further assurance that there is still demand for the region's debt. That helped stir confidence among investors, who drove the EuroStoxx 50 to a 3.0% gain -- its strongest single-session move in three months.

Big gains abroad provided a positive backdrop to for action at home. Strong demand for stocks sent the Dow, Nasdaq Composite, and S&P 500 to new two-year highs. Meanwhile, the Nasdaq 100, S&P 400, and Russell 2000 all recorded fresh three-year highs.

Financials experienced some of the strongest demand of the day. The sector was spurred to a 1.7% gain. Share volume in the sector was highest among banking issues.

An appetite for the relative risk of stocks caused rotation out of the dollar. That left the greenback to tumble 1.0% against a basket of competing currencies, namely the euro. The euro lacked direction in the early going, but it gradually worked its way to a gain of about 1.3% at $1.314.

Treasuries were also weakened by the move to own stocks, but they were able to trim losses following strong results from an auction of 10-year Notes. The auction drew a bid-to-cover ratio of 3.30 and dollar demand of $69.3 billion, which marks the strongest dollar demand since August 2009. The indirect bidder participation rate was 53.6%, the fourth highest in more than two years.

The Treasury's Budget deficit for December totaled $80 billion, down from the $91.4 billion deficit that was recorded last month.

The Fed's latest Beige Book indicated that across the various Fed districts conditions were better in manufacturing, retail, and nonfinancial services than they were in financial services or real estate, which remained weak across all districts. Labor markets were said to be firming somewhat in most districts.

Advancing Sectors: Financials (+1.7%), Energy (+1.2%), Materials (+0.9%), Tech (+0.9%), Industrials (+0.9%), Consumer Staples (+0.8%), Utilities (+0.5%), Health Care (+0.5%), Telecom (+0.5%), Consumer Discretionary (+0.3%)
Declining Sectors: (None)DJ30 +83.56 NASDAQ +20.50 NQ100 +0.7% R2K +0.8% SP400 +0.6% SP500 +11.48 NASDAQ Adv/Vol/Dec 1785/1.88 bln/859 NYSE Adv/Vol/Dec 2158/960 mln/854

8:31AM O2Micro receives patent for Phase-on-demand invention (OIIM) 6.39 : Designed for large panel LCD TV and LCD Monitor applications that support multiple-load light sources, this patented invention reduces the time-to-market and system cost. Its design methodology regulates power delivered to loads.

8:01AM Silicom Limited announces new design wins from major customer to boost co's revs by ~$2 mln/year (SILC) 18.22 : Co announces that one of its largest customers has selected Silicom to supply an additional three products, including two encryption cards and one special networking card. Based on the customer's forecasts, co expects the volume of purchase orders for these cards to ramp up gradually to ~$2 million per year, bringing the customer's purchases from Silicom to a total of ~$5 million per year.

7:30AM QLogic raises Q3 guidance above consensus (QLGC) 16.96 : Co raises Q3 non-GAAP EPS guidance to $0.38-0.39 (ex-a $0.10 tax benefit) from $0.34-0.38 vs. the $0.36 Thomson Reuters consensus; raises revs to $155-156 mln from $148-156 mln vs $153.32 mln Thomson Reuters consensus. "Our revenue performance was primarily driven by sequential growth in revenue for our Host Products compared to the second quarter of fiscal 2011. In addition, we experienced sequential growth in revenue for our Network Products. Our strong operating performance is expected to include higher gross margin and lower operating expenses than the previously provided guidance."

07:22 am Intel: Priced for mediocrity; expect better for the stock - Auriga: . Auriga notes investors appear to be focused on tablet cannibalization of client PCs -- MSFT's announcement that the next version of its Windows OS will run on ARMH architecture has exacerbated these concerns. It's also clear that Q4 was well below normal seasonality, and its model suggests that Q1 will come in a touch light of consensus expectations. However, firm's work suggests that the stock is already discounting most of the bad news, while not taking into account increased data center requirements that the profusion of relatively under-powered mobile devices will drive over the next several years. FQ410 (December) results after market close on Thursday

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 14-Jan-11 major indices rallied this week, with the S&P 500 advancing +1.7% in broad-based gains as fourth quarter earnings reporting season kicked off. Better-than-expected earnings and better-than-feared sovereign debt offerings from Portugal, Italy and Spain helped support the market.

Nine of the 10 of the sectors gained, led by Financials, +3.2%, and energy +3.3%. The resource-related sectors benefited from a 6.7% in oil prices.

Defensive stocks underperformed on a relative basis. Telecom fell -1.6% and utilities rose +0.5%.

The body of U.S. economic data this week continues to paint a picture of economic recovery and that core inflation will remain in check. The stock market had an overall limited reaction to the releases, however. Retail sales topped estimates and inflation was muted, though initial claims were slightly higher than expected.

In earnings news, Alcoa (AA -2.7%) topped estimates and issued better-than-expected guidance.

JPMorgan Chase (JPM +2.5%) reported a 47% increase in net income that topped estimates. The company also said it would like to raise its dividend soon.

Intel (INTC +1.9%) reported better than expected earnings, with net income rising 48% and issued first quarter revenue guidance 7% of the consensus estimate.

In other corporate news, Merck (MRK) plunged after announcing changes related to its clinical studies on cardiovascular medicine Vorapaxar.

Companies continue to seek acquisitions. Some of the more sizeable deals include
Duke Energy (DUK +0.6%) buying Progress Energy (PGN +0.1%) in a $13.7 bln stock transaction; DuPont (DD +0.1%) buying Danisco for $5.8 bln in cash; and speculation that Johnson & Johnson (JNJ -0.1%) has interest in acquiring Smith & Nephew (SNN +7.9%).

As a reminder, U.S. equity and bond market s are closed Monday in observance of Martin Luther King Jr. Day.

 
 Index	  Started Week	Ended Week  Change % Change	YTD % 
 DJIA	    11674.76	 11787.38   112.62    1.0	1.8 
 Nasdaq	     2703.17	  2755.30    52.13    1.9	3.9 
 S&P 500	     1271.50	  1293.24    21.74    1.7	2.8 
 Russell 2000  787.83	   807.57    19.74    2.5	3.0
 
 
                            

[ReturntoSender]

Monday Morning Outlook: DJIA 12,000 is Within View
Earnings look strong, but consumers are still wary
by Todd Salamone 1/15/2011 10:24 AM
http://www.schaeffersresearch.com/commentary/observations.aspx?ID=104552&trackback=mmoezine

The Dow Jones Industrial Average knocked down another 100-level marker last week, barreling past the 11,700 level, and settling within a field goal's distance of 11,800. Is 12,000 within reach? The Dow hasn't traveled in that company since June 2008. Looking ahead, Todd Salamone, Senior Vice President of Research, digs into the high-profile American Association of Individual Investors (AAII) survey. Many analysts are viewing the recent bullish readings on this survey as a contrarian signal. Todd isn't buying it, and he explains why. Next, Senior Quantitative Analyst Rocky White takes a look at the relative performance of the Dow and gold over the years. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

Recap of the Previous Week: Onward and Upward
Schaeffer's Editorial Staff

Bulls continued to battle traditionally bearish January headwinds, and extended their weekly winning streak to seven. The first week of earnings season offered some bright spots -- Alcoa (AA), Intel (INTC) and JPMorgan (JPM) impressed with better-than expected reports -- but traders also faced renewed concerns about the weak employment picture in the U.S. and heavy sovereign debt loads in Europe.

Portuguese debt issues dominated the headlines early in the week, with some European leaders suggesting the country would need to accept an Irish-style bailout. Investors were also antsy ahead of the kickoff to earnings season. The Dow lost 0.32% on Monday.

Dow component Alcoa (AA) launched the earnings parade Monday night with better-than-expected numbers, and homebuilder Lennar Corp. (LEN) followed suit Tuesday morning. Sears Holdings Corp. (SHLD) leaped more than 6% after it forecast strong earnings for the fourth quarter. And in the most anticlimactic revelation of the year to date, Verizon Communications Inc. (VZ) and Apple Inc. (AAPL) announced that Verizon would begin selling its version of the iPhone. Apple's share price was last spotted aboard the space shuttle, hurtling toward the stratosphere. The Dow climbed 0.30%, bringing the week almost back to breakeven.

Traders were encouraged early Wednesday by a successful Portuguese bond auction, and were further cheered when Wells Fargo upgraded the U.S. banking sector to "overweight," with particular kind words for Goldman Sachs (GS), JPMorgan, and Bank of America (BAC). In the afternoon, the Fed's latest Beige Book confirmed that the U.S. labor market is finally healing. "Labor markets in most districts appear to be firming somewhat," the Fed reported. The Dow surged 0.72%, galloping past the 11,700 marker, and closing at its highest level since June of 2008.

Jobless claims took an expected jump on Thursday, setting the tone for a downbeat day, although some analysts dismissed the number as a holiday reporting glitch. The rest of the day was a mixed bag: Wholesale inflation rose by 1.1% in December, although most of that increase was driven by volatile food and energy costs, and the trade deficit unexpectedly narrowed in November. Spain and Italy successfully auctioned off debt. The Dow slipped 0.20%.

JPMorgan boosted the financial sector on Friday by posting a 47% jump in fourth-quarter profit, beating analysts' expectations. Other news pointed to a continued recovery, but perhaps not as quickly as some hoped. U.S. retail sales rose 0.6% in December, the sixth straight monthly increase, but a little less than some had expected. The University of Michigan consumer sentiment index for January dipped to 72.7 from 74.5 in December; analysts were expecting another increase. Finally, the consumer price index rose 0.5% in December, in line with expectations. The Dow gained a healthy 0.47% on the day, tagging an intraday peak of 11,794.15 in the process. That brought the Dow's weekly advance to 1%. The S&P 500 Index rose 1.7% for the week, while the Nasdaq Composite climbed 1.9%.

What the Trading Desk Is Expecting: Sorting Out Conflicting Indicators
By Todd Salamone, Senior Vice President of Research

"Our models estimate that Equity Long/Short funds reduced their net exposure to 25% net long. This is likely due to reduced exposures going into year-end. Market Neutral funds maintained equity exposure ~5% net short; meanwhile, Macro HF's noticeably sold commodities, 10-year Treasuries and U.S. equity futures."

--Bank of America Merrill Lynch Hedge Fund Monitor, Jan. 4, 2011

"In bridge and investing, you are constantly being bombarded with an enormous amount of information... The key is seeing all the possibilities... Similarly, in investing, knowing which market indicators to monitor, and when, is more critical than watching every piece of information."

--Brad Moss, hedge fund manager, Fortune magazine, Jan. 7, 2011

The above excerpt from an article that appeared in Fortune magazine last week resonated with us. At Schaeffer's Investment Research, we monitor many sentiment and technical indicators in our efforts to gauge the risk and reward in the market. Sometimes, the various indicators we monitor are at odds with each other and, therefore, to Brad's point above, knowing which market indicators to follow becomes of paramount importance.

One such market indicator is the weekly American Association of Individual Investors (AAII) survey, which for weeks has indicated optimism among retail investors. I have noticed that many market participants are reacting to this survey's bullishness with caution. In fact, we would argue that the intense focus on this survey has kept many would-be investors on the sidelines, as they use this survey as a contrarian signal, missing the market's advance in the process.

The bullish sentiment found in this survey is in major conflict with actual fund flows in the domestic equity fund world, a more robust measure of retail market sentiment. For example, one might anticipate that on the heels of double-digit 2010 gains and a fresh start to a new year, fund flows into domestic equity funds would have been positive. However, in the first week of 2011, fund flows were more negative than they were during any of the first weeks of the prior five years. As a reminder, this period includes 2008-2009, the height of the real estate bust and financial crisis. So, while some avoid the market due to "excessive optimism," there is evidence that fear among this contingent of investors is higher now than during the dreary fundamental and technical backdrop of 2008-2009.

As we have seen during the past few weeks, pure market momentum has trumped all other indicators. But who is keeping the momentum alive? From our analysis of option activity on major exchange-traded funds, it appears to be hedge fund managers moving from an underweight position in U.S. equities. As we have said on previous occasions, the market's best days during the past couple of years have occurred when hedge funds are in accumulation mode. We see the evidence of this accumulation in the rising buy-to-open put/call volume ratio on major exchange-traded funds (ETFs), which are typically used as hedging vehicles.

With respect to hedge fund positioning, we said last week:

"...There is a hint of good news for bulls in our analysis of the 20-day buy-to-open put/call volume ratio on the QQQQ, IWM, and SPY, which has stabilized recently at former lows, and is now at its highest level in a month. Admittedly, this ratio has been volatile in recent weeks. But, if it continues to move higher from the current low level amid strength in the market, it would signal hedge fund managers moving back into the U.S. equity market from an underweight position, which would have bullish implications. This is an indicator that we continue to follow closely."

Last week, the indicator looked like this:



The graph below displays the buy-to-open put/call volume ratio at present.

The turn higher in this ratio from low levels, and amid strong price action, improves the market's risk/reward equation, as hedged buyers appear to be in the early stage of accumulation, a group that is less apt to panic sell on negative news, given that they own portfolio insurance. In looking at all possibilities, one might conclude that we are in the early stages of moving out of an oversold condition, and this might be the only indicator that matters now. If so, it will continue to distort traditional overbought/oversold levels, as we have been "overbought" using traditional technical tools since the holidays.



Turning quickly to the charts, the Russell 2000 Index's (RUT – 807.57) move above the 800-century mark is a plus for the bulls. The next big hurdle for the RUT would be the 850 area, site of its all-time high. Support is currently at 780, which acted as resistance in the second half of December, and in turn acted as support in this month's first week of trading.

The Standard & Poor's 500 Index (SPX – 1,293.24) has moved soundly above 1,250, and the round 1,300 level on the SPX lingers just above, with 1,333 – double the March 2009 low – sitting 2.5% above this century mark. Support for the SPX is in the 1,260-1,280 zone.

Finally, the Nasdaq Composite (COMP – 2,755.30) sits about 100 points below its October 2007 peak at 2,861, entering the holiday-shortened expiration week. We view support in the 2,650-2,700 area.

Risk factors have not changed:

1. January has not been seasonally strong during the past 10 years, marking various corrections and/or beginnings of corrections.

2. The CBOE Market Volatility Index (VIX) is trading at a significant premium to SPX historical volatility... and trading just above 15.00 again, which has marked a floor.

3. Equity option players are displaying an extreme in call buying relative to put buying.

If you enjoy Monday Morning Outlook...

...why not check out Opening View, our daily preview of market activity? Each morning, we analyze the prior day, review the overnight markets, and monitor the morning wires to give you our special Schaeffer's take on the action, before the opening bell. Sign up here to have Opening View delivered straight to your inbox every morning.

Prepare for the investing week ahead. Every week, Bernie Schaeffer and his staff provide you with their insight about what has happened and, more importantly, what will happen in the market. We dig deep and show you what's happening behind the scenes, and tell you which indicators are predicting major market moves. If you enjoyed this week's edition of Monday Morning Outlook, sign up here for free weekly delivery straight to your inbox.

Indicator of the Week: Pricing the Dow in Alternative Assets
By Rocky White, Senior Quantitative Analyst

Foreword: Unless you've been living under a rock, you know that money has been pouring into gold over the last several years. In fact, since 2001, gold has been up in every single year AND has outperformed the Dow in each of those years. Perhaps it was due, gold having lost about half its value over a 20-year period from 1980 to 2000. Below is a longer-term chart of the Dow and gold. You can see that the market began climbing higher in the 1980s, leaving gold behind. Then, since 2000, the Dow has gone almost nowhere while gold has quadrupled.



Another way to look at this relationship is to chart the Dow priced in ounces of gold, rather than dollars. In other words, if gold is trading for about $1,350 an ounce, it would take about 8.5 ounces of gold to buy a Dow valued at $11,800. When gold is trading for half that amount, it would take twice as many ounces. Put yet another way, it's the Dow value divided by the price of gold. Inflation hawks like this chart because they think excessive money printing is devaluing the dollar and driving the market higher. They think pricing the Dow in ounces of gold gives a truer measure of the market's value.

Looking at the chart this way shows that the recent surge in gold versus the market has brought the market down from about 40 ounces of gold, at its peak, to about 8.5 ounces right now. This current level seems right in line with historical levels, as the Dow's average since 1910 is about 10.5 ounces, with a median around 6.5.



Valuing the Dow with Copper: If you're not going to use dollars to value the market, then gold is typically the next choice. This is because it is often referred to as the world's universal currency. But there's no reason you couldn't value the Dow in other assets. Below is a chart of the Dow valued in pounds of copper. Again, the current level is right around the historical norms. The Dow is priced at about 2,700 pounds of copper, which is right around the median value since 1940, and slightly below the average. At the height of the tech boom, it cost about 20,000 pounds of copper to buy the Dow.



Barrels of Oil: Below is the chart of the Dow valued in barrels of oil. Just as with the other commodities, the Dow has been falling since 2000. The Dow reached 800 barrels of oil in 1998, but now stands at about 130 barrels. Unlike the other charts, the Dow is below its long-term median level when priced in barrels of oil.



Implications: Stocks have been flat over the past 10 years, while commodities have done exceptionally well. The charts above show the market is in a severe downtrend when priced in those commodities. Even in the last couple of years, when the Dow was up big (in dollars), it's down when priced in the commodities above. Despite the last 10 years, the Dow is now right in line with historical norms compared to these hard assets. So it's hard to say the market is particularly overbought. As fast as the money entered commodities over the last several years, it's just as easy for it to turn around and find its way back into stocks.





This Week's Key Events: Apple, IBM, Google, GE Among Big Names on Tap
Schaeffer's Editorial Staff

Earnings season picks up the pace, with some big names in the tech and financial sectors weighing in. Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday
* The market is closed Monday for Martin Luther King Jr. Day.

Tuesday
* The Federal Reserve will publish its January survey of manufacturers in New York State, and the National Association of Home Builders will offer up its housing market index for the same month. Scheduled to report earnings are Citigroup Inc. (C), Fastenal Company (FAST), Origin Agritech Ltd. (SEED), TD Ameritrade Holding Corp. (AMTD), Apple Inc. (AAPL), Cree Inc. (CREE), IBM Corp. (IBM), Western Digital Corp. (WDC), Linear Technology Corp. (LLTC) and McMoRan Exploration Co. (MMR).

Wednesday
* The Commerce Department will report December housing starts and building permits. ASML Holding N.V. (ASML), The Bank of New York Mellon Corp. (BK), Comerica Incorporated (CMA), Goldman Sachs Group Inc. (GS), State Street Corp. (STT), U.S. Bancorp (USB), Wells Fargo & Company (WFC), eBay Inc. (EBAY), F5 Networks Inc. (FFIV), Raymond James Financial Inc. (RJF), Seagate Technology PLC (STX), SLM Corporation (SLM), Xilinx Inc. (XLNX), and Northern Trust Corp. (NTRS) plan to report earnings.

Thursday
* The Labor Department will give us its weekly look at jobless claims, the National Association of Realtors will report on existing home sales in December, and the Conference Board will publish its Leading Indicators Index for December. Meanwhile, the Philadelphia Fed will provide its read on manufacturing activity in its region in January. We'll also get the usual weekly report on crude inventories, a day later than usual because of the holiday. Fairchild Semiconductor International (FCS) Fifth Third Bancorp (FITB), Freeport McMoRan Copper & Gold Inc. (FCX), Huntington Bancshares Incorporated (HBAN), ITT Educational Services Inc. (ESI), Morgan Stanley (MS), PNC Financial Services (PNC) PPG Industries Inc. (PPG), The Progressive Corporation (PGR), Southwest Airlines Co. (LUV), UnitedHealth Group Inc. (UNH), Advanced Micro Devices Inc. (AMD), Capital One Financial Corp. (COF), Google Inc. (GOOG), Intuitive Surgical Inc. (ISRG), and Parker-Hannifin Corp. (PH) will report earnings.

Friday
* There are no major economic reports scheduled for Friday. Bank of America Corp. (BAC), BB&T Corp. (BBT), General Electric Co. (GE), Schlumberger Limited (SLB), and SunTrust Banks Inc. (STI) will report earnings.

[ReturntoSender]

Amateur Investors Weekend Stock Market Analysis (1/22/11)

http://www.amateur-investor.net/Weekend_Market_Analysis_Jan_22_11.htm

Since I have received some inquiries regarding whether the S&P 500 can rise back to the late 2007 level here is the type of pattern that would likely pan out over the next year or so which is a "Broadening Top". If this type of pattern is developing then the S&P 500 would eventually rally back above its previous 2007 high which was at 1576. Currently the move up from the March 2009 low would be the final 5th Wave. However keep in mind once this pattern completes then a large sell off or consolidation pattern would follow with potential retest of the longer term downward trend line.



Meanwhile a longer term chart of the S&P Composite is shown below. Values before 1928 were based on research done by Robert Shiller who calculated monthly values for the S&P Composite going way back to 1871. Notice there have been two other Broadening Top patterns during the past 140 years in the S&P Composite. The first one was in the early 1970's and the other in the early 1900's. Notice once the Broadening Top pattern completed in the early 1970's a sharp 48% sell off followed. Meanwhile the other Broadening Top pattern completed in the early 1900's (1912 to be exact) and was then followed by a choppy 9 year consolidation period through 1921 in which the S&P Composite lost 37% of its value over an extended period of time. Thus it's not impossible that a repeat of one of these two past occurrences could happen again if the S&P does rise back to the late 2007 high within the next two years.



Meanwhile a closer look at the Broadening Top pattern from the early 1970's shows the final 5th Wave acted like an "ABC" type affair.



Now if a Broadening Top pattern is developing then the move from March 2009 to April of 2010 was likely "A" of an "ABC" affair which was followed by "B" that corresponded to the July low. Furthermore the recent move up from the July low 1011 would be the 1st Wave of a larger 5 Wave pattern for "C". Meanwhile a Wave 2 pullback should develop soon with support coming in at or above the 61.8% Retrace around 1120 (calculated from 1011 to 1296). This would then be followed by Wave's 3, 4 and 5 to complete the pattern just above the 2007 high of 1576 probably around 1600 or so. Naturally this would be bullish over the next year or two but then turn bearish in the longer term as a potential retest of the longer term downward trend line would eventually occur after 2015.



Finally also notice the longer term upward trend line in the S&P Composite (green line) would eventually intersect with the current downward trend line (black line) as well at point A?

[ReturntoSender]

From Briefing.com: 4:30 pm : The stock market scored a strong gain and locked in its first positive finish for January since 2007 with help from the energy sector, which climbed sharply in response to a spike in oil prices.

Oil prices extended their recent climb to a two-year high of $92.84 per barrel before they settled with a 3.2% gain at $92.19 per barrel. That price spike pulled buyers into oil and gas equipment stocks (+2.6%), exploration issues (+4.4%), and drillers (+2.4%). In turn, the overall energy sector advanced 2.6%.

Massey Energy (MEE 62.86, +5.63) was a standout in the energy sector. It surged close to 10% in response to news that Alpha Natural Resources (ANR 53.73, -4.15) will acquire MEE for $69.33 per share in a mix of cash and stock. Exxon Mobil (XOM 80.68, +1.69) advanced more than 2%, but more of that is owed to a strong sector performance than the oil giant's upside earnings surprise.

Investor appetite for natural resource plays spread to the basic materials stocks, which collectively climbed 1.6%. Materials made up the second best performing sector of the session.

As a group financials advanced 1.0%, but Deutsche Bank (DB 58.55, -0.35) faltered following an earnings forecast that failed to meet what Wall Street had already projected.

Intel (INTC 21.46, +0.00) finished flat after participants assessed news that the firm discovered a chipset error. Although the error will adversely impact the firm's revenue, it wasn't enough to stop Intel from increasing its overall revenue forecast.

Defensive-oriented issues generally lagged, but consumer staples stocks made up the only major sector that suffered a loss. They fell 0.3%.

While energy plays provided leadership, generally broad market strength helped the S&P 500 settle into a 2.3% monthly gain for January. The benchmark Index hasn't booked a January gain in four years.

Amid an increased appetite for risk, the dollar turned lower in today's trade. By the time of the closing bell, the greenback lagged a collection of competing currencies by 0.5%. Most of its slide came against the British pound and the euro, which was helped by higher eurozone inflation readings. Reduced concern about the likelihood of social unrest in Egypt spilling over into other country's also convinced some to rotate out of the dollar. The dollar's loss today locked it in for a 1.6% monthly loss.

The latest dose of data failed to act as any kind of a catalyst. Personal income for December increased 0.4%, which is slightly less than the 0.5% increase that had been expected. Personal spending during December increased 0.7%, which is greater than the 0.6% increase that had been widely anticipated. However, core personal consumption expenditures were flat when a 0.1% increase had been expected by a broad span of economists.

The Chicago PMI came in at 68.8 for December. That represents its best reading since 1988.

Advancing Sectors: Energy (+2.6%), Materials (+1.6%), Financials (+1.0%), Industrials (+0.9%), Tech (+0.7%), Health Care (+0.1%), Consumer Discretionary (+0.1%), Telecom (+0.1%), Utilities (+0.1%)
Declining Sectors: Consumer Staples (-0.3%)DJ30 +68.23 NASDAQ +13.19 NQ100 +0.5% R2K +0.8% SP400 +0.8% SP500 +9.78 NASDAQ Adv/Vol/Dec 1536/1.98 bln/1088 NYSE Adv/Vol/Dec 2054/1.19 bln/915

6:10PM Silicon Motion beats by $0.09, beats on revs; guides Q1 revs above consensus; guides FY11 revs above consensus (SIMO) 5.56 +0.26 : Reports Q4 (Dec) earnings of $0.18 per share, excluding non-recurring items, $0.09 better than the Thomson Reuters consensus of $0.09; revenues rose 77.8% year/year to $40 mln vs the $34.5 mln consensus. Co issues upside guidance for Q1, sees Q1 revs flat to down 10% sequentially, which calculates to ~$36-40 mln vs. $31.33 mln Thomson Reuters consensus. Co issues upside guidance for FY11, sees FY11 revs growth of 20-30%, which calculates to ~$158.9-172.1 mln vs. $142.60 mln Thomson Reuters consensus.

5:23PM Corning Incorporated to acquire MobileAccess (GLW) 22.21 +0.41 : Co announced that it has signed an agreement to acquire MobileAccess, a leading provider of wireless network solutions. The terms of the agreement are not being disclosed. Pending regulatory approval, the acquisition is expected to be completed by the end of the first quarter in 2011.

4:08PM Novellus beats by $0.09, beats on revs (NVLS) 36.07 +0.29 : Reports Q4 (Dec) earnings of $1.03 per share, excluding non-recurring items, $0.09 better than the Thomson Reuters consensus of $0.94; revenues rose 57.4% year/year to $384.4 mln vs the $377.8 mln consensus.

4:08PM Novellus beats by $0.09, beats on revs (NVLS) 36.07 +0.29 : Reports Q4 (Dec) earnings of $1.03 per share, excluding non-recurring items, $0.09 better than the Thomson Reuters consensus of $0.94; revenues rose 57.4% year/year to $384.4 mln vs the $377.8 mln consensus.

4:03PM Intl Rectifier beats by $0.14, reports revs in-line; guides Q3 revs above consensus (IRF) 32.03 +0.75 : Reports Q2 (Dec) earnings of $0.62 per share, $0.14 better than the Thomson Reuters consensus of $0.48; revenues rose 34.0% year/year to $281.7 mln vs the $281.5 mln consensus. Co issues upside guidance for Q3, sees Q3 revs of $285-295 mln vs. $275.47 mln Thomson Reuters consensus.

4:03PM Integrated Device beats by $0.01, reports revs in-line (IDTI) 6.55 +0.27 : Reports Q3 (Dec) earnings of $0.15 per share, $0.01 better than the Thomson Reuters consensus of $0.14; revenues rose 7.5% year/year to $153.2 mln vs the $153.1 mln consensus.

10:46AM General Electric signs wind services agreement in Europe with Cobra Energia (GE) 20.24 +0.04 : Co has signed a 10-year contract with Spanish wind developer Cobra Energia to provide advanced services for 178 GE wind turbines installed at eight wind farms across Spain. The agreement is GE's largest wind energy services contract in Europe and reinforces the company's position in Europe's highly competitive wind turbine services sector.

10:16AM Intel announces chipset design error, co raises Q1 and FY11 rev guidance to incorporate Infineon acq.; lowers gross margin guidance (INTC) 21.45 -0.00 : Co has discovered a design issue in a recently released support chip, the Intel 6 Series, code-named Cougar Point, and has implemented a silicon fix. Co expects this chipset issue to reduce revenue by ~$300 mln as the co discontinues production of the current version of the chipset and begins manufacturing the new version. FY11 rev is not expected to be materially affected by the issue. Co raises guidance to incorporate Infineon acquisition. Co raises Q1 rev guidance to $11.3-12.1 bln from $11.1-11.9 bln vs $11.46 bln Thomson Reuters consensus. Co raises FY11 rev growth guidance to be in the mid-to high teens, compared to the co's prior expectation of ~10% vs the +8.0% consensus. Co lowers Q1 non-GAAP gross margin consensus to ~62% from ~64% (consensus 64.1%); FY11 to 64% from 65% (cons: 64.9%). "In some cases, the Serial-ATA ports within the chipsets may degrade over time, potentially impacting the performance or functionality of SATA-linked devices such as hard disk drives and DVD-drives. The chipset is utilized in PCs with Intel's latest Second Generation Intel Core processors, code-named Sandy Bridge. Intel has stopped shipment of the affected support chip from its factories. Intel has corrected the design issue, and has begun manufacturing a new version of the support chip which will resolve the issue. The Sandy Bridge microprocessor is unaffected and no other products are affected by this issue. The co expects to begin delivering the updated version of the chipset to customers in late February and expects full volume recovery in April... For computer makers and other Intel customers that have bought potentially affected chipsets or systems, Intel will work with its OEM partners to accept the return of the affected chipsets, and plans to support modifications or replacements needed on motherboards or systems."

8:01AM Chipmos Technology announces early repayment of its syndication loan; completes transaction with Spil (IMOS) 1.63 : Co announces its early repayment in full, through its free cash flow, of its $74.5 mln syndication loan. Separately, ChipMOS Taiwan made its final payment to Siliconware Precision Industries Co. of $16.8 mln on Jan 4, 2011, in connection with the Equipment Purchase Agreement between ChipMOS Taiwan and S.P.I.L with the U.S. Securities and Exchange Commission. In turn, S.P.I.L. paid $16.8 mln to the company on January 10, 2011 to purchase the last tranche of ChipMOS Taiwan's common shares pursuant to the Share Purchase Agreement between company and S.P.I.L. dated Feb. 26, 2010. Post completion of the share purchase transaction, S.P.I.L. holds approximately 15.8% of the total number of ChipMOS Taiwan's outstanding shares and the company holds approximately 84.2% of the total number of ChipMOS Taiwan's outstanding shares.

IBM (IBM) announced that it has been selected by the City of New York to build a more efficient, smarter technology platform for CITIServ, the City's IT infrastructure modernization program.

7:01AM DSP Group reports EPS in-line, beats on revs; guides FY11 revs in-line (DSPG) 7.56 : Reports Q4 (Dec) loss of $0.17 per share, in-line with the Thomson Reuters consensus of ($0.17); revenues fell 20.7% year/year to $43.4 mln vs the $42 mln consensus. Co issues in-line guidance for FY11, sees FY11 revs of $227-245 mln vs. $236.15 mln Thomson Reuters consensus. "Despite the overhang and depletion of excess inventory at several ODM and OEM customers during the fourth quarter, we were able to execute and deliver on our 2010 business plan as reflected in the year-on-year improvements in all of our annual financial metrics. In addition, we generated $17 million of free cash flow during the year and ended the year with a strong cash position of approximately $140 million in cash and cash equivalents."

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks scored their strongest single session gain in eight weeks on the back of broad-based buying. The effort took the stock market to a new two-year high.

The stock market's refusal to extend Friday's sharp slide yesterday was treated as an encouraging sign to buyers. Gains abroad also offered a positive backdrop for further buying this session.

Support for stocks was wide ranging as nearly 90% of the issues in the S&P 500 staged gains. Every sector except consumer staples (+0.7%) registered a gain of more than 1%. Materials stocks and financial stocks were among the best performers for the second straight session; they climbed 2.8% and 2.2%, respectively.

Such a strong, concerted buying effort helped the S&P 500 close comfortably above the 1300 line, which is where it had faltered on a couple of occasions last week, to its best level since August 2008. The Dow also set a two-year high and closed above the psychologically significant 12,000 line for the first time since June 2008, but the Nasdaq is still shy of the highs that it set a couple of weeks ago.

Dow component Pfizer (PFE 19.22, +1.00) was among this session's best individual performers and most actively traded names by volume. The pharmaceutical outfit's upside earnings surprise was cheered while its disappointing forecast was shrugged off.

In other earnings news, Baidu.com (BIDU 118.73, +10.10), Anadarko Petroleum (APC 78.54, +1.46), UPS (UPS 74.59, +2.97), and Archer-Daniels Midland (ADM 34.70, +2.03) all beat bottom line expectations. BP Plc (BP 47.98, +0.51) came short of the consensus earnings estimate, but announced that it will resume its dividend at 50% of its dividend from the first quarter of fiscal 2010.

Ford Motor (F 15.89, -0.06) saw strong volume following news of its 13% increase in total January sales. General Motors (GM 36.45, -0.04) announced a 23% annual increase in January sales and Toyota Motor (TM 83.29, +1.11) said its January U.S. sales increased 17% from the prior year.

An increased appetite for stocks prompted many to dump the dollar. In turn, the greenback fell 1.0% against a collection of competing currencies to its lowest level in more than two months.

Data was given only brief consideration this session. Although the January ISM Manufacturing Index improved to a six-year high of 60.8, which is greater than the 58.4 that had been expected, on average, among economists polled by Briefing.com, construction spending during December fell 2.5% when a 0.4% decline had been widely expected.

Advancing Sectors: Materials (+2.8%), Financials (+2.2%), Energy (+1.9%), Tech (+1.8%), Health Care (+1.8%), Industrials (+1.6%), Consumer Discretionary (+1.2%), Telecom (+1.2%), Utilities (+1.1%), Consumer Staples (+0.7%)
Declining Sectors: (None)DJ30 +148.23 NASDAQ +51.11 NQ100 +1.9% R2K +2.3% SP400 +1.6% SP500 +21.47 NASDAQ Adv/Vol/Dec 2036/2.28 bln/624 NYSE Adv/Vol/Dec 2482/1.09 bln/539

5:02PM Verigy received initial draft of definitive agreement from Advantest (ATE) to acquire all of the outstanding Verigy ordinary shares for $15.00 per share in cash (VRGY) 13.23 -0.11 : Co announced that on January 26, 2011 it received an initial draft of a definitive agreement from Advantest relating to Advantest's proposal to acquire all of the outstanding Verigy ordinary shares for $15.00 per share in cash. The Verigy Board of Directors is in the process of reviewing Advantest's proposed agreement and continues to engage with Advantest in due diligence, business analysis and management meetings in connection with the proposed transaction. The Verigy Board has not made any recommendation with respect to the Advantest proposal. There can be no assurances that an agreement will be reached with Advantest or that a transaction with Advantest will be consummated, and Verigy does not intend to comment further unless an agreement is reached with Advantest or discussions are terminated.

5:00PM JA Solar to supply 400 MW of solar modules to a leading European provider of photovoltaic systems by 2013 (JASO) 6.93 +0.03 : Co announced that it has signed a supply agreement with one of the leading European specialists in photovoltaic systems to provide 400 megawatts (MW) of solar modules from 2011 through the end of 2013. Under the terms of this agreement, JA Solar will supply the company with 100 megawatts of solar modules in 2011, 125 megawatts in 2012 and 175 megawatts in 2013.

4:30PM Amtech Systems to acquire controlling interest in Ion implant technology based in China; strengthens high-efficiency solar cell strategy (ASYS) 26.39 : Co announced it has entered into an agreement to acquire a controlling interest in a China-based ion implant technology company located in Shanghai, China. The acquisition is expected to close in February 2011, subject to compliance with formal Hong Kong filing requirements. Under the terms of the acquisition: For its 55% ownership, Amtech will pay $5.5 mln in the form of cash and stock, and will pay up to $4 mln in the form of a contingent promissory note. The payments of up to $4 mln pursuant to the contingent note are to be made to the acquired company and used to fund Kingstone Semiconductor's development of a next generation solar ion implant machine.

4:06PM Broadcom announces 12.5% increase in quarterly cash dividend and $300 million accelerated share repurchase plan (BRCM) 46.30 +1.21 : Co announces that its Board of Directors has approved a 12.5% increase in the quarterly cash dividend to $0.09 cents per share, up from $0.08 per share, payable to holders of the Company's Class A and Class B common stock. Co also announced a $300 million accelerated share repurchase plan under its existing evergreen share repurchase program.

4:06PM Powerwave misses by $0.02, misses on revs (PWAV) 3.47 -0.01 : Reports Q4 (Dec) earnings of $0.06 per share, excluding non-recurring items, $0.02 worse than the Thomson Reuters consensus of $0.08; revenues rose 23.1% year/year to $175.6 mln vs the $179.5 mln consensus.

4:03PM Magma Design increases authorization in common stock repurchase program to $30 mln (LAVA) 5.59 +0.16 :

[ReturntoSender]

Amateur Investors Weekend Market Analysis (2/5/11)

http://www.amateur-investor.net/Weekend_Market_Analysis_Feb_5_11.htm

For those watching Bonds the 10 Year has been in a long term downward trend going back to the peak in the early 1980's. Meanwhile since the late 1980's the 10 Year has been in a downward channel (black lines) while making a series of lower Lows (L) and lower Highs (H).



Meanwhile it doesn't take a rocket scientist to figure out the long term downward trend in the yields helped ignite the Bull Market from the early 1980's through the late 1990's (points A to B). Of course the big question is will the long term trend in the 10 Year Bond Yields continue lower and remain contained within their downward channel or will they eventually break out of their downward channel and undergo a substantial rise like occurred in the 1970's? As you can see the rising yields in the 1970's (points C to D) had an adverse affect on the market as it traded nearly sideways for several years while undergoing a consolidation period.

[ReturntoSender]

19 Year (TNX) 10 Year Bond Chart Versus the Dow



Many people think that there is no way interest rates can stay this low especially with the economy finally showing some signs of strength. I personally agree but I would add that interest rates can and do rise even as the market does within reason.

If we do hit real inflation like we saw several decades ago then many investors will look to bond yields as a more secure investment opportunity than a stagnant stock market should that happen again.

JMHO, RtS

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks started the session without much direction, but they gradually chopped their way higher to settle with solid gains at their best levels in more than two years.

Early participants were hesitant to buy, but given the stock market's uptrend many were also unwilling to sell. In turn, only a modest reaction was made to news that China added 25 basis points to its one-year deposit rate and lending rate, even though there is concern that higher rates in China could curtail the country's ability to drive a global economic recovery.

It took a while to get things going, but stocks eventually staged a gradual climb. The effort was broad based in that only energy stocks (-0.5%) and utilities stocks (-0.1%) failed to find higher ground.

Consumer discretionary stocks scored the strongest gains. As a group they advanced 1.2%. Retailers led the way with a 1.5% gain.

McDonald's (MCD 75.36, +1.91) was a leader among blue chips. The stock pulled back a bit when it failed to push past its 50-day average, but it still scored its strongest single-session gain in nine months amid news of a 5.3% increase in January global sales.

It mattered little to the broader market, but the latest round of earnings was largely lackluster. Teva (TEVA 52.02, -2.96) reported worse-than-expected results, which overshadowed news that it has hiked its quarterly dividend by 14%. Avon Products (AVP 28.47, -0.88), Beazer Homes (BZH 5.59, +0.14), and Principal Financial Group (PFG 32.24, -1.46) both posted disappointing results, too. Coventry Health Care (CVH 29.78, -1.56) posted an upside surprise, but issued downside guidance. Becton Dickinson (BDX 81.03, -4.61) had a better-than-expected bottom line, but its top line was lighter than what had been widely expected.

An absence of trading catalysts made for moderate share volume. In turn, the share tally on the NYSE came in at an unimpressive 885 million. That makes for the lowest total of 2011 and the fifth straight session in which trading volume has failed to eclipse 1 billion shares on the Big Board.

Treasuries resumed their descent by selling off in the wake of the latest 3-year Note auction. The auction produced a bid-to-cover of 3.01 and dollar demand of $96.3 billion. The indirect bidder participation rate came in at 27.6%. Selling sent the yield on the benchmark 10-year Note comfortably above 3.70% for the first time since May.

Advancing Sectors: Consumer Discretionary (+1.2%), Financials (+0.7%), Industrials (+0.7%), Consumer Staples (+0.6%), Tech (+0.4%), Telecom (+0.3%), Materials (+0.3%), Health Care (+0.3%)
Declining Sectors: Utilities (-0.1%), Energy (-0.5%)DJ30 +71.52 NASDAQ +13.06 NQ100 +0.6% R2K +0.7% SP400 +0.5% SP500 +5.52 NASDAQ Adv/Vol/Dec 1526/1.81 bln/1109 NYSE Adv/Vol/Dec 1914/885 mln/1073

4:18PM BCD Semiconductor reports Q4 YoY net income growth of 8.6% to $3.8 mln; revs rose 14.1% to $31.6 mln (BCDS) 11.62 +0.37 : Revenue for Q1 of fiscal year 2011 is expected to be in the range of $30 to $31 million, representing growth of ~5% to 8% when compared to Q1 2010. Gross margin is expected to be in the range of 29.5% to 30.5% for the first quarter of fiscal year 2011.

4:17PM TranSwitch misses by $0.01, misses on revs; planning a restructuring including a workforce reduction (TXCC) 2.19 +0.05 : Reports Q4 (Dec) loss of $0.05 per share, $0.01 worse than the Thomson Reuters consensus of ($0.04); revenues fell 16.5% year/year to $10.1 mln vs the $10.5 mln consensus. In addition, TranSwitch also announced that it is planning a restructuring including a workforce reduction to be implemented and concluded during the first quarter of 2011. The actions are meant to continue to further reshape the company consistent with its increased focus on video and voice-over-IP. TranSwitch expects that these restructuring actions will result in annual savings of approximately $2 million, and that these savings will begin to be recognized in the second quarter of 2011. In connection with the restructuring, TranSwitch expects to incur pre-tax restructuring charges of approximately $500,000. The Company expects these charges to be recorded in the first quarter of 2011.

8:56AM Zoran urges stockholders to reject Ramius' efforts to take control of the Board of Directors and co through its consent solicitation and to disregard Ramius' consent efforts and discard any materials sent by Ramius (ZRAN) 9.34 : Co states in letter to shareholders that it believes that its DTV breakeven revenue threshold of $140 million in 2012 is achievable... expects its cost reduction initiatives to culminate in Q3 2011, resulting in a run-rate of $55-$60 million of annual non-GAAP operating expenses, rather than $78.5 million per Ramius, which, when combined with co's expected non-GAAP gross margin in the DTV business, is expected to generate breakeven profitability. Co believes it can achieve $140 million of revenues in 2012, under a streamlined cost structure, is attainable and will enable DTV to be profitable for 2012 and beyond.

Sanmina-SCI Corporation (SANM) earned Nadcap certification at its Singapore PCB location.

Altera (ALTR) announced it successfully completed interoperability testing between its Stratix IV GT FPGA and the Bandwidth Engine device from MoSys in a serial memory application.

8:02AM Vishay beats by $0.04, beats on revs; guides Q1 revs above consensus (VSH) 17.18 : Reports Q4 (Dec) earnings of $0.48 per share, excluding non-recurring items, $0.04 better than the Thomson Reuters consensus of $0.44; revenues rose 13.4% year/year to $688.6 mln vs the $669.5 mln consensus. Co issues upside guidance for Q1, sees Q1 revs of $675-715 mln vs. $662.17 mln Thomson Reuters consensus. "During the fourth quarter, we completed a repurchase of 21.7 million shares of our common stock, demonstrating our confidence in the long-term prospects of Vishay and our commitment to creating long-term value for our stockholders. Our healthy balance sheet and strong cash flow generation allowed us to use a low-coupon convertible debenture offering to finance the buy-back, which was more efficient than using our cash, most of which is off-shore."

Veeco Instruments (VECO) announced that Shanghai Epilight Technology placed a large multi-tool order for Veeco TurboDisc K465i Metal Organic Chemical Vapor Deposition (MOCVD) systems during the fourth quarter of 2010.

09:46 am VECO Guides Q1 Below Consensus (VECO)

Veeco (VECO $46.52 +1.38) reported fourth quarter earnings of $1.62 per share, $0.01 better than the Thomson Reuters consensus of $1.61.

Revenues rose 151.9% year-over-year to $300 million versus the $302.2 million consensus.

Reports fourth quarter gross margins of 50.2% versus 50.3% consensus. Co issues downside guidance for first quarter, sees EPS of $1.02-1.39 vs. $1.45 Thomson Reuters consensus; sees first quarter revs of $215-265 million versus the $292.56 million Thomson Reuters consensus.

In fiscal year 2011, the company expects earnings of greater than $5.00 versus $4.96 Thomson Reuters consensus; sees FY11 revs of greater than $1 bln vs. $1.09 bln Thomson Reuters consensus.

"First quarter 2011 revenues will be lower than Q4 2010 because we are planning to ship 12-20 MOCVD reactors in the new MaxBright "cluster" format, and will not be recording any revenue on these systems in the first quarter.

Timing of revenue is also being impacted by the longer order-to-revenue cycle times associated with the high percentage of business currently coming from China, primarily due to customer facility readiness. The average time to convert orders to revenue is currently several months longer in China than in other regions."

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 11-Feb-11The major indices posted another gain this week, aided by favorable momentum and positive economic data. The positive items helped offset a downside surprise and plunge in shares of tech bellwether Cisco (CSCO, -15.2% ) and an increase in lending rates out of China. Meanwhile, Egypt continued to be the focus of the media, though the impact on the stock market was relatively limited. At the end of the week, prior to the market close, President Mubarak stepped down.

Nine of the 10 sectors gained. Gains were led by consumer discretionary (+3.5%), financials (+2.9%) and industrials (+2.8%). Energy (-0.2%) and materials (+0.6%), which outperformed last week, underperformed on a relative basis. Overall trading volume was relatively light.

Cisco acted as the main drag on the S&P 500, plunging 15% after announcing a disappointing outlook. The tech giant hit a fresh 52-week low as margin compressions resulted in downside guidance for fiscal year 2011.

Retailers had a strong showing, which helped lift the consumer discretionary sector. Big Lots (BIG +22.4%) rallied on news the discount retailer was considering a possible sale. JCPenney (+14.9%) rallied as activist investor Bill Ackman said that the fair value of JCP is "meaningfully higher". Ackman's hedge fund Pershing Square owns a 15% stake in JCP.

Meanwhile, Walt Disney (DIS +6.6%) gained 6.9% after reporting upside results, sending the stock to a record high.

In other major corporate news, Coca-Cola (KO +1.6%) met estimates on strong volume growth. 3M (MMM +4.0%) increased its quarterly dividend 5% and also announced an additional $7 bln share repurchase plan.

Among financials, NYSE Euronext (NYX +17.3%) posted the largest advance. The exchange may be purchased by Deutsche Boerse, which would create the world's largest exchange. On a similar note, the latest exchange deal-making includes plans of the London Stock Exchange to acquire TMX Group, which is the owner of the Toronto Stock Exchange, for $3.2 billion.

In other M&A news, Danaher (DHR +7.6%) is buying Beckman Coulter (BC +8.2%) for approximately $6.8 bln in cash while Ensco (ESV -2.7%) is going to acquire Pride International (PDE +16.5%) for roughly $7.3 bln in a cash and stock deal. Those deals represent premiums of 45% and 21%, respectively, for shareholders of the acquired companies.

Moving on to the economy, there was better news in the weekly initial claims report. Claims for the week ending February 5 declined by 36,000 to 383,000 (Briefing.com consensus 410,000), which is the lowest level since July 2008. That dropped the 4-week moving average to 415,500 from 431,500.

 
 Index	 Started Week  Ended Week  Change % Change  YTD % 
 DJIA	    12092.15	12273.26   181.11    1.5    6.0 
 Nasdaq	     2769.30	 2809.44    40.14    1.4    5.9 
 S&P 500	     1310.87	 1329.15    18.28    1.4    5.7 
 Russell 2000  800.11	  822.11    22.00    2.7    4.9

9:40AM Zoran: Ramius issues statement on Zoran's campaign; filed supplemental presentation materials with the SEC (ZRAN) 9.15 -0.01 : Ramius Value and Opportunity Advisors, a subsidiary of Ramius announced it has filed supplemental presentation materials with the SEC and issued a statement to shareholders of Zoran Corporation condemning the Zoran Board of Directors for leading a campaign of misleading information designed to confuse and mislead shareholders. In the presentation materials, Ramius urges shareholders "not to be misled by the Company's recent attempt to downplay its true underperformance by "cherry-picking" a peer group of massively underperforming companies and using a disingenuous, artificial comparison date of December 31, 2009, a date that has no relevance for the Company or its shareholders."

# New LTE Picocell and 4G MIMO Active Array Antenna products will lead the lineup of 4G network infrastructure products being debuted at Mobile World Congress next week by Powerwave Technologies (PWAV).

# Dell (DELL) Services announced a new comprehensive line of services and solutions that will help enterprise customers achieve the benefits of mobile collaboration, computing and communications enhanced business processes.

2:53AM Nokia and Microsoft (MSFT) announce partnership; outlines new strategy, introduces new operational structure; provides financial targets (NOK) 10.88 : Nokia and Microsoft today announced plans to form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem. As of April 1, NOK will have a new company structure, which features two distinct business units: Smart Devices and Mobile Phones. Under the proposed partnership with MSFT. Due to the initiation of NOK's strategic transformation on February 11, 2011, the full-year prospects for its Devices & Services business are subject to significant uncertainties, and therefore co believes it is not appropriate to provide annual targets for 2011 at the present time. Co expects 2011 and 2012 to be transition years, as the co invests to build the planned winning ecosystem with MSFT. After the transition, NOK targets longer-term: 1) Devices & Services net sales to grow faster than the market and Devices & 2)Services non-IFRS operating margin to be 10% or more. Additionally, Nokia and Nokia Siemens Networks expect overall industry revenue to grow slightly in 2011, compared to 2010. Nokia and Nokia Siemens Networks target: 1)Nokia Siemens Networks net sales to grow faster than the market in 2011. 2) Nokia Siemens Networks non-IFRS operating margin to be above breakeven in 2011. Additionally, Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to reduce its non-IFRS annualized operating expenses and production overheads by EUR500 mln by the end of 2011, compared to the end of 2009.

[ReturntoSender]

InvestmentHouse Weekend Market Update:

http://investmenthouse2.com/cntdirplus.asp?name=IHDaily&zid=2770189&eeid=XFcqVytdVygELD4ZXlAyUFpZGFAqWg==

- This time Mubarak quits for real and the market does the same thing it did on the dry run: rally.
- Treasury proposes 'winding down' FRE, FNM . . . very slowly.
- Foreclosures down again.
- Michigan Sentiment continues to improve.
- Market does the improbable again, i.e. extending its rally beyond most traders' comfort level.
- Extended and moving into next resistance, but big and little names continue to jump higher.

MARKET OVERVIEW

After a trial 'resignation' stirs up more trouble, the military shows you who is in charge in Egypt. Oh yes, and stocks like what they hear.

Thursday night I pondered if the market would sell on Friday since Mubarak did not really resign. Everyone thought he would resign, including the State Department, all of the administration, and thousands of people in the street. It definitely sounded that way when he began his speech. Once it became apparent that he was not quitting, the market started to sell back and futures were down after hours.

We were wondering if it would sell, and it was selling in the morning. Futures were lower. After the dry run of the resignation on Thursday, the military showed us who is actually in charge in Egypt. They politely told Father Mubarak that he better officially resign. The people in the street would not stand for it, and the military did not want to fire upon their own citizens. From the safety of his summer residence, Mubarak then sent his VP out to say that this time, no fingers crossed, he was resigning. When that happened, the market took off to the upside. It was enjoying itself with a nice run through mid-morning.

It set up a strong surge mid-morning. A pullback, a lower high, a lower low, and a little ABCD pattern. It had the expected response. It broke back to the upside and the market rallied into the close, posting gains on top of gains. NASDAQ +0.7%; SP500, +0.5%; Dow +0.35%, SP600, +1%; SOX, +0.8%. Very solid moves indeed.

Looking at the chart, after a test to the 10 day EMA on Thursday and a gap lower on Friday, buyers stepped back in and bought the stock market once more. The market continues to do the improbable, and that is to continue rallying after a run that has now equaled the August-November run. It is making traders extremely uncomfortable to see stocks continuing to surge to the upside. CAT bounced back to the upside on Friday, and WYNN surged to the upside as well. This is on top of moves Thursday that were very impressive from stocks such as JNPR and WFMI. There were moves all across the market from many different sectors Thursday and Friday.

It is not just a big rush higher; there are very selective stocks making great moves, but everything is generally drifting to the upside. The market move is extended, but how many times have I said that the market will surprise you in how far it will rally. It will go beyond rational thought and continue to the upside. Recall when they talked about the internet bubble that just had to burst. It was totally irrational, and there were people not buying into it because they said it had to break. Of course it had to break but, as they say, timing is everything.

Many people also like to say you cannot time the market. What they are really saying is, "We do not want to TRY to time the market." Are we really timing the market, however? No. We are letting the market tell us what to do. We may believe it is topping. We even tried some downside plays on the QQQQ and the SPY, but those lasted about a day before we were out of them. You see it set up and you have a good risk/reward position, but you get out if it does not work.

That is exactly what happened. And what has happened since then? The market has rallied to the upside, thank you very much. Those who do not want to participate are missing out on the great moves we are all enjoying.

OTHER MARKETS

Dollar: The dollar continued to the upside. It had a very strong day on Thursday, and it continued on Friday. Recall that on Thursday there were issues in Europe with Portugal as well as the UK. That helped bolster the dollar versus the pound and basically every other currency. It was still moving higher on Friday, but it was not about to hold all of its gains. It came close to the 50 day EMA and pulled back, but the dollar still put in a decent performance (1.3547 Euro versus 1.3595 Thursday).

The dollar continues to bounce off of this support level. It is coming up toward a resistance point, and it is actually starting to bump into a range of resistance. The US economy is apparently improving, and there was more evidence of that on Friday. That was helping the dollar look better and better. The US economy is looking better versus some of the emerging markets that are threatening to have some runaway inflation. It is not even emerging markets in some cases; the UK saw a big 3.6% spike in inflation just as recently as December. Ouch.
Click to view the chart

Bonds: Bonds rallied back (10 year 3.63% yield versus 3.70% Thursday). A modest bounce underway, but the bigger picture is bonds have been killed after the Egyptian news broke and we found out it was not as bad as anticipated. There was a lateral move here because the bond market was anticipating something was going on. It was not sure what, and it turned out to be Egypt. It moved laterally, ready to bounce if the news was really bad. It was not, and it broke below in range. Now it is trying to rebound a bit. It is in a relief move at this point. The treasury came out with its plan to "wind down" Fannie Mae and Freddie Mac. That helped bolster interest rates a bit and made things look better from the US standpoint. Some investors decided to put money in bonds as well, but it is just a little reallocation. Not a lot of sense there, but that is what we were hearing from our friends at the bond desks.
Click to view the chart

Gold: Gold has had a nice bounce back to the upside during the crisis in Egypt. That was a fear thing. There are also some inflation worries too, as we saw from the EU. The problem is that it has run into resistance. We will see if it can plow through. If the US economy continues to improve, that would suggest there might be inflationary pressures based on the way the Phillips curve folks read economic activity. In reality, economic activity does not breed inflation in itself. It just depends on whether the road to recovery has been skewed to push demand over supply.

That might be the case. There are a lot of small businesses were we supply a lot of the goods and services, and they have not been doing so well. There is a little US worry of inflation, but the emerging market inflation is the main concern. Gold had a good run, but then on Friday it hit some headwinds as the Egyptian story unfolded more favorably and took some fear out of the market. Gold dropped a bit ($1,357.20, -5.30). No big turn. It is just trading around inside of its range right now.
Click to view the chart

Oil: Oil also lost ground because the Egyptian fear story was dying down ($85.55, -1.18). Oil is back down, trading close to where it was before the Egyptian story broke. Remember, it was falling rapidly at that time. It was not because the word was falling apart. Oil just ran to the top of its range, got a bit extended, and it bounced down toward the bottom of its range. The dollar was rallying during the same time. As the dollar rallies, it takes fewer dollars to buy each barrel of oil and the price declines.

Recall the vicious cycle we were in last year and the year before. The dollar was diving lower every day, and the price of a barrel of oil rose every day. It was a double whammy where the oil had cost more and we could buy less of it. It was a multiplier, and it was a pernicious form of price inflation. Now we are getting a breather, but just a little one.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS

Volume. Volume was a bit lower. It spiked to 2.4B shares on NASDAQ Thursday. It fell to 2B on Friday down 15%. On the NYSE, it fell as well, though only a couple of percentage points to just below 1B shares.

Breadth. Breadth was decent at 2:1 on the NASDAQ. Much better at 2.7:1 on the NYSE thanks to the small caps leading with that 1% gain.

CHARTS

SP500. SP500 is on its second leg of this breakout run. It has now put in as much time and distance to the upside as the prior run. You would anticipate some kind of pullback, but as noted, it is not showing any signs of weakness in the armor. There may have been some churn late in the week, but Friday it bounced right back up to a new rally high. Unbelievably impressive.

NASDAQ. NASDAQ was impressive as well. It gapped lower but reversed on Thursday. Then it gapped lower but reversed to a new rally high on Friday. Strong volume on both sessions. After a lateral move, that was just a little trading range; it was about half the depth of the November correction/consolidation. NASDAQ is off and running to new highs. Hard to argue with what is happening in these indices.

SP600. SP600 broke to a new rally high as well. It bumped its head four straight days at the 430 level and then broke through. Of all the indices, the SP600 has been in the best consolidation. A nice lateral trading range, it has broken out, and it is moving higher on strong volume Thursday and Friday. I know some will say that is not strong volume, but I say that relative to other volume.

SOX. Semiconductors were coming back to life as well. They tested a bit longer with a 1-2-3 pullback. They are on the way back up. No new high on Friday, but it is aiming at one.

While the SP500 looks extended in a straight run, the NASDAQ, SP600, and SOX show some volatility. They have shown some lateral movement and have consolidated somewhat to put a shelf to support the run higher. That looks to be what is happening in the market.

LEADERSHIP

Financial. Financials had a big day. JPM was racing to the upside with a 2.2% gain. Not bad. GS did not have a great day, but it was trying to set up and move. WFC bounced off the 18 day EMA. Financials were enjoying the upside, continuing their trends yet again.

Industrial. Industrials were moving well. CAT broke to a new rally high. An incredible run. DE is running, though not as fast as CAT. Who would have thought a cat could outrun a deer? They are both trending higher quite nicely.

Agriculture. Agriculture is doing well; slow but steady. It started this move back in late January. AGU is moving to the upside. POT broke out of a week-long lateral consolidation and started to rally. No complaints there.

Semiconductors. Semiconductors remain solid. SMTC broke higher. Nice pattern and good volume on Friday. We picked up some of that. YGE had a nice bounce. A handle and good volume to the upside. SIMO continued its substantial break to the upside.

Medical. ISRG was breaking out of a lateral consolidation after the breakaway gap. We bought into it before the gap and loved it. The stock is in a comeback mode because it has a long base behind it. It gapped higher and made us a bunch of money. It moved laterally at this next resistance point and started to break higher again. Good volume. No issues with that.

China. China is looking decent. CTRP is interesting. Hard to tell exactly what this is, but it is worth watching. It is getting volume to the upside. It is definitely holding this level at 41. It bounced up there and could not move through. It spent over a month at that level. It came down and held it. There was that big day where it reversed and came back up. Now there is a big reversal, another big reversal, and now back to the upside. Very interesting action. You always watch for these kinds of signals when you see a stock at what appears to be an important level. That shows you buyers are pushing in.

They tried to sell it off in early January or late December, and it had no follow-through. It reversed right back up and rallied. Then they tried to sell it through that level again. Big downside day, but it reversed right back up. It tried to come back down this week, but it was popped right back to the upside on each day it went down. Watch that kind of thing. That tells you where the important levels are. If you get enough buying momentum behind it, you can see a break to the upside.

ASIA broke this long downtrend line with a nice gap and rally. It held the 200 day EMA and it looks like it is starting to move back up. Interesting. Chinese stocks are performing well even after the rate hikes. A lot of them have already run higher. We are just looking at some that have not made those big moves yet. We are trying to pick out what will be the next group of leaders.

Technology. AAPL had a great week. It ended up flat, but it held its gains. It is indicative of the move that the NASDAQ made, fighting off the gloam. GLD had a nice pullback flag pattern. It gapped through some resistance and is coming back to test. Look how it tapped at the 20 day EMA on the low and reversed. Always be watching for those kinds of moves. It was a day similar to Thursday.

While the market overall is moving up, a lot of the stocks are just moving in a nice, steady manner. There are some stocks, however, that have been blasting to the upside. The market appears to be extended overall. It may make traders a bit uncomfortable given the risk/reward, but we will not sit out and let it go by when we see really good moves in a market that is running more than we think it should. I have often said that is just what a market does.

THE ECONOMY

To view the Economy video in Flash click the following link:
Economy Summary Video

THE MARKET

MARKET SENTIMENT

VIX. The VIX is back down to the level it has hit three times over the past month and a half. The market has continued to the upside, more or less, during that period. There has been a bit of volatility outside the SP500. The SP500 has made a fairly straight shot to the upside. It has not shown any real selloff. It did have a big jog lower one day and a test to the 10 day EMA another day, but that was it. There is no real volatility here. That makes me wonder if we should put much stock in the fact that the VIX is back down to levels it hit earlier this year and in April before the market was in a deep selloff during the summer. I have my thoughts about that.

Volatility can indicate there might be a pullback coming. The market does need a correction. In November, however, the market never reached this level when it started the last correction. Do we really want to put too much emphasis on the fact that it is down at this level again? It has not corrected since it has been down here. It can, but what do we have? We have a stock market that is extended. With the VIX hitting those lows, it may foretell a much needed correction from this run straight to the upside.

Overall, however, I do not believe that VIX is saying anything about the long-term effects of the rally. It had a good base. There has been one run, a test, and now a second run. I think another test will come. The VIX is not saying this will be the last run at all. Volatility can remain low for a long time. As long as it is declining as the market is rallying, there is no major selloff in the works.

VIX: 15.69; -0.4
VXN: 17.18; -0.73
VXO: 14.27; -0.36

Put/Call Ratio (CBOE): 0.82; +0.05

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 53.4% versus 52.7%. After dipping a week the bulls are on the rise though still below the 55.1% three weeks back. Down from 58.8% high on this leg. Still at a high level in a string of high readings but below the 5 year high at 62.0. Fading back from the level considered bearish, i.e. where so many are in the market and believe it is going up that the ammunition to send it higher runs low. This is where you start to be careful and watch for breakdowns, but there is also a lot of liquidity being pushed into the market and that can continue the move despite excess bullishness. The crossover level at 29% bulls is long gone, but it did its job. The high on the last leg was 56.0% after starting at 35.6% on the low in February, the lowest it has been since July 2009 . . . until this last leg. 35% is the threshold level suggesting bullishness. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 23.3% versus 22.0%. While bulls may be getting back their strength, bears are not as sanguine about the market's prospects. Still below the 28.3% in September, but up from the 19.1% level where they dallied for almost a month. The 37.7% peak at the height of the crossover is well in the rearview mirror but bears remain well below the 35% level, above which is considered bullish for the market overall. Hit 18.7% on the low in April. Hit a high of 27.8% level on the prior leg in February. For reference, cracking above the 35% threshold considered bullish. Hit a high on the prior run at 47.2%. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: +18.99 points (+0.68%) to close at 2809.44
Volume: 2.033B (-15.6%)

Up Volume: 1.285B (+157.37M)
Down Volume: 761.223M (-530.126M)

A/D and Hi/Lo: Advancers led 2.13 to 1
Previous Session: Advancers led 1.07 to 1

New Highs: 234 (+61)
New Lows: 27 (-1)

NASDAQ CHART: Click to view the chart

NASDAQ 100 CHART: Click to view the chart

SOX CHART: Click to view the chart

SP500/NYSE

Stats: +7.28 points (+0.55%) to close at 1329.15
NYSE Volume: 995.392M (-2.01%)

Up Volume: 712.977M (+236.447M)
Down Volume: 256.765M (-270.038M)

A/D and Hi/Lo: Advancers led 2.73 to 1
Previous Session: Advancers led 1 to 1

New Highs: 584 (+456)
New Lows: 61 (+29)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: +18.99 points (+0.68%) to close at 2809.44
Volume DJ30: 184M shares Friday versus 150M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

This coming week is loaded with data. We have retail sales, the regional manufacturing reports with New York coming out. There are Fed minutes, housing starts, building permits, industrial production and capacity. Of course there is also the usual stuff. We have continuing claims, the Philly Fed, and the CPI is out on Thursday. There will be no dearth of news to help drive the market. That might help since earnings season is winding down and stocks may be looking for another reason to move up.

Think about it. We have fantastic news built into the market. We had an earnings season that surprised everyone again to the upside. It beat some tough comps because last year things were in the pits. It was easy to walk all over your prior year's competition. Now things are a bit tougher, and they are actually able to beat. Then we have the Egyptian issue, and it seems to be resolving favorably. The military, similar to Turkey, is in charge and keeping things at bay. They are trying to let a little democracy take shape perhaps. That is a good result.

The US economy continues to show improvement. Unfortunately there is a big sector of the economy that is not participating yet, but it is trying to get involved. There may be some help from the Feds, and it might actually do something constructive. I have talked about the shortened SBA form and process that is supposed to hit in March. There may be a few other things coming out. The Treasury announced its plan to wind down Fannie Mae and Freddie Mac, and that is a start. It gives people some hope that some of the right things may be done.

We have some hope, but what do we see in the market? When looking at the SP500, one wonders if it can continue to move higher. I think it can overall. I do not think the run is nearly done. I think this is just the second leg of a breakout, and we could get one, two -- maybe even three more such legs on this move. That would take us easily through the end of 2011.

I am hearing it already. "Man, Johnson is off his rocker. He is too bullish. It is time to abandon everything." You know, I am a skeptic of most everything, but that is what you do. You should be skeptical when you trade. I like to quote a lot of movies in reference to this, like Field of Dreams. "Look for low and away, but watch out for in your ear." That is one you always have to be careful of. As soon as you are not watching for in your ear, you get it in your ear.

Markets tend to run further than you would ever expect they would, but do not expect that they are going to run. As soon as you expect that your trades will automatically win, the ice gets thin and you will fall. Just as in Shannon's Deal, that classic, much-heralded-but-apparently-underappreciated television series from the early 1990's: When you think you know the cards before they are turned over, then you are in trouble.

I am concerned. I think that this move will continue, but you do have to watch out in the short term. Stocks are exploding higher everywhere. There is money hitting this market, coming in as some of the retail investors finally give in and throw some of the money to their brokers or their mutual funds. They are putting that money to work.

We are more than happy to ride the move to the upside. We just have to keep our wits about us and keep reasonable stops. We are still looking at place that offer good risk/reward. They are out there. There are stocks that have not rallied. ISRG had great bases beneath them. They are really set up nicely to take advantage of the rally because they have not rallied that far. Those stocks that have a great base under them still have plenty of room to move, just as I think SP500 and the other indices have.

We look for those that have good risk/reward, and if it does not work out, we will get out. Just like the QQQQ play and the SPY play that we were in for a day before the market went back up. We bailed right out of that. There was good risk/reward and it was worth a shot. We just kept piling into the upside plays, and we have taken a lot of gain since then.

That is how you play it. Do not get too cocky. Look for good moves. If they are not there, you do not take them. If they are there, however, do not sit around cursing at the darkness and saying things cannot keep going up. It can, and we have all seen it happen. Just as in a bear market when you think it cannot keep going down. It certainly can.

We will keep playing it. I will give you a bit of wisdom from another Kevin Costner film, Tin Cup: "You ride her till she bucks you." That is just what we will do. Ride the trend until it bucks you, but keep your eyes open for in your ear. You can see indications when it is ending that make you naturally want to keep tighter stop losses and maybe not take risks on a few plays. Maybe you will not take as many positions on those plays, but you still ride until you get bucked off.

I will see you on Monday. Stay warm and enjoy your weekend!

Support and Resistance

NASDAQ: Closed at 2790.45
Resistance:
2825 is the 2007 closing peak.
2862 is the 2007 peak

Support:
2766 is the January low
The 20 day EMA at 2745
2735 from late 2007 interim peak
2729 is the 127% Fibonacci extension of the August 2010 run
2725 from July 2007 interim peak
2688 is the recent January low
The 50 day EMA at 2684
2676 is the January 2010 low
2593 is the November 2010 high
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak
2550 from May and June 2008 peaks
2540 is the gap up point from early November
2535.28 is the April 2010 intraday peak
2530 is the April 2010 closing peak
2518 is interim peak from April 2010
2511 is the lower range of the November gap up point
2482 is the recent October peak
2460 is the November 2010 low.
2434 is the May interim peak and the 78% Fibonacci retracement of the April selloff.
2425 is an interim peak from May 2010
The 200 day SMA at 2413

S&P 500: Closed at 1321.87
Resistance:
1325-27 is the March 2008 closing low and the May 2006 peak
1364 is the March 2007 low
1370 is the August 2007 low

Support:
1313 from the August 2008 interim peak
The 20 day EMA at 1299
1278 is the 127% Fibonacci extension of the August 2010 run
1275 is the January 2010 low
The 50 day EMA at 1270
1227 is the November 2010 peak
1220 is the April 2010 peak
1185 from late September 2008
1174 is the May 2010 high, 78% Fibonacci retracement of April peak
1173 is the November 2010 low
1170 is the prior March 2010 high
The 200 day SM A at 1161
1156 is the Sept 2008 low
1151 is the January 2010 peak
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
1129 to 1131 is the June and August 2010 peaks

Dow: Closed at 12,229.29
Resistance:
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,110 from the March 2007 closing low
The 20 day EMA at 11,997
11,893, from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
The 50 day EMA at 11,739
11,734 from 11-98 peak
11,452 is the November 2010 peak
11,258 is the April 2010 peak
11,205 is the April closing high
11,100 from the 7-08 low
10,963 is the July 2008 low
10,920 is the recent May high
The 200 day SMA at 10,866
10,730 is the January 2010 peak

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

February 11 - Friday
- Trade Balance, December (08:30): -$40.6B actual versus -$40.4B expected, -$38.3B prior
- Michigan Sentiment Preliminary, February (09:55): 75.1 actual versus 75.5 expected, 74.2 prior

February 15 - Tuesday
- Retail Sales, January (08:30): 0.5% expected, 0.6% prior
- Retail Sales ex-auto, January (08:30): 0.6% expected, 0.5% prior
- Empire Manufacturing, February (08:30): 16.0 expected, 11.92 prior
- Export Prices ex-ag., January (08:30): 0.6% prior
- Import Prices ex-oil, January (08:30): 0.3% prior
- Net Long-Term TIC Fl, December (09:00): $85.1B prior
- Business Inventories, December (10:00): 0.7% expected, 0.2% prior
- NAHB Housing Market Index, February (10:00): 16 expected, 16 prior

February 16 - Wednesday
- MBA Mortgage Purchases, 02/11 (07:00): -5.5% prior
- Housing Starts, January (08:30): 540K expected, 529K prior
- Building Permits, January (08:30): 580K expected, 635K prior
- PPI, January (08:30): 0.7% expected, 1.1% prior
- Core PPI, January (08:30): 0.2% expected, 0.2% prior
- Industrial Production, January (09:15): 0.6% expected, 0.8% prior
- Capacity Utilization, January (09:15): 76.4% expected, 76.0% prior
- Crude Inventories, 02/12 (10:30): 1.9M prior
- Fed Minutes (2:00)

February 17 - Thursday
- CPI, January (08:30): 0.3% expected, 0.5% prior
- Core CPI, January (08:30): 0.1% expected, 0.1% prior
- Initial Claims, 02/12 (08:30): 410K expected, 383K prior
- Continuing Claims, 02/05 (08:30): 3900K expected, 3888K prior
- Leading Indicators, January (10:00): 0.2% expected, 1.0% prior
- Philadelphia Fed, February (10:00): 21.9 expected, 19.3 prior

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 18-Feb-11The major indices logged another weekly gain, with the S&P 500 climbing 1.0% after posting modest gains in four of the five sessions. The S&P 500 and Dow hit fresh two year highs, while the Nasdaq hit a three-year high and is 30 points away from its 2007 high. Overall it was a relatively slow week, with energy stocks acting as the primary driver of this week's gains.

Eight of the 10 sectors advanced. Energy (+3.7%) led the way as oil gained 0.7% and a dividend hike from ConocoPhillips (COP +7.0%).

ConocoPhilips rallied 7% after raising its quarterly dividend 20% to $0.66 per share, adding $10 bln to its share repurchase program and approving $13.5 bln in capex in 2011.

FedEx (FDX +3.0%) issued an earnings warning. But the stock managed to gain as the company cited rough weather.

Dell (DELL +10.5%) rallied on better-than-expected earnings results and guidance.

In economic news, retail sales increased 0.3% in January (Briefing.com consensus +0.5%). Excluding autos, they also rose 0.3% (Briefing.com consensus +0.6%). The January figures followed on the heels of downward revisions for December, which showed total retail sales up 0.5% (prior +0.6%) and retail sales excluding autos up 0.3% (prior +0.5%).

Retail sales have now risen seven months in a row.

The Producer Price Index increased 0.8% in January (Briefing.com consensus +0.7%) on top of a downwardly revised 0.9% increase in December. Core prices, though, were up a stronger than expected 0.5% (Briefing.com consensus +0.2%), which was the largest rise since October 2008.

Core prices exclude food and energy. The jump in January was attributed primarily to the index for pharmaceutical preparations, which was up 1.4%, and higher prices for plastic products.

The January figures left total PPI up 3.6% year-over-year and core PPI up 1.6%.

The Consumer Price Index for January validated the last point. Overall prices rose 0.4% while core prices, which exclude food and energy, increased 0.2%. The Briefing.com consensus estimates called for increases of 0.3% and 0.1% respectively.

Increases in the food and energy indexes accounted for over two thirds of the all items increase, according to the Bureau of Labor Statistics.

On a year-over-year basis, total CPI is up 1.6% and core CPI is up 1.0% versus 1.5% and 0.8%, respectively, in December. This is an encouraging uptick that supports a disconnect from a trend of disinflation.

Separately, initial claims for the week ending February 12 jumped 25,000 to 410,000. That was close to the Briefing.com consensus estimate of 408,000 and left the 4-week moving average fairly steady at 417,750.

In commodities, silver climbed to a thirty year high and the CRB Index climbed 1.2%.

The U.S. stock and bond market is closed Monday in observance of President's Day.

 
 Index	  Started Week	Ended Week  Change % Change  YTD % 
 DJIA	    12273.26	 12391.25   117.99    1.0    7.0 
 Nasdaq	     2809.44	  2833.95    24.51    0.9    6.8 
 S&P 500	     1329.15	  1343.01    13.86    1.0    6.8 
 Russell 2000  822.11	   834.82    12.71    1.5    6.5

3:26PM Intel to invest more than $5 billion to build new factory in Arizona (INTC) 22.11 +0.14 : Co announces plan to invest more than $5 billion to build a new chip manufacturing facility at its site in Chandler, Ariz. The new Arizona factory, designated Fab 42, will be the "most advanced, high-volume semiconductor manufacturing facility in the world."

2:41PM Amkor confirms that it received a license termination notice from Tessera (AMKR) 7.68 +0.03 : Co announces that it received a notice from Tessera, Inc. purporting to terminate Amkor's Patent License Agreement with them. "This latest letter is just another part of Amkor's ongoing dispute with Tessera regarding the License Agreement and does not affect our business."

1:23PM LDK Solar prices RMB 1.2 Billion US$-settled senior notes due 2014 (LDK) 14.71 +0.35 : Co announces the pricing of US$-settled 10.00% senior notes due 2014 in the aggregate principal amount of RMB 1.2 billion being offered and sold outside the United States. The Notes will bear interest at the rate of 10.00% per annum, from February 28, 2011, payable semi-annually in arrears on February 28 and August 28 of each year, beginning on August 28, 2011. The Notes will mature on February 28, 2014 and will be guaranteed by certain of LDK Solar's offshore subsidiaries.

12:27PM Intel extends breakout, hovering near lower end of resistance zone (INTC) 22.19 +0.22 : Yesterday highlighted the test of its Jan peak (21.94) with the breakout and follow through today bringing the stock up to a resistance zone between 22.23 and 22.36 (session high 22.21). This marks its July peak, May gap and a retracement of the April to Aug decline.

Cray (CRAY) announced that the Swiss National Supercomputing Centre in Manno, Switzerland has awarded a contract to Cray to acquire a next-generation Cray XMT supercomputer.

Tessera Technologies (TSRA) announced that on February 17, 2011, it sent Amkor Technology (AMKR) an official notice of termination of their license agreement with Tessera. The two companies are currently in arbitration regarding multiple issues, including several past breaches by Amkor of the license agreement.

09:46 am SPWRA Guides FY11 Above Consensus (SPWRA)

Sunpower (SPWRA $18.80 +1.37) reported fourth quarter earnings of $1.36 per share, excluding non-recurring items, $0.31 better than the Thomson Reuters consensus of $1.05.

Revenues rose 71.0% year-over-year to $937.1 million versus the $931.4 million consensus.

For the first quarter, the company guided earnings in the range of $0.15 to $0.21, excluding non-recurring items, versus $0.16 Thomson Reuters consensus. For the first quarter, the company sees revenues in the range of $475 million to $525 million versus $488.61 million Thomson Reuters consensus.

For fiscal year 2011, the company guided earnings at $2.00 to $2.20, excluding non-recurring items, versus $1.87 Thomson Reuters consensus. Revenues are expected to be $2.8 billion to $2.95 billion versus $2.78 billion Thomson Reuters consensus.

[ReturntoSender]

Monday Morning Outlook: Three Simple Reasons to Remain Bullish
The calm before the storm might last longer than you think
by Todd Salamone 2/19/2011 12:35 PM

http://www.schaeffersresearch.com/commentary/observations.aspx?ID=105142

Stocks ended higher for the third consecutive week last Friday, despite an ever-growing list of reasons to be skeptical. Against this backdrop, Senior Vice President of Research Todd Salamone picks apart the bears' laundry list of concerns, and spins it into three solid reasons why contrarians should remain invested in this market. (Never one for irrational exuberance, Salamone still recommends protective puts -- especially with low volatility creating some option-buying bargains.) Meanwhile, Senior Quantitative Analyst Rocky White takes a long-term look at analyst ratings to determine the market's most unfairly maligned sector. Finally, we wrap up with a quick preview of the holiday-shortened week ahead, plus a few sectors of note.

Recap of the Previous Week: Bulls Make It Three in a Row
Schaeffer's Editorial Staff

There was plenty of news last week that could have spooked traders right out of the market -- but instead, stocks continued their gravity-defying climb. Sure, inflationary data came in a little hotter than expected; and yes, jobless claims were slightly steeper than forecast. News from across the globe was similarly dreary, as China upped its reserve requirements for banks again, and a wave of sociopolitical unrest rippled through Iran and Bahrain.

Apparently, though, investors have already priced in all of their panicky feelings about rising inflation, high unemployment, turmoil in the Middle East and slower growth in China. Instead, traders turned their attention to a few new bright spots. On Wednesday alone, in fact, Wall Street learned of an upwardly revised growth forecast from the Fed, a fresh round of merger-and-acquisition news, and an uptick in new home construction. Amid this hot-and-cold data, the market more or less stumbled its way higher throughout the week.

The Dow Jones Industrial Average (DJIA -- 12,391.25) ended the week up 0.96%, and settled above 12,300 on a weekly closing basis for the first time since June 13, 2008. In fact, the Dow wrapped up Friday's session just hundredths of a point from its intraday peak of 12,391.29, which marked its highest price since June 6, 2008. So far in February, the blue-chip average has added 4.19%.

The S&P 500 Index (SPX -- 1,343.01) racked up a weekly gain of 1.04%, with the broad-market measure up 4.42% for February. On Friday, the SPX topped out at 1,344.07, in territory the index hasn't charted since June 19, 2008.

The Nasdaq Composite (COMP -- 2,833.95) eked out the slimmest weekly win of 0.87%, but its February advance now stands at a more-than-respectable 4.96%. The index found a Friday high of 2,840.51, representing its best price since Oct. 31, 2007.

However, it's the Russell 2000 Index (RUT -- 834.82) that's really leading the charge higher this month, with the small caps up 6.86% for February. On the other hand, the CBOE Market Volatility Index (VIX -- 16.43) has shed 15.87% month-to-date.

What the Trading Desk Is Expecting: More Calm Ahead, or a Looming Storm?
By Todd Salamone, Senior Vice President of Research

"... 1,333.58 on the SPX is double the index's March 2009 low. We point this out because the SPX ran into its 'double October 2002 low' in May 2007, before a major topping process took place during the next several months. The SPX went on to experience only one monthly close above 2002's double low at 1,537.26, before ultimately peaking in October 2007.

For short-term traders, 1,333.58 is worth noting as a potential resistance or hesitation area. But longer term, we think the sentiment backdrop is one of much more investor caution and worry relative to 2007, implying the 'double-low' resistance could be a speed bump, at worst, and not a major inflection point like four years ago."
--Monday Morning Outlook, Feb. 12, 2011

In case you haven't heard -- which seems doubtful, given the attention this data point received last week in various media outlets -- the S&P 500 Index (SPX) rallied and closed last week above the level that marked a doubling of its March 2009 intraday low. For those of you who put more emphasis on closing lows, 1,353.06 would mark a doubling of the March 9, 2009 closing low of 676.03. So, some might argue, "We're not there yet!"

Regardless, the SPX's double from its intraday 2009 low received a lot of media attention. But there doesn't seem to be a lot of euphoria attached to this milestone, with the contrarian implication being that there could be more firepower left to keep the uptrend intact. In fact, after scanning various articles from major publications, the laundry list of present worries seems to go as follows:

* Stocks have come "too far, too fast"
* Transports have not participated in the rally
* Volume has been lackluster
* Recent inflows into domestic mutual funds suggest retail investors are late
* Low volatility could be a sign of complacency, or a "calm before the storm"
* Geopolitical turmoil in Egypt, Bahrain, and Iran
* On the corporate earnings front, margins have peaked
* Inflationary data indicates significantly higher food prices
* Government stimuli and the Fed may have created another bubble, and the risk of stimulus efforts being unwound is growing as the economy improves

From a contrarian perspective, bulls like to see a long, lengthy list of worries that range from geopolitical to fundamental to technical, as this is indicative that, despite strong price action:

1. Plenty of cash remains on the sidelines that could still be deployed;
2. Portfolio insurance is actively being purchased, which makes stocks less vulnerable to panic selling when negative headlines hit the newswires; and
3. Short sellers are still actively engaged in the market -- pressuring stocks coincidentally, but providing short-covering potential in the future.

Let's address a few of the aforementioned worries, beginning with retail investors coming back into the marketplace. Is this behavior among retail investors really a warning signal for stocks? The fact is, according to Investment Company Institute (ICI) data, there were outflows of $327 billion from 2007 through 2010. During the past five weeks, there have been inflows of $17 billion, or 5% of the 2007-2010 outflows.

We have often noted that in the absence of hedge fund buying during the past two years, the market struggled to make headway, as retail investors pulled cash out of domestic funds, leaving traditional fund managers with little flexibility to make new investments. Therefore, a contrarian takeaway is that with retail investors possibly in the early innings of returning to the stock market, this new and additional source of demand may prove to be bullish, even as many view it with a skeptical eye.

Technical warnings signs such as "too far, too fast" and lackluster volume are complaints we have heard on an intermittent basis since the fall of 2009. This isn't to say that low volume cannot precede a short-term sell-off or a shift in momentum -- but the point is that we have heard this before, and the fears are nothing new in the context of this impressive uptrend. Moreover, remember not so long ago when we were cautioned that financials were not participating in advances? The same basic worry is present, with the only difference being that we're now hearing concerns about the lagging transportation stocks.

Finally, it should be noted that while low-volatility periods have previously given way to higher-volatility "stormy" periods, low volatility was a four-and-a-half-year fixture after the 2000-2002 bear market, when the 20-day SPX historical volatility ranged between 6 and 16 from May 2003 through March 2007.

Yes, this low-volatility environment eventually gave way to a high-volatility environment, which is why we are hearing cautionary warnings now. But as you can see by the first chart below, anyone who "sold the calm" in 2003 or 2004 missed a huge rally in the SPX.



Moreover, the current "calm" is nothing compared to 2003-2007. On the next chart below, note that SPX 20-day historical volatility has ranged between 6 and 16, but only since late September. Will there be four more years of this? Based on the past, it is certainly a possibility, but many investors may not be thinking this way.



The point is, instead of letting the "calm" keep you out and viewing it as an imminent warning sign, take advantage of this low volatility by purchasing cheap portfolio insurance, as option prices have become much more inexpensive relative to the storm that preceded this calm. The insurance allows you to stay invested, while offering you protection in the event that an unexpected event with negative market repercussions should emerge.

Indicator of the Week: Breaking Down Analyst Ranks by Sector
By Rocky White, Senior Quantitative Analyst

Foreword: Keeping an eye on the ratings doled out by Wall Street analysts is a good way to assess sentiment. Though they are professionals, analysts have a tendency to be behind the curve in predicting stock prices. In fact, we (and others) have done studies showing that stocks with a lot of "sell" recommendations tend to outperform those stocks with a large amount of "buy" recommendations. This week, I'm taking a look at where analysts stand on a sector-by-sector basis, and measuring how those stocks have performed during the last year. Hopefully, this will reveal some sectors where analysts are behind the curve, and tell us which sectors may outperform going forward.

Percentage of "Buys" by Sector: In the analysis below, I grouped S&P 500 Index (SPX) stocks by sector, and found the percentage of "buy" recommendations as of one year ago to compare with the current analyst ratings configuration. I also found the median return of the stocks within each sector. The last column shows the difference in percent "buys" from one year ago through today. A positive number means Wall Street analysts have become more bullish on that sector, while a negative number means they've become more bearish. I measured the sector's performance by the median one-year return of the stocks within that sector. The table is sorted with the best-performing sector at the top, and the worst at the bottom.

Analyst Ranks by Sector


Analysis: What I looked for in the table above are sectors that have had very strong returns, yet analysts have not scrambled to become more bullish. Electronics and semiconductors both fit under the wider umbrella of tech stocks, and both of those sectors share this trait. Semiconductors are especially obvious. It's one of the top-performing sectors by median return, but analysts have become even more bearish on the group over the last year. One year ago, 51% of analyst recommendations were a "buy," and today, just 46.5% of recommendations are a "buy" within that sector. The pessimism shown by analysts toward this technically strong sector has very bullish implications.

Plus, compare the semiconductor stocks to a couple of sectors at the bottom of the table. Aerospace/airline companies and the Wall Street sector have significantly lagged the market during the past year, with a median return right around 15% (remember, the SPX is up 25% over this time frame). However, analysts have become even more bullish on those sectors, with the percentage of "buys" going from about 48% to the upper 50s year-over-year.

This Week's Key Events: Fourth-Quarter GDP Punctuates a Short Week
Schaeffer's Editorial Staff

Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday
* The market will be closed Monday in observance of Presidents Day.

Tuesday
* On the economic front, Tuesday brings us the S&P Case-Shiller home price index for December, the consumer confidence index for February, and the latest Richmond Fed business activity survey. It's a busy day for earnings, too, with reports from Hewlett-Packard (HPQ), Wal-Mart Stores (WMT), RadioShack (RSH), Macy's (M), and Home Depot (HD) slated to hit the Street.

Wednesday
* Wednesday brings us the ICSC-Goldman Sachs chain store sales index for the week ended Feb. 19, as well as existing home sales data for January. Meanwhile, Fed Presidents Hoenig (of Kansas City) and Plosser (of Philadelphia) are scheduled to deliver remarks on the economy. Notable earnings reporters include Lowe's (LOW), Saks (SKS), Toll Brothers (TOL), and Transocean (RIG).

Thursday
* The government's weekly report on crude supplies will hit the Street a day late, due to Monday's holiday. Traders will also receive their regularly scheduled update on weekly jobless claims. General Motors (GM), Target (TGT), Salesforce.com (CRM), and The Gap (GPS) will share the earnings spotlight.

Friday
* We wrap up the week with a pair of key economic reports: the preliminary estimate on fourth-quarter gross domestic product (GDP), and February's consumer sentiment index from Reuters/University of Michigan. On the earnings docket, J.C. Penney (JCP), American International Group (AIG), and Tenet Healthcare (THC) will reveal their latest quarterly results.

[ReturntoSender]

Monday Morning Outlook: Bulls Hesitate as SPX Churns in Tight Trading Range
Stocks are chopping lower as hedge funds tap the brakes -- and the little guy hits the exits
by Todd Salamone 3/12/2011 12:01 PM

It was a hectic week in the equities market, as traders were faced with ongoing violence in Libya, new conflicts in Saudi Arabia, dismal global economic data, and a devastating natural disaster in Japan. Stocks wrapped up the week solidly lower, but the CBOE Market Volatility Index (VIX) remained stuck beneath a few key trendlines -- prompting Todd Salamone to ponder whether the current VIX level is too complacent, given the current uncertainty hovering over world markets. Meanwhile, Rocky White takes a closer look at investor sentiment surveys, and tries to determine whether optimism is approaching troublesome levels. Finally, we wrap up with a look at the week ahead, as well as a few sectors of note.

What the Trading Desk Is Expecting: Should Be an Interesting Expiration Week...
By Todd Salamone, Senior Vice President of Research

"With all the talk about the SPX doubling a couple of weeks ago, it appears some hedge fund managers may have taken this as a cue to become less aggressive in accumulating equities. Our analysis of option activity on the iShares Russell 2000 Index (IWM), PowerShares QQQ Trust (QQQQ), and SPDR S&P 500 ETF (SPY) shows the combined buy-to-open put/call ratio on these funds rolling over, suggesting that the purchase of portfolio protection that usually occurs with equity accumulation has slowed. Previous such rollovers in the ratio have preceded range-bound periods or declines."

Monday Morning Outlook, Feb. 26, 2011

Since we first hypothesized that hedge fund managers may no longer be in accumulation mode in late February, not a whole lot has changed. As you can see in the graph below, the 20-day buy-to-open combined put/call volume ratio continues to trend lower on the SPDR S&P 500 ETF Trust (SPY), PowerShares QQQ Trust (QQQQ), and iShares Russell 2000 Index Fund (IWM). For those of you who are new to this column, the theory here is that put buying will increase relative to call buying on major exchange-traded funds (ETFs) as fund managers accumulate new long positions.



In that same late-February report, we noted that retail investors were coming back into domestic funds -- a new source of demand that the market has typically been lacking for the last few years. Our conclusion was that this could be a bullish omen, as investors coming off the sidelines could further drive a rally.

Last week, however, domestic funds experienced outflows. With a lack of hedge fund accumulation, and negative headlines once again driving the little guy away from the market, the broad market has indeed been pressured during the past few weeks. The S&P 500 Index (SPX -- 1,304.28) has been entrenched in a choppy decline between 1,300 and 1,333 since the last trading day of February.



The bulls are encouraged by the fact that the SPX, Russell 2000 Index (RUT -- 802.83) and Dow Jones Industrial Average (DJIA -- 12,044.40) continue to find support at their key respective round-number levels of 1,300, 800, and 12,000. This resilience is impressive amid negative headlines related to geopolitical concerns in North Africa and the Middle East, in addition to the uncertainty created with Friday's earthquakes in Japan, and the resulting tsunamis along the Pacific Coast.

"The CBOE Market Volatility Index (VIX --19.06) comes into this week trading at a critical juncture. Last week, we discussed the late-February pop in the 'fear index' that was capped at the VIX's 200-day moving average, which is currently situated at 22.31... Like its 200-day counterpart, the 80-week trendline has had historical significance. Bulls would prefer to see the VIX remain below these long-term moving averages, while caution should be exercised if the index were to move above them."

Monday Morning Outlook, March 5, 2011

As we enter expiration week, we continue to monitor the behavior of the CBOE Market Volatility Index (VIX -- 20.08). The past five days' worth of action was almost a mirror image of the week of Feb. 22, as the VIX moved back above the significant 20 level early in the week, and then peaked at its 200-day moving average around mid-week before moving lower once again. The one difference last week is that the VIX closed above 20. As we mentioned previously, bulls would prefer that the VIX remain below its 200-day moving average, at 21.85, and its 80-week moving average, currently situated at 22.27.

On Thursday and Friday, we observed that while the SPX traded south of its Feb. 24 low, the VIX remained well below its late-February high of 23.22. To some, this relatively muted reaction in the VIX might feel like complacency, or may be interpreted as having bearish implications, since the "fear index" failed to reach new heights as the market touched three-week lows.

But here's something to ponder about this "muted" VIX move. In March 2009, when the market made its bear-market lows, the VIX only rose to the mid-50s -- well short of the 90 level it achieved months prior to the market's bottom. Demand for portfolio protection had dried up as many investors moved to the sidelines, and had little invested in the market to insure. After all, why buy index and ETF puts for hedging purposes if you are in cash?

If investors already own portfolio protection via index or ETF puts, or have a higher-than-normal cash allocation, the need for portfolio protection decreases. If this is indeed why the VIX made a relatively muted move last week, it would suggest that fear and caution are alive and well, which has bullish implications.



"...while low-volatility periods have previously given way to higher-volatility 'stormy' periods, low volatility was a four-and-a-half-year fixture after the 2000-2002 bear market, when the 20-day SPX historical volatility ranged between 6 and 16 from May 2003 through March 2007."

Monday Morning Outlook, Feb. 19, 2011

While on the subject of volatility, note in the below chart that SPX historical volatility is approaching the 16 level again, where it peaked following a mild correction in November 2010. The 16 area also defined peaks from 2003-2007, as we alluded to a few weeks ago. Bulls would prefer that historical volatility peak in this region again as a confirmation that low volatility is here to stay for more than a few months.



Finally, the SPY comes into expiration week resting just above peak put open interest at the 130 strike, which is equivalent to 1,300 on the SPX. Anything can happen during expiration week -- from delta-hedge selling related to the enormous put open interest below current levels, to a short-covering rally related to the expiration of the put open interest. Probabilities favor the short-covering rally, but watch out below if delta-hedge selling occurs, where big put strikes essentially act like magnets if penetrated.



Admittedly, there is a lot to digest this week. In our view, the long-term outlook remains bullish, but the short-term outlook still suggests choppy action between 1,300 and 1,333 for the SPX. If 1,300 breaks decisively, look for the 1,270 area to be the next level of support, as it's the site of the SPX's 80-day moving average. If a breakout above 1,333 occurs, 1,343 would be the next speed bump, as it's the site of the mid-February high.

Indicator of the Week: Investors Intelligence Sentiment Survey
By Rocky White, Senior Quantitative Analyst

Foreword: As contrarians who closely monitor investor sentiment, we naturally keep a close eye on sentiment polls. Currently, most sentiment polls are registering very high levels of optimism. However, you must interpret the poll in the context of a strongly advancing market. The S&P 500 Index (SPX) has nearly doubled over the last two years. That would make even the most faithful of bears admit defeat and turn bullish.

Below is a chart showing the results from the latest sentiment poll conducted by Investors Intelligence. Sure enough, there is a high level of bulls and a low number of bears. Bearish pundits may use this data to suggest extreme levels of optimism, signifying the market has topped out.

However, optimism may not be as high as what the raw numbers suggest. Notice in the chart below that similar levels of optimism were seen in the middle of 2003, which marked the very early stages of a four-year bull market. Also, despite the fact that the SPX is showing healthy year-to-date gains, the percentage of bulls has been falling steadily all year.

SPX vs. Bulls and Bears


Prior Bull Markets: As I mentioned earlier, you should expect a high level of optimism in a bull market as compared to a bear market. So, I wanted to see whether the current level of optimism is, in fact, out of the ordinary when you consider the strength of the market. Therefore, I compared this bull market to past bull markets. The SPX is up about 90% in the last two years. The other bull markets I looked at were August 1987, April 1999, and February 2005, which had two-year returns of 79%, 83%, and 45%, respectively.

The table below tracks the percentage of bulls over the last year, as compared to the results during the second year of the aforementioned bull markets. Compared to previous bull markets, the current optimism is by no means at an extreme. The average percentage of bulls over the last year is 47%, which is lower than any of the other previous bull markets we looked at. Also, despite the fact the SPX is up 90% in two years, the highest reading of bulls reached in the last year was 59% -- which is lower than any of the other high readings. Furthermore, in none of the other bull markets did the percentage of bulls fall below 30%, but it has for this current one.



Crash Confidence Index: My theory is that there is not quite as much confidence in this market as what the sentiment polls are showing. Articles talking about the shaky fundamentals of this economy are still coming out. Imagine trying to be a bear over the last two years. You list all your reasons why the market should tank, but it keeps going higher and higher, and you start to feel foolish. At some point, you'll throw your arms up and say "Fine! I don't understand it, but I'm bullish simply because I'm tired of being wrong." That's the collective feeling I'm sensing in these sentiment polls.

In fact, I think the sentiment poll conducted by the Yale School of Management supports my belief. They ask investors (both institutional and individuals) if they are confident that there will not be a stock market crash in the next six months. If optimism was at an extremely high level, a large number of investors should say there will not be a crash in the next six months. However, the chart below shows only around 30% of respondents are confident that there will not be a crash. This percentage is up, of course, since the March 2009 bottom, but it's nowhere near where it was pre-2008. These investors may say they're bullish, but that does not necessarily mean they're truly confident in this market.

SPX vs. Individual/Institutional Investors


This Week's Key Events: Fed Statement and Inflation Data in Focus
Schaeffer's Editorial Staff

Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday
* The pace of earnings reports slows to a trickle this week, but a few notable names on Monday are General Steel Holdings (GSI), Tsakos Energy Navigation (TNP), and Neutral Tandem (TNDM). Meanwhile, the economic calendar is bare.

Tuesday
* The key economic event Tuesday will be the Fed's 2:15 p.m. decision on monetary policy, but the day also brings the latest Empire State manufacturing data and the National Association of Home Builders' housing market index for March. On the earnings front, we'll hear from Pacific Sunwear (PSUN), DSW (DSW), and Vera Bradley (VRA).

Wednesday
* Inflationary data starts to roll in Wednesday, with the release of the producer price index (PPI) and core PPI for February. Harbin Electric (HRBN), General Maritime (GMR), Guess (GES), and Medivation (MDVN) will share the earnings spotlight.

Thursday
* All eyes will be on the consumer price index (CPI) and core CPI data for February, but that's not the only economic report of note. Traders will also hear the Conference Board's index of leading indicators for February, the Philly Fed index for March, and last month's industrial production and capacity utilization data. The earnings calendar includes FedEx (FDX), Lululemon Athletica (LULU), and Nike (NKE).

Friday
* Overseas developments may drive the market action on Friday, as there are no major U.S. earnings or economic reports of note.

[ReturntoSender]

Not Your Typical Pre-Election Year For The Stock Market
Posted on March 17, 2011 by Babak

http://tradersnarrative.wordpress.com/2011/03/17/not-your-typical-pre-election-year-for-the-stock-market/

It is widely known that the third year in the 4 year election year cycle is very good for the stock market – on average. That qualifier is going to be important to stress this year as the historical pattern seems to be breaking down.

Until the start of this month, the Dow Jones was on the same historically set path as always. It was even a bit ahead of itself earlier in February. But with the recent market weakness, the Dow Jones has veered off the average historical precedent and basically wiped out any gains for the year:


Source: Chart of the Day

I mentioned a caveat for the presidential year cycle a few weeks ago: When the Presidential Cycle Backfires. To summarize, if we separate the instances between when an incumbent was re-elected and when they lost to another candidate, the 3rd year looks completely different. For charts and full details, follow the previous link.

No longer is the third year the charming, happy-go-lucky year for equities. I think it is too early to conclude this for 2011 but for now, it is important to remember that this pattern is only an average and that if the economy weakens, due to an oil shock or other external influences, most probably we’ll see a new president for the US. And that means that the stock market will have performed quite poorly as well.

The third year cycle is an important reason for many people being bullish right now. This includes illustrious investors like Jeremy Grantham of GMO who expects the market to continue rallying until the cycle ends in September-October 2011 (see “Pavlov’s Bulls”). But if we look a bit deeper at the actual data, this is anything but a slamdunk.

Article 2

Third Year Charm? When The Presidential Cycle Backfires
Posted on February 16, 2011 by Babak

http://tradersnarrative.wordpress.com/2011/02/16/third-year-charm-when-the-presidential-cycle-backfires/

As the market powers ahead, many are turning to the Presidential cycle as an explanation. Even Jeremy Grantham, in his latest quarterly letter (Pavlov’s Bulls) begrudgingly acknowledged that with the help of this powerful seasonality, the stock market could continue until October 2010 and potentially reach as high as 1400-1500 (S&P 500 index).

And of course, we are all by now well familiar with this four year phenomena, also known as the election year cycle. First pointed out by Yale Hirsch in his seminal work, the Stock Trader’s Almanac, it has now become common knowledge. The data shows that the “sweet spot” for the election cycle is towards the latter part of the second year and the (full) third year – when the vast majority of the outperformance shows up.

But what if we were to look a bit more closely at this crucial third year? Let’s say, for a lark, that we look at the performance of the stock market depending on whether the sitting president is elected again or he becomes a one-term president.

This is exactly what Geroge Slezak of StockIndexTiming.com was thinking recently. For those unfamiliar with Slezak, he is a well established stock newsletter writer and he was recently ranked the third best market timer by Timer Digest. Clearly, Slezak is deserving of our attention.

You can look at the charts Slezak presents and listen to his audio presentation here. Slezak points out that there is a big difference depending on whether the sitting president is elected again or not.

In a slideshow presentation, he shows the presidential cycle for each instance. But I wish he had actually shown the annual and average performance of the Dow based on the criteria he proposes. Being curious, I went ahead and did the work to fill in this oversight.



I calculated the annual return for each 3rd year in the presidential election cycle. I then separated the returns based on whether the incumbent president is once again elected or if he is replaced (either by being voted out or by death). Here is a chart showing the annual returns with the orange representing the 1 term presidents and the blue the successfully reelected ones:

Before we get to the numbers, you’ll notice that the majority of the time, the incumbent wins again (67% of the time in fact). So we have just 10 data points for the instances when the sitting president is not elected (orange bars). I’ll leave it to the statisticians to fight amongst themselves about whether this is a large enough sample or not.

In any case, when the sitting president is elected again, the market does really well – on average rising 17.8%.

If he’s not elected again, the average annual return for the third year is just 1.11%.

That is a huge difference!

You’ve probably also noticed that there are two very large data points that could potentially skew the averages. In 1915 the Dow gained appx. 82% (as Wilson was re-elected) and in 1931 the Dow fell 55% as Hoover lost to Franklin Delano Roosevelt. Removing these two reduces the gap but it is still very large: 14.5% (for 3rd years in the presidential election cycle when the president was re-elected) compared to 7.38% for those years he wasn’t. That’s still a gap of almost double.

Knowing that there is a bifurcation in this seasonality tells us one important thing: the 3rd year is not guaranteed to be a boon to equity investors. Unfortunately, it doesn’t really help us out that much in predicting what will happen to the Dow Jones in 2011. That’s because whether the president is re-elected or not largely depends on how successful he was in managing the economy and keeping people happy.

Usually when presidents fail to bring prosperity, they are voted out. So the re-election of Obama depends largely on how well the economy and stock market does this year. If it turns out that the US economy falters back into recession, the presidential election cycle is in no way a guarantee of higher stock prices. In fact, the historical pattern suggests that the market would be relatively weak. Slezak suggests we closely monitor the next few months because they will set the tone for the rest of the year.

One caveat: I estimated the annual return by eyeballing the charts for the very early years of the Dow. If anyone has data for these early years of the Dow, drop me a line. I’d really appreciate using accurate daily data.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 01-Apr-11The S&P 500 continued its rally, advancing 1.4% on the week amid broad-based gains. The stock market's resilience is underpinned by the fundamental forces of low interest rates, low inflation, strong earnings, healthy corporate balance sheets, and accommodative Fed policy, which have helped expose the relative value of U.S. equities versus the Treasury market and other stock markets.

The advance this week sent the S&P 600 SmallCap Index past its prerecession high (also a lifetime high), joining the Nasdaq 100 and the S&P 400 MidCap Index.

Nine of the 10 sectors advanced, with all nine rising at least 1%. The tech sector underperformed, down 0.1%.

Telecom led the way, spiking 4.2% as AT&T (T) gained as investors continued to evaluate the impact of the merger agreement between AT&T and T-Mobile.

In other M&A news, Nasdaq OMX (NDAQ) rallied 9.3% after teaming up with IntercontinentalExchange (ICE) to make an $11.3 billion rival bid for NYSE Euronext (NYX). The value of the potential deal is 19% above Deutsche Boerse's offer.

The focal point in terms of economic data this week was the March employment report. Most aspects of the report were encouraging. Nonfarm payrolls rose by 216,000 (Briefing.com consensus 185,000) while private sector payrolls jumped 230,000 (Briefing.com consensus 203,000). Nonfarm payrolls for January and February were revised slightly higher, too.

One striking feature of the nonfarm payrolls gain is that it was fairly broad-based, led by a 78,000 increase in professional and business services, a 45,000 increase in education and health services, a 37,000 increase in leisure and hospitality, and a 17,000 increase in manufacturing.

The unemployment rate ticked down to 8.8% from 8.9%.

In commodity trading, crude oil gained 2.0% while gold advanced 0.2%. The dollar index fell 0.4%.

The 10-year Treasury yield was largely unchanged from the prior week.

 
 Index	  Started Week	Ended Week  Change % Change  YTD % 
 DJIA	    12220.59	 12376.72   156.13    1.3    6.9 
 Nasdaq	     2743.06	  2789.60    46.54    1.7    5.2 
 S&P 500	     1313.80	  1332.41    18.61    1.4    5.9 
 Russell 2000  823.85	   846.77    22.92    2.8    8.1

4:56PM Research In Motion executive adopts automatic securities disposition plan (RIMM) 56.08 -0.46 :

4:50PM GSI Technology sued by Cypress Semiconductor (GSIT) 8.91 -0.18 : Co announced that on March 30, 2011, Cypress Semiconductor (CY) filed suit against GSI in the United States District Court for the District of Minnesota. Cypress' complaint alleges five counts of patent infringement, principally related to GSI's SigmaQuadTM and SigmaDDRTM products. GSI has not yet been formally served in this matter. The Company has begun an investigation of Cypress' claims and intends to defend the lawsuit vigorously.

8:06AM MIPS Tech addresses certain matters regarding Android anti-fragmentation efforts in Q&A (MIPS) 10.49 : Co's Vice President of Marketing and Business Development in Q&A regarding how Google's (GOOG) anti-fragmentation initiatives for Android code impact providers of microprocessor architectures such as MIPS and INTC. Click here to read the Q&A.

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks spent most of the session plodding along the neutral line amid an absence of catalysts.

Stocks concluded the prior on a strong note as participants responded positively to gains abroad and a better-than-expected jobs report. However, there was neither strong buying abroad nor any key piece of data to provide cues for participants this morning. That kept many traders on the sidelines and left stocks to spend the session stuck in a sideways slog along the flat line.

Materials stocks managed to attract buyers, but the sector's leadership was limited by its lack of market weight. Nonetheless, the materials sector scored a 0.7% gain for the session.

Tech stocks traded with relative weakness all session long. The sector settled with a 0.5% gain as several large-cap tech plays encountered selling pressure. Semiconductors were among the sector's hardest hit issues, but only minutes after the close it was announced that Texas Instruments (TXN 34.11, -0.12) has offered to acquire National Semiconductor (NSM 14.07, -0.16) for $6.5 billion.

In other transaction-related news, Pfizer (PFE 20.54, +0.16) sold its Capsugel business to investment firm KKR (KKR 17.14, +0.23), prompting the pharmaceutical giant to pare its forecast.

Vivendi announced that it will acquire from Vodafone (VOD 29.07, -0.01) a 44% stake in French telecom play SFR for about $11.3 billion.

Outside of equities, oil prices extended their climb to a new two-year high of $108.78 per barrel in overnight trade. The commodity pulled back during pit trade, but made a late push so that it secured its best settling price, $108.47 per barrel, in more than two years.

Advancing Sectors: Materials (+0.7%), Health Care (+0.6%), Consumer Staples (+0.2%), Telecom (+0.2%), Industrials (+0.1%), Consumer Discretionary (+0.1%)
Unchanged: Energy
Declining Sectors: Tech (-0.5%), Financials (-0.1%), Utilities (-0.1%)DJ30 +23.31 NASDAQ -0.41 NQ100 -0.4% R2K +0.3% SP400 +0.1% SP500 +0.46 NASDAQ Adv/Vol/Dec 1387/1.71 bln/1230 NYSE Adv/Vol/Dec 1602/770 mln/1344

5:01PM JA Solar announces strategic partnership With Jabil (JBL) (JASO) 6.57 -0.20 : JA Solar Holdings Co., Ltd. (JASO), one of the world's largest manufacturers of high-performance solar cells and solar power products, announced that it has entered into a two-year strategic partnership with Jabil Circuit (JBL), a global electronic product solutions company headquartered in St. Petersburg, Florida. Under the partnership framework, JA Solar expects to supply Jabil with up to 400MW of solar cells over two years, as well as certified module designs to Jabil for the manufacturing of up to 200MW per year of modules with JA Solar cells. JA Solar intends to provide solar cells and additionally grant Jabil the right to manufacture JA Solar's portfolio of OEM modules at Jabil's solar facilities, including those in Mexico, Poland and China. The companies will further collaborate on marketing and selling JA Solar modules to customers, especially in the U.S. The duration of the alliance is for two years. Module production is expected to commence in Q3 of 2011.

4:18PM NVIDIA has named Bob Worrall, a Sun Microsystems executive, as its Chief Information Officer (NVDA) 17.55 -0.65 :

4:05PM National Semi to be acquired by Texas Instruments (TXN) for for $25 per share in an all-cash transaction of about $6.5 billion (NSM) 14.07 -0.16 : Texas Instruments (TXN) and NSM announced they have signed a definitive agreement under which TXN will acquire National for $25 per share in an all-cash transaction of about $6.5 billion. Under terms of the agreement, National stockholders will receive $25 in cash for each share of National common stock they hold at the time of closing. TXN expects to fund the transaction with a combination of existing cash balances and debt. The acquisition is subject to customary closing conditions, including review by U.S. and international regulators and approval by National's shareholders. The transaction is expected to close in six to nine months. Today at 5:30 p.m. EDT, TXN and National will hold a live audio webcast.

Cree, Inc. (CREE) and Osram GmbH announced the signing of a comprehensive, worldwide patent cross-license agreement. The agreement underscores each company's commitment to speeding the adoption of LED lighting while respecting the value and importance of each company's intellectual property. The cross-license agreement covers patents from both parties in the fields of blue LED chip technology, white LEDs and phosphors, packaging, LED luminaires and lamps, and LED lighting control systems.

6:04AM Advanced Micro amends wafer supply agreement with GLOBALFOUNDRIES; discloses GLOBALFOUNDRIES investment-related noncash gain of $492 mln (AMD) 8.36 : Co announces that it amended its Wafer Supply Agreement with GLOBALFOUNDRIES Inc. The primary purpose of the amendment was to revise the pricing methodology applicable to wafers delivered in 2011 for co's microprocessor and accelerated processing unit products. GLOBALFOUNDRIES has committed to provide co with, and co has committed to purchase, a fixed number of 45nm and 32nm wafers per quarter in 2011. Co currently estimates that it will pay GLOBALFOUNDRIES ~$1.1-1.5 bln in 2011 and $1.5-1.9 bln in 2012 for wafer purchases under the amended WSA. As a result of this contribution co will recognize a noncash gain in its first fiscal quarter 2011 financial results of ~$492 mln.

LDK Solar (LDK) announced the addition of one new cell manufacturing site in Hefei City, Anhui Province. The new cell plant expands LDK Solar's cell capacity to 570 MW per annum.

3:31AM Tower Semicon expects to nearly double production capacity with proposed acquisition of Micron Technology (MU) Wafer Manufacturing Plant in Japan (TSEM) 1.35 : Co announces it has signed a non-binding term sheet contemplating its purchase of Micron Technology's (MU) fabrication facility in Nishiwaki City, Hyogo, Japan. The total value of the proposed transaction, including assumed liabilities, is anticipated to ~$140 mln, of which $40 mln would be paid in cash, ~20 mln of TSEM ordinary shares would be issued to MU or its Japanese subsidiary and the remainder is assumed long-term retirement liabilities that would be payable incrementally upon employee retirements. The proposed purchase would nearly double co's current internal manufacturing capacity, cost-effectively increasing production by 60,000 wafers per month. This is expected to help position co to achieve its expressed $1 bln annual revenue run rate by 2014.

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks overcame some choppy trade in the early going to stage a nice advance, but the move eventually lost momentum, leaving the major averages to roll over.

Stocks followed up lackluster action in the prior session with a relatively flat start today. Overseas markets failed to provide a lift as most of the major global averages moved lower following China's 25-basis point rate increase and the latest round of ISM Services readings from Europe. As for domestic data, the ISM Services Index for March came in at 57.3, which is not only down from the 59.7 that had been recorded for the prior month, but it is less than the 59.5 that had been expected among many economists polled by Briefing.com.

Despite mixed interest in the early going, buying interest gradually increased as the session progressed. The buying effort took the Dow to a new 52-week high, but the S&P 500 only came within a few points of its 52-week high.

Tech stocks had been a key source of broad market strength following news that Texas Instruments (TXN 34.69, +0.58) will acquire National Semiconductor (NSM 24.06, +9.99) for $6.5 billion, or $25 per share. The takeover price represents a premium of almost 80% above NSM's prior session closing price.

Interest among tech issues even helped Apple (AAPL 338.89, -2.30) recover from an opening drop that came in response to news that its weight in the Nasdaq 100 will be reduced to about 12% from 20% with the rebalancing of the Index.

Broad market strength began to fade a bit in afternoon trade, and some knee-jerk selling followed the release of minutes from the most recent FOMC meeting.

According to the minutes, a few members noted that evidence of a stronger recovery, or of higher inflation or rising inflation expectations, could make it appropriate to reduce the pace or overall size of the asset purchase program while several others indicated that they did not anticipate making adjustments to the program before its intended completion. Voting members also noted anticipation that recent increases in the prices of energy and other commodities will result in only a transitory increase in headline inflation.

Investor interest in basic commodities and materials plays helped the materials sector remain propped up while the rest of the market drifted lower in afternoon trade. In turn, materials stocks settled with a collective gain of 1.1% while the major equity averages settled mixed.

Advancing Sectors: Materials (+1.1%), Consumer Discretionary (+0.4%), Energy (+0.3%), Consumer Staples (+0.1%)
Declining Sectors: Tech (-0.1%), Financial (-0.1%), Utilities (-0.3%), Industrials (-0.4%), Health Care (-0.5%), Telecom (-0.7%)DJ30 -6.13 NASDAQ +2.00 NQ100 -0.3% R2K +0.5% SP400 +0.4% SP500 -0.24 NASDAQ Adv/Vol/Dec 1328/1.96 bln/1270 NYSE Adv/Vol/Dec 1629/829 mln/1312

5:02PM Applied Materials announced to sell Chamber Cleaning and Coating Services Group to Quantum Global Technologies (AMAT) 15.53 +0.13 : AMAT and Quantum Global Technologies, LLC (QuantumClean) announced a definitive agreement for QuantumClean to acquire the assets of Applied Materials' Chamber Performances Services semiconductor process kit precision cleaning, coating services and associated analytical testing services businesses for an undisclosed cash amount. The deal is expected to close within 30 days.

7:34AM Applied Materials wins second multi-year service contract at TowerJazz (TSEM) (AMAT) 15.40 : Co announced that it signed a multi-year service contract with TowerJazz, to support Applied Materials equipment at its semiconductor manufacturing facility in Newport Beach, California. This is the second service contract TowerJazz has awarded AMAT; the first contract covers all Applied Materials systems at TowerJazz's Fab 2 in Migdal Haemek, Israel. Under the agreement, Applied will service etch, metrology and inspection tools.

4:22PM Verigy wins new business from Networking and Multimedia Group at Continuing Customer Freescale Semiconductor (VRGY) 14.07 +0.04 : Co has won new business with Freescale Semiconductor's Networking and Multimedia Group, which has placed a volume order for Verigy's V93000 scalable test platform to use in testing select QorIQ PowerPC communications microprocessors, based on Power Architecture technology.

SMSC (SMSC) announced the availability of its OS81092 Intelligent Network Interface Controller for MOST.

07:59 am Analog Devices upgraded to Hold at Auriga U.S.A; tgt raised to $39: . Auriga U.S.A upgrades ADI to Hold from Sell and raises their tgt to $39 from $31 based on their review of the impact of the Japanese earthquake on semiconductor fundamentals, and the valuation implications of recent M&A activity. Firm says they remain concerned that consensus is overly optimistic on analog growth rates over the next several years. However firm says, while the full impact of the earthquake across the semi food chain is still not well understood, it is becoming apparent that uncertainty of supply is driving "panic-ordering" of components, which they expect to result in better-than-expected sales of broadline semis in the months of March and April.

09:46 am LEDS Guides Q3 Revs Below Consensus (LEDS)

SemiLEDs (LEDS $11.95 -2.51) reported a second quarter loss of $0.03 per share, excluding non-recurring items, $0.11 worse than the Thomson Reuters consensus of $0.08.

Revenues rose 29.9% year-over-year to $10 million versus the $11.5 million consensus.

Margins were negatively impacted by previously announced pricing pressure, lower capacity utilization, change in product mix, as well as a shortage in metal organic chemical compound.

For the third quarter, the company guided GAAP earnings in the range of ($0.10) to (0.07), not comparable to the $0.14 non-GAAP Thomson Reuters consensus. On the top line, the company is expecting to see revenue of $6.0 million to $7.0 million versus the $13.88 million Thomson Reuters consensus.

The company said, "While we believe the long term market opportunity of LEDs has not changed, the quarter did not meet our expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and our decision to preserve our market share. Efforts to improve our gross margin include taking actions to improve our yield, transition to four inch wafers in our Taiwan facility, as well as ramping volume production of our new high brightness LED chip, I-Do, which delivers up to 135 lumens per watt, enabling us to provide our customers with a very cost effective lighting solution."

09:34 am TXN to Buy NSM for $25/Share (NSM)

Texas Instruments (TXN $33.24 -0.87) and National Semi (NSM $24.10 +10.03) announced they have signed a definitive agreement under which TXN will acquire National for $25 per share in an all-cash transaction of about $6.5 billion.

Under terms of the agreement, National stockholders will receive $25 in cash for each share of National common stock they hold at the time of closing. TXN expects to fund the transaction with a combination of existing cash balances and debt.

The acquisition is subject to customary closing conditions, including review by U.S. and international regulators and approval by National's shareholders. The transaction is expected to close in six to nine months.

[ReturntoSender]

From Briefing.com: 4:30 pm : Trade was sloppy this session, but the major equity averages still settled near the neutral line. The action came in the wake of the first rate hike by a major central bank and news of another earthquake in Japan. Reports from retailers had little impact on the overall market.

Stocks started the session flat as participants assessed an in-line initial jobless claims tally of 382,000, news that late yesterday Portugal requested foreign financial aid, and the first rate hike by the European Central Bank since mid-2008. The ECB's key lending rate now stands at 1.25%. According to comments from ECB President Trichet, the vote for the increase was unanimous.

The Bank of England and the Bank of Japan both concluded meetings of their own today. England's central bank kept target rates unchanged at 0.5% and held in place its 200 billion pound asset purchase program. Japan's central bank announced that a special lending program will be made available to companies adversely affected by the massive earthquake that hit the country last month.

News of another earthquake in Japan today was met with some knee-jerk selling that took the Dow down to a loss of almost 100 points. Some buyers were brought back into the fold by follow-up reports that the quake wasn't as severe as it had been feared and that nuclear facilities weren't damaged. Still, stocks struggled to put together a sustainable rebound. In turn, they spent the rest of the session chopping along without much direction. The action made for another flat finish.

Even though the overall market continued its sideways crawl, shares of several retailers put together impressive gains with help from stronger-than-expected same-store sales results for March. Bed Bath & Beyond (BBBY 29.99, +0.24) was a top performer, but its strength came on the back of better-than-expected earnings and an upside forecast. In contrast, Gap (GPS 22.72, -0.34) issued downside guidance, which combined with disappointing same-store sales to take the stock to a loss.

Muddled action in the overall market mired energy stocks, which only mustered modest gains as oil prices climbed to new two-year highs above $110 per barrel. The energy component settled pit trade at $110.30 per barrel. It is now up more than 20% year to date.

Financials fell to a 0.4% loss after the sector outperformed in the prior session with a gain of more than 1%. Although weakness was widespread, most of the pushback was made against insurance issues.

Telecom finished the day flat, but it had one of the strongest finishes. At its session low the sector was off by more than 1%.

Advancing Sectors: Energy (+0.2%), Consumer Staples (+0.1%), Tech (+0.1%)
Unchanged: Telecom
Declining Sectors: Materials (-0.2%), Health Care (-0.2%), Consumer Discretionary (-0.3%), Financials (-0.4%), Utilities (-0.5%), Industrials (-0.5%)DJ30 -17.26 NASDAQ -3.68 NQ100 +0.00% R2K -0.6% SP400 -0.6% SP500 -2.03 NASDAQ Adv/Vol/Dec 935/1.81 bln/1658 NYSE Adv/Vol/Dec 1116/910 mln/1872

4:35PM Seagate Tech guides Q3 revs above consensus (STX) 14.69 -0.07 : Co issues upside Q3 revs guidance; co sees Q3 revs at ~$2.7 bln vs. $2.62 bln Thomson Reuters consensus, unit shipments of 49 million and gross margin as a percent of revenue near or slightly above the high-end of the original outlook range of 18-19%. Cash, cash equivalents and short-term investments at the end of the fiscal third quarter totaled ~$2.5 billion. Inventory in the distribution channel of Seagate 3.5" SATA hard disk drives is below the targeted range of 4-6 weeks on hand.

4:16PM Advanced Analogic Tech announces resolution of litigation with Linear Technology (LLTC); terms not disclosed (AATI) 3.72 -0.08 :

1:54PM Motorola Mobility confirms launch of its SocialTV Companion Service (MMI) 24.68 +0.23 : Motorola's SocialTV Companion Service includes interactive games and social experiences enabling viewers to express themselves and interact real-time with their virtual community of friends also watching the TV show.

12:58PM Semiconductor ETFs back near highs (SMH) : The SMH has rebounded off morning lows and it is back flirting with last week/this week highs at 35.09/35.14. The SOXX is testing last week's high and its 50 sma at 60.17/60.24 (session high 60.17) while the XSD is near a similar level (last wk high/50 day sma) at 59.23/59.38 (session high 59.22).

10:01AM Dell invests $1 billion in technology solutions and services (DELL) 14.85 +0.07 : Co announces it is increasing its investments in new technology solutions and services. Co plans to build multiple next generation cloud data centers that operate and deliver hyperscale efficiency. Dell will open 12 Global Solution Centers this year and is planning 10 more over the next 18 months, to better bring open, capable and affordable solutions to organizations around the world.

4:03AM Advanced Semi reports consolidated net revs of NT$16.527 mln; +4.3% YoY; +19.1% sequentially (ASX) 5.70 :

[ReturntoSender]

From Briefing.com: 4:35 pm : Both the Nasdaq Composite and the S&P 500 fell to modest losses, but the Dow finished flat in another listless session of trade.

Stocks stayed near the neutral line during almost all of last week's trade. They were confined there by a lack of leadership. Such was the case again today.

Although the early tone of trade was mildly positive, the limited number of headlines failed to bolster buying interest ahead of the latest quarterly report from Dow component Alcoa (AA 17.77, -0.15). In turn, stocks were left to drift lower.

Uncertainty about what earnings season may have in store kept many traders on the sidelines. As a result, trading volume on the NYSE barely broke 800 million shares.

Those that did participate in today's trade failed to find inspiration from a few corporate deals, including the purchase of Global Crossing (GLBC 24.97, +10.17) by Level 3 (LVLT 1.70, +1.70) in a stock-for-stock transaction that values GLBC at $23.04 per share, which is a premium of more than 50% above its closing price from Friday. American Medical (AMMD 29.50, +7.17) will be acquired by Endo (ENDP 41.06, +0.21) for $30 per share, which is a premium of more than 30% over its closing price from last week.

NYSE Euronext (NYX 37.59, -1.11) issued a rejection of the takeover bid issued by Nadsaq (NDAQ 28.03, -0.42) and IntercontinentalExchange (ICE 120.55, +0.00) due to its commitment to combine with Deutsche Boerse.

A 2.5% drop in oil prices to $109.92 per barrel didn't do anything to spur buying interest in stocks either. Rather, energy stocks were sold off. The Energy Select SPDR (XLE 78.15, -1.57) shed 2%.

Frequent broad market leaders, financials fought off selling efforts to finish flat, as measured by the Financial Select SPDR (XLF 16.46, +0.00), while the Tech SPDR (XLK 25.89, -0.04) slipped only modestly. DJ30 +1.06 NASDAQ -8.91 SP500 -3.71 NASDAQ Adv/Vol/Dec 885/2.06 bln/1711 NYSE Adv/Vol/Dec 911/817 mln/2089

5:01PM Veeco Instruments: U.S. Department of Energy awards funding to CNSE CIGS Solar Project (VECO) 48.64 -0.59 : Co reports that, last week, the U.S. Department of Energy (DOE) announced a $57 million award to The College of Nanoscale Science and Engineering (CNSE) at the State University of New York at Albany as part of its SunShot Advanced PV Manufacturing Partnerships Program. Veeco Instruments (VECO), a provider of equipment for the solar industry, announced that it is a key partner for CNSE on this project as part of the U.S. Photovoltaic Consortium

4:07PM Alcoa beats by $0.01, misses on revs (stock is halted); reaffirms FY11 global aluminum demand growth forecast of 12% (AA) 17.77 -0.15 : Reports Q1 (Mar) earnings of $0.28 per share, excluding $0.01 in non-recurring items, $0.01 better than the Thomson Reuters consensus of $0.27; revenues rose 21.9% year/year to $5.96 bln vs the $6.07 bln consensus. The improvement over fourth quarter 2010 results was driven by higher realized prices for alumina and aluminum and growing demand for aluminum products in major end markets, along with productivity improvements. These were offset somewhat by a weaker U.S. dollar, along with higher energy and materials costs. Alcoa reaffirmed the co's projection that global aluminum demand would grow 12% in 2011 on top of the 13 percent growth rate in 2010. "It was an excellent first quarter as we improved profitability across all business segments, set profit records in our midstream and downstream businesses and grew substantially." Stock is halted.

4:02PM Micrel lowers Q1 EPS, rev below consensus; sees Q2 rev up QoQ (MCRL) 14.40 -0.09 : lowers Q1 EPS to $0.13-0.14 from $0.17-0.19 vs $0.18 Thomson Reuters consensus; sees rev down 10-11% QoQ to ~$67.3-68.0 mln vs. $72.6 mln consensus, vs. -2 to -6% previously. The shortfall in rev is primarily a result of lower than expected sales to a device manufacturer in Korea that makes wireless handsets and other consumer electronic devices. This customer moderated product deliveries during the quarter to control inventory levels. In addition, Micrel also experienced a reduction in overall demand in March related to disruptions in the worldwide electronics supply chain due to the earthquake and tsunami in Japan. The co also had a further inventory reduction by its sell-in (POP) channel partners as a result of the inventory over-build that took place in the last half of 2010. Based upon current demand estimates, the co expects second quarter 2011 revs to grow sequentially over first quarter 2011 revenues (cons: $76.3 mln).

7:01AM Benchmark Elec lowers Q1 guidance below consensus (BHE) 18.41 : Co lowers Q1 guidance, see EPS of $0.23-0.26, ex-items, vs $0.30-0.36 previously and the $0.33 Thomson Reuters consensus; revs $540 mln from $565-605 mln vs. $587.30 mln Thomson Reuters consensus "due to softer than projected demand and temporary inventory corrections from some of its customers... We anticipate a reversal of this sales decline and expect a rebound in the second quarter."

LDK Solar (LDK) announced a $35 mln investment to establish a new manufacturing line to produce silane gas in its Mahong Plant in Xinyu City, Jiangxi Province to supply up to 2,000 MT of silane gas to meet the growing demand from the semiconductor, solar and flat panel display industries.

[ReturntoSender]

From Briefing.com: 4:35 pm : For the second straight session the stock market overcame selling pressure to finish flat. In both sessions stocks were able to do it without help from the financial sector.

Stocks dropped markedly in the first few minutes. Sellers were motivated by renewed weakness among several major foreign equity averages and a disappointing initial jobless claims count for the week ended April 9. Initial claims climbed 27,000 week-over-week to 412,000, which is greater than the 385,000 initial claims that had been widely expected. The surprisingly high tally marked the first time in more than a month that initial claims exceeded 400,000.

Separately, the Producer Price Index for March increased by 0.7%, which is less than the 1.1% increase that had been broadly expected. Excluding food and energy, producer prices for March increased by a much more tepid 0.3%, which is slightly greater than the 0.2% increase that had been expected, on average, among economists polled by Briefing.com.

Early pressure was primarily focused on tech stocks and financials. Although buying interest gradually emerged to help tech stocks pare losses, financials remained hampered by weakness among diversified bank stocks ahead of the latest report from Bank of America (BAC 13.13, -0.14) tomorrow morning. Investment bank stocks were also weak amid news that Goldman Sachs (GS 155.79, -4.38) has been accused by a Senate subcommittee for lying in a testimony during 2010. Additionally, Deutsche Bank (DB 60.57, -0.81) and Credit Suisse (CS 44.24, -0.42) were both downgraded by analysts at Societe Generale. Overall, the financial sector fell 0.9%, which comes on top of its 0.8% decline in the prior session.

Strong buying interest in consumer staples stocks and energy stocks helped lift the two sectors to gains of 0.6% gain, but the pair failed to provide much broad market leadership. Although their inability to provide a lift to the broader market left the major averages to settle near the neutral line, the flat finish actually represented considerable improvement over the tone of trade seen in the early going.

Waning negativity caused Treasuries to slip a bit. Results from the auction of 30-year Bonds didn't exactly bolster buying interest in the space. The auction drew a bid-to-cover of 2.83, dollar demand of $36.8 billion, and an indirect bidder participation rate of 47.2%.

Ongoing pressure against the greenback led the Dollar Index down to a new 52-week low. Amid the decline in the dollar, oil prices climbed back above $108 per barrel, while gold gained more than 1% to eclipse $1472 per ounce and silver surged 3.5% to $41.69 per ounce.

Advancing Sectors: Consumer Staples (+0.6%), Energy (+0.6%), Health Care (+0.5%), Utilities (+0.5%), Materials (+0.3%), Telecom (+0.2%)
Unchanged: Industrials
Declining Sectors: Consumer Discretionary (-0.3%), Tech (-0.3%), Financials (-0.9%)DJ30 +14.16 NASDAQ -1.30 NQ100 -0.2% R2K +0.4% SP400 +0.0% SP500 +0.11 NASDAQ Adv/Vol/Dec 1455/1.72 bln/1121 NYSE Adv/Vol/Dec 1600/925 mln/1358

5:50PM Cirrus Logic drops ~7.5% to $16.75 after reducing Q4 gross margin expectations due to a charge (See 17:46 comment) (CRUS) 18.10 +0.10 :

5:46PM Cirrus Logic lowers Q4 gross margins due to ~$4.2 mln charge; co sees Q4 revs of ~$91.4 mln vs. $91.3 mln consensus (CRUS) 18.10 +0.10 : Co reported that, for FY11 it see revs of ~$369.6 mln vs. $369.4 mln consensus. Co lowers gross margin to ~50% , below previously issued guidance of 54-56%. The co's lower-than-expected gross margin for the quarter is the result of a charge of ~$4.2 mln, or $0.06 per share, based on 72.3 mln diluted shares outstanding, due to a production issue with a new audio device that entered high volume production in March 2011. The co expects a smaller residual impact to gross margins in the first two quarters of FY2012 as the company works through in line inventory related to this product.

4:05PM Google misses by $0.02, beats on revs (GOOG) 578.51 +2.23 : Reports Q1 (Mar) earnings of $8.08 per share, $0.02 worse than the Thomson Reuters consensus of $8.10; revenues rose 29.1% year/year to $6.54 bln, ex-TAC, vs the $6.32 bln consensus. Google reports Q1 Paid Clicks +18% YoY vs. the +15% consensus; CPC +8% YoY vs. the +6% consensus. Google reports Q1 non-GAAP operating margin of 38% vs. the 38.4% consensus... Net cash provided by operating activities in the first quarter of 2011 totaled $3.17 billion, compared to $2.58 billion in the first quarter of 2010. In the first quarter of 2011, capital expenditures were $890 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. In the first quarter of 2011, free cash flow was $2.28 billion. "We expect to continue to make significant capital expenditures."

2:02PM Fairchild Semi announces acquisition of TranSiC, a Silicon Carbide power transistor company (FCS) 17.79 -1.39 : Fairchild also acquired a team of highly experienced SiC engineers and scientists and multiple patents in SiC technology.

Mozy, the online backup service from EMC Corporation (EMC), announced it successfully completed a SAS 70 Type II audit and received 27001 certification by the International Organization for Standardization.

Zilog, a wholly-owned subsidiary of IXYS Corporation (IXYS) and a trusted supplier of application-specific, embedded microcontroller system-on-chip solutions for industrial, power management and consumer applications, announced that its Z8F082A MCU has been selected as the core microcontroller by SenseAir for their newest Fast Response CO2 Sensor Module.

8:01AM Cymer's display equipment product division received volume order for TCZ-1500B from flat panel display manufacturer (CYMI) 50.08:

7:32AM Fairchild Semi beats by $0.03, reports revs in-line; guides Q2 revs above consensus (FCS) 19.18 : Reports Q1 (Mar) earnings of $0.39 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $0.36; revenues rose 9.3% year/year to $413 mln vs the $413.3 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $425-435 mln vs. $423.62 mln Thomson Reuters consensus. "Our current scheduled backlog is sufficient to achieve this range. We expect to increase adjusted gross margin to 37.0-37.5% due primarily to the impact of better mix and higher factory utilization in Q1. We anticipate R&D and SG&A spending of $96 to $98 million in the second quarter as we increase our investment in new product development and sales and incur greater equity compensation expenses driven by our higher stock price. Net interest expense is expected to be roughly $2 million per quarter going forward. The adjusted tax rate is forecast at 15 percent plus or minus 3 percent for the quarter. As with last quarter, we are not assuming any obligation to update this information, although we may choose to do so before we announce second quarter results."

09:55 am Cree ests lowered at Gabelli ahead of earnings: . Gabelli is lowering its gross margin projection estimates as it's reiterating its view of pricing pressure, inventory correction, and potentially gross margin deterioration due to weak market. Firm also thinks it may see a longer delay in the completion of the new China street lighting technical specification requirement. Furthermore, it believes that Chinese government will shift its LED lighting subsidy from MOCVD equipments to downstream LED lighting products, i.e. LED components and LED lighting products. Firm's 3Q11 ests to rev of $215 mln, gross margin 41.5%, non-GAAP EPS $0.25 from $218/43.0%/$0.29 ($217/$0.29/43.3% consensus). Co reports 4/19.

[ReturntoSender]

It's been quite typical the last couple of cycles for semiconductor related stocks (SOX) to stop making higher highs as well in advance of the S&P 500 making its own cyclical top:



I'm still looking for a rise to RSI(14) of 70 on this chart to help signal a potential top.



Is there any real reason to expect things will be different this time? Technology is an early cycle leader. We are entering the middle of an economic recovery with major headwinds in the form of high gas prices and rising commodity prices:



We may not get another year of overall rally if gasoline and other commodity prices don't start falling soon.

RtS

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks spent this morning stuck in listless trade, but they managed to settle with decent gains after natural resource plays provided an afternoon lift.

Early trade was entirely lackluster as participants processed the latest round of earnings results. Several financial players posted results, but most attention was paid to Goldman Sachs (GS 151.86, -1.92) and U.S. Bancorp (USB 25.25, -0.31). Although both exceeded earnings expectations, each succumbed to selling. Shares of GS only trimmed losses after they attracted support near the $150 mark, which made for a multi-month low.

Texas Instruments (TXN 34.54, -0.25) was also clipped. News of its earnings miss first broke last evening. In turn, semiconductor stocks in Asia shared in the company's disappointment during overnight trade. The company also made note during its conference call that earthquakes in Japan took their toll on operations.

Data from abroad featured a mixed bag of PMI Services and Manufacturing readings, but domestic data was limited to monthly housing starts and building permits. Housing starts for March improved to an annualized rate of 549,000, which is greater than the rate of 520,000 units that had been broadly expected. Building permits improved to an annualized rate of 594,000, which is greater than the 540,000 building permit rate that had been forecasted, on average, by economists surveyed by Briefing.com.

Building materials stocks benefited from that news. They combined with steel stocks, which bounced on the back of better-than-expected results from Steel Dynamics (STLD 18.46, +1.00), to drive the overall materials sector to a 1.8% gain.

Though not quite as impressive, energy stocks scored a collective gain of 1.1%. Oil services stocks were leaders in the energy space as they rebounded from the prior session's slide.

Health care stocks and industrial stocks weren't too far behind energy. Both sectors put together a 0.9% gain. Health care was led by Dow component Johnson & Johnson (JNJ 62.69, +2.23), which won strong support after it posted a better-than-expected bottom line and issued an improved outlook. PACCAR (PCAR 52.19, +1.88) was a top performing industrial play after it reported its own quarterly results.

Advancing Sectors: Materials (+1.8%), Energy (+1.1%), Health Care (+0.9%), Industrials (+0.9%), Tech (+0.4%),Financials (+0.4%), Consumer Discretionary (+0.3%), Consumer Staples (+0.2%)
Unchanged: Utilities
Declining Sectors: Telecom (-0.1%)DJ30 +65.16 NASDAQ +9.59 NQ100 +0.6% R2K +0.2% SP400 +0.5% SP500 +7.48 NASDAQ Adv/Vol/Dec 1304/1.67 bln/1278 NYSE Adv/Vol/Dec 2006/847 mln/980

4:18PM Juniper Networks reports EPS in-line, revs in-line; guides Q2 EPS below consensus, revs in-line (JNPR) 38.47 +0.21 : Reports Q1 (Mar) earnings of $0.32 per share, excluding non-recurring items, in-line with the Thomson Reuters consensus of $0.32; revenues rose 20.7% year/year to $1.1 bln vs the $1.1 bln consensus. Co reports Q1 non GAAP gross margins of 70.6% vs targeted range of 66% and 68%. Co issues downside EPS guidance for Q2, sees EPS of $0.31-0.34, excluding non-recurring items, vs. $0.36 Thomson Reuters consensus; sees in-line Q2 revs of $1.13-1.18 bln vs. $1.16 bln Thomson Reuters consensus.

4:11PM IBM beats by $0.11, beats on revs; raises FY11 EPS above consensus (IBM) 165.40 -0.54 : Reports Q1 (Mar) earnings of $2.41 per share, $0.11 better than the Thomson Reuters consensus of $2.30; revenues rose 7.7% year/year to $24.6 bln vs the $24.02 bln consensus. IBM reports Q1 GAAP gross margins of 44.1% vs 44.7% Thomson Reuters consensus. Software revenue excluding divested PLM operations up 10%, 8% adjusting for currency; 6% including PLM, 4% adjusting for currency; Systems and Technology revenue up 19%, 16% adjusting for currency; System z mainframe revenue up 41%; MIPS up 34%; Services revenue up 6%, 3% adjusting for currency; Services backlog of $142 billion, up $8 billion; Growth markets revenue up 18 percent, 12 percent adjusting for currency; Business analytics revenue up 20 percent; Smarter Planet revenue up 20 percent; Cloud revenue 5 times first-quarter 2010 revenue; Co raises guidance for FY11, sees EPS of at least $13.15, up from at least $13.00 vs. $13.08 Thomson Reuters consensus.

4:10PM Riverbed Technology beats by $0.01, beats on revs (RVBD) 33.43 +0.54 : Reports Q1 (Mar) earnings of $0.20 per share, excluding non-recurring items, $0.01 better than the Thomson Reuters consensus of $0.19 and vs. guidance of $0.19-0.20; revenues rose 45.5% year/year to $163.6 mln vs the $161.9 mln consensus and vs. $163-164 mln guidance. Co reports record non-GAAP operating margin of 29.3% vs. 20.8% a year ago. Note, co is expected to guide for Q2 on the call at 4:30pm ET... Briefing.com note: RVBD issued guidance on 4/12 for Q1 revs of $163-164 mln (vs $160.1 mln Thomson Reuters consensus at the time), and Non-GAAP EPS of $0.19-0.20 (vs $0.18 consensus at the time).

4:03PM Cree misses by $0.02, reports revs in-line; guides Q4 EPS below consensus, revs below consensus (CREE) 40.81 -0.26 : Reports Q3 (Mar) earnings of $0.27 per share, $0.02 worse than the Thomson Reuters consensus of $0.29; revenues fell 6.4% year/year to $219.2 mln vs the $217.4 mln consensus; reports Q3 non-GAAP gross margin of 42.4% vs. the ~43% guidance and the 43.3% consensus; Inventory increased $24.1 million from Q2 of fiscal 2011 to $169.6 million and represents 119 days of inventory, an increase of 23 days from Q2 of fiscal 2011. Co issues downside guidance for Q4, sees EPS of $0.25-0.31 vs. $0.36 Thomson Reuters consensus; sees Q4 revs of $225-245 mln vs. $243.78 mln Thomson Reuters consensus; non-GAAP gross margin targeted at 40% +/-.

STEC (STEC) announced that its wholly owned subsidiary, STEC India Private Limited, has acquired certain assets of Knowledge Quest Infotech Private Limited, or KQI, a software development company based in Pune, India. The portfolio of acquired assets includes KQI's intellectual property rights. In addition, STEC has hired ~30 key employees of KQI to augment its existing software development team. The financial terms of this transaction are not disclosed.

8:03AM Chipmos Technology announces automatic conversion of its 8% senior convertible bonds due 2014 and 2015 (IMOS) 8.71 :

4:05AM Seagate Tech and Samsung enter in to broad strategic alliance; co expects transactions and agreements to be meaningfully accretive to non-GAAP diluted earnings per share and cash flow within the first full year (STX) 17.84 : Co and and Samsung Electronics announce that they have entered into a definitive agreement under which STX and Samsung will significantly expand and strengthen their strategic relationship by further aligning their respective ownership, investments and key technologies. Major elements of the agreement include: 1) Samsung combining its hard disk drive operations into Seagate; 2) Extending and enhancing the existing patent cross-license agreement between the companies; 3) A NAND flash memory supply agreement under which Samsung will provide STX with its market-leading semiconductor products for use in Seagate's enterprise solid state drives, solid state hybrid drives and other products; 4) A disk drive supply agreement under which STX will supply disk drives to Samsung for PCs, notebooks and consumer electronics; 5) Expanded cooperation between the companies to co-develop enterprise storage solutions; 6) Samsung receiving significant equity ownership in STX; 7) A shareholder agreement under which an executive of Samsung will be nominated to join co's Board. The combined value of these transactions and agreements is ~$1.375 bln , which will be paid by STX to Samsung in the form of 50% stock and 50% cash. Additionally, these transactions and agreements to be meaningfully accretive to non-GAAP diluted earnings per share and cash flow within the first full year does not expect any material restructuring costs in connection with them.

SANYO Semiconductor, an ON Semiconductor (ONNN) co, announced the introduction of a new 8-bit flash microcontroller with USB 2.0 Full-Speed interface function and built-in DC-DC converter with selectable output voltages.

07:36 am Dell ests lowered at Collins Stewart on lower PC unit growth: . Collins Stewart is lowering its FY12 (Jan) revenue but maintaining its EPS est for DELL as it's lowering its 2011 PC unit growth outlook to 2.3% from mid-to high-single-digit growth. Most of DELL's revenue (78%) is enterprise focused, and the enterprise refresh cycle is helping support PC growth, but only at modest, not exceptional levels. On the consumer side, demand has been weak for almost a year. In addition, tablets -- most notably the AAPL iPad -- are certainly cannibalizing and slowing PC unit growth. FY12 total revenue growth est to 3.3% (down from 5.7% v 5.2% consensus) & FY13 to 3.9% growth (down from 4.1% v 3.7% consensus).

09:47 am TXN Guides Q2 EPS In-line (TXN)

Texas Instruments (TXN $34.29 -0.50) reported first quarter earnings of $0.55 per share, $0.03 worse than the Thomson Reuters consensus of $0.58.

Revenues rose 5.8% year-over-year to $3.39 billion versus the $3.4 billion consensus.

TXN reports first quarter gross margin of 50.9 %, worse than expected.

For the second quarter, the company issued earnings guidance of $0.52 to $0.60, which includes a $0.05 negative impact from the impact of the Japanese earthquake and aftermath, may not be comparable to $0.63 Thomson Reuters consensus. On the top line, the company expects revenue to fall in the range of $3.41 billion to $3.69 billion versus the $3.53 billion Thomson Reuters consensus.

[ReturntoSender]

From Briefing.com: 4:35 pm : Stocks finished this holiday-shortened week on a high note, thanks largely to another big batch of better-than-expected earnings. Broad buying during the past two sessions gave the Dow and S&P 500 weekly gains of little more than 1%, but the Nasdaq Composite climbed 2% this week.

The Nasdaq outperformed its counterparts during the past couple of sessions with help from large-cap tech issues. Intel (INTC 21.46, +0.05) was a leader among tech issues in the prior session, but today Apple (AAPL 350.70, +8.29) and Qualcomm (QCOM 56.94, +1.67) were primary benefactors of the tech sector's bounce. As a group, tech stocks scored a 1.0% gain.

Materials stocks lack the collective weight of tech issues, but their 1.1% gain didn't go unnoticed. DuPont (DD 55.91, +0.54) was a strong performer following its upside earnings surprise. Better-than-expected results also helped Newmont Mining (NEM 59.23, +0.38) settle higher, although the stock surrendered some of its gains.

Financials put together their best gain of the week by advancing 0.6%. Dow component Travelers (TRV 61.32, +2.19) was a leader as its shares climbed to a record year high with help from strong quarterly results. Consumer finance play Capital One (COF 53.26, +2.73) also surged, but peer American Express (AXP 47.11, +0.11) put together only a modest gain amid a positive earnings surprise. Morgan Stanley (MS 26.48, +0.44) also had a stronger-than-expected quarter, but the stock forfeited some of its gains.

Blue chips General Electric (GE 19.95, -0.45), Verizon (VZ 36.91, -0.88), and McDonalds (MCD 76.91, -1.49) both had better-than-expected bottom lines, but neither scored a gain. GE actually augmented its report with a dividend hike.

Pfizer (PFE 19.79, -0.60) fell sharply after reports indicated that deaths were reported in relation to one of the company's drug tests. Amgen (AMGN 53.69, -2.49) was also a source of weakness following its latest quarterly report, but an upside earnings surprise from UnitedHealth (UNH 47.81, +3.57) offered some support to the overall health care sector, which settled with a tame gain of 0.3%.

Data, although generally disappointing, did little to disrupt today's broad market advance. Initial jobless claims for the week ended April 16 totaled 403,000, which is greater than the 390,000 claims that had been expected, on average, among economists polled by Briefing.com. Week over week, initial claims came down by 13,000. As for continuing claims, they fell 7,000 week over week to 3.70 million.

The latest Philadelphia Fed Index for April dove sharply to 18.5 from 43.4 in the prior month. It had been expected to come in at 33.0.

Leading Indicators for March increased 0.4%. That is down from the 0.8% increase in the prior month, but greater than the 0.2% increase that had been widely expected.

As a reminder, the observance of Good Friday will keep U.S. markets closed tomorrow.

Advancing Sectors: Materials (+1.1%), Tech (+1.0%), Consumer Discretionary (+0.6%), Financials (+0.6%), Energy (+0.6%), Health Care (+0.3%), Telecom (+0.3%), Utilities (+0.2%), Industrials (+0.2%)
Unchanged: Consumer Staples
Declining Sectors: (None)DJ30 +52.45 NASDAQ +17.65 NQ100 +0.8% R2K +0.7% SP400 +0.6% SP500 +7.02 NASDAQ Adv/Vol/Dec 1532/1.87 bln/1040 NYSE Adv/Vol/Dec 1960/811 mln/1022

5:14PM Ixia sees Q2 revenues in the range of $78-82 mln, Thomson Reuters consensus $81.35 mln; sees Q2 EPS in the range of $0.14-0.17, Thomson Reuters consensus $0.16... non-GAAP gross margin between 78-80% (XXIA) :

4:04PM Ixia beats by $0.02, reports revs in-line (XXIA) 15.44 +0.19 : Reports Q1 (Mar) earnings of $0.16 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of $0.14; revenues rose 26.7% year/year to $78.6 mln vs the $78.7 mln consensus.

4:27PM Cymer beats by $0.13, beats on revs; guides Q2 revs in-line (CYMI) 52.39 -0.44 : Reports Q1 (Mar) earnings of $0.94 per share, $0.13 better than the Thomson Reuters consensus of $0.81; revenues rose 35.7% year/year to $154.4 mln vs the $150.3 mln consensus. Co issues in-line guidance for Q2, sees Q2 revs of ~$157 mln vs. $156.94 mln Thomson Reuters consensus.

4:19PM Advanced Micro beats by $0.03, reports revs in-line; sees Q2 rev flat to slightly down QoQ, in-line (AMD) 8.71 +0.08 : Reports Q1 (Mar) earnings of $0.08 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $0.05; revenues rose 2.5% year/year to $1.61 bln vs the $1.61 bln consensus. Co sees Q2 rev flat to slightly down vs. the -1.4% consensus; Q1 GAAP gross margin of 42.8% vs. the 44.8% consensus. "First quarter operating results were highlighted by strong demand for our first generation of AMD Fusion Accelerated Processing Units (APUs). APU unit shipments greatly exceeded our expectations, and we are excited to build on that momentum now that we are shipping our 'Llano' APU."

4:09PM SanDisk beats by $0.03, beats on revs (SNDK) 48.99 +0.54 : Reports Q1 (Mar) earnings of $1.03 per share, excluding non-recurring items, $0.03 better than the Thomson Reuters consensus of $1.00; revenues rose 19.2% year/year to $1.29 bln vs the $1.26 bln consensus. Co reports Q1 non-GAAP gross margins of 43.1% vs 43.0% consensus. "Our embedded mobile business drove growth in the first quarter, and SanDisk executed well to deliver strong business results," said Sanjay Mehrotra, President and CEO. "We have been actively managing our supply chain following the recent events in Japan and believe we remain on track to deliver a strong 2011 for SanDisk."

4:06PM Lattice Semi reports EPS in-line, beats on revs; guides Q3 rev above consensus; gross margin in-line (LSCC) 6.32 +0.12 : Reports Q1 (Mar) earnings of $0.09 per share, in-line with the Thomson Reuters consensus of $0.09; revenues rose 13.0% year/year to $82.6 mln vs the $76.5 mln consensus. Lattice Semi sees Q2 rev flat to up 5% QoQ consensus calling for $79.3, with gross margin of 60-62% vs. 60.2% consensus. "This was a strong quarter for us across the board. Positive demand trends in the consumer, and industrial and other end markets were bolstered by a pick-up in the communications market. Of note, revenue came in well above the high-end of our prior guidance. Based on customer feedback, we believe that only $1 million to $2 million of the upside came from unexpected, Japan-related 'safety stock' buying; the rest of the upside reflects the continued strength in our business, along with higher than anticipated demand from our mainstream products. Adding to our momentum, we are pleased with the positive response from customers for our recently launched low power, low cost MachXO2."

4:03PM Maxim Integrated reports EPS in-line, revs in-line; guides Q4 EPS in-line, revs in-line (MXIM) 26.15 +0.56 : Reports Q3 (Mar) earnings of $0.40 per share, in-line with the Thomson Reuters consensus of $0.40; revenues rose 19.3% year/year to $606.8 mln vs the $605.5 mln consensus. Co issues in-line guidance for Q4, sees EPS of $0.40-0.44 vs. $0.42 Thomson Reuters consensus; sees Q4 revs of $610-640 mln vs. $619.74 mln Thomson Reuters consensus. Co reports their 90 day backlog at the beginning of the fourth fiscal quarter was $462 million.

9:19AM Celestica beats by $0.02, reports revs in-line; guides Q2 EPS, revs in-line; see 7:04 comment for purchase of BRKS's semi-equip. contract manufacturing ops. (CLS) 10.58 : Reports Q1 (Mar) earnings of $0.25 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of $0.23; revenues rose 18.6% year/year to $1.8 bln vs the $1.79 bln consensus. Co issues in-line guidance for Q2, sees EPS of $0.22-0.28, excluding non-recurring items, vs. $0.25 Thomson Reuters consensus; sees Q2 revs of $1.75-1.90 bln vs. $1.82 bln Thomson Reuters consensus. Co also announced that it has agreed to acquire the semiconductor equipment contract manufacturing operations of Brooks Automation (BRKS), see 7:04 comment.

8:16AM Ultratech beats by $0.03, beats on revs (UTEK) 27.02 : Reports Q1 (Mar) earnings of $0.30 per share, $0.03 better than the Thomson Reuters consensus of $0.27; revenues rose 72.4% year/year to $47.4 mln vs the $46.1 mln consensus.

In the latest move to expand its global market share in Fibre Channel switching, QLogic Corp. (QLGC) announced that its 5800V Series and 9000 Series 8Gb Fibre Channel stackable switches will be available immediately from Huawei Symantec, a global provider of network security and storage appliance solutions to enterprise customers around the globe.

8:02AM Cypress Semi beats by $0.01, beats on revs; Q2 guidance to be better than seasonal (CY) 19.44 +1.14 : Reports Q1 (Mar) earnings of $0.24 per share, $0.01 better than the Thomson Reuters consensus of $0.23; revenues rose 15.2% year/year to $233.1 mln vs the $228.9 mln consensus. Co says rev growth was driven by record TrueTouch touchscreen controller shipments. Co also says that Q2 guidance to be better than seasonal.

7:34AM Verizon beats by $0.01, reports revs in-line; reaffirms FY11 EPS, rev growth guidance (VZ) 37.79 : Reports Q1 (Mar) earnings of $0.51 per share, $0.01 better than the Thomson Reuters consensus of $0.50; revenues rose 0.3% year/year to $26.99 bln vs the $26.86 bln consensus. Co reaffirms guidance for FY11, sees EPS +5-8% to ~$2.18-2.25, excluding non-recurring items, vs. $2.22 Thomson Reuters consensus; sees FY11 revs +4-8% to ~$110.83-115.10 bln vs. $110.2 bln Thomson Reuters consensus. Wireless: 6.3 percent YoY increase in service revenues in 1Q 2011; data revenues up 22.3 percent; 25.8 percent operating income margin and 43.7 percent Segment EBITDA margin on service revenues (non-GAAP). 1.8 mln net additions, excluding acquisitions and adjustments, includes 906,000 retail postpaid net customer additions; continued low retail postpaid churn of 1.01 percent. 104.0 mln total connections, includes 88.4 mln retail customers. Cash flow from operations totaled $5.0 bln in Q1, down from $7.1 bln in first-quarter 2010. Operating cash flow from higher net income in first-quarter 2011 was offset by the launch of the iPhone and satisfaction of Verizon's full-year 2011 pension funding obligation of $392 mln. In addition, the first half of last year included cash flows from since-divested properties. ~77 percent of first-quarter 2011 revenues were generated by higher-growth wireless, FiOS and strategic enterprise services, compared with ~72 percent of comparable first-quarter 2010 revenues. Verizon continues to expect 2011 capital spending to be essentially flat, compared with the 2010 investment of $16.5 bln. In first-quarter 2011, Verizon's capital expenditures totaled $4.4 bln, compared with $3.4 bln in first-quarter 2010, as the co aggressively invested in growth opportunities, including the deployment of Verizon's nationwide 4G LTE

7:04AM Celestica to acquire Brooks Automation's (BRKS) semiconductor equipment contract manufacturing operations for ~$80 mln (CLS) 10.58 : Co announces the acquisition of Brooks Automation's (BRKS) semiconductor equipment contract manufacturing operations. The purchase price is expected to be ~$80 mln and will be financed from either the co's credit facility or from cash on hand. The business generated revenue of ~$135 mln for the six months ended March 31, 2011.

7:03AM Entegris beats by $0.03, beats on revs; guides Q2 EPS above consensus, revs above consensus (ENTG) 8.25 +0.40 : Reports Q1 (Mar) earnings of $0.23 per share, $0.03 better than the Thomson Reuters consensus of $0.20; revenues rose 26.5% year/year to $203.1 mln vs the $187.9 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.22-0.25 vs. $0.22 Thomson Reuters consensus; sees Q2 revs of $200-210 mln vs. $192.91 mln Thomson Reuters consensus.

6:41AM General Electric beats by $0.03, beats on revs; raises divdend 7% (GE) 20.40 : Reports Q1 (Mar) GAAP earnings from continuing operations of $0.31 per share, $0.03 better than the Thomson Reuters consensus of $0.28; revenues rose 6.2% year/year to $38.45 bln vs the $34.64 bln consensus. GE Capital Services' (GECS) revs increased 3% from last year to $13.2 bln. Industrial sales of $22.1 bln decreased 6% versus 2010. Segment profit increased 36% compared with the first quarter of 2010, as increases of more than 200% at GE Capital, 37% at Transportation, 7% at Healthcare and 5% at Aviation more than offset a 7% earnings decline at Energy Infrastructure. "GE Healthcare, Transportation and Aviation delivered strong results. Strategic investments in high-growth segments have strengthened the co's Energy portfolio and position that business to return to growth in the second half of this year. We ended the quarter with a record high backlog of $177 billion... Reserve coverage decreased slightly in the quarter, driven by improving portfolio quality. Since the first quarter of 2010, we've improved our GECC Tier 1 common ratio to 9.8% from 7.8% and reduced GECC leverage to 4.5:1 from 5.5:1." GE raised its quarterly dividend by $0.01 to $0.15 effective in the third quarter of 2011. This is the third dividend increase declared in the last 12 months and reflects GE leadership's confidence in the company's business performance.

6:23AM Nokia and Microsoft sign definitive agreement ahead of schedule (NOK) 8.59 : Nokia (NOK) and Microsoft (MSFT) announce the signing of a definitive agreement on a partnership that will result in a new global mobile ecosystem, utilizing the very complementary assets of both companies. Completed ahead of schedule, the definitive agreement is consistent with the joint announcement made on February 11. In addition to agreeing to the terms of their partnership, including joint contributions to the development of the new ecosystem, Nokia and Microsoft also announced significant progress on the development of the first Nokia products incorporating Windows Phone. Nokia has also started porting key applications and services to operate on Windows Phone and joint outreach has begun to third party application developers. Nokia will deliver mapping, navigation, and certain location-based services to the Windows Phone ecosystem. Nokia will build innovation on top of the Windows Phone platform in areas such as imaging, while contributing expertise on hardware design and language support, and helping to drive the development of the Windows Phone platform. Microsoft will provide Bing search services across the Nokia device portfolio as well as contributing strength in productivity, advertising, gaming, social media and a variety of other services. Joint developer outreach and application sourcing, Microsoft will receive a running royalty from Nokia for the Windows Phone platform, starting when the first Nokia products incorporating Windows Phone ship. The royalty payments are competitive and reflect the large volumes that Nokia expects to ship, as well as a variety of other considerations related to engineering work to which both companies are committed. Microsoft delivering the Windows Phone platform to Nokia will enable Nokia to significantly reduce operating expenses.

# SanDisk (SNDK) announced a 64-gigabit, 2-bits-per-cell based monolithic chip made on 19-nanometer technology, which co states is "the most advanced memory process technology node in the world."

# Intel (INTC) and Micron Technology (MU) expanded their NAND Flash memory joint venture operations with the official opening of IM Flash Singapore. The $3 bln facility is expected to employ about 1,200 and is currently ramping production of the cos' industry-leading 25 nanometer NAND Flash memory.

NXP Semiconductors (NXPI) announced an addition to its broad GreenChip SSL family of products, the GreenChip SSL4101T controller IC, which offers new levels of professional-grade performance for Solid State LED lighting power supplies.

09:48 am AAPL Guides Q3 Below Consensus (AAPL)

Apple (AAPL $352.34 +9.93) reported second quarter earnings of $6.40 per share, $1.03 better than the Thomson Reuters consensus of $5.37.

Revenues rose 82.7% year-over-year to $24.67 billion versus the $23.38 billion consensus.

For the third quarter, the company expects to see earnings of approx. $5.03 versus the $5.25 Thomson Reuters consensus. On the top line, the company expects to see revenue of approx. $23 billion versus the $23.83 billion Thomson Reuters consensus.

The company reported second quarter gross margins of 41.4% well above expectations and the company's guidance.

The company reported 3.76 million Macs sold in second quarter, better than expectations, 18.65 million iPhones sold, better than expectations, and 4.69 iPads sold, better than expectations.

The company said, "With quarterly revenue growth of 83 percent and profit growth of 95 percent, we're firing on all cylinders," said Steve Jobs, Apple's CEO. "We will continue to innovate on all fronts throughout the remainder of the year." (Briefing.com note: AAPL typically provides conservative guidance on its earnings releases)

09:41 am GE Tops Q1 Expectations; Raises Dividend (GE)

General Electric (GE $20.33 -0.07) reported first quarter GAAP earnings from continuing operations of $0.31 per share, $0.03 better than the Thomson Reuters consensus of $0.28.

Revenues rose 6.2% year-over-year to $38.45 billion versus the $34.64 billion consensus.

GE Capital Services' (GECS) revs increased 3% from last year to $13.2 billion. Industrial sales of $22.1 bln decreased 6% versus 2010. Segment profit increased 36% compared with the first quarter of 2010, as increases of more than 200% at GE Capital, 37% at Transportation, 7% at Healthcare and 5% at Aviation more than offset a 7% earnings decline at Energy Infrastructure.

The company said, "GE Healthcare, Transportation and Aviation delivered strong results. Strategic investments in high-growth segments have strengthened the co's Energy portfolio and position that business to return to growth in the second half of this year. We ended the quarter with a record high backlog of $177 billion... Reserve coverage decreased slightly in the quarter, driven by improving portfolio quality. Since the first quarter of 2010, we've improved our GECC Tier 1 common ratio to 9.8% from 7.8% and reduced GECC leverage to 4.5:1 from 5.5:1."

GE raised its quarterly dividend by $0.01 to $0.15 effective in the third quarter of 2011. This is the third dividend increase declared in the last 12 months and reflects GE leadership's confidence in the company's business performance.

[ReturntoSender]

From Briefing.com: 5:00 pm : The stock market extended its near three-year high this morning, but a lack of direction in afternoon action ultimately led to the broad market's first loss in five sessions.

News that U.S. forces killed terrorist leader Osama bin Laden dominated headlines all day, but the stock market lacked a discernible reaction to the story. And since many overseas markets were closed for holiday observance, traders had few cues to follow.

The broad market was initially helped by modest buying this morning. Both the S&P 500 and the Dow came closer to fresh three-year highs, but the Nasdaq actually hit its highest level in a decade. A lack of leadership and a 1.3% drop among energy stocks eventually led the market lower, though.

Energy's decline came in the face of a rebound by oil prices, which had been down to about $111 per barrel overnight, but finished with a 0.4% loss near $113.50 per barrel. Oil's bounce was helped by another decline in the dollar, which set a new two-year low against a collection of competing currencies. The greenback cut its loss to finish the trading day unchanged, though.

Health care stocks made up the only sector to sustain any kind of strong gain. The sector settled 1.0% for the better amid support from biotech plays, which were propped up by news that Cephalon (CEPH 80.11, +3.09) will be acquired by Teva Pharmaceuticals (TEVA 47.27, +1.54) for $81.50 per share, which is a premium of almost 6% over its closing price from last week. Elsewhere in the health care sector, Humana (HUM 76.48, +0.36) reported in-line earnings and an upside forecast.

Data had little impact on trade, but featured the April ISM Manufacturing Index. It came in at 60.4, which is greater than the 59.7 that had been expected, on average, among economists polled by Briefing.com. Construction spending during March increased by 1.4%, which is surprisingly strong, given that the consensus among economists surveyed on behalf of Briefing.com had called for no change.

Advancing Sectors: Utilities (+1.0%), Consumer Discretionary (+0.3%), Consumer Staples (+0.2%), Utilities (+0.1%)
Declining Sectors: Industrials (-0.1%), Telecom (-0.2%), Financials (-0.4%), Tech (-0.4%), Materials (-0.6%), Energy (-1.3%)DJ30 -3.18 NASDAQ -9.46 NQ100 +0.00% R2K -1.2% SP400 -0.6% SP500 -2.39 NASDAQ Adv/Vol/Dec 822/2.07 bln/1808 NYSE Adv/Vol/Dec 1242/934 mln/1747

4:36PM Advanced Energy beats by $0.08, reports revs in-line; guides Q2 EPS in-line, revs above consensus (AEIS) 13.51 -0.64 : Reports Q1 (Mar) earnings of $0.43 per share, $0.08 better than the Thomson Reuters consensus of $0.35; revenues rose 97.6% year/year to $137.7 mln vs the $137.5 mln consensus. Co issues guidance for Q2, sees EPS of $0.36-0.44 vs. $0.38 Thomson Reuters consensus; sees Q2 revs of $148-160 mln vs. $144.17 mln Thomson Reuters consensus. Total rev of $137.7 mln was split between Thin Films at $100.1 million and $37.6 million in the Renewables Business Unit. Thin films sales were primarily driven by strength in the semiconductor market. Renewables sales were impacted by the North American market first quarter seasonality, but delivered record bookings of $65.5 million for the quarter. Bookings for the first quarter were $184.0 million, compared to $83.2 million in the first quarter of 2010. "We are very excited about our announcement today that our inverters have been chosen for two major Utility projects: a 150MW project with Zachry in Arizona and a 35MW project in California with Cupertino Electric, demonstrating the differentiated reliability and efficiency of our inverters and the subsequent impact on the levelized cost of energy. We are seeing a growing number of larger, Utility scale projects as the solar market continues its expansion."

4:08PM Rudolph Tech reports 1Q11 results, misses on revs (RTEC) 11.12 -0.19 : Reports Q1 (Mar) earnings of $0.26 per share, excluding items, may not compare to the Thomson Reuters consensus of $0.20; revenues rose 24.6% year/year to $50.6 mln vs the $52.3 mln consensus. First quarter 2011 gross margin was 54%, up from 50% in the first quarter 2010. Higher margin software sales in the quarter were offset by an increase in inventory reserves related to older product lines.

4:06PM Power Integrations beats by $0.01, beats on revs; guides Q2 revs in-line (POWI) : Reports Q1 (Mar) earnings of $0.40 per share, excluding non-recurring items, $0.01 better than the Thomson Reuters consensus of $0.39; revenues rose 7.4% year/year to $76.8 mln vs the $74.2 mln consensus. Co issues in-line guidance for Q2, sees Q2 revs of $76-82 mln vs. $78.72 mln Thomson Reuters consensus.

4:04PM Intl Rectifier beats by $0.08, beats on revs; guides Q4 revs above consensus (IRF) 34.29 -0.27 : Reports Q3 (Mar) earnings of $0.55 per share, excluding non-recurring items, $0.08 better than the Thomson Reuters consensus of $0.47; revenues rose 22.7% year/year to $296.7 mln vs the $291.3 mln consensus. Co issues upside guidance for Q4, sees Q4 revs of $310-320 mln vs. $299.47 mln Thomson Reuters consensus, with gross margin of ~38%. "We continue to see strength in appliance, industrial and automotive markets in addition to seasonal strength in the computing and consumer markets. "Looking further out, IR has achieved significant new design wins which will contribute to IR's growth above the industry, both in the short- and long-term. We have good visibility and strong growth momentum for the remainder of calendar 2011 and our long-term target operating model remains unchanged."

Following on the success of the Facebook for BlackBerry smartphones app, Research In Motion (RIMM) announced Facebook for BlackBerry PlayBook.

7:10AM JinkoSolar Holding beats by $0.57, beats on revs; guides Q2 revs in-line; reaffirms FY11 revs guidance, abvoe consensus (JKS) 27.15 : Reports Q1 (Mar) earnings of $2.10 per share, $0.57 better than the Thomson Reuters consensus of $1.53, rev +290% YoY to $326.7 mln vs. the $289.8 mln consensus. Co issues in-line guidance for Q2, sees Q2 revs of $330-350 mln vs. $346.29 mln Thomson Reuters consensus, with shipments of 190-200 MW. Co reaffirms guidance for FY11, sees FY11 revs of $1.40-1.50 bln vs. $1.39 bln Thomson Reuters consensus, with shipments of 950-1l MW. "During the quarter, we exceeded our guidance in terms of revenue and beat expectations for our solar module shipments while continuing to make timely deliveries despite the uncertainty surrounding Italy's solar policies. This helped us maintain strong relationships with our customers in Italy as well as in Germany, strengthening our position as a leading solar module provider in those countries. We also continued to execute on our strategies of growing our market share, diversifying our customer base and expanding geographically. During the quarter, we achieved a historic high of 166.6 MW of solar module shipments, a sequential increase of approximately 50%. Although we expect the average selling price for solar modules to continue to decline in the second quarter, we are confident that we can gain additional market share from our competitors due to our vertical integration, leading cost structure and strengthened brand recognition. For the second quarter, we expect to see an increase of at least 14% in solar module shipments. We continued to diversify our customer base across a range of markets, including the United States and France, while significantly reducing our exposure to Italy from 50% of total module shipments in the fourth quarter of 2010 to 30.7% in the first quarter of 2011."

Medigus and TowerJazz (TSEM) announced successful sampling of the second generation of TowerJazz's CMOS imager that serves in Medigus' line of disposable miniature cameras.

AMD (AMD) introduced the AMD Radeon E6760 embedded discrete graphics processor. Available now, the AMD Radeon E6760 GPU is the first of its kind to offer embedded system designers the combination of OpenCL support along with support for six independent displays.

NextOp Software announced that NVIDIA (NVDA) has signed a multi-license agreement to expand its usage of NextOp's BugScope assertion synthesis product.

07:39 am JA Solar downgraded to Hold at Needham: . Needham downgrades JASO to Hold from Buy saying while they believe visibility should improve going into June, they are concerned that solar cells will continue to see substantial pricing pressure and lower margins throughtout 2011. Longer-term, they believe JASO is well positioned with its high-efficiency offering, but suspect the company will not see the benefits until 2012 and beyond. With the downside risk to estimates, they expect near-term pressure on JASO share price and suggest investors wait on the sideline until visibility improves.

09:43 am JKS Guides Q2 Revs Above Consensus (JKS)

JinkoSolar (JKS $27.31 +0.16) reported first quarter earnings of $2.10 per share, $0.57 better than the Thomson Reuters consensus of $1.53.

Revenues rose 290% year-over-year $326.7 million versus the $289.8 million consensus.

For the second quarter, the company see revenues at $330 million to $350 million versus the $346.29 million Thomson Reuters consensus, with shipments of 190-200 MW.

The company reaffirms fiscal year 2011 earnings guidance of $1.40 to $1.50 billion versus the $1.39 billion Thomson Reuters consensus, with shipments of 950-1l MW.

"During the quarter, we exceeded our guidance in terms of revenue and beat expectations for our solar module shipments while continuing to make timely deliveries despite the uncertainty surrounding Italy's solar policies. This helped us maintain strong relationships with our customers in Italy as well as in Germany, strengthening our position as a leading solar module provider in those countries. We also continued to execute on our strategies of growing our market share, diversifying our customer base and expanding geographically. During the quarter, we achieved a historic high of 166.6 MW of solar module shipments, a sequential increase of approximately 50%. Although we expect the average selling price for solar modules to continue to decline in the second quarter, we are confident that we can gain additional market share from our competitors due to our vertical integration, leading cost structure and strengthened brand recognition. For the second quarter, we expect to see an increase of at least 14% in solar module shipments. We continued to diversify our customer base across a range of markets, including the United States and France, while significantly reducing our exposure to Italy from 50% of total module shipments in the fourth quarter of 2010 to 30.7% in the first quarter of 2011."

[ReturntoSender]

From Briefing.com: 4:30 pm : Stocks settled with solid gains after spending the first part of the session mired near the neutral line. Natural resource plays provided leadership as commodities kicked higher.

An initially positive tone ahead of the open this morning was offset as Europe's major bourses moved lower amid concerns that Greece may need more bailout funding. The country's flagging finances earned its debt another downgrade by analysts at S&P. Greece's debt is now rated B/C with a Negative outlook.

Although stocks were flat for the first couple of hours of the session, buyers flocked back into commodities following their dive last week. Sharp selling last week caused the CRB Commodity Index to drop 9%, but it bounced to a 2.0% gain today. Oil prices led the way with a 5.4% advance to $102.55 per barrel.

Oil's rebound underpinned interest in the energy sector, which steadily outperformed for virtually the entire session. Energy stocks closed with a 1.6% gain, collectively. An appetite for natural resource plays helped basic materials stocks win favor. In turn, the materials sector staged a 1.5% gain.

The broader market was slow to follow the leadership of energy or materials stocks. In actuality, it didn't move higher until the dollar turned downward to trade with a loss. The dollar had been up with a solid gain in morning trade as participants pressured the euro in response to the Greece headlines, but the greenback gradually gave back its gain. Pressure caused the dollar to extend its slide so that it ended the session with a 0.4% loss against a basket of major foreign currencies.

Broad market strength failed to lift financials out of the red. The sector's 0.2% loss is mostly because bank stocks fell out of favor, giving the KBW Bank Index a 0.4% loss. No other sector settled in the red.

The absence of bellwethers and blue chips from the latest round of earnings announcements made for a relatively slow news day. Data were also lacking. The case is expected to be the same tomorrow.

Without any major headlines to trade, participation suffered. In turn, fewer than 800 million shares traded hands on the NYSE. That anemic number comes after a reverse split of Citigroup (C 44.16, -1.04), formerly the most frequently traded stocks by share volume, cut into the total.

Advancing Sectors: Energy (+1.6%), Materials (+1.5%), Health Care (+0.6%), Industrials (+0.4%), Consumer Staples (+0.4%), Telecom (+0.3%), Tech (+0.2%), Consumer Discretionary (+0.2%), Utilities (+0.2%)
Declining Sectors: Financial (-0.2%)DJ30 +45.94 NASDAQ +15.69 NQ100 0.3% R2K 1.1% SP400 0.9% SP500 +6.09 NASDAQ Adv/Vol/Dec 1710/1.64 bln/895 NYSE Adv/Vol/Dec 2099/777 mln/906

4:05PM Integrated Device beats by $0.02, beats on revs (IDTI) 8.22 +0.16 : Reports Q4 (Mar) earnings of $0.13 per share, $0.02 better than the Thomson Reuters consensus of $0.11; revenues rose 6.8% year/year to $147.3 mln vs the $145 mln consensus. "As we enter fiscal year 2012, we believe that continued growth in our new and core businesses, driven by cloud computing and the ongoing deployment of 4G/LTE wireless infrastructure, will drive continuing top line improvement."

4:04PM Vishay to offer $150 mln of convertible senior debentures due in 2041 (VSH) 16.24 -0.58 :

4:03PM Diodes reports EPS in-line, beats on revs; guides Q2 revs above consensus (DIOD) 33.67 +0.78 : Reports Q1 (Mar) earnings of $0.47 per share, in-line with the Thomson Reuters consensus of $0.47; revenues rose 18.1% year/year to $161.6 mln vs the $159.8 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $170-178 mln vs. $167.97 mln Thomson Reuters consensus. Co expects gross margin to be comparable to the first quarter. Operating expenses are expected to be down slightly from the first quarter levels on a percent of revenue basis. They expect income tax rate to range between 17 and 23%. Shares used to calculate GAAP EPS for the second quarter are anticipated to be approximately 47.5 million.

9:07AM NVIDIA to acquire Icera for $367 million in cash (NVDA) 19.32 : The acquisition, for $367 million in cash, has been approved by both companies' boards of directors and is expected to be completed, subject to customary closing conditions, in approximately 30 days. The transaction is expected to be slightly dilutive on an operating basis through the first half of calendar 2012, and accretive on an operating basis in the second half of calendar 2012. This expectation does not take into account significant revenue synergies that the companies anticipate.

HP (HPQ) expanded its notebook PC line with products and services. Part of HP's consumer notebooks launch unveiled on May 9, 2011, the redesigned HP Mini 210 features vibrant new colors and HP Beats Audio, creating the ideal mobile companion. The company also launched HP DataPass, a pre-paid 3G mobile broadband service available in the United States across HP's business notebook lineup, and expanded HP Beats Audio technology to a business notebook and consumer Mini PC. HP furthered its "FORGE" business notebook design framework with the HP ProBook m-series and HP EliteBook p-series models and built upon its "MUSE" consumer notebook design philosophy with the HP Mini 210, HP Pavilion dv4 and HP ENVY 14.

1:51AM Broadcom intends to acquire SC Square for ~$41.9 mln; expects transaction to be dillutive to earnings for the remainder of 2011 by ~$0.01 (BRCM) 34.14 : Co announces it has signed a definitive agreement to acquire SC Square based in Israel. In connection with the acquisition, co expects to pay ~$41.9 mln to acquire all of the outstanding shares of capital stock and other equity rights of SC Square. The purchase price will be paid in cash, with a portion of the consideration placed into escrow pursuant to the terms of the acquisition agreement. Co expects the acquisition of SC Square to be dilutive to earnings for the remainder of 2011 by ~$0.01.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 20-May-11The stock market ended the week with a loss after being unable to sustain a midweek recovery effort. Tech stocks pushed the market lower after Hewlett-Packard disappointed investors and concerns over European debt continues to hurt investor confidence. The decline this week marked the S&P 500's third consecutive loss.

Four of the 10 sectors advanced, led by energy (+0.9%) and utilities (+0.6%). The heavyweight tech sector underperformed with a loss of 1.5%.

In corporate news, Hewlett-Packard (HPQ -11.0%), Home Depot (HD 0.1%) and Wal-Mart (WMT-0.8%) all underwhelmed with their earnings reports. That's not to say they missed expectations altogether. In fact, they all topped earnings estimates for their reported quarter, but some element of their guidance -- either sales or earnings or both -- failed to lift investors' spirits.

Hewlett-Packard's shares came under pressure and played the primary role in the underperformance of the tech sector this week. Its guidance for the fiscal third quarter and full year was below current consensus estimates and was blamed in part on continued softness in sales of consumer PCs. The Dow component was forced to move up its earnings report date due to a leaked memo from the CEO who reportedly told staffers the company faces another tough quarter and that current headcount plans are unaffordable.

Dell (DELL -2.2% ) limited its losses this week despite the HP news after posting better-than-expected earnings and guidance.

Analog Devices (ADI 2.5%), Deere & Co. (DE -3.4%), Abercrombie & Fitch (ANF -0.1%), and Target (TGT -3.6%) all reported quarterly earnings that exceeded consensus estimates.

Retailers saw some selling pressure. Staples (-19.2%) had the largest percent decline in the S&P 500 followed by Gap (GAP -16.6%) after the retailers each reported disappointing earnings/guidance.

In M&A news, Barnes & Noble (BKS 31.1%) received a $17 per share buyout offer from Liberty Media.

Shares of social networking company LinkedIn (LNKD 109%) soared 109% in its public debut. Excluding ADRs, the one-day return marked the second highest IPO in the last 10 years ? Nymex Holdings rallied 125% its first day in 2006--but ranks only 157th in the last 30 years-- VA Linux tops the list with a gain of 698% in 1999. Excluding the tech bubble years, LinkedIn's one-day return ranks 18th.

In economic news, initial claims for the week ended May 14 were better than expected, falling 29,000 to 409,000 (Briefing.com consensus 420,000). Continuing claims for the week ended May 7 fell by 81,000 to 3.711 mln (Briefing.com consensus 3.713 mln).

The claims level is still on the wrong side of 400,000, yet the rapid drop from the 478,000 claims reported on April 30 suggests the poor seasonal adjustment factors in April are working their way out of the system. We expect claims to move back toward the 380,000 level in the next few weeks; however, it is possible the effects of the flooding could forestall that move.

The yield of the 10 year Treasury note fell to a fresh 2011, but bounced higher a bit following the release of the FOMC meeting minutes to eventually settle the week largely unchanged at 3.15%. The recent moves in Treasuries have been primarily driven by inflation expectations.

 
 Index	  Started Week	 Ended Week  Change  % Change	YTD % 
 DJIA        12595.70	 12512.00   -83.70     -0.7	8.1 
 Nasdaq	     2828.47	  2803.32   -25.15     -0.9	5.7 
 S&P 500	     1337.77	  1333.27    -4.50     -0.3	6.0 
 Russell 2000  835.67	   829.06    -6.61     -0.8	5.8

11:46AM LDK Solar reaffirms Q1, FY11 guidance (LDK) 7.41 -0.80 : Co reaffirms Q1, FY11 guidance; sees Q1 rev guidance of $745-755 mln vs $769.45 mln Thomson Reuters consensus; wafer shipments of 625 to 635 megawatts, module shipments of 109 MW to 114 MW, in-house polysilicon production of 2,450 MT to 2,470 MT, in-house cell production between 44 MW and 46 MW, and gross margin between 30.0% and 31.0%. Sees FY11 rev guidance $3.5-3.7 bln vs. the $3.18 bln consensus, gross margins between 24% and 29%, wafer shipments to be between 2.7 and 2.9 GW, module shipments to be between 800 and 900 MW, polysilicon production to be between 10,000 and 11,000 MT, and in-house cell production to be between 500 and 600 MW. Co will report June 7, in the afternoon.

07:11 am JinkoSolar Holding target lowered to $34.50 at Collins Stewart: . Collins Stewart lowers their JKS tgt to $34.50 from $38 recent checks indicate that module prices are eroding faster than what they had built into their previous JKS forecast. Weak demand in Italy has persisted in recent weeks, as an expected demand recovery following the announcement of the revised policy has been more muted than expected. While German demand is said to have picked up, they believe the industry is still dealing with the inventory that built up during the March-April lull and prices are now falling as a result. FY11/12 ests have been lowered, still above consensus while their Q2 EPS est has fallen to $1.23 from $1.60 (cons: $1.77), also due in part to recent convertible notes issuance.

07:10 am LDK Solar downgraded to Hold at Kaufman Bros; tgt lowered to $8: . Kaufman Bros downgrades LDK to Hold from Buy and lowers their tgt to $8 from $24 after LDK issued a press release announcing that it has decided to pull its second high-yield debt offering of the year due to poor market conditions. Firm says while the deal could probably be done, the interest rates that were required were likely untenable for the long-term prospects of the company. Firm says this highlights a risk for the company as it continues to maintain a highly leveraged balance sheet.

[ReturntoSender]

From Briefing.com: 4:30 pm : Buying tapered off into the close, but stocks still scored strong gains ahead of the monthly payrolls report on Friday. Participants were particularly fond of cyclical plays.

A better-than-expected ADP Employment Report bolstered a bullish bias in today's trade. The report suggested that private payrolls increased in June by 157,000, which is greater than the 60,000 increase that had been expected. That portends a positive reading for the official nonfarm payrolls report on Friday.

Weekly initial jobless claims received less attention. Although they continue to trend at elevated levels above 400,000, the total initial claims count for the week ended July 2 eased to 418,000 from 432,000 in the prior week. The consensus among economists polled by Briefing.com had called for an initial claims count of 425,000.

Strength was relatively broad, but buyers were fondest of financials. The sector offered leadership for virtually the entire session and scored a 1.6% gain for the day. Banks were the primary backers of the sector's bounce.

Materials stocks, energy stocks, and tech stocks complemented the financial sector's leadership. Retailers also staged strong gains. Macy's (M 30.46, +1.59) was a top performer among retailers after it reported a near 7% increase in same-store sales for June. Gap (GPS 19.28, +0.95) staged a strong gain of its own after it posted a surprise 1% increase in same-store sales.

Such strong buying has the stock market up about 7% in just two weeks and sitting at its best level since mid-May.

Defensive-oriented stocks failed to participate in the latest leg of gains. In fact, telecom was mired at the neutral line while health care actually logged a loss.

The dollar dipped, too. It had initially moved higher this morning as traders looked to extend its recent advance. However, that move failed to find traction, so the greenback ended the day with a loss of about 0.2% against competing currencies. Relative to the euro, the dollar declined 0.2% after the European Central Bank decided to raise its target lending rate by 25 basis points to 1.50%. The greenback gained 0.2% against the sterling pound, though. Weakness in the pound came after the Bank of England announced that it would leave its target rate unchanged at 0.50% and keep in place its 200 billion pound asset purchase plan.

Advancing Sectors: Financials +1.6%, Materials +1.5%, Tech +1.4%, Energy +1.4%, Consumer Discretionary +1.3%, Industrials +1.0%, Consumer Staples +0.6%, Utilities +0.4%
Unchanged: Telecom
Declining Sectors: Health Care -0.1%DJ30 +93.47 NASDAQ +38.64 NQ100 +1.4% R2K +1.5% SP400 +1.0% SP500 +14.00 NASDAQ Adv/Vol/Dec 2007/1.90 bln/608 NYSE Adv/Vol/Dec 2372/843 mln/643

4:32PM Multi-Fineline drops 11.1% to $19.31 after lowering Q3 revs guidance (see 16:31 comment) (MFLX) 21.73 -0.03 :

4:31PM Multi-Fineline sees Q3 revs of ~$191 mln vs previous guidance of $200-220 mln and consensus of $209.95 mln (MFLX) 21.73 -0.03 : Co updated its business outlook for the third quarter of fiscal 2011 ended June 30, 2011. The Company expects net sales in the third quarter to be approximately $191 million vs $209.95 mln consensus and gross margin to be approximately 12 percent. This compares to guidance issued on May 5, 2011 that projected third quarter net sales of $200 to $220 million and gross margin of 12 to 13 percent. Co says "Primarily due to a reduction in demand from one key customer in the latter part of June, net sales for the third quarter were lower than expected. Although forecasting in the near term is difficult, we believe we have significant market share with our major customers and we expect net sales to increase on a sequential quarter basis in the fourth quarter due to higher seasonal demand."

4:15PM SemiLEDs is halted and will resume trading at 16:30 (LEDS) : See 16:05 earnings comment.

4:10PM Ixia to resume trading at 16:35 ET (XXIA) 13.01 +0.01 :

4:08PM Ixia lowers Q2 guidance (XXIA) 13.01 +0.01 : Co issues downside guidance for Q2 (Jun), sees EPS of $0.07-0.08 down from $0.14-0.17 previously vs. $0.16 Capital IQ Consensus Estimate; sees Q2 (Jun) revs of $67-69 mln down from $78-82 mln previously vs. $80.16 mln Capital IQ Consensus Estimate. Co says "We are disappointed with our revenue performance this quarter, which was impacted by several factors, including delays and reductions in spending by certain large network equipment makers, a large wireless order received too late in the quarter to ship and soft sales in the Asia Pacific region, while we expected revenue from Japan to decline sequentially from the record first quarter, we experienced unexpected weakness in other parts of Asia Pacific, such as China and India. It is important to note that second quarter sales to our largest customer, Cisco, were strong at approximately $10 million. Additionally, we did see some encouraging trends in the quarter, including an overall book-to-bill ratio in excess of one, and we secured our highest booking quarter to date for our IxCatapult wireless solutions, some of which will be recognized as revenue in future quarters. These indicators give us confidence that we will return to sequential growth in the third quarter although we remain cautious about the overall spending environment..."

4:05PM SemiLEDs misses by $0.12, misses on revs; guides Q4 EPS, revs below consensus (LEDS) 6.20 +0.12 : Reports Q3 (May) GAAP loss of $0.19 per share, $0.12 worse than the Capital IQ Consensus Estimate of ($0.07); revenues fell 43.4% year/year to $5.6 mln vs the $6.3 mln consensus. GAAP gross margin for the third quarter of fiscal 2011 was 9%, compared with 51% in the third quarter of fiscal 2010. Operating margin for the third quarter of fiscal 2011 was negative 70%, compared with 36% in the third quarter of fiscal 2010. Margins were negatively impacted by a charge of $1.1 million for the write-downs of inventory. Co issues downside guidance for Q4, sees GAAP EPS of ($0.25)-(0.23) vs. ($0.03) Capital IQ Consensus Estimate; sees Q4 revs of $5.5-6.5 mln vs. $9.03 mln Capital IQ Consensus Estimate; with a negative GAAP gross margin.

Rudolph Technologies (RTEC) announced the release of Genesis Enterprise version 7.0. Genesis is an offline yield analysis and data mining software with parametric yield management tools designed to maximize factory efficiency and identify causes of yield loss.

4:03AM Tower Semicon sells its holdings in HHSL for $32 mln (TSEM) 1.15 : Co announces it has agreed to sell its holdings in Hua Hong Semiconductor in an HHSL buyback transaction, for $32 mln in cash. Co owns 10% of HHSL'S shares, valued per GAAP in the amount of $17 mln on co's balance sheet. Co expects to record a gross gain in the third quarter of $15 mln as a direct result of this sale, and ~$8 mln of net gain.

[ReturntoSender]

Chart of the Day - COTD - Stock Market Corrections of 15% or Greater:

http://www.chartoftheday.com/20110812.htm?T

The stock market remains highly volatile and currently trades significantly lower than where it did three short weeks ago -- investors are concerned. For some perspective on the current correction, today's chart illustrates all major stock market corrections (15% loss or greater) of the last 111 years. Each dot represents a major correction as measured by the Dow. For example, the bear market that began in 1973 lasted 481 trading days and ended after the Dow declined 45%. There are a few items of interest... Since 1900, the Dow has undergone a major correction 26 times or one major correction every 4.3 years. Second, most major corrections since 1900 (62%) have resulted in a drop of less than 40% while lasting less than 400 trading days. Since 1950, the percentage of major market corrections that were less than 40% and 400 trading days increased to 78%. As it stands right now, the current stock market correction (April 2011 peak to most recent low) would measure below average in both magnitude and duration.

[ReturntoSender]

Long Term Market Breadth Indicators for the market. Crossing over the green horizontal lines are indicative of oversold conditions that could lead to a rally. Crossing over the red lines is indicative of overbought conditions that could lead to a sell off. In either case the market might recover from these conditions only to head further into oversold or overbought territory. It is therefore important to look for positive or negative divergences. Positive divergences were seen at the last major market bottom in October 2002 and in March of 2009 where most market breath indicators had improved readings than those seen at the previous bottoms even though the market was actually much lower.

[ReturntoSender]

Monday Morning Outlook: Two Key Trendlines to Watch on the S&P 500 Index
Hedge funds could be starting to unwind their bearish bets on stocks
by Todd Salamone 8/27/2011 11:56 AM

http://www.schaeffersresearch.com/commentary/observations.aspx?ID=107753&trackback=recapezine

Stocks ended higher for the first week in five, giving investors a brief respite from the long, grueling slog that has been the month of August. Fed Chairman Ben Bernanke's Friday speech helped boost the bulls, even though he neglected to unveil any revolutionary new stimulus measures. Instead, Bernanke promised that the Federal Open Market Committee (FOMC) would take a long, hard look at its tool kit during September's two-day meeting -- which means we can all look forward to another solid month, at least, of "will he or won't he?" speculation about QE3. In the meantime, the major market indexes are still on shaky ground, and Wall Street is staring down the barrel of three straight days' worth of jobs data.

In this uncertain environment, Todd Salamone is still keeping a watchful eye on the market's deep-pocketed players. Recent options activity suggests that hedge funds may be regaining their appetite for equities, just as gloomy headlines are stacking up about these big-money investors. Meanwhile, Rocky White takes a retrospective look to find out whether the market's miserable August is a harbinger of more pain to come. Finally, we wrap up with a preview of the major economic events for the week ahead, as well as a few sectors of note.

Notes from the Trading Desk: Has Hedge-Fund Pessimism Already Peaked?
By Todd Salamone, Senior VP of Research

"Hedge-Fund Bets Against S&P 500 at Highest Since 2008"
The Wall Street Journal, August 25, 2011

"Icahn Gained on $2 Billion Bet Against S&P"
Bloomberg, August 22, 2011

"Hedge Funds Most Bearish Since July 2009 After Global Equities Retreat 15%"
Bloomberg, August 19, 2011

During the past few weeks, through our analysis of option activity on major exchange-traded funds (ETFs) -- the SPDR S&P 500 Trust (SPY), iShares Russell 2000 Index Fund (IWM) and PowerShares QQQ Trust (QQQ) -- we suggested that hedge funds were turning sour on the market, and went so far as to speculate that they were actively shorting the market. As you can see by the headlines above, various news stories last week confirmed our words of warning.

Hedge fund managers can change course in the blink of an eye, with $2 trillion in assets at their disposal. Bears, take note: This group, which has disappointed investors lately with lackluster returns, has unusually low equity exposure, even as the major market indexes have shown signs of stabilization during the past couple of weeks. Sure, hedge funds could use this week's rally to add to their short positions, and this would likely pressure equities. But, at this juncture, might they be thinking of covering their bearish bets? After all, equities rallied on the heels of Fed Chairman Ben Bernanke's keynote speech at Jackson Hole, Wyo., where central bankers from around the world gathered this past week. For those of you who don't remember, this annual event sparked the year-end rally in 2010, and a potential replay of last year is likely top-of-mind for market-moving players.

At the very least, it appears the relentless shorting activity has lightened up, as the combined 20-day buy-to-open put/call ratio on the SPY, IWM, and QQQ has finally turned higher. Remember, an uptick in this ratio is what bulls would like to see as evidence of a potential bottom forming. Since calls are used to hedge short equity exposure, a rising put/call ratio indicates that major players, such as hedge funds, are turning less negative, which means short-covering activity and/or cash moving in from the sidelines could spark a rally. And the timing of this ratio turning higher is certainly intriguing, as it comes at a time when the general investing public is finally made aware that hedge funds have turned negative on the market. In other words, just as retail-level traders are catching on, there is new evidence that the pessimism that has driven stocks lower is decreasing.



If a post-Jackson Hole rally occurs, like it did last year, it would happen in the context of a weaker technical backdrop. For example, ahead of the 2010 meeting, the S&P 500 Index (SPX - 1,176.80) was sitting just above its 80-week moving average, whereas it's trading below this trendline at present. After Friday's rally, bulls would prefer that the SPX immediately trade back above this moving average, which is currently at 1,209.40.

That said, we find it interesting that in both 2010 and 2011, equities had tested a long-term moving average of historical significance just ahead of the central bank summit. This year, it was the 40-month moving average, which was tested earlier in August. As you can see on the chart below, this trendline has carried major significance, having previously caught the 1987 crash low, and then acting as support in 1990 and 1994. Moreover, this trendline acted as resistance right ahead of the May 2010 "flash crash." If the SPX immediately heads lower from here, this is a moving average that we will continue to focus on in the weeks ahead.



The 1,133 area could also prove psychologically important through the end of the month, as it marks the 10-year breakeven on the SPX as of the close of trading this Wednesday, Aug. 31. For what it's worth, the 10-year breakeven based on the September 2001 month-end close is 1,040, just above the SPX's July 2010 low.

After Friday's advance, there is still work to be done to repair the technical backdrop, as it has been a volatile, choppy ride since the Aug. 9 lows. Encouraging for the bulls is that the CBOE Market Volatility Index (VIX - 35.59) remains well below 50, major equity indexes remain above historically significant long-term moving averages, and there are signs that heavy pessimism among hedge fund managers is dissipating.

In this environment, we recommend you dip your toes into highly shorted equities that are trading at long-term support -- such as consumer discretionary stocks that have pulled back recently, but are still in the black for 2011. If a bottom is in place, these equities will likely outperform. However, continue to maintain exposure to gold and bonds, and avoid the large-cap financials.

Indicator of the Week: Looking Past August to September Seasonality
By Rocky White, Senior Quantitative Analyst

Foreword: What a tough August it has been. The S&P 500 Index (SPX) is down 8.9% with a few days remaining, putting us on pace for the third-worst August we've seen in the last 30 years. Only 1998 and 1990 were worse, with the index falling 14.6% and 9.4%, respectively.

Since we're in a hurry to get this month over with, I'm going to start talking about September. The two tables below show the SPX's monthly returns over the last five- and 10-year time frames. September has been positive four of the last five years, averaging a 1.86% return. That's a pretty decent performance, making September the fourth-best month over that time frame. Over the last 10 years, though, September averages a loss of about 1% --ranking it ninth out of the 12 calendar months.



Awful Augusts: There is a silver lining to the very painful August we've endured. Historically speaking, when the SPX tanks in August, the last four months of the year tend to bounce back in a big way. Below are the 10 worst August returns over the last 30 years, and you can see how the market performed during the rest of the year. Only once did the market end lower, in 1981.

The average gain for those 10 years is 8.5% over the last four months of the year (that's about 28% annualized). So, in those years listed below, traders who sold their equity holdings in a panic during the late-summer drop missed out on significant gains for the rest of the year.



This Week's Key Events: Pins and Needles Ahead of August Payrolls
Schaeffer's Editorial Staff

Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday

The economic calendar kicks off Monday with pending home sales for June, and personal income and spending stats for July. Donaldson Co. (DCI), LDK Solar (LDK), and Winn Dixie Stores (WINN) are expected to report earnings.

Tuesday

The S&P/Case-Shiller 20-city home price index for June, the Conference Board's consumer confidence index for July, and the minutes from the latest meeting of the Federal Open Market Committee (FOMC) are all set to hit the Street on Tuesday. Earnings are due out from Barnes & Noble (BKS), Dollar General (DG), and Vera Bradley (VRA).

Wednesday

Employment data starts to trickle in on Wednesday, with the release of ADP's private-sector payrolls report for August and the Challenger, Gray & Christmas update on monthly job cuts. Also due out are July's factory orders and the Chicago purchasing managers index (PMI) for August, as well as the usual update on weekly petroleum supplies. Coldwater Creek (CWTR), Hovnanian Enterprises (HOV), Joy Global (JOYG), and Shuffle Master (SHFL) will share the earnings spotlight.

Thursday

Initial jobless claims are due out on Thursday, as is the ISM manufacturing index for August. Also on the day's docket are July's construction spending and auto sales for August. On the earnings front, we'll hear from Ciena (CIEN), Finisar (FNSR), H&R Block (HRB), and Quiksilver (ZQK).

Friday

The Labor Department's much-anticipated nonfarm payrolls report for August will be released ahead of the open on Friday, capping off our three-day deluge of jobs data. Campbell Soup (CPB) headlines a quiet day of earnings.

And now a few sectors of note...


Dissecting The Sectors
Sector Leisure/Retail
Bullish
Outlook: After flirting with a technical breakdown earlier this month, the SPDR S&P Retail ETF (XRT) showed some resilience last week. The fund crossed back above its 80-week moving average, and settled Friday's session comfortably north of this significant trendline. From a sentiment perspective, XRT's 50-day buy-to-open put/call volume ratio seems to have bottomed out after a lengthy decline. Going forward, an uptick in this ratio would confirm that big-money players are once again building long positions in the retail space. Within the group, we're drawn to stocks in solid technical uptrends that remain surrounded by skepticism. Chipotle Mexican Grill (CMG), Lululemon Athletica (LULU), and AutoNation (AN) have racked up double-digit percentage gains in 2011, easily surpassing the broader market -- yet all three equities have been heavily targeted by short sellers, and the majority of analysts also remain dedicated to the bearish camp. Meanwhile, Green Mountain Coffee Roasters (GMCR) has been the target of speculative put buying, even though the shares have rallied roughly 200% year-to-date. As these discretionary stocks continue to outperform on the charts, a capitulation by the bears could provide a fresh influx of buying pressure. Sector Large-Cap Tech
Bearish
Outlook: Last Friday, OmniVision Technologies (OVTI) became the latest victim of a particularly weak round of tech-sector earnings. The shares plummeted to a new annual low as traders panned the company's disappointing financial guidance, fresh on the heels of similarly bleak earnings reactions from the likes of Dell (DELL) and Hewlett-Packard (HPQ). From a technical standpoint, the PowerShares QQQ Trust (QQQ) spiraled lower after a recent test of the $60 level -- which represents exactly half its all-time high of $120, set back in March 2000. Furthermore, the trust remains stuck beneath its year-to-date breakeven level, located near the $54 area. This former layer of support now seems to be emerging as stubborn resistance for QQQ. Within the tech sector, semiconductor stocks could prove to be a particular pocket of weakness, as analysts remain surprisingly upbeat on this underperforming group. The percentage of "buy" ratings on components of the Semiconductor HOLDRS Trust (SMH) peaked at 58.2% in late July, hitting its highest level since May 2010. Meanwhile, the percentage of "sells" is resting near an annual low. In the same optimistic vein, a few upbeat analysts have recently flagged the poor price action in chip stocks as a buying opportunity. With SMH faring even worse than the broader QQQ in 2011, this defiantly bullish attitude suggests that semiconductors could be vulnerable to a shift in sentiment as the weak technical performance continues.
Sector Financials
Bearish
Outlook: Banks continue to struggle, due to lingering uncertainty about European debt exposure and new warnings about the threat of recession. Bank of America (BAC) got a high-profile boost this past week, thanks to a vote of confidence from none other than Warren Buffett -- but the underperforming blue chip remains stifled by resistance at the $8 level, which marked the site of a bearish gap in early August. Taking a broader look at the group, the Financial Select Sector SPDR (XLF) pared its weekly losses after falling to a new two-year low of $11.81 on Tuesday. However, XLF remains pinned beneath its 20-day moving average, as well as the formerly supportive $13.50 area -- either of which could thwart any short-term rally attempts. Meanwhile, media coverage on the group is still bullishly slanted, with pundits pointing to "attractive valuations" in the wake of recent declines. Likewise, data from Zacks indicates that 62.8% of analyst ratings on finance stocks are of the "buy" or better variety, despite the group's dismal price action and mounting fundamental challenges. This stubbornly bullish configuration leaves plenty of room for additional downgrades going forward, which could exacerbate the weak price action.

[ReturntoSender]

From Briefing.com: 4:30 pm : A strong, steady ascent gave the stock market another big gain. In turn, the S&P 500 has advanced more than 7% in just five sessions.

The stock market's upward momentum in recent days has been helped along by improved sentiment in Europe, where the major bourses have been fighting to overcome concerns about fiscal and financial instability among countries in the region's periphery. That said, reports of consolidation in Greece's banking industry were widely regarded as a step toward stabilizing the country's banking system, so most of Europe's major bourses bounced by more than 2%.

Strength abroad made it easier for the stock market to resume the upward climb that it began last week, when the S&P 500 finished in positive territory in four out of five sessions for a cumulative gain of almost 5% -- its first weekly advance in five weeks.

The most recent effort favored financials the most; they swung to a gain of more than 4%. Insurers were among the sector's top performers as traders regarded Hurricane Irene's damage to the Northeast as less severe than what had been feared potential. Banks were back in favor as they resumed their rally from the beat downs that were repeatedly suffered in recent weeks.

Although they weren't the day's top performers, pharmaceutical plays Pfizer (PFE 18.88, +0.67) and Bristol Myers Squibb (BMY 29.29, +0.57) staged impressive gains following positive results from a joint Phase III drug trial.

With stocks looking so strong and participants showing an increased tolerance for risk, small-cap stocks swung sharply higher. Collectively, small-cap stocks advanced almost 5%, as measured by the Russell 2000.

An increased preference for risk put pressure on safe havens like gold. Gold prices had started pit trade with a gain of more than 1%, but reversed course to close with a 0.3% loss at $1791.60 per ounce.

Treasuries were also pressured, but the benchmark 10-year Note managed to limit its loss. As a result, its yield remains below 2.30%.

Economic data neither added to nor detracted from the market's upward momentum. According to the latest numbers, personal income increased in July by 0.3%, which is slightly less than the 0.4% increase that had been broadly expected. However, spending spiked 0.8%, which bested the 0.5% increase that had been anticipated. Separately, pending home sales fell in June by 1.3%, which is slightly less than the 1.4% decline that had been generally expected.

Advancing Sectors: Financials +4.2%, Industrials +3.2%, Materials +3.0%, Tech 2.8%, Consumer Discretionary +2.9%, Energy +2.9%, Health Care +2.6%, Utilities +1.9%, Consumer Staples +1.8%, Telecom +1.2%
Declining Sectors: (None)DJ30 +254.71 NASDAQ +82.26 NQ100 +2.9% R2K +4.8% SP400 +3.9% SP500 +33.28 NASDAQ Adv/Vol/Dec 2267/1.62 bln/342 NYSE Adv/Vol/Dec 2820/912 mln/271

4:01PM Universal Display announces agreement with Panasonic (PC) Idemitsu OLED lighting for OLED lighting products (PANL) 51.10 -0.61 : Co announced that it has entered into a technology license agreement with Panasonic Idemitsu OLED Lighting Co, a joint venture between Panasonic Electric Works and Idemitsu Kosan. Under the new agreement, Panasonic Idemitsu OLED Lighting will be licensed to integrate Universal Display's proprietary UniversalPHOLED phosphorescent and other OLED technologies and materials into OLED lighting products.

4:01PM Amkor and GLOBALFOUNDRIES to collaborate on advanced assembly and test solutions (AMKR) 4.20 +0.22 : The companies plan to collaborate to co-develop and commercialize integrated fab-bump-probe-assembly-test solutions aimed at multiple customers and end-market applications and expand theSunPower (SPWRA, SPWRB) announced that Akuo Solar, a subsidiary of Paris-based Akuo Energy, has ordered 75,000 high efficiency SunPower solar panels for Akuo's planned 24-megawatt solar development.

MEMC Electronic Materials (WFR) announced that it has commenced an offer to exchange any and all of its outstanding $550 mln aggregate principal amount of 7.750% Senior Notes due 2019 for a like principal amount of new 7.750%.

6:31AM Integrated Device intends to sell Its Hillsboro, Oregon Wafer Fabrication Facility to Alpha and Omega Semiconductor (AOSL) for ~$26 mln (IDTI) 5.60 : Co announces that it intends to sell its Hillsboro, Oregon wafer fabrication facility and related assets to Alpha and Omega Semiconductor (AOSL). Under a foundry service arrangement with IDT, AOSL has the option to acquire the wafer fabrication facility and related assets for $26 mln. The anticipated sale is subject to the execution of a definitive asset purchase agreement with customary closing conditions between AOSL and IDT.

11:23 am S&P Tech Sector Almost Two Percent Higher, Beating Broader Market

The tech sector is trading higher today, and topping gains in the broader market. Semiconductors are showing strength in the tech space with the Philly Semi Index trading 1.9% higher. Among chips in the index, MU (+5.8%) is a notable leader. Among other major indices, the S&P 500 is trading 1.6% higher, while the NASDAQ is trading 2.0% higher. The QQQ, meanwhile, is trading 1.8% higher. Among tech bellwethers, ORCL (+3.1%) is showing relative strength, while VZ (+0.3%) is lagging.

In news, YOKU (+6.9%) and DreamWorks Animation entered an online distribution agreement for KungFu Panda Films in China. Also, Facebook plans to shut down online deal programs.

In rumors, we are hearing CVG (+3.2%) M&A potential making the rounds. Separately, there's AAPL (+1.6%) for EK (+4.5%) chatter.

There were few notable analyst calls this morning in tech. Of note, Barrington Research initiated SQI (-1.1%) with an Outperform.

There are no notable tech names set to report results today after the close.

10:06 am Bank of America Sells 13.1 Billion Shares Of China Construction Bank (BAC)

Bank of America (BAC $8.03 +0.27) agrees to sell 13.1 billion shares of China Construction Bank; sale expected to generate $8.3 billion in cash The sale is expected to generate approx. $8.3 billion in cash proceeds and an after-tax gain on sale of approx. $3.3 billion.

The sale should improve Tier 1 Common Capital Under Basel I by $3.5 billion. Co retains a 5% stake in CCB.

09:48 am LDK Solar Reaffirms Fiscal Year 2011 Guidance (LDK)

LDK Solar (LDK $5.93 +0.09) reported second quarter loss of ($0.62) per share, $0.29 worse than the Capital IQ Consensus Estimate of ($0.33).

Revenues fell 11.7% year/year to $499.4 million versus the $478.8 million consensus.

For the third quarter, the company expects to see upside revenue guidance of $630 million to $680 million versus the $584.70 million Capital IQ Consensus Estimate.

The company reaffirmed its fiscal year 2011 revenue guidance at $2.5 billion to $2.7 billion versus the $2.45 billion Capital IQ Consensus Estimate.

"In recent weeks, we have seen average selling prices begin to stabilize and improvement to order patterns. We have continued to gain traction in expanding our presence in key markets such as North America and China. In the U.S., our recently established sales and marketing operation has already begun to gain traction in winning large module contracts. In China, we are encouraged by the announcement of the unified national feed-in-tariff program. We have an established, strong market position in our domestic market and see significant long-term growth opportunities... Going forward, based on our current pipeline of business, we believe growth will resume in the second half of 2011."

[ReturntoSender]

From Briefing.com: 4:30 pm : Selling in the final minutes caused stocks to settle short of their session highs, but the major equity averages still managed to hold on for another gain.

Stocks extended their early morning slide in response to an abysmal Consumer Confidence Index for August. The Index had been generally expected to ease to 52 from just above 59, but slumped to 44.5, which is the worst reading since April 2009. It is suspected that the worse-than-expected reading was the result of stock market volatility, slow job growth, and concerns about the pace of the overall economic recovery.

Although there isn't any empirical evidence that connects consumer confidence with actual spending, participants used the report as an excuse to sell stocks. That sent the broad equity market down to a loss of more than 1%, but it didn't take long for buyers to scale back in. The stock market's move off of its morning low was rather choppy, though.

Minutes from the most recent FOMC meeting failed to have any meaningful impact on trade. They didn't offer any clues for plans of further stimulus, although the members of the Committee agreed monetary policy couldn't completely address the various strains on the economy.

Despite a general lack of leadership, stocks were still able to work their way up to a modest gain. The effort was challenged shortly before the toll of the closing bell, but stocks the major equity averages managed to hold on for varied gains -- the Nasdaq again outperformed its counterparts with help from Internet-related plays.

This session's gain marked the stock market's fifth advance in six sessions. During that time the S&P 500 has advanced 8%. It is still down 6% for August, though. As for the Nasdaq, it is up 10% in six sessions, but down 6.5% for the month. Meanwhile, the Dow has advanced almost 7% in the past six sessions, but is down 4.8% month to date.

Advancing Sectors: Telecom +1.0%, Industrials +0.8%, Materials +0.8%, Health Care +0.4%, Consumer Discretionary +0.4%, Tech +0.3%, Energy +0.3%, Consumer Staples +0.2%
Unchanged: Utilities
Declining Sectors: Financials -0.7%DJ30 +20.70 NASDAQ +14.00 NQ100 +0.6% R2K +0.5% SP400 +0.4% SP500 +2.84 NASDAQ Adv/Vol/Dec 1324/1.86 bln/1204 NYSE Adv/Vol/Dec 1910/1.02 bln/1084

1:54PM Zoran stockholders approve CSR merger for $6.26/share in cash and 0.589 ordinary shares of CSR (ZRAN) 8.23 +0.15 : Merger is expected to close on August 31, 2011 and trading of Zoran's common stock will be halted on Nasdaq before market open on August 31, 2011.

1:17AM STEC Inc authorizes an additional stock repurchase program of up to $40 mln of the co's common shares (STEC) 9.35 : This $40 mln stock repurchase program is in addition to the $15 mln of common shares repurchased earlier this month.

09:46 am LDK Solar downgraded to Hold at Needham: . Needham downgrades LDK to Hold from Buy. Firm notes while guidance implies higher revenue in both 3Q11 and 4Q11, they are concerned that falling prices will offset increased volume, limiting revenue growth. Additionally, they believe weaker gross margins coupled with higher expenses will result in more losses over the next few quarters. Longer-term, they believe co's strategy of integrating all parts of the solar value chain should enable competitive advantages over many peers but the slow ramp up of polysilicon production is preventing the co from fully realizing those benefits.

10:52 am S&P Tech Sector Trades Lower, In-line With The Broader Market (MSFT)

The tech sector is trading lower today, roughly inline with losses the broader market. Semiconductors are showing slight relative weakness in the tech space with the Philly Semi Index trading 1.1% lower. Among chips in the index, MU (-3.5%) is a notable laggard, while NVDA (+1.5%) is bucking the trend. Among other major indices, the S&P 500 is trading 0.9% lower, while the NASDAQ is trading 0.6% lower. The QQQ, meanwhile, is trading 0.5% lower. Among tech bellwethers, T (+0.8%) is showing relative strength, while CSCO (-1.9%) is under pressure.

There were no notable tech names that reported. In news, PANL (+1.8%) announced that it has entered into a technology license agreement with Panasonic Idemitsu OLED Lighting. Also, CLGX (+25.1%) formed a committee of independent directors to explore a wide range of options aimed at enhancing shareholder value including, but not limited to, cost savings initiatives, an evaluation of the company's capital structure, possible repurchases of debt and common stock, the potential disposition of business lines, the potential sale or business combination of the company and other alternatives.

Among notable analyst upgrades this morning, MIPS (+2.9%) was upgraded to Buy at Capstone and PTNR (--0.5%) was upgraded to Buy at Citigroup. Also, Ticonderoga wrote in a note that it's time for MSFT (+0.8%) to significantly raise its dividend. In downgrades, EMR (-2.7%) was downgraded to Hold at Argus.

There are no notable tech names set to report results today after the close.

Ticonderoga noted Microsoft (MSFT $26.19 +0.34) has a history of increasing its dividend during the month of September. They believe that Microsoft should and will once again raise its dividend after its board meeting in Sept. If MSFT were to match it peers on payout ratios, it would equate to a dividend yield increase to 6.0% from the current 2.6%, and include an approximate doubling of the co's dividend.

[ReturntoSender]

From Briefing.com: 4:30 pm : Trade on Tuesday was quite volatile. The S&P 500 quickly tumbled in excess of 2%, but retraced the downturn into midday. The struggle to extend the move into anything more than an incremental gain invited renewed selling in the afternoon, but a late rally helped the market close with a gain of more than 2%.

Ongoing concerns about financial conditions in Europe and Greece's ability to pay its debts, let alone meet deficit reduction targets, prompted overseas markets to suffer steep losses in schizophrenic-like trade. The negative sentiment permeated premarket trade and prompted domestic participants to push stocks sharply lower in the first few minutes.

Few stocks were sparred from the sell-off as the S&P 500 dropped to the 1075 line for the first time in about 13 months. At that point, the stock market was more than 20% below its early May high, bringing about the undesirable distinction of bear market territory.

Tech stocks provided support in the face of the broad market's dive. The sector rallied to a gain of more than 1% with help from semiconductor-related plays. Tech's strength took the Nasdaq up to a nice midsession gain and helped the S&P 500 reverse its loss, but the broad market measure was unable to move up from the neutral line while the Dow remained mired in the red.

Tech's strength was challenged in the afternoon, though. Loss of leadership from the sector, which is the largest by market weight, invited sellers to redouble their efforts and drive stocks back into negative territory.

Reports that officials in the European Union are considering plans to recapitalize banks coincided with a barrage of buying in the final hour. The move by the S&P 500 from its afternoon low to its close spanned 4%. At the same time, the Dow bounded by more than 350 points with barely a pause along the way. The Nasdaq settled with a 3% gain, the strongest of the trio.

Although the Nasdaq outpaced its counterparts, primary component Apple (AAPL 372.50, -2.01) was unable to find positive territory. The stock's loss came amid a rather negative response to the unveiling of the company's latest iPhone.

Comments from Fed Chairman Bernanke to the Joint Economic Committee were consistent with recent policy statements in that the Fed remains prepared to provide additional support as necessary. The absence of surprises essentially made the speech a non-event for the market.

The market's reversal into the close caused the dollar to take a late dive. It ended the day about 0.7% behind a basket of major foreign currencies after it had worked its way out of the red during afternoon trade. The downturn was largely owed to newfound support for the euro, which settled with a 1.4% gain at $1.337.

Treasuries also sold off. Their downturn wasn't terribly steep, but it was still enough to take the yield on the benchmark 10-year Note back above 1.80%.

A dour mood during pit trade kept pressure on oil prices, which closed the day with a 2.5% loss at $75.67 per barrel. That marked their lowest close in more than a year, but futures prices climbed in conjunction with the equity market after pit trade had closed. As for gold, the precious metal slumped during pit trade to $1616 per ounce for a 2.2% loss, unable to attract even safety seekers.

Advancing Sectors: Financials +4.1%, Materials +3.7%, Energy +3.2%, Consumer Discretionary +3.1%, Industrials +2.6%, Tech +2.1%, Health Care +1.0%, Consumer Staples +0.7%, Telecom +0.6%
Declining Sectors: Utilities -0.5%DJ30 +153.41 NASDAQ +68.99 NQ100 +2.1% R2K +6.4% SP400 +4.1% SP500 +24.72 NASDAQ Adv/Vol/Dec 1903/3.04 bln/691 NYSE Adv/Vol/Dec 1866/1.66 bln/1233

4:56PM TranSwitch announces a business re-organization and restructuring, in-line with co's Growth Strategy; narrows Q3 revs guidance to $6.5-7.0 mln vs. $7.17 mln Capital IQ Consensus Estimates, from $!~$7.0 mln (TXCC) 2.15 -0.10 : Co reported that as part of its ongoing strategy to focus resources on high-growth opportunities, today announced a business re-organization and restructuring to better align the Company's R&D resources and other operating expenses towards its stated goals. The reorganization and restructuring will be concluded during Q4 ending Dec 31, 2011. Co expects that these restructuring actions and other cost reduction initiatives will result in annual savings of ~$3.6 mln and that these savings will begin to be recognized in Q4 of 2011. Of this amount, co expects annual savings of ~$3.2 mln in reduced employee related costs including base salary reductions and $0.4 mln from other cost savings initiatives. In connection with the restructuring, co expects to incur pre-tax restructuring charges of ~$0.9 mln which will be cash expenditures primarily for employee related costs. Co expects these charges to be recorded in Q3 of 2011. Co said, The objective of the corporate reorganization is to ensure that our operations are aligned with high growth opportunities and I believe that these changes announced today will go a long way toward that goal. Once these actions are completed, our quarterly operating expenses should be around $6.6 mln on a non-GAAP basis excluding one-time expenses related to product tooling." Co narrows guidance; The co also expects its fiscal Q3 2011 revenue to be in the range of $6.5 mln to $7 mln compared to the guidance provided on August 8, 2011 of roughly $7 mln.

2:54PM Apple issued press release confirming launch details for the iPhone 4S, iOS 5 & iCloud (AAPL) 360.67 -13.92 : iPhone 4S will be available in the US for a suggested retail price of $199 for the 16GB model and $299for the 32GB model and $399 for the new 64GB model. iPhone 4S will be available from the Apple Online Store, Apple's retail stores and through AT&T (T), Sprint (S), Verizon Wireless (VZ) and select Apple Authorized Resellers. iPhone 4S will be available in the US, Australia, Canada, France, Germany, Japan and the UK on Friday, October 14 and customers can pre-order their iPhone 4S beginning October 7. iPhone 4 will also be available for just $99 and iPhone 3GS will be available for free with a two year contract. iPhone 4S will roll out worldwide to 22 more countries by the end of October including Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Mexico, Netherlands, Norway, Singapore, Slovakia, Slovenia, Spain, Sweden and Switzerland.

8:32AM IBM to acquire privately held Q1 Labs; Financial terms were not disclosed (IBM) 173.29 : Following the close of the acquisition, Q1 Labs will join the newly-formed IBM Security Systems division, representing the world's most comprehensive security portfolio. After the close, IBM intends the new division to be led by Brendan Hannigan, CEO of Q1 Labs.

8:03AM Intel's McAfee to acquire NitroSecurity; terms are not disclosed (INTC) 20.62 : McAfee announced a definitive agreement to acquire privately owned NitroSecurity. Co anticipates that the acquisition will close by the fourth quarter of 2011.

7:31AM Qualcomm announces Steve Altman will become vice chairman and Steve Mollenkopf has been promoted to President and COO (QCOM) 47.65 : The changes will be effective November 12, 2011. Altman has served as president of QTL and has been a member of the executive committee since 1992. Altman joined Qualcomm in 1989 and is the chief architect of the Company's licensing business model.

Freescale Semiconductor (FSL) announced that VIKO Electric and Electronic has selected the Freescale MC9S08LH64 microcontroller (MCU) for its single-phase residential electricity meters. These meters are expected to be available early next year.

11:56 am S&P Tech Sector Showing Nice Gains, Outperforming the S&P 500

The tech sector is trading higher today, ahead of losses in the broader market. Semiconductors are showing relative strength in the tech space with the Philly Semi Index trading 2.0% higher. WFR (+5.3%) is a notable leader in that index. Among other major indices, the S&P 500 is trading 0.4% lower, while the NASDAQ is trading 0.8% higher. The QQQ, meanwhile, is trading 0.5% higher. Among tech bellwethers, CSCO (+1.1%) is showing notable strength.

In earnings, MSPD (+3.7%) lowered its Q4 guidance. In news, AAPL (+0.9%) is expected to unveiled its newest iPhone today at 1 ET.

Among rumors, there's renewed YHOO (+5.0%) takeover chatter making the rounds. There are also rumors of RIMM (+2.9%) exploring strategic alternatives.

Among notable analyst upgrades this morning, ERIC (+1.3%) was upgraded to Buy at Citigroup and PLCM (+10.8%) and SHOR (+8.3%) were upgraded to Overweight at Barclays. In downgrades, QSII (-3.1%) was downgraded to Neutral at Piper Jaffray and RVBD (-4.4%) was downgraded to Equal Weight at Barclays.

No notable names in tech set to report results today after the close.

Mindspeed (MSPD $5.04 +0.11) issued downside guidance for the fourth quarter with revenues of $40.5 million versus the $43.14 million Capital IQ Consensus and below prior guidance of $42.2-43.9 million. The company expects preliminary fiscal fourth quarter of 2011 non-GAAP gross margin percentage range and non-GAAP operating expenses to be consistent with the previous outlook. Additionally, the company states: "We experienced a weaker demand environment in the fiscal fourth quarter of 2011, primarily impacting our high-performance analog and legacy wide area networking business, as a result of weakening demand in the communications infrastructure market."

Polycom (PLCM $18.72 +1.04) was upgraded to Overweight from Equal Weight at Barclays. The firm says given a range of checks through the quarter, they revisited their networking names and prioritize those which they think are likely to lead through a difficult economy 2nd half 2011 and into 2012. They conclude healthy videoconferencing and unified communications trends should allow PLCM and SHOR to lead their networking peers. They think Riverbed's underlying drivers are intact, but demand may be slower to recover in a downturn, particularly in Europe.

Red Hat (RHT $38.39 -2.10) has agreed to acquire Gluster, a privately-held company, for approximately $136 million in cash. As part of the transaction, Red Hat will also assume unvested Gluster equity outstanding on the closing date and issue certain equity retention incentives. The transaction is expected to close in October, subject to customary closing conditions. The acquisition is expected to have no material impact to Red Hat's revenue this fiscal year but should begin to grow next year based on a subscription revenue model. The company reaffirmed its third quarter EPS guidance of $0.25-0.26 versus the $0.26 Capital IQ Consensus Estimate with revenues of $288-290 million versus the $289 million consensus. The company also reaffirmed its fiscal year 2012 EPS guidance of $1.03-1.05 versus the $1.05 consensus with revenues of $1.12-1.13 billion versus the $1.128 billion consensus.

Apple (AAPL $362.54 -12.05) held a media event where they announced the iPhone 4S, which will have a duel core A5 processor. It will be able to work on both GSM and CDMA networks. It also announced that iCloud, including iTunes in the Cloud, that will work seamlessly with AAPL devices will be available on October 12. The iPhone will available on October 14th.

[ReturntoSender]

From Briefing.com: 4:30 pm : Tech helped lead the Nasdaq to a strong gain, but the broader market finished only fractionally above the flat line.

Participants opted to take a breather after the aggressive bout of buying in the prior session. Action was also subdued as participants awaited the EFSF vote by Slovakia and traders showed continued concern about the specter of a default by Greece, despite the Troika's decision to make another disbursement of financial aid to flagging country.

A lack of enthusiasm in Europe also left the euro to drift lower. It eventually rebounded against the greenback to end the day with a marginal gain at $1.364.

The Nasdaq scored another solid gain with help from the tech sector, which ended the day with a 0.6% gain. That has the tech-rich Index at a 10-day high.

Alcoa (AA 10.30, +0.21) offered leadership to the Dow ahead of its latest quarterly report, which unofficially marks the start of earnings season, but the blue chip average stayed close to the flat line all session. The broad-based S&P 500 did the same.

Treasuries stayed under heavy pressure all session. That took the yield on the benchmark 10-year Note is up to almost 2.20%. Since the U.S. bond market was closed yesterday in observance of Columbus Day, Treasuries were left to price in the stock market's prior session surge, which was actually its best single-day jump since August. They didn't really benefit from results of a $32 billion auction of 3-year Notes. The auction drew a yield of 0.544% on a bid-to-cover ratio of 3.30. The indirect bidder participation rate came in at almost 38%.

Advancing Sectors: Tech +0.6%, Industrials +0.4%, Consumer Discretionary +0.3%, Materials +0.2%, Energy +0.1%
Declining Sectors: Financials -0.1%, Consumer Staples -0.2%, Health Care -0.4%, Telecom -1.0%, Utilities -1.1%DJ30 -16.88 NASDAQ +16.98 NQ100 +0.7% R2K +0.6% SP400 +0.1% SP500 +0.65 NASDAQ Adv/Vol/Dec 1527/1.66 bln/994 NYSE Adv/Vol/Dec 1666/882 mln/1320

4:01PM ON Semiconductor confirmed impact from Thailand Flood (ONNN) 7.31 0.00 : Co confirmed that its SANYO Semiconductor division's operations located in the Rojana Industrial Park in Ayutthaya, Thailand, have been suspended as a result of recent flooding in the region. Based on currently available information, the operations located in the Rojana Industrial Park are estimated to have produced ~5 to 10% of ON Semiconductor's total worldwide output as measured by revenues of $905.8 million for the second quarter of 2011. There was no impact to third quarter 2011 results from the flooding. The company expects, however, due to the flood and related damage of operations in the Rojana Industrial Park, some loss of revenue in the fourth quarter of 2011 and into 2012. Multiple factors could affect revenue loss, including the amount of finished goods inventory available, extent of the damage to the building and the equipment, the length of time for operations to resume back to full production levels, the ability to shift production to other locations and the level of demand from customers taking product from this location. The company is actively working to shift production located in the Rojana Industrial Park to other locations worldwide. ON Semiconductor expects to describe the financial impact of the flood in further detail during its third quarter 2011 earnings call in the first week of November.

Axcelis Technologies (ACLS) announced that it has received an order for the Company's Optima HDx high current implanter from one of the world's largest device manufacturers.

SEMICON Europa-Invensas, a wholly owned subsidiary of Tessera Technologies (TSRA) announced that NANIUM is using Invensas' new multi-die face down packaging technology in the design of NANIUM's latest high density, high speed DRAM solutions.

7:02AM Cray lands $97 mln contract to upgrade supercomputer at Oak Ridge National Laboratory (CRAY) 5.98 : Co announces it has signed a contract to upgrade the Cray XT5 supercomputer nicknamed "Jaguar" located at the DOE's Oak Ridge National Laboratory to a new Cray XK6 supercomputer, which will be nicknamed "Titan." The Titan system at ORNL will bring together the features of a proven, production petascale architecture with innovative NVIDIA (NVDA) Tesla graphic processing unit technologies.

6:21AM JinkoSolar Holding resumes production at its Haining facility (JKS) 6.69 : Co announced that it has resumed production at its facility in Haining City in Zhejiang Province, China. The Haining facility, one of two JinkoSolar production facilities, suspended production on September 17, 2011, after an accident involving suspected leakage of fluoride from a waste storage warehouse into a nearby small water channel due to extreme and unforeseen weather conditions.

Hudson Square Research raised their target on Apple (AAPL $397.91 +9.10) to $700 from $500 driven by an update to its comprehensive deep dive into Apple's expanding addressable market. The firm expects Apple to report a very strong FY4Q11 after the market close on October 18.

10:13 am S&P Tech Sector Showing Modest Gains; Outperforming the Broader Market

The tech sector is trading slightly lower today, just ahead of losses in the broader market. Semiconductors are showing relative weakness in the tech space with the Philly Semi Index trading 0.7% lower. RBCN (-6.5%) is a notable drag in that index. Among other major indices, the S&P 500 is trading 0.5% lower, while the NASDAQ is trading 0.2% lower. The QQQ, meanwhile, is trading 0.1% lower. Among tech bellwethers, AAPL (+2.0%) is again showing notable strength, while CSCO (-1.0%) is a laggard.

In earnings, KNXA (+10.2%) announced it expects Q3 financial results to be at or above high-end of previously issued guidance.

In news, ARRS (-2.3%) will acquire BBND (+74.0%) for a purchase price of $2.24 per share in cash. Among rumors, there are reports that investors are pushing RIMM (+3.4%) to explore options. Also, there's renewed AKAM (-1.9%), and separately NVLS (+0.1%), takeover chatter making the rounds.

Among notable analyst upgrades this morning, ARMH (-1.1%) was upgraded to Buy at Citigroup and SYNA (+5.1%) was upgraded to Buy at Collins Stewart. In downgrades, RBCN (-6.5%) and VECO (-3.0%) were downgraded at Piper Jaffray and STM (-5.0%) was downgraded to Sell at Citigroup.

No notable names in tech are set to report results today after the close.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 14-Oct-11The S&P 500 overcame resistance on Friday to score another strong gain, contributing to the broad market's best weekly performance since July 2009. A positive tone among market participants was perpetuated by more buying in Europe, where the continent's major bourses extended their recent rally. On Friday, Britain's FTSE advanced 1.2%, but gained more than 3% for the week. France's CAC clmbed 1.0% in the week's final session, but 4% over the past five trading days. A 0.9% advance by the Germany's DAX on Friday helped fuel a 5% weekly gain. Such strength reflected improved sentiment in the eurozone, where concerns about fiscal and financial conditions in both the peripheral and core constituents have threatened confidence for months. A commitment early this week by leading eurozone officials to develop a comprehensive plan intended to stabilize precarious conditions and shore up capital at European banks sent a strong signal to global investors. It also got the week started on a strong note -- the stock market rallied more than 3% on Monday for its best single-session percentage gain in almost seven weeks. Following that heady move, trade became more subdued on Tuesday. Participants kept their focus on Europe as Slovakia moved to vote on the European Financial Stability Facility (EFSF). Country officials actually voted down the plan Tuesday night in conjunction with a no confidence vote for Slovakia's prime minister, but there remained a belief that the EFSF will eventually win approval. Tuesday also ushered in the unofficial start of earnings season when Dow component Alcoa (AA 10.26, +0.16) announced its latest quarterly results after the close. Some regarded the fact that the company came short of the consensus earnings estimate as an ominous sign. Minutes from the most recent FOMC meeting were released Wednesday, but the release was essentially a non-event since it offered no new insight into the mindset of the monetary policy setting committee. JPMorgan Chase (JPM 31.89, +0.29) was bid up aggressively ahead of its quarterly announcement on Thursday morning. The diversified financial services giant posted earnings that exceeded what Wall Street had widely expected, but the dubious quality of that beat was a focus of analysts. Concerted selling caused the stock to drop sharply. Given that JPMorgan Chase is widely regarded as the best in its class, many other banks were implicated. The result was a near 5% drop for the KBW Bank Index, which only made a half-hearted attempt to rebound on Friday, when it advanced a relatively tame 0.7%. Another weekly initial jobless claims count narrowly above 400,000 -- 404,000 to be specific -- had little impact on action during Thursday's trade, but that's mostly because the tally was right in stride with the 406,000 claims that had been widely expected. A superior report from Google (GOOG 591.68, +32.69) helped close out the week on a strong note. Both the top and bottom line bested what had been expected. That sent the stock to its highest level in more than one month and inspired buying in other large-cap tech issues. Collectively, tech stocks climbed 2.1% on Friday. Since tech is the largest sector by market weight, its strength helped the S&P 500 stage a late climb that took it past the 1220 line, which had been a point of formidable resistance at the start of the session and earlier in the week. Energy stocks were the best performers on Friday. Their 3.6% climb was helped along by a 3.2% spike in oil prices to almost $87 per barrel. Oil prices ended the week about 5% above where they began it. In the backdrop of Friday's action were some encouraging retail sales numbers. Overall retail sales for September increased by 1.1%, while sales less autos increased by 0.6%. Economists surveyed by Briefing.com had expected respective increases of 0.6% and 0.3%. Not only did the September numbers exceed expectations, but they also marked the strongest increases since the first quarter. Friday's advance marked the fourth gain in five sessions, helping the S&P 500 score a 6% weekly gain. Perhaps more impressive is that the stock market has now advanced in seven of the past nine sessions for a cumulative gain of more than 11%. ..Nasdaq 100 +1.9%. ..S&P Midcap 400 +1.9%. ..Russell 2000 +2.0%.

 
 Index	  Started Week	Ended Week  Change  % Change  YTD % 
 DJIA	    11103.12	11644.49    541.37     4.9    0.6 
 Nasdaq	     2479.35	 2667.85    188.50     7.6    0.6 
 S&P 500	     1155.46	 1224.58     69.12     6.0   -2.6 
 Russell 2000  656.21	  712.38     56.17     8.6   -9.1

4:45PM Sprint statement on launch day ales of iPhone 4S and iPhone 4; its best ever day of sales in retail, web and telesales for a device family in Sprint history (S) 2.79 +0.01 : Co began selling iPhone 4S and iPhone 4 in Sprint retail stores nationwide this morning at 8:00am local time. Sprint is the only U.S. carrier to offer new and existing customers the iPhone experience with unlimited data plans starting at just $79.99 per month. Fared Adib, Sprint Product Chief, issued the following statement: "Sprint today reported its best ever day of sales in retail, web and telesales for a device family in Sprint history with the launch of iPhone 4S and iPhone 4. We reached this milestone at approximately noon CT/1pm ET. The response to this device by current and new customers has surpassed our expectations and validates our customers' desire for a truly unlimited data pricing plan."

Last night, Google (GOOG $593.60 +34.61) reported third quarter earnings of $9.72 per share, excluding non-recurring items, $0.95 better than the consensus of $8.77, while net revenue (subtracting traffic acquisition costs) rose 37% YoY to $7.51 billion versus the $7.21 billion consensus. Gross revenues rose 33.4% year/year to $9.72 billion versus the $9.45 billion consensus. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 28% over the third quarter of 2010 and increased approximately 13% over the second quarter of 2011. Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 5% over the third quarter of 2010 and decreased approximately 5% over the second quarter of 2011. Operating expenses, other than cost of revenues, were $3.28 billion in 3Q11, or 34% of revenues, compared to $2.19 billion in the third quarter of 2010, or 30% of revenues. As of Sept 30, 2011, cash, cash equivalents, and short-term marketable securities were $42.6 billion. On a worldwide basis, Google employed 31,353 full-time employees as of September 30, 2011, up from 28,768 full-time employees as of June 30, 2011. Google+ is now open to everyone and we just passed the 40 mln user mark.

Microchip (MCHP $33.75 -1.56) sees second quarter revenues of $340.6 million versus the $360.2 million Capital IQ consensus with EPS of $0.45-0.47 versus the $0.52 consensus. The company said, "Our net sales activity in the September quarter did not progress as we originally expected. Entering the September quarter we anticipated that business conditions would continue to be impacted by weak, broad-based demand conditions, but would begin to improve towards the latter part of the quarter from the seasonal Christmas builds in Asia. Instead we experienced incrementally stronger headwinds and saw no seasonal Christmas build, which in turn adversely impacted all of our product lines and sales channels.

10:49 am Consumer Sentiment Falls in September, Outlook on the Economy Weakens
The preliminary reading of the October University of Michigan Consumer Sentiment Index dropped from 59.4 in September to 57.5 in October. The Briefing.com consensus expected consumer sentiment to increase modestly to 60.0.

The consumer expectations index fell to its lowest level since May 1980, dropping from 49.4 in September to 47.0 in October. To put that into perspective, when the U.S. was in its worst recession since the Great Depression, consumers were less concerned about the future than they are today. This is most likely the result of media reports constantly flashing high probabilities of another recession and not from economic fundamentals.

The current economic conditions index fell to 73.8 in October from 74.9 in September. While the drop in current conditions is disappointing, it follows an unexpected, and undeserved, increase in September. The current level is close to where we expect it to be considering weakness in equity prices and employment growth.

Fortunately, the drag on sentiment will most likely not have an adverse effect on consumption. Consumption tends to follow income, and income growth, while weak, remains positive.

10:47 am S&P Tech Sector Over One Percent Higher, Outperforming Broader Market

The tech sector is trading higher today, outpacing gains in the broader market. Semiconductors are showing relative weakness, however, with the Philly Semi Index trading only 0.3% lower. LRCX (-1.6%) is a notable laggard in that chip index. Among other major indices, the S&P 500 is trading 1.0% higher, while the NASDAQ is trading 1.2% higher. The QQQ, meanwhile, is trading 1.4% higher. Among tech bellwethers, GOOG (+6.2%) is showing notable strength.

In earnings, GOOG (+6.2%) posted a sizeable Q3 beat (EPS $0.95 better than the consensus of $8.77 and net revs rose 37% year/year to $7.51 bln vs. the $7.21 bln consensus). Elsewhere, MCHP (-4.3%) guided Q2 lower, while SAP (+2.6%) issued upside guidance.

In news, ZYNGA disclosed that it will move forward with its IPO. COOL (+5.0%) and GLUU (+6.9%) are trading higher on the news.

Among rumors, there's renewed GOOG (+6.2%) for AKAM (-1.1%) chatter making the rounds. Separately, we are hearing NTCT (+4.6%) takeover speculation.

Among notable analyst upgrades this morning, RAX (+1.2%) was upgraded to Buy at Goldman, NTES (+1.6%) was upgraded to Overweight at Piper Jaffray, and BRCM (+2.6%) was upgraded to Outperform at Baird. In downgrades, FXCM (-7.1%) was downgraded to Sell at Citigroup and ADTN (+6.6%) was upgraded to Buy at Jefferies.

[ReturntoSender]

InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

- To the flat line as market nurses its party hangover.
- Supposed reemergence of European worries blamed for stock stall.
- Spending posts a solid increase but incomes again stagnant.
- Michigan sentiment rides market bounce higher.
- Weak earnings outlooks versus strong outlooks: which is right?
- A breakout test likely a good buy thanks to seasonal trends and fund buying.

A slow, flat, and normal session on the heels of a big upside break.

It was a week that saw the indices break out of the old trading range indeed, two trading ranges and into a new range. It was the last one below the April and May highs that mark the zenith of the rally off of the March 2009 lows. I want to take a moment to backtrack and see where we are. The market was running into the beginning of 2011. That was on the heels of QE2 that broke the stock market higher beginning in late August and early September of 2010. A very powerful run up into early 2011. At that point the Fed was saying that QE2 would be removed in June, and the market started to pitch a bit. It moved laterally, trying to make a breakout in late April with earnings trying to assist it. It could not hold the move, however, and it faded back into June.

What happened? It tried to bounce again to end May. In June when there was no renewal of Quantitative Easing, the market sold off. It tried again, deciding it did not need the Fed. Perhaps it thought maybe things had turned enough where the market could break out to a new high and continue to the upside. That would show that the economy was picking up. It did not happen, and it fell back. What happened right after that? All of the issues in Europe came to the fore. We knew all along there were problems in Europe, but they came to a head in July and August. There were fears of a total meltdown, and we took those gains out of the market through mid-August.

After that, it looked like the crisis might have been averted. The dive was enough to get the heads of state in Europe to start talking about the problem. That was a giant leap forward, and the market started to bounce up and down. After there was word that there would be a deal made and this was the final deal, of course the market found its bottom, reversing off a false breakout on SP500, and rallied in October. Indeed, if this move holds through Monday, this will be the best rally in October ever. That is how powerful this move was. It was a powerful move to the downside as the Europe problem was factored into stock prices, and stocks rallied in anticipation when it was believed that a deal was in the offing. When a deal was announced on Thursday, stocks exploded higher, breaking into that new range. This is the final one before the indices can test that late April/early May high.

That will truly be the lick log moment. We may get some trading in this range, but getting up to the top and breaking out would tell a lot of stories. What do I mean? If stocks can break out, that would mean better economic times ahead. Why would they do that? Nothing has changed other than time. But time, as they say, does heal all wounds. But is it going to heal these wounds? Has enough time elapsed since the credit crisis hit? We have been in this for three years. It surely seems as if enough time has gone by. But we have problems such as ECRI saying that a recession is baked into the cake. Things improved this past week in the cycle, but that really does not matter. The indicators are as such that a recession is considered something of a done deal at this point. It is just a question of how deep or significant it will be.

Indeed, ECRI has been saying that we could have negative GDP by Q1 of 2012, if not sooner. GDP came in at 2.5% on Thursday for Q3. If it was sooner, that would mean it is happening this quarter. It may not happen because things have been looking a bit better. That is the irony of the ECRI. Oftentimes the CEOs will see business looking great and say, "What do you mean we will have a recession?" But the numbers are what the numbers are. The ECRI guys say, "That is what you are paying us for." They pay them to tell them what the cycle is. We will have to see how that actually turns out. The lick log point is up at these prior highs. What will propel the market higher? We have Europe taken out, and we have Europe put back in. Now we have to focus on U.S. domestic issues. Is there enough to drive the market higher? I will talk about this later. Who is right? Is it MMM and WHR who have dour outlooks? Or is it the other side of the equation like PNRA and CAT who say things look solid? That is the sixty-billion dollar question, no doubt.

Getting back to the session and the week itself, we saw the indices break out into a new range. A powerful week nearly ending a powerful month we still have Monday to factor in. We had the huge move on Thursday. There was the rush up higher on the Deal of the Century in Europe. This may be the deal that actually solves the problems. A lot has to be worked out. As I said last night: Short on fact and long on promises. We will see what happens. There was a big run on the Europe news and the fact that the U.S. data was better. Even though Europe's actual data has been worsening, the deal makes the difference. Then we had a hangover on Friday. After the stock market parties up 3% and more on the indices, it is hard to continue that kind of action even on a Friday. Maybe I should say especially on a Friday after a big move.

As you can see from the intraday chart for Friday, stocks were very flatline. They opened weaker, bounced, and then traded laterally the entire day in a narrowing range. At the end of the day, it was a wash. There were a few above the flatline and a few below the flat line.

SP500, 0.04%; NASDAQ, -0.05%; Dow, +0.2%; SP600, -0.6%; SOX, +0.15%.

You see the point. Flatlining, comatose, whatever you want to call it. The market had no stomach to continue the upside, and that is perfectly normal after such a huge move to the upside.

What was blamed on the day for the stock market going nowhere? If you read the headlines, it was the supposed reemergence of worries about Europe a day after the deal supposedly resolves all of the problems with Europe. Friday saw some new data. The UK confidence level fell precipitously. Spain's unemployment rate came out at 21.5% on Q3. That was high, and you just have to feel for them. Italy had some bond auctions, and it had to pay a record level of interest rate for a bond auction. That just shows you that things are not well in Europe even with the bailout. Maybe it is true what some people are saying. They say we had a big rally on this deal, but just what was the deal and how will it fix these problems? Debt problems fixed by more debt? Some people are thinking that, and that is good. You have to keep an open mind, right?

Blame whatever you want, it was really a technical issue. The market factored in a European collapse, and then over the past month, it has taken that back out. Stocks have bounced back up to where they were before that news became a serious concern. That leaves us now looking at what the U.S. will do. Do we have enough to drive us forward, or are we just back to where we were, looking for QE3 perhaps to take us higher? The market was struggling after QE2 ended. It did not have any reason to move higher. Maybe the economic data is enough to take it upside. We will have to see just how the market reacts to this range and, indeed, the peaks from July and April/May.

OTHER MARKETS

Dollar: 1.4161 versus 1.4189 euro. The dollar broke, and it broke big. It held the line for the entire month of August before it finally broke higher as the European worries skyrocketed. Then on Friday the dollar plummeted. Against the euro, it actually gained. Against the other currencies, however, it dove lower as the DXYO shows. Big drops. It is still hitting lows against the yen, and those other currencies weighed down the dollar even though it was up slightly against the euro.
Click to view the chart

Bonds: 2.32% versus 2.38% 10 year U.S. Treasury. Bonds rebounded modestly. They broke on Thursday below support. There was a modest rebound Friday that did not change anything about the break. This was an inside day technically, therefore it really means nothing. This first move is still in control.
Click to view the chart

Gold: 1,747.20, -0.50. Gold took the day off. Virtually flat after a very strong week. Broke to the upside, perhaps on some fears of more inflation. There is not really any fear in Europe, right? That is all gone because the deal has solved it. But it has rallied somewhat, maybe on some inflation fears. This was an unexpected move, as noted. Inflation is what explains the move since fear was falling.
Click to view the chart

Oil: 93.32, -0.64. Oil prices backed off on Friday after a strong week. Oil has bounced through the $90 resistance range. It is now bumping up against the $96 range that acts as some resistance. Very strong move. A little lateral movement and backfilling. That is totally expected after such a good break to the upside. The question is will it break out over the May to July resistance? If it does, gasoline prices will surge.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS

After a very strong Thursday, Friday was a sleeper.

Breadth. Breadth was 1.3:1 decliners over advancers on NASDAQ. Breadth was 1.3:1 advancers over decliners on the NYSE.

Volume. NASDAQ saw volume fall 35% to 1.8B shares. NYSE trade fell 30% to 900M shares. Definitely not a banner internal day. It was a flatline on the markets, so that is expected.

CHARTS

SP500. SP500 tested the 200 day EMA on the low. It broke through that on Thursday, and it rebounded back up to close flat on the session. That still keeps it in its range. It still wants to bang around in there and perhaps move up to the top and break out. But it surely will have to prove that to us and virtually everyone on the planet.

NASDAQ. NASDAQ showed the same action. A gap lower, reversed to close flat. It, too, has broken into the final range before that April and May peak. It has some interim highs at July that it has to deal with as well. It is in the range. It made a big gap upside, and it could test and then continue on. Nothing wrong with that. We will see if it can hold the move.

SP600. The small caps were down on the session a bit more, but they are holding right at the 200 day EMA after surging up to that level on Thursday. They were right at the bottom of their March and June lows that mark the upper range that leads to the July peak. That is where the small caps hit their high versus April and May.

SOX. SOX sported some very good earnings this past week and Thursday it gapped above the down trendline out of February. Very solid action. It also gapped above the June and July lows that acted as resistance points. It is a double break of double resistance, so to speak. It did not go anywhere on Friday; it just broke some big overhead resistance. Taking a day or two off is normal. Semiconductors look decent. You always love to see a trendline break, although there is still some serious resistance at 420. But that is a nice run from here as the index closed the week out at around 396. Plenty of room to run just as there is room to run in the other indices back up to the prior peak.

LEADERSHIP

Leadership from the week was across the board. A lot of stocks rebounded. I will not go through all of them tonight because it was such a broad move. We have seen some of those little rounded bottom breaks to the upside that set up and broke higher this past week.

BRKS in the semiconductors equipment area is one that shows us somewhat of the typical pattern. The downtrend, the rounded bottom, a little double bottom. It formed the handle and then broke higher. It gave us a great buy and is surging. This is what we see not only in the semiconductors area, but in tech, retail, metals (not as much, but we are seeing it), and in a plethora of sectors across the market.

It is not really a question at this point of one or two sectors leading the move. That happened on the initial run with stocks such as AAPL or CERN moving higher. Now those stocks are fading back and testing. They are not necessarily breaking down, but they are testing while the other stocks that formed that little bottom and started to break higher are making the runs for us now. Stocks such as TRV in the insurance business formed that rounded bottom, the handle, and then broke to the upside. As noted, we see them across the market. We moved into quite a few of them last week, and now we will be waiting for a pullback. If we get it, we can move into these. Why do we want to do that? I will talk about that as I discuss Monday's session.

THE MARKET

SENTIMENT INDICATORS

VIX: 24.53; -0.93
VXN: 25; -1.28
VXO: 24.21; -0.44

Put/Call Ratio (CBOE): 1; +0.09

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 40.0% versus 35.8%. Big jump in bulls as the cross back above bears. It could not last forever and with the surge in October just a matter of time. Did its work, however, as the market surged off the readings below 35%. 35% is the threshold measuring bullish versus bearish action. Six weeks the bulls were below bears. A powerful sentiment signal. Solid move lower from 49.5% in late July. Highs from April and December (60% readings spanning December through early May 2011). The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 37.9% versus 45.0%. Backing off hard as Bulls recover hard. As with bulls, an expected move given the rally. Just now crossing back below bulls after six weeks of bears over bulls and seven weeks over the 35% threshold considered a bullish indicator. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: -1.48 points (-0.05%) to close at 2737.15
Volume: 1.823B (-34.54%)

Up Volume: 999.51M (-1.48B)
Down Volume: 851.39M (+488.24M)

A/D and Hi/Lo: Decliners led 1.27 to 1
Previous Session: Advancers led 4.9 to 1

New Highs: 61 (-49)
New Lows: 24 (-1)

NASDAQ CHART: Click to view the chart

NASDAQ 100 CHART: Click to view the chart

SOX CHART: Click to view the chart

SP500/NYSE

Stats: +0.5 points (+0.04%) to close at 1285.09
NYSE Volume: 902M (-30.08%)

Up Volume: 2.46B (-3.8B)
Down Volume: 2.03B (+1.666B)

A/D and Hi/Lo: Advancers led 1.26 to 1
Previous Session: Advancers led 7.01 to 1

New Highs: 76 (-104)
New Lows: 21 (+14)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: +22.56 points (+0.18%) to close at 12231.11
Volume DJ30: 163M shares Friday versus 251M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

There is a lot of economic data. It is, of course, the first Friday of the new month, so we will have the employment data late in the week. Everything will be geared toward that piece of information. We do have a lot of other salient economic reports ahead of that. On Monday we have the Chicago PMI, the precursor to Tuesday's overall national ISM manufacturing number. It is expected to climb after hanging on at 51. We have seen the regions go both ways some negative and some holding positive such as Chicago with its 60 reading the prior month. It is expected to continue a bit of improvement. That would be good news for everybody.

There will be the precursors to the jobs report coming out on Wednesday: Challenger Job Cut Report and the ADP Employment Index. There is a little thing called an FOMC rate decision on Wednesday. No one expects much. Watch out for things that no one expects much from. The market stalled out before June in anticipation of the end of QE2. Nothing has been done in Congress with respect to any kind of jobs initiative. I wish the Republicans would come out with their own jobs initiative, pass it, and then let the Senate work on it. Just try to do something. The President said he will write some executive orders and do a few things with student loans etc. to try to push his agenda. To me that means that Bernanke may have the green light to try something on his own as well. QE3? If that happens, that will start a new, powerful rally to the upside. That is a big long shot at this point. We will have to see. On Thursday we have the usual Jobless Claims and also the ISM Services for the month. Friday is the Jobs Report, of course.

There are two real areas to look at. The third is the wild card of the FOMC and a QE3. If that is announced, it throws everything out the window and we have a powerful rally. It may not solve any problems, and it may kill the dollar even more. Maybe the dollar is anticipating it, and that is why the dollar is in total freefall, from the looks of it, on Friday. But there are two other issues to deal with. Number one is the competing earnings reports. We have seen some great guidance from companies such as CAT. It is looking super, rallying to the upside and announcing great guidance ahead. It is basically the shining star in the earnings picture for the rest of the market. There are others that have done very well and announced great earnings. INTC has done super. It looks great heading forward.

Then there are others that are not really helping the cause. It is not because they are not making some money now; they just do not see the business down the road. TXN was having a problem. MMM did not have a good outlook at all. It was having cost issues, and they are saying that it is an execution problem. On TXN they said they must not been doing something right because everyone else is reporting great earnings. Then there were our old friends. AAPL surprised with a miss, and no one really knew what was going on with that. With AMZN everyone said it was just a retooling. They said they just have to spend more money, and they have done this from time to time. I frankly believe that is the case, but it is another one that did not have such great guidance. On Friday WHR announced terrible results, a bad forecast, and said it will lay off 5K workers. That is a downer.

Who is right? What is going on here? We have a battle of the weak earnings outlooks versus the strong earnings outlooks. The answer has to be that no one really knows. But we do know one thing: When there is volatility in the market or in anything, that usually presages some change in the trend. We have had a series of strong quarters with ever-increasing earnings. The outlooks have been great. Now we are seeing outlooks that are not so great. In other words, we are getting volatility where there was no volatility for several quarters. That shows you that something is changing. That brings up the specter of ECRI and its forecast for things being so much worse that they are calling for a recession. One thing about ECRI that is different from all other leading indicator reports is that it has never called a false recession. It is gotten them all right. That is just a fact.

We have that worry out there and we see strong, solid companies saying that things are not as great as some people are saying. It is easy to blame execution, but these are good companies. We will see if it is execution or not. That is something to be concerned about. I will reiterate, however, that volatility typically suggests a change in the trend. Strong earnings were the norm all during the run higher, and then we had sudden volatility. Seriously negative outlooks could stall out the indices as they get back toward those prior highs. Remember, they have to have some reason to break through these. QE2 carried the market up to the April highs. Now it needs a new catalyst to carry it further. Either QE3 or some kind of notion that the economy will improve even more and thus make stock prices more valuable down the road.

That is the longer-term picture. This is what we have to watch out for when the indices bounce up to the top of this range and test the old highs (the head and shoulders on SP500). That leads us to the more near-term issues. We have to keep an eye on the long term, but right now we have had a great breakout. We have a lot of stocks in these neat bases that broke higher last week. We have a market that surged tremendously on Wednesday and Thursday. It is in need of a little pullback, and Friday it started to do that. If we get another pullback Monday and Tuesday and we get some new money coming in at the beginning of the month there will be funds playing catch up we could see stocks bounce right back up. We could use that to play the move in the range. We want to play the moves that are here at hand. We keep an eye on the macro situation, and then if the market breaks out, great. It breaks out and then our upside plays continue to run for us. If it does not, we take some profits and see what happens after that. Are we going to trade in a range again as we did from August into October? We will have to see how that plays out.

There are some interesting features driving this action. It makes it pretty cool for us at least for those who want to play it upside. You have the seasonal trends in place. Remember that the techs like the time around October. They start to rally and move higher toward the end of the year. They led the move up. They were the first to break out of their range. They were the first to test and break into the new range. Techs were showing the power that they should in the season. That part of the world is correct. We anticipate those seasonal trends to continue because they broke into the new range and they can rally up to the top of the range. Then everything will be just as it should be.

When we broke out of the trading range, a lot of people were shorting the market or thought it was going to fail. I was one of them; I thought it was going to fail, but it broke out. That forced shorts to cover. Then the test came, it held, and there was a new breakout. That forced shorts to cover more. Not only that, there are a lot of funds out there playing catch up. They have to make more money to the end of the year because they were not buying any of this move up. This is the one chance to grab hold, and they want to follow it through the end of the year and catch that seasonal trend. We have that as a backstop as well.

What does it mean? It means pullbacks are likely going to be backstopped by the big funds using them as buying opportunities to catch a continued move up toward the end of the year. They have our back, so to speak, and that is just fine with me. We can play that even if the market ultimately tops out at the July and April highs and rolls back over. We can play that move and make great money doing it. We can do it with a bit more confidence because those big funds have our backs.

With that, next week we will look for a bit more pullback and some stocks getting in good position to buy again after that big surge. Then we will anticipate the big boys coming in and pushing those stocks back up, driving our current positions higher, thank you very much. We can take some more gain. It will help us make some nice trades up to the prior high on the new positions that came back to test and those great patterns that broke higher. They will make us some money as well.

Sounds easy when you lay it out that way, but listen: Patience is the key. Let them set up, and do not chase the bus. A lot of people will do that. As soon as you start chasing the bus, however, things come back on you. I still do it all the time. Here in the trading room, we will have a play ones or twice a week where we make a buy just at the wrong time, of course. Then it turns on us. Discipline is the key. Fortunately we limit that to a single sacrificial one. I always say I am just trying to get the market to turn, so I will go ahead and do it. Then, sure enough, it will turn. But understand that is part of the discipline of trading. This is a trader's market, no doubt about that right now. Everyone here as figured that out.

In any event, be patient. Let the plays come to us. If they do, we have great entries and can make money. If you chase, you have to be just right. Have a little patience and let it set up. We have the big boys backstopping us probably for another month I hate to put a timeline on it, but this is the time of year where they should be doing that. If they will provide the backstop, that's great. We will play in that field and make some money. I will see you on Monday.

Have an excellent weekend!

Support and Resistance

NASDAQ: Closed at 2737.15
Resistance:
2759 is the mid-May low
2762 is the February low
2796 is the February gap down point
2816 is the early April peak.
2825 is the 2007 closing peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak

Support:
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
The 200 day SMA at 2691
2686 is the January 2011 closing low
2676 is the January 2010 low
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low
2593 is the November intraday high
The 50 day EMA at 2587
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak
2555 is the mid-August 2011 peak
2546 is the early September 2011 gap down point
2540 is the early November 2010 lower gap point
2532 is the early August gap down point
2512 is last week's gap down point
2469 is the November 2010 low
2331 from October 2010 low and the August 2011 intraday low
2305 from the August 2010 peak (summertime base)
2139 is the May and June 2010 low
2123 is the August 2010 gap down point
2100 from the August 2010 lows

S&P 500: Closed at 1285.09
Resistance:
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1313 from the August 2008 interim peak
1318.51 is the May low
1325-27 is the March 2008 closing low and the May 2006 peak.
1332 is the early March peak
1340 is the early April 2011 peak
1344 is the February 2011 peak is being challenged again
1357 is the July 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1275 is the January 2010 low, early January 2011 peak
The 200 day SMA at 1274
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
The 50 day EMA at 1208
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1075 is the October 2011 intraday low
1099 from the mid-July interim peak
1090 is the early September 2010 gap up point
1040 from the August 2010 lows and May/June 2010 lows
1011 is the summer 2010 low

Dow: Closed at 12,231.11
Resistance:
12,283 is the March 2011 peak
12,391 is the February 2011 peak
12,754 is the July intraday peak
12,876 is the May high
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The 200 day SMA at 11,973
The June low at 11,897 (closing)
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,700
11,555 is the March low
The 50 day EMA at 11,501
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak
9938 is the August 2010 low

Economic Calendar

October 25 - Tuesday
- Case-Shiller 20-city Index, August (9:00): -3.80% actual versus -3.5% expected, -4.21% prior (revised from -4.11%)
- Consumer Confidence, October (10:00): 39.8 actual versus 46.0 expected, 46.4 prior (revised from 45.4)
- FHFA Housing Price Index, August (10:00): -0.1% actual versus 0.0% prior (revised from 0.8%)

October 26 - Wednesday
- MBA Mortgage Index, 10/22 (7:00): 4.9% actual versus -14.9% prior
- Durable Orders, September (8:30): -0.8% actual versus -1.0% expected, -0.1% prior
- Durable Orders -ex Transportation, September (8:30): 1.7% actual versus 0.4% expected, -0.4% prior (revised from 0.0%)
- New Home Sales, September (10:00): 313K actual versus 300K expected, 296K prior (revised from 295K)
- Crude Inventories, 10/22 (10:30): 4.735M actual versus -4.729M prior

October 27 - Thursday
- Initial Claims, 10/22 (8:30): 402K actual versus 402K expected, 404K prior (revised from 403K)
- Continuing Claims, 10/15 (8:30): 3645K actual versus 3700K expected, 3741K prior (revised from 3719K)
- GDP-Adv., Q3 (8:30): 2.5% actual versus 2.3% expected, 1.3% prior
- GDP Deflator, Q3 (8:30): 2.5% actual versus 2.5% expected, 2.5% prior
- Pending Home Sales, September (10:00): -4.6% actual versus -0.9% expected, -1.2% prior

October 28 - Friday
- Personal Income, September (8:30): 0.1% actual versus 0.3% expected, -0.1% prior
- Personal Spending, September (8:30): 0.6% actual versus 0.6% expected, 0.2% prior
- PCE Prices - Core, September (8:30): 0.0% actual versus 0.1% expected, 0.1% prior
- Employment Cost Inde, Q3 (8:30): 0.3% actual versus 0.6% expected, 0.7% prior
- Michigan Sentiment -, October (9:55): 60.9 actual versus 58.0 expected, 57.5 prior

October 31 - Monday
- Chicago PMI, October (9:45): 58.9 expected, 60.4 prior

November 1 - Tuesday
- ISM Index, October (10:00): 52.1 expected, 51.6 prior
- Construction Spending, September (10:00): 0.3% expected, 1.4% prior
- Auto Sales, November (15:00): 4.07M prior
- Truck Sales, November (15:00): 5.97M prior

November 2 - Wednesday
- MBA Mortgage Index, 10/29 (7:00): 4.9% prior
- Challenger Job Cuts, October (7:30): -211.5% prior
- ADP Employment Change, October (8:15): 100K expected, 91K prior
- Crude Inventories, 10/29 (10:30): 4.735M prior
- FOMC Rate Decision, November (24:30): 0.25% expected, 0.25% prior

November 3 - Thursday
- Initial Claims, 10/29 (8:30): 402K expected, 402K prior
- Continuing Claims, 10/22 (8:30): 3675K expected, 3645K prior
- Productivity-Preliminary, Q3 (8:30): 2.8% expected, -0.7% prior
- Unit Labor Costs -Preliminary, Q3 (8:30): -1.1% expected, 3.3% prior
- Factory Orders, September (10:00): -0.2% expected, -0.2% prior
- ISM Services, October (10:00): 53.7 expected, 53.0 prior

November 4 - Friday
- Nonfarm Payrolls, October (8:30): 88K expected, 103K prior
- Nonfarm Private Payrolls, October (8:30): 114K expected, 137K prior
- Unemployment Rate, October (8:30): 9.1% expected, 9.1% prior
- Hourly Earnings, October (8:30): 0.2% expected, 0.2% prior
- Average Workweek, October (8:30): 34.3 expected, 34.3 prior

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 04-Nov-11Renewed weakness on Friday left stocks to finish the week on a down note, contributing to the market's worst weekly performance in more than a month. As has been the case all week, participants paid close attention to the events of Europe.

Greece drove trade for virtually the entire week and, by extension, was responsible for most of the market's volatility. During the course of this week's first two sessions stocks sank more than 5% as participants reacted to news that Greece wanted to pursue a referendum of the eurozone bailout, effectively threatening to undermine the efficiency with which the plan could be completed and implemented. Stocks spiked in the next two sessions as sentiment improved amid reports that officials put pressure on Greece to acquiesce to the agenda of other eurozone members by abandoning its plans for a referendum. Although the drama didn't exactly rival a Greek tragedy, it still made for interesting theatre.

By Friday, stocks were unable to build on the gains achieved in the past two sessions. Buying was partly diffused by news that discourse during a G-20 meeting became less than amicable. That seemed to suggest that, despite recent efforts, an agreement on how to handle Greece and precarious conditions in the rest of Europe remain elusive.

Market participants were also uninspired by news that unemployment eased down to 9.0% from 9.1%, which is where it had been expected to remain. Nonfarm payrolls for October totaled 80,000, which is slightly less than the tally of 85,000 that had been expected, on average, among economists polled by Briefing.com. Nonfarm private payrolls increased by 104,000, which is less than the consensus call for an increase of 117,000, but on par with the ADP Employment Change that was reported this past Wednesday. The latest weekly initial jobless claims count of 397,000 was not included in calculations, though it is worth noting that that tally marked the first time in a month that initial claims slipped below 400,000.

In all, the employment levels proved on par with weak-to-moderate economic growth. With that in mind, the Fed announced mid-week that it raised its long-run umemployment rate forecast to 5.6% from 5.4%. The Fed also cut its growth forecast for fiscal 2011 to the range 1.6% to 1.7% from the range 2.7% to 2.9%. For 2012, growth is expected the range from 2.5% to 2.9%, down from a range of 3.3% to 3.7% that had been previously projected.

In its most recent policy statement, the FOMC kept its target interest rate at 0.00% to 0.25%. It also stated that the Fed remains prepared to employ its tools to promote a stronger economic recovery and that it will continue to extend the average maturity of its securities holdings. At the European Central Bank's latest meeting, members decided to become more accommodative by trimming the key lending rate by 25 basis points to 1.25%.

Other data this week featured the October ISM Manufacturing Index, which declined to 50.8 from 51.6 in the prior month. It had been expected to improve to 52.1. As for the ISM Services Index, it came in at 52.9, which is less than the 53.9 that had been broadly expected.

Given the market's fixation on macro-related headlines, earnings were given secondary concern. Overall, results this week were generally better-than-expected. Pfizer (PFE 56.50, +0.39), Kraft (KFT 35.18, -0.60), MasterCard (MA 360.09, -6.50), and Qualcomm (QCOM 56.50, +0.39) were among the more major names that reported -- each exceeded what Wall Street had expected. Comcast (CMCSA 22.75, -0.57), ArcelorMittal (MT 20.31, -0.29), Kellogg (K 49.91, +0.00) and Marsh & McLennan (MMC 30.58, -0.19) were among the more widely held names that came short of the consensus estimate.

With earnings mattering little to market participants this week, stocks slid to a 2.5% weekly loss. That snapped four straight weeks of gains.

Amid the market's weakness, the dollar attracted buyers. For the week it climbed about 2.5% against a basket of major foreign currencies. Most of its strength came earlier in the week, when participants had dumped the euro amid all of the headlines out of the eurozone. The yen also slumped earlier this week. Its dive came after Japan's officials intervened in the currency in an effort to curb its strength. Just last week the yen set a post-WWII record high.

..Nasdaq 100 -0.5%. ..S&P Midcap 400 +0.1%. ..Russell 2000 -0.7%.

 
 Index	  Started Week	 Ended Week   Change  % Change	 YTD % 
 DJIA	    12231.11	 11983.24    -247.87	-2.0	 3.5 
 Nasdaq	     2737.15	  2686.15     -51.00	-1.9	 1.3 
 S&P 500	     1285.08	  1253.23     -31.85	-2.5	-0.4 
 Russell 2000  761.00	   746.49     -14.51	-1.9	-4.7

Advanced Energy Industries (AEIS) announced that its Solaron PV inverters have been installed at a 35-megawatt solar project located near Coalinga, California.

Skyworks (SWKS $20.70 +0.21) reported fourth quarter earnings of $0.54 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.53, while revenues rose 28.4% year/year to $402.3 million versus the $400.69 million consensus. The company issued downside guidance for the first quarter with EPS of $0.50, excluding non-recurring items, versus the $0.54 consensus and revenues in the $390 million range versus the $416.65 million consensus. "Our guidance reflects near term market weakness largely offset by new program ramps. Note, our outlook excludes any contribution from Advanced Analogic Technologies."

Alcatel-Lucent (ALU $2.30 -0.46) reported third quarter earnings of $0.08 per share, $0.05 better than the Capital IQ Consensus of $0.03, while revenues fell 6.9% year/year to $3.79 billion versus the $4 billion consensus. "And given economic uncertainties, we will take more radical actions to accelerate our transformation and reduce quickly our costs structure, especially in Europe. This will generate additional savings in 2012 of EUR 200 million in fixed costs addressing mainly our SG&A spending and EUR 300 million in variable costs addressing mainly project and delivery efficiency. For the remaining part of 2011, given these market uncertainties, and selective spending from our customers, especially in Europe, we now expect weaker revenues there than initially planned in the fourth quarter of 2011. Therefore, we now are aiming for an adjusted operating margin of around 4% of 2011 sales taking benefit of the fixed costs savings already achieved in 2011, at an exit run-rate level of around EUR300 mln a year."

Advanced Micro (AMD $5.55 -0.18) announced a restructuring plan and expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 mln in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the Q1 of 2012. Based on anticipated savings from the restructuring plan, AMD expects Q4 2011 operating expenses will be approximately $610 million. As a result of implementing efficiencies across the company's operations, AMD expects to save approx $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012. The company's actions pursuant to the restructuring plan will take place primarily during the fourth quarter of 2011, with some restructuring plan activities extending into 2012. Co currently estimates that it will record restructuring expense in the fourth quarter of 2011 and in 2012 of approximately $101 million and $4 million, respectively. Of the total restructuring expense, approximately $56 million will be future cash expenditures in 2011, $33 million will be future cash expenditures in 2012 and $15 mln will be future cash expenditures in 2013. As a result of implementing efficiencies across the company's operations, AMD expects to save ~$90 mln in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 mln of expected combined operational savings in 2012.

RealNetworks (RNWK $8.09 -1.27) was downgraded to Hold from Buy at Brigantine with an $8.50 target following earnings saying there is a new CEO coming in with a strategic plan developed by the board. The firm notes the underlying business is seeing declining revenues in the mean time. They are happy to give the new plan full attention and interest when it is rolled out. However at this time they cannot tell investors to put new money into RealNetworks until they have some new direction.

Alcatel-Lucent (ALU $2.31 -0.45) reported third quarter earnings of $0.08 per share, $0.05 better than the Capital IQ Consensus Estimate of $0.03.

Revenues fell 6.9% year/year to $3.79 billion versus the$4 billion consensus.

"And given economic uncertainties, we will take more radical actions to accelerate our transformation and reduce quickly our costs structure, especially in Europe. This will generate additional savings in 2012 of € 200 million in fixed costs addressing mainly our SG&A spending and EUR300 mln in variable costs addressing mainly project and delivery efficiency. For the remaining part of 2011, given these market uncertainties, and selective spending from our customers, especially in Europe, we now expect weaker revenues there than initially planned in the fourth quarter of 2011. Therefore, we now are aiming for an adjusted operating margin of around 4% of 2011 sales taking benefit of the fixed costs savings already achieved in 2011, at an exit run-rate level of around EUR300 mln a year.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 18-Nov-11

Stocks slogged along for almost the entire session. They ultimately finished flat. The lack of action made for an unexciting finish to the stock market's worst week in more than a month.

Premarket posture was positive. Participants responded to the stabilization of yields on the debt of such trouble spots as Spain and Italy, renewed strength in the euro, and a climb by Europe's bourses from their session lows. Buying in Europe eventually lost momentum, leaving the region's major averages to settle with varied losses.

An absence of follow through buying in Europe undermined this morning's improved tone. In turn, stocks slipped at the open of U.S. trade and never really established a direction of trade. Movement in the S&P 500 was partly limited because of resistance near 1225 and support at the weekly low just beneath 1210.

Consistent with trade earlier this week, stocks lacked a legitimate form of leadership. That said, financials managed to put together their best performance of the week by advancing 0.5% as a group. They still shed more than 5% for the week, though.

Tech stocks, which make up the largest sector by market weight, lagged once again. With a 0.7% slide the sector logged its third straight loss. Tech stocks collectively fell about 4% this week.

The expiration of monthly options likely added to the market's chop. Option-related trade helped inflate share volume on the NYSE in the absence of market-moving corporate news and economic data. Share volume on the Big Board still didn't break 1 billion, though.

Action on Friday made for a rather boring follow-up to the sharp losses suffered in the prior two sessions. Those back-to-back declines combined for a drop of more than 3%, which made up the bulk of the near 4% weekly slide suffered by stocks.

 
 Index	 Started Week	Ended Week   Change  % Change  YTD % 
 DJIA	    12153.68	 11796.16   -357.52    -2.9    1.9 
 Nasdaq	     2678.75	  2572.50   -106.25    -4.0   -3.0 
 S&P 500	     1263.85	  1215.65    -48.20    -3.8   -3.3 
 Russell 2000  744.64	   719.42    -25.22    -3.4   -8.2

8:00AM Chipmos Technology announced it would effect its US$10 mln share repurchase program in compliance with Rule 10b5-1 and Rule 10b-18 (IMOS) 5.50 :

Last night, Marvell (MRVL $14.78 +1.02) reported third quarter earnings of $0.40 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.39, while revenues fell 1.0% year/year to $950 million versus the $940.08 million consensus. Non-GAAP gross margin for the third quarter of fiscal 2012 was 56.8 percent, compared to 58.1 percent for the second quarter of fiscal 2012 and 59.5 percent for the third quarter of fiscal 2011.

11:06 am Technology Sector Trading Slightly Higher Today (HPQ)

The tech sector is trading marginally higher today, trailing gains in the broader market. Semiconductors is showing relative weakness within the tech space with the Philly Semi Index trading 0.1% lower. Yet, MRVL (+7.6%) is a notable leader in the chip index. Among other major indices, the S&P 500 is trading 0.4% higher, while the NASDAQ is trading 0.1% higher and the QQQ is trading 0.7% lower on the session.

Among tech bellwethers, CSCO (+0.6%) is showing relative strength, while VZ (-0.7%) is underperforming. In earnings last night, CRM (-8.7%) reported a Q3 beat and guided Q4 EPS inline and revenues above expectations. Elsewhere, BCSI (+8.5%) posted a beat with upside guidance, INTU (+1.8%) reported a beat with mixed guidance, and MRVL (+7.6%) posted a slight beat and issued downside guidance.

In news, HPQ (+3.6%) added Relational Investor founder Ralph Whitworth to its Board, his firm also took a 1% stake in the company according to reports.

Among notable analyst upgrades this morning, HPQ (+3.6%) was upgraded to Buy at Sterne Agee and BCSI (+8.5%) was upgraded at Sterne Agee and Miller Tabak. In downgrades, MRVL (+7.6%) was downgraded to Hold at Craig Hallum.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 25-Nov-11The major market averages ended lower as the Nasdaq paced the decline with a loss of 0.8%. Today marked the seventh consecutive close in the red for the S&P 500, during which the index has fallen 7.8%. Today's slide caps off the worst Thanksgiving week ever for stocks as the S&P 500 tumbled 4.7%.

Financials were the top performers today as the S&P 500 Financial Index gained 0.4% collectively. Citigroup (C $23.63, +$0.12) and Bank of America (BAC $5.17, +$0.03), two of the more heavily beaten down names in the space, saw solid gains.

Shares of AT&T (T $27.41, -$0.14) fell 0.5% after the company announced it was withdrawing its T-Mobile merger plan from further consideration by the Federal Communications Commission. The company announced it will first focus on receiving approval from the U.S. Justice Department which filed a lawsuit to block the merger. AT&T is setting aside $4 billion which it would need to pay T-Mobile's parent company Deutsche Telekom should the deal collapse.

Retailers underperformed despite today's excitement over Black Friday, the busiest shopping day of the year. The SPDR S&P Retail Index (XRT $48.50, -$0.48) lost 1.0% after running to a gain of 0.7% early in the session. Online retailer Amazon (AMZN $182.40, -$6.59) was one of the worst performers in the space, ending down 3.5%. Home improvement stores Home Depot (HD $36.47, -$0.05) and Lowe's (LOW $22.68, +$0.20) outperformed while electronics retailer Best Buy (BBY $25.63, -$0.08) slid into the red.

Commodities were mixed as precious metals sold off while energy traded flat to higher. After a brief run into positive territory gold ended the day down more than $10 near $1685. Silver, the more speculative of the precious metals, fell more than 2.5% to finish the day just above the $31 level. Crude oil ran to session highs near $97.50 before paring its gains and ending near $96 per barrel. Natural gas outperformed all session long, gaining 1.5% to $3.51.

Markets were closed on Thursday in observance of Thanksgiving.

Widespread weakness on Wednesday resulted in a broad-based sell-off that sent stocks to their lowest level in more than a month. The descent came as market participants, already feeling bearish, reacted to the Fed's decision to increase capital controls for banks. Participants remained pessimistic following underwhelming data from abroad and an in-line initial jobless claims report, mixed durable goods orders data, and a mixed reading on personal income and spending.

On Tuesday stocks overcame disappointment related to downward revision to third quarter GDP, but a loss of momentum left the major averages to roll over. Stocks managed to rebound because of a combination of technical support and a headline that the IMF has established a new liquidity line, but the effort still failed to give stocks a positive finish.

Market participants were put into a negative mindset at the start of the week by renewed concerns about financial conditions in Europe's periphery and core after Moody's issued cautious comments about France's debt rating outlook. Bias was also imbued by the inability of U.S. officials to look past partisan politics in an effort to address domestic fiscal conditions. Such discouraging themes came as many participants continued to reflect on a significant technical breakdown that took place late in the previous week.

 
 Index     Started Week  Ended Week  Change  % Change  YTD % 
 DJIA	    11796.16	 11231.94  -564.22    -4.8   -3.0 
 Nasdaq	     2572.50	  2441.58  -130.92    -5.1   -8.0 
 S&P 500	     1215.65	  1158.67   -56.98    -4.7   -7.9 
 Russell 2000  719.42	   668.78   -50.64    -7.0  -14.7

Ticonderoga notes, Apple (AAPL $369.44) announced the details around its "special one-day Apple shopping event" at Apple retail stores that includes discounts on what the firm believes will prove to be the hottest tech gifts this holiday season. The firm says, AAPL does not need to cut prices to generate demand, however, this promotion generally drives incremental purchases as the global economy is clearly showing signs of decelerating.

09:52 am Technology Sector Trading Higher Today Along With The Broader Market (MSFT)

The tech sector is trading higher today along with gains in the broader market. Semiconductors are showing relative strength in the tech space with the Philly Semi Index trading 0.7% higher. Among other major indices, the S&P 500 & Nasdaq are trading 0.5% higher, while QQQ is trading 0.6% higher on the session. Among tech bellwethers, AAPL is trading 0.8% higher.

In news, MSFT +0.6% inks nondisclosure agreement With YHOO +0.4%, according to reports from Wednesday.

There are no notable tech names reporting after the close today.

[ReturntoSender]

From Briefing.com: 4:30 pm : Efforts to overcome early losses looked like they would end with stocks at the flat line for the second straight session, but a late squeeze gave the broad market a modest gain as participants spent the final minutes positioning themselves for the European Central Bank's monetary policy statement and the outcome of a summit of eurozone officials later this week.

Sellers sent the major averages down to marked losses in the opening minutes, but the tone of trade strengthened when financials began to offer leadership following word that results from recent EBA stress tests will be released tomorrow. Financials were down about 1% at their session low, worked their way up to the flat line, and then squeezed higher into the close for a 1.2% gain. Financials were among the poorest performers in early trade, but boasted the biggest gains by the finish.

Health care stocks make up the day's the second best performing sector, but their 0.6% advance is only half of what the financial sector scored. Pharmaceutical play Pfizer (PFE 20.47, +0.24) provided leadership to the sector for the second straight session. The stock, along with a few other blue chips, also helped keep the Dow out in front of its counterparts for the second day in a row.

The market's path to a gain was interrupted for a time by reports that analysts at S&P may be questioning the European Union's top-notch credit rating. The potential for a downgrade comes amid persistently precarious conditions in the region, so the threat of a negative revision wasn't regarded as anything new, but it did remind traders of the headline risk associated with Europe.

Although stocks stretched higher during the last leg of trade, their position was pared in the final few minutes. That left the major averages to settle shy of session highs.

Advancing Sectors: Financials +1.2%, Health Care +0.6%, Consumer Discretionary +0.5%, Telecom +0.2%, Tech +0.1%, Consumer Staples +0.1%, Materials +0.1%
Declining Sectors: Industrials -0.2%, Utilities -0.3%, Energy -0.3%DJ30 +46.24 NASDAQ -0.35 NQ100 +0.0% R2K -0.1% SP400 -0.2% SP500 +2.54 NASDAQ Adv/Vol/Dec 1167/1.64 bln/1327 NYSE Adv/Vol/Dec 1584/960 mln/1407

LTX-Credence (LTXC) announced that ANADIGICS (ANAD) has chosen the LTX-Credence PAx tester as its preferred test platform for its power amplifier cellular and WiFi device testing.

Texas Instruments (TXN $30.26 +0.03) was upgraded to Mkt Outperform from Mkt Perform at JMP Securities and the firm set a target price at $36 based on the emergence of favorable cycle indicators and their belief in the co's ability to drive upside margin leverage going forward.

Needham raises their Novellus (NVLS $36.56 +0.96) tgt to $40 from $37 following the mid quarter update. The firm prefers co over mid/large-cap semi equipment stocks for its strong positions at leading capex spenders, low exposure to second-tiered DRAM customers, improved leverage of its financial model and aggressive buyback program.

10:48 am S&P Tech Sector Trading Just Under One Percent Lower, In-line With The S&P 500 (MRVL)
The tech sector is trading lower today, along with losses in the broader market. Semiconductors are showing weakness inline with the tech space with the Philly Semi Index trading 1.1% lower. STM (-3.2%) is a notable laggard in the chip index. Among other major indices, the S&P 500 is trading 1.1% lower, while the NASDAQ is trading 1.3% lower and the QQQ is 1.2% lower on the session. Among tech bellwethers, CSCO (+0.7%) are showing strength, while ORCL (-2.7%) is a notable underperformer.

In earnings last night, SAI (+5.5%) reported a Q3 beat and reaffirmed guidance, while PLAB (-1.8%) posted an inline qtr.

Among notable analyst upgrades this morning, MRVL (+0.9%) and SABA (0.0%) were upgraded at Craig Hallum. Among downgrades, S (-2.9%) was downgraded to Sector Perform at RBC.

There are no notable names in tech scheduled to report results today after the close.

[ReturntoSender]

From Briefing.com: 4:30 pm : A late bout of buying helped stocks settle above session lows, but the broad market still booked a sizable loss as participants focused on the formidable challenges facing eurozone officials and a disappointing forecast from Intel.

Concerns about the macro picture were revived early this morning. Market participants digested data that indicated China experienced during November a slowdown in export growth, which many regarded as a sign of deceleration in the country that has helped prop up the global economy.

Sentiment in Europe soured as traders shifted their focus from the agreements struck during the eurozone summit to the difficult task of efficiently implementing plans and reaching a consensus on those topics that eluded officials last week. Responding to worries that such processes will continue to slog along without real results, yields on the debt of countries in the eurozone periphery were sent higher. The region's major bourses were also punished by sellers, such that the EuroStoxx 50 fell about 1.6%.

Weakness was exacerbated ahead of the open by a disappointing outlook from Dow component and semiconductor bellwether Intel (INTC 24.00, -1.01). The stock's 4% loss was its worst single-session slide in about 4% and dragged down the rest of the semiconductor space so that the Philadelphia Semiconductor Index shed nearly 3%.

In the face of widespread weakness telecom stocks were able to limit their losses to a collective decline of only 0.3%, which is about one-fifth of what the broad market suffered. In times of volatility, many analysts favor the sector for its stable businesses, strong balance sheets, and hefty dividends. That said, consumer discretionary plays also limited their losses to a collective decline of 0.3%.

Trading volume was paltry this session, coming in below 800 million on the NYSE. That makes for a more muddled picture when trying to assess sentiment since low share volume suggests less participation.

Favor for safety also compelled traders to rotate into the dollar, which gained about 1.2% against a basket of competing currencies by session's end.

Treasuries also traded higher, but the yield on the benchmark 10-year Note had difficulty breaking below 2.00%. Treasuries even had trouble adding to gains after results from an auction of 3-year Notes proved exceptionally strong. The auction drew a bid-to-cover of 3.62, dollar demand of $115.8 billion, and an indirect bidder participation rate of 39.1%. For comparison, an average of the past six auctions results in a bid-to-cover of 3.28, dollar demand of $104.8 billion, and an indirect bidder rate of 38.4%.

Advancing Sectors: (None)
Declining Sectors: Telecom -0.3%, Consumer Discretionary -0.3%, Consumer Staples -0.8%, Utilities -1.0%, Health Care -1.2%, Tech -1.5%, Industrials -1.8%, Materials -2.2%, Energy -2.4%, Financials -2.6%DJ30 -162.87 NASDAQ -34.59 NQ100 -1.1% R2K -1.9% SP400 -1.7% SP500 -18.72 NASDAQ Adv/Vol/Dec 635/1.54 bln/1922 NYSE Adv/Vol/Dec 616/775 mln/2418

4:37PM Cypress Semi announces that Avago Technologies (AVGO) dropped patent lawsuit regarding Optical Navigation Technology (CY) 17.36 -1.10 : Cypress paid no damages and admitted to no infringement in the case.

9:42AM Semiconductor Hldrs ETF weak in early trade thanks to INTC (SMH) 29.97 -0.90 : Thus far, it has been able to stabilize at last week's low the the 50% retracement of the Nov-Dec sprint at 29.81/29.82 (session low 29.82).

Cree (CREE) announced a nonexclusive worldwide license agreement with RFHIC Corporation that provides access to Cree's pioneering Doherty amplifier-related patents.

Apple (AAPL) announced that over 100 million apps have been downloaded from the Mac App Store in less than one year.

Lattice Semiconductor (LSCC) announced release 6.2 of its PAC-Designer mixed signal design software, with updated support for Lattice's Platform Manager, Power Manager II and ispClock devices.

09:39 am Intel Trading Lower After Issuing Downside Guidance This Morning
Intel (INTC $24.14 -0.87) is down 3.6% after reporting that its fourth quarter revenue is expected to be below expectations due to hard disk drive supply shortages.

This morning, the company announced that it's forecasting fourth quarter revenues to be $13.4 billion to $14.0 billion versus the $14.67 billion Capital IQ Consensus Estimate and below prior guidance of $14.7 billion due to hard disk drive supply shortages.

The company states sales of personal computers are expected to be up sequentially in the fourth quarter. However, the worldwide PC supply chain is reducing inventories and microprocessor purchases as a result of hard disk drive supply shortages. The company expects hard disk drive supply shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012.

The company now expects the fourth-quarter gross margin to be 64.5%, plus or minus a couple of percentage points, lower than the previous expectation of 65 percent, plus or minus a couple of percentage points. The expectation for a non-GAAP gross margin is 65.5%, plus or minus a couple of percentage points, lower than the previous expectation of 66%, plus or minus a couple of percentage points.

[ReturntoSender]

InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

- GOOG has its impact but the flat close was not bad action all things considered.
- DJ30 leads as MSFT, IBM, INTC rally on earnings.
- Existing home sales up 5%, but still distressed and cash sales.
- Expecting some more upside then the test.
- Three options for the test to come.

GOOG blocks another upside session but stocks perform decently.

It was not much of a day for the stock market. SP500 closed up just 0.88 points. It could not even muster a point. That in itself was not necessarily a bad thing considering that GOOG was slammed on its earnings report. That did not seem to hold sway, at least for Friday. Looking at the results, there are a lot of currency exchange issues that caused the numbers to be lower than anticipated. If GOOG would get a bit better at managing its currency along the lines of IBM or other big international players, its numbers would have been just fine. As it was, the stock was kicked around. We will have to wait until next week to see if the support at 580 (where it gapped and tested in October and then tested again in November) turns out to be a support level and people see this for what it is and move in.

Other stocks performed well and offset the GOOG problem. IBM surged upside. INTC posted a nice gain as well. MSFT sported a very solid 5.5% gain. Strong action offset the GOOG weakness, thus we saw the Dow (where all three of those stocks reside) post the market-leading 0.75% gain Friday. NASDAQ had to struggle with GOOG. There was also a drop in AAPL with the stock falling 1.75%. NASDAQ still held up pretty well, falling less than 2 points on the session.

You can see the issues when looking at the intraday chart. There was the drop in futures, the choppy morning trade, but then an afternoon recovery. It was a pretty impressive afternoon recovery, indeed, as the indices surged upside late in the day. NASDAQ's chart is very instructive. The index started to the downside, but it traded in a 10-point move five times. From an early low to peak, then back and forth until a furious late rally pushed the index basically flat on the session. Expiration can be volatile. When you look at NASDAQ's intraday chart, there is no doubt it was volatile on Friday.

The indices managed to pull off a decent day despite the problems with GOOG. As I talked about on Thursday night, GOOG's results seemed to be isolated to itself. I have already talked about the currency issue, and GOOG had some problems with that. That insulated the rest of the market somewhat.

SP500, +0.07%; NASDAQ, -0.06%; Dow, +0.76%; SP600, +0.3%; SOX, +0.54%; NASDAQ 100, -0.2%

There was news out on the day, no doubt. It was mostly to do with earnings, but there was some posted scheduled economic data. Friday was the day for Existing Home Sales, and they came in at 5%. That was a bit better than expectations. You have to look at the mix of the number, however, to see the full picture. Distress sales made up 32% of the market. Investor sales were 21% of the sales. Cash sales were 34%. These are still indications that the housing market is in the pre-recovery mode where the buyers are those still looking for investments or rock-bottom prices before the market returns. It always happens before the market returns. The question is when it will return. An important feature is that prices were down 2.5%. We still have not found bottom on pricing. That makes sense given there is still speculation on the downside. It will turn someday.

A lot of the other news out had to do with Europe. Greece met with its creditors wanting debt swaps. No success today, and that makes the third day in a row. They will meet again on Saturday and try to get that resolved. That is a bit disconcerting. We do not want to see Europe thrust back in the limelight because we know what happens then. The market starts to trade in the eurozone or head back that way when Europe starts to emerge as a problem. There will be some issues, no doubt. It would help if Greece could get things under control.

Other than that, there was not a lot of news outside of earnings on Friday. The week before was quite impressive with all of the data that came out. Overall it was pretty good. It continues to show a recovery in the U.S. It is slow and painstaking, but nonetheless a recovery. That is helping drive stock prices higher as we have seen on this run into earnings. The question we have heading into next week, given that the market survived GOOG, is whether this move can continue to the upside toward that April/May into July highs from 2011 that mark the top of the recovery off of the bear market lows.

It has been a good run. We basically got what we have been looking for but I think there is still more upside, particularly based on the reaction to GOOG even with AAPL down on Friday. The indices held their own. A bit tired, but I think they can squeeze out more upside before they turn down for a more significant test of that October high. That will be the key. NASDAQ and the SOX just broke above that October peak this week. They will need to test that. It will happen, and it is just a matter of when. We are looking for a bit more squeeze to the upside on the next earnings out early in the week. Then we might get the turn to make that test. That is nice. That gives us a little more upside squeeze. We can take gain on that move and then let stocks slide back down and test, and then maybe set up some new buys. That will be the litmus for the move. That is the test of the October high that marked the peak when SOX tried to break out of the eurozone range after that ugly July-August selloff that blew them off the tops from 2011.

OTHER MARKETS

The other markets were struggling, at least in the anti-Europe trade. What do I mean by that? The dollar and bonds have been inverse with respect to Europe. When Europe is better, bonds and the dollar are worse and vice versa. With Europe somewhat on the mend this week, the dollar was down along with bonds.

Dollar. 1.2928 versus 1.2936 euro. It was basically flat on the day, but it was down for the week on the better perception out of Europe. That is okay. The dollar should be stronger if the U.S. economy rises, and the dollar has been rising. What has been taking it back is when Europe feels better. We have a fear play and an economic recovery play. When you see how much the dollar is hammered back when Europe is in play, you realize that while there is some economic strength adding to the move upside, a lot of it has to do with fear out of Europe even at this juncture.

Bonds. 2.03% versus 1.98% 10 year U.S. Treasury. Bonds had a tough week. They are breaking down now. It was not long ago that yields were at 1.8%. They are starting to rise. They should rise in a stronger economy, and they are falling because of a little perceived improvement in Europe. Indeed, they broke the 50 day EMA. They are still near a support level, so they can still hold up and continue this range that started in November. It has been trading in this range after flattening out the move to the upside. This is a key test. It is the first time it has come back down to these lows it hit in early December. We will see if it can hold and bounce or if there will be an appreciable selloff which would push interest rates to the upside. That is in contrast to the idea that the Fed would announce a QE3.

Last week I said that was a possibility, and it is one that may be announced somewhat soon. There is an FOMC meeting next week that concludes on Wednesday. Some are betting that there would be a QE3 announced. As I have said before, if the economy is recovering then there is no reason to announce that at all. We have enough debt as it is and enough problems with inflation. Even though they are not showing up yet, it is getting baked into the cake, and we have to worry about that. We do not want to chance sparking it when there is no need.

But maybe there is a need since it is an election year. As I said last week, the Fed chairman knows who butters his bread. He will not be around long if a Republican is elected. A little bit of Quantitative Easing goes a long way with the stock market, and that goes a long way with election results. I hate to play conspiracy theorist and say that people in the government might try to manipulate things for political gain. Heaven forbid. We have to wake up, leave Alice in Wonderland, and face the real world. It could definitely still happen, but bonds are not indicating that would be the case. They are starting to peak lower, and that means yields are going higher as you would expect in an improving economy.

Gold. 1,663.60, +9.00. Gold just hung out on the session. Not much of a move as it hangs out just over the 200 day EMA. It has bounced and has run out of a bit of steam below that upper channel line. It may trade back down in the channel. We are trying to see a more definitive pattern set up where it will break one way or the other. Right now it is channel bound, however, and it looks like it wants to come back down. Maybe this channel will narrow and it will have a downward-pointing wedge that eventually leads to a breakout. Right now it will have to prove it. It will have to get a better pattern before we can actually play one of those moves.

Oil. 98.25, -2.10. Oil had a rough Friday. It was ugly. It is down to the 50 day EMA again, but it is still in its range. That range runs from 96 up to 104. It is holding at the 50 day EMA just as it did a week ago. This is not necessarily a serious problem for oil. It made a lower high, but it is not tanking. It is just range trading for now.

TECHNICAL SUMMARY

The internals tell an interesting story on the day.

Volume. -1.4% NASDAQ, 1.95B; +13.5% NYSE, 850M. Volume was not anything great. That is okay. You can have upside, as seen on the Dow, and have a good volume surge. That is exactly what we were seeing on Friday. There were some big volume movers from MSFT, INTC, and IBM. Those are traded on the NYSE as well as the NASDAQ. A lot of the volume we saw on the Dow was attributable to these stocks. That could be a positive. You get upside volume from buying, and that is always a good thing.

Breadth. NASDAQ +1.5:1; NYSE +1.4:1. NASDAQ was down on the day. It recovered late, but that usually does not catch up with the actual breadth. It takes awhile for a choppy day for the breadth to catch up with the final move. It did not have enough time to do that. A couple of large cap names -- GOOG and AAPL -- were holding down the index. Overall, there were more advancers and decliners on the NASDAQ. That was mirrored by the NASDAQ 100 which was down on the day. Much more than NASDAQ. Breadth on the NYSE was unspectacular. It was more in line with what we saw from the NYSE indices.

CHARTS

SP500. SP500 managed an ever-so-slight gain on top of a solid move for the week. That began on Wednesday with a good upside break. It tried to move Tuesday and failed. Wednesday it sealed the deal, and on Thursday it put in another good session. A couple of solid back-to-back days. I would have loved to see a third solid upside day, but it was not going to happen Friday with the GOOG story out there. SP500 is still in good shape. It is at 1315. I have talked before about the initial resistance being at 1345. Looking into July, it is at 1355. There is a bit more room it can run. No problem. We can squeeze another day or two to the upside, and it will look just great. After that, where does it go? It has already tested the move over October once. It will likely have to come back and test again.

The question we have to deal with is whether the market will test back to the October high and then move for a breakout over the 2011 highs. Is it going to move higher and then just collapse and trade mid-range? Or trade lower back down into the other range, trading in a very large trading range? Or will it just break down, tumble, and just forget it? That would forecast a really bad 2012 in economic terms.

Likely we will get a range trade in this higher range. Maybe not over the October peak, but in this consolidation level anywhere from 1225 up to 1260 as the bottom. This is not a purely technical read, but I am combining what is coming out of Europe and the United States. We could see a very nice trading range for SP500 that would give us a lot of opportunity to trade up and down. You have to love trading ranges. If we get a higher trading range, we can make some really good money on that. That is a preview of what I think may happen down the road.

DJ30. DJ30 was strong, moving well. It is at 12,720. No problem. The issue is the twin peaks from July are at 12,753. We are only 34 or 35 points away from that eye right now thanks to the strength of MSFT, INTC, and IBM and their results that boosted the index on Friday. It is almost at the initial peaks. These are the foothills of the prior highs. This one on the Dow was in early May at 12,876. If you want to look at it that way, we have plenty of room to the upside. 150 points more for the Dow. It will start feeling that problem. It may get shoved back down. That would take the rest of the market with it, most likely, on that test of the October high. It will test it again. This would be a great place for it to hold or set up a trading range from 12,000 to almost 13,000. Yes, Virginia, we can make money on that kind of trading range.

NASDAQ. NASDAQ was down on the session, but virtually flat. It gapped lower but recovered and still held above that October high. NASDAQ will have to test this. It will be the same issue. Will it hold or will it fold? You know the story. We were looking for a little more upside. If GOOG would have played along, that would have been nice, but we have some important moves next week. That includes AAPL after the close on Tuesday. It has had a very solid month of gains, and it is starting to get some taken out of it on Friday. Are we seeing it already sell back ahead of the numbers that have grown with the anticipation that they will be really solid? Maybe it has. AAPL has been very strong. I would be surprised if it continued to sell into the number. I expect a bit more upside.

SP600. SP600 put in a modest gain. It is struggling a bit. It is at 438. That puts it right at some peaks from February and March and then some lows from May. It is getting at the point where it will have some headwinds buffeting it, and it will have to come back and test as well. The question is when. Do they continue on for another few days or a week? That remains to be seen.

SOX. The SOX posted another gain after gapping lower. It moved up 0.5%. Very solid action, but it is also approaching resistance at 423. It closed at 414, just 9 points away.

All of the indices are getting to the upper reaches of this range. Or at least where I think they will be moving. I anticipate more gain. You never know how far these can run. I am just being realistic and noting that the indices have put in a good four-week run. They have broken out. They will maybe go a bit higher toward the top of the range, and then they will probably run out of some gas and have to test. That is totally normal. We are playing this move. If we get another good upside session, then we will probably be banking a lot more gain and then look for some downside. Another day or two, and that really puts positions in good shape. We can get out or at least lighten up some more as we were doing this week. Then we will see how the test plays out.

LEADERSHIP

Many groups this week contributed to the upside move.

Semiconductor/Tech. Semiconductors generated a big push to the upside. Some of them continued moves that were already in place. Nice moves such as KLAC that put in a wonderful upside run and extended it with the continued break higher. Telecom stocks are starting to show life as well. IDCC is starting to turn the corner after a long selloff, but it is forming something of a rounded bottom. HLIT is starting to turn as well. NTGR started a nice move up this week. It is continuing a great pattern thus far with a cup with handle breakout. Technology is obviously helping lead the move, but we also saw many other areas start higher.

Industrial. CAT and TEX were moving nicely to the upside.

Financial. Financials continue to move higher. JPM came back from a problem with its earnings. WFC continued higher with its good report.

Medical/Healthcare. Healthcare and medical has been one of the real pleasant surprises. There are stocks that have just been racing to the upside out of really nice bottoms. OFIX was running nicely to the upside. ARAY posted a great week to the upside out of another nice rounded bottom. This is what I talk about. You can pick the nice gains, the fruit of the nice patterns that set up when they make their upside breaks. It has been fairly easy money to do that. The question is whether we will be able to come up with more of those -- or will the market be able to come up with more of those -- and move to the upside in order to continue the overall market's move?

Miscellaneous. SOL had a nice rounded bottom or trend reversal and a break to the upside. WYNN is breaking back to the upside, or so it seems. We will see, but it could help produce more of that next wave to the upside. SONC has rising MACD, and it looks like it is trying to set one of these bottoms that we have seen in other stocks in the past that have broken to the upside. We will keep eyes out and see where the money is going. Maybe we can pick more of this easy fruit as they make that turn off the bottom and start the move up to form that cup.

THE MARKET

SENTIMENT INDICATORS

VIX: 18.28; -1.59
VXN: 18.97; -1.3
VXO: 16.99; -1.87

Put/Call Ratio (CBOE): 0.8; +0.1

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 50.0% versus 51.1%. Market up but bulls lower. Still moving higher but encountering resistance in this 50% area. Over the past three months a steady increase but slowing here. Still probing the overdone range and could be part of the picture that tops out the current in January, but it is not there yet. 35% is the threshold measuring bullish versus bearish action. Six weeks the bulls were below bears. A powerful sentiment signal but now dissipating. Highs from April and December (60% readings spanning December through early May 2011). The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 29.8% versus 29.8%. Holding flat, again flat lining at 30%. Bears are not growing but they are not necessarily buying into the upside move. Back and forth around 30% where it has flat-lined for 8 weeks. Again, Bears remain skeptical. Skeptics in the face of a move is a good sign the move continues. Lower but not anywhere near suggesting investors are carefree. The average the past month and more is 30%. The index spent seven weeks over the 35% threshold considered a bullish indicator. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: -1.63 points (-0.06%) to close at 2786.7
Volume: 1.948B (-1.42%)

Up Volume: 1.11B (-150M)
Down Volume: 805.49M (+114.72M)

A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Advancers led 1.4 to 1

New Highs: 56 (-23)
New Lows: 11 (+1)

SP500/NYSE

Stats: +0.88 points (+0.07%) to close at 1315.38
NYSE Volume: 850M (+13.48%)

Up Volume: 2.11B (-920M)
Down Volume: 1.67B (+280M)

A/D and Hi/Lo: Advancers led 1.39 to 1
Previous Session: Advancers led 1.9 to 1

New Highs: 134 (-51)
New Lows: 15 (-7)

DJ30

Stats: +96.5 points (+0.76%) to close at 12720.48
Volume DJ30: 255M shares Friday versus 148M shares Thursday.

MONDAY

Next week there is more data out, but it does not really start until Wednesday. We have the FOMC rate decision at the end of the day. Before that are Pending Home Sales and Crude Inventories. On Thursday we have Jobless Claims, of course. We also get Durable Orders and New Homes Sales. They will be important. On Friday there is Michigan Sentiment and also the GDP. We will see what the numbers are that the government puts out. Who knows what it really is because it is always revised.

There is a lot of data, but it will be all about earnings. There are some huge names out starting on Monday. Then there is AAPL after the close on Tuesday. It will be a big earnings week, no doubt about it. Our plan remains the same as it has been. I think we will get more upside. We watched how the market acted today. We were ready to start pulling the trigger and taking more off the table. But even with GOOG falling and AAPL falling, NASDAQ held up fairly well. The rest of the market also held up fairly well. I think there could be some more anticipation of those AAPL earnings out on Tuesday. That gives the market a couple of days to move to the upside. If we get that, we will take more off the table, lightening it up at the logical points.

What do I mean by logical points? When the market moves back up toward these prior highs. It has made a good run and fought its way back. Higher lows, higher highs. And now it is moving up to those levels. Do you think there is enough new news out there to actually drive the indices through these? Maybe if Europe says everything is okay and we all believe them. That might do it. There may be some super earnings and guidance that says everything will be rosy forever. That would certainly do it as well.

We have to stick to the reality zone and the way that markets and indices usually trade. That means when we get up to this resistance point after a good, long run and we get more news out from the earnings season, we will figure out where things are. There will not be any more anticipation and excitement such. To paraphrase Mr. Spock in an episode of Star Trek: As illogical as it may seem, having is not as enjoyable as wanting. It is that anticipation that makes it so great and drives the markets higher. Once reality is all there, that is when people decide they know the story and things come back down. Combine that with a good move. Combine that with the peaks close at hand, and then you get a little more upside. Then you get some downside after that even if there is not any bad news out there.

We will use a little more upside to take some gain and lighten the positions up. Then we see the kind of test we get. Will it just be a test of the October high, a move back up, and then trading in that range? Or maybe a breakout? Or does it come back lower and bounce around in this upper range? I have several support lines drawn, and the market could bounce around in that as well. Then you have the other alternatives where it gets an ugly and goes back down. That would probably take something negative like really bad earnings guidance and some worsening economic data. Maybe something bad out of Europe, which would be the most likely scenario. That would hurt stocks. If they cannot get a deal that would push things back down and threaten the eurozone or actually break back into the eurozone where stocks were burning over the late summer.

We will see what we get. If I was a betting man, I would say we get this range trade for awhile and then whatever happens will happen. The market will tend to forecast what will happen well down the road in the economy. If there will be a problem in 2012, the market will start pricing it in before too long, particularly as bounces up to these old highs. They have a way of making you or breaking you. You will either hold up and do fine, range trade and then make a breakout, or that will be all she wrote. The cat expends all of its lives just clawing back to this level. And then boom. It is like a basketball game. The team gets way down and has to make a big run. It makes the run but cannot quite push over the other team. Then it is done. It takes a lot of energy to make that run, and if you cannot consummate it, you are usually cooked.

I still expect some upside, and we will make some money from it. We also see good plays still developing. If we trade in a range, those will continue to give us good plays. We will still get those stocks that set up in rounded bottoms and then make the breaks to the upside. You will get those even in a trading range. We will get to trade stocks both ways, all the while looking for the great ones to set up for possibly a breakout move.

I will see you on Monday with a full, post-expiration week of trade. We will see if we get more of a bump higher from the earnings. Have an outstanding weekend!

Support and Resistance

NASDAQ: Closed at 2788.33
Resistance:
2796 is the February gap down point
2816 is the early April peak.
2825 is the 2007 closing peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak

Support:
2762 is the February low
2759 is the mid-May low
2754 is the recent October 2011 high
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
The 200 day SMA at 2659
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
The 50 day EMA at 2639
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2572 is the November 2-11 gap down point
2555 is the mid-August 2011 peak
2546 is the early September 2011 gap down point
2535 is the November island reversal gap point
2532 is the early August gap down point
2469 is the November 2010 low
2441 is the November 2011 low
2331 from October 2010 low and the August 2011 intraday low
2305 from the August 2010 peak (summertime base)
2139 is the May and June 2010 low
2123 is the August 2010 gap down point
2100 from the August 2010 lows

S&P 500: Closed at 1314.50
Resistance:
1318.51 is the May low
1325-27 is the March 2008 closing low and the May 2006 peak.
1332 is the early March peak
1340 is the early April 2011 peak
1344 is the February 2011 peak is being challenged again
1357 is the July 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1313 from the August 2008 interim peak
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
The 200 day SMA at 1258
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
The 50 day EMA at 1255
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1075 is the October 2011 intraday low
1099 from the mid-July interim peak
1090 is the early September 2010 gap up point
1040 from the August 2010 lows and May/June 2010 lows
1011 is the summer 2010 low

Dow: Closed at 12,623.98
Resistance:
12,754 is the July intraday peak
12,876 is the May high
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,391 is the February 2011 peak
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
The 50 day EMA at 12,118
12,094 is the April 2011 low
The 200 day SMA at 11,962
The June low at 11,897 (closing)
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak
9938 is the August 2010 low

Economic Calendar

January 17 - Tuesday
- Empire Manufacturing, January (8:30): 13.5 actual versus 10.0 expected, 8.2 prior (revised from 9.5)

January 18 - Wednesday
- MBA Mortgage Index, 01/14 (7:00): 23.1% actual versus +4.5% prior
- MBA Mortgage Purchas, 01/14 (7:00): +4.5% prior
- PPI, December (8:30): -0.1% actual versus 0.1% expected, 0.3% prior
- Core PPI, December (8:30): 0.3% actual versus 0.1% expected, 0.1% prior
- Net Long-Term TIC Fl, November (9:00): $59.8B actual versus $8.3B prior (revised from $4.8B)
- Industrial Production, December (9:15): 0.4% actual versus 0.5% expected, -0.3% prior (revised from -0.2%)
- Capacity Utilization, December (9:15): 78.1% actual versus 78.1% expected, 77.8% prior
- NAHB Housing Market Survey, January (10:00): 25 actual versus 21 expected, 21 prior

January 19 - Thursday
- Initial Claims, 01/14 (8:30): 352K actual versus 385K expected, 402K prior (revised from 399K)
- Continuing Claims, 01/07 (8:30): 3432K actual versus 3600K expected, 3647K prior (revised from 3628K)
- Core CPI, December (8:30): 0.0% prior
- CPI, December (8:30): 0.0% actual versus 0.1% expected, 0.0% prior
- Core CPI, December (8:30): 0.1% actual versus 0.1% expected, 0.2% prior
- CPI, December (8:30): 0.2% prior
- Housing Starts, December (8:30): 657K actual versus 673K expected, 685K prior
- Building Permits, December (8:30): 679K actual versus 680K expected, 680K prior (revised from 681K)
- Philadelphia Fed, January (10:00): 7.3 actual versus 10.0 expected, 6.8 prior (revised from 10.3)
- Crude Inventories, 01/14 (11:00): -3.438M actual versus 4.958M prior

January 20 - Friday
- Existing Home Sales, December (10:00): +5.0%; 4.61M actual versus 4.55M expected, 4.39M prior (revised from 4.42M)
- Distressed sales: 32%
- Investor sales: 21%
- Cash sales: 34%
- Prices: -2.5% year/year

January 25 - Wednesday
- MBA Mortgage Index, 01/21 (7:00): 23.1% prior
- Pending Home Sales, December (10:00): -3.0% expected, 7.3% prior
- FHFA Housing Price Index, November (10:00): -0.2% prior
- Crude Inventories, 01/21 (10:30): -3.438M prior
- FOMC Rate Decision, January (24:30): 0.25% expected, 0.25% prior

January 26 - Thursday
- Initial Claims, 01/21 (8:30): 375K expected, 352K prior
- Continuing Claims, 01/14 (8:30): 3550K expected, 3432K prior
- Durable Orders, December (8:30): 2.0% expected, 3.7% prior (revised from 3.8%)
- Durable Orders -ex Autos, December (8:30): 0.7% expected, 0.3% prior
- New Home Sales, December (10:00): 322K expected, 315K prior
- Leading Indicators, December (10:00): 0.7% expected, 0.5% prior

January 27 - Friday
- Chain Deflator-Adv., Q4 (8:30): 2.6% prior
- GDP-Adv., Q4 (8:30): 3.1% expected, 1.8% prior
- Chain Deflator-Adv., Q4 (8:30): 1.5% expected, 2.6% prior
- Michigan Sentiment - Final, January (9:55): 74.2 expected, 74.0 prior

[ReturntoSender]

InvestmentHouse Weekend Market Summary:

http://www.investmenthouse.com/weekendmarketsummary.htm

- A bit more expiration volume as indices close mixed on the day, mixed on the week.
- Large cap indices still holding the 50 day EMA, still in decent shape. Of course small caps and semiconductors are still in not so decent shape.
- AAPL effect? Large cap, big name leaders testing and weighing on the markets, but other stocks look solid as the big leaders make very normal tests of very strong runs.
- First week of earnings sees 85% of S&P reporting beating estimates.
- Headlines say German business sentiment helping the euro versus the dollar while the ongoing EU sovereign debt crisis said to help US bond markets. All the while European bond yields and CDS rates climb.
- French elections and their impact on France. A preview of the US?
- A fall from the highs then two weeks of lateral movement. The next move should be close to showing itself.
- Market still looks heavy as some leaders fade, but many quality stocks still on the move.
- AAPL earnings and an FOMC meeting could provide the market the information it needs, of course on top of Europe's troubles, French elections, earnings, economic data . . .

Expiration comes and goes leaving the market basically unchanged from Thursday.

The stock indices finished expiration Friday mixed, and they also finished the week mixed. SP500 and the Dow were to the upside while NASDAQ was to the downside on the day and the week. It is as if the markets did not know what to key off of for the week and on Friday. There was a bit more expiration volume. It kicked up, but there was not a lot of volatility. Looking at the intraday chart, there was a gap to the upside and then a rally through lunch that was given away in the afternoon. Rather typical expiration action, particularly when you have had some of the fireworks earlier in the week such as on Thursday.

There was better German sentiment, and that was said to bolster some of the other markets such as the euro versus the dollar. There were also earnings. MCD was in line and showing good U.S. sales. MSFT beat. ETFC beat by almost 50% as perhaps the retail investor is returning. Those numbers benefited the individual stocks, but outside of that there was not much of a coattail effect. Of course when the likes of SNDK, RVBD, and TPX all reported earnings that missed, there was a counterbalance. There is also that ever-present EU sovereign debt issue hanging there. It was said to impact the U.S. Treasury, sending them to the upside.

We have some news out of Europe that supposedly is hurting U.S. markets, and other news is supposedly helping U.S. markets. Then you have a mixed bag in the States. You get a mixed bag overall in the indices both on the week and on the session.

SP500, +0.12%; NASDAQ, -0.24%; Dow, +0.50%; SP600, +0.57%; SOX, -2.38%; NASDAQ 100, -0.4%.

Obviously the large caps were leading to the downside as the NASDAQ 100 topped the overall NASDAQ's decline.

It was a week that left the indices undecided. The large caps are still holding above the 50 day EMA, working laterally after that fall two weeks ago. The smaller caps and the SOX are struggling below the 50 day EMA after their fall. That was three weeks ago with a two-week lateral move. We had that initial decline, and we have had a two-week lateral move. No resolution yet, but there were some events that may precipitate more interesting action in the week or two ahead.

OTHER MARKETS

Dollar. 1.3215 versus 1.3122 euro. The U.S. dollar was down. The German business confidence supposedly helped the euro versus the dollar. Okay, I guess we can buy into that. The dollar did fall, but it held its lower trendline and the 200 day EMA. Very interesting. It is in quite an interesting pattern that could lead to an upside break. As with the rest of the market, it is equivocal right now, but it is setting up some support. That support has been steady. We will see if it can bounce.

Bonds. 1.96% versus 1.96% 10 year U.S. Treasury. Bonds were basically flat on the session, and the 10 year was actually flat. Bonds were higher and yields were lower on the week. That is the sovereign debt issue that was discussed on Friday in some other headlines. Some headlines were saying that the German confidence was helping the markets. Others said that the ongoing European sovereign debt crisis was hurting markets in Europe and helping some markets in the U.S. while stalling out equity markets. Even the headlines are contradictory, but of course you know that. It can even be contradictory within the same news source. There are different writers with different takes, and you are left scratching your head over a mishmash of opinions.

Bonds were up nicely on the week. There is no issue with respect to the allure of U.S. bonds thanks to the ongoing problems in Europe. We had the big jump in bonds when we had one of those weaker bond auctions in Europe a couple of weeks ago. We supposedly had better bond auctions this past week from Spain and Italy. But U.S. Treasuries are still holding their gains. Even though these bond auctions were termed successful, we saw interest rates on the continent continue to rise. As they continue to rise, we see our interest rates fall because money is being moved into U.S. Treasuries. We also see credit default swap rates on the rise in Europe. The spreads are widening, and that means risk. The market makers have to widen those spreads to hedge their bets.

In any event, bonds had a good week in the U.S., at least holding their gains from the moves higher two weeks back.

Gold. 1,643.00, +1.60. Gold was virtually flat. It continues its now rather tight lateral move. It is a trading range after the breakout and then the failure in late February. That was after the Bernanke talk where it was perceived that there would be no Quantitative Easing. This was after the Bernanke talk two weeks earlier where it was perceived that there WOULD be Quantitative Easing. The sum total was, with the FOMC minutes and Bernanke's subsequent talk, they said we may have to wait for QE3. Notice that I did not say they had scrapped plans for QE3. If you look at gold, it is just working laterally in a range and biding its time to see if the Fed will move once again.

Oil. 103.83, +1.56. Oil was up on the day. It remains in this range, but it continues to hold its bid as well. There are too many issues out there for it not to.

TECHNICAL SUMMARY

Volume. NASDAQ -3.8%, 1.89B; NYSE +17.5%, 894M. Volume was mixed, most likely due to the same thing that pumped up volume on Thursday: expiration. Of course it did not impact the market evenly. That could be good given that NASDAQ sold. You would like to see volume contract a bit if you are playing the upside. Volume was up as the SP500 (and the small caps, for that matter) posted a gain. You want to see that upside volume that shows more buyers than sellers. Again, all of this was likely just an expiration distortion, so we cannot put too much into it.

Breadth. NASDAQ +1.45:1; NYSE +1.9:1. Breadth was a yawner.

THE CHARTS

SP500. SP500 is still holding above the 50 day EMA. This is a two week lateral move over this level after the fall three weeks ago that undercut the 50 day EMA but then managed a relatively quick recovery. Higher low, putting in a higher bottom above the March low. The trend is still in place, it just looks heavy. Yes, it is over the February peak, so there is really no head and shoulders here. At least not a classic one. There is a two week lateral move over the 50 day EMA that we are still going through. It has the look of a lower high trying to set, but it has not yet.

MACD is lower, no doubt. The day to day volatility was there at the top. Up one day, down the next, up, and then back down again. It could not make the move, and consequently it fell away from the high. Now it has bounced along. It is basically the same story: Up a day, down a day, or up one day and down two days. You get the picture. But it has not broken yet. It does not look good. It looks heavy, but it has not broken. You can say that about all of the large cap indices.

DJ30. The Dow has a more classic head and shoulders trying to set up. Maybe it is a double head and shoulders. It is still above its 50 day EMA as well. It sold off sharply, hit the trendline and bounced, and then it just moved itself laterally over those past two weeks, similar to SP500. Heavy, yes. It still has the same problems. Lower MACD. This one put in a lower low versus the SP500 which put in a higher low. It has a lower MACD, a lower low. It has bounced but is below the prior peaks, and it looks to be running out of gas. You name it. Again, it has not broken down. It does not look great because some of the leaders that have pushed it higher thus far are struggling, but it is hanging in there.

NASDAQ. NASDAQ is the same story. It is holding the 50 day EMA for the past two weeks. Third test to this level after that decline off of the new post bear market highs. MACD put in a lower high here as well. It did put in a higher low, so it still has the trend in place. As with SP500, it simply is not that powerful looking. The major point is that they are holding support, and we have no follow-through to the downside. Follow through is everything. You can have patterns that look weak or you can have patterns that look great. If they can never follow through in the direction of the apparent trend, or the trend change that wants to take place, then it is as good as if it never happened.

NASDAQ is struggling, but some of its main components are struggling as well, such as AAPL. It is down to its 50 day EMA (that it perfectly normal, by the way). GOOG is falling down to its 200 day EMA. PCLN is in a modest two week decline as well. With those horsemen in a bit of trouble, it is understandable that NASDAQ will experience some downside as well. But as with its main component, AAPL, NASDAQ is still holding its 50 day EMA. It looks to be something of a periodic test of that after a nice, long run up the 10 day EMA and 20 day EMA until peaking in late March. Now it is in a 50 day EMA test. Nothing unusual about that at all, as I discussed earlier in the week.

SP600. The SP600 never made the break through their 50 day EMA. They have tried but failed. The small caps potentially have a head and shoulders setting up. As I said, those are important patterns, but a lot of times they set up and then never do anything. They dissipate and the move continues. We will see. It is up to leadership to help lead the small caps (and, indeed, the market) to the upside, even if the big leaders that led the move higher have to take a breather for awhile.

SOX. SOX struggled. It put in a lower low on this pullback, dropping 2.4%. It is still holding just above the early-March lows, so it has not really broken out of the range. It is trying. It put in a higher low and now a lower low. You could say it has put in something of a head and shoulders. It certainly looks like it wants to fill the gap from mid January. There are several gaps starting from early January on. It could easily move back and fill those. Of course, that would pressure the rest of the market to come back and test a bit more. Will they break down as the stocks make a further and deeper test? Not necessarily. We will talk more about this when we look out to the coming week. Suffice it to say that the week ended with the large cap indices holding support. They look as if they are weaker, but the selling has not been able to follow through. The growth indices the SOX and SP600 never did break back above the 50 day EMA, and they have toppish looks to them.

You have heavy looks on the large cap indices that could fall further but have not. Then you have toppish patterns on the smaller indices. They have not broken down either. It looks a lot like they are going to, but none of them have yet.

LEADERSHIP

The question we have to ask: Is this something of an "AAPL effect"? AAPL makes up a large percentage of the SP500 and the NASDAQ's movement. When AAPL fades, they fade as well. As noted, there are other large cap stocks that carry a lot of weight that are struggling after nice moves. PCLN is one. GOOG is another. Others are performing well. MSFT announced earnings and gapped to the upside. It is no slouch when it comes to it is impact on the NASDAQ either. But AAPL is huge, and as it fades it tends to impact the trade overall. We can understand that, and there is no intuitive problem with it. The thing is, there are still a lot of stocks holding up really well that can move these indices higher. Or at least that could offset what we are seeing from AAPL and friends. Of course those are big stocks, and they do sag the market when they move. It takes a lot more of the smaller stocks to fill in the gaps, but it looks to be doing so.

What do I mean? SBUX was down a bit this week after it announced its earnings, but it still looks solid. UA has put in a five-week lateral move, and then it started a break higher on Friday. PII announced good earnings and gapped higher. ISRG had blowout earnings again, gapped to the upside, and it helped move things. Of course there is the old, stodgy standby KO. It announced good earnings and gapped to the upside as well. These are not necessarily going to all lead the market higher, but they are definitely helping to offset some of the sag from the bigger names. And they are holding the indices up at that near support. There are still many other stocks that are good looking right now and can move. UA and SBUX definitely look as if they can continue. Then there is PII after its breakaway gap. It can continue as well.

We are finding stocks that look good all around the market. TITN is another one. This does not mean that they will necessarily be able to offset any heaviness in the indices. But when we put this "AAPL effect" into perspective, you can understand why the indices are fading as some of the leaders pull back. You can also understand why there are still a lot of stocks out there that look good and are moving up even though the indices are pulling back. They just do not have the market cap of AAPL and friends to move the index higher. But they are helping offset or blunt some of the impact of the moves from AAPL, CMG, PCLN, et cetera.

Is this necessarily when we look at the indices negative patterns? I went through all the reasons that they looked bad. But again, they are still holding up with no follow through. That is important. Seeing how some of the leaders are sagging and pulling things back but a lot of other stocks are still positive, that suggests that this is exactly what is going on. Thus, once AAPL and company finish their pullbacks, they will be in decent buying shape. The other stocks that have helped hold the index up by moving higher during this should likely continue to do so. Maybe we get a synergistic effect and really get something good going. Of course, as soon as I say that things will crack because there are some issues ahead. But you have to do the analysis and look at leadership and where they all stand to come up with our game plan for what the market may do and how we will react.

THE ECONOMY

French election and its ties to the US elections.

The socialist candidate in France is leading current president Sarkozy by 6% to 16% depending upon the poll. France is the second strongest economy in Europe behind Germany. Its bond yields are on the rise as are its credit default swaps rates. Its credit rating is on downgrade watch from S&P and Moody's is likely to follow. Compared to Greece, Spain and Italy, not many appear worried about France. If the socialist is elected (voting starts Sunday) and implements his policies, that will change rapidly. This is very instructive for the US for those who will take a look at history.

The socialist platform Hollande espouses? Increase government spending, increase taxes, decrease immigration. In our lifetimes (at least for most of us) we have seen firsthand the failure of socialism and communism as economic systems. Yet as happens about every thirty years or so, capitalism is blamed. Without capitalism, US capitalism, Europe would not have lasted this long. One example: the US invented the vast majority of the drugs that Europe and other parts of the world demand to receive at lower prices, forcing the US to subsidize the world's cheaper miracle drugs. Without the capitalist system where risk taking and invention are rewarded, there would be no such drugs. Another example: but for the wealth created by capitalism, Europe would have had no defense against the USSR as its socialist systems could not produce enough wealth to fund their own defense.

Keynesian economics stating that government spending will create supply and demand is simply empirically wrong. The most recent proof is quite clear, the massive spending from the 'stimulus' bill and the massive liquidity poured into the system by the Federal Reserve. If it worked we would have millions upon millions of jobs created here in the US given the massive government spending.

Yet, this economic 'recovery' is the worst since the Great Depression. Seventeen quarters out we average 2.4% GDP growth with just four quarters at 3% or better, none over 4%. The last reading of 3% (Q4 2011) and that was mostly made up of inventory buildup (inventory building is not good if sales are not growing); remove the inventory build and that GDP read was below 2%. The low end of historical US trend growth is 3%; when emerging from recessions we typically have 7% to 11% GDP growth per quarter for many quarters. Adjusting for inflation, sales and wages are not only flat, they are down. Once more we proved that massive government spending does not work, yet what do many want here: more taxing for more spending. If this worked, the USSR would be here today and an economic superpower.

France's socialist tendencies have kept its growth hobbled for decades. The French socialist candidate's 'solutions', however, are going to smash down on the accelerator and race France off the economic cliff. France cannot support its own spending; there is no way it, the second strongest European economy, can support the other countries or even help Germany stave off the Continent's economic woes given it is apparently, based on the current voter polls, set on committing economic suicide.

Cross the Atlantic to the US. What is the difference here? The only difference is our heritage of entrepreneurship and fervent individualism. That is rapidly losing its power in the face of 47% of the voting population paying no income taxes and an entitlement state where those receiving government benefits average MORE disposable income than those making the average US income. Are they going to vote to have to work for effectively less pay than they can get for not working? They are not bad people, but if you pay someone not to work, he won't work. When your education system through 3 decades of federal intervention has failed to inculcate the necessary values and norms of a free, self-governing society, what do you get? Many kids in high school do not even know why we are a separate country, that many of the reasons we revolted from England and King George are present here today in the laws and regulations promulgated by our federal government.

In my day if you had less you went out and worked hard to have more. Now you turn to the government, and not even for a job but a handout, a grant, a subsidy. Kennedy was a democrat and he reminded us we do not look at what our country can do for us but what we can do for our country. How things have changed when the entitlement society grew to equal the entrepreneur portion of our society. Tocqueville wrote of this long ago, and in this election it could all come true.

If nothing is done, the US will, on autopilot, follow France and Europe off the cliff with automatic tax increases in 2013 (Bush cuts expire), no cuts in entitlements (thus increasing our $60T entitlement burden), continued governmental corruption and waste (the latest example in the GSA scandal), and if not overturned by the Supreme Court, the complete domination of the citizenship thanks to the 2010 health care act. Of course those are just the automatic impacts; those in power will actively work to further regulate every aspect of society through executive orders and regulations promulgated by the EPA and other non-elected officials, Congress be damned. The Supreme Court will change dramatically and the recent 5-4 decision allowing us to maintain firearms outside a militia will be reversed. Again, Tocqueville warned of this, as did Ben Franklin, Ronald Reagan and many others, throughout our history. Given we do not learn from economic history, it is not surprising we did not learn this lesson either.

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:
Economy Summary Video

THE MARKET

SENTIMENT INDICATORS

VIX: 17.44; -0.92
VXN: 20.17; -0.82
VXO: 17.54; -0.89

Put/Call Ratio (CBOE): 0.88; -0.12

Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 44.1% versus 48.4%. Fading more abruptly after bouncing to 50.5% recently. Still not excessive either way but is fading off relatively high levels from February. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 23.7% versus 21.5%. Rebounding after the surprise decline last week. Now bulls and bears are congruent in their heading, i.e. bulls lower, bears higher. Was 23.6% a month back and that was down from the 25% to 26% level it held for weeks. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: -7.11 points (-0.24%) to close at 3000.45
Volume: 1.891B (-3.81%)

Up Volume: 826.13M (+70.5M)
Down Volume: 1.09B (-120M)

A/D and Hi/Lo: Advancers led 1.44 to 1
Previous Session: Decliners led 1.66 to 1

New Highs: 63 (-6)
New Lows: 36 (-16)

SP500/NYSE

Stats: +1.61 points (+0.12%) to close at 1378.53
NYSE Volume: 894M (+17.48%)

Up Volume: 1.91B (+560M)
Down Volume: 1.88B (-870M)

A/D and Hi/Lo: Advancers led 1.91 to 1
Previous Session: Decliners led 1.44 to 1

New Highs: 112 (+39)
New Lows: 31 (-9)

DJ30

Stats: +65.16 points (+0.5%) to close at 13029.26
Volume DJ30: 212M shares Friday versus 140M shares Thursday.

MONDAY

With that in mind, we can look at what is coming up next week. We start with looking at the economical calendar. It is fairly full. It does not really get rolling until Tuesday. Although, over the weekend we have the French election which will be quite important in the outlook on the market overall.

We have Case/Shiller, Consumer Confidence, and New Home Sales on Tuesday. We have a triumvirate of important reports. Then on Wednesday we have Durable Goods. It is always interesting to see where they are trading. They have been volatile of late, back and forth. Then we actually have an FOMC two-day meeting that we will get the results from. We will get the next look at the psyche of the Fed. Thursday we have Initial Claims and Pending Home Sales. On Friday we have another revision of Q1 GDP. It is expected to come down somewhat along with the Michigan Sentiment final for April.

We will have Europe, the scheduled economic data, and the earnings reports as well. Thus far, earnings have been coming out pretty well. Of the SP500 stocks that reported this week, 85% have beaten the street on their results. Not bad. We will have 400 or so report this coming week. It will be very busy. We do not like earnings season for stocks that we have because it makes it very difficult to play them. We make decisions about whether we want to ride them through the results or not and how much we want to ride through. We decide if we want to take some profits, for example. Or if they are not performing well and we just do not feel good about the pattern we can close them.

We also love earnings season because, on stocks that we feel will do well and we keep some positions, they have a great run like on PII. We also can play off of the moves that result from earnings. An example again is PII. It gapped to the upside in a breakaway move. It has had a nice test. It could put in a pennant and continue to the upside. We have played those quite frequently, the continuation gaps whether up or down. They tend to make us money as we leverage more into winners that are showing positive patterns and continue to the upside. We will be looking to play stocks such as that. In other words, we will still be looking to play the upside move for several reasons I have talked about before.

There is no question we have the day to day volatility that has come into the market. It started at the peak in late March. We had gaps to the upside followed by immediate selling. That was followed by immediate buying and immediate selling. Day-to-day, things got choppier, and then the market sold off in early April. But it did not break. It has moved laterally since. Two weeks laterally with the large cap indices holding support. As noted before, MACD is lower. Some leadership is falling. It does not look that strong, but there has been no downside follow through. As noted, we think this might about the "AAPL effect" where some of the leaders that led the move to the upside are obviously pulling back but have not sold off. AAPL at the 50 day EMA just as the NASDAQ is at the 50 day EMA. Coincidence? Not really. Not when you look at the percentage of AAPL as relates to the NASDAQ.

We have this pullback and it is holding. Things do not look great, but we have other stocks that look just fine in the leadership area. While the market looks heavy and some of its leaders fade, there are many quality stocks out there that can offset at least on a temporary basis and hold the market in place. We can make money off of those. Then when stocks such as AAPL decide to move back up move its 50 day EMA, if that is going to be the case, then it will bring the market right back up.

I want to reiterate that this is a normal move. You had a long, lateral base in AAPL. We had July through December, and then a breakout. Now we have had a run of the 10 day EMA and 20 day EMA. We have had four to five bounces, and then we got the fade to the 50 day EMA. That is so normal in action. MACD put in a higher high as it was moving up. Yes, it tailed off at the end, but it has made its pullback. Now we will see if it can break to the upside.

This reminds me of PCLN, a stock that we got into awhile back. It put in a base from April into January. Just a regular trading range, and then a breakout and test. We were fortunate. We were watching it, we got into it, and it ran beautifully for us. Now PCLN is coming back to test as well. Some people say it has put in a mini head and shoulders. It has. We will see if it comes back to the 50 day EMA as well and holds that. If it does, we could very easily be moving into new positions on PCLN. Maybe on this bounce we get the run to 1000 that we have been looking for.

I do not want people coming away from this saying, "Well, Johnson is off his rocker. He is super bullish now." I am not super bullish; I am concerned about what is ahead for the market. I am concerned about what is ahead for the economy. Very concerned. But I also cannot let my feelings about what I think may be happening in the economy overall bias what I am seeing in the market. What I am seeing from AAPL and others is totally normal action, so I cannot let my gut feelings about the economy color what is going on. The economy has pulled back, and these stocks have pulled back. But the regional reports in manufacturing have not flipped negative, so I cannot say we will have a recession. Yes, ECRI says we will, and I have a lot of faith in ECRI. But I also have a lot of faith in what stock charts are telling me. If they think money will flow back in from the Fed, then they could go up.

Maybe we will find out on Tuesday that that is not the case. We will have AAPL's earnings and we will have the Fed on Wednesday. Those are some pretty powerful stories coming out in the market. If we have a negative reaction to AAPL's earnings and/or the FOMC decision and the statement, then things could get ugly. As noted, the indices are holding up at support for now. It would not take much to shove them over the edge if things got really ugly, however. Any big story can still hurt the market. But that has been the case for months upon months. We see good stocks in position as the other stocks pull back. Those other stocks that are pulling back are still not really harming themselves. I think it would be a bit much to jump to the conclusion that the market will crumble and crater from here.

I am apprehensive, but I always am. I am even more apprehensive now given the action that I see. It looks like rounded tops. We have volatility, lower MACD, some internal volatility. I am cautious as can be. But when I see good patterns and I see totally normal action in some really strong, powerful stocks that are still showing that they are strong and powerful, I am not going to automatically clam up or jump ship. We will get more information, and we will definitely see where this market is going over the next week or so. We have some major news coming. What I see now does not automatically say that we will go lower.

I hope that is clear. I have tried to make it clear over the past two nights and explain what some of the volume and volatility is that we have been seeing. I hope that you understand that, while I am cautious, I still see positives that would be positive in any market that you looked at. If you see that, you cannot ignore it, just as you cannot ignore obvious negatives as well. We are at a crossroads, yes. These stocks that are pulling back could break down, but if they can maintain their strength and their trend, they could also continue right back up. We will find out more over the next week or two. That is the way it always is. But we just have to act when the market says act. If we do that, we will be in good shape.

Have a great weekend, and I will see you next week.

Support and Resistance

NASDAQ: Closed at 3000.45
Resistance:
3042 from 5/2000 low
3026 from 10/2000 low
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
3000 is the February 2012 post-bear market high
The 50 day EMA at 2990
2910 is the recent March 2012 low
2900 is the March 2012 low
2888 is the May 2011 peak and PRIOR post-bear market high
2879 is the July 2011 peak
2862 is the 2007 peak
2841 is the February 2011 peak
2816 is the early April 2011 peak.
2754 is the October 2011 high
The 200 day SMA at 2725
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2555 is the mid-August 2011 peak
2535 is the November island reversal gap point
2441 is the November 2011 low

S&P 500: Closed at 1378.53

Resistance:
1378 is the February 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1371 is the May 2011 peak, the post-bear market high
The 50 day EMA at 1371
1357 is the July 2011 peak
1344 is the February 2011 peak
1340 is the early April 2011 peak
1332 is the early March 2011 peak
1318.51 is the May 2011 low
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
The 200 day SMA at 1273
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1099 from the mid-July interim peak
1075 is the October 2011 intraday low

Dow: Closed at 13,029.26
Resistance:
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
The 50 day EMA at 12,940
12,876 is the May high
12,754 is the July intraday peak
12,391 is the February 2011 peak
12,284 is the October 2011 peak
12,258 is the December 2011 peak
The 200 day SMA at 12,147
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak

Economic Calendar

April 16 - Monday
- Retail Sales, March (8:30): 0.8% actual versus 0.3% expected, 1.0% prior (revised from 1.1%)
- Retail Sales ex-auto, March (8:30): 0.8% actual versus 0.6% expected, 0.9% prior
- Empire Manufacturing, April (8:30): 6.6 actual versus 17.5 expected, 20.2 prior
- Net Long-Term TIC Fl, February (9:00): $10.1B actual versus $102.4B prior (revised from $101.0B)
- Business Inventories, February (10:00): 0.6% actual versus 0.5% expected, 0.8% prior (revised from 0.7%)
- NAHB Housing Market Index, April (10:00): 25 actual versus 29 expected, 28 prior

April 17 - Tuesday
- Housing Starts, March (8:30): 654K actual versus 700K expected, 694K prior (revised from 698K)
- Building Permits, March (8:30): 747K actual versus 710K expected, 715K prior (revised from 717K)
- Industrial Production, March (9:15): 0.0% actual versus 0.2% expected, 0.0% prior
- Capacity Utilization, March (9:15): 78.6% actual versus 78.5% expected, 78.7% prior (revised from 78.4%)

April 18 - Wednesday
- MBA Mortgage Index, 04/14 (7:00): 6.9% actual versus -2.4% prior
- Crude Inventories, 04/14 (10:30): 3.856M actual versus 2.791M prior

April 19 - Thursday
- Initial Claims, 04/14 (8:30): 386K actual versus 375K expected, 388K prior (revised from 380K)
- Continuing Claims, 04/07 (8:30): 3297K actual versus 3275K expected, 3271K prior (revised from 3251K)
- Existing Home Sales, March (10:00): 4.48M actual versus 4.62M expected, 4.60M prior (revised from 4.59M)
- Philadelphia Fed, April (10:00): 8.5 actual versus 10.3 expected, 12.5 prior
- Leading Indicators, March (10:00): 0.3% actual versus 0.2% expected, 0.7% prior

April 24 - Tuesday
- Case-Shiller 20-city, February (9:00): -3.4% expected, -3.8% prior
- Consumer Confidence, April (10:00): 69.5 expected, 70.2 prior
- New Home Sales, March (10:00): 320K expected, 313K prior
- FHFA Housing Price Index, February (10:00): 0.0% prior

April 25 - Wednesday
- MBA Mortgage Index, 04/21 (7:00): 6.9% prior
- Durable Goods Orders, March (8:30): -1.9% expected, 2.4% prior (revised from 2.2%)
- Durable Goods -ex Transports, March (8:30): 0.5% expected, 1.8% prior (revised from 1.6%)
- Crude Inventories, 04/21 (10:30): 3.856M prior
- FOMC Rate Decision, April (24:30): 0.25% expected, 0.25% prior

April 26 - Thursday
- Initial Claims, 04/21 (8:30): 373K expected, 386K prior
- Continuing Claims, 04/14 (8:30): 3300K expected, 3297K prior
- Pending Home Sales, March (10:00): 0.5% expected, -0.5% prior

April 27 - Friday
- GDP-Adv., Q1 (8:30): 2.6% expected, 3.0% prior
- Chain Deflator-Adv., Q1 (8:30): 2.2% expected, 0.9% prior
- Employment Cost Index, Q1 (8:30): 0.5% expected, 0.4% prior
- Michigan Sentiment - Final, April (9:55): 75.7 expected, 75.7 prior

[ReturntoSender]

Amateur Investors Weekend Market Analysis (4/28/12)

http://www.amateur-investor.net/Weekend_Market_Analysis_April_28_2012.htm

The Global Dow Index (GDOW) shows a far different picture of world market conditions than the current US Market. For a description of the Global Dow you can go to Wikipedia however here is a breakdown by % of each country. Notice US Companies still make up 42.3% of the GDOW.

 
 USA 	       42.27% 
 Japan 	        9.97% 
 Great Britain 	8.30% 
 France         6.85% 
 Germany 	4.74% 
 Switzerland 	4.62% 
 China 	        3.05% 
 India 	        2.39% 
 Spain 	        2.29% 
 Hong Kong 	2.20% 
 Brazil         1.86% 
 Canada         1.64% 
 South Korea 	1.52% 
 Australia 	1.37% 
 Italy 	        1.15% 
 Mexico   	0.96% 
 Taiwan         0.79% 
 Portugal 	0.73% 
 Finland 	0.68% 
 Sweden         0.64% 
 Russia         0.54% 
 Greece    	0.44% 
 Norway   	0.40% 
 Denmark 	0.32% 
 Netherlands 	0.29%

As you can see there is a large divergence developing between the GDOW and the Dow as it has rallied above its April 2011 high while the GDOW hasn't come even close. Notice this is the first major divergence between the two since the GDOW started in 2001.



Meanwhile there is also a clearly defined Head and Shoulders Top pattern in the GDOW. Thus if the rest of the world continues to have problems, which will be reflected in the GDOW, it's hard to imagine this won't have an affect on the US Market in the future.

[ReturntoSender]

From Briefing.com: 4:30 pm : The major equity averages started the session near the neutral line, but a lack of support left stocks to slide into negative territory. They settled only modestly above session lows as participants prepared for a highly anticipated payrolls report after receiving a mixed batch of data.

Sentiment improved slightly ahead of the open when it was learned that 365,000 initial jobless claims were filed for the week ended April 28, down from the prior week total of 392,000 and less than the 375,000 claims that had been broadly expected, but the accompanying bid proved temporary. Many simply shrugged off a 2.0% increase in first quarter unit labor costs and a 0.5% decline in productivity -- the Briefing.com consensus called for an increase of 3.0% and a decline of 0.8%, respectively.

Stocks chopped along without much direction in the opening minutes of trade, but sellers were stirred by the latest. ISM Non-Manufacturing Index. After a print of 56.0 in the prior month it pulled back to 53.5 for April. Many had expected a more modest decline to 55.5.

Given the lack of actual leadership, stocks were unable to sustain a mid-morning rebound effort. Sectors with meaningful market weight, like Tech, Financials, and Energy, were weak all afternoon. Each suffered a loss of roughly 1% or more.

For the second straight session Energy stocks were the worst performers. Collectively, they declined 1.5% after a 1.6% slide in the prior session.

Suffering a 1.1% loss, Materials stocks also succumbed to stiff selling pressure. Weakness among natural resource plays was likely exacerbated by a drop in commodity prices -- the CRB Commodity Index fell 0.9% after a 1.3% loss in the prior session.

The drop by commodities came even though the dollar mustered only a modest gain today. As of the close it was up just 0.1% against a basket of major foreign currencies. It was flat versus the euro, which moved modestly earlier in the day amid hawkish commentary from European Central Bank President Draghi.

Earnings were given little regard in the broader market, but quarterly reports provided fodder for traders of individual stocks. Visa (V 116.41, -5.78), General Motors (GM 22.37, -0.56), and Prudential (PRU 54.62, -6.32) all posted upside surprises, but still suffered losses. Allstate (ALL 34.23, +1.32) staged a strong climb after it announced.

Even amid the headlines of the day market participants remained mindful that tomorrow morning brings the government's official nonfarm payrolls report. Earlier this week a glimpse of what monthly payrolls might look like was provided by the ADP Employment Report, which suggested that fewer jobs were added in April than what many had expected. Economists polled by Briefing.com expect, on average, that nonfarm payrolls officially grew by roughly 160,000 in April.

Advancing Sectors: Consumer Staples +0.1%, Telecom +0.1%
Declining Sectors: Health Care -0.4%, Utilities -0.6%, Consumer Discretionary -0.7%, Financials -0.9%, Industrials -0.9%, Tech -1.0%, Materials -1.1%, Energy -1.5%DJ30 -61.98 NASDAQ -35.55 NQ100 -1.1% R2K -1.5% SP400 -1.7% SP500 -10.74 NASDAQ Adv/Vol/Dec 643/1.84 bln/1897 NYSE Adv/Vol/Dec 900/844 mln/2094

4:42PM Sierra Wireless beats by $0.08, beats on revs; guides Q2 EPS above consensus, revs above consensus (SWIR) 7.04 +0.16 : Reports Q1 (Mar) earnings of $0.16 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of $0.08; revenues rose 4.2% year/year to $150.3 mln vs the $145.35 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.18-0.21, excluding non-recurring items, vs. $0.12 Capital IQ Consensus Estimate; sees Q2 revs of $157-162 mln vs. $152.48 mln Capital IQ Consensus Estimate. "Overall I am very pleased with our Q1 results and trajectory. We have strengthened our operating model and have good visibility to growth drivers in both M2M and Mobile Computing."

4:15PM QLogic beats by $0.02, misses on revs (QLGC) : Reports Q4 (Mar) earnings of $0.34 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.32; revenues fell 11.3% year/year to $135.1 mln vs the $137.58 mln consensus.

4:08PM TriQuint Semi announces $50 mln stock repurchase program (TQNT) 4.60 -0.29 :

4:08PM First Solar misses by $0.69, misses on revs; guides FY12 EPS in-line (FSLR) 18.07 +0.25 : Reports Q1 (Mar) loss of $0.08 per share, excluding non-recurring items, $0.69 worse than the Capital IQ Consensus Estimate of $0.61; revenues fell 12.3% year/year to $497 mln vs the $688.57 mln consensus. Co issues in-line guidance for FY12, sees EPS of $4.00-4.50 vs. $4.03 Capital IQ Consensus Estimate.

"First Solar's performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future," said Mike Ahearn, Chairman of the Board. "Looking forward, we are confident we have the right long-term strategy and the right platform to enable long-term growth and value creation. We believe that by executing our strategic roadmaps and completing our restructuring program we can achieve our targets of 2.6 to 3.0 GW of sales in sustainable markets, earning a return on invested capital of 13 to 17 percent by 2016."

Based on reductions in First Solar's ongoing cost structure related to our restructuring initiatives, the Company is increasing 2012 guidance as follows: Earnings per fully diluted share guidance to $4.00-$4.50, compared to prior guidance of $3.75-$4.25, in each case excluding restructuring and impairment charges, and costs in excess of normal warranty expense; Operating cash flow guidance to $850-$950 million, compared to prior guidance of $800-$900 million.

4:06PM Power Integrations beats by $0.09, beats on revs; guides Q2 revs above consensus (POWI) 37.21 -0.93 : Reports Q1 (Mar) earnings of $0.36 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus Estimate of $0.27; revenues fell 6.5% year/year to $71.8 mln vs the $67.26 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $78-84 mln vs. $74.42 mln Capital IQ Consensus Estimate. For Q2, Non-GAAP gross margin is expected to increase by approximately one percentage point compared with the first quarter (calculated by excluding from GAAP cost of revenues approximately $0.3 million of stock-based compensation, $0.5 million of amortization of acquisition-related intangible assets and $1.5 million of amortization of the write-up of acquired inventory). GAAP gross margin is expected to be approximately 47 percent.

TSMC (TSM) announced its 28nm high performance ARM Cortex-A9 dual-core processor test chip achieved 3.1GHz performance under typical conditions.

ON Semiconductor (ONNN $8.83 +0.52) reported first quarter earnings of $0.12 per share, $0.03 better than the Capital IQ Consensus of $0.09, while revenues fell 14.5% year/year to $744.4 million versus the $742.89 million consensus. Gross margin was 32.9%. The company issued in-line guidance for the second quarter revenues of $745-785 million versus the $783.97 million consensus Co states, "Backlog levels for 2Q12 represent approximately 80 to 85% of our anticipated second quarter 2012 revenues. We expect that average selling prices for the second quarter of 2012 will be down approximately one to two percent when compared to the first quarter of 2012. The non-GAAP outlook for the second quarter of 2012 includes stock-based compensation expense of approximately $8 to $10 million."

JDS Uniphase (JDSU $11.87 -0.14) Reports Q3 (Mar) earnings of $0.11 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.11, while revenues fell 9.9% year/year to $409.2 million versus the $420.28 million consensus. The company issued downside guidance for the fourth quarter with revenues of $415-435 million versus the $458.08 million consensus.

09:20 am Atmel downgraded to Hold at Capstone Investments: . Capstone Investments downgrades ATML to Hold from Buy as they believe growth within Touch ICs has likely plateaued. Firm says with limited upside from prior two leading customers they are more concerned about future growth prospects from touch IC products. They have noted recent OEM decisions to swap-out one touch IC vendor for another suggesting limited differentiation among touch offerings.

10:48 am Information Technology sector declines along with overall market

The tech sector is trading lower today, inline with losses in the broader market. Semiconductors are showing relative weakness with the Philly Semi Index trading 0.7% lower. WFR (-3.3%) is a notable laggard in that chip index. Among other major indices, the SPY is trading 0.4% lower today, while the QQQ is down 0.3% and the NASDAQ is trading 0.5% lower on the session.

Among tech bellwethers, GOOG (+0.7%) is showing notable strength. In earnings last night, ONNN (+4.3%) posted a quarterly beat and issued inline guidance and TDC (+6.5%) posted a beat and raise. Elsewhere, JDSU (-3.6%) and MITK (-48.1%) reported misses and downside guidance, while APKT (+0.4%) posted a miss but reaffirmed guidance. This morning, AMT (+2.6%) posted a beat, while KITD (-21.8%) preannounced downside guidance. In news, NOK (0.0%) has filed a patent related lawsuits against RIMM (-5.1%) and HTC, according to reports. Among rumors, there is renewed takeover chatter on FIO (-0.7%) making the rounds.

Among notable analyst upgrades this morning, CRM (+1.9%) was upgraded to Outperform at Credit Suisse and ONNN (+4.3%) was upgraded to Outperform at Pacific Crest. While in downgrades, NVTL (-17.1%) was downgraded to Market Perform at BMO Capital following last night's dissapointing results. LNKD (+1.3%), and MCHP (+.01%) are a few notable names in tech scheduled to report quarterly results today after the close.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 04-May-12Stocks were up nicely a few days ago, but fell in the last three sessions to finish the week at a low point, giving the S&P 500 a 2.4% weekly loss -- its worst weekly performance of the year. The sell-off on Friday followed a disappointing jobs report and concerted selling of the market's most influential sectors.

Premarket participants initially had only a modestly negative response to the April payrolls report, which inidcated that nonfarm jobs increased by 115,000 and nonfarm private payrolls increased by 130,000. However, both came short of Briefing.com consensus estimates for increases of 162,000 and 167,000, respectively. The headline unemployment rate of 8.1% was slightly less than the 8.2% that had been broadly anticipated, though.

A flurry of selling sank stocks upon the open. The effort gradually gained momentum into early afternoon trade, leaving stocks to drift along session lows for the final few hours of the day. Weakness was widespread, but Energy and Tech stocks were hit the hardest. Both settled with losses in excess of 2%. Financials fell 1.6%.

Utilities stocks made gains in the face of broad market weakness. The defensive-oriented sector's 0.2% gain was helped along by a few better-than-expected earnings reports from industry players -- the latest round of earnings results was generally uninspiring, however.

An interest in safety prompted some to rotate into the dollar, which advanced 0.3% against a basket of major forein currencies today. It gained about 1.0% for the week. Treasuries also traded higher. In turn, the yield on the benchmark 10-year Note fell to a three-month low of less than 1.90%.

Precious metals attracted buyers, gaining their only gain of the week. Losses in previous sessions ultimately led gold and silver to finish the week 1.2% lower at $1645.40 per ounce and 3.1% lower at $31.42 per ounce, respectively.

Elsewhere in the commodity complex, crude oil prices were cut down aggressively. The energy component closed pit trade at a new three-month low of $98.49 per barrel with a 6.1% loss for the week. Broad market weakness amid macro concerns and reports that oil production in Iraq is expected to pick up exacerbated selling pressure.

Although it was learned yesterday that initial weekly jobless claims fell more than expected from the prior week to 365,000, market participants were given a clue on Wednesday that April private payrolls might not have been as strong as economists had predicted when the latest ADP Employment Report suggested that nonfarm private payrolls increased by only 119,000, contrasting with calls for an increase of 170,000.

Other data failed to provide an entirely positive picture, given that the ISM Manufacturing Index made surprise improvement to 54.8 from 53.4 in the prior month, but the ISM Non-Manufacturing Index fell from 56.0 in the prior month to 53.5 for April, missing expectations for a print of 55.5. China reported a Manufacturing PMI reading of 53.3, which is its best reading in about one year, but it is still less than what had been widely expected. Most of Europe also reported disappointing Manufacturing PMI readings this week.

Personal spending increased by 0.3% during March, but that's a slower clip than the 0.5% increase that had been expected, on average, among economists polled by Briefing.com. The smaller-than-expected increase came despite a stronger-than-expected pickup in personal income, which increased by 0.4% when a 0.2% increase had been widely anticipated. As for core personal consumption expenditures (PCE), they increased by 0.2% month over month, as had been broadly expected.

..Nasdaq 100 -2.5%. ..S&P Midcap 400 -1.6%. ..Russell 2000 -1.8%. ..NYSE Adv/Dec 733/2282. ..NASDAQ Adv/Dec 501/2017.

 
 Index	  Started Week  Ended Week   Change  % Change  YTD % 
 DJIA	    13228.31	 13038.27   -190.04    -1.4    6.7 
 Nasdaq	     3069.20	  2956.34   -112.86    -3.7   13.5 
 S&P 500	     1403.36	  1369.10    -34.26    -2.4    8.9 
 Russell 2000  825.47	   791.84    -33.63    -4.1    6.9

10:04AM Nokia comment on class action complaint says ' reviewing the allegations contained in the complaint and believes that they are without merit' (NOK) 3.23 -0.12 : Co stated 'Nokia has become aware of the filing of a securities class action complaint naming Nokia Corporation as a defendant, filed in the US District Court for the Southern District of New York on May 3, 2012. Nokia is reviewing the allegations contained in the complaint and believes that they are without merit. Nokia will defend itself against the complaint.'

11:41 am Tech Stocks lower today along with market

The tech sector is trading lower today, just trailing losses in the broader market. Semiconductors are showing slight relative strength with the Philly Semi Index trading only 1.5% lower. POWI (+16.4%) is a notable leader in that chip index. Among other major indices, the SPY is trading 1.2% lower today, while the QQQ is down 1.8% and the NASDAQ is trading 1.7% lower on the session. Among tech bellwethers, ORCL (-2.6%) is showing notable weakness.

In earnings last night, LNKD (+9.0%), TRMB (-2.6%), SPRD (+14.9%), and SWIR (+6.0%) posted quarterly beats and raises, while DRIV (-11.5%) reported a beat but issued downside guidance. Elsewhere, DLB (+17.2%) posted a beat and announced a deal with MSFT (-1.9%) to include Dolby tech into Windows 8. In news, NOK (-5.2%) is trading lower after the company received a class action lawsuit alleging that it misled investors regarding its transition to MSFT's (-1.9%) Windows platform. Among notable analyst upgrades this morning, DLB (+17.2%) was upgraded at William Blair and Avondale, GA (-2.0%) and SPRD (+15.1%) were upgraded to Neutral at BofA/Merrill, and Stifel Nicolaus upgraded CTCT (+3.7%) to Buy While in downgrades, DRWI (0.0%) was downgraded to Hold from Buy at Jefferies.

LinkedIn (LNKD $118.43 +9.02) reported first quarter earnings of $0.15 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of $0.09, while revenues rose 100.7% year/year to $188.5 million versus the $177.75 mln consensus. Revenue from Hiring Solutions products totaled $102.6 million, an increase of 121% compared to the first quarter of 2011. Hiring Solutions revenue represented 54% of total revenue in the first quarter of 2012, compared to 49% in the first quarter of 2011. The company issued upside guidance for the second quarter with revenues of $210-215 million versus the $205.40 million versus the consensus, with adjusted EBITDA of $40-42 million, may not compare to $29 million ests. The company issued upside guidance for fiscal year 2012 with raised revenues to $880-900 million from $840-860 million versus the $864.31 million consensus and raised adjusted EBITDA to $170-175 mln from $155-165 millon versus estimates near $170 million.

RealPage (RP $16.29 -1.01) reported fourth quarter earnings of $0.10 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.10, while revenues rose 31.4% year/year to $71.1 million versus the $74.2 mln consensus. The company issued downside guidance for the first quarter with EPS of $0.10, excluding non-recurring items, versus the $0.11 consensus and revenues of $73-74 million versus the $76.75 million consensus. The company issued in-line guidance for fiscal year 2012 with EPS of $0.46-0.49 versus the $0.49 consensus and revenues of $320-330 million versus the $329.90 million consensus.

Digital River (DRIV $16.70 -1.89) reported first quarter earnings of $0.30 per share, $0.01 better than the Capital IQ Consensus of $0.29, while revenues rose 4.3% year/year to $102.4 million versus the $100.22 million consensus. The company issued downside guidance for the second quarter with EPS of $0.17-0.19 versus the $0.22 consensus with revenues of $92-94 million versus the $95.21 million Capital IQ Consensus Estimate. "While we are maintaining a slightly cautious outlook on the European economy, we continue to invest for the future, developing some great products in cloud-based subscriptions and building out our catalog of APIs to simplify the process of onboarding new clients. Our mission is to continually strengthen our position as the revenue growth experts in global cloud commerce."

Dolby Labs (DLB $44.30 +6.67) reported second quarter earnings of $0.91 per share, $0.11 better than the consensus of $0.80, while revenues rose 4.1% year/year to $260.3 million versus the $252.99 mln consensus. The company issued in-line guidance for fiscal year 2012 with EPS of $2.80-3.04 versus the $2.86 consensus and revenues of $910-960 million versus the $942.90 million Capital IQ Consensus Estimate. Microsoft (MSFT) will include Dolby Digital Plus 5.1-channel decoding and Dolby Digital two-channel encoding in Windows 8. Under this arrangement, original equipment manufacturers (OEMs) generally will be required to directly license and pay Dolby a base royalty rate for the right to use the Dolby technologies included in Windows 8 and installed on PCs and tablets for online and file-based content. Dolby expects the majority of PCs to continue to ship with optical disc drives when Windows 8 is released and to include optical disc playback functionality. For devices that also include optical disc playback functionality, which will be enabled by independent software vendor (ISV) applications installed on devices running Windows 8, OEMs will be required to pay a higher per-unit rate. This higher rate is consistent with historical rates paid for the inclusion of Dolby disc playback software. Dolby expects to receive only one royalty payment per device containing these technologies. Dolby does not expect this agreement to affect its fiscal 2012 outlook because Windows 8 is not expected to ship until Dolby's fiscal 2013.

QLogic (QLGC $14.80 -2.06) reported fourth quarter earnings of $0.34 per share, $0.02 better than the Capital IQ Consensus of $0.32, while revenues fell 11.3% year/year to $135.1 mln vs the $137.58 mln consensus.

09:17 am Microsoft resumed with a Buy at Stifel Nicolaus; tgt $38: . Stifel Nicolaus resumes coverage of MSFT with a Buy and sets target price at $38 saying while many investors have viewed MSFT as "dead money" and a "value trap" over the past few years, the firm believes the tides are finally changing and think the name is falling back into favor. They believe MSFT has plenty of legs remaining in several of its products (Office 2010, Windows 7, Kinect, etc.), has one of the most promising product cycles (Windows 8, Windows 8 Server, Office 12, etc.) in its history in front of it, and is levered to numerous secular trends (cloud computing, virtualization, big data, etc.), which should enable the company to outpace IT spending and outperform its peers for the foreseeable future.

[ReturntoSender]

From Briefing.com: 4:30 pm : Tech had attempted to provide the broad market with a positive source of leadership today, but instead the stock market fell to its eighth loss in 10 sessions as participants remained focused on the problems of the eurozone.

Word that first quarter economic growth in Germany exceeded expectations had quelled concerns about the precarious eurozone region and resulted in gains by Europe's major bourses, but sentiment soured when market participants were reminded of the persistent problems in the eurozone periphery. Specifically, headlines indicative of continued political impasse in Greece revived worries about what that could mean for the country's austerity plans. Greece returned to focus later in the day as financial media detailed the outflow of deposits among Greece's banks.

A relatively underwhelming dose of domestic data failed to instill confidence among market participants. Both overall retail sales and retail sales less autos increased during April by 0.1%. Economists polled by Briefing.com had expected both to increase by 0.2%.

There were no surprises to the latest Consumer Price Index. Overall CPI was flat from the prior month, while core CPI increased by 0.2%.

The Empire State Manufacturing Index for May surprised many, however. It improved to 17.1 from 6.6 in the prior month to exceed the 8.4 that many economists had expected.

Stocks struggled to sustain an early bid amid eurozone worries, but an advance by Tech helped lift the Nasdaq to a nice gain and put the S&P 500 in positive territory. However, Tech's strength proved unsustainable in the face of a broad market downturn in afternoon trade. Tech stocks collectively shed 0.5%.

Even Consumer Discretionary stocks suffered a 0.2% loss after the sector had been up about 1% at its session high. Although home improvement retailer Home Depot (HD 48.67, -1.21) lagged in the wake of its latest quarterly report, TJX Co's (TJX 42.45, +2.75) managed to maintain most of its gain following its latest earnings announcement.

Energy received an early bid, but eventually the sector succumbed to the efforts of sellers, who dropped it to a 2012 low and a 1.5% loss. Energy's action came in close connection to that of crude oil, which chopped around the unchanged line in early morning action, but fell as low as $93.77 per barrel before settling with a 0.8% loss at a 2012 closing low of $93.97 per barrel.

The afternoon slide among stocks sent both the Dow and S&P 500 to their lowest level in little more than three months. The Nasdaq set a three-month low by only an incremental margin.

Despite the slip, Treasuries saw only limited support. As such, the 10-year Note settled near the neutral line, but that kept its yield a few basis points below 1.80%.

Buying interest in the greenback grew as trade progressed. By the close the dollar was up about 0.8% against a basket of major foreign currencies. The Dollar Index is now at its highest level since January.

Advancing Sectors: None
Declining Sectors: Utilities -0.1%, Consumer Discretionary -0.2%, Telecom -0.4%, Tech -0.5%, Health Care -0.5%, Financials -0.6%, Utilities -0.6%, Industrials -0.6%, Materials -1.5%, Energy -1.5%DJ30 -63.35 NASDAQ -8.82 NQ100 -0.4% R2K -0.2% SP400 -0.4% SP500 -7.69 NASDAQ Adv/Vol/Dec 1131/1.83 bln/1387 NYSE Adv/Vol/Dec 1041/868 mln/1968

11:19 am Tech Sector trading lower today along with market

The tech sector is trading higher today, outpacing gains in the broader market. Semiconductors are also showing relative weakness with the Philly Semi Index trading only 0.2% higher. POWI (+2.1%) is a notable leader in that chip index. Among other major indices, the SPY is trading 0.01% higher today, while the QQQ and the NASDAQ are trading 0.4% higher on the session. Among tech bellwethers, GOOG (+1.2%) is showing notable strength, while CSCO (-0.9%) is under pressure.

In earnings last night, A (+5.8%) posted a quarterly beat and issued guidance slightly above consensus, whereas this morning ACXM (+4.6%) reported a beat but guided lower. In news, FB increased its IPO price range to $34-38/share from $28-35. ZNGA (+7.2%) is trading higher in sympathy. Among notable analyst upgrades this morning, The Benchmark Company upgraded MIPS (+7.2%) to Buy, JNPR (+4.1%) and JBL (+3.0%) were upgraded to Buy at BofA/Merrill and AKAM (+2.6%) was upgraded to Buy at Janney. While in downgrades, AMAT (-0.4%) was downgraded to Hold at Needham. SINA (-0.2%) is the notable name in tech scheduled to report quarterly results today after the close.

EMCORE (EMKR) announced that it has been awarded a solar panel manufacturing contract by NASA's Jet Propulsion Laboratory for its Soil Moisture Active Passive mission targeted for launch in late 2014.

O2Micro International (OIIM) was issued 20 claims under U.S. patent for its Circuits and Methods for LED control. Co was also issued 18 claims under U.S. patent for its Portable Lighting Device methodology.

8:33AM Lam Research enters into accelerated stock buyback agreement to repurchase an aggregate of $375 mln of its common stock (LRCX) 41.20 : Co announced today that it entered into an accelerated stock buyback agreement ("ASB agreement") with Goldman, Sachs & Co. to repurchase an aggregate of $375 million of Lam Research common stock. The Company will acquire the common shares pursuant to the ASB agreement as part of its $1.6 billion stock repurchase program.

HGST, formerly Hitachi Global Storage Technologies and now a Western Digital company, (WDC) announced a new family of CinemaStar 2.5-inch hard disk drives for the growing traditional and small form factor audio/video and consumer electronics HDD markets.

Nokia (NOK) unveiled two new mobile phone models as it continues to accelerate its strategy to connect the next billion consumers to information and the internet. The Nokia 110 and Nokia 112 have been designed to appeal to young, urban consumers who want to experience a fast, affordable online experience.

Suntech Power (STP) and Krannich Solar announced an agreement for Suntech to supply up to 120 megawatts of solar panels in 2012.

Groupon (GRPN $13.74 +2.05) reported first quarter earnings of $0.02 per share, excluding non-recurring items, in-line with the consensus of $0.02, while revenues rose 89.6% year/year to $559.3 million versus the $530.45 million Capital IQ consensus. Gross billings, which reflects the gross amounts collected from customers for Groupons sold, excluding any applicable taxes and net of estimated refunds, increased 103% to $1.35 billion in the first quarter 2012, compared with $668.2 million in the first quarter 2011. Free cash flow, a non-GAAP financial measure, was $70.6 million for the first quarter 2012. At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term debt.The company issued in-line guidance for the second quarter with revenues of $550-590 million versus the $560.11 million consensus. Income from operations for the second quarter 2012 is expected to be between $25 million and $45 million, compared with a loss from operations of $101.0 million in the second quarter 2011.

Agilent (A $41.21 +2.32) reported second quarter earnings of $0.78 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.73, while revenues rose 3.3% year/year to $1.73 billion versus the $1.71 billion consensus. For the third quarter the company sees EPS of $0.82-0.84, excluding non-recurring items versus the $0.83 consensus and revenues of $1.77-1.79 billion versus the $1.76 billion consensus. The company issued in-line guidance for fiscal year 2012 with EPS of $3.18-3.24, excluding non-recurring items, versus the $3.19 consensus and revenues of $6.94-7.00 billion versus the $6.95 billion consensus.

OPNET (OPNT $26.81 +4.68) reported first quarter earnings of $0.21 per share, excluding non-recurring items, $0.01 better than the consensus of $0.20, while revenues rose 8.5% year/year to $44.6 million versus the $44.48 million consensus. The company issued in-line guidance for the first quarter with EPS of $0.16-0.23, excluding non-recurring items, versus the $0.20 consensus and revenues of $42.5-45.0 million versus the $43.73 million consensus. "While we are disappointed that we did not achieve our revenue guidance for the quarter, we are pleased to report that $2.2 million of the $2.4 million in delayed March deals discussed during our last conference call have been closed. Our application performance management (APM) products continue to drive our business. APM product bookings accounted for 78% of our total product bookings during the March quarter, and grew 37% from the same quarter last fiscal year. The growth in demand for our APM products, together with strong maintenance renewal bookings, allowed us to end the quarter with record deferred revenue of $54.9 million."

[ReturntoSender]

InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

- Facebook IPO: Like? No.
- Facebook lackluster trade, NASDAQ issues, more market downside. Not a banner day for stocks or investor confidence.
- Facebook raises $16B, the largest tech IPO ever. Of course, that is just 4 days of the US debt growth.
- Bonds here, bonds there pricing in something not that great.
- Bulls flat, bears creep higher, but after this week they likely converge more.
- After FB, the market still has to face Europe and a truly bad situation.
- Some more downside then an oversold bounce attempt.

Facebook fails to save the market from its downside.

Like? It took two major efforts from the underwriters to hold $38.

I will open with the intraday chart of Facebook. It was a little late in opening, and it sold off immediately. The underwriters stepped in to support it, it rallied into mid-afternoon, and then it sold off in the last hour. It took every scrap of what the underwriters had to close this stock above the IPO price of $38. It closed out at $38.23. There is a doji on the chart. One day and a doji. It went nowhere, and it was considered a disappointment in that it failed to rally to the upside. Maybe this was a mistake by Zuckerberg; maybe it was a mistake by the underwriters and where they wanted to price it. Whatever the case, it was priced at the max, and people wanted to get rid of it. It wanted to dive lower in the afternoon. It took the underwriters to step up and eat the loss. Day one is in the books. Next week we may see the stock fall further, but it depends. We never invest on the first day. We like to wait until it makes its first base, and then we will invest if it shows us the right moves.

Things were not so great. It took two efforts to keep the stock afloat above $38, and then we had issues with NASDAQ. It raised questions about electronic trading once again. A big thumbs down for NASDAQ because it pretty much muffed the largest tech IPO in history. Remember the flash crash problem with the electronic trades that saw the Dow lose 1000 points intraday only to rebound. Basically all retail investors and many other investors threw up their hands and gave up at that point. They figured they could win against the market, but maybe they cannot win against the market if they play that game and buy and hold. That has been the problem for quite some time, not just since the flash crash. This market, and frankly any market around the world, requires that you do not just put blind stops in and hope for the best. We know all about that and will not go that route.

NASDAQ muffs biggest tech IPO in history. Nothing like continuing to assure investors.

NASDAQ did nothing to help investor confidence. That is one of the main problems now. We hear about lack of confidence from businesses in the future, in the economy, and in what the administration will or will not do. The same thing occurs with investors. They will not put their hard-earned money into the market if they feel like they have little control over the outcome. Sure, stock prices go up and they go down, but it is the wild gyrations with no rhyme or reason that has squelched investor enthusiasm. It was not a banner day for the stock, and it was not a banner day for NASDAQ.

DEBT VERSUS CAPITAL

U.S. Debt Increase Per Day: $4 billion

Do the math: the largest tech IPO ever generated only 4 days worth of our national debt increase.

If closed all loopholes, collected all taxes supposedly evaded (I guess that includes Mr. Saverin), raised corporate taxes to 40%, and went back to Clinton-era individual tax rates we would still fall 1.4T short of meeting just the 2012 spending projections.

There is an interesting feature with the largest technology IPO on record. Facebook raised $16B dollars, and the U.S. debt increases by $4B a day. You do the math. The largest tech IPO in history generated only four days' worth of our national debt increase. We could closed all of the loopholes, and we could collect all of the taxes that are supposedly evaded; we could raise corporate taxes to 40%; we could go back to the Clinton-era individual tax rate; and we would still fall $1.4T short of meeting JUST the 2012 spending projections. I say projections because we do not have a budget. Under the Obama administration, we have never had a budget. Obama produces these absurd, pie-in-the-sky budgets that fail to garner one vote in the House or the Senate. We have problems on both sides. No leadership from the White House, no leadership from the Senate, and no real leadership in the House. Although the House has at least tried to pass budgets and has done so, but no one else is taking up the mantle and addressing the hard issues. The point is that even if we raise taxes where they want to, we cannot tax our way out of it. Even if we confiscated everything that the Fortune 500 companies made a year, we simply could not cover our debt.

We have serious problems, but we apparently do not have serious people in Washington, D.C. if the largest IPO in technology covers merely four days of our debt increase. Those are mind-boggling numbers. We have a bunch of children and fools who are supposedly leading this country. I can only hope that in November we toss everyone out and start over again.

Looking at the action on the day, there was yet another modest bounce to the upside on the open. Last night my query was whether Facebook would be the savior of the market. Obviously it was not. Whatever faux enthusiasm there was at the open quickly dissipated, and stocks sold off. They managed to bounce when Facebook opened, and they sold off big time late in the session for, once again, losses across the board. They tried to trade around the flatline for much of the day, but they could not hold the move.

SP500, -0.74%; NASDAQ -1.24%; Dow, -0.59%; SP600, -0.79%; SOX, -1.88%.

Pretty much a beating across the market, but with most of the pain felt in the growth areas. There was another down day in the market, and it is one of many. We have three weeks to the downside. It was expiration as well, so there is a bit of extra volume on the session. That does not really mean anything. The point is we have a sharp blow down for the past three weeks. We are below support, moving into the next level that we think would hold. Those are the ones I cited on Thursday, and I will go over them again when discussing the market technicals.

OTHER MARKETS

It was a wild week, but wild is relative.

Dollar. 1.2767 versus 1.2702 euro. The dollar went straight up. The dollar was lower against the euro, but intraday it hit 1.2642 on the low, and that was before it reversed late. Some monkeying around was going on. In my opinion, it was basically a short cover at the end of the week because the dollar had been straight up against the euro, based upon the once-again inflamed worries over what is happening in Greece, Spain, Italy, and now Ireland again. Not to mention France. There are a lot of problems, and the dollar is the recipient of those funds that are leaving all the European banks. First it was in Greece with the run on the bank, and then Spain. Who knows what will be next? I hear Ireland may be having some banking

Bonds. 1.71% versus 1.70% 10 year U.S. Treasury. That money is going into bonds as well. The 10 year on Friday was down a bit. It does not really matter. That was a record 10 year low. Bonds have surged. There was one of those false breakdowns in March. Then it gapped and has rallied sharply to the upside. It does not look as if bonds will slow down.

Indeed, if we look at bonds across the world, focusing on Europe, we know that there is a serious issue. It looks as if something nefarious is brewing, and that something nefarious may be ready to occur. The US bonds have been running higher, of course, but the Germany bund, its 10 year, is at a record low at 1.43%. Greek 10 year bonds are over 29%. Spain is at 6.27%, running back up toward 7%. Credit default swap spreads are rising even higher and higher. Credit default swaps are basically insurance policies, and when spreads widen that means uncertainty is growing. We know how markets of any kind hold great disdain for uncertainty.

Gold. 1,592.10, +17.30. Gold continued its rebound. That is about all we can call it at this point. Two days of a good bounce off of that Wednesday doji at the upper channel line. We have a decent relief bounce underway. It may be more; it may be less. We will see how it all plays out, but gold is bouncing where it needs to. I note that some have called this the bottom in gold. No one knows whether it is or not, but I like the pattern we are seeing. It is holding at an interesting point above that late-December low as well as where it reached down in September 2011 and reversed intraday. It is an interesting point and one where it could mount a relief bounce. We will see if something more comes of it.

Oil. 91.48, -1.08. Oil continues to struggle, and it was down again. No bounce for oil at $92. Oil continues to slide lower on, well, you name it: European economic issues, Chinese economic issues with fear of a hard landing, the Indian slowdown, and Brazil having to cut rates and worry about its economy. Not to mention the U.S. which showed somewhat upsetting news on the economic front on Thursday (there was none out on Friday). There was the negative turn for the Philly Fed, and the leading economic indicators flipped negative as well.

We have some issues here. When it all piles up, you get the dollar rallying and our treasuries moving to the upside. With the fear, you even get gold moving to the upside plus a little oversold relief bounce. The only thing that does not benefit is oil because it depends on economic activity. It had a big run. Now those nasty speculators that ran oil higher are running it lower now, I guess. So let's kick at them. Why are they doing that? Or maybe we should reward them for running it lower. We vilified them when it went higher, so we should make nice to them as it goes lower. Fat chance.

TECHNICAL SUMMARY

The internals were not too exciting, but they were somewhat interesting nonetheless for an expiration session.

Volume. NASDAQ +30%, 2.66B; NYSE +23%, 1.06B. It was expiration Friday along with the Facebook IPO, so that artificially raised the volume. We cannot put too much into that. All week the market sold on elevated volume, and that shows that there has been distribution which is high-volume selling of shares. That continued on Friday even though it was expiration. If you take away some of the Facebook trades, and you still get a high level of volume. Suffice it to say that stocks are selling on high volume. That is not necessarily a bad thing. It gets it out of the system, and they can reverse after that. But that is another story altogether.

Breadth. NASDAQ -2.5:1; NYSE -3.1:1. The advance/decline line was not that nasty on Friday.

Put/Call Ratio. The put/call ratio is at 1.34. It is down a bit from Thursday, but it is high. It has been high for several days straight. It is over a week now above 1.0, and it has been in the 1.2 - 1.4 range which is extraordinarily high. Looking at Investor's Business Daily where they compile all of the put/call numbers together, it is all the way up to 1.4. It is quite high, and that shows that there are a lot of downside plays. We do not know whether they are speculating to the downside or hedging for the downside by buying puts. You do know from general knowledge that it is a combination of those.

Point being that this is a very high number. When everyone starts to think the market is going lower as evidenced by the number of puts being bought either for hedging or outright speculation, that it usually a sign that you have something of a turn coming. Again, this fits into our thesis that the indices are approaching a support level that will at least bounce them up some in a relief bounce.

Summary: We have volatility running higher, hitting almost a resistance point. We have the bulls and bears getting a bit more in line. They need to do more work. We also have the put/call ratio showing that it was a very high level and plays into a rebound scenario. The sentiment indicators are getting a little extreme. When they get extreme, you look for turns in the opposite direction.

THE CHARTS

SP500. SP500 is heading lower once more. It is doing exactly what we thought it would do. We felt that SP500 had more to the downside. It had additional ground to cover down to the 1285 level where we were looking for it to hold. It is about 10 points above that right now. It has that ABCD pattern that I talked about on Thursday night. That is a good bullish consolidation pattern as well. High put/call ratio, VIX spiked up, and now we have a good pattern coming down to the next support level. Maybe we get a bounce. You have to watch for those. It is a situation where everything starts falling together and stacking up into position. You do not want to ignore it and just go all into the downside, particularly after three weeks lower. That is another reason to anticipate a bounce. The rubber band is stretched down to a support level. It has a good consolidation pattern, you have the put/call ratio, and you have VIX. It all dovetails. The problem is that a lot of patterns out there are utter junk. I will talk about that shortly.

DJ30. Dow showed the same kind of pattern: down on rising volume, approaching the next support level, and with of something ABCD pattern. It is not as clean as SP500, however. It is heading lower, but if SP500 hits and bounces, the Dow will do the same thing.

NASDAQ. NASDAQ has an ABCD pattern as well. It is coming down to its support level. We were looking for a hold around 2745, and it closed at 2779. We have about 35-40 points where it can still drop down to support, and then we see if it bounces as well. Same story as the SP500. All those same items falling into position as far as sentiment. We have NASDAQ approaching a support level with a decent pattern as far as a consolidation of the last run.

SP600. SP600 fell as well. It is coming down to its support level although it does not have an ABCD pattern. Remember it is a head and shoulders that broke lower, but it is coming down near some support. We will see if it can hold the line next week as it heads toward 415.

SOX. SOX blasted through its support level. It did not stop or even try to pause. It decided to avoid the Christmas rush and dive through that November 2010 low. Now it is back in the eurozone, that July-December meltdown from last year. The semiconductors leading lower does not bode well for the rest of the market. This one goes to the stack on the other side of the scale that suggests maybe no bounce. Unless things are falling off a cliff, you typically will get a rebound after three or so weeks of downside particularly given all of what I have cited before. There are the ABCD patterns, falling back to support, the stretched rubber band, the put/call ratio, the VIX. You get the idea.

LEADERSHIP

You always have to take leadership into consideration. Do we have any leaders out there? Some stocks have not broken down, although they may not be in particularly great position to buy.

Retail. TJX is holding at the 50 day EMA. That is not bad at all. It is holding up quite well in a weak market. BBBY has had a rough end of the week, but it still has its uptrend in place. It still made a higher high, it is still making higher lows. We will see if it can continue on. RL is heading in the opposite direction, driving lower. It is diving toward those late-2011 lows. We have the good and the bad. That is the way this market is.

Industrial. A lot of key industrials look ready to bounce after a real bloodletting. CAT is at support. It might try to bounce upside, but it would likely just be a relief bounce. It has a big, broad top. It is will probably want to test this very strong 3.5 week move to the downside. At most it will probably make it up to this upper resistance line. That would put it around 97. You could maybe make a trade out of that, but unless there is a major change in the market, you will not get the kind of reversal you want. We have been playing JOY to the downside. It tried to bounce on Friday. Volume has been picking up a bit as it sold off. It is down big over the past four weeks. These could bounce, but these are the kinds of stocks that just rebound. Their patterns kind of stink, so they rebound to take some of the downside pressure off, and then they roll back over and sell again. You can see this across pretty much any of the industrials, whether it is metals with FCX, or industrial metals with BHP. These are in freefall. They could bounce, but they surely do not look as if they will reverse any time soon.

Energy. Energy is the same thing. Coal continues to get utterly slaughtered with BTU getting taken out and shot in as many ways as possible. On the other hand, oil service has been hammered lately, but it has also come back down to a support level. It may want to try a bounce. HAL is coming to a prior low. SLB has come back to a prior low. Slightly undercutting them, but how often do you get that rebound after that slight undercut of prior lows? It did that pack in December, so it is not unheard of that it could make a recovery. We will have to watch those. We are not ready to delve into them with new plays necessarily. But we will definitely be watching them early next week. We will see what they do when they get back up to that support level, which now looks to be a resistance level. If they move through it, then we can make a play to the upside. Looking at the OIH, the overall oil service ETF, you can see that they have bounced down just below the lows and are trying to come back up through them. We will watch those.

Healthcare/Drugs. Drugs and healthcare-related stocks are not stinking the place up. ARNA surged to the upside. It has a beautiful test underway. EW is making a nice test of its own. VRTX has a very nice flag or pennant test of a great move to the upside. We even have some of those interesting possible rebounds in a trading range or off of support. NFLX has a big reversal off of the lows on Friday, right at a support level. There are possibilities to the upside, and we will take a look at those. As a matter of fact, if we will have a rebound those will be the ones we want to play.

THE MARKET

SENTIMENT INDICATORS

The VIX continued to run higher. It is up near the 200 day EMA and is at some resistance. Not a lot of resistance, but it will bump into some. That fits into our thesis that the SP500 and NASDAQ are almost at support levels that will want to bounce them after three weeks of sharp downside selling. There you have it. You got the definitive story, and you heard it here.

VIX: 25.1; +0.61
VXN: 27.55; +1.05
VXO: 24.52; +0.24

Put/Call Ratio (CBOE): 1.34; -0.11

Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls/Bears. The bulls crept higher last week from 38.7% up to 39.4%. Stock traders were bullish, at least as of Wednesday and Thursday this week. That also included some of last week, so we will likely see that turn. 35% on the bulls is considered the threshold. Below 35% is bullish for the market. They are all bummed, but it is good for the market because enough people are out of the market where if they want to buy, all of a sudden there is plenty of ammunition to run the market higher.

Bears crept higher. They went to 22.3% versus 20.4% last week. They held steady the week before that. They are coming off of almost 24%, however. They have a lot of catching up to do with the bulls. Actually we want to see the bulls turn and fall through 35. We want to see the bears spike higher and have another of these crossovers to the upside as we had back in 2011 when thing got so negative. Then we had a good rally out of that selloff back in the summer and early fall of last year. We had another crossover even before that back when things were really bad in 2009. You get these crossovers, and they can generate good rallies. When we look at the charts, you will see that we have the same kind of action that we had in 2011 when these Quantitative Easing rounds come to an end.

Bulls: 39.4% versus 38.7%. Up again though off the 43.0% and 41.9% the prior two weeks. Still heading for 35%, the key level that turns this to a bullish indication. This is lining up with the put/call ratio. Still over 35% (below which is considered bullish) but dropping fast. Just as the market found support to bounce the bulls ran. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 22.3% versus 20.4% versus 20.4%. Heading back up toward the 23.7% before. Have to get over 35% to really be a good upside indicator and it is heading in the wrong direction. Thus the contrary worry it stirs. Are investors too complacent with the market facing all of these issues? Below late March, and that was down from the 25% to 26% level it held for weeks. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: -34.9 points (-1.24%) to close at 2778.79
Volume: 2.665B (+29.94%)

Up Volume: 984.21M (+758.84M)
Down Volume: 1.68B (-90M)

A/D and Hi/Lo: Decliners led 2.45 to 1
Previous Session: Decliners led 4.12 to 1

New Highs: 11 (-6)
New Lows: 198 (+30)

SP500/NYSE

Stats: -9.64 points (-0.74%) to close at 1295.22
NYSE Volume: 1.066B (+22.81%)

Up Volume: 1.37B (+829.32M)
Down Volume: 3B (-1.05B)

A/D and Hi/Lo: Decliners led 3.07 to 1
Previous Session: Decliners led 6.28 to 1

New Highs: 30 (-10)
New Lows: 157 (-4)

DJ30

Stats: -73.11 points (-0.59%) to close at 12369.38
Volume DJ30: 240M shares Friday versus 147M shares Thursday.

MONDAY

Next week we will have some economic data. There are existing home sales on Tuesday. There are new home sales on Wednesday. Thursday we have durable orders and initial claims. We have the Michigan Sentiment final which has been higher than most expectations. We had those surprising economic numbers from Philly and the leading economic indicators last week. Those were not good news. We will have to factor that in along with post-Facebook trading. We still have to face Europe, and I talked about some of the issues when discussing bonds. They are just not good. Late on Friday night, Spain trade to slip in that its deficit numbers would be different. It will add 5.9 percent versus 5.4 percent. We have a bad situation getting worse.

There are the issues I have already discussed. It looks to be a very oversold market. Of course, an oversold market can become even more oversold, so we do not want to say that it has to bounce because it has been down for three weeks. It does not work that they way, although you watch for it. We have all those factors I have already discussed. Three weeks down, support level, high put/call ratio, and the VIX running higher. We do not have a lot of leadership, but we do have some in position to rally. We could get others to bounce. We have to look at it as a relief bounce. That is all you can say given the hard selling. This test from SP500 holdings promise. Same with the NASDAQ; it, too, holds the promise of that ABCD. They are not the prettiest patterns, and leadership is always the litmus test of any attempted move higher.

When you have an ABCD, your target is the prior high. Even if it rallies off of this, it is not necessarily going to break out to a new rally high unless the Fed announces some kind of Quantitative Easing plan. Same as it did in late 2011 with Operation Twist, and same as in August 2010 with QE2. We got the big moves thanks to those, particularly in QE2. Twist wasn't as big, but it managed to keep the money flow coming. That is what the market wanted.

We have those possibilities out there that could bounce the market to a new rally high. We also have to understand that there were a lot of gyrations as QE2 ran out before things fell off a cliff. We have some serious problems. We get an oversold bounce similar to what we had when QE2 was running out. We got good bounces. Look how it made an ABCD and rallied back up just above that prior peak before it rolled over. We can get very good bounces in these moves. Overall, however, we have to watch out for this again because Europe is much worse than I think most people realize or want to admit. We talk about bond yields and CDS spreads, we talk about leaving the EU, and that all seems kind of surreal to us. It is like Europe is having its usual problems. But those usual problems are the kind of problems we had, and what happened? We kind of got out of ours by flooding with liquidity. We have managed to have a very modest attempt at recovery. But we dragged Europe down. It could not stand. It was doing okay, but it could not survive without us. Now it is feeling the aftershocks. We are going back and forth, playing a hot potato game. Now we add in China, Brazil, and India with their economic issues, and we have problems.

We get a bounce after some more selling to start next week. We come down to these support levels I am talking about. We see if we get a reversal. If we do, we can take some more downside off of the table. Then we let the market bounce and we can play some upside. As noted, we will find some stocks that look good to bounce to the upside. We are not playing them for new highs; we are playing them for a bounce to the upside. Then we look to reload to the downside. That is what we had to do this time last year when QE2 was running out. That is the market we have now. We are waiting on the Fed to announce something else. The Fed has no choice but to announce something because the economy is that bad, and so are the other economies of the world. We will get that. The question is when do we get it? That will answer a lot of the problems we face with respect to uncertainty. Why? Because the market loves liquidity, and it will run higher. But all that will do is make the ultimate pain even worse than it would be now.

The Fed is committed. Bernanke does not want to be seen as the guy who let a potential recovery slip away. He does not want to be seen as the guy who engineered the second Great Depression, although that is what he has done with the help of the Obama administration and its policies. He has to act before too long, or else he will be seen as the political hack that he is. I am being very hard on him, I know. It has been a long week. But he will have to act before too long because he has no choice. You can pick the image of Mr. Bernanke that you like: villain, hero, whatever. The point is that he will have to make a decision relatively soon. Given the shape of the European situation and problems and China and other places (as well as here in the U.S.), he is not going to have a lot of success. We worry about whether there will be another recession. Europe is heading that way. It is already in one, really, even though it had a 0.0% GDP growth this past quarter. It is just getting worse. Frankly, I do not believe we are getting better. It is a long way from being in a recession, but Mr. Bernanke will not take that chance. He will do something. The question, again, is timing.

For now, we play a little upside. We play a little more upside on a bounce after that selling, and then we gear up for more downside. Not a pleasant prognosis, but we are working through a post-Quantitative Easing/Twist environment, and we are waiting on the next program to be initiated. That is what you get with this kind of intervention.

I will see you on Monday. Have a great weekend!

Support and Resistance

NASDAQ: Closed at 2778.79
Resistance:
2816 is the early April 2011 peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
The 10 day EMA at 2887
2888 is the May 2011 peak and PRIOR post-bear market high
2900 is the March 2012 low
2910 is the recent March 2012 low
The 50 day EMA at 2965
3000 is the February 2012 post-bear market high
3026 from 10/2000 low
3042 from 5/2000 low
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
2754 is the October 2011 high
The 200 day SMA at 2741
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2555 is the mid-August 2011 peak
2535 is the November island reversal gap point
2441 is the November 2011 low

S&P 500: Closed at 1295.22

Resistance:
1318.51 is the May 2011 low
1332 is the early March 2011 peak
The 10 day EMA at 1335
1340 is the early April 2011 peak
1344 is the February 2011 peak
1357 is the July 2011 peak
The 50 day EMA at 1364
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
The 200 day SMA at 1278
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1099 from the mid-July interim peak
1075 is the October 2011 intraday low

Dow: Closed at 12,369.38
Resistance:
12,391 is the February 2011 peak
The 10 day EMA at 12,682
12,754 is the July intraday peak
12,876 is the May high
The 50 day EMA at 12,907
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,284 is the October 2011 peak
12,258 is the December 2011 peak
The 200 day SMA at 12,198
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak

Economic Calendar

May 22 - Tuesday
Existing Home Sales, April (10:00): 4.65M expected, 4.48M prior

May 23 - Wednesday
MBA Mortgage Index, 05/19 (7:00): 9.2% prior
New Home Sales, April (10:00): 340K expected, 328K prior
FHFA Housing Price Index, March (10:00): 0.3% prior
Crude Inventories, 05/19 (10:30): 2.128M prior

May 24 - Thursday
Initial Jobless Claims, 05/19 (8:30): 365K expected, 370K prior
Continuing Claims, 05/12 (8:30): 3250K expected, 3265K prior
Durable Goods Orders, April (8:30): 0.3% expected, -3.9% prior (revised from -4.0%)
Durable Goods Orders -ex Transportation, April (8:30): 1.0% expected, -1.3% prior (revised from -0.8%)

May 25 - Friday
Michigan Sentiment - Final, May (9:55): 77.5 expected, 77.8 prior

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 25-May-12

Action this week started on a strong note. Stocks then managed to muster gains that ranged from only incremental to modest during the course of the next few sessions. Still, it was enough to give the S&P 500 a weekly gain of 1.7%, which snapped a streak of three straight weekly slides.

Perhaps most impressive about the stock market’s weekly advance is that it came in the face of continued concerns about persistently precarious conditions in the eurozone.

Most of this week’s gain was earned on Monday, when a blend of bargain hunting and short covering drove the S&P 500 to its strongest performance in two months to snap a six-session losing streak. However, stocks had a hard time building on that bounce with the euro communicating serious concerns about the eurozone by dropping to a near two-year low of about $1.25.

The euro acted as a trading catalyst for most of the week. Its gyrations came amid concerns about the possibility and implications of a eurozone breakup. Those concerns were aroused by a former Greece prime minister, who indicated that the country may be considering an exit from the euro. Subsequent calls by eurozone officials for contingency plans and the need for the creation of eurozone bonds were aimed at addressing the issue. There was also some chatter about coordinated central bank actions regarding swap line fees.

As was the case at the start of the week, stocks were helped later on by some short covering, which helped the broad market reverse out of the red as many market participants were prompted to exit their positions so as to take profits or protect against additional upside action once stocks had stabilized.

In the final session of the week trade was mostly subdued, or at least until the final hour. For the first several hours the broad market was restricted to a low-volume chop with so few traders at their desks ahead of the long Memorial Day weekend. A lack of headlines also made the market less appealing to play. However, a modest slip by the euro seemed to evoke a final flurry of selling. While both the Nasdaq and the S&P 500 managed to limit losses, the Dow fell a little harder due to the weighting of a few Industrial and Financial constituents.

CORPORATE NEWS
Home improvement retailer Lowe's (LOW 27.24, +0.14) reported stronger-than-expected earnings, but issued disappointing guidance this week. Fellow retailers Best Buy (BBY 19.17, +0.35), Urban Outfitters (URBN 28.42, +0.39), and Polo Ralph Lauren (RL 149.84, +1.16) were also in play. Polo Ralph Lauren complemented its quarterly report with news of plans to double its dividend to $0.40 per share.

Dell (DELL 12.46, +0.01) endured its worst one-day drop in more than a decade to set a new 52-week low in response to a disappointing quarterly report. Fellow Tech outfit Hewlett-Packard (HPQ 22.33, +0.56) was greeted with a positive response following its latest earnings announcement, resulting in the stock’s best single-session percentage gain in more than a month. Meanwhile, Yahoo! (YHOO 15.36, +0.01) made headlines with its decision to sell half of its stake in Alibaba.

Diversified financial services giant JPMorgan Chase (JPM 33.50, -0.47) opted to suspend its share repurchase program, but stated that it intends to maintain its dividend.

ECONOMICS
Only a dearth of domestic data was released this week.

Durable goods orders increased by 0.2% during April, but orders less transportation items declined by 0.6%. It had been generally expected that overall orders would increase by 0.3%, while orders less transportation would increase by 1.0%. Prior month data was revised to reflect a 3.7% decline in overall orders and a 0.8% decline in orders less transportation items.

The latest weekly initial jobless claims count totaled 370,000, which is on par with the 365,000 initial claims that had been widely forecasted, and consistent with the 372,000 initial claims filed in the prior week.

During April existing home sales hit an annualized rate of 4.62 million while new home sales hit an annualized rate of 343,000. Respective rates of 4.65 million and 339,000 had been broadly expected.

The revised monthly Consumer Sentiment Survey from the University of Michigan made a surprise improvement to 79.3, which stands as a four-year high.

Global data of note featured disappointing PMI manufacturing and services numbers from the eurozone. Numbers from France also disappointed, but readings from Germany were more mixed.

Amid the persistently precarious conditions in Europe, the OECD now expects a mild economic contraction in the euro area.

Leaders of China conveyed a willingness to consider accommodative policies with regard to stimulating economic growth. Later in the week it was announced that the World Bank trimmed its growth forecast for China to a rate slightly greater than 8%.

The Japanese yen was also hit with selling pressure. Its weakness followed a decision by analysts at Fitch to downgrade Japan's long-term debt rating to A+ from AA.

TREASURIES
Late last week the yield on the benchmark 10-year Note set a new historical low fractionally under 1.70%, but improved sentiment in the stock market prompted some participants to rotate out of the safe haven, resulting in a modest rise in yields.

A series of auctions this week featured offerings for Notes with 2-year, 5-year, and 7-year terms.

The auction of 2-year Notes drew a bid-to-cover of 3.95, dollar demand of $138.3 billion, and an indirect bidder participation rate of 33.3%. For comparison, the prior auction drew a bid-to-cover of 3.76, dollar demand of $131.6 billion, and an indirect bidder rate of 32.1%, while an average of the past six auctions results in a bid-to-cover of 3.71, dollar demand of $129.9 billion, and an indirect bidder rate of 33.1%.

Results from an auction of 5-year Notes drew a bid-to-cover of 2.99, dollar demand of $104.7 billion, and an indirect bidder participation rate of 42.6%. For comparison, the prior offering produced a bid-to-cover of 3.09, dollar demand of $108.2 billion, and an indirect bidder rate of 47.5%, while an average of the past six auctions results in a bid-to-cover of 3.00, dollar demand of $105.1 billion, and an indirect bidder participation rate of 45.1%.

The auction of 7-year Notes drew a bid-to-cover of 2.80, dollar demand of $81.2 billion, and an indirect bidder participation rate of 42.7%. For comparison, the prior auction attracted a bid-to-cover of 2.83, dollar demand of $82.1 billion, and an indirect bidder rate of 38.2%, while an average of the last six auctions results in a bid-to-cover of 2.88, dollar demand of $83.5 billion, and an indirect bidder rate of 39.4%.

Semtech (SMTC $23.89 +0.19) reported first quarter earnings of $0.27 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus of $0.31, while revenues rose 3.7% year/year to $116.6 million versus the $116.03 million consensus. The company issues in-line EPS guidance for the second quarter with EPS of $0.37-0.45, excluding non-recurring items, versus the $0.42 consensus and revenues of $146-154 million versus the $144.91 million

Riverbed Technology (RVBD $15.66 +0.14) was initiated with a Buy at Gabelli & Co saying they believe Riverbed is well positioned to capitalize on the explosive growth of global long-distance data traffic, infrastructure consolidation (data centers, servers, networks, and enterprise storage), the globalization of information technology infrastructure, cloud computing, and virtualization. Firm says the network equipment market is expected to grow 8.7% and reach $39.4 billion in 2012 according to IDC.

[ReturntoSender]

Amateur Investors Weekend Stock Market Analysis (5/26/12)

http://www.amateur-investor.net/Weekend_Market_Analysis_May_26_2012.htm

The Global Dow Index (GDOW) which is a good indicator of world market conditions continues to exhibit a Head and Shoulders Top pattern. It appears the GDOW may test it's Neckline support area (yellow line) this Summer which is just above the 1550 level. In addition also notice the 61.8% Retracement Level from the early 2009 low to the 2011 high is just above the 1550 area as well. Thus the 1560 area appears to be a major support level for the GDOW this Summer.



Meanwhile in the longer term if the Neckline support area were to be broken then we could see an eventual retest of the previous 2009 low based as a large "ABC" corrective pattern evolves from the late 2007 high.

[ReturntoSender]

From Briefing.com: 4:10 pm : Stocks ended on their best levels of the session as a Wall Street Journal report suggesting the Fed is “weighing more action amid recovery doubts,” and the strong Australian first quarter GDP print of 1.3% QoQ bolstered investor confidence. The Nasdaq led today’s advance, climbing 2.4% while the S&P 500 and Dow both finished with 2.3% gains.

This morning’s European Central Bank interest rate decision went as expected as the central bank held its benchmark interest rate steady at 1.00% with head Mario Draghi insisting the bank would act if needed.

Economic data disappointed, but had little impact as both productivity and unit labor cost revisions fell short of estimates.

The Fed's latest Beige Book was released this afternoon. but stocks did not see any real reaction. In short, it suggested that overall economic activity in the dozen Fed districts continued to increase at a modest to moderate pace in March and early April. Reports of consumer spending were "unchanged to up moderately."

Shares of Tempur-Pedic (TPX 22.39, -21.28) fell 48.7% after the company lowered its guidance due to new competitive product introductions. The company now expects full year earnings per share of $2.70 which is down from its previous estimate of $3.80-3.95. Also moving lower was the company’s full year revenues guidance which was dropped to $1.43 billion from its previous expectations of $1.60-1.65 billion. Related names Select Comfort (SCSS 20.61, -5.32) and Mattress Firm (MFRM 28.00, -7.30) were also under pressure on the news.

Gold miners gave up this morning’s solid gains with most ending the day in negative territory. The Market Vectors Gold Miners ETF (GDX 47.62, +0.09) eked out a small gain of 0.2% to finish higher for a fourth consecutive session. Individual names such as Barrick Gold (ABX 40.45, -1.60) and Yamana Gold (AUY 16.08, -0.01) both finished in the red.

Ancestry.com (ACOM 25.06, +2.43) jumped 10.7% on reports the company is putting itself up for sale. Today’s surge has the stock contending with both its 100- and 200-day moving averages which come into play near resistance provided by the March lows.

Treasuries were hammered for a third consecutive session as the long bond lost another point and a half. Today’s selling ran the 10-yr yield up to 1.651% at the cash close where it is now more than 20 basis points above last week’s record low. The yield curve swung steeper on the selling as the 2-10-yr spread widened to 140 basis points.

The Volatility Index, or VIX, fell 10.5% to finish at 22.11, its low level since May 29.

Volume picked up as 861 million shares changed hands on the floor of the New York Stock Exchange.DJ30 +286.84 NASDAQ +66.61 SP500 +29.63 NASDAQ Adv/Vol/Dec 2091/1.70 bln/445 NYSE Adv/Vol/Dec 2689/861.6 mln/383

5:03PM Oracle unveils "industry's broadest cloud strategy" and introduced Oracle Cloud Social Services, a broad enterprise social platform offering (ORCL) 27.53 +0.83 : Oracle Cloud delivers a broad set of industry-standards based, integrated services that provide customers with subscription-based access to Oracle Platform Services, Application Services, and Social Services, all completely managed, hosted and supported by Oracle. Offering a wide range of business applications and platform services, the Oracle Cloud is the only cloud to enable customers to avoid the data and business process fragmentation that occurs when using multiple, siloed public clouds. Oracle Cloud is powered by leading enterprise-grade infrastructure, including Oracle Exadata and Oracle Exalogic, providing customers and partners with a high-performance, reliable, and secure infrastructure for running critical business applications. Oracle Cloud enables easy self-service for both business users and developers. Business users can order, configure, extend, and monitor their applications. Developers and administrators can easily develop, deploy, monitor and manage their applications.

4:31PM Microchip announces receipt of antitrust clearance in U.S. and submission of non-U.S. antitrust filings to acquire Standard Microsystems (SMSC) (MCHP) 31.70 +0.91 : Co announced that, in connection with the previously announced definitive agreement under which Microchip will acquire Standard Microsystems (SMSC), Microchip and SMSC were granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on May 18, 2012. Microchip also announced that the required non-U.S. filings for pre-closing antitrust clearance applicable to the merger have been submitted.

4:06PM Tessera Tech sees Q2 revs $59-60 mln vs $58.70 mln Capital IQ Consensus Estimate; sees significantly higher IP litigation expense (TSRA) 13.79 +0.64 : Revenue from the Intellectual Property segment is expected to range between $50.5 million and $51.0 million, which includes one-time payments of approximately $8.0 million, lower reported unit volumes of certain DRAM licensees, and the transitional impact of a renewed contract with a major DRAM licensee... Non-GAAP operating expenses for the second quarter 2012, excluding litigation expenses, are expected to range between $44.0 million and $45.0 million, which compares to $43.4 million in the prior quarter and includes expenses related to our continued investment in MEMS, lens, and camera module designs in our DigitalOptics segment... The Intellectual Property segment's litigation expense in the second quarter of 2012 is expected to be significantly higher than the first quarter 2012 expense of $3.5 million, which was exceptionally low due to the timing of litigation events.

4:05PM Aehr Test Systems announced receipt of a follow-on order for its advanced ABTS high-power burn-in system (AEHR) 1.23 +0.00 : "We expect that this customer will have a need for additional ABTS systems for both production and engineering burn-in requirements, as it ramps up capacity for new higher-power ASICs and wireless and mobile processors."

AMD (AMD) announced the launch of its latest AMD E-Series Accelerated Processing Unit platform. Designed for essential notebook and desktop personal computers which meet basic performance needs at accessible price points.

10:29 am S&P Information Technology

The tech sector is trading higher today, outpacing gains in the broader market. Semiconductors are also showing relative strength with the Philly Semi Index trading 2.5% higher. WFR (+9.0%) is a notable leader in that chip index. Among other major indices, the SPY is trading 1.3% higher today, while the QQQ is up 1.6% and the NASDAQ is trading 1.5% higher on the session. Among tech bellwethers, TXN (+3.0%) is showing notable strength, while FB (-1.2%) is under pressure once again.

In earnings last night, GWRE (+10.4%) posted a Q3 earnings and revenue beat. In news, ACOM (+10.9%) is reportedly considering a sale. Also, LNKD (-0.4%) experienced a security breach leaking passwords, according to reports. Among notable analyst upgrades this morning, GRPN (+8.1%) was upgraded to Hold at Stifel Nicolaus. While in downgrades, SYMC (+0.3%) was downgraded to Mkt Perform at FBR, RAX (-2.5%) was downgraded to Hold at Jefferies, and VSH (+0.6%) was downgraded to Neutral at JP Morgan.

VRNT (+0.8%) is the only notable name in tech scheduled to report quarterly results today after the close.

[ReturntoSender]

COTD - Country Debt Loads

http://www.chartoftheday.com/201206222.htm?T

Chart of the Day

For some perspective on the European sovereign debt crisis, today's chart illustrates the forecasted 2012 debt to GDP ratio for each of the PIIGS (red bars) plus a handful of today's major economies (blue bars). While the PIIGS are currently enduring relatively high debt loads, it is noteworthy how some of the relatively safe nations/bond markets (e.g. United State and Germany) are not far behind. These relatively high debt loads are of concern as they could lead to higher taxes sometime in the future and can risk fiscal crises if bond holders sense an increasing risk of default. The current crisis in Europe provides a clear example of the bond market's reaction (i.e. higher bond yields) to increased default fears. This leads to a very interesting case study that is Japan. With a debt to GDP ratio of over 200%, the Japanese 10-year bond yield is a relatively low 0.83%. Why? At the moment, the bond market feels that the Japanese have the ability to repay their debts -- in part due to Japan's perceived ability to raise taxes. To that end, Japanese Prime Minister Yoshiko Noda just won opposition support for the doubling of the nation's sales tax to 10% by 2015. So it's not just the amount of debt but also convincing your banker that you are good for it.

[ReturntoSender]

An unexpected decline in manufacturing data seemed to be the predominant factor pushing the Dow lower today. The Institute for Supply Management said its index of national factory activity fell almost four points to 49.7 from 53.5, far below expectations of 52.2 for the month of June. This marks the first time since July 2009 that the index fell below the 50 mark, which indicates an economic contraction. Stocks immediately turned lower following the data's release earlier this morning. While the decline in American manufacturing arrived unforeseen, a larger decline in eurozone manufacturing came as no surprise, as factories in Germany and France show they're suffering from the problems of their southern neighbors.

http://www.fool.com/investing/general/2012/07/02/manufacturing-decline--dow-drop.aspx#.T_HRS8WDmSo

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 10-Aug-12

Dow +42.76 at 13213.06, Nasdaq +2.22 at 3020.86, S&P +3.07 at 1405.87

Equity markets started today's session lower by nearly 0.5%. The losses held early on before the S&P 500 got a lift from a strengthening euro. Challenged by low volume, stocks then staged a slow climb off their lows resulting in a marginally positive close. The S&P 500 ended higher by 0.2%.

Two companies saw heavy selling after reporting their quarterly results. Ubiquiti Networks (UBNT 8.71, -6.30) fell 42.0% despite an earnings and revenue beat. However, the company issued lower guidance which was responsible for today's heavy selling which has dropped the stock to its lowest level since the shares started trading in October 2011.

Elsewhere, Grocery store operator Roundy's (RNDY 7.71, -2.52) plunged 24.6% after missing on earnings. Revenues were slightly below expectations and the company lowered their full-year outlook. The disappointing report combined with multiple analyst downgrades puts the stock at its all-time low, near $7.70.

The telecommunications sector has managed to stay positive today. As most sector components traded in-line with the broader market, Level 3 Communications (LVLT 21.94, +1.76) spiked 8.7% after securing additional financing. In addition, analyst coverage of the stock was initiated at Goldman Sachs with a buy rating.

Financials underperformed the broader market before rallying into the close. The SPDR Financial Select Sector ETF (XLF 14.94, +0.01) gained 0.1%. Within the sector, American Express (AXP 55.85, -0.62) and Morgan Stanley (MS 14.61, -0.10) slipped 1.1% and 0.7% respectively. Barclays (BCS 11.52, +0.31) outperformed other banks as shares gained 2.8%. Today's advance came on the heels of an announcement that Sir David Walker will be the next Chairman.

Manchester United (MANU 14.00, 0.00) was flat on its first day as a publically traded company as underwriters supported the stock at $14.00. This week's other IPO, Bloomin' Brands (BLMN 12.86, -0.63) dipped 4.7%. Shares of the company saw their first down day since it began trading on Wednesday.

J.C. Penney (JCP 23.40, +1.30) gained 5.9%. The company delivered disappointing earnings and reported a 21.7% decrease in same store sales. However, an upbeat earnings call and likely short-covering led to a reversal in the stock. The stock lifted off its pre-market lows as company's Chief Executive Officer Ron Johnson indicated that last quarter's earnings do not reflect the success of recent pricing and marketing changes which have only been in effect for less than a month.

The economic calendar was light today as well. Export prices, excluding agriculture, declined by 0.3% in July after they had decreased by 1.4% in the prior month. Excluding oil, import prices were down in July by 0.4%, which follows the 0.3% decrease experienced in the prior month.

The Treasury Budget for July showed a $69.6 billion deficit, which is better than the deficit of $71.0 billion that had been broadly expected. The report has mattered little to market participants as equity indices did not respond to the news.

Stimulus chatter continues as markets make slim advances

Looking back on the week, Monday started with headlines indicating that The People's Bank of China suggested it would take monetary policy up a notch in the back half of the year and vowed to bolster the economy with improved credit. It also sees a broader use of currency in cross-border trade and investing. Knight Capital Group (KCG 2.90, -0.17) confirmed weekend reports that it will raise $400 million in convertible preferred stock. The preferred stock will be convertible into approximately 267 million shares of common stock of the company. The S&P 500 ended higher by 0.2%.

Tuesday began with comments out of Germany where a spokesperson out of Angela Merkel's camp indicated that the German Chancellor has conceded her hard stance and will back the ECB's bond buying program. Most notable earnings report was Chesapeake Energy (CHK 19.68, -0.63), which gained 9.4% for the day after missing earnings estimates by $0.03 but beating revenue expectations handily. The company also made positive commentary on asset sales. With no economic data of note being released, the S&P ended up 0.5%.

On Wednesday, European macro data was light, with Germany's Trade Balance exceeding expectations. In the UK, Bank of England Governor Mervyn King spoke in favor of David Cameron's conservative budget and said that further rate cuts may be counterproductive. Priceline.com (PCLN 563.16, +0.90) plunged 17.3% after missing on revenues. The company issued lower third quarter guidance, blaming the cloudy outlook on the persisting European debt crisis. The S&P 500 finished near the unchanged level.

Thursday's latest weekly initial jobless claims count totaled 361,000, which was lower than the expected 375,000. The trade deficit narrowed to $42.9 billion during June after an upwardly revised prior month deficit of $48.0 billion. Economists polled by Briefing.com had expected that the June deficit would come in at $47.5 billion. Consumer staples were Thursday's main laggard. Monster Beverage (MNST 54.27, -6.93) plunged 9.7% after missing earnings expectations by $0.02 and missing revenue forecasts by $3 million. The S&P was nearly unchanged on the day.

Handful of earnings scheduled to come in

There will be a considerable drop off in the number of companies reporting earnings next week. Just over 20 companies in the S&P 500 are expected to report their quarterly results. Going forward, earnings will largely be dominated by retailers whose fiscal periods end in July. Local deal website Groupon (GRPN 7.44, +0.79) will report Monday after the close, while Home Depot (HD 53.06, -0.09) TJX (TJX 44.46, -0.54) and Michael Kors (KORS 42.32, -0.68) will report on Tuesday morning.

 
 Index     Started Week  Ended Week  Change  % Change  YTD % 
 DJIA	    13096.17	 13207.95   111.78     0.9    8.1 
 Nasdaq	     2967.90	  3020.86    52.96     1.8   16.0 
 S&P 500	1390.99   1405.87    14.88     1.1   11.8 
 Russell 2000  788.48	   801.55    13.07     1.7    8.2

9:48AM Semiconductor Hldrs displays some relative strength as it pushes into positive territory, hovering near yesterday's two month high at 33.77 (SMH) 33.72 +0.06 :

NVIDIA (NVDA $15.18 +0.47) reported second quarter earnings of $0.27 per share, $0.05 better than the consensus of $0.22, while revenues rose 2.7% year/year to $1.04 billion versus the $1.01 billion consensus. Q3 non-GAAP gross margins are expected to be flat relative to the prior quarter, at 52.0 percent. Co issues upside guidance for Q3, sees Q3 revs of $1.15-1.25 bln vs. $1.1 bln Capital IQ Consensus Estimate. Co also sees non-GAAP operating expenses are expected to be approximately $350 million. Q3 GAAP and non-GAAP tax rates are expected to be approximately 20 percent, plus or minus one percentage point, excluding any discrete tax events that may occur during the quarter, which, if realized, may increase or decrease our third quarter GAAP and non-GAAP tax rates. If the U.S. research tax credit is reinstated into tax law, the co estimates annual effective tax rate for the fiscal year 2013 to be approximately 16 percent. They estimate depreciation and amortization for the third quarter to be approximately $57 million to $59 million. Capital expenditures are expected to be in the range of $30 million to $40 million.

11:09 am Information Technology sector trading lower by 0.2% following earnings

The tech sector is trading just lower today, along with losses in the broader market. Semiconductors are showing relative strength, however, with the SOX trading 0.3% higher. Within the chip index, BRCM (+2.5%) is a notable leader. Among other major indices, the SPY is trading 0.2% lower today. The QQQ and the NASDAQ are trading also 0.2% lower on the session. Among tech bellwethers, FB (+3.7%) is once again showing strength, while CSCO (-1.4%) is under pressure.

In earnings last night, NVDA (+0.1%) and FIO (+29.0%) both posted a quarterly beats and raised guidance, while SPRD (-11.4%) missed estimates and UBNT (-41.4%) guided sharply lower. In news, IBM (-0.3%) may be interested in RIMM's (+5.9%) enterprise division, according to reports. Also, FB (+3.5%) is trading higher after NFLX (-0.6%) CEO, also a Director at FB, disclosed buying $1 mln in FB stock.

Among rumors, Bloomberg discussed takeover potential for LEAP (+3.8%). Among notable analyst upgrades this morning in the tech space, SMI (-4.1%) was upgraded to Overweight from Neutral at HSBC, Needham upgraded JIVE (-1.8%) to Buy, and BRCM (+2.5%) and SPIL (+1.8%) were upgraded at Bernstein. In downgrades, CVG (-2.8%) was downgraded to Neutral at Baird, TSRA (-1.1%) and YHOO (-5.2%) were downgraded at BofA/Merrill, SSNC (-8.8%) was downgraded to Hold at Jefferies, FXCM (-3.9%) was downgraded to Neutral at Citigroup, UBNT (-41.4%) was downgraded at several firms including Deutsche Bank, and SOHU (-3.0%) was downgraded to Neutral at UBS.

[ReturntoSender]

From Briefing.com: 4:15 pm : Challenged by thin volume, equities endured yet another day of lackluster action. After reaching lows during the first hour of trade, stocks staged a slow, session-long recovery. As a result, the major indices ended flat.

Healthcare was one of today's top performers. The space was lifted by Coventry Health Care (CVH 42.04, +7.10) as it surged 20.3% after being acquired by Aetna (AET 40.18, +2.14) in a $7.3 billion deal. Other healthcare components received a lift from the acquisition as Bio-Reference Laboratories (BRLI 29.71, +0.31) gained 1.1% and Humana (HUM 68.23, +0.43) added 0.6%.

Technology stocks posted gains as the group's biggest component, Apple (AAPL 665.15, +17.04), advanced by 2.6%. As shares marked a new all-time high above $665.00, the company achieved a milestone market cap of $623.14 billion. This made Apple the most valuable company in history. Competitors Hewlett-Packard (HPQ 20.09, +0.57) and Dell (DELL 12.56, +0.34) gained 2.9% and 2.8%, respectively. The two computer makers are scheduled to release their earnings later in the week.

Airline stocks outperformed after Southwest Airlines (LUV 9.44, +0.31) announced a $10 increase in the price of nearly a third of its flights. Shares of the discount airline ended higher by 3.4%. Other carriers followed the announcement with fare hikes of their own. United Continental Holdings (UAL 19.45, +1.05) and JetBlue (JBLU 5.27, +0.21) jumped 5.7% and 4.2%, respectively.

The consumer discretionary sector underperformed with some of the biggest losses observed in homebuilder stocks. The group retreated after making a broad advance resulting from Thursday's positive new housing permit data. KB Home (KBH 10.59, -0.45) was down 4.1% while NVR (NVR 811.59, -32.17) and DR Horton (DHI 18.41, -0.57) ended lower by 3.8% and 3.0%, respectively.

The telecommunications sector was the day's biggest laggard. Stocks within the space have been on a strong run recently and today's weakness appeared to be due to profit-taking rather than a sector-wide sell-off. Sprint (S 5.11, -0.08) shed 1.5% and MetroPCS (PCS 9.91, -0.12) was off by 1.2%.

Lowe's (LOW 26.26, -1.61) fell 5.8% on heavy volume. Shares of the hardware retailer are under pressure after the company delivered disappointing results which showed both earnings and revenues misses, and lowered guidance. Competitor Home Depot (HD 56.57, -0.16) slipped 0.3%.

Best Buy (BBY 18.16, -2.11) slumped 10.4% after Hubert Joly was named as the new Chief Executive Officer. Shares of the technology retailer are under pressure as the board of directors steps up its battle with founder Richard Schulze over an attempted buyout. Best Buy will report earnings tomorrow before the bell.

There is no notable economic data scheduled for release tomorrow.DJ30 -3.56 NASDAQ -0.38 SP500 -0.03 NASDAQ Adv/Vol/Dec 999/1.41 bln/1435 NYSE Adv/Vol/Dec 1322/550.9 mln/1671

3:30 pm : Crude oil spent the majority of its floor session in negative territory. The energy component fell to a session low of $95.32 per barrel in morning action and then worked on erasing the loss. It dipped again in the afternoon pit session but a rally heading into the close helped push prices up briefly into the black to a session high of $96.45 per barrel. The late effort had crude settle just 3 cents lower at $96.29 per barrel.

Natural gas fell into the red in morning pit action, but investors quickly stepped in and brought prices back into positive territory. The momentum continued for the remainder of pit trade, and natural gas settled 2.2% higher at $2.78 per MMBtu, or just below its session high of $2.79 per MMBtu. Precious metals got a boost during today's pit trade from a weakening dollar.

Gold came off its floor session low of $1611.80 per ounce and broke into positive territory by late morning action. It then brushed a session high of $1624.50 per ounce and settled at $1622.90 per ounce for a gain of 0.2%. Silver dipped to a session low of $27.88 per ounce but quickly recovered back into the black. Prices began to see real strength as the metal rallied in late morning action and touched a session high of $28.65 per ounce. Silver then consolidated in afternoon action and settled at $28.60, or 2.2% higher.DJ30 -9.29 NASDAQ -3.10 SP500 -1.11 NASDAQ Adv/Vol/Dec 925/1157 mln/1515 NYSE Adv/Vol/Dec 1197/350 mln/1757

11:00AM Agilent secures patent for market-leading CGH assays (A) 36.76 -0.46 : Co announced that it was awarded a significant patent for comparative genomic hybridization methods. CGH methods help researchers study genetics and cancer in both basic and clinical research. The U.S. patent (No. 8,232,055) has claims for measuring copy number changes in genomic DNA, covering both one-color and two-color assays using oligonucleotide probes and samples with high-sequence complexity, such as human genomic DNA samples.

8:04AM Ramtron: Cypress Semiconductor (CY) extends offer to acquire Ramtron International to Aug 24 from Aug 17 (RMTR) 2.65 :

McAfee, a unit of Intel (INTC) announced enhancements to its McAfee Mobile Security software, providing Android smartphone and tablet owners with additional privacy features that help them ensure apps are not accessing their personal information without their knowledge.

5:40AM Chipmos Technology authorizes A new $10 mln shares repurchase program (IMOS) 14.55 :

Tessera Tec (TSRA $14.71 -0.09) announced today that Tessera, Inc. has received an initial payment of ~ $20 million from Amkor Technology related to the interim award the International Court of Arbitration of the International Chamber of Commerce issued on July 6, 2012, in favor of Tessera in its dispute with Amkor.

09:23 am Seagate Tech downgraded to Hold at Stifel Nicolaus: . Stifel Nicolaus downgrades STX to Hold from Buy as they see a more balanced risk/reward profile at current levels. Firm says this is not a negative call on Seagate nor the HDD industry, but rather a reflection of their effort to maintain discipline and capitalize on what has been strong share performance.

09:23 am Facebook upgraded to Buy at Capstone Investments; tgt $26: . Capstone Investments upgrades FB to Buy from Hold and sets target price at $26 saying they believe that the FB shares' 16X '13E EV/EBITDA multiple provides investors with upside to the Company's core business and potential returns from new businesses the stock price currently does not give the Company credit for.

10:23 am Tech Sector shares are trading lower in line with the broader market
The tech sector is trading lower today, inline with losses in the broader market. Semiconductors are showing relative weakness, however, with the SOX trading 1.0% lower. Within the chip index, VECO (-4.6%) is a notable laggard. Among other major indices, the SPY is trading 0.3% lower today, while the QQQ and the NASDAQ are trading 0.4% lower on the session. Among tech bellwethers, only AAPL (+1.2%) is showing strength. There were no earnings of note in the tech space. In news, the ZAGG (-14.0%) CEO stepped down, the board appoints Randy Hales as interim CEO and the co reaffirmed FY12 revenue guidance.

Among notable analyst upgrades this morning in the tech space, Capstone Investments was upgraded FB (-0.3%) to Buy. In downgrades, RDA (-3.0%) was downgraded to Neutral at UBS, Stifel Nicolaus downgraded STX (-1.9%) to Hold, and TI (-4.8%) was downgraded to Neutral at JPMorgan. FN (-0.9%) is the only notable name in tech scheduled to report quarterly results today after the close.

[ReturntoSender]

From Briefing.com: 4:20 pm : Stocks started the day higher but were only able to hold a portion of their gains in a session which saw two pullbacks to the unchanged line. After spending most of the day in the black, the S&P 500 ended higher by 0.2%.

Telecoms were broadly higher as indicated by the iShares Dow Jones US Telecom ETF (IYZ 25.22, +0.29), which added 1.2%. MetroPCS (PCS 10.31, +0.25) advanced 2.5% on rumors regarding a possible merger with another major carrier. Meanwhile, Sprint (S 5.10, +0.10) and Verizon (VZ 44.89, +0.65) settled higher by 2.0% and 1.5%, respectively.

The Dow Jones Transportation Average has been on a steady rise over the past week, and it added another 0.8% today. Airline stocks showed strength as Delta (DAL 9.50, +0.22), Southwest (LUV 9.18, +0.23), and United Continental (UAL 20.31, +0.51) all posted gains between 2.3% and 2.6%. Shipping and trucking stocks were also higher as Overseas Shipholding Group (OSG 6.72, +0.34) and Landstar (LSTR 49.62, +0.94) advanced 5.3% and 1.9%, respectively.

Financial stocks outperformed the broader market as banks continued adding to their recent gains. Goldman Sachs (GS 118.24, +1.55), JPMorgan Chase (JPM 39.92, +0.32), and Citigroup (C 33.05, +0.39) all gained near 1.0%. Meanwhile, Bank of America (BAC 8.97, -0.06) lagged the other majors with a 0.7% loss. European financials were also on the rise with Credit Suisse (CS 22.55, +1.06) and UBS (UBS 12.82, +0.26) ending higher by 4.9% and 2.1%, respectively. On the downside, Deutsche Bank (DB 42.43, -0.19) slipped 0.5% after rallying more than 55.0% since July 25th.

Chinese internet stocks were on the move after Citigroup initiated coverage of three names. Youku (YOKU 18.79, +0.94) and Sohu.com (SOHU 42.50, +1.50) received a ‘buy' rating and gained 5.3% and 3.7%, respectively. Meanwhile, Renren (RENN 3.81, +0.04) added 1.1% despite receiving a ‘sell' rating. Elsewhere, Yahoo! (YHOO 15.40, +0.24) rose by 1.6% as the company is expected to acquire the assets of online business-to-business trading platform, Alibaba, by the end of the week.

Shares of Facebook (FB 20.93, +1.50) jumped 7.7% after Chief Executive Officer Mark Zuckerberg participated in a Q&A session at an event in San Francisco last evening. At the event, Mr. Zuckerberg commented on mobile ads, saying that they are performing better than the ones which appear on the desktop platform. In addition, Zuckerberg called Zynga (ZNGA 3.07, +0.28) a "fundamentally strong company." Shares of ZNGA spiked 10.0% in response to the comments.

Export prices, excluding agriculture, increased by 0.4% in August after they had decreased by 1.4% in the prior month. Excluding oil, import prices were down in August by 0.2%, which follows a 0.3% decrease experienced in the prior month.

Separately, wholesale inventories were up 0.7% in July. That is higher than the increase of 0.3% which had been broadly forecast.

Tomorrow's key economic events include the Federal Open Market Committee announcing its statement and rate decision at 12:30 ET, and its economic projections at 14:00 ET. Finally, Federal Reserve Chairman Ben Bernanke will hold a press conference at 14:15 ET.

A handful of economic data points are scheduled to be released tomorrow. Initial and continuing claims, as well as PPI and core PPI will be released at 8:30 ET while the U.S. Treasury will report its budget at 14:00 ET.

The U.S. Treasury will hold a $13 billion, 30-yr reopening.DJ30 +9.99 NASDAQ +9.78 SP500 +3.00 NASDAQ Adv/Vol/Dec 1467/1.65 bln/990 NYSE Adv/Vol/Dec 1965/663.7 mln/1043

3:30 pm : Crude oil touched a session high of $97.49 per barrel in morning action but slid to a session low of $96.30 per barrel following weaker-than-anticipated inventory data that showed a build of 1.994 mln barrels when a draw of 2.8 mln barrels was expected. The energy component then chopped around slightly below the breakeven line and settled just 3 cents lower at $97.01 per barrel.

Natural gas dipped to a session low of $2.95 per MMBtu in morning floor trade but rallied back into positive territory in afternoon action. It settled with a 2.3% gain at $3.06 per MMBtu, or just below its session high of $3.07 per MMBtu.

Precious metals traded higher in overnight action as the dollar index fell following the German Constitutional Court's ruling rejecting the injunction against the ESM. However, the momentum faded and both gold and silver fell into negative territory in morning pit action.

Gold dipped to a session low of $1728.50 per ounce and spent the remainder of its session trading in a consolidative pattern just below the unchanged line. It eventually settled 0.1% lower at $1733.40 per ounce. Silver attempted to erase losses after it fell to a session low of $32.51 per ounce. Despite inching higher, the metal settled with a 1.0% loss at $33.26 per ounce.DJ30 +12.24 NASDAQ +1.67 SP500 +1.86 NASDAQ Adv/Vol/Dec 1235/1391.6 mln/1203 NYSE Adv/Vol/Dec 1801/452 mln/1196

4:32PM SunPower extends long-standing partnership with Toshiba (SPWR) 4.80 +0.04 : Co announced that it has extended its long-standing partnership with Toshiba for the next several years. Under the terms of the master supply agreement, Toshiba will place orders of more than 100-megawatts (MW) for SunPower's high efficiency solar panels to support the rapidly growing residential solar market in Japan. Since SunPower first partnered with Toshiba in 2010, it has delivered approximately 70 MW of its high-performance solar panels.

2:40PM Apple confirms new iPod touch and iPod nano (AAPL) 663.95 +3.37 : Co introduced the new lineup of the world's most popular music players including the all-new iPod touch and reinvented iPod nano. The new iPod touch is the thinnest iPod touch ever and features a brilliant 4-inch Retina display; a 5 megapixel iSight camera with 1080p HD video recording; Apple's A5 chip; Siri, the intelligent assistant; and iOS 6, the world's most advanced mobile operating system. The new iPod touch comes in a new ultra-thin and light anodized aluminum design, and for the first time ever, iPod touch comes in five vibrant colors. The new iPod nano is the thinnest iPod ever featuring a 2.5-inch Multi-Touch display; convenient navigation buttons; built-in Bluetooth for wireless listening; and the new iPod nano comes in seven new colors.

2:21PM Apple confirms new iTunes for Mac and PC (AAPL) 663.29 +2.70 : Co announced the new iTunes for Mac and PC featuring a redesigned player, seamless integration with iCloud, and anew look for the online music, apps, TV and movie stores. The new iTunes is coming in October and will feature a simpler and cleaner interface that keeps iTunes content at the forefront.

2:03PM Apple confirms introduction of iPhone 5 (AAPL) 662.89 +2.30 : Co announced iPhone 5, the thinnest and lightest iPhone ever, completely redesigned to feature a new 4-inch Retina display; an Apple-designed A6 chip for blazing fast performance; and ultrafast wireless technology. iPhone 5 comes with iOS 6 with over 200 new features including: the all new Maps app with Apple-designed cartography and turn-by-turn navigation; Facebook integration; Passbook organization; and more Siri features and languages. iPhone 5 comes in either white & silver or black & slate, and will be available in the US for a suggested retail price of $199 for the 16GB model and $299 for the 32GB model and $399 for the 64GB model. iPhone 5 will be available from the Apple Online Store, Apple's retail stores, and through AT&T (T), Sprint (S), Verizon Wireless (VZ) and select Apple Authorized Resellers. iPhone 5 will be available in the US, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the UK on Friday, September 21, and customers can pre-order their iPhone 5 beginning Friday, September 14. iPhone 4S will also be available for $99 and iPhone 4 will be available for free with a two-year contract. iPhone 5 will roll out worldwide to 22 more countries on September 28.

Maxim Integrated Products (MXIM) has established a Corporate Venture Group to invest in startup companies and innovative technologies.

8:02AM Ramtron: Cypress Semiconductor (CY) extends tender offer to acquire RMTR to Sep 25 2012 (RMTR) 2.89 : Cypress's offer represents a 59% premium over Ramtron's closing price of $1.81 per share on June 11, 2012, the day before Cypress publicly disclosed its offer for Ramtron. Except for the extension of the expiration date, all other terms and conditions of the offer remain unchanged. The all-cash offer is not conditioned on due diligence or financing.

Texas Instruments (TXN $28.45 -0.13) narrowed its third quarter revenue outlook to $3.27-3.41 billion versus $3.3 bln consensus, raises bottom end of EPS guidance to $0.45-0.49, excluding $0.07 in charges (noted in the company's most recent earnings release) vs $0.45 consensus, up from $0.41-0.49, excluding $0.07 in charges.

Mizuho notes Intel (INTC $23.40 +0.26) kicked off its 2012 developer forum on Tuesday in San Francisco. The company continued to highlight its focus on the ultrabook category of PCs and remained optimistic about the various form factors that will soon be available. INTC expects its 22nm Haswell processor to provide improved performance at lower power consumption and showcased emerging applications such as voice and gesture recognition and smart, secure payments. They remain positive on MLNX given its exposure to the HPC markets and its leadership position in InfiniBand; they note the co reaffirmed this week.

10:45 am Information Technology shares rise and are in line with broader market today

The tech sector is trading higher today, along with gains in the broader market. Semiconductors are showing relative strength with the SOX trading 0.5% higher. Within the chip index, STM (+5.3%) is a notable standout. Among other major indices, the SPY is trading 0.3% higher today, while the QQQ and the NASDAQ are trading 0.2% higher on the session. Among tech bellwethers, FB (+5.8%) is showing notable strength following Zuckerberg's interview last night.

In tech earnings, TXN (-0.5%) narrowed its Q3 rev guidance inline with consensus. Elsewhere, GCOM (-18.8%) posted a Q4 beat and issued downside guidance and XRTX (-11.6%) preannounced downside Q3 resutls. In news, FB (+5.8%) CEO Zuckerberg presented at the Disrupt conference after the close. He said that Wall St. is underestimating the Co's potential in mobile. Also, STEC (-4.8%) disclosed that PwC has resigned as its auditor. Among rumors, AOL (+1.5%) has spoken to Marissa Mayer about possible YHOO (+2.0%) merger, according to reports.

In notable analyst upgrades this morning in the tech space, SYNC (+1.2%) was upgraded to Neutral at Citigroup and RCI (+2.7%) was upgraded to Buy from Neutral at BofA/Merrill. Among downgrades, Needham downgraded SYNA (-6.2%) to Hold, and ADP (-1.3%) & PAYX (-0.6%) were downgraded to Underperform at Jefferies. There are no notable names in tech scheduled to report quarterly results today after the close. However, AAPL (-0.2%) is holding an event at 1 ET at which the company is expected to unveil its newest iPhone.

[ReturntoSender]

From Briefing.com: 4:15 pm : Equities began today's session on a down note after Spain and the country's fiscal struggles were put back in the spotlight. The major indices marked session lows during the first hour before reversing and attempting a return to the unchanged line. However, due to the lack of a catalyst, the key averages were unable to sustain a meaningful rally. As a result, the S&P 500 slipped 0.6%. The Nasdaq underperformed and settled lower by 0.8%.

Utility stocks led as the defensive sector rose on the back of today's risk-off sentiment. High-yielding major utility producers advanced as a group. Consolidated Edison (ED 60.09, +0.63), Southern Company (SO 46.11, +0.37), and PG&E (PCG 43.00, +0.35) all gained near 1.0%.

Technology stocks were under pressure as the sector trailed the broader market. Apple (AAPL 665.18, -8.36) continued its recent slump as the tech giant slipped 1.2%.

Two listings traded lower after reporting earnings. Jabil Circuit (JBL 18.90, -2.07) slid 9.9% after delivering a mixed quarterly report. JBL missed on earnings, but reported revenues above consensus. In addition, the company issued downside guidance for the first quarter and announced the authorization of a $100 million share repurchase program.

SYNNEX (SNX 32.45, -1.80) slipped 5.3% after missing on earnings and reporting in-line revenues. In addition, the company issued downside guidance for the fourth quarter. Following the earnings release, Needham downgraded shares of SNX from ‘strong buy' to ‘buy' while lowering the price target from $42 to $40.

Elsewhere in the sector, semiconductor makers continued selling off. Infineon (IFNNY 6.36, -0.24), which cut its guidance yesterday, was downgraded from ‘hold' to ‘underperform' by Jefferies. The stock settled lower by 3.3% while its peer Texas Instruments (TXN 27.57, -0.26) lost 0.9% after being downgraded from ‘positive' to ‘neutral' by Avian.

Lastly, GT Advanced Technologies (GTAT 5.35, -0.29) slumped 5.3% after Canaccord Genuity downgraded the stock from ‘buy' to ‘hold' while lowering the price target from $9 to $6.

Major financials continued their post-FOMC weakness. The SPDR Financial Select Sector ETF (XLF 15.49, -0.10) shed 0.6% as it traded in-line with the broader market. Individual components which showed relative weakness include, American Express (AXP 56.14, -0.99), Citigroup (C 32.51, -0.35), and Wells Fargo (WFC 34.42, -0.30). The three names all lost close to 1.0%.

Also of note, Santander Mexico (BSMX 12.91, +0.72) closed higher by 6.0% on its first day of trading as an exchange-listed company.

The Dow Jones Transportation Average showed little change as it outperformed the broader market. Airlines were relatively strong as the 20-stock group was led by Alaska Air (ALK 35.74, +2.07) which added 6.2% after announcing a $250 million share repurchase program. Meanwhile, Delta (DAL 9.16, +0.14), Southwest (LUV 8.92, +0.08), and United Continental (UAL 20.16, +0.33) all gained between 0.9% and 1.7%.

Railroad stocks were down as a group once again. CSX (CSX 21.00, -0.17) shed 0.8%, while Kansas City Southern (KSU 75.36, -1.00), Norfolk Southern (NSC 64.57, -0.50), and Union Pacific (UNP 118.92, -1.46) were all down near 1.0%.

Shares of homebuilders were broadly weaker as the SPDR S&P Homebuilders ETF (XHB 24.60, -0.57) lost 2.3%. The ETF began selling off after new home sales indicated 373k new homes were sold in August while a reading of 380k was expected. Shares of major homebuilders declined broadly as Ryland Homes (RYL 30.01, -1.81) fell 5.7%. Meanwhile, PulteGroup (PHM 15.30, -0.76), Standard Pacific (SPF 6.80, -0.35), KB Homes (KBH 13.90, -0.51), and Lennar (LEN 34.64, -1.62) all slipped between 3.5% and 5.0%.

In tomorrow's economic data, weekly initial and continuing unemployment claims will be reported at 8:30 ET. Durable orders, durable orders ex-transportation, and GDP-third estimate will also be released at 8:30 ET. Lastly, pending home sales will cross the wires at 10:00 ET.

The U.S. Treasury will auction off 7-yr notes.DJ30 -44.04 NASDAQ -24.03 SP500 -8.27 NASDAQ Adv/Vol/Dec 909/1.71 bln/1530 NYSE Adv/Vol/Dec 1229/738.7 mln/1823

3:35 pm : Most commodities sold off this morning as a rising dollar index added pressure on the group.

Nov crude oil sold off hard today, declining below the $90 level and as low as $88.97/barrel, crude chopped higher following that LoD and ended its floor trading session just under $90. Crude ended the day $1.49/barrel lower at $89.93 and it now 9.5% off its recently-hit high, which was on Sept. 14.

Nov natural gas began to move sharply higher this morning. Overall, nat gas trended higher all session, hitting as high as $3.24/MMBtu. Nat gas ended the day 3.5% higher at $3.22/MMBtu.

Precious metals ended the day mixed as silver finished its pit trading session basically flat (down 1 cent) at $33.94/oz. Both gold and silver sold off sharply earlier this morning and while silver made it back into positive territory a short while before the close of floor trading, gold never made it back into positive territory. Dec copper ended the day 1.3% lower at $3.71/lb.DJ30 -41.96 NASDAQ -26.39 SP500 -7.84 NASDAQ Adv/Vol/Dec 824/1474.7 mln/1610 NYSE Adv/Vol/Dec 1125/518 mln/1899

O2Micro International (OIIM) announced that it was issued 20 claims under U.S. patent for its Vertical Bus Circuit invention.

Technology stocks are under pressure as the sector underperforms the broader market. Apple (AAPL 664.15, -9.39) is continuing its recent slump. Shares of the tech giant are down 1.4%.

Two listings are trading lower after reporting earnings. Jabil Circuit (JBL 18.94, -2.03) is sliding 9.7% after delivering a mixed quarterly report. JBL missed on earnings, but reported revenues above consensus. In addition, the company issued downside guidance for the first quarter and announced the authorization of a $100 million share repurchase program.

8:29AM EMCORE awarded solar panel manufacturing contract by Orbital Sciences Corp for the ice, cloud, and land Elevation Satellite-2 (ICESat-2) mission (EMKR) 5.44 : Co announced that it has been awarded a solar panel manufacturing contract by Orbital Sciences Corporation for NASA's Ice, Cloud, and land Elevation Satellite-2 (ICESat-2) mission targeted for launch in early 2016. Solar panels populated with EMCORE's most advanced ZTJ triple-junction solar cells will power the ICESat-2 spacecraft manufactured by Orbital. ICESat-2 builds on measurements taken by NASA's original ICESat mission

Cypress Semiconductor (CY) announced that Himax Imaging has selected Cypress's EZ-USB FX3 peripheral controller for its USB 3.0 5M Sensor Evaluation Board.

Universal Display (PANL $36.64 +1.01) and Duksan Hi-Metal Company announced that the companies have entered into a master services agreement to enhance Universal Display's local presence and expansion in Korea. As the first initiative under the agreement, Duksan will provide manufacturing services for one of Universal Display's host products for certain Korean customers. Universal Display and Duksan will also explore additional areas for collaboration to better serve and support the needs of the growing Korean OLED industry.

Jabil Circuit (JBL $19.77 -1.20) reported fourth quarter earnings of $0.54 per share, $0.04 worse than the Capital IQ Consensus of $0.58, while revenues rose 1.4% year/year to $4.34 billion versus the $4.22 billion consensus. The company issued downside guidance for the first quarter with EPS of $0.51-0.62 versus the $0.67 consensus Estimate; sees Q1 revs of $4.3-4.5 bln vs. $4.51 bln Capital IQ Consensus Estimate. "Results for the fourth quarter were negatively impacted by a challenging new program ramp in our Specialized Services sector...Additionally demand remained weak in most of our business segments." Management also announced that the Jabil Board of Directors has authorized the repurchase of up to $100 million worth of shares of the Company's common stock during the next twelve months.

Yahoo (YHOO $15.77 +0.11) announced that Ken Goldman will join the company as CFO, effective Oct. 22. Goldman joins Yahoo! from Fortinet, a provider of threat management technologies, where he served as CFO. Goldman succeeds Yahoo! CFO Tim Morse, who has been with the company since June 2009. Morse will leave the company later this fall.

Synnex (SNX $34.25 +0.00) reported third quarter earnings of $0.93 per share, $0.01 worse than the consensus of $0.94, while revenues rose 0.2% year/year to $2.58 billion versus the $2.59 bln consensus. The company issued downside guidance for the fourth quarter EPS of $1.02-1.06 versus the $1.18 consensus and revenues of $2.71-2.81 billion versus the $2.85 billion consensus.

09:56 am Texas Instruments downgraded to Perform at Oppenheimer: . Oppenheimer downgrades TXN to Perform from Outperform. While they continue to believe in the co's long-term "core" analog/embedded share gain story, TXN's "non-core" wireless business remains a headwind. Tuesday, TXN articulated a shift in wireless strategy, with plans under way to discontinue wireless (OMAP/connectivity) investment for smartphone/tablet. Wireless (~10% of sales) will likely see revs dwindle over the next several years as the business slowly unwinds, much as the baseband exit created material top-line headwinds. As it is the most broadly diversified co in their universe, they expect challenged global GDP will weigh on the core business near term. With upside likely limited, they are stepping to the sidelines.

09:55 am Marvell downgraded to Hold at Canaccord Genuity on storage and mobile headwinds: . Canaccord Genuity downgrades MRVL to Hold from Buy and lowers target price at $9 on shrinking HDD TAM and TD- SCDMA share loss. It's lowering its estimates and sees potential for additional revisions. While MRVL is trading near its 52-week low, firm believes further downside is likely as Street consensus estimates move lower. It believes the dividend provides enough support to preclude a SELL rating.

09:54 am Google tgt raised to $850 at Canaccord Genuity;: . Canaccord Genuity raises their GOOG tgt to $850 from $700 on a higher multiple (18x from 16x) and a rollout to FY13 ests. They believe Google stock can continue its recent momentum on the basis of 1) better CPC trends creating an upward bias to revenue estimates in future periods, 2) continued dissipation of MMI-related apprehension and 3) multiple expansion; Buy.

10:50 am S&P Information Technology Index trading lower today as market sells off

The tech sector is trading lower today, trailing narrower losses in the broader market. Semiconductors are showing relative weakness as well with the SOX trading 1.3% lower. Within the chip index, SNDK (-3.6%) is a notable laggard. Among other major indices, the SPY is trading 0.3% lower today, while the QQQ and the NASDAQ are both trading 0.6% lower on the session. Among tech bellwethers, TXN (-2.6%) is showing notable weakness, while T (+0.6%) is bucking the trend. In tech earnings last night, JBL (-9.2%) posted a mixed Q4 and guided lower. Elsewhere, SNX (-4.4%) reported a slight Q3 miss and guided lower. In news, YHOO (-0.1%) named Ken Goldman as CFO. He was formerly from FTNT (-6.7%). Also, PANL (+2.4%) contracted with Duksan Hi-Metal to provide manufacturing services for OLED host material.

There were no notable analyst upgrades this morning in the tech space, but there were plenty of downgrades. IFNNY (-3.8%) was downgraded to Underperform at Jefferies, Needham downgraded SNX (-4.4%) to Buy, SNDK (-3.6%) was downgraded to Market Perform at JMP, EA (-4.0%) was downgraded to Neutral at BofA/Merrill, Oppenheimer downgraded TXN (-2.6%) to Perform, CVG (-3.9%) was downgraded to Neutral at Macquarie, PAYX (-0.7%) was downgraded to Equal Weight at First Analysis, Canaccord downgraded MRVL (-2.4%) to Hold, Avian downgraded TXN (-2.6%) to Neutral, and MRVL (-2.4%) & INTC (+0.2%) were downgraded at Caris. There are no notable names in tech scheduled to report quarterly results today after the close.

[ReturntoSender]

From Briefing.com: 4:15 pm : Equities began the session on a positive note after the weekly initial claims were reported at their lowest level since January 2008. However, the number may not be entirely comparable to the prior period as one large state was not included in the total. The early bullish sentiment failed to hold as the major averages reversed during the first hour, and headed for the flat line. As a result, the S&P 500 ended flat.

The latest weekly initial claims count totaled 339,000, which was lower than the widely-expected 370,000. The tally was below the revised prior week count of 369,000. As for continuing claims, they fell to 3.273 million from 3.288 million.

With oil adding in excess of 1.3%, the energy sector outperformed all others. Within the space, coal stocks rallied broadly. Alpha Natural Resources (ANR 8.55, +1.24) and Arch Coal (ACI 7.94, +1.08) both surged near 16.0%. Meanwhile, James River Coal (JRCC 3.74, +0.58) and Peabody Energy (BTU 26.18, +2.15) added 18.4% and 9.0%, respectively. The strength in coal is likely related to the recent surge in natural gas prices as more expensive gas makes coal an attractive alternative. It should also be noted that iron ore prices have been on the rise. This is seen as bullish for coal which is used in conjunction with iron ore to make steel.

Other energy names also saw gains, albeit less robust. Oil drilling equipment supplier Schlumberger (SLB 72.42, +1.34) advanced 2.3% after Howard Weil upgraded the shares to ‘focus stock' from ‘outperform.' SLB's peer, Lufkin (LUFK 54.39, +1.84) also saw its shares upgraded by Howard Weil. The company's rating was raised to ‘outperform' from ‘market perform' and its shares settled higher by 3.5%.

The telecom space was the biggest laggard as a couple of sector components appeared in the headlines. Sprint Nextel (S 5.76, +0.72) advanced 14.3% after the company confirmed reports which indicated Softbank is looking to acquire a stake in Sprint.

MetroPCS (PCS 11.64, -0.40) slid 3.3% after separate reports suggested that Sprint has not considered making a bid to rival the one from Deutsche Telekom's T-Mobile USA unit. Other major telecom names were relatively weak as AT&T (T 36.51, -0.41) and Verizon (VZ 45.30, -0.48) ended with respective losses of 1.6% and 1.1%.

The Dow Jones Transportation Average remains in the spotlight as the bellwether group looks to recouple with the broader market. After outperforming the remaining industrials during recent sessions, the transportation average traded in-line with the Dow. Heavy vehicle lessor, Ryder Systems (R 42.40, +0.44) led the 20-stock complex with a 1.1% gain. Meanwhile, shipper Overseas Shipholding Group (OSG 5.88, -0.23) trailed the remaining transportation stocks before ending with a loss of 3.8%.

It should be noted that Overseas Shipholding Group was weaker while other oil tanker shippers like Nordic American Tankers (NAT 9.33, +0.05), Frontline (FRO 3.53, +0.01), and Teekay (TK 31.91, +0.39) all posted gains between 0.3% and 1.2%.

Oshkosh Truck (OSK 28.89, +2.04) spiked 7.6% after Carl Icahn announced his intention to commence a tender offer for "any and all" of the outstanding shares of Oshkosh at $32.50 per share. In addition, Mr. Icahn said he plans to nominate directors to the company's board. Oshkosh responded by saying it will advise shareholders of its positioning regarding the offer and that Carl Icahn was unsuccessful in his prior attempt to elect any of his six director nominees during last year's annual meeting.

Navistar (NAV 22.61, +0.62) also surged on the news as Carl Icahn's plan includes merging the two truck makers. The stock settled higher by 2.8%.

Elsewhere, Cooper Tire (CTB 19.78, +1.09) surged 5.8% after earlier reports indicated India's Apollo Tyres is looking to acquire Cooper. Peer Goodyear Tire (GT 12.44, +0.11) added 0.9% while American Axle & Manufacturing Holdings (AXL 12.07, +0.09) added 0.8%.

The trade deficit widened to $44.2 billion during August after the prior month's reading was revised down to $42.5 billion. Economists polled by Briefing.com had expected that the deficit would come in at $43.6 billion.

Separately, export prices, excluding agriculture, increased by 0.7% in September after they had increased by 0.4% in the prior month. Excluding oil, import prices rose by 0.2%, which follows the 0.2% decrease experienced in the prior month.

Tomorrow, September PPI and core PPI will be reported at 8:30 ET. In addition, the October Michigan Sentiment will be released at 9:55 ET.DJ30 -18.58 NASDAQ -2.40 SP500 +0.28 NASDAQ Adv/Vol/Dec 1465/1.56 bln/971 NYSE Adv/Vol/Dec 1991/646.7 mln/1024

3:30 pm : Crude oil spent pit trade in positive territory as a weaker dollar index and continued tension between Turkey and Syria supported the advance. The energy component traded up to a session high of $92.94 per barrel in morning action but retreated slightly following inventory data that showed a build of 1.672 mln barrels when a build of 1.5 mln barrels was anticipated. Still, it settled with a 1.0% gain at $92.18 per barrel.

Natural gas came off its pit session low of $3.50 per MMBtu and popped to a session high of $3.63 per MMBtu on bullish inventory data that showed a build of 72 bcf when a build of 80 bcf was expected. Despite losing some steam in afternoon action, it settled 4.0% higher at $3.61 per MMBtu and hit a new high for 2012 at $3.63/MMBtu.

Gold also traded higher during today's pit session as the dollar index weakened. The yellow metal fell off its session high of $1776.60 per ounce to a session low of $1766.30 per ounce following initial unemployment data. It eventually settled with a 0.3% gain at $1770.50 per ounce. Silver touched a session high of $34.38 per ounce moments after pit trade opened but gave up gains as the session progressed. It closed 0.1% lower at $34.08 per ounce, or just above its session low of $34.04 per ounce.DJ30 +8.51 NASDAQ +6.68 SP500 +3.86 NASDAQ Adv/Vol/Dec 1536/1304.6 mln/890 NYSE Adv/Vol/Dec 2129/451 mln/892

4:21PM Advanced Micro lowers Q3 rev, gross margin guidance (AMD) 3.20 +0.05 : Co issues downside guidance for Q3 (Sep), sees Q3 (Sep) revs -10% QoQ (down from +2 to -4%) to ~$1.271 bln vs. $1.38 bln Capital IQ Consensus Estimate. The lower than anticipated preliminary revenue results are primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment. The co now expects third quarter gross margin to be ~31%; less than the previous expectation of ~44% primarily due to an inventory write-down of ~$100 million due to lower anticipated future demand for certain products. Third quarter gross margin was also negatively impacted by weaker than expected demand, which contributed to lower than anticipated average selling prices (ASPs) for the co's Computing Solutions Group products and lower than expected utilization of its back-end manufacturing facilities. Operating expenses for the third quarter are expected to decline ~7% QoQ as a result of tightly controlled expenses in the quarter. AMD will report third quarter 2012 results after market close on Thursday, October 18, 2012.

4:20PM Advanced Micro initially drops 6.3% to $3.00 after issues Q3 prelim revs below consensus and lowering Q3 its gross margin outlook; AMD is now at $3.00 after hours (AMD) 3.20 +0.04 :

4:00PM RF Micro Device announces ITC lawsuit withdrawn by plaintiffs (RFMD) 3.67 0.00 : Co announced that Peregrine Semiconductor (PSMI) has filed a motion to voluntarily withdraw the lawsuit it filed against RFMD in the U.S. International Trade Commission (ITC) in February 2012. RFMD believes the decision by Peregrine to terminate the ITC proceeding is in response to developments in the case that have consistently validated RFMD's longstanding position that no infringement of Peregrine's patents occurred and that the validity of the asserted Peregrine patents is clearly in doubt. RFMD respects the intellectual property rights of others and takes care to avoid infringements.

Juniper Networks (JNPR) announced the world's most powerful edge services router and a single, virtualized platform for rapid deployment of multivendor applications.

1:23AM Suntech Power responds to final DOC determination (STP) 0.89 : Co offers statement regarding the U.S. Department of Commerce's final determination to impose countervailing duties (CVD) of 14.78% and anti-dumping duties of effectively 21.19% on Suntech's crystalline silicon photovoltaic cells imported from China. "Unilateral trade barriers will not make any one company more competitive, but will make solar less competitive against other forms of electricity generation. These ill-conceived taxes on solar products were the outcome of an unrealistic analysis...It's unfortunate that the process works this way; however, Suntech is well-prepared for the future and to serve the needs of our customers."

Extreme Networks (EXTR $3.35 +0.05) announced its Board of Directors has authorized the repurchase of common stock worth up to $75 million which may be purchased over the next three years from time to time in the open market or in privately negotiated transactions. Extreme Networks will fund the share repurchases from cash on hand, which was approximately Co announced its Board of Directors has authorized the repurchase of common stock worth up to $75 million which may be purchased over the next three years from time to time in the open market or in privately negotiated transactions. Extreme Networks will fund the share repurchases from cash on hand, which was approximately $200 million as of September 30, 2012. As of August 6, 2012, there were approximately 95 million shares of common stock outstanding.00 million as of September 30, 2012. As of August 6, 2012, there were approximately 95 million shares of common stock outstanding.

FBR Capital Markets are adjusting their Microsoft (MSFT $29.65 +0.16) estimates to reflect the impact of the Office 2013 upgrade program on the company's revenues. While the firm believes the company is in the midst of a healthy product cycle. they remain concerned over headwinds in the PC market in 2012 and beyond in the face of the macro environment, European weakness, consumerization of IT, and supply chain issues. To this point, they are taking a wait-and-see approach on the prospects of the new operating system and its potential impact to growth. THey are lowering their F1Q13 revenue and pro forma EPS estimates from $16.8 billion and $0.60 to $16.7 billion and $0.59, respectively (First Quarter Capital IQ Consensus $0.60/16.56 billion). FBR notes

Research In Motion's (RIMM $7.82 -0.04) August-ending quarter's result was significantly stronger than many investors expected. While a look at RIMM's operating metrics clearly reflected a Co under continued duress, mgmt seemed to ameliorate a tough situation and has slowed RIMM's rate of decline. Overall, mgmt seems to have emphasized revs, ASPs, smartphone units, subscriber net adds, and operating cost controls at the expense of GMs, service ARPU, and tablet sales. FBR expects the same trends to continue through year-end and up to the BB10 launch, when mgmt likely begins emphasizing upgrading corporate customers in its developed markets. FBR reiterates Underperform but raises its target to $6.50 from $6.

[ReturntoSender]

InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

-Low to high action returns as stocks overcome a weak start but cannot push out of the recent range.
- Distribution on the week, but indices held support and recovered some ground.
- Incomes plunge on tax maneuvering, Construction Spending plunges.
- China and Europe remain weaker.
- As with 2011 and 2012, so many reasons for stocks to correct.
- Unlike 2011 and 2012, Bernanke has QE in place and says it is going to stay.
- Someday a major tumble will come as a result of all of this, but not now. For now, watch out for DC taking your retirement accounts 'for your own good.'

Stocks closed out the week and started the month with a mixed session as the midcaps and semiconductors lagged, but the large cap indices were able to sequester some gains. Note how smoothly I worked that into the opening line. Stocks held their ground on the week, despite the obvious desire to test, as Bernanke promised the money was here to stay. Stocks, similar to the sequester, may not feel the impact of the money in a week, two weeks, three weeks, or even a month. But it is there, working on the market.

SP500 3.52, 0.23%
NASD 9.55, 0.30%
DJ30 35.17, 0.25%
SP400 -0.41%
RUTX 0.40%
SOX -0.36%

After squandering a nice gain Thursday, stocks posted low to high action, overcoming a soft start.

Volume fell once again on the upside: -5% NASD, -8% NYSE

A/D: weak at 1.3:1 NASD, 1.2:1 NYSE.

NASDAQ
Stats: +9.55 points (+0.3%) to close at 3169.74
Volume: 1.848B (-4.99%)

Up Volume: 1.18B (+170M)
Down Volume: 676.75M (-318.16M)

A/D and Hi/Lo: Advancers led 1.33 to 1
Previous Session: Decliners led 1.05 to 1

New Highs: 108 (+3)
New Lows: 38 (+18)

S&P Stats: +3.52 points (+0.23%) to close at 1518.2
NYSE Volume: 645M (-7.99%)

A/D and Hi/Lo: Advancers led 1.19 to 1
Previous Session: Advancers led 1.02 to 1

New Highs: 221 (-70)
New Lows: 59 (+11)

DJ30
Stats: +35.17 points (+0.25%) to close at 14089.66

Did the session change anything? Not really. Technically the indices are still chopping around in a 1.5 week lateral move after peaking, suffering some sharp distribution, but managing to hold the trend (for most indices) on the week's lows. The session helped the patterns a bit, stretching the move laterally and trying to build a consolidation shelf to calm things down in an attempt to extend the move higher.

Despite the distribution on the week stocks held the line at support, and that is the key feature of the week.

GOOG provided the leadership for NASD, AAPL did not. AMZN is trying to set up. Homebuilders were blase, industrial machinery ditto. Retail had some bright spots from DECK and BBY, while M and some friends set up decently. Some biotechs and medical stocks rallied, e.g. SNSS, CELG, BABY, BMRN. This group suddenly revived.

Still some leadership holding and emerging in this market chop. Choppy action allows stocks to set up and there are those using the chop to do just that.

OTHER MARKETS

Dollar stronger yet again, topping a strong week: 1.3029 vs 1.3087 euro.

Bonds rallied yet again post-Bernanke: 1.85% vs 1.88% 10 year

Oil sold hard, falling to the 200 day EMA: 90.68, -1.37

Gold faded modestly: 1572.60, -5.50. Trying to bounce off a possible double bottom.

ECONOMIC DATA:

Personal income tanked: -3.6% vs -2.4% expected. Biggest decline in 20 years as citizens prepped for the tax hikes (end of Bush, new Obama) by early dividends, taking bonuses early, etc. That is what happens when taxes are going up.

ISM: 54.2 versus 52.4 exp, 53.1 prior. Not bad on top of Chicago.

Construction Spending, January: -2.1% vs 0.5% exp, 1.1% December.

Michigan Sentiment: 77.6 vs 76.3 exp.

China PMI fell to 50.1, the lowest in 5 months. China would rather have some slowing than the inflation it is feeling so it withdrew money from the system and is willing to live with it.

Europe showed more weak data even if the German and France PMI beat (50.3 and 43.9, respectively).

NEXT WEEK

To sum up the week there was more distribution and rather weak upside. With the insider selling (record 50:1 selling to buying ratio last month), the size of this run that equals the past two extended upside move, the market looks winded. That is the technical look.

Yet, the indices held where they needed, bounced (some), and are moving laterally as they try to set up a new upside move. Mr. Bernanke assured us all the QE was here to stay regardless of what others on the FOMC say. The economic data was warmer but also cold, enough, however, to keep the notion of slow, stumbling growth.

Obvious tensions. Unlike 2011 and 2012, there is no ending of one QE program and waiting for the start of another. Bernanke says the money is there and will be there. More than that he says the unemployment rate will not fall to 6% until 2015. He all but said the money was going to be there until that time . . . or at least for a long time.

Thus the market has money without question, unlike 2011 and 2012. It will of course still have to test, and it is doing that now. After this test/consolidation, it will want to put that money into the market and thus continue the gains.

So, we will look for the test to end and before it does there will be leaders setting up. Those are the ones to focus on because they are in the patterns, preparing for the next move. We keep tabs on them, know the play we want to make, and then when they move, make the play.

It may appear strange with so many issues, truly bad issues, facing the world and the US, we look for the market to rise. As stated earlier in the week, the bad time will come unless the US radically changes its course. History promises this and it is not different this time. Until that time is hit, however, markets can rise and rise on printed money just as they did in Rome and in other powers that became impoverished or disappeared by virtue of devaluation and debt. Keep your eyes on your retirement accounts; the government certainly is and more in DC are talking about how they can be 'used' to shore up US finances and 'guarantee protected' returns to the owners (or really former owners, right?).

Until then, we look for those stocks setting up as they are the next leaders to join those who were out in front on this move. Of course if the current leaders tests and set up new entries, who are we to not participate in that?

Have a great weekend!

Support and resistance

NASDAQ: Closed at 3169.74

Resistance:
3171 is the October intraday high
3197 is the September 2012 post-bear market high
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
3134 is the March 2012 post-bear market peak
3130 from some January 2013 lows
The 50 day EMA at 3125
3104-3112 from August and mid-October peaks.
The 2011 up trendline at 3109
3101 is the August 2012 high
3090 is the mid-March interim high
3076 is the late April 2012 high and the 1/2013 low after gapping higher
3062 is the December 2012 prior peak
3042 from 5/2000 low and several other price points
3024 is the gap point from early May
The 200 day SMA at 3013
3000 is the February 2012 post-bear market high
2999 is the bottom of the August 2012 consolidation
2988 is the July 2012 high
2977 to 2980 is the bottom of the late October 2012 consolidation, July 2012 peak
2962 is the April 2012 low
2950 is the mid-April closing low
2942 is the mid-June 2012 high
2900 is the March 2012 intraday low
2858 is the late July 2011 peak
2847 is the mid-May 2012 low
2838 from the July 2012 lows

S&P 500: Closed at 1518.20

Resistance:
1531 is the recent high
1539 from June 2007

Support:
1499 from January 2008
The November up trendline at 1491
The 50 day EMA at 1486
1475 is the September 2012 high
1471 is the October 2012 intraday high
1466 is the September 2012 closing peak and rally closing high
1440 from November 2007 closing lows
1434 from early November 2012
1433 from August 2007 closing lows
1427 is the August 2012 peak
1425 from May 2008 closing highs and the October 2012 low
The 200 day SMA at 1412
1408 is the late October 2012 range closing low
1406 is the early May 2012 peak
1402.22 - 1400 is the closing low of the August 2012 lateral consolidation
1378 is the February 2012 peak
1375 is the early July 2012 peak
1371 is the May 2011 peak, the post-bear market high
1363.46 is June 2012 high
1359 is the April 2012 low
1357 is the July 2011 peak
1344 is the February 2011 peak
1340 is the early April 2011 peak
1332 is the early March 2011 peak

Dow: Closed at 14,089.66

Resistance:
14,149 is the February 2013 high
14,198 from the October 2007 high

Support:
14,022 from 7-07 peak
The 50 day EMA at 13,728
13,692 from 6-2007 peak
13,668 from 12-2007 peak
13662 is the October 2012 intraday high
13,653 is the September 2012 high
13,557 to 13,662
13,413 from the late September 2012 low
13,300 to 13,331 is the August 2012 post-bear market high
13,297 is the April 2012, prior post bear market high
The 200 day SMA at 13,161
13,058 from the May 2008 peak on that bounce in the selling
13,056 is the February 2012 high
12,716 is the April 2012 closing low
12,524 is a range of support from early 2012 and summertime 2012
12,391 is the February 2011 peak
12,369 is the left shoulder low from May 2012
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
12,035 is the June 2012 base low
The June 2011 low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak

Economic Calendar

February 26 - Tuesday
- Case-Shiller 20-city, December (9:00): 6.8% actual versus 6.5% expected, 5.4% prior (revised from 5.5%)
- FHFA Housing Price Index, December (9:00): 0.6% actual versus 0.4% prior (revised from 0.6%)
- New Home Sales, January (10:00): 437K actual versus 383K expected, 378K prior (revised from 369K)
- Consumer Confidence, February (10:00): 69.0 actual versus 62.0 expected, 58.4 prior (revised from 58.6)

February 27 - Wednesday
- MBA Mortgage Index, 02/23 (7:00): -1.7% prior
- Durable Orders, January (8:30): -3.5% expected, 4.3% prior (revised from 4.6%)
- Durable Goods -ex transports, January (8:30): 0.2% expected, 1.0% prior (revised from 1.3%)
- Pending Home Sales, January (10:00): 1.0% expected, -4.3% prior
- Crude Inventories, 02/23 (10:30): 4.143M prior

February 28 - Thursday
- Initial Claims, 02/23 (8:30): 344K actual versus 360K expected, 366K prior (revised from 362K)
- Continuing Claims, 02/16 (8:30): 3074K actual versus 3150K expected, 3165K prior (revised from 3148K)
- GDP - Second Estimate, Q4 (8:30): 0.1% actual versus 0.5% expected, -0.1% prior
- GDP Deflator - Second Est., Q4 (8:30): 0.9% actual versus 0.6% expected, 0.6% prior
- Chicago PMI, February (9:45): 56.8 actual versus 54.0 expected, 55.6 prior
- Natural Gas Inventories, 02/23 (10:30): -171 bcf actual versus -127 bcf prior

March 1 - Friday
- Personal Income, January (8:30): -3.6% actual versus -2.4% expected, 2.6% prior
- Personal Spending, January (8:30): 0.2% actual versus 0.2% expected, 0.1% prior (revised from 0.2%)
- PCE Prices - Core, January (8:30): 0.1% actual versus 0.2% expected, 0.0% prior
- Michigan Sentiment -Final, February (9:55): 77.6 actual versus 76.3 expected, 76.3 prior
- ISM Index, February (10:00): 54.2 actual versus 52.4 expected, 53.1 prior
- Construction Spending, January (10:00): -2.1% actual versus 0.5% expected, 1.1% prior (revised from 0.9%)
- Auto Sales, February (14:00): 5.6M prior
- Truck Sales, February (14:00): 6.5M prior

March 5 - Tuesday
- ISM Services, February (10:00): 55.4 expected, 55.2 prior

March 6 - Wednesday
- MBA Mortgage Index, 03/02 (7:00): -3.8% prior
- ADP Employment Change, February (8:15): 150K expected, 192K prior
- Factory Orders, January (10:00): -2.2% expected, 1.8% prior
- Crude Inventories, 03/02 (10:30): 1.130M prior

March 7 - Thursday
- Initial Claims, 03/02 (8:30): 350K expected, 344K prior
- Continuing Claims, 02/23 (8:30): 3100K expected, 3074K prior
- Trade Balance, January (8:30): -$43.0B expected, -$38.5B prior
- Productivity-Rev., Q4 (8:30): -1.6% expected, -2.0% prior
- Unit Labor Costs -Rev., Q4 (8:30): 4.2% expected, 4.5% prior
- Natural Gas Inventories, 03/02 (10:30): -171 bcf prior
- Consumer Credit, January (15:00): $12.8B expected, $14.6B prior

March 8 - Friday
- Nonfarm Payrolls, February (8:30): 165K expected, 157K prior
- Nonfarm Private Payrolls, February (8:30): 178K expected, 166K prior
- Unemployment Rate, February (8:30): 7.9% expected, 7.9% prior
- Hourly Earnings, February (8:30): 0.2% expected, 0.2% prior
- Average Workweek, February (8:30): 34.4 expected, 34.4 prior
- Wholesale Inventories, January (10:00): 0.2% expected, -0.1% prior

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 22-Mar-13

Sector Performance (% change of the week): Financials (+1.35%), Tech (+0.25%), Health Care (+0.69%), Consumer Staples (-0.11%), Consumer Discretionary (+0.15%), Industrials (+0.75%), Energy (+1.11%), Telecom (-0.47%), Materials (+1.00%), Utilities (+1.19%).

Dow +90.54 at 14512.03, Nasdaq +22.40 at 3245, S&P +11.09 at 1556.89

Equity indices finished today's session firmly higher and the S&P 500 settled with a gain of 0.7%.

Stocks began the final session of the week on a positive note with notable strength in consumer stocks. The consumer discretionary sector paced today's advance from the opening bell after Nike (NKE 59.53, +5.93) and Tiffany (TIF 69.23, +1.32) reported bottom line beats and contributed to the relative strength of retailers. In addition, quick service restaurant operators outperformed after Darden Restaurants (DRI 49.62, +0.66) beat on earnings.

The growth-oriented discretionary sector was followed by its defensively-minded cousin, consumer staples. Food and beverage producers saw relative strength after reports indicated investor Nelson Peltz has built stakes in both Mondelez International (MDLZ 29.73, +1.17) and Pepsico (PEP 78.64, +2.49). The two stocks settled with respective gains of 4.1% and 3.3%.

The mixed sector leadership reflected a certain degree of uncertainty, which remains in the market. Going into the weekend, the situation in Cyprus remains unresolved with the latest reports indicating the Cypriot parliament has made some headway, but considerable funding needs remain unaddressed.

Although equities finished higher and appeared unconcerned by potential negative fallout from the inability to reach agreement, financials did not share that optimism. Bank of America (BAC 12.56, -0.01) and Citigroup (C 45.23, 0.00) ended little changed while the SPDR Financial Select Sector ETF (XLF 18.18, +0.11) underperformed the broader market with a gain of 0.6%. Notably, the financial sector proxy ETF ended the week lower by 1.5% as the possibility of a Cypriot exit from the eurozone weighed.

While major financials were tentative in their advance, the growth-oriented materials sector did not participate in the rally at all. After starting the session in line with the broader market, the SPDR Materials Select Sector ETF (XLB 39.07, +0.05) slid back to its unchanged level, and remained there until the close. The lack of a bounce in basic materials was notable as the sector bore the brunt of yesterday's selling.

Elsewhere, tech shares also underperformed notably in yesterday's action, but finished today in the middle of sector rankings. Although most tech stocks rebounded, Oracle (ORCL 31.98, -0.32) remained under pressure after reporting below-consensus earnings following Wednesday's close.

Trading volume was the lowest of the week as just over 620 million shares changed hands on the floor of the New York Stock Exchange.

Reviewing the final sector performance, consumer discretionary (+1.2%), consumer staples (+0.9%), energy (+0.8%), and telecom (+0.7%) finished in the lead. On the downside, materials (+0.1%), utilities (+0.2%), and financials (+0.5%) trailed behind the broader market.

There was no economic news released today with Monday's economic calendar also free of scheduled reports.

Week in Review: Stocks Waver as European Union Targets the Cypriot Saver

On Monday, equities began the session amid broad losses after the conditions of a Cypriot bailout put the package in jeopardy of being voted down in the country's parliament. Per the original agreement, Eurozone rescue funds would provide Cyprus with EUR10 billion in recapitalization with a 'stability levy' imposed on all bank accounts expected to raise an additional EUR5.8 billion. The financial sector bore the brunt of Monday's selling as bank stocks tend to show increased sensitivity in the face of political or economic uncertainty. Morgan Stanley (MS 22.18, +0.12) was the weakest performer among the majors, and the SPDR Financial Select Sector ETF lost 1.0%. Notably, European financials saw wider losses than their U.S. counterparts. Barclays (BCS 17.92, +0.13) and Deutsche Bank (DB 42.11, +0.11) settled lower by 4.1% and 3.6%, respectively.

Tuesday's session began with slim gains, but the early strength lacked conviction as uncertainty continued to surround Cyprus and the terms of its proposed bailout. The expectation of a failed parliamentary vote was confirmed during the afternoon when the Cypriot MPs voted down the deposit tax with 36 'No' votes and 19 abstentions. The energy sector was the biggest laggard with a decline in the price of crude contributing to the weakness. The energy component slid 1.8% to $92.46. Meanwhile, the SPDR Energy Select Sector ETF (XLE 78.75, +0.62) settled lower by 1.1%.

On Wednesday, the S&P 500 settled higher by 0.7% after spending the entire session in positive territory. The otherwise quiet session was highlighted by a policy statement from the Federal Reserve, which was largely in-line with expectations. With regards to economic conditions, the Committee observed a return to "Moderate economic growth following a pause late last year." Regarding price levels, "Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable." Industrial component FedEx (FDX 98.48, +1.98) endured a rough session and fell 6.9% after missing on the bottom line. The company also guided fourth quarter earnings below consensus due to a slowdown in global revenues.

Thursday began in the red with tech stocks driving the early decline. The technology sector underperformed notably after disappointing earnings and cautious revenue guidance from Oracle contributed to selling in several other large cap names. While tech shares pressured the broader market from the opening bell, producers of basic materials declined steadily after France and Germany surprised the market with contractionary manufacturing and services PMI reports. The growth concerns regarding core eurozone economies weighed on the economically-sensitive sector and the SPDR Materials Select Sector ETF lost 1.7%.

 
 Index	  Started Week	 Ended Week  Change  % Change	YTD % 
 DJIA	    14514.11	 14512.03    -2.08	-0.0	10.7 
 Nasdaq	     3249.07	  3245.00	-4.07	-0.1	7.5 
 S&P 500	1560.70	  1556.89	-3.81	-0.2	9.2 
 Russell 2000  952.48	   946.27	-6.21	-0.7   11.4

MU (10.15 +11.91%): Reported Q2 loss of $0.28 per share, includes items, may not be comparable to the Capital IQ Consensus Estimate of ($0.19), beat on revs; tgt raised to $12 from $11 at Sterne Agee; tgt raised to $12 at RBC Capital Mkts; tgt raised to $12 from $11 at UBS.

Analog Devices (ADI) announced the availability of a low-cost hardware-software solution focusing on circuit testing designed for the engineering education market.

9:02AM Anadigics announces the appointment of Ron Michels as Chairman (ANAD) 1.94 : Co announced President and Chief Executive Officer, Ron Michels has been appointed Chairman of the Board of Directors effective March 20, 2013. In conjunction with this appointment, the Company also announced the appointment of Lew Solomon as Lead Independent Director of the Board of Directors.

10:43 am S&P Information Tech +0.52% in line with broader market
he tech sector is trading higher today, in line with gains in the broader market. Semiconductors are showing relative strength with the SOX trading 1.1% higher. Within the chip index, MU (+10.4%) is a notable standout following earnings. Among other major indices, the SPY is trading 0.6% higher today, while the QQQ is up 0.6% and the NASDAQ is trading 0.5% higher on the session. Among tech bellwethers, QCOM (+0.9%) is showing notable strength, while ORCL (-0.7%) is under pressure for the second straight session.

In tech earnings, TIBX (-15.5%) posted a slightly lower Q1 revs, inline EPS and downside guidance, while MU (+11.1%) posted upside quarterly sales. In news, CRM (+1.7%) announced a four-for-one stock split. TECD (-4.1%) restated prior financial statements, which will reduce previously reported consolidated operating income by ~$30-40 mln. Among IPOs, WSTC (has yet to open) priced below its expected range, while MRIN (+28.1%) priced above its expected range. Among rumors, there were reports that BX (-0.3%) is currently studying DELL (-0.1%) buyout, but decision is not certain. Among notable analyst upgrades this morning in the tech space, ADTN (+2.8%) was upgraded to Mkt Perform at Raymond James, PANW (0.0%) was upgraded to Buy at B. Riley Caris and SPRD (+2.2%) was upgraded to Buy at BofA/Merrill. Among downgrades, INFA (-3.8%) was downgraded to Neutral at Nomura, RAX (-1.1%) was downgraded to Sector Perform at Pacific Crest, PLT (-2.0%) was downgraded to Neutral at Sidoti and TIBX (-15.5%) was downgraded at Susquehanna, FBN, and Atlantic. There are no notable names in tech scheduled to report quarterly results today after the close.

Micron (MU) reported second quarter loss of $0.28 per share, includes items, may not be comparable to the Capital IQ Consensus Estimate of ($0.19), while revenues rose 3.4% year/year to $2.08 billion versus the $1.92 billion consensus.

Salesforce.com (CRM) announced that its Board of Directors has approved a four-for-one split of the co's common stock and that its stockholders have approved a proportional increase in the number of authorized shares of salesforce.com common stock from 400 million to 1.6 billion. Each stockholder of record at the close of business on April 3, 2013, will receive three additional shares for every outstanding share held on the record date. Co expects that the additional shares will be distributed by the transfer agent on April 17, 2013, and that trading will begin on a split-adjusted basis on April 18, 2013.

TIBCO Software (TIBX) reported first quarter earnings of $0.18 per share, in-line with the Capital IQ consensus of $0.18, while revenues rose 5.4% year/year to $237.8 million versus the $242.44 million consensus License revenue of $78.3 million. "I believe we are making the right moves to steady our performance and deliver our next leg of growth. Our competitive differentiation remains strong, and we are well positioned to benefit from the current trends driving enterprise IT spending, such as 'big data,' especially with our event-driven platform approach to integrating and analyzing data in real-time."

Tech Data (TECD) announced that the Audit Committee of its Board of Directors, on the recommendation of management, and after discussion with the Company's independent accountants, Ernst & Young LLP, concluded that the Company will restate some or all of its previously issued quarterly and audited annual financial statements for the fiscal years 2011 and 2012, and some or all of the quarters of fiscal year 2013, including our fourth quarter and fiscal year 2013 earnings release dated March 4, 2013. Accordingly, investors should no longer rely upon the Company's previously released financial statements and other financial data relating to these periods. In addition, the Company will likely seek a 15-day filing extension for its Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The Company anticipates that the restatement will be made to correct improprieties primarily related to how the Company's U.K. subsidiary reflected vendor accounting. The Company estimates that the restatement will reduce previously reported consolidated operating income by an aggregate amount of approximately $30 million to $40 million, and consolidated net income by an aggregate amount of approximately $25 million to $33 million, over the three fiscal year periods. These preliminary estimates are based on currently available information and are subject to change during the course of the Company's ongoing investigation. As a result of this investigation, the Company is in the process of evaluating deficiencies in its internal controls over financial reporting.

[ReturntoSender]

NYSE Margin debt for March is finally out. It's the second largest ever at $379,522 million.

http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=3153&category=8

http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=278&category=8

The only time it was higher was July 2007. That was just a few months before the big sell off started.

Expect to see more stories warning about margin debt soon:

https://www.google.com/search?q=margin+debt&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

RtS

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 24-May-13

Dow +8.60 at 15303.1, Nasdaq -0.27 at 3459.14, S&P -0.91 at 1649.6

Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.

The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.

The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced 4.1% after the company reaffirmed its fourth quarter guidance and named Alan Lafley President, Chairman, and Chief Executive Officer. Mr. Lafley had previously served as company President and CEO from 2000 to 2009.

With light volume ahead of the holiday weekend, the broader market drifted back towards yesterday's closing levels. However, the S&P was kept from turning positive by the underperformance of influential sectors.

The energy space lost 0.4% as crude oil shed 0.4% to end at $93.92. Meanwhile, the other commodity-related sector, materials, slipped 0.3% as steelmakers lagged. The Market Vectors Steel ETF (SLX 41.67, -0.42) ended lower by 1.0%.

Industrials also pressured the broader market as transportation-related names sold off. Relative weakness in truckers, delivery services, and shippers caused the Dow Jones Transportation Average to lose 0.5%. However, another industrial subgroup, defense stocks, fared relatively well as the PHLX Defense Index rose 0.1%.

Cyclical groups saw comparable losses in early action. However, the financial sector displayed some afternoon strength as major banks registered gains. As a result, the sector ended with a slim gain of 0.1%.

Today's biggest laggards could be found in the high-yielding utilities sector as the group continued its recent weakness. Including today's 1.0% decline, the sector lost 3.7% this week, and is down 6.7% in May.

The CBOE Volatility Index (VIX 14.11, +0.04) spiked to 14.79% amid the early weakness before the near-term volatility measure surrendered the bulk of its gains.

As mentioned earlier, volume was well below average with only 591 million shares changing hands on the floor of the New York Stock Exchange.

Today's economic data was limited to durable goods orders. For April, orders rose 3.3% after declining an upwardly revised 5.9% (from -6.9%) in March. The Briefing.com consensus expected durable goods orders to rise 1.6%. The sawtooth pattern in transportation held up despite Boeing (BA 100.00, +0.25) announcing lower aircraft orders in April. Transportation orders rose 8.1% in April as defense and nondefense aircraft orders increased 25.7%.

Excluding transportation, durable goods demand was solid all-around and increased 1.3% in April after declining 1.7% in March.

Note that equity and bond markets will be closed on Monday for Memorial Day. On Tuesday, the March Case-Shiller 20-city Index will be reported at 9:00 ET while May consumer confidence will cross the wires at 10:00 ET.

Week in Review: S&P 500 Registers First Weekly Loss of the Month

On Monday, the major averages registered slim losses after intraday action saw the Russell 2000 cross above the 1,000 level for the first time. The lack of conviction was owed in part to a lack of stirring catalysts. M&A activity was among the notable developments as Yahoo! (YHOO 26.33, +0.31) acquired Tumblr for $1.1 billion in cash. Stocks ended Tuesday's session modestly higher as the S&P 500 climbed 0.2% and the Dow added 0.4% to register its 19th consecutive Tuesday of gains. Equity indices saw little change during morning action, but afternoon buying interest helped lift the three averages to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology continued its strong run with the iShares Nasdaq Biotechnology ETF (IBB 180.74, -0.53) advancing 1.0%.

Wednesday saw the S&P 500 settle lower by 0.8% after early strength turned into afternoon weakness. From highs to lows, the S&P fell 1.9% as investors focused on Ben Bernanke's testimony before the Joint Economic Committee. During his remarks, Chairman Bernanke said premature tightening of monetary policy could stall the pace of recovery. Equities spiked at the start of the testimony, but sellers made their presence known this afternoon as the major averages slumped to session lows. The utilities and telecom sectors led to the downside as traders continued to dump income-oriented names. Elsewhere, the energy space lost 1.2% as crude oil declined 2.1%. The energy component ended at $94.18 per barrel, and weighed on the growth-sensitive sector.

On Thursday, the major averages ended modestly lower with the S&P 500 shedding 0.3%. The benchmark average saw an opening loss of 1.2% after Japan's Nikkei tumbled 7.3%. Japanese stocks sold off amid continued volatility in Japanese Government Bond futures as the 10-yr yield spiked to 1.002 before the Bank of Japan's JPY2 trillion liquidity injection caused yields to slide back to session lows. Adding insult to injury was news out of China where the HSBC Flash Manufacturing PMI (49.6 actual, 50.5 consensus, 50.4 prior) fell below 50 for the first time in seven months. The utilities sector was the weakest performer, ending lower by 0.8% after a morning flash crash in American Electric Power (AEP 47.71, -0.57) and NextEra Energy (NEE 77.30, -0.92) briefly wiped out more than $33 billion in combined market capitalization.

 
 Index	   Started Week	  Ended Week  Change  % Change	YTD % 
 DJIA	     15354.40	   15303.10   -51.30    -0.3	16.8 
 Nasdaq	      3498.97	    3459.14   -39.83	-1.1	14.6 
 S&P 500	1667.47	    1649.60   -17.87	-1.1	15.7 
 Russell 2000   996.28	     984.28   -12.00	-1.2	15.9

:31PM This week's biggest % gainers/losers (SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

Utilities: EBR (2.97 +16.14%)
Technology: JASO (8.03 +45.69%), SCTY (48.78 +31.1%), YGE (3.19 +23.17%), VSAT (71.57 +19.78%), GAME (3.59 +19.54%), FLTX (29.74 +18.06%), WFR (7.45 +16.86%), HPQ (24.21 +16.39%)
Services: WBSN (24.8 +32.08%), SKS (15.49 +30.06%), RUE (42.03 +24.77%), DANG (6.11 +16.37%)
Industrial Goods: XONE (45 +16.6%)
Healthcare: MNKD (6.55 +32.75%), ARIA (19.57 +18.03%), INSM (12.93 +17.8%), GTXI (5.89 +16.76%)
Basic Materials: CENX (9.86 +18.41%), PEIX (4.63 +17.58%)

Thsi week's top 20 % losers

Technology: ARUN (13.3 -24.7%), CRUS (17.36 -20.22%), IGTE (14.23 -12.46%), SWI (41.01 -12.14%), SAAS (7.36 -11.67%), RHT (48.49 -9.78%), CAVM (31.85 -9.76%), ADNC (14.77 -9.42%)
Services: HGG (13.91 -10.55%), SSI (23.26 -10.43%)
Industrial Goods: ICA (8.04 -22.68%), PGTI (8.03 -11.68%), OSIS (57.85 -11.33%), RAVN (31.26 -11.3%), NCS (15.06 -9.94%)
Healthcare: IRWD (12.83 -14.25%)
Financial: BSMX (14.92 -11.47%), APO (25.04 -10.34%)
Basic Materials: HK (5.54 -11.11%), CHKR (14.32 -10.9%)

9:01AM DSP Group: Starboard issues open letter to DSP shareholders; urges all shareholders to vote the white proxy card (DSPG) 8.17 : Letter stated "Starboard Value LP, together with its affiliates, currently beneficially owns approximately 10.1% of the outstanding common shares of DSP Group, making us one of the Company's largest shareholders. We have nominated three highly qualified and independent director candidates -- Michael Bornak, Norman J. Rice, III, and Norman P. Taffe for election to DSP's Board of Directors as Class I directors at the upcoming 2013 Annual Meeting. Our Nominees are running against the Company's Class I director nominees, Eliyahu Ayalon, Zvi Limon, and Reuven Regev. The Company recently proposed to elect Gabi Seligsohn as a Class II director at the Annual Meeting as well. We are not nominating any individual to oppose Mr. Seligsohn....We are seeking your support to elect our Nominees because we believe that the Board has failed to represent the best interests of DSP's shareholders. Our Nominees are highly qualified, capable and ready to serve shareholders and to help make DSP a stronger, more profitable, and ultimately, more valuable company....Just as revealing, Messrs. Traub and Lacey, who are experienced veterans of numerous boards of directors, believed it was necessary for them to resort to the unusual step of refusing to sign the Company's Annual Report on Form 10-K for the year ended December 31, 2012 due to the Company's insistence on including FALSE and misleading statements about Messrs. Traub and Lacey in its disclosure despite their specific objections."

10:38 am Technology sector -0.6% trading lower along with the overall market today
The tech sector is trading lower today, along with losses in the broader market. Semiconductors are showing weakness as well with the SOX trading 0.7% lower on the session. Within the chip index, SPRD (-2.3%) is a notable laggard. Among other major indices, the SPY is trading 0.7% lower today, while the QQQ and the NASDAQ are both trading 0.6% higher on the session. Among tech bellwethers, AAPL (+0.4%) is showing notable strength, while ORCL (-1.9%) is under pressure.

In tech earnings last night: CRM (-7.8%) posted an inline qtr and offered inline guidance MRVL (-0.2%) reported a slight beat but guided slightly below consensus MENT (+0.7%) posted a beat and raise. In rumors, GOOG (-1.1%) is considering purchase of mapping company Waze for more than $1 bln; according to reports. FB (-1.4%) was previously speculated as a potential buyer. In notable analyst upgrades this morning in the tech space, ADS (+0.6%) was upgraded to Outperform at William Blair. Among notable downgrades in tech, CRM (-7.8%) was downgraded to Neutral at Wedbush, MRVL (-0.2%) was downgraded to Mkt Underperform at JMP, CRUS (-1.2%) was downgraded to Hold at Canaccord, and CHL (-0.6%) was downgraded to Neutral at Goldman.

Marvell (MRVL) reported first quarter adjusted earnings of $0.19 per share, $0.05 better than the Capital IQ consensus of $0.14, while revenues fell 5.3% year/year to $734.4 million versus the $721.55 million consensus. Non-GAAP gross margin for the first quarter of fiscal 2014 was 54.6 percent, compared to 53.2 percent for the fourth quarter of fiscal 2013 and 54.5 percent for the first quarter of fiscal 2013. The company issued guidance for the second quarter EPS of $0.17-0.21, excluding non-recurring items, versus the $0.18 Capital IQ consensus and revenues of $770-810 million versus the $762.96 million Capital IQ consensus. Under the share repurchase program, Marvell repurchased ~20 million shares for a total of $200 million in the first quarter of fiscal 2014. Over the past eleven quarters, Marvell has repurchased and retired ~204 million shares, or about 29 percent, of its outstanding shares. "Our results in the first quarter were at the high-end of our guidance mainly due to better than normal seasonal demand and share gains in our storage and networking end markets. Starting in the second quarter of fiscal 2014, we expect many of our investments and key initiatives across all of our end markets to produce tangible results. More specifically, we expect growth to be driven by increased traction in areas such as mobile handsets, tablets, connectivity and SSDs.

[ReturntoSender]

OT: Chart of the Day - COTD - Real Estate Prices Rising at Fastest Pace Ever!

http://www.chartoftheday.com/20130626.htm?T

The US real estate market continues to surge. For some perspective, today's top chart illustrates the US median price (adjusted for inflation) of a single-family home over the past 43 years while today's bottom chart presents the annual percent change in home prices (also adjusted for inflation). Today's chart illustrates that the inflation-adjusted median home price has rarely increased more than 7.5% in one year (gray shading). When inflation-adjusted home prices did increase more than 7.5% in one year, it was often soon followed by a period of stagnant or declining prices. The exception to this occurred during the credit bubble (2001 and 2002). It is worth noting that over the past 12 months, the median price for a single-family home has shot up at the fastest pace on record.

[ReturntoSender]

From Briefing.com: 4:15 pm : The S&P 500 settled higher by 1.0% as all ten sectors registered gains.

Equities began the session on an upbeat note despite today's disappointing economic news, which indicated first quarter GDP growth was revised down with the third estimate to 1.8% from 2.4%. Typically, revisions to GDP in the third estimate are very minor. The large decline in this report was very unusual and caught all economists by surprise.

Most of the downward revision came from consumption in services. In the previous estimate, services spending increased 3.1%. That was revised down to 1.7% growth and contributed 0.6 percentage points less to GDP growth.

Stocks received this news in stride as sluggish growth suggests the Federal Reserve is less likely to withdraw its support from the markets. To that end, the Treasury complex received an aggressive bid immediately after the GDP revision crossed the wires. The benchmark 10-yr yield ended lower by seven basis points at 2.542%.

There was no defined sector leadership today as health care and utilities finished atop the leaderboard while the discretionary sector and industrials followed closely.

The health care space rose 1.5% as biotechnology rallied. The iShares Nasdaq Biotechnology ETF (IBB 173.02, +4.38) advanced 2.6%.

Another countercyclical group, utilities, settled higher by 1.3% as today's gain allowed the rate-sensitive sector to erase its June loss and join the telecom space in positive territory for the month.

Elsewhere, the discretionary sector climbed 1.3% as most components rebounded from recent weakness. However, homebuilders remained shaky. DR Horton (DHI 20.92, +0.01) ended little changed, Toll Brothers (TOL 32.56, +0.60) added 1.9%, while the broader iShares Dow Jones US Home Construction ETF (ITB 22.21, +0.19) rose 0.9%. Despite today's advance, the homebuilders ETF is down more than 15.0% since notching its mid-May high.

Also of note, the industrial sector received a boost from transportation-related names as the Dow Jones Transportation Average added 0.8%.

Precious metals endured another rough session as gold futures fell 3.9% to $1225.00 per troy ounce while silver futures declined 5.2% to $18.50 per troy ounce.

With stocks ending on their highs, the CBOE Volatility Index (VIX 17.22, -1.25) settled on its lowest level in more than a week.

Tomorrow, weekly initial claims, May personal income, personal spending, and core PCE prices will all be reported at 10:00 ET while the May pending home sales report will cross the wires at 10:00 ET.

The U.S. Treasury will auction $29 billion in 7-yr notes.DJ30 +149.83 NASDAQ +28.34 SP500 +15.23 NASDAQ Adv/Vol/Dec 1349/1.59 bln/1110 NYSE Adv/Vol/Dec 2346/774.2 mln/741

3:30 pm :

Precious metals fell to new lows since August 2010 as a stronger dollar index put pressure on prices.
Aug gold tumbled to $1228.80 per ounce in afternoon pit trade and settled with a 3.6% loss at $1229.80 per ounce as it was unable to find support from buyers.
July silver saw even biggest losses as prices slumped to $18.52 per ounce in morning pit action. It eventually settled at $18.59 per ounce, booking a 4.8% loss.
Aug crude oil slipped to a session low of $93.68 per barrel following weak inventory data that showed a build of 0.018 mln barrels when a draw of 1.725 mln barrels was anticipated. However, the energy component managed to erase the loss and settled 0.2% higher at $95.49 per barrel, slightly below its session high of $95.60 per barrel.
Aug natural gas chopped around in positive territory today. It brushed a session low of $3.67 per MMBtu in early morning floor trade and eventually settled with a 1.9% gain as it closed at its session high of $3.74 per MMBtu.

5:30PM Applied Micro announces retirement of CFO (AMCC) 9.54 -0.07 : Co announced the retirement of Robert G. Gargus, Chief Financial Officer. Shiva Natarajan, Chief Accounting Officer and Controller, will serve as Interim CFO.

1:37PM SolarCity introduces LightMount for commercial buildings (SCTY) 37.17 +1.16 : Co introduced LightMount, a lightweight roof mounting product that will maximize solar installation capacity on commercial building rooftops. LightMount will be available exclusively to SolarCity customers for commercial rooftop solar installations. LightMount was engineered to ease rooftop weight constraints and maximize the solar capacity of a system.

11:04AM Canadian Solar popping higher; Samsung Renewable Energy signs manufacturing partnership agreement with Canadian Solar (CSIQ) 9.51 +0.58 : Samsung Renewable Energy reached a partnership agreement with Canadian Solar to open a new manufacturing facility in London, Ontario. The facility will produce solar PV Modules and Medium Voltage Power Stations. This plant will supply Samsung's Ontario solar projects, such as the 100 megawatt (MW) Grand Renewable Energy Park in Haldimand County, the 100 MW Sol-Luce Kingston Solar PV project in Kingston and Loyalist Township, and future solar projects within the GEIA. The new facility will also be a hub for Canadian Solar to conduct research and product development associated with solar energy generation.

10:16AM Apple continues to slide lower off the opening, nearing Monday's low of 398.05. (AAPL) 398.18 -4.45 : Next support zone lies around its April swing lows of 392.50/390/385.10.
10:13AM Semiconductor Hldrs ETF displaying some intraday relative weakness in recent trade (SMH) 37.20 +0.12 : AMAT -1.3%, NVDA -0.6%, BRCM -0.3%, ALTR -0.2%, MRVL -0.1%, KLAC -0.1%

Qualcomm (QCOM) announced that its subsidiary, Qualcomm Technologies, is enabling the Samsung (SSNLF) Galaxy S4 LTE-A, powered by the Qualcomm Snapdragon 800 processor.

NXP Semiconductors (NXPI) announced that Vestel, a home appliance manufacturer based in Turkey, has selected the LPC1785 microcontroller to drive advanced TFT displays in new models of ovens.

Synopsys (SNPS) and United Microelectronics (UMC) announced that the collaboration between the two cos has resulted in the successful tapeout of UMC's first process qualification vehicle in its 14-nanometer FinFET process utilizing Synopsys' DesignWare Logic Library IP portfolio and StarRC parasitic extraction solution, a part of the Galaxy Implementation Platform.

Lattice Semiconductor (LSCC) announced the introduction of AEC-Q100-certified "Lattice Automotive" devices in its award-winning LatticeECP3 FPGA family.

Global supercomputer leader Cray (CRAY) announced the European Centre for Medium-Range Weather Forecasts selected a Cray XC30 supercomputer and Cray Sonexion storage for their next operational facility.

The Benchmark Company upgrades Arm Holdings (ARMH) to Buy from Hold and raises their target to $45 from $44; perception is the only thing that has changed during the recent sell-off in ARM shares. Over the next several years, they continue to expect the served available market for the types of chips ARM is designed into to grow at a 9% compound annual rate through 2017 and for ARM to grow market share by 300bp-400bp over this time frame (translating into 15-20%-point growth premium over the chip industry). ar term as it delivers more consistent revenue and earnings growth.

[ReturntoSender]

From Briefing.com: 4:20 pm : The S&P 500 settled higher by 0.6% as nine of ten sectors posted gains.

Equities were off to the races at the sound of the opening bell, aided by today's personal income report, which pointed to an increase of 0.5% in May. The Briefing.com consensus expected personal income to rise 0.2%.

Meanwhile, personal spending increased 0.3% in May and nearly reversed the entire 0.3% decline that occurred in April. The consensus expected spending levels to increase 0.4%.

In addition, the core PCE price index increased 0.1% in May. That was up from no growth in April and exactly what the consensus expected.

Stocks received a secondary boost from the pending home sales report as May sales rose 6.7% (1.5% consensus).

The S&P notched its high of 1620 shortly after the market digested the latest housing data point. However, the index was unable to rise above that level as the 20- and 50-day moving averages served as resistance at today's high.

Today's housing data provided homebuilders with a significant boost. Although the report focused on pending home sales, strong demand in that market suggests healthy demand for new homes as well. The iShares Dow Jones US Home Construction ETF (ITB 22.75, +0.54) traded on its lows before the housing data sent the ETF to its best levels.

Most other cyclical groups also registered solid gains with financials settling in the lead, sporting a gain of 1.3%.

Financials were closely followed by this month's top performing group, telecom services. The high-yielding sector took a significant hit when Treasury yields began their climb in May. However, recent days have seen the sector rally even with yields not far from their recent highs.

The telecom space ended higher by 0.9% to extend its June advance to 2.6%. Meanwhile, the second-best sector of the month, consumer staples, climbed 0.9%, padding its June return to 0.4%.

On the downside, the materials space shed 0.1%. The sector was pressured by a 2.1% loss in Monsanto (MON 98.75, -2.09). Interestingly, the Market Vectors Gold Miners ETF (GDX 22.79, +0.57) gained 2.6% despite continued weakness in gold futures, which slumped 2.6% to $1198.00 per troy ounce. This marked the first time the yellow metal traded south of the 1200 level since August 2010.

Treasuries saw some intraday weakness but ended near their highs after today's strong 7-yr auction. The benchmark 10-yr yield slipped six basis points to 2.511%.

Looking at today's remaining economic data, the initial claims level fell from an upwardly revised 355,000 (from 354,000) for the week ending June 15 to 346,000 for the week ending June 22. The Briefing.com consensus expected the initial claims level to fall to 345,000.

Over the past several weeks, the initial claims level has followed a soft sawtooth path with the four-week moving average remaining nearly flat the entire time. The claims data suggest that labor market conditions have not materially changed during this time.

Tomorrow, June Chicago PMI and the final reading of the June Michigan Consumer Sentiment Survey will cross the wires at 9:45 and 9:55 ET, respectively.DJ30 +114.35 NASDAQ +25.64 SP500 +9.94 NASDAQ Adv/Vol/Dec 1982/1.61 bln/525 NYSE Adv/Vol/Dec 2608/737.8 mln/469

3:30 pm :

Aug crude oil advanced for a fourth consecutive session with prices rising to a pit session high of $97.41 per barrel in morning action. It settled at $97.05 per barrel, booking a 1.6% gain.
Aug natural gas, on the other hand, plunged deeper into negative territory following inventory data that showed a build of 95 bcf when a smaller build of 88 bcf was anticipated. Prices fell from a session high of $3.73 per MMBtu and touched a session low of $3.56 per MMBtu. Unable to erase much of the loss, natural gas settled 4.3% lower at $3.58 per MMBtu. o Precious metals sold off sharply heading into the close.
Aug gold spent most of today's pit trade chopping around near the unchanged line and touched a session high of $1237.20 per ounce. However, it slipped to a session low of $1206.50 per ounce moments before settling with a 1.5% loss at $1211.60 per ounce. Prices briefly dipped below the $1200 per ounce level in electronic trade.
Sep silver rose to a session high of $18.88 by late morning action but gave up its entire gain as it settled at $18.56 per ounce, or 0.3% lower.

4:12PM Adobe Systems to acquire Neolane for ~$600 mln in cash (ADBE) 45.93 +0.25 : Co believes the acquisition of Neolane will not materially affect the co's forecasted revenue and non-GAAP financial results in fiscal year 2013. Due to the absence at this time of certain acquisition-related cost estimates and purchase price accounting, co is currently unable to provide an estimated impact on future GAAP earnings.

4:06PM CalAmp beats by $0.03, beats on revs; guides Q2 EPS in-line, revs in-line (CAMP) 14.38 +0.63 : Reports Q1 (May) earnings of $0.16 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.13; revenues rose 22.5% year/year to $53.7 mln vs the $52.4 mln consensus. Co issues in-line guidance for Q2 (Aug), sees EPS of $0.14-0.18, excluding non-recurring items, vs. $0.16 Capital IQ Consensus Estimate; sees Q2 revs of $53-57 mln vs. $53.7 mln Capital IQ Consensus Estimate.

"We're off to a strong start in fiscal 2014."
In Q1, Wireless Datacom segment revenue increased 29% YoY driven by continued momentum from Mobile Resource Management (MRM) products and contributions from its Wireless Matrix acquisition that was completed at the beginning of Q1.
Wireless Datacom gross margin improved to 39.1% due mainly to higher margin subscription revenue from the Wireless Matrix acquisition.
For its Satellite segment, co saw improving margins along with some growth resulting in a meaningful impact to bottom line results.

2:02PM Microchip closes $2.0 bln credit agreement (MCHP) 37.24 +0.29 : Co announced that it has executed a new $2.0 billion unsecured credit agreement with a group of lenders with $1.65 billion of such amount being a revolving loan facility and $350 million being a term loan. Borrowings under this facility are expected to be used for general corporate purposes including potential acquisition activity. The agreement has a five year term and an option to increase the amount available to $2.3 billion. The agreement replaces the $750 million unsecured credit agreement that Microchip previously had in place.

Magwel N.V. announced that ON Semiconductor (ONNN) has selected Magwel's PTM-ET Electro-Thermal Simulation tool for use in its design and verification of high current, high power devices.

Juniper Networks (JNPR) has announced that Lotus F1 Team, currently standing a close fourth in the Constructors' Championship after the first seven races, has built a mission-critical network infrastructure using Juniper's portfolio of switching, security, wireless LAN, routing and application software solutions to improve flexibility and enhance performance.

[ReturntoSender]

I recently involved myself in a financial discussion with a friend of mine in which I stated that the recent rise in the stock market is no longer supported by rising earnings but rather hopes that growth in earnings will resume. This is happening at the same time as the market was rising to new highs. Last month of course we actually got something of a pullback. This might not be the beginning of a larger sell off but when a rising wedge breaks out to the upside this is often a warning sign seen at the end of a move before a deep sell off begins. Page down to rule 4:

http://www.siliconinvestor.com/readmsg.aspx?msgid=28770834



Don's comments from the last couple of months on his tables suggest that he too is concerned with the slowing of growth in actual earnings in the semiconductor space:

http://www.siliconinvestor.com/readmsg.aspx?msgid=28962899&srchtxt=Bookings%20Billings

http://www.siliconinvestor.com/readmsg.aspx?msgid=28912162&srchtxt=actual%20earnings

Considering the fact that the P/E ratio on the S&P 500 is actually rising for the first time in a few years due to an overextended stock market and slowing earnings growth I think being careful with our investment dollars is more important now than at any other time over the last 5 years:

http://www.multpl.com/

RtS

[ReturntoSender]

From Briefing.com: 4:15 pm : The S&P 500 settled lower by 0.1% after recovering a portion of its losses into the close.

Equities saw little change at the start of today's session after index futures surrendered their pre-market gains just ahead of the opening bell. The decline in futures coincided with euro weakness after reports indicated the International Monetary Fund and Eurozone officials gave Greece three days to prove its reforms are on course.

Contributing to the euro weakness was the situation in Portugal where the country's foreign minister resigned after the finance minister, who constructed the country's EU/IMF bailout, submitted his resignation yesterday. The resignations of two key figures put the spotlight on Prime Minister Pedro Passos Coelho, who said he does not plan to step down. The uncertainty pushed the Portuguese 10-yr yield higher by nine basis points to 6.42%.

Stocks were able to look past the cautious open and the S&P 500 climbed to a session high less than a point above its 50-day moving average. However, similar to yesterday, the index was unable to hold above that level into the close.

The major averages retreated from their highs amid headlines from Germany, where Chancellor Angela Merkel said Greece may not receive the full bailout amount as planned. Instead, the funds could be paid out in installments.

The follow-up to earlier headlines took some wind out the market's sails and eventually pressured the euro below 1.3000, to a one-month low against the dollar.

Today's dollar strength did not slow the advance in crude oil as the energy component added 1.4% to $99.40 per barrel. On a related note, U.S. television networks brought some additional attention to the intensifying protests in Egypt. Yesterday, the Egyptian military said it will intervene if a solution is not reached in 48 hours. Today, subsequent reports indicated the military will suspend the constitution and dissolve the country's government if no agreement is reached by tomorrow.

While crude oil registered a solid gain, other commodities underperformed. Copper futures slid 0.7% to $3.134 per pound while gold futures declined 1.1% to $1242.00 per ounce. This weighed on the materials sector, which ended with a loss of 0.4%.

Elsewhere, the industrial space trailed behind the broader market from the start. Transportation-related names lagged as the Dow Jones Transportation Average shed 0.5%. In addition, defense contractors displayed broad weakness. The PHLX Defense Index fell 1.3% as 16 of its 17 components ended in the red. Of the 16 decliners, 11 names registered losses larger than 1.0%.

Countercyclical sectors ended in mixed fashion as the telecom space outperformed with a gain of 0.5% while the health care sector shed 0.3% after the Centers for Medicare and Medicaid Services announced a 9.4% decrease in payments to dialysis providers starting in 2014.

Today's economic data was limited to manufacturing orders, which increased 2.1% in May, up from an upwardly revised 1.3% (from 1.0%) in April. The Briefing.com consensus expected factory orders to increase 2.0%.

A full slate of economic reports is scheduled for tomorrow, beginning with the 7:00 ET release of the weekly MBA Mortgage Index. June Challenger Job Cuts and ADP Employment Change will be reported at their respective 7:30 ET and 8:15 ET while weekly initial claims will cross the wires at 8:30 ET. Finally, the May trade balance will be reported at 8:30 ET while June ISM Services Index will be announced at 10:00 ET.DJ30 -42.55 NASDAQ -1.09 SP500 -0.88 NASDAQ Adv/Vol/Dec 1227/1.64 bln/1283 NYSE Adv/Vol/Dec 1190/716.7 mln/1850
3:35 pm : Commodities ended the day mixed, with energy higher and metals and grains lower.

Crude oil rallied from below $98/barrel and rose as high as $99.87/barrel. By the end of today's session, Aug crude oil was up 1.4%, closing at $99.42/barrel. Natural gas trended high during today session, ending 2% higher at $3.65/MMBtu.

Metals ended the day in the red, with Aug gold losing 0.1% to $1243.30/oz, while July silver declining 1.2% to $19.33/oz. Sept copper ended 2 cents lower at $3.14/lb.

4:31PM Ultratech secures repeat AP order win with OSAT customer (UTEK) 36.52 -0.20 : Co announced that it has received a repeat order from a leading outsourced semiconductor assembly and test (OSAT) company in Asia. The AP300W lithography system built on Ultratech's customizable Unity Platform will be utilized for wafer-level packaging (WLP) applications to support growth driven by communication devices. As the advanced packaging technology requirements evolve, OSATs will play an important role in establishing the supply chain. This major win further confirms Ultratech's ability to deliver operational flexibility, technology leadership and highest economic value for its customers.

3:52PM Oracle prices EUR 2.0 bln of investment grade notes (ORCL) 30.06 -0.05 : Co announced the pricing of its sale of EUR 1.25 billion of 2.250% Notes due 2021 and EUR 750 million of 3.125% Notes due 2025. The offering is expected to settle on July 10, 2013. The 2021 Notes will bear interest at the rate of 2.250% per year and the 2025 Notes will bear interest at the rate of 3.125% per year. Interest will be payable annually on January 10 for the 2021 Notes, commencing on January 10, 2014, and on July 10 for the 2025 Notes, commencing on July 10, 2014. Oracle intends to use the net proceeds from the offering for general corporate purposes, which may include stock repurchases, payment of cash dividends on its common stock and future acquisitions. BNP Paribas, Deutsche Bank AG, London Branch and The Royal Bank of Scotland plc are as acting as joint book-running managers for the offering.

11:52AM Floor Talk: June Review (TALKX) : After starting the year with five consecutive monthly gains, the three major averages ended June in the red. The losses took place amid spiking interest rates around the world, increased volatility in the U.S. dollar, and liquidity and growth concerns in China. Nine out of ten economic sectors ended the month in negative territory with cyclical groups leading to the downside. The S&P 500 found itself locked in a technical affair as the 20-, 50-, and 100-day moving averages all came into play during the month.

VIX Escalates

This year's prior bouts with volatility produced brief, sharp spikes in the CBOE Volatility Index (VIX). However, the most recent episode differed as VIX began climbing in mid-May. It entered June at 16.30%, and saw a post-FOMC spike to 20.49% before retreating to 16.86% by month's end.

Markets Throw Taper Tantrum

On June 19, the FOMC concluded its two-day meeting, but Ben Bernanke's subsequent press conference caught the market's attention as the chairman indicated the Fed could modify its asset purchase program before the end of this year with a potential end coming in the middle of 2014. Mr. Bernanke stressed that any such modifications would only take place if economic data continued to show improvement, yet the mere mention of tapering roiled the capital markets.

U.S. Treasuries sold off, causing the benchmark 10-yr yield to spike from 2.175% to 2.657% over the course of four sessions. Yields then retreated off their highs into month-end, settling at 2.478%.
The sharp rise in Treasury yields was accompanied by a spike in global interest rates. Peripheral European interest rates were noteworthy as Italy's 10-yr yield jumped to 4.934% before ending the month at 4.559%. Spain's benchmark yield climbed to a June high of 5.173% before easing to 4.776%.

The rapid rise in global interest rates pressured equities. The S&P 500 slashed through its 20- and 50-day moving averages, but a rebound off the 100-day average helped the S&P end the month almost 50 points off its lows. The recovery effort was aided by a parade of Fed speakers insisting the markets misunderstood Chairman Bernanke's message and that changes to asset purchases remain data dependent and not calendar dependent. Further, the final reading of first quarter GDP was hardly supportive of modifications to asset purchases as the prior reading of 2.4% was revised down to 1.8%.

The stock market rebound effort, however, ran into resistance that coincided with the S&P's 20- and 50-day moving averages.

Growth-oriented Sectors Slump

While the final week of the month saw the S&P 500 reclaim a good portion of its losses, some cyclical sectors were not as fortunate. On the flip side, income-oriented groups sold off with the post-FOMC spike in Treasuries, but received a solid bid into the end of the month.

The materials sector was the biggest laggard, losing 4.8% as the softness in commodities weighed on the related sector. In addition, the large June loss caused the materials space to trim its year-to-date gain to 2.2% and fall to the bottom of this year's sector rankings. Interestingly, the discretionary sector managed to tack on 0.5% but a large subsector, homebuilders, was a notable laggard. The iShares Dow Jones US Home Construction ETF (ITB) fell 8.0% in June and registered a second quarter loss of 6.3%. Despite the significant loss, the homebuilders ETF ended the month with a year-to-date gain of 5.7%.

Dollar Roundtrips

The first half of the month saw significant dollar weakness as the Japanese yen continued its surge from late May. Dollar/yen opened June at 100.50, slid all the way to 94.00 (-6.5%), and then recovered nearly all of its losses.

The sharp decline in the exchange rate pressured equities, sending the S&P 500 to its 50-day moving average.
While dollar weakness dominated through the first half of the month, subsequent greenback strength helped the Dollar Index erase its earlier losses to end June little changed. The Index surged off its mid-June lows following the latest meeting of the Federal Open Market Committee and comments from Federal Reserve Chairman Ben Bernanke.

Chinese Liquidity Crunch Resonates

China began flashing signs of liquidity issues early in the month as the Shanghai Interbank Offered Rate (SHIBOR) began climbing. That rise turned into a mid-month spike in the overnight rate to 25% as inflation worries caused the People's Bank of China to refrain from injecting liquidity into the banking system. However, some of the market's fears were allayed when the central bank said funds would be provided to large lenders in need.

The liquidity crunch sent shockwaves through global markets and the S&P 500 tested its 100-day moving average for the first time in 2013.

In addition to the liquidity concerns, Chinese economic data did not inspire much confidence. The country's June Manufacturing PMI declined to 50.10 from 50.80 (50.00 expected) while the HSBC Manufacturing PMI remained in contraction with a downtick to a nine-month low of 48.2 from 48.3 (48.3 forecast).

Commodities Suffer

The concerns surrounding the strength of the Chinese (and global) economy were reflected by the weakness in commodities. Copper futures tumbled nearly 8.0% to $3.06 per pound while gold futures had a flashback to April, falling 12.3% to $1,223.70 per troy ounce.

Weakness in those metals was not exclusive to June. Over the course of the second quarter, copper declined 9.1% while gold endured a 21.6% plunge.

Unwelcomed Visitor Makes Return Appearance(s)

In our May summary we highlighted the first couple appearances this year of the Hindenburg Omen, which is said to foreshadow a correction based, in part, on a divergence in the market when NYSE issues making new 52-week highs and lows exceed 2.2%. This pattern becomes stronger when it appears in clusters no more than one month apart. In June, the Hindenburg Omen made return appearances on four separate occasions (June 3, 4, 10, and 20).

To recap, these conditions must be satisfied for the pattern to be activated:

The number of NYSE new 52-week highs and new 52-week lows must both be greater than 2.2%.
Of these two extremes, the smaller number must be greater than or equal to 69.
The NYSE 10-week (50-day) moving average must be rising.
The McClellan Oscillator must be negative.
Finally, the issues making new 52-week highs cannot be more than twice the amount of shares at new 52-week lows.

Click here to see a breakdown of monthly sector performance.

8:13AM Silicon Motion lowers Q2 rev guidance, raises Q2 non-GAAP gross margin guidance (SIMO) 10.70 : Co issues downside guidance for Q2 (Jun), lowers Q2 (Jun) revs to flat QoQ at $57.4 mln (from +5-10% QoQ) vs. $61.3 mln Capital IQ Consensus.

Gross margin (non-GAAP) is expected to be in the 47 to 49% range, above the co's guidance of 45 to 47%.

"In the second quarter, we saw demand for our embedded controllers (eMMC) exceed our own expectations along with continuing strong OEM sales of our other controller products. However, with availability of NAND flash still tight for module makers, procurement of our card and USB flash drive controllers from these customers was lower than expected."

8:04AM SanDisk announces definitive agreement to acquire SMART Storage Systems; SanDisk will pay ~$307 mln in cash (SNDK) 61.42 : Co announced a definitive agreement to acquire SMART Storage Systems, a developer of enterprise solid state drives (SSDs) based on the SATA and SAS storage protocols. Under the terms of the agreement, SanDisk will pay ~$307 mln in cash and certain equity-based incentive awards to acquire SMART Storage Systems, which is part of the SMART Worldwide Holdings portfolio of companies, acquired in 2011 by two related investment funds of Silver Lake.

The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including regulatory review and approval, and it is expected to close in August, 2013. Approximately 250 employees of SMART Storage Systems will join SanDisk at the close of the transaction.

Microsemi (MSCC) added two new ultra-low dropout linear point-of-load regulators for space, commercial aviation and defense applications to its radiation-hardened solutions portfolio. The MHL8701 and MHL8705 regulators are the first devices of their kind to include an integrated single event effects filter to protect against soft errors caused by heavy ions often found in air- and space-borne applications.

6:11AM Spreadtrum comms Board of Directors selects financial advisor with respect to the previously-announced preliminary non-binding proposal made by Tsinghua Unigroup pursuant to which Unigroup proposes to acquire the Company for $28.50 in cash per ADS (SPRD) 26.48 : Co announced that its Board of Directors has retained Morgan Stanley Asia Limited as its financial advisor with respect to the previously-announced preliminary non-binding proposal made by Tsinghua Unigroup pursuant to which Unigroup proposes to acquire the Company for $28.50 in cash per American Depositary Share Morgan Stanley has been retained to assist the Board in its evaluation of the Unigroup Proposal and the Board's consideration of potential alternatives to the Unigroup Proposal. The Board is continuing its review and evaluation of the Unigroup Proposal and other alternatives available to the Company. The Board has not yet made any decisions with respect to such matters. There can be no assurance that any agreement will be executed with Unigroup or any other party, or that this or any other transaction will be approved or consummated.

Fujitsu Semiconductor Limited and ARM (ARMH) announced a licensing agreement that enables Fujitsu Semiconductor to release a system on chip solution which takes advantage of the benefits of ARM big.LITTLE technology and ARM Mali-T624 graphics processing.

SanDisk (SNDK) announced that the construction of the phase two shell of the Fab 5 joint venture wafer fabrication facility located in Yokkaichi, Japan, will begin in August 2013 with expected completion in mid-2014.

10:29 am Technology
The tech sector is trading higher today, ahead of narrower gains in the broader market. Semiconductors are showing strength as well with the SOX trading 0.8% higher.

Within the chip index, RBCN (+4.5%) is a notable standout. Among other major indices, the SPY is trading 0.4% higher today, while the QQQ is up 0.4% and the NASDAQ is trading 0.3% higher on the session. Among tech bellwethers, AAPL (+2.2%) is showing notable strength, while FB (-1.3%) is under pressure. In notable tech earnings last night: AFOP (+6.2%) raised Q2 revenue guidance XRTX (+1.7%) reported a Q2 beat and guided inline with consensus This morning in tech earnings, MMS (-4.0%) guided mixed FY14 guidance. Also, SIMO (+0.2%) lowered Q2 rev guidance and raised Q2 non-GAAP gross margin guidance. In news, ZNGA (+10.4%) confirms that it will name Don Mattrick, formerly of MSFT (-0.3%), as CEO.

Elsewhere, NLSN (+2.3%) will replace S (+0.2%) in the S&P 500. Among notable analyst upgrades in tech this morning, STX (+0.1%) was upgraded to Equal Weight at Barclays. Also, GRPN (+2.7%) was initiated with a Buy at Wunderlich. In downgrades, CACI (-2.2%) was downgraded to Underperform at RBC, BCE (-0.2%) was downgraded to Hold at Canaccord and ACN (0.0%) was downgraded to Hold at Argus. Also, MU (-1.4%) is trading lower after peer SK Hynix was downgraded at Credit Agricole. There are no notable names in tech scheduled to report after the close.

Zynga (ZNGA) confirmed that it will name Don Mattrick Chief Executive Officer. Mattrick spent six years at Microsoft (MSFT) -- the last three as president of the Interactive Entertainment Business.

Xyratex (XRTX) reported second quarter earnings of $0.10 per share, ex items, which was better than expected, while revenues fell 32.9% year/year to $216.2 million which was also higher than expected. Co issued third quarter guidance with EPS of ($0.04)-$0.20, which was in line with range of estimates, and revenues of $195-225 million, which was also in line with expectations. Gross profit margin in the second quarter was 22.0%, compared to 16.5% in the same period last year and 18.9% in the prior quarter. The increases from last year and the prior quarter primarily reflect a favorable variation in product mix in both our Enterprise Data Storage Solutions and Hard Disk Drive Capital Equipment product segments. "The gradual revenue decline from our previously largest customer NetApp (NTAP) will cease after 2014 and this revenue is being replaced with new OEM business wins. With our new ClusterStor product line, which addresses the HPC/Big Data marketplace, we have achieved incremental design wins, added a number of new customers in just the last 3 months and are on course to meet our revenue target of $60m in fiscal 2013. I am very encouraged that ClusterStor is approaching the inflection point where, as revenue ramps year over year, the product line can generate a positive contribution to the overall business,"

Oppenheimer initiated Textura (TXTR) with a Outperform and price target of $35; co is currently disrupting the collaboration intensive commercial construction market by bringing to the owners, general contractors and subcontractor masses an easy-to-use suite of SaaS products that improves productivity and lowers risk. Textura's end market (estimated ~$1.2B TAM presently) is on the cusp of a major expansion cycle after a lengthy downturn that should triple its TAM over the next few years. They think Textura's unique combination of simplicity, computing power, fast deployment, and network effects puts the company, which recently IPO'd, in an enviable position to take advantage of this large opportunity by addressing industry participants who mostly use manual processes (i.e., spreadsheets) or legacy, on-premise software, but not formal SaaS construction collaboration applications today.

[ReturntoSender]

InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

- More gains for the weekend as momentum carries small caps to new highs, large cap indices to trendlines.
- Lots of negative news but it does not slow the market that is high on 'in Bernanke we trust.'
- Plosser says Fed should start taper in September, doesn't want to create another housing boom.
- PPI jumps past Fed purported speed limit.
- Michigan Sentiment misses as inflation expectations rise along with gasoline and mortgage prices.
- UPS lowers earnings guidance on a weak US outlook.
- JPM latest to cut its GDP outlook.
- Stocks sitting on a great run, some indices at resistance, as earnings kick off.

All news is good news for stocks, though Boeing burns the Dow.

United Technologies air unit allegedly catches fire on Boeing plane. The fire was extinguished with no casualties other than the 787 Dream.

The news was not good. You can slice it anyway you want and the Friday news still comes out bad. An impressively lengthy and depressing string of stories. Not bad enough to head to the shelter, safe room, don sackcloth and ashes, or whatever your escape plan/ritual may be, but more worrisome issues for the US economy.

Boeing has a dream of a dreamliner, but that dream appears in the process of being deferred as two issues for the jet hit Friday: a fire in the cooling unit in one and an undisclosed problem with another caused a return to the airport of origin. Is a dream deferred a dream denied? Friday it was and Boeing weighed down the Dow. That was Friday, and I seriously doubt that BA's dream will be denied. Indeed, if the stock sells off significantly on this news it will be a buy. I won't be flying on any 787 until the kinks are out but again, if the stock sells off BA has always been a buy.

Oh if it were just Boeing. But, alas, it was not.

PPI overall rose 0.8% month over month on a 2.9% increase in fuel costs. Gasoline rose 7.9% and that is only going to get worse after this recent spike in prices hitting this weekend. They were already up 0.7% in June before this last spike hits.

PPI, June (8:30): 0.8% actual versus 0.3% expected, 0.5% prior
Core PPI, June (8:30): 0.2% actual versus 0.1% expected, 0.1% prior

Indeed the lion's share, near all, of the jump was fuel. Food rose just 0.2%, and while not a huge jump the cumulative gain hurts.

The overall PPI rose 2.5%, the highest since March 2012. So, when you take out food and energy there the core rose 1.7%. That is within the Fed's 'speed limit' of 2%, but food and energy are so critical right now given so few have more income to spend on fuel and food, necessities.

Look at where prices are now with such a slow economy.

Of course Ben Bernanke then has the nerve to say inflation is not high enough. Lessons from the '70's forgotten. Unfortunately, not just this lesson but most all others as we pursue massive regulation growth, punishing small business, inflating energy prices, expanding social programs, and further squandering our reputation in the world. We never learn from history. I also never stay on point.

Michigan sentiment missed expectations, the biggest drop since December 2012.

Michigan Sentiment, July (9:55): 83.9 actual versus 85.0 expected, 84.1 prior

Still elevated over the levels 6 months ago, but expectations faded. Higher gasoline prices? Spiking mortgage prices? Could be; inflation expectations hit their highest in 2013. Certainly stock prices were higher but they could not offset the other factors consumers see down the road with more money coming out of their pocket each week to pay for gas. That is money right out of the economy.

Shipping warnings again

Ah, and that brings up UPS. Federal Express warned prior to its last earnings and its results lived up to its warning. Slowing overseas demand and less desire to pay for expedited services (the 'absolutely, positively has to be there' delivery) made sense given slowing foreign economies. UPS, however, cut its quarter guidance as well as its full year, and it was specific, saying the "slowing US industrial economy" was the cause of its guidance dropped to 1.13 versus 1.20 this quarter.

JPM jumped on this story and indeed seconded Barclay's cut of expected Q2 GDP. Barclays slashed its outlook to less than 1%. JPM didn't go as far but it did cut its outlook in half from 2% to 1%. Great expectations indeed.

Plosser at the Fed sticks to his guns.

Finally, while the market 'cheered' the weaker economic news, apparently taking it as some indication the Fed would further delay any initiation of taper, Mr. Plosser voiced contrary thoughts. He wants QE over by year end. He wants the taper to start in September. Indeed, as I stated before, in order to get anywhere near removing QE by year end and do so in an orderly manner, the Fed has to start in September.

See, the Fed has nothing left up its sleeve.

The reason for Plosser's concern: he stated 'we' don't want to create another housing bubble. Some jumped on the 'we' and opined and indeed concluded Plosser confirmed the Fed caused the last housing bubble. With insanely low rates of course the Fed at least assisted in creating the bubble, but I am not sure Plosser was admitting anything. It was more a 'we' in the sense of all the factors and powers that be worked to create the last bubble and 'we,' being all of us, don't want to let that happen again. Semantics of course, but I don't think you will get anyone outside of Dallas Fed President Fisher or former Dallas Fed President McTeer saying that is the case.

To us, Plosser's comments underscore the Fed DOES start the taper in September. Maybe the market, by its reaction, is telling us it gets that and still wants to rally. Maybe, however, the market is just running until harsh reality slaps it.

Despite all of this news, and as noted perhaps because of it, stocks rallied. If Bernanke is saying don't fear the taper, well then it makes sense, in one view, for stocks to move higher still.

We can be like they are. Come on baby. Don't fear the taper.

The Action

Didn't start out like a ball of fire, indeed futures stumbled around all morning but were holding flat to upside. As anticipated in the morning alert they caught a bid and rallied. Nothing spectacular but some decent moves on the indices and some even better moves by individual leaders.

SP500 5.17, 0.31%
NASDAQ 12.78, 0.61%
DJ30 3.38, 0.02%
SP400 0.35%
RUTX 0.32%
SOX 0.63%

AMZN, NFLX, PCLN, GOOG, EBAY. Very good moves by some big names. Very good moves by others: BMRN, KLAC, ALTR.

The Charts

In the end, another good move as the market piled on more gains. Now, however, they have to deal with next resistance in the form of the November 2012 trendlines previously broken to the downside.

SP500 is at the November trendline marking the bottom of the old channel. DJ30 remains just below its November lower trendline. NASDAQ is already at the upper channel line and of course at a new post-bear market high. It failed at this channel line in May when it last touched, but it is showing power. Volume is not great, always a worry, but it did expand on the rally.

RUTX, Russell 2000, hit new all-time highs each session last week. An incredible sprint and as indicators go, the small caps are typically an economic indicator.

SP400 had matched the small cap surge, but not to new highs. It put in a closing high Friday but is still off the May intraday peak.

SOX: Wednesday SOX broke back through the 2011 peak. Thursday it gapped and ran, sprinting past the June high and putting distance on those contenders, similar to Chris Froom blowing past contenders on Mont Ventoux.

THIS WEEK

Indeed, all of the indices enjoy strong moves the past three weeks. With the move to resistance by the large cap indices the market could be due a rest. Just so happens that earnings swing into full gear this week.

A three week run to new highs in some cases, to resistance in others is a logical point to take a breather, and if earnings don't match expectations or hopes, the market is definitely primed for a pullback. Moves higher cannot continue forever, and often runs into earnings are indeed tested after some results are reported.

So, it is logical for the market overall to give some back after three weeks of gains, new highs, and bumping resistance. It is indeed inevitable that the market will give some of the gains back. The question is when. There is likely not much more upside from here before it does test.

That doesn't mean you run out and sell everything. As you know, our method is to take partial gains on the way up as logical targets are hit. What you don't know, though you may have suspicions, is how far the market can run before it tops and puts in a more serious test other than a three to four day fade. SP500 has hit its A point in the ABCD pattern, and that is the initial target you shoot for. Case in point are the plays on the QLD and SSO; we had initial targets playing a modest move. Hit those, took some gain. Moved higher to other resistance; took some gains. Still moving higher, letting the rest of the position run until the market takes us out.

The point: while my years of trading the market tells me a three week run to highs and resistance at the start of earnings begs for a pullback, with the Fed involved and the relief the market is feeling right now, the run can continue further before it turns. You want to capture that move and thus the partial profits. Take some, bank some gain, let other positions work for you until they don't.

With that in mind, we took some gain Friday again, but also let positions such as those on PCLN to continue because the stock was surging higher yet again . It may turn this week; if so we can bank some of the gain. For stocks that are on the cusp of earnings we take some gain or close the position if we are uncomfortable with riding any through the result. If we have already banked a significant portion of the position with good profits we often decide to let that last piece rise through the results and perhaps get the big swirl of icing on the top of the cake.

As for new positions, yes we are going to look at new upside. There are great stocks out there setting up to move again, some that we already own positions on. Right now the overriding issue is earnings (thought I was going to say the Fed, right?) in terms of new positions (and indeed existing positions). Earnings is news, and news trumps everything. There are cases where we will pick up positions ahead of earnings, upside or downside, e.g. possible splits, but it is not our favorite entry point. Playing off earnings is one of our favorite tactics.

That means not as many plays as earnings approach, but more will open up as results are released. Patience in new positions, taking care of current positions as earnings approach, taking gain when logical, letting them run if they are winning and don't have an earnings date the next session.

TECHNICAL SUMMARY

INTERNALS

NASDAQ
Stats: 0 points (0%) to close at 3600.08
Volume: 1.534B (-10.19%)

Up Volume: 950.58M (-479.42M)
Down Volume: 481.56M (+183.21M)

A/D and Hi/Lo: Advancers led 1.19 to 1
Previous Session: Advancers led 2.47 to 1

New Highs: 311 (-95)
New Lows: 10 (0)

S&P
Stats: +5.17 points (+0.31%) to close at 1680.19
NYSE Volume: 572M (-14.37%)

A/D and Hi/Lo: Decliners led 1.03 to 1
Previous Session: Advancers led 5.92 to 1

New Highs: 355 (-123)
New Lows: 110 (-6)

DJ30
Stats: +3.38 points (+0.02%) to close at 15464.3

SENTIMENT INDICATORS

VIX: 13.84; -0.17
VXN: 13.96; +0.09
VXO: 13.46; -0.38

Put/Call Ratio (CBOE): 0.9; -0.11

Bulls and Bears:

Bulls are running and bears retreating as bulls are back up to the highs from four weeks back as bears are back where they were four weeks back. They converged to their closest since November 2012 to start July but have diverged again. Not at extremes, but the fear faded rather quickly. Bulls have hit stall speed around 55%, prompting pullbacks in the market.

Bulls: 46.9% versus 43.8% versus 41.7% versus 46.8% versus 43.8% versus 45.8% versus 52.1% versus 54.2% versus 52.1% versus 47.9% versus 44.3% versus 47.4% versus 50.5%.

Background: Undercut 35%, the threshold for bullishness, in early June. As noted, hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 22.9% versus 25.0% versus 21.9% versus 22.9% versus 20.8% versus 19.8% versus 19.8% versus 19.8% versus 18.8% versus 19.6% versus 20.6% versus 20.6% versus 19.4% versus 19.6% versus 18.6% versus 18.8% versus 21.1% versus 21.1% versus 22.1% versus 21.1% versus 21.1% versus 22.3% versus 22.3% versus 23.4% versus 24.5% versus 24.5% versus 23.4% versus 25.5% versus 27.7% versus 27.7% versus 28.7% versus 27.7%.

Summary: Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

Have a great evening!

Support and resistance

NASDAQ: Closed at 3600.08

Resistance:
3601 is the upper channel line for the November 2012 to present uptrend

Support:
3532 is the May intraday high
3521 is the August 2000 low.
3502 is the May 2013 closing high
3504 is the November 2012 up trendline
The 10 day EMA at 3504
The 50 day EMA at 3422
3295 is the June 2013 low selloff
The 2011 up trendline at 3286
3227 is the April 2000 intraday low
3197 is the September 2012 post-bear market high
The 200 day SMA at 3197
3171 is the October intraday high
3134 is the March 2012 post-bear market peak
3130 from some January 2013 lows
3104-3112 from August and mid-October peaks.
3101 is the August 2012 high
3090 is the mid-March interim high
3076 is the late April 2012 high and the 1/2013 low after gapping higher
3062 is the December 2012 prior peak
3042 from 5/2000 low and several other price points

S&P 500: Closed at 1680.19

Resistance:
The November up trendline at 1683
1687 is the May high and post-bear market high
1764 is the upper trendline in the channel

Support:
1654 is the June 2013 peak
The 10 day EMA at 1646
The 50 day EMA at 1621
1576 from October 2007, the prior all-time high
1569.48 is the 78% Fibonacci retracement of the April to May 2013 run
1560 is the June 2013 reversal low
1556 from July 2007
1541 is the April 2013 closing low in that pullback inside the uptrend
1539 from June 2007
1531 is the recent high
The 200 day SMA at 1519
1499 from January 2008
1475 is the September 2012 high
1471 is the October 2012 intraday high
1466 is the September 2012 closing peak and rally closing high
1440 from November 2007 closing lows

Dow: Closed at 15,464.30

Resistance:
15,542 is the May 2013 intraday high
The November up trendline at 15,618

Support:
The 50 day EMA at 15,035
14,888 is the April peak and prior all-time high
14,844 is the June intraday low
14,551 is the June 2013 intraday low on the selloff
14,198 from the October 2007 high
14,149 is the February 2013 high
The 200 day SMA at 14,079
14,022 from 7-07 peak
14,010 from the early February 2013 consolidation
13,784 is the late February 2013 closing low
13,692 from 6-2007 peak
13,668 from 12-2007 peak
13662 is the October 2012 intraday high
13,653 is the September 2012 high

Economic Calendar

July 8 - Monday
- Consumer Credit, May (15:00): $19.6B actual versus $13.2B expected, $10.9B prior (revised from $11.1B)

July 10 - Wednesday
- MBA Mortgage Index, 07/06 (7:00): -4.0% actual versus -11.7% prior
- Wholesale Inventories, May (10:00): -0.5% actual versus 0.3% expected, -0.1% prior (revised from 0.2%)
- Crude Inventories, 07/06 (10:30): -9.874M actual versus -10.347M prior
- FOMC Minutes, 6/19 (14:00)

July 11 - Thursday
- Initial Claims, 07/06 (8:30): 360K actual versus 345K expected, 344K prior (revised from 343K)
- Continuing Claims, 06/29 (8:30): 2977K actual versus 2949K expected, 2953K prior (revised from 2933K)
- Export Prices ex-ag., June (8:30): -0.2% actual versus -0.7% prior
- Import Prices ex-oil, June (8:30): -0.3% actual versus -0.3% prior
- Natural Gas Inventor, 07/06 (10:30): 82 bcf actual versus 72 bcf prior
- Treasury Budget, June (14:00): $116.5B actual versus $115.0B expected, -$59.7B prior

July 12 - Friday
- PPI, June (8:30): 0.8% actual versus 0.3% expected, 0.5% prior
- Core PPI, June (8:30): 0.2% actual versus 0.1% expected, 0.1% prior
- Michigan Sentiment, July (9:55): 83.9 actual versus 85.0 expected, 84.1 prior

July 15 - Monday
- Retail Sales, June (8:30): 0.7% expected, 0.6% prior
- Retail Sales ex-auto, June (8:30): 0.4% expected, 0.3% prior
- Empire Manufacturing, July (8:30): 3.6 expected, 7.8 prior
- Business Inventories, May (10:00): -0.1% expected, 0.3% prior

July 16 - Tuesday
- CPI, June (8:30): 0.3% expected, 0.1% prior
- Core CPI, June (8:30): 0.2% expected, 0.2% prior
- Net Long-Term TIC Fl, May (9:00): -$37.3B prior
- Industrial Production, June (9:15): 0.3% expected, 0.0% prior
- Capacity Utilization, June (9:15): 77.7% expected, 77.6% prior
- NAHB Housing Market Index, July (10:00): 51 expected, 52 prior

July 17 - Wednesday
- MBA Mortgage Index, 07/13 (7:00): -4.0% prior
- Housing Starts, June (8:30): 958K expected, 914K prior
- Building Permits, June (8:30): 1000K expected, 974K prior
- Crude Inventories, 07/13 (10:30): -9.874M prior

July 18 - Thursday
- Initial Claims, 07/13 (8:30): 348K expected, 360K prior
- Continuing Claims, 07/06 (8:30): 2950K expected, 2977K prior
- Philadelphia Fed, July (10:00): 5.3 expected, 12.5 prior
- Leading Indicators, June (10:00): 0.3% expected, 0.1% prior
- Natural Gas Inventories, 07/13 (10:30): 82 bcf prior

[ReturntoSender]

From Briefing.com: 4:15 pm : The S&P 500 ended lower by 0.4% to snap its streak of eight consecutive gains. Today's decline marked only the third time this month where the S&P registered a loss, and first with a decline of more than one point.

Heavily-weighted sectors, including financials and health care, pressured the broader market despite better-than-expected quarterly results from Goldman Sachs (GS 160.24, -2.76) and Johnson & Johnson (JNJ 90.40, 0.00). In addition, market participants appeared cautious ahead of tomorrow's testimony by Fed Chairman Ben Bernanke in front of the House Financial Services Committee. Mr. Bernanke's prepared remarks are set to be released at 8:30 ET and the testimony is scheduled to begin at 10:00 ET.

Cyclical sectors underperformed with energy and materials leading to the downside. The energy space shed 0.6% while crude oil slipped 0.5% to $105.78 per barrel. In addition, cautious second quarter guidance issued by Marathon Petroleum (MPC 69.93, -3.17) weighed on the sector.

Although producers of basic materials trailed behind the broader market (-0.8%), most of the weakness was contained to chemical producers after Mosaic (MOS 54.12, -2.01) reported in-line results but disappointed on potash pricing. Meanwhile, steelmakers and gold miners displayed relative strength with the Market Vectors Steel ETF (SLX 39.74, +0.31) and Market Vectors Gold Miners ETF (GDX 25.65, +1.36) rising 0.8% and 5.6%, respectively. On a related note, gold futures climbed 0.6% to $1291.60 per troy ounce.

Elsewhere, discretionary shares suffered from broad weakness as homebuilders and retailers lagged. The iShares Dow Jones US Home Construction ETF (ITB 22.97, -0.14) jumped after the July NAHB Housing Market Index surpassed expectations (57 actual, 51 expected), but surrendered its gains shortly thereafter. With regard to retailers, the SPDR S&P Retail ETF (XRT 80.66, -0.56) slumped 0.7%. While most cyclical groups ended firmly in the red, the technology sector continued its recent outperformance amid general strength. The group ended little changed and held its July gain of 5.1%.

Defensively-oriented sectors finished in mixed fashion. Telecom services outperformed with a gain of 0.6% while health care and utilities each lost 0.5%. For its part, the consumer staples sector ended in-line with the broader market. Sector component Coca-Cola (KO 40.23, -0.78) shed 1.9% after missing on revenue.

Treasuries were confined to a narrow range, and the benchmark 10-yr yield ended lower by two and a half basis point at 2.532%.

June consumer prices rose 0.5%, which was above the 0.3% uptick that had been expected by the Briefing.com consensus. This followed the prior month's increase of 0.1%. The jump in prices was mostly a result of a 6.3% increase in the gasoline index. In addition, core prices rose 0.2%, in line with the Briefing.com consensus.

Industrial production increased 0.3% in June, which was in-line with the consensus estimate. That followed on the heels of an unchanged reading for May and was driven by a 0.3% increase in manufacturing production and a 0.8% jump in the output at mines. The output of utilities decreased 0.1%.

Lastly, the May net long-term TIC flows report indicated a $27.2 billion outflow of foreign capital from U.S. denominated assets. This followed the prior month's $37.3 billion outflow.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while June housing starts and building permits will be announced at 8:30 ET. At 14:00 ET, the Federal Reserve will release its Beige Book for July. On the earnings front, Abbott Labs (ABT 35.70, +0.22) and Bank of America (BAC 13.92, +0.04) will report their quarterly results before the opening bell.DJ30 -32.41 NASDAQ -8.99 SP500 -6.24 NASDAQ Adv/Vol/Dec 1107/1.52 bln/1360 NYSE Adv/Vol/Dec 1046/617.1 mln/1944

3:35 pm :

Aug crude oil slipped into the red after trading as high as $106.90 per barrel in early morning action. Unable to regain momentum, it settled 0.3% lower at $106.00 per barrel
Aug natural gas lifted from its session low of $3.61 per MMBtu set moments after pit trade opened and touched a session high of $3.71 per MMBtu. It eventually settled with a 0.3% gain at $3.68 per MMBtu
Precious metals traded higher today, gaining support from a weaker dollar index
Aug gold advanced to a session high of $1294.70 per ounce and settled at $1290.10 per ounce, or 0.5% higher
Sep silver spent afternoon pit action trading in a consolidative pattern near the $19.93 per ounce level. It then settled with a 0.5% gain at $19.94 per ounce

9:47AM Semiconductor Hldrs ETF displaying relative strength, notches new session high (SMH) 39.46 +0.20 : MU +1.8%, XLNX +1.3%, AMAT +1.1%, INTC +1%, AMKR +0.8%, KLAC +0.8%, BRCM +0.8%, AMD +0.8%, NVDA +0.7%, LLTC +0.6%.

5:20AM ReneSola raises Q2 revs, shipments and GM guidance (SOL) 2.89 : Co provides updates to its second quarter and full year 2013 outlook.

Q2

The Co estimates its total solar wafer and module shipments to be in the range of 760-770 MW, compared to its previously guided range of 700-720 MW.
The Co estimates its solar module shipments to be in the range of 450-460 MW, compared to its previously guided range of 400 MW to 420 MW.
The Co estimates its revenues to be in the range of $365-375 million vs $316.9 mln CIQ est and above to its previously guided range of $310-330 million.
The Co estimates its gross margin to be in the range of 5-6%, compared to its previously guided range of 3-5%.

FY13

The Co estimates its total solar wafer and module shipments to be in the range of 2.8-3.0 GW, compared to its previously guided range of 2.7-2.9 GW.
The Co estimates its solar module shipments to be in the range of 1.6-1.8 GW, compared to its previously guided range of 1.4 -1.6 GW.

Riverbed Technology (RVBD) introduced a new release of its groundbreaking Riverbed? Granite product family that delivers an enterprise-class solution for server and data consolidation. With expanded capacity and higher performance IT managers can now extend the benefits of Granite to larger branch offices and data-intensive applications that previously were difficult or impossible to consolidate

NQ Mobile (NQ) provided preliminary Q2 2013 revenue guidance, above the the company's prior guidance. The co now estimates that its overall revenues for Q2 2013 will exceed $40 million. The company will provide final second quarter 2013 results during its regularly scheduled earnings conference in mid-August. Also, the co announces that it has entered into a share purchase agreement to acquire the remaining 45% stake in its subsidiary, Beijing NationSky Network Technology, and fully consolidate the two businesses. This transaction is expected to be accretive to earnings in Q3 2013 as both the revenue growth and profitability trends of NationSky are exceeding the co's original targets. The total cash and stock consideration for the NationSky purchase is valued at $25.2 million. The consideration includes $11 million in cash and $14.2 million in the co's Class A common shares. There will be additional performance-based consideration provided that certain profitability targets are met over the next 18 months. "Our businesses are performing extremely well. With our updated second quarter 2013 revenue outlook, it is clear that our strategy to monetize our growing user base is taking hold. Our excitement is only increasing as we look towards the future of our business," said Co-CEO, Omar Khan. "The purchase of the remaining 45 percent of NationSky is also an exciting development. NationSky is well positioned to leverage the explosive global growth in enterprise mobility solutions. The bring-your-own-device (BYOD) trends within the enterprise are blending the individual consumer's desires with the demands of the enterprise environment. By fully integrating our business with that of NationSky, NQ Mobile is uniquely positioned as a global mobility solutions and services provider."

Emulex (ELX) announced that its board of directors has unanimously approved a leadership succession that will ensure a seamless transition and continued strong leadership at Emulex. As part of this, Jeffrey W. Benck, Emulex's current president and chief operating officer (COO), has been appointed president and chief executive officer (CEO) of Emulex and a member of the board of directors, effective immediately. James M. McCluney, who has served as Emulex's CEO since 2006, has been named executive chairman of the board, also effective immediately. Paul Folino will step down from his role as chairman and will continue as a director. Mr. Benck joined Emulex in 2008 as COO, and was promoted to president in 2010. "Preliminary results for the fourth quarter include total net revenues of $119 to $120 million, (which was in line estimates), which is at the midpoint of our May guidance of $118 to $122 million. Preliminary estimated Non-GAAP diluted earnings per share for the quarter are also expected to be in line with our May guidance of $0.11 to $0.13 per share (also in line with estimates)"

Liquidity Services (LQDT) issued guidance for the third quarter with EPS of $0.43-0.45, excluding non-recurring items, which is below consensus. Liquidity Services expects to report Gross Merchandise Volume of $228 million to $231 million, which is lower than the Company's previous expectations of $250 million to $275 million. Adjusted EBITDA, which excludes stock based compensation and acquisition costs, is expected to be $26 million to $27 million compared to the Company's previous expectations of $29 million to $32 million.As a result of the lower than expected third quarter results, the Company expects to lower its fiscal year 2013 guidance for GMV, Adjusted EBITDA and Adjusted EPS. The updated guidance will be provided on the earnings call on August 7, 2013. Results were impacted by lower than expected GMV in the Company's capital assets and retail supply chain verticals as a result of lower product flows from existing clients and slower than expected rollout of new client programs. "While our preliminary GMV results for Q3-FY13 and the impact on our Adjusted EBITDA and Adjusted EPS results were disappointing and below our expectations, our emphasis has been on profitable growth and we have made good progress with the integration of our GoIndustry acquisition, which is now operating at near breakeven. Overall margins in our business remain strong; we expect to report that adjusted EBITDA margins increased to ~11.5% in the third quarter from 11.3% in the second quarter primarily as a result of sharper focus and streamlined operations. The lower than expected top line results during the quarter were driven by delays in new programs, weaker volumes in the consumer electronics sector and the continued repositioning of the GoIndustry marketplace to focus on the key global Fortune 1000 relationships that we expect will drive sustained profitable growth in this business."

[ReturntoSender]

From Briefing.com: 4:15 pm : The S&P 500 settled with a gain of 0.5% after notching a fresh intraday record high of 1693.13. Meanwhile, the tech-heavy Nasdaq underperformed, ending unchanged.

Equities climbed at the open and received an additional boost after the July Philadelphia Fed Index, which is a survey of regional manufacturing conditions, spiked to 19.8 from 12.5. That was well ahead of the Briefing.com consensus estimate of 5.3 and marked the highest reading for the index since March 2011.

The S&P was able to register to a new intraday high as the heavily-weighted energy, financial, and industrial sectors all logged gains of at least 0.9%. The financial space led the way with a gain of 1.3% as just about every large component settled in positive territory. American Express (AXP 74.01, -2.79) was the lone exception following its earnings beat on below-consensus revenue.

Elsewhere, the energy sector rose 0.9% as crude oil jumped to its highest level of the year. The energy component climbed 1.5% to $108.08 per barrel. The recent gains in WTI crude have caused the Brent-WTI spread to narrow to just 68 cents from $5.00 on July 1.

Despite the continued rise in oil, the Dow Jones Transportation Average notched a fresh all-time high before ending with a gain of 1.7%. The relative strength of the bellwether complex helped the industrial sector finish among the leaders.

The benchmark average settled below its session high due to weakness in technology. The tech sector shed 0.3% as eBay (EBAY 53.52, -3.86) and Intel (INTC 23.24, -0.91) weighed following the release of their quarterly results. Online auction site eBay fell 6.7% after its mixed earnings were overshadowed by cautious third quarter guidance. Meanwhile, Intel dropped 3.8% after reporting its fourth quarterly revenue decline in a row. The largest chipmaker weighed on its industry group as the PHLX Semiconductor Index settled lower by 0.9%.

Also of note, IBM (IBM 197.99, +3.44) beat on earnings while missing its revenue expectations. However, upbeat full-year guidance helped the top-weighted Dow component finish higher by 1.8%.

Weekly initial claims decreased by 24,000 to 334,000. The Briefing.com consensus expected claims to come in at 348,000. The encouraging headline number for initial claims is unlikely a number that can be taken at face value, just as last week's disappointing number couldn't be. The issue is that there are seasonal adjustment problems related to the July 4 holiday and auto plant shutdowns for retooling that are not occurring in their usual fashion this year. These factors, and particularly the last factor, have created some saw-tooth volatility in the claims reporting.

Separately, the Leading Indicators report for June was unchanged. That followed a 0.2% increase in May and was worse than the 0.3% increase expected by the Briefing.com consensus.

There is no economic data scheduled to be released tomorrow. However, quarterly earnings will continue pouring in. Notably, General Electric (GE 23.63, +0.09), Honeywell (HON 82.97, +0.53), and Whirlpool (WHR 119.37, -1.23) will report their results ahead of the opening bell.DJ30 +78.02 NASDAQ +1.28 SP500 +8.46 NASDAQ Adv/Vol/Dec 1542/1.63 bln/932 NYSE Adv/Vol/Dec 2067/668.4 mln/952

3:30 pm :

Aug crude oil hit its highest level since March 2012 as it rose above the $108 per barrel level. The energy component came off its session low of $106.83 per barrel and steadily climbed as high as $108.43 per barrel. It settled at $108.03 per barrel, booking a 1.5% gain.
Aug natural gas popped from its session low of $3.67 per MBMtu following inventory data that showed a build of 58 bcf when a higher build of 63-64 bcf was anticipated. It settled 5.0% higher at $3.81 per MMBtu, slightly below its session high of $3.84 per MMBtu.
Aug gold traded higher today despite a stronger dollar index. The yellow metal lifted from its session low of $1276.50 per ounce and spent afternoon floor trade trading in a tight range near the $1284 per ounce level. It eventually settled at $1284.30 per ounce, or 0.5% higher.
Sep silver slipped to a session low of $19.22 per ounce in late morning action but was able to erase most of the loss after chopping around near the unchanged line in afternoon action. It settled 0.1% lower at $19.41 per ounce.

4:31PM Skyworks beats by $0.01, reports revs in-line; guides Q4 EPS above consensus, revs above consensus (SWKS) 22.45 -0.37 : Reports Q3 (Jun) earnings of $0.54 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.53; revenues rose 12.1% year/year to $436.1 mln vs the $436.03 mln consensus.

Co issues upside guidance for Q4, sees EPS of $0.62, excluding non-recurring items, vs. $0.60 Capital IQ Consensus Estimate; sees Q4 revs of $475 mln vs. $470.37 mln Capital IQ Consensus Estimate.

4:31PM Skyworks announces its Board of Directors has authorized the repurchase of up to $250 mlnk of the co's common stock from time to time prior to July 16, 2015 (SWKS) 22.45 -0.37 : This newly authorized stock repurchase program replaces in its entirety the $200 million stock repurchase program which was approved by the Board of Directors on November 8, 2012, and had $35.6 million of repurchase authority remaining.

4:19PM Advanced Micro beats by $0.03, beats on revs; guides Q3 revs above consensus (AMD) 4.64 +0.26 : Reports Q2 (Jun) loss of $0.09 per share, $0.03 better than the Capital IQ Consensus Estimate of ($0.12); revenues fell 17.9% year/year to $1.16 bln vs the $1.11 bln consensus. Gross margin decreased sequentially. Q2 2013 gross margin included an $11 million benefit from sales of inventory that had been previously reserved in Q3 2012 and this positively impacted gross margin by 1 percentage point as compared to a similar $20 million benefit in Q1 2013 which positively impacted gross margin by 2 percentage points.

Co issues upside guidance for Q3, sees Q3 revs of $1.38-1.45 bln (+19-25% q/q) vs. $1.22 bln Capital IQ Consensus Estimate.

4:14PM Google misses by $1.24, misses on revs (GOOG) 910.68 -7.87 : Reports Q2 (Jun) earnings of $9.56 per share, excluding non-recurring items, $1.24 worse than the Capital IQ Consensus Estimate of $10.80; revenues rose 18.6% year/year to $14.11 bln vs the $14.46 bln consensus. GAAP operating income in Q2 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in Q2 was $3.99 billion, or 28% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in 2Q12.
Revenues and other information

On a consolidated basis, Google Inc. revenues for the quarter ended June 30, 2013 were $14.11 billion, an increase of 19% y/y.
Google Revenues (advertising and other) -- Google revenues were $13.11 billion, or 93% of consolidated revenues, in Q2 representing a 20% increase y/y.
Google Sites Revenues -- Google-owned sites generated revenues of $8.87 billion, or 68% of total Google revenues, in Q2 up 18% y/y.
Google Network Revenues: Google's partner sites generated revenues of $3.19 billion, or 24% of total Google revenues, in tQ2 up 7% y/y.
Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in Q2, up 138% y/y.
Google International Revenues : Google revenues from outside of the United States totaled $7.2 billion, representing 55% of total Google revenues in the second quarter of 2013, compared to 55% in Q1.
Foreign Exchange Impact on Google Revenues - Had foreign exchange rates remained constant from the first quarter of 2013 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $177 million higher. Google revenues from the United Kingdom totaled $1.32 billion, representing 10% of Google revenues in Q1, compared to 11% in 2Q12.
Paid Clicks: Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 23% over the second quarter of 2012 and increased approximately 4% over the first quarter of 2013.
Cost-Per-Click: Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the second quarter of 2012 and decreased approximately 2% over the first quarter of 2013.
Traffic acquisition costs increased to $3.01 billion in Q2, compared to $2.60 billion in 2Q12. TAC as a percentage of advertising revenues was 25% in Q2, same as prior year.
Motorola Mobile Revenues (hardware and other) - Motorola Mobile revenues were $998 million, or 7% of consolidated revenues in Q2, compared to $843 million, or 7% of consolidated revenues in 2Q12.
Operating expenses were $4.92 billion in Q2 or 35% of revenues, compared to $3.89 billion in the second quarter of 2012, or 33% of revenues.
Motorola Mobile Operating Loss: GAAP operating loss for Motorola Mobile was $342 million, or -34% of Motorola Mobile revenues in Q2. This compares to GAAP operating loss of $199 million, or -24% of Motorola Mobile revenues in 2Q12. Non-GAAP operating loss for Motorola Mobile in Q2 was $218 million, or -22% of Motorola Mobile revenues. This compares to non-GAAP operating loss of $49 million, or -6% of Motorola Mobile revenues in 2Q12.
Cash Flow and Capital Expenditures - Net cash provided by operating activities in the second quarter of 2013 totaled $4.71 billion, compared to $4.25 billion in the second quarter of 2012. In the second quarter of 2013, capital expenditures were $1.6 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow was $3.09 billion. We expect to continue to make significant capital expenditures.
Cash: As of June 30, 2013, cash, cash equivalents, and marketable securities were $54.4 billion.

4:10PM Microsoft misses by $0.16, misses on revs (MSFT) 35.44 -0.30 : Reports Q4 (Jun) earnings of $0.59 per share, including a $900 mln boost, $0.07/share, from Surface RT inventory adjustments; $0.16 worse than the Capital IQ Consensus of $0.75; revenues rose 10.2% year/year to $19.9 bln vs the $20.7 bln consensus. In addition, these financial results reflect the recognition of $782 million of previously deferred revenue related to the Office Upgrade Offer. All growth comparisons relate to the corresponding period in the last fiscal year.

Microsoft Business Division revenue grew 14% for the fourth quarter and 3% for the full year. Adjusting for the recognition of previously deferred revenue related to the Office Upgrade Offer, Microsoft Business Division non-GAAP revenue increased 2% for the fourth quarter. Office 365 is now on a $1.5 billion annual revenue run rate.

Server & Tools revenue grew 9% for the fourth quarter and 9% for the full year, driven by double-digit percentage revenue growth in SQL Server and System Center.

Windows Division revenue grew 6% for the fourth quarter and 5% for the full year. Excluding the impact of the prior year Windows Upgrade Offer revenue deferral, Windows Division non-GAAP revenue decreased 6% for the fourth quarter and 1% for the full year. In June, Microsoft released the public preview of Windows 8.1 which will be made available to OEMs in August.

Online Services Division revenue grew 9% for the fourth quarter and 12% for the full year, driven by an increase in revenue per search and volume. Bing organic U.S. search market share was 17.9% for the month of June 2013, up 230 basis points from the prior year period.

Entertainment and Devices Division grew 8% for the fourth quarter and 6% for the full year. During the quarter, transactional revenue within Xbox LIVE grew nearly 20%, and we unveiled our next-generation gaming and entertainment console, Xbox One.

"While our fourth quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE."

XLNX (45.75 +5.1%): Beat on EPS by $0.09, beat on revs; guided Q2 revs above consensus; target raised to $45 from $39 at Mizuho, to $47 from $37 at Jefferies, to $49 from $43 at Piper, to $50 from $42 at Credit Suisse, to $43 from $36 at Canaccord Genuity; downgraded to Market Perform at Wells Fargo; upgraded to Buy from Neutral at Lazard.

IBM (IBM) announced a multi-billion dollar, 10-year agreement to transform the IT infrastructure that supports all of UniCredit's commercial and private banking activities in Europe.

Cypress Semiconductor (CY) announced that Lenovo (LNVGY) has selected Cypress's PRoC-UI solution for its new SmartTouch N800 wireless touch mouse.

Power Integrations (POWI) introduced CHY100, the first AC-DC wall-charger interface IC that enables designers of mobile devices to implement the Quick Charge 2.0 protocol from Qualcomm (QCOM).

8:02AM Cypress Semi is halted (CY) 11.92 :

8:02AM Cypress Semi beats by $0.07, beats on revs; Co says that revenue growth and earnings leverage to continue in Q3 (CY) 11.92 : Reports Q2 (Jun) earnings of $0.14 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus Estimate of $0.07; revenues fell 3.9% year/year to $193.5 mln vs the $182.9 mln consensus.

7:35AM Verizon beats by $0.01, reports revs in-line; raises FY13 cap-ex guidance 1.9% (VZ) 50.74 : Reports Q2 (Jun) earnings of $0.73 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.72; revenues rose 4.3% year/year to $29.79 bln vs the $29.83 bln consensus. Consolidated EBITDA grew 9.5% year over year, totaling $10.7 billion in second-quarter 2013. EBITDA margin (non-GAAP) expanded to 35.9% in second-quarter 2013, up 170 basis points year over year. Cash flow from operating activities totaled $17.1 billion in first-half 2013, compared with $15.3 billion in first-half 2012.

Verizon is increasing its capital spending guidance from $16.2 billion to between $16.4 billion and $16.6 billion for full-year 2013, as the co anticipates higher demand for wireless data consumption and begins deployment of AWS (advanced wireless services) spectrum in second-half 2013.

Wireless Financial Highlights

Total revenues were $20.0 billion in second-quarter 2013, up 7.5% year over year. Service revenues in the quarter totaled $17.1 billion, up 8.3% year over year. Retail service revenues grew 7.8% year over year, to $16.4 billion. Retail postpaid ARPA (average revenue per account) increased 6.4% over second-quarter 2012, to $152.50 per month. In second-quarter 2013, wireless operating income margin was 32.4%, compared with 30.8% in second-quarter 2012. Segment EBITDA margin on service revenues was 49.8%, up 80 basis points over second-quarter 2012.

Wireless Operational Highlights

Verizon Wireless added 941,000 retail postpaid net connections, out of a total 1.0 million net retail connections, in the second quarter. These additions exclude acquisitions and adjustments. Verizon expects to continue to see increases in quarterly sequential net additions for retail postpaid connections in the second half of 2013. At the end of the second quarter, the co had 100.1 million retail connections, a 6.3% increase year over year -- including 94.3 million retail postpaid connections. At the end of the second quarter, smartphones accounted for more than 64% of the Verizon Wireless retail postpaid customer phone base, up from 61% at the end of first-quarter 2013. Retail postpaid churn was 0.93% in the second quarter, up 9 basis points year over year. Retail churn was 1.23% in the second quarter, up 12 basis points year over year.

7:33AM Fairchild Semi misses by $0.06, reports revs in-line; guides Q3 revs below consensus (FCS) 14.32 : Reports Q2 (Jun) earnings of $0.01 per share, ex items, $0.06 worse than the Capital IQ Consensus Estimate of $0.07; revenues rose 1.1% year/year to $365.5 mln vs the $365.66 mln consensus.

Co issues downside guidance for Q3, sees Q3 revs of $355-370 mln vs. $388.20 mln Capital IQ Consensus Estimate.

Fairchild reported second quarter adjusted gross margin of 29.8%, up 200 basis points from the prior quarter and 280 basis points lower than the second quarter of 2012. Adjusted gross margin excludes accelerated depreciation related to a line closure.

"Our high voltage product sales supporting the industrial and appliance markets were up 15 percent sequentially. "Our current scheduled backlog is nearly sufficient to achieve the low end of this range. We expect adjusted gross margin to be 31.5 to 33.0 percent due primarily to improved factory utilization and better product mix. We anticipate R&D and SG&A spending to be $97 to $99 million. The adjusted tax rate is forecast at 15 percent plus or minus 3 percentage points for the quarter. Consistent with our usual practices, we are not assuming any obligation to update this information, although we may choose to do so before we announce third quarter results."

6:15AM Taiwan Semi beats by NT$0.10, reports revs in-line; guides Q3 revs below consensus (TSM) 18.45 : Reports Q2 (Jun) earnings of NT$2.00 per share, NT$0.10 better than the Capital IQ Consensus Estimate of NT$1.90; revenues rose 21.6% year/year to NT$155.89 bln vs the NT$155.3 bln consensus.

Gross margin for the quarter was 49.0%, operating margin was 37.0%, and net profit margin was 33.2%. Shipments of 28-nanometer process technology reached 29% of total wafer revenues. 40/45-nanometer accounted for 21% of total wafer revenues. Advanced technologies, defined as 40/45-nanometers and below, accounted for 50% of total wafer revenues.

Co issues downside guidance for Q3, sees Q3 revs of NT$161-164 bln vs. NT$165.53 bln Capital IQ Consensus Estimate.

11:05 am Tech Sector trading higher today but behind the broader market
The tech sector is trading higher today, but trails larger gains in the broader market. Semiconductors are showing relative weakness as well with the SOX trading 0.6% lower. TSM (-8.0%) is weighing on the chip index. Among other major indices, the SPY is trading 0.8% higher today, while the QQQ is up 0.2% and the NASDAQ is trading 0.4% higher on the session. Among tech bellwethers, IBM (+2.7%) is showing notable strength, while INTC (-3.3%) is under pressure.

In tech earnings last night:

IBM (+2.7%) beats Q2 EPS by $0.14, misses on revs and raised FY13 EPS (ex-$1 bln workforce rebalancing charge) above consensus
SNDK (+0.9%) beat Q2 EPS by $0.28, beat on revs and offered Q3 and FY13 guidance above consensus
XLNX (+5.7%) beat Q1 by $0.09, beat on revs and guided Q2 revs above consensus

This morning in earnings:

SAP (-1.7%) missed Q2 EPS by EUR0.14, missed on revs, and reaffirmed non-IFRS operating profit; reduces FY13 revs outlook
ERIC (-4.9%) missed Q2 earnings and revs
CHKP (+6.1%) posted a Q2 EPS beat with inline revs
TSM (-8.0%) reported a Q2 earnings beat, inline revs and guided Q3 below consensus
NOK (-3.0%) posted a mixed Q2 and guided Q3 Device and Services rev higher QoQ
GILT (-13.9%) lowered FY13 guidance FCS () posted a miss and guided lower
VZ (-1.9%) posted a modest beat and raised CapEx
NTCT (+0.8%) posted a beat and reaffirmed guidance
CY (+6.1%) reported a beat and issued revenue growth and earnings leverage to continue in Q3
APH (-7.0%) posted a relatively inline qtr and guided below consensus
SYNT (+2.2%) posted a beat and raise
TZOO (+0.2%) reported a Q2 EPS beat
SIFY (+7.9%) posted a sizeable Q2 beat

In news, DELL (+2.4%) confirmed that today's Special Meeting of Stockholders was convened and adjourned to provide additional time to solicit proxies from Dell stockholder. GLUU (+6.5%) disclosed last night that the Co and MGM Interactive entered into a warrant initially exercisable to purchase up to 3,333,333 shares of the co's common stock at an initial exercise price of $3.00 per share.

In M&A, VZ (-1.9%) on its call said that on call not interested in LEAP (0.0%).

In rumors, AAPL (+0.9%) may be in talks with LPL (-2.6%) on HDTV panels, according to reports.

Among notable analyst upgrades in tech this morning, XLNX (+5.7%) was upgraded to Buy at Lazard and QSII (+4.6%) was upgraded at MS and JP Morgan.

In downgrades, ASML (-0.3%) was downgraded to Neutral at Piper Jaffray, XLNX (+5.7%) was downgraded to Market Perform at Wells Fargo, CTXS (-0.1%) was downgraded to Mkt Perform at Raymond James, and SNDK (+0.9%) was downgraded to Equal-Weight at Morgan Stanley.

AMD (+0.5%), GOOG (-0.4%), MSFT (+0.2%), and SWKS (+0.8%) are the notable names in tech scheduled to report after the close.

Plexus (PLXS) reported third quarter earnings of $0.68 per share, which was better than expected, while revenues fell 6.1% year/year to $571.9 million, which was better than expected. The company issued mixed guidance for the fourth quarter with EPS of EPS of $0.60-0.66 which was better than expected, with fourth quarter revenues of $545-575 million which was in line with consensus.

SanDisk (SNDK) reported second quarter earnings of $1.21 per share, excluding non-recurring items, which was better than expected, while revenues rose 43.0% year/year to $1.48 billion, which was better than expected. "We delivered record second quarter results driven by increasing momentum across our business. We achieved solid revenue growth in our embedded solutions portfolio with many design wins ramping into production," The company sees the third quarter revenues of $1.525-1.575 billion which as better than expected. The company also raised fiscal year 2013 revenue guidance to $5.95-6.05 billion (from $5.6-5.75 bln), which was ahead of expectations.

Intel (INTC) reported second quarter GAAP earnings of $0.39 per share, in-line with estimates, while revenues fell 5.1% year/year to $12.81 billion which was in line with expectations. PC Client Group revenue of $8.1 billion, up 1.4% sequentially and down 7.5% year-over-year. Data Center Group revenue of $2.7 billion, up 6.1% sequentially and flat year-over-year. Other Intel Architecture Group revenue of $942 million, down 3.7% sequentially and down 15.0% year-over-year. Gross margin of 58%, up 2%age points sequentially and down 5%age points year-over-year. The company issued in-line guidance for the third quarter with revenues of $13-14 billion which was in line with estimates. The company issued guidance for fiscal year 2013 revenues to flat year over year to from up in the low single digits previously and lowered fiscal year 2013 gross margin guidance to 59% +/-2% from 60% +/-2%. On the Intel (INTC) conference call management said the company was slow to respond to the ultra-mobile PC trends. The traditional PC segment is down from the company's expectations from the beginning of the year, while the ultra-mobile device market is up. Co believes it has made the appropriate organizational and strategic changes to address these trends. All changes are "based on value creation." The company will provide a further update on the changes at its investor meeting in November. Management also noted that inventory levels across the PC supply chain increased slightly but remain well below historical levels due to uncertainty. In the Q&A session management said it expects the macroeconomic environment to improve in the back half of the year.

IBM (IBM) reported second quarter earnings of $3.91 per share, excluding non-recurring items, which was better than expected, revenues fell 3.3% year/year to $24.92 billion which was lower than expected. Software revenue up 4%, up 5% adjusting for currency; Key branded middleware up 9%; up 10% adjusting for currency; Services revenue down 4%, down 1% adjusting for currency; Global Business Services revenue down 1%, up 2% adjusting for currency; Services backlog of $141 billion, up 3%, up 7% adjusting for currency; Systems and Technology revenue down 12%, down 11% adjusting for currency: System z mainframe revenue up 10%; up 11% adjusting for currency; Growth markets revenue flat, up 1% adjusting for currency; Business analytics revenue up 11%; Smarter Planet revenue up more than 25% in first half; Cloud revenue up more than 70% in first half. The company issued upside guidance for fiscal year 2013 with raised EPS to at least $16.90, excluding $1 bln workforce rebalancing charge, from at least $16.70 which was above expectations.

eBay (EBAY) reported second quarter earnings of $0.63 per share, which was in line with expectations, while revenues rose 14.1% year/year to $3.88 billion which was in line with expectations. Total company Enabled Commerce Volume (ECV) grew 21% for the quarter, to $51 billion. PayPal revenue increased 20% to $1.6 billion. PayPal gained 4.7 million active registered accounts in the period and ended the quarter with 132 million, a 17% increase. PayPal's net total payment volume (TPV) grew 24% to $43 billion driven by consumer and merchant use of PayPal both on and off eBay. Marketplaces revenue of $2.0 billion, increasing 10%, or 12% excluding the gain from the resolution of an indirect tax dispute in 2012. Marketplaces gained 3.5 million active users in the period and ended the quarter with 120 million, a 14% increase. Gross merchandise volume (GMV), excluding vehicles, increased 13% to $18 billion. Fixed price GMV grew 17% globally and represented 69% of total GMV. Operating margin: GAAP operating margin decreased to 19.3% for the second quarter of 2013, compared to 20.5% for the same period last year. Non-GAAP operating margin decreased to 26.3% in the second quarter, compared to 27.3% for the same period last year. Cash flow: The company generated $1.0 billion of operating cash flow and $658 million of free cash flow during the second quarter of 2013. The company issued guidance for the third quarter with EPS of $0.61-0.63 which was below expectations with revenues of $3.85-3.95 billion, which was also below estimates.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 19-Jul-13

Dow -4.80 at 15543.74, Nasdaq -23.66 at 3587.61, S&P +2.72 at 1692.09

Today's session featured disappointing earnings from technology heavyweights, Google (GOOG 896.60, -14.08) and Microsoft (MSFT 31.40, -4.04), but that could have gone unnoticed if someone were to only focus on the performance of the S&P 500, which ended with a slim gain of 0.2%, notching a new record high.

Meanwhile, the Nasdaq settled lower by 0.7% as earnings and revenue misses from the two major components weighed on the tech-heavy index. For its part, the S&P technology sector fell 2.0%.

While technology shares displayed weakness across the board, the broader market was kept afloat by the outperformance of heavily-weighted energy, health care, and industrial sectors. The three groups added between 1.2% and 1.4% with health care ending in the lead.

The health care sector spent the entire session in a steady climb as biotechnology provided significant support. The iShares Nasdaq Biotechnology ETF (IBB 195.00, +3.06) advanced 1.6% after marking a fresh all-time high.

Elsewhere, the industrial sector was underpinned by Dow component General Electric (GE 24.72, +1.09), which jumped 4.6% after its slim earnings beat overshadowed a 3.5% year-over-year decline in revenue. Another Dow member, Boeing (BA 106.96, -0.67), kept industrials from logging further gains after two more jets produced by the company were forced to return to their home ports following in-flight technical issues.

Also of note, the energy sector advanced 1.4% on the back of better-than-expected earnings from Schlumberger (SLB 82.74, +4.33). On a related note, crude oil added 0.3% to $108.15.

Another commodity-related sector, materials, rose 0.5% as chemical producers and gold miners displayed strength. The Market Vectors Gold Miners ETF (GDX 25.86, +1.08) jumped 4.4%. Gold futures displayed strength as well, climbing 0.8% to $1294.30 per troy ounce.

The CBOE Volatility Index (VIX 12.54, -1.23) spent the entire session in a steady decline, dropping to its lowest level since May 17. After notching its 2013 high of 21.91% on June 24, the near-term volatility measure has logged three consecutive weekly losses as the S&P 500 climbed to fresh all-time highs.

Participation was relatively limited and NYSE trading volume of 872 million shares was light when taking today's options expiration into account.

On Monday, June existing home sales will be reported at 10:00 ET.

Week in Review: Another Week, Another Record for the S&P 500

On Monday, the S&P 500 settled higher by 0.1% to mark its eight consecutive advance. The utilities sector ended atop the leaderboard with a gain of 1.6%, but the relative strength of three influential sectors (financials, industrials, and technology) helped the S&P end less than five points away from its May 22 all-time intraday high of 1687.18. Notably, the session was one of the quietest of the year in terms of participation as only 567 million shares changed hands on the floor of the New York Stock Exchange. Financials provided the broader market with an opening boost after Citigroup (C 52.35, -0.34) reported better-than-expected earnings on above-consensus revenue. Citigroup rose 2.0% while the broader sector added 0.4%.

Tuesday's session saw the S&P 500 end lower by 0.4% to snap its streak of eight consecutive gains. The decline marked only the third time this month where the S&P registered a loss, and first with a drop larger than one point. Heavily-weighted sectors, including financials and health care, pressured the broader market despite better-than-expected quarterly results from Goldman Sachs (GS 164.36, +0.30) and Johnson & Johnson (JNJ 92.23, +2.06). In addition, market participants appeared cautious ahead of the Wednesday testimony by Fed Chairman Ben Bernanke in front of the House Financial Services Committee. Also of note, Coca-Cola (KO 41.09, +0.28) shed 1.9% after missing on revenue.

Equities began Wednesday's session in the black and the S&P 500 added 0.3% after the prepared remarks from Ben Bernanke's testimony in front of the House Financial Services Committee provided an opening boost. Mr. Bernanke's comments were in-line with previous statements, indicating the Federal Reserve plans to base its decisions on the incoming data. The Fed Chairman expounded on this by saying asset purchases could be scaled back if economic conditions improve faster than expected, and inflation rises towards the Fed's objective. However, if financial conditions were to tighten, the current pace of purchases could be maintained or increased. In that vein, housing data released concurrently with Chairman Bernanke's comments spoke in favor of leaving asset purchases unchanged after June housing starts hit an annualized rate of 836,000 units (958,000 Briefing.com consensus). The large miss was mostly due to 26.2% decline in multi-family units while single-family starts declined by 0.8%. Separately, the weekly MBA Mortgage Index decreased 2.6% to mark its fifth negative reading in a row and the ninth decline out of the past ten weeks. Homebuilders received the news in stride, and the iShares Dow Jones US Home Construction ETF (ITB 23.23, +0.16) advanced 1.3%.

On Thursday, the S&P 500 settled with a gain of 0.5% after notching a fresh intraday record high of 1693.13. Meanwhile, the tech-heavy Nasdaq underperformed, ending unchanged. Stocks climbed at the open and received an additional boost after the July Philadelphia Fed Index spiked to 19.8 from 12.5. That was well ahead of the Briefing.com consensus estimate of 5.3 and marked the highest reading for the index since March 2011. The S&P was able to register to a new record high as heavily-weighted energy, financial, and industrial sectors all logged gains of at least 0.9%.

 
 Index	     Started Week  Ended Week  Change  % Change  YTD % 
 DJIA	       15464.30	    15543.74	79.44	  0.5	18.6 
 Nasdaq	        3600.08	     3587.61   -12.47	 -0.3	18.8 
 S&P 500	1680.19	     1692.09    11.90     0.7	18.6 
 Russell 2000	1036.52	     1050.48	13.96	  1.3	23.7

4:30PM This week's biggest % gainers/losers (SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

Technology: LEAP (17.39 +122.98%), SOL (3.72 +39.18%), GAME (5.74 +28.36%), RVLT (4.92 +24.94%), SFUN (31.5 +23%), AMCC (11.04 +21.42%), POWI (52.87 +18.12%), CYOU (39.09 +17.87%)
Services: XPO (23.06 +25.97%), ATHN (110.27 +25.6%), VIPS (37.21 +23.07%), OSTK (32.77 +21.34%), RSH (3.07 +19.77%), BYI (69.8 +17.98%)
Healthcare: STSI (1.97 +23.38%), XOMA (4.86 +20.1%), TSRX (11.48 +17.89%)
Financial: TAYC (22.39 +28.47%)
Consumer Goods: SHFL (22.92 +24.18%), ACW (6.6 +21.09%)

This week's top 20 % losers

Technology: AFFX (4.09 -16.57%), UTEK (30.01 -11.89%), SPIL (5.27 -11.55%), FCS (12.85 -11.13%), APH (76.78 -10.31%), UMC (2.06 -10.17%)
Services: LQDT (28.9 -12.76%), CHUY (36.71 -11.52%), RLD (12.03 -10.95%), SCHL (29.54 -10.3%)
Industrial Goods: XONE (63.37 -12.69%)
Healthcare: RGLS (10.08 -20.95%), VSTM (15.55 -10.99%), AIRM (33.29 -10.55%)
Financial: SRC (9.6 -49.35%)
Consumer Goods: SCSS (24.03 -12.33%)
Basic Materials: TGD (2.16 -12%), GORO (7.84 -10.64%), SHW (172.86 -10.13%), SAND (5.96 -10.08%)

12:51PM 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

CMG (408.43 +8.41%): Beat quarterly EPS by $0.01 ($2.82 vs $2.81 estimate); comparable restaurant sales rose 5.5%; management expects 165-180 new restaurant openings, low to mid single digit comparable restaurant sales in 2013; target raised to $455 from $427 at Lazard, to $435 from $420 at Wedbush
SLB (83.19 +6.00%): Beat quarterly EPS by $0.05 ($1.15 ex items vs $1.10 estimate), revs rose 8.1% yoy to $11.18 bln vs $11.12 bln estimate; mentioned positively at Cowen
GE (24.7 +4.53%): Beat quarterly EPS by $0.01 ($0.36 vs $0.35 estimate), revs fell 3.5% yoy to $35.12 bln vs $35.49 bln estimate; Q2 orders +4%, U.S. orders +20%

Large Cap Losers

ISRG (371.25 -11.92%): Missed quarterly EPS by $0.14 ($3.90 vs $4.04 estimate), revs rose 7.8% yoy to $578.5 mln vs $574.68 mln estimate; lowered FY13 rev guidance to flat to +7% (~$2.18-2.33 bln) from +16-19% vs $2.45 bln estimate; lowered FY13 procedures growth guidance to +15-18% from +20-23%
MSFT (31.57 -10.93%): Missed quarterly EPS by $0.16 ($0.59 vs $0.75 estimate), revs rose 10.2% yoy to $19.9 bln vs $20.7 bln estimate; downgraded to Market Perform at Raymond James; downgraded to Market Perform at Cowen; reiterated with a Sell at Pacific Crest
TSM (16.14 -3.99%): Beat quarterly EPS by NT$0.10 (NT$2.00 vs NT$1.90 estimate), revs rose 21.6% yoy to NT$155.89 vs NT$155.3 bln estimate; sees Q3 revs of NT$161-164 bln vs NT$165.53 bln estimate; downgraded to Neutral from Overweight at HSBC Securities

Mid Cap Gainers

CBST (56.5 +9.54%): Missed quarterly EPS by $0.13 ($0.42 ex items vs $0.55 estimate), revs rose 12.2% yoy to $258.8 mln vs $254.77 mln estimate; announced the initiation of Phase 3 efficacy studies of bevenopran (previously known as CB-5945) in patients with chronic non-cancer pain and opioid-induced constipation
ALGN (43.1 +8.70%): Beat quarterly EPS by $0.08 ($0.36 ex items vs $0.28 estimate), revs rose 12.5% yoy to $163.8 mln vs $156.2 mln estimate; target raised to $46 from $43 at Stifel; target raised to $43 from $38 at Jefferies; target raised to $47 from $43 at JMP Securities; target raised to $42 from $40 at Cantor Fitzgerald
HOLX (21.66 +8.46%): Sees Q3 revs of ~$626 mln (vs $626.72 mln Capital IQ Consensus Estimate), in-line with previous guidance of $625-630 mln; sees Q3 EPS of $0.38 (vs $0.37 Capital IQ consensus Estimate), slightly above previous guidance of $0.36-0.37

Mid Cap Losers

AMD (3.95 -14.87%): Beat quarterly EPS by $0.03 (-$0.09 vs -$0.12 estimate), revs fell 17.9% yoy to $1.16 bln vs $1.11 bln estimate; gross margin decreased sequentially; sees Q3 gross margin of 36%, down 300 bps; sees Q3 revs of $1.38-1.45 bln vs $1.22 bln estimate; downgraded to Underweight at Morgan Stanley; downgraded to Underperform at Credit Suisse; target raised to $4 from $2 at Bernstein; target raised to $6 from $5 at Canaccord Genuity
RGA (67.08 -8.49%): Reports Q2 net loss of $49.6 mln or $0.69 per share which includes a charge and may not be comparable to the estimate of $1.83, excluding the charge EPS was $1.84
CYH (43.89 -7.23%): Sees Q2 revs of $3.236 bln vs $3.375 bln estimate; sees FY13 revs of $13.0-13.4 bln vs $13.44 bln estimate; sees FY13 EPS of $2.95-3.25 vs $3.65 estimate

07:59 am Skyworks shares spike 8% following better than expected earnings
Skyworks (SWKS $24.25 +1.80) reported third quarter earnings of $0.54 per share, excluding non-recurring items, which was better than expected, while revenues rose 12.1% year/year to $436.1 million which was in line with expectations. The company issued fourth quarter guidance EPS guidance $0.62, which beat expectations, with revenues $475 million which also topped expectations.

07:53 am Google shares fall 3% following miss on earnings
Google (GOOG $882.03 -28.68) reported second quarter earnings of $9.56 per share, excluding non-recurring items, which missed expectations, while revenues rose 18.6% year/year to $14.11 billion which also missed expectations. GAAP operating income in Q2 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in Q2 was $3.99 billion, or 28% of revenues.

This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in 2Q12. On a consolidated basis, Google Inc. revenues for the quarter ended June 30, 2013 were $14.11 billion, an increase of 19% y/y. Google Revenues (advertising and other) -- Google revenues were $13.11 billion, or 93% of consolidated revenues, in Q2 representing a 20% increase y/y. Google Sites Revenues -- Google-owned sites generated revenues of $8.87 billion, or 68% of total Google revenues, in Q2 up 18% y/y. Google Network Revenues: Google's partner sites generated revenues of $3.19 billion, or 24% of total Google revenues, in tQ2 up 7% y/y. Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in Q2, up 138% y/y. Google

International Revenues : Google revenues from outside of the United States totaled $7.2 billion, representing 55% of total Google revenues in the second quarter of 2013, compared to 55% in Q1. Foreign Exchange Impact on Google Revenues - Had foreign exchange rates remained constant from the first quarter of 2013 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $177 million higher. Google revenues from the United Kingdom totaled $1.32 billion, representing 10% of Google revenues in Q1, compared to 11% in 2Q12. Paid Clicks: Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 23% over the second quarter of 2012 and increased approximately 4% over the first quarter of 2013. Cost-Per-Click: Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the second quarter of 2012 and decreased approximately 2% over the first quarter of 2013. Traffic acquisition costs increased to $3.01 billion in Q2, compared to $2.60 billion in 2Q12. TAC as a percentage of advertising revenues was 25% in Q2, same as prior year.

Motorola Mobile Revenues (hardware and other) - Motorola Mobile revenues were $998 million, or 7% of consolidated revenues in Q2, compared to $843 million, or 7% of consolidated revenues in 2Q12. Operating expenses were $4.92 billion in Q2 or 35% of revenues, compared to $3.89 billion in the second quarter of 2012, or 33% of revenues. Motorola Mobile Operating Loss: GAAP operating loss for Motorola Mobile was $342 million, or -34% of Motorola Mobile revenues in Q2. This compares to GAAP operating loss of $199 million, or -24% of Motorola Mobile revenues in 2Q12. Non-GAAP operating loss for Motorola Mobile in Q2 was $218 million, or -22% of Motorola Mobile revenues. This compares to non-GAAP operating loss of $49 million, or -6% of Motorola Mobile revenues in 2Q12. Cash Flow and Capital Expenditures - Net cash provided by operating activities in the second quarter of 2013 totaled $4.71 billion, compared to $4.25 billion in the second quarter of 2012. In the second quarter of 2013, capital expenditures were $1.6 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow was $3.09 billion. We expect to continue to make significant capital expenditures. Cash: As of June 30, 2013, cash, cash equivalents, and marketable securities were $54.4 billion.

07:51 am Microsoft shares plunge 7% following miss on earnings
Microsoft (MSFT $32.89 -2.55) reported fourth quarter earnings of $0.59 per share, including a $900 million boost, $0.07/share, from Surface RT inventory adjustments, which was worse than expected, while revenues rose 10.2% year/year to $19.9 billion which was worse than expected. In addition, these financial results reflect the recognition of $782 million of previously deferred revenue related to the Office Upgrade Offer. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft Business Division revenue grew 14% for the fourth quarter and 3% for the full year. Adjusting for the recognition of previously deferred revenue related to the Office Upgrade Offer, Microsoft Business Division non-GAAP revenue increased 2% for the fourth quarter. Office 365 is now on a $1.5 billion annual revenue run rate.

Server & Tools revenue grew 9% for the fourth quarter and 9% for the full year, driven by double-digit percentage revenue growth in SQL Server and System Center. Windows Division revenue grew 6% for the fourth quarter and 5% for the full year. Excluding the impact of the prior year Windows Upgrade Offer revenue deferral, Windows Division non-GAAP revenue decreased 6% for the fourth quarter and 1% for the full year. In June, Microsoft released the public preview of Windows 8.1 which will be made available to OEMs in August. Online Services Division revenue grew 9% for the fourth quarter and 12% for the full year, driven by an increase in revenue per search and volume. Bing organic U.S. search market share was 17.9% for the month of June 2013, up 230 basis points from the prior year period. Entertainment and Devices Division grew 8% for the fourth quarter and 6% for the full year.

During the quarter, transactional revenue within Xbox LIVE grew nearly 20%, and we unveiled our next-generation gaming and entertainment console, Xbox One. "While our fourth quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE."

Skyworks (SWKS) reported third quarter earnings of $0.54 per share, excluding non-recurring items, which was better than expected, while revenues rose 12.1% year/year to $436.1 million which was in line with expectations. The company issued fourth quarter guidance EPS guidance $0.62, which beat expectations, with revenues $475 million which also topped expectations.

Advanced Micro (AMD) reported a second quarter loss of $0.09 per share, which was a lower than expected loss, revenues fell 17.9% year/year to $1.16 billion which also topped expectations. Gross margin decreased sequentially. Q2 2013 gross margin included an $11 million benefit from sales of inventory that had been previously reserved in Q3 2012 and this positively impacted gross margin by 1 percentage point as compared to a similar $20 million benefit in Q1 2013 which positively impacted gross margin by 2 percentage points. The company issues guidance for the third quarter with revenues of $1.38-1.45 billion (+19-25% q/q) which also topped expectations.

Southeastern Asset Management, Inc. and Carl C. Icahn today issued the following statement in response to the decision by Dell (DELL) to adjourn the company's Special Meeting to July 24, 2013. "It is unfortunate, although not surprising, that Dell's Board and Special Committee have delayed the date of the Special Meeting at which stockholders can vote on the Michael Dell/Silver Lake freeze out transaction. We believe that this delay reflects the unhappiness of Dell stockholders with the Michael Dell/Silver Lake offer, which we believe substantially undervalues the company. This is not the time for delay but the time to move Dell forward. Should the Michael Dell/Silver Lake transaction be defeated, we urge the Dell Board to move quickly to hold the Annual Meeting when stockholders will have the opportunity to elect our slate of directors. Our slate has met and unanimously supports our proposed Dell self tender offer and its implementation in accordance with their fiduciary duties. As previously communicated, we believe that our proposed Dell self tender offer has a total value to tendering stockholders of approximately $15.50 to $18.00 per share. Southeastern and Icahn continue to recommend that our fellow Dell stockholders vote the gold proxy card (1) against the Merger Agreement proposal, (2) against the Golden Parachute proposal, and (3) 'against' the Adjournment proposal."

[ReturntoSender]

InvestmentHouse Weekend Market Update:

http://www.investmenthouse.com/weekendmarketsummary.htm

- Some resilience despite GOOG, MSFT earnings bombs yet market just takes a moment.
- Money moving into US equities funds.
- Slow day but doing what it needs to do.
- Global economies slowing but oil is spiking.
- Detroit files for bankruptcy. Some recovery.
- Getting toward the limits of recent runs. Will earnings and money push indices higher or will they wait for the new month?
- Leaders still there and as they set up, with the money moving in, we will look at more.

Despite GOOG and MSFT's earnings misses, the session was, by any measure, pretty darn boring and pretty darn resilient. A little boring and a little sluggish is what happens when you have a great three week rally, new highs, some resistance, and investors looking for the next reason to buy.

Now they might indeed be finding that reason, at least the big money managers who truly move the market, and thus the market's resilience in the face of some fairly crappy revenue reports yet again. Friday we all learned that cash inflows to US equities funds surged the most since money was dumped into the market to start the year. Remember that January 2 gap higher on NASDAQ a month into the bounce off the November low? You can see it on the chart. That triggered the next leg in the November to present rally. Can it keep this rally running with just a modest consolidation?

Of course there was no NASDAQ upside gap Friday thanks to MSFT and GOOG stinking the place up. Indeed a gap down was the actual result. Even so, the indices were mixed with a rather casual session, particularly for expiration, as stocks overall continue to take a moment after the three week run from June.

I mean the market is showing some effect from a bevy of big name top line misses (GE, MSFT, GOOG, KO, UPS, etc.) and other out and out misses period (again, GOOG and MSFT), but you would not know it from looking at Russell 2000 or SP400. Of course those don't have the likes of MSGOOG so there you go. Even NASDAQ, the index taking it for the team with two big players missing, easily held above the 10 day EMA and the May peak, the last high in the move.

What is going on with tech? MSFT you can understand. It has not had an original idea since DOS and it bought the first DOS from some unsuspecting schmuck for $50K after Gates told IBM Gates' company had developed a disk operating system. It succeeded when Steve Jobs trusted Gates with the guts of the Mac operating system. Jobs was livid, Gates laughed all the way to the bank.

Of course Apple got its Macintosh ideas from Xerox because Xerox management balked at the idea of the company selling anything that had a mouse. Vision. It is a great thing.

Overall, however, the 'old' tech is struggling as the PC morphs into something else whether a tablet, phone, watch, glasses, suit, or whatever. There is a big struggle for Dell, and it is a big cash cow, but frankly it is not the future. Those vying for it are simply trying to buy a cash stream for as little as possible. Period. Michael Dell may have some other romantic notion as it is his company since college days, but he is the only one.

Reasons for Google's miss? Perhaps sharing data with the government is not what people really want after all. People still do have a choice of search engines to use. Not much of a choice, however, as there are few alternatives that do not track everything you do on the web and then grab their toes every time the feds ask for the data (PG-13 reference). In any event, a miss by any other name.

Boring and resilient equals slow. Earnings are in full swing and the market is feeling the effects of a bevy of top line misses, and in some cases, bottom line as well. Overall, however, this is a very casual pullback and in many cases not a pullback at all. NASDAQ and SOX are taking the brunt of the 'blow' in the consolidation, but it is more akin to a slap on the wrist as both hover just above the 10 day EMA. Quite a selloff indeed.

The action Friday was low to high, some indices higher than others. NASDAQ struggled all session with the twin albatrosses GOOG and MSFT. Those did not help SP500, but it had other outlets to push it higher. For the large cap NYSE indices it was another day of lateral to slightly higher gains. The prior Friday to Thursday the big indices worked laterally in an 'in place' consolidation. Thursday they again rallied; Friday they held steady, not quite making that big break yet. SP400 midcaps and RUTX small caps never really stopped to consolidate, just slowed the move a bit.

With the money flowing into equity funds, it seems the indices want to keep moving higher, or at least hold their gains versus selling back. Resilient again comes to mind given the earnings, Bernanke's testimony (many still say no taper in September; I think they will be sad), and spiking oil and gas. Regional manufacturing reports from Philly and New York, however, managed to buoy spirits as to the economic outlook.

SP500 2.72, 0.16%
NASDAQ -23.67, -0.66%
DJ30 -4.80, 00.03%
SP400 0.13%
RUTX 0.02%
SOX -0.22%

Volume surged on NYSE by 28% and bumped 4.5% on NASDAQ, both above average, as expiration spurred Friday's trade.

Breadth modest but higher on NYSE (1.2:1), slightly down on NASDAQ (-1.1:1), indicating it was indeed a large cap issue for techs (NASDAQ 100 declined 1.07%; tells the story).

THE NEWS

There was some end of the week news, but even though significant, it appeared to be lost versus Bernanke's congressional testimony and the high profile earnings.

Detroit filed for Chapter 9 'uncle' bankruptcy, as the same city the President promised he would not let fail is now saying the city gets no bailout. Someone said the city should be bulldozed in strips and rebuilt. I posted pictures awhile back of Hiroshima and Nagasaki Japan versus Detroit. Utter devastation to current modern metropolises. Not saying Detroit should be nuked; it still has beautiful buildings, but some areas are forsaken, and those comparisons give the bulldozing idea some appeal. Of course it would need some new industry; that is a matter of the available labor force, whether local government will embrace growth policies, and if they get the mindset away from government handouts.

US equity funds, as noted above, received $16.4B the past week, the fifth largest injection ever.

Goldman Sachs' Global Leading Indicator shows that the global cycle is back to slowing. Still positive, but momentum is slowing toward the flat line yet again. At the same time Markit's global business confidence survey fell to a post-2007/2008 crisis low in June. The US and China are key components in the slowing as money supply growth is slowing in China and in the US, already slow commercial bank lending is slowing at a sharper pace.

WTI oil moved past Brent for the first time in three years even as more and more US oil is produced.

SEC sues hedge fund manager Steve Cohen in a CIVIL SUIT for failing to prevent insider trading among other claims. It seems inherently wrong that the government can sue an individual in civil court versus criminal court for breaking laws in order to achieve a lower burden of proof than in a criminal case. In the 'old days,' civil suits were left for citizens and non-government entities. In an all-powerful government, however, this is not surprising.

This as the Washington Post reports the NSA in testimony to Congress said they sure tried to keep their data gathering program secret in response to inquiries as to how they thought they could keep us in the dark. Hero or villain, Snowden let us see something we all suspected was happening was indeed actually happening. In a case of strange bedfellows, former President Carter says Snowden's actions were a net positive as he informed us of illegal actions by the NSA. There you go.

THE MARKETS

OTHER MARKETS

Dollar modestly weaker: 1.3136 versus 1.3109 euro. The dollar is under pressure once the market decided the Fed may not be so bent on cutting the taper.

Bonds bouncing: 2.49% versus 2.53%. After breaking lower Thursday and looking like a rollover, TLT bounces right back to the 20 day EMA. Key level. This looks as if bonds could rally again off of this low as MACD was at a higher low on the early July low.

Oil surging, kind of: 108.05, +0.01. WTI moved past Brent for the first time in three years though WTI closed well off its intraday high. Oh well, right? It broke higher from the lateral consolidation and has no weakness. Why is this with a slowing world economy and more petroleum output? Money, dear Watson. The dollar is weaker and the world is awash with liquidity. Thus even though less oil is being used and more produced, the price in dollars and the amount of money is inflating oil prices.

Gold: 1292.80, +8.60. Gold won't give up at the 20 day EMA, stretching its lateral move to over a week. Gold may just make the break higher.

TECHNICAL SUMMARY

INTERNALS

NASDAQ
Stats: -23.66 points (-0.66%) to close at 3587.61
Volume: 1.75B (+4.48%)

Up Volume: 684.59M (-236.45M)
Down Volume: 1.07B (+338.99M)

A/D and Hi/Lo: Decliners led 1.1 to 1
Previous Session: Advancers led 1.64 to 1

New Highs: 224 (-122)
New Lows: 13 (+5)

S&P
Stats: +2.72 points (+0.16%) to close at 1692.09
NYSE Volume: 765M (+27.93%)

A/D and Hi/Lo: Advancers led 1.12 to 1
Previous Session: Advancers led 2.04 to 1

New Highs: 347 (-147)
New Lows: 96 (-20)

DJ30
Stats: -4.8 points (-0.03%) to close at 15543.74

CHARTS

SP500/DJ30: After a weeklong lateral move on SP500 and DJ30 into Thursday, those indices started higher Thursday and they held the move Friday. Not over near resistance, however.

NASDAQ slid up the upper channel line all week but Friday gapped lower gratis MSFT, GOOG. Held over the 10 day EMA so not a major crack and easily inside the channel. Now we see if it can regroup and move on the remaining earnings.

SP400: New highs on the week after a one-day pause Tuesday. Slowing the move but still moving higher.

RUTX: Just managed to scratch out a new closing high Friday after punching new highs Monday and Thursday. Took a midweek breather and then continued the move. Stretched thin right now, likely pulls back, but money keeps rotating and moving the small and midcaps higher.

SENTIMENT INDICATORS

VIX: 12.54; -1.23
VXN: 13.75; +0.28
VXO: 12.58; -0.92

Put/Call Ratio (CBOE): 0.79; +0.05

Bulls and Bears:

Bulls continue to surge with another impressive, indeed more impressive, gain. Bears are the lowest in 6 weeks. Nothing like gains to surge sentiment back up from the contraction of the distance between bulls and bears at the start of July. Bulls are closing in on the highs that started pullbacks. Bears are at that level right now.

Note short interest spiking toward highs of the past half year. That is still a bullish indication somewhat in contrast to bulls and bears. Note, however, that short interest has moved more in line with market movements than contrary.

Bulls: 52.1% versus 46.9% versus 43.8% versus 41.7% versus 46.8% versus 43.8% versus 45.8% versus 52.1% versus 54.2% versus 52.1% versus 47.9% versus 44.3% versus 47.4% versus 50.5%.

Background: Undercut 35%, the threshold for bullishness, in early June. As noted, hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 19.8% versus 22.9% versus 25.0% versus 21.9% versus 22.9% versus 20.8% versus 19.8% versus 19.8% versus 19.8% versus 18.8% versus 19.6% versus 20.6% versus 20.6% versus 19.4% versus 19.6% versus 18.6% versus 18.8% versus 21.1% versus 21.1% versus 22.1% versus 21.1% versus 21.1% versus 22.3% versus 22.3% versus 23.4% versus 24.5% versus 24.5% versus 23.4% versus 25.5% versus 27.7% versus 27.7% versus 28.7% versus 27.7%.

Summary: Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

MONDAY

More and more earnings. More data (Existing Home Sales, New home sales, Durables, Michigan Sentiment Final). More money for equities? More rotation? The latter two, with the help of some Fed-speak, have kept the now four week rally moving upside.

Overextended? Yes. Look at the April to May run. Five weeks, 150 SP500 points. Current run is 4 weeks, 133 SP500 points. Some more upside is available, but it is getting thinner. Nickels in front of an oncoming bus?

Rotation remains the key for new positions and indeed in the market further move. It pushes new stocks to the fore as leaders and keeps the market holding steady or moving up slightly as seen this past week.

Thus while the market may be near a peak for this particular leg it is generating new leaders and thus new moves. A move lives by its leaders.

Helping out to create more leaders is the money moving into the market. Fund flows are picking up as bonds sold. Ironically, bonds are set to rebound. Once investors in a certain asset feel jilted, however, the love affair is typically over, and money likely continues to leave in favor of equities.

That keeps upside pressure on stocks. The question is whether they move higher from here or not. Money doesn't defeat all market technicals; they still need pullbacks. Massive money, however, can do that. Likely, however, that money waits for more earnings and the start of the next month to come in full bore.

Earnings will jostle the cart a bit more this week as more big names report. NFLX is early in the week, Monday after the close. AMZN reports next week as well. Some important market leaders on the agenda, again. If they can show revenue growth the market might find more sustaining breath.

We will look for more possible leader plays. With money flowing into funds it will be put to work with some accumulation, and as stocks set up we want to be ready with plays for when they make the break. In addition, as stocks report, we like to make post-earnings plays. Some you can enter right after the move, others have to set up. The latter will play into a new money rush to start August. To say the least, there will be opportunity of various kinds over the next few weeks and we will have plays at the ready depending upon what those stocks and what the market does from here.

Massive move ahead? If money is starting to flow big time from other areas the market could see a big surge. The worry is whether it is the last swoosh higher as the Fed starts to bow out of QE and the last money is sucked into stocks. We will see. Something to keep in mind but not something to make you pull away from making money in stocks as the money comes into the market.

Have a great weekend!

Support and resistance

NASDAQ: Closed at 3587.61

Resistance:
3621 is the upper channel line for the November 2012 to present uptrend. Being tested.

Support:
The 10 day EMA at 3566
3532 is the May intraday high
3530 is the November 2012 up trendline
3521 is the August 2000 low.
3502 is the May 2013 closing high
The 50 day EMA at 3455
3295 is the June 2013 low selloff
The 2011 up trendline at 3293
3227 is the April 2000 intraday low
The 200 day SMA at 3209
3197 is the September 2012 post-bear market high
3171 is the October intraday high
3134 is the March 2012 post-bear market peak
3130 from some January 2013 lows
3104-3112 from August and mid-October peaks.
3101 is the August 2012 high
3090 is the mid-March interim high
3076 is the late April 2012 high and the 1/2013 low after gapping higher
3062 is the December 2012 prior peak
3042 from 5/2000 low and several other price points

S&P 500: Closed at 1692.09

Resistance:
The November up trendline at 1693

Support:
1687 is the May high and post-bear market high
The 10 day EMA at 1671
1654 is the June 2013 peak
The 50 day EMA at 1633
1576 from October 2007, the prior all-time high
1569.48 is the 78% Fibonacci retracement of the April to May 2013 run
1560 is the June 2013 reversal low
1556 from July 2007
1541 is the April 2013 closing low in that pullback inside the uptrend
1539 from June 2007
1531 is the recent high
The 200 day SMA at 1525
1499 from January 2008
1475 is the September 2012 high
1471 is the October 2012 intraday high
1466 is the September 2012 closing peak and rally closing high
1440 from November 2007 closing lows

Dow: Closed at 15,528.71

Resistance:
The November up trendline at 15,727

Support:
15,542 is the May 2013 intraday high
The 10 day EMA at 15,404
15,318 is the June closing high
The 50 day EMA at 15,119
14,888 is the April peak and prior all-time high
14,844 is the June intraday low
14,551 is the June 2013 intraday low on the selloff
14,198 from the October 2007 high
14,149 is the February 2013 high
The 200 day SMA at 14,130
14,022 from 7-07 peak
14,010 from the early February 2013 consolidation
13,784 is the late February 2013 closing low
13,692 from 6-2007 peak
13,668 from 12-2007 peak
13662 is the October 2012 intraday high
13,653 is the September 2012 high

Economic Calendar

July 22 - Monday
- Existing Home Sales, June (10:00): 5.28M expected, 5.18M prior

July 23 - Tuesday
- FHFA Housing Price Index, May (9:00): 0.7% prior

July 24 - Wednesday
- MBA Mortgage Index, 07/20 (7:00)
- New Home Sales, June (10:00): 481K expected, 476K prior
- Crude Inventories, 07/20 (10:30): -6.902M prior

July 25 - Thursday
- Initial Claims, 07/20 (8:30): 328K expected, 334K prior
- Continuing Claims, 07/13 (8:30): 2990K expected, 3114K prior
- Durable Orders, June (8:30): 1.5% expected, 3.7% prior (revised from 3.6%)
- Durable Goods -ex transports, June (8:30): 0.4% expected, 0.5% prior (revised from 0.7%)
- Natural Gas Inventories, 07/20 (10:30): 58 bcf prior

July 26 - Friday
- Michigan Sentiment - Final, July (9:55): 84.2 expected, 83.9 prior

[ReturntoSender]

From Briefing.com: 4:15 pm : The S&P 500 ended today's session with a loss of 0.4% after equities ran into significant resistance at the open. Although investors received a full slate of mostly better-than-expected earnings, aggressive profit-taking prevented the S&P from breaching the 1,700 level. However, today's decline comes after the benchmark index ended twelve of the past fourteen sessions with gains, climbing 4.9% during that span.

Nine of ten sectors ended in the red while technology outperformed with a gain of 0.9%. The tech sector spent the entire session in positive territory after Apple's (AAPL 440.51, +21.52) earnings topped analyst estimates. The largest tech stock gained 5.1% but chipmakers did not fare as well. The PHLX Semiconductor Index fell 1.8% and index component Broadcom (BRCM 27.01, -4.82) tumbled 15.1% after its cautious guidance overshadowed the company's in-line report.

Outside of technology, the health care space (-0.1%) ended ahead of the broader market. The sector received some support from Eli Lilly (LLY 52.55, +1.56) as well as biotechnology companies. Eli Lilly gained 3.1% following its earnings beat on strong revenue growth and the iShares Nasdaq Biotechnology ETF (IBB 193.01, +0.66) added 0.3%.

On the downside, heavily-weighted energy, financials, and industrials spent the entire session in a steady decline, which prevented the S&P from staging a meaningful intraday recovery. The energy sector lost 1.0% while crude oil fell 1.8% to $105.26 per barrel.

Elsewhere, the financial sector ended lower by 0.8% as nearly all major banks registered losses. Discover Financial (DFS 50.43, -0.28) shed 0.6% despite beating on earnings and revenue.

Also of note, industrials were pressured by transportation-related names. The Dow Jones Transportation Average fell 1.1% as 17 of 20 components registered losses. Railroads were pressured following below-consensus earnings from Norfolk Southern (NSC 74.66, -2.21). Meanwhile, Delta Air Lines (DAL 20.80, +0.35) and United Continental (UAL 34.97, +0.41) settled with respective gains of 1.7% and 1.2% after Delta reported a bottom-line beat.

While the three cyclical groups pressured the broader market, the rate-sensitive utilities (-1.6%) sector ended at the bottom of today's leaderboard. On a related note, Treasuries sold off before the open and held their levels throughout the session. The benchmark 10-yr yield climbed eight basis points to 2.59%.

Today's new home sales report surprised to the upside but home builders sold off regardless. The iShares Dow Jones US Home Construction ETF (ITB 22.55, -0.67) fell 2.9%.

Unlike existing home sales, which showed an unexpected downturn in June, new home sales increased for a third consecutive month. Sales rose 8.3% in June to 497,000 from a downwardly revised 459,000 (from 476,000) in May. The Briefing.com consensus expected sales to increase to 483,000. The June sales total was the highest since May 2008 when 504,000 new homes were sold.

Separately, the weekly MBA Mortgage Index fell 1.2% to follow last week's decline of 2.6%. This was the sixth negative reading in a row and the tenth decline out of the past eleven weeks.

Tomorrow, weekly initial claims and June durable orders will be reported at 8:30 ET. On the earnings front, 3M (MMM 116.33, -0.42) and Colgate-Palmolive (CL 58.47, +0.06) will report their results before the opening bell.

The U.S. Treasury will auction $29 billion in 7-yr notes.DJ30 -25.50 NASDAQ +0.33 SP500 -6.45 NASDAQ Adv/Vol/Dec 1016/1.74 bln/1475 NYSE Adv/Vol/Dec 731/678.5 mln/2292

3:30 pm :

Sep crude oil traded in negative territory today. The energy component rose to a session high of $106.91 per barrel following inventory data that showed a draw of 2.825 mln barrels when a draw of 2.4-2.8 mln barrels was anticipated. However, prices quickly pulled-back and dropped to a session low of $104.79 per barrel in late afternoon action. Crude oil eventually settled with a 1.7% loss at $105.44 per barrel
Aug natural gas advanced to a session high of $3.78 per MBMtu but lost momentum and slipped back into the red. It settled at its session low of $3.69 per MMBtu, booking a loss of 1.3%
Precious metals retreated into negative territory as the dollar index gained strength
Aug gold pulled back from its session high of $1341.20 per ounce set at floor trade open and settled at $1318.90 per ounce, booking a 1.2% loss.
Sep silver chopped around near the unchanged line in early morning action but eventually settled 1.2% lower at $20.02 per ounce

6:09PM Teradyne beats by $0.11, beats on revs; guides Q3 EPS below consensus, revs below consensus (TER) 17.29 -0.42 : Reports Q2 (Jun) earnings of $0.43 per share, excluding non-recurring items, $0.11 better than the Capital IQ Consensus Estimate of $0.32; revenues fell 21.8% year/year to $428.89 mln vs the $407.39 mln consensus.

"Semiconductor Test orders grew 40% in the quarter driven by the mobile, power management, microcontroller, and memory test sectors. Wireless and Systems Test orders declined in the quarter as customers adjusted their capacity to market demand."

Co issues downside guidance for Q3, sees EPS of $0.39-0.49, excluding non-recurring items, vs. $0.60 Capital IQ Consensus Estimate; sees Q3 revs of $425-465 vs. $523.50 mln Capital IQ Consensus Estimate.

4:22PM Cadence Design beats by $0.01, reports revs in-line; guides Q3 EPS below consensus, revs in-line; guides FY13 EPS in-line, revs in-line (CDNS) 15.40 -0.18 : Reports Q2 (Jun) earnings of $0.21 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.20; revenues rose 11.0% year/year to $362 mln vs the $359.54 mln consensus.

Co issues mixed guidance for Q3, sees EPS of $0.19-0.21, excluding non-recurring items, vs. $0.23 Capital IQ Consensus Estimate; sees Q3 revs of $360-370 mln vs. $368.78 mln Capital IQ Consensus Estimate.
Co issues in-line guidance for FY13, sees EPS of $0.80-0.89, excluding non-recurring items, vs. $0.88 Capital IQ Consensus Estimate; sees FY13 revs of $1.445 to $1.465 billion vs. $1.46 bln Capital IQ Consensus Estimate.

4:21PM Applied Micro beats by $0.03, reports revs in-line (AMCC) 10.61 -0.25 : Reports Q1 (Jun) earnings of $0.02 per share, $0.03 better than the Capital IQ Consensus Estimate of ($0.01); revenues rose 31.0% year/year to $54.1 mln vs the $54.24 mln consensus.

We had an excellent quarter, where we had strength in our base business and also continued to make significant progress towards getting our revolutionary and category defining X-Gene server platforms to market," said Dr. Paramesh Gopi, President and Chief Executive Officer. Shiva Natarajan, interim Chief Financial Officer, commented, "We had a great quarter where we achieved better than expected non-GAAP results. We expect to continue to execute solidly as we position ourselves for the growth we anticipate in the future".

4:19PM Western Digital beats by $0.15, beats on revs (WDC) 67.53 -0.30 : Reports Q4 (Jun) earnings of $1.96 per share, $0.15 better than the Capital IQ Consensus Estimate of $1.81; revenues fell 21.6% year/year to $3.73 bln vs the $3.63 bln consensus.

For its fourth fiscal quarter ended June 28, 2013, the company reported revenue of $3.7 billion, hard-drive shipments of 59.9 million

"I am pleased with our performance in fiscal year 2013 and the June quarter, reflecting our expanding participation in the storage market, including the cloud and personal storage as we address the ongoing growth in digital data,"

Co to issue guidance on CC at 17:00

4:18PM Mattson beats by $0.01, misses on revs (MTSN) 2.21 -0.09 : Reports Q2 (Jun) loss of $0.05 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of ($0.06); revenues fell 29.5% year/year to $24.6 mln vs the $24.86 mln consensus.

Gross margin in the second quarter of 2013 was 34 percent, a 12 percentage point improvement compared with the 22 percent gross margin reported in the first quarter of 2013 and a four percentage point deterioration compared with the 38 percent gross margin in the second quarter of 2012. The significant improvement in gross margin in the second quarter compared to the prior quarter is primarily due to a more typical product mix of system sales as compared to the last quarter when approximately 85 percent of our system shipments consisted of our lower margin strip products.

4:12PM TriQuint Semi beats by $0.04, beats on revs; guides Q3 EPS above consensus, revs above consensus; guides FY13 EPS above consensus (TQNT) 6.79 -0.07 : Reports Q2 (Jun) loss of $0.07 per share, $0.04 better than the Capital IQ Consensus Estimate of ($0.11); revenues rose 6.8% year/year to $190.1 mln vs the $187.97 mln consensus.

Co issues upside guidance for Q3, sees EPS of $0.09-0.11 vs. $0.03 Capital IQ Consensus Estimate; sees Q3 revs of $245-255 MLN vs. $228.35 mln Capital IQ Consensus Estimate.
Co issues upside guidance for FY13, sees EPS of $0.05 vs. ($0.10) Capital IQ Consensus Estimate.
"It is an exciting time for TriQuint. Our results exceeded our April guidance, but more importantly, this marks the beginning of the next phase of growth at TriQuint. In Q3 2013, I expect revenue to jump 30% sequentially, bringing significantly improved margins and profitability. I believe Q3 is the beginning of a stronger period of performance for TriQuint, built on a differentiated strategy that is defensible and sustainable. Our strategic focus is on innovation, technology and a comprehensive RF capability. Our investments in proprietary GaN, BAW and advanced SAW are examples of where we set ourselves apart from the competition and I believe our Q3 outlook validates our path."

4:08PM F5 Networks beats by $0.04, beats on revs; guides Q4 EPS in-line, revs in-line (FFIV) 81.42 +1.51 : Reports Q3 (Jun) earnings of $1.12 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $1.08; revenues rose 5.0% year/year to $370.3 mln vs the $361.5 mln consensus.

Co issues in-line guidance for Q4, sees EPS of $1.17-1.20, excluding non-recurring items, vs. $1.17 Capital IQ Consensus Estimate; sees Q4 revs of $378-380 mln vs. $380.62 mln Capital IQ Consensus Estimate.

4:06PM Mellanox Tech beats by $0.11, beats on revs (MLNX) : Reports Q2 (Jun) earnings of $0.30 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.19; revenues fell 26.4% year/year to $98.2 mln vs the $95.34 mln consensus.

4:05PM LSI Logic announces initiation of $0.03 quarterly dividend (LSI) 7.42 -0.18 : Co declared a quarterly cash dividend of $0.03 per common share. The dividend is payable on September 20, 2013, to stockholders of record on September 6, 2013.

LSI also outlined its intent to continue allocating capital to its share repurchase program, which has returned over $2 billion of cash to stockholders over the last six years. LSI has over $356M available for future share repurchases under its existing authorization.

4:04PM LSI Logic beats by $0.02, beats on revs; guides Q3 EPS in-line, revs in-line (LSI) 7.42 -0.18 : Reports Q2 (Jun) earnings of $0.15 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.13; revenues fell 10.5% year/year to $590 mln vs the $580.16 mln consensus. Co issues in-line guidance for Q3, sees EPS of $0.13-0.19, excluding non-recurring items, vs. $0.15 Capital IQ Consensus Estimate; sees Q3 revs of $590-630 mln vs. $615.81 mln Capital IQ Consensus Estimate.

4:04PM Qualcomm reports EPS in-line, beats on revs; guides Q4 EPS, revs in-line (QCOM) 61.39 -0.91 : Reports Q3 (Jun) adj. earnings of $1.03 per share, in-line with the Capital IQ Consensus Estimate consensus of $1.03; revenues rose 35.0% year/year to $6.24 bln vs the $6.06 bln consensus.

Co issues in-line guidance for Q4, sees adj. EPS of $1.02-1.10 vs. $1.08 Capital IQ Consensus Estimate; sees Q4 revs of $5.9-6.6 bln vs. $6.29 bln Capital IQ Consensus Estimate.

Q3 Key Business Metrics MSM chip shipments: 172 million units, up 22 percent y-o-y and down 1 percent sequentially. March quarter total reported device sales: ~$56.5 billion, up 18 percent y-o-y and down 8 percent sequentially. March quarter estimated 3G/4G device shipments: ~244 to 248 million units, at an estimated average selling price of ~ $227 to $233 per unit.

Large Cap Gainers

VMW (82.63 +15.92%): Beat quarterly EPS by $0.02 ($0.79 vs $0.77 estimate), revs rose 10.4% yoy to $1.24 bln vs $1.23 bln estimate; sees Q3 revs of $1.27-1.30 vs $1.29 estimate; sees FY13 revs of $5.12-5.26 bln vs $5.17 bln estimate; upgraded to Outperform from Market Perform at Raymond James; Upgraded to Buy from Neutral at Nomura
NJ (20.53 +6.21%): Continued strength following strong Q1 results reported yesterday
EMC (26.85 +6.02%): Reported Q2 EPS of $0.42 (in-line), revs rose 5.7% yoy to $5.61 bln vs $5.62 bln estimate; reaffirmed FY13 EPS guidance of ~$1.85 vs $1.86 estimate, revs of ~$23.5 bln vs $23.42 bln estimate; mentioned positively at ISI Group

Large Cap Losers

BRCM (26.78 -15.87%): Beat quarterly EPS by $0.01 ($0.70 vs $0.69 estimate), revs rose 4.2% yoy to $2.09 bln vs $2.11 bln estimate; sees Q3 revs of $2.05-2.2 bln vs $2.245 bln estimate; downgraded at BMO Capital Markets, William Blair, Mizuho, RBC Capital Markets, Credit Suisse, Citigroup, and B.Riley & Co.
MSI (54.87 -8.52%): Beat quarterly EPS by $0.08 ($1.12 vs $1.04 estimate), revs fell 1.9% yoy to $2.11 bln vs $2.13 bln estimate; sees Q3 EPS of $0.97-1.02 vs $1.22 estimate, revs flat to -3% yoy (~$2.08-2.15 bln) vs $2.26 bln estimate
CAJ (31.78 -7.95%): Beat quarterly EPS by JPY 3.65 (JPY 57.68 vs JPY 54.03 estimate), rev rose 7.5% yoy to JPY 966.88 bln vs JPY 951.13 bln estimate; lowered FY13 rev guidance to JPY 3.85 trln (from JPY 3.98 trln) vs JPY 3.89 trln estimate

Mid Cap Gainers

ILMN (82.17 +11.39%): Beat quarterly EPS by $0.03 ($0.43 ex items vs $0.40 estimate), revs rose 23.3% yoy to $346.1 mln vs 332.0 mln estimate; sees FY13 EPS of $1.68-1.72 ex items vs $1.68 estimate, revs growth of +20% (~$1.38 bln) vs $1.35 bln estimate
EA (26.34 +10.55%): Beat quarterly EPS by $0.20 (-$0.40 vs -$0.60 estimate), revs rose 0.8% yoy to $495 mln vs $454.1 mln estimate; sees Q2 EPS of $0.12 (in-line), revs of $975 mln vs $979.9 mln estimate; sees FY14 EPS of $1.20 vs $1.21 estimate, revs of $4 bln vs $4 bln estimate; target raised to $30 from $27 at Stifel
LL (94.08 +8.62%): Beat quarterly EPS by $0.13 ($0.73 vs $0.60 estimate), revs rose 22.3% yoy to $257.1 mln vs $243.67 mln estimate; sees FY13 EPS of $2.45-2.60 (raised from $2.10-2.35) vs $2.42 estimate, sees FY13 revs of $940-963 mln (raised from $913-942 mln) vs $947.17 mln estimate; sees FY13 comparable store net sales increasin in the high single to low double digits

Mid Cap Losers

HTS (20.31 -10.56%): Reported Q2 EPS of $0.66 (may not compare to $0.64 estimate); reported equity decline of 19.3% for quarter and year-to-date
PNRA (166.78 -8.37%): Missed quarterly EPS by $0.03 ($1.74 vs $1.77 estimate), revs rose 11.0% yoy to $589 mln vs $595.84 mln estimate; sees Q3 EPS of $1.32-1.36 vs $1.47 estimate; sees Q4 EPS of $2.05-2.11 vs $2.18 estimate; sees FY13 EPS of $6.75-6.85 vs $7.04 estimate
PVR (26.79 -6.88%): Reported Q2 EPS of -$0.21 (may not compare to $0.11 estimate), revs rose 22.7% yoy to $273.5 mln vs $280.63 mln estimate

10:03AM Broadcom (-13.5%) extending losses at session/3.5 year lows following earnings; stock was downgraded by 7 firms this morning (BRCM) 27.52 -4.31

8:27AM First Solar to build New Mexico solar projects totaling 23MW for PNM (FSLR) 48.00 : Co announced an agreement with Public Service Company of New Mexico (PNM) to construct three solar power plants totaling 23 megawatts (MW)AC of generating capacity. Under the agreement, First Solar is expected to provide engineering, procurement and construction (EPC) services, using its advanced thin-film photovoltaic (PV) modules.

7:49AM IBM and Pivotal to accelerate open cloud innovation with Cloud Foundry (IBM) 194.98 : Co and Pivotal announced that the two companies will collaborate on further development of the Cloud Foundry platform and open source project, and work towards establishing an open governance model for the community. Cloud Foundry is an interoperable Platform-as-a-Service framework that allows users to have freedom of choice across cloud infrastructure and application programming models, and cloud applications. Pivotal will establish a community advisory board of Cloud Foundry users and vendors - including IBM - to guide the community as outlined on the Cloud Foundry site. Pivotal will continue to steward the Cloud Foundry brand and preserve the trademark from direct commercial use in product names.

7:40AM Caterpillar misses by $0.25, misses on revs; lowers FY13 EPS and revenue guidance, below consensus (CAT) 85.51 : Reports Q2 (Jun) earnings of $1.45 per share, $0.25 worse than the Capital IQ Consensus Estimate of $1.70; revenues fell 15.8% year/year to $14.62 bln vs the $14.92 bln consensus.

Co lowers guidance for FY13, sees EPS of $6.50 vs. $6.84 Capital IQ Consensus Estimate, down from $7.00; lowers FY13 revs guidance to $56-58 bln vs. $58.58 bln Capital IQ Consensus Estimate, down from $57-61 bln.

Reason for the change in revenue: Sales volume decreased $2.545 billion with the most significant decline in Resource Industries. About half of the total volume decrease was related to changes in dealer machine inventory. During the second quarter of 2012, dealers increased machine inventory about $300 million in anticipation of higher demand. In the second quarter of 2013, dealers reduced their machine inventory by about $1 billion. The remaining decline was primarily a result of lower machine dealer deliveries to end users.

Sales by geographic region: While sales declined in all geographic regions, the most significant reduction was in Asia/Pacific. The Asia/Pacific decline was primarily related to lower Australian mining sales in our Resource Industries segment. While sales in Asia/Pacific declined overall, sales in China increased.

Outlook:
In general, end-user demand is similar to our previous outlook. However, dealer machine inventory reductions in the second quarter were more than anticipated, and we expect that substantial reductions will continue in the second half of 2013.

Xilinx (XLNX) announced that Bosch Motorsport is using Xilinx Zynq-7000 All Programmable devices in its latest engine ECU processing core called HEL.

7:18AM Seagate Tech beats by $0.01, reports revs in-line (STX) 45.31 : Reports Q4 (Jun) earnings of $1.20 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $1.19; revenues fell 23.6% year/year to $3.42 bln vs the $3.42 bln consensus. During the fourth quarter, the Company generated ~$394 million in operating cash flow, paid cash dividends of $137 million and repurchased 1 million of ordinary shares for approximately $42 million.

7:10AM Motorola Solutions beats by $0.08, reports revs in-line; guides Q3 EPS below consensus, revs below consensus (MSI) 59.98 : Reports Q2 (Jun) earnings of $1.12 per share, $0.08 better than the Capital IQ Consensus Estimate of $1.04; revenues fell 1.9% year/year to $2.11 bln vs the $2.13 bln consensus; Government sales were down 1 percent, while Enterprise sales declined 5 percent. Co issues downside guidance for Q3, sees EPS of $0.97-1.02 vs. $1.22 Capital IQ Consensus Estimate; sees Q3 revs flat to down 3% y/y (approx of $2.08-2.15 bln) vs. $2.26 bln Capital IQ Consensus Estimate.

7:01AM RF Micro Device signs agreement to sell semiconductor manufacturing facility in the UK to Compound Photonics (RFMD) 5.44 : Co announced an agreement to sell its Gallium Arsenide semiconductor manufacturing facility in Newton Aycliffe, in the U.K. to Phoenix-based Compound Photonics. Terms of the transaction were not disclosed. The transaction and product transition are expected to provide RFMD $20 million in annual cost savings, or $5 million per quarter.

6:59AM EMC reports EPS in-line, revs in-line; reaffirms FY13 EPS guidance, revs guidance (EMC) 25.33 : Reports Q2 (Jun) non-GAAP earnings of $0.42 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.42; revenues rose 5.7% year/year to $5.61 bln vs the $5.62 bln consensus.

Co reaffirms guidance for FY13, sees EPS of ~$1.85 vs. $1.86 Capital IQ Consensus Estimate; sees FY13 revs of ~$23.5 bln vs. $23.42 bln Capital IQ Consensus Estimate.

EMC's Information Infrastructure business increased revenue 4% compared with the year-ago quarter. Second-quarter revenue from EMC's Information Storage business accelerated to 4% year over year. Highlights within this include: 39% year-over-year revenue growth from EMC's Emerging Storage business.

"The strength and demand we saw during the quarter, despite a cautious IT spending environment, speaks to the soundness of our strategy, the value customers see in our federated business model, and the massive opportunity ahead in cloud computing, Big Data and trusted IT. EMC Information Infrastructure, VMware and Pivotal are positioned on the leading edge of these significant trends. Each business is focused on building its own unique technologies and independent partner ecosystems to offer customers greater choice. Collectively they add up to a very competitive technology stack that not only addresses our customers' top IT needs in 2013, but also their longer-term business transformation priorities."

6:37AM ATMI misses by $0.06, misses on revs (ATMI) 26.47 : Reports Q2 (Jun) earnings of $0.29 per share, $0.06 worse than the Capital IQ Consensus Estimate of $0.35; revenues fell 3.7% year/year to $102 mln vs the $107.61 mln consensus.

"Our second quarter results reflect a mixed demand environment in Microelectronics and continued momentum in LifeSciences, resulting in revenues that are up sequentially but lower than last year. Within Microelectronics, we view the market as generally tepid. Leading edge foundries continue to be strong, while there were meaningful wafer start declines in the logic space, which impact certain of our product lines. LifeSciences achieved record revenue due to growth across most product lines as the business continues to benefit from the adoption of single-use technology. We continued to make progress on commercializing our electronic waste recovery solution, eVOLV by signing another agreement during the quarter, our first in Asia...

With growing uncertainty around consumer electronic demand trends, the outlook for wafer starts is being tempered as we look into the second half of the year. Our expectation now is for minimal wafer start growth in 2013. While we still see momentum for advanced devices used in mobile applications, there is growing evidence that other segments are not as strong. We continue to work to overcome these challenges by maintaining our focus on the leading edge. LifeSciences is growing in line with our expectations and is steadily marching toward our target of 20 to 30 percent annual growth, and achieving breakeven performance during the fourth quarter of 2013. Finally, I'm very pleased with our success in eVOLV and anticipate this business will become more meaningful to our financial results over the next several quarters."

5:36AM ARM Holdings reports EPS in-line, beats on revs (ARMH) 41.85 : Reports Q2 (Jun) earnings of GBP0.05 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of GBP0.05; revenues rose 26.3% year/year to GBP171.2 mln vs the GBP165.77 mln consensus.

Order backlog up more than 10% sequentially. In Q2, ARM's processor royalty revenue again outperformed the semiconductor industry, growing at 24% year-on-year. In part this outperformance was driven by the growth in smartphones and mobile computing.

Gross margins in Q2 2013, excluding share-based payment costs of 0.5 million, were 94.3% compared to 95.1% in Q2 2012.

In respect of the year to 31 December 2013, the directors are declaring an interim dividend of 2.1 pence per share, an increase of 26% over the 2012 interim dividend of 1.67 pence per share. This interim dividend will be paid, out of the UK GAAP distributable reserves of ARM Holdings plc, on 4 October 2013 to shareholders on the register on 6 September 2013.

"ARM enters the second half of 2013 with a record order backlog and a robust opportunity pipeline. Relevant data for the second quarter, being the shipment period for ARM's Q3 royalties, points to a small sequential increase in industry revenues. Building on our strong performance in the first half, we expect overall Group dollar revenues for full year 2013 to be at least in line with market expectations."

11:05 am S&P Consumer Discretionary Index flat, modestly outperforming the broader market
The consumer discretionary group is slightly outperforming the broader market in early trade. The retail group is in the red with the Retail HOLDRS Trust (RTH) -0.3% and the SPDR S&P Retail ETF (XRT) -0.4%. Trading higher following earnings/guidance: EA +9%, IGT +5.4%, WYN +3.5%, F +3%.

Trading lower following earnings/guidance: ACC -3.7%, DPS -2%, KOF -0.9%Panera Bread (PNRA) making new lows following earnings, now down 7.2% following earnings, weighing on select restaurant/QSR names (BWLD -1.6%, BJRI -1.6%, RT -1%, EAT -0.9%, NDLS -0.9%, DRI -0.5%, DIN -0.5%, BLMN -0.5%, TXRH -0.5%, BKW -0.4%, CHUY -0.4%, JACK -0.6%, SONC -0.3%) Other notable mentions: TRLG FLAT (DXPE to replace TRLG in the S&P SmallCap 600)... Leaders: MFB 22.5% (Maidenform Brands to be acquired by HanesBrands (HBI) for $23.50 per share in cash; expected to be accretive to HBI within first 12 months and add $0.60 of EPS annually within 3 years )... Laggards: OMX -1.2% (announces promotion of Deb O'Connor to Interim CFO and departure of EVP and CFO Bruce Besanko ), SFD -0.1% (announces update on CFIUS Process; continue to expect the transaction to close in the second half of 2013).

Analyst related: Upgrades: WEN 0.2% ( upgraded to Neutral from Sell at Goldman)... Misc: COST -0.7% ( initiated with a Outperform/Buy at Williams Capital Group)

11:04 am New Home Sales Jump to Five Year High
Unlike existing home sales, which showed an unexpected downturn in June, new home sales increased for a third consecutive month. Sales rose 8.3% in June to 497,000 from a downwardly revised 459,000 (from 476,000) in May. The Briefing.com consensus expected sales to increase to 483,000.Sales in June were the most since 504,000 new homes were sold in May 2008.Inventory levels increased 1.3% from 159,000 in May to 161,000 in June. The large increase in sales, however, dented the supply to 3.9 months. That ties for the lowest level of supply since October 2004 and is well below a 6.0 months' supply that builders try to keep during normal selling conditions.The lack of inventory should keep upward pressure on new construction of single-family homes.There is some concern that new home sales will not continue on their current torrid pace. Recent increases in mortgage rates may have caused potential buyers to rush into the market sooner than they anticipated out of fear that mortgage costs would increase further in the near future. This near-term surge may have pulled forward some sales that would normally have come in August or September.The existing home data did not give a clear picture if the above scenario is currently occurring, but it is definitely a large probability and something to watch out for.The median new home price increased 7.4% y/y in June to $249,700.

11:01 am New Home Sales Jump to Five Year High
Unlike existing home sales, which showed an unexpected downturn in June, new home sales increased for a third consecutive month. Sales rose 8.3% in June to 497,000 from a downwardly revised 459,000 (from 476,000) in May. The Briefing.com consensus expected sales to increase to 483,000.Sales in June were the most since 504,000 new homes were sold in May 2008.Inventory levels increased 1.3% from 159,000 in May to 161,000 in June. The large increase in sales, however, dented the supply to 3.9 months. That ties for the lowest level of supply since October 2004 and is well below a 6.0 months' supply that builders try to keep during normal selling conditions.The lack of inventory should keep upward pressure on new construction of single-family homes.There is some concern that new home sales will not continue on their current torrid pace. Recent increases in mortgage rates may have caused potential buyers to rush into the market sooner than they anticipated out of fear that mortgage costs would increase further in the near future. This near-term surge may have pulled forward some sales that would normally have come in August or September.The existing home data did not give a clear picture if the above scenario is currently occurring, but it is definitely a large probability and something to watch out for.The median new home price increased 7.4% y/y in June to $249,700.

07:55 am Panera Bread shares fall 6% following miss on earnings
Panera Bread (PNRA $170.25 -11.76) reported second quarter earnings of $1.74 per share, which was below expectations, while revenues rose 11.0% year/year to $589 million which was below consensus. Co issued guidance for Q3 with EPS of $1.32-1.36 which was below expectations.

The company issued guidance the fourth quarter with EPS of $2.05-2.11 which was below expectations. The company issued guidance for fiscal year 2013 with EPS of $6.75-6.85 which is below expectations.. This lower diluted earnings per share target reflects lower than previously expected growth in Company-owned comparable net bakery-cafe sales.

07:54 am Electronic Arts shares rise 8% following beat on earnings
Electronic Arts (EA $25.80 +1.97) reported first quarter loss of $0.40 per share, which was better than expected, while revenues rose 0.8% year/year to $495 million which was better than expected. EA's mobile and handheld digital revenue generated $103 million in the quarter, a 30% year-over-year increase in digital net revenue.

The company issued guidance for the second quarter with EPS of $0.12 which is in line with expectations with revenues of $975 million which is slightly below expectations. The company reaffirmed guidance for fiscal year 2014 with EPS of $1.20 which is below expectations with revenues of $4 billion which is line with expectations.

07:52 am VMWare soar 14% following better than expected earnings
VMware (VMW $81.56 +10.28) reported second quarter earnings of $0.79 per share, which was better than expected, while revenues rose 10.4% year/year to $1.24 billion which was in line with expectations. The company issued guidance for the third quarter with revenues of $1.27-1.30 billion which is line with expectations. Sees license revenues in the range of $535-55 million. The company issued in-line guidance for fiscal year 2013 with revenues of $5.12-5.26 billion (Prior $5.12-5.24 billion) which is line with expectations, and the company also sees license revenues in the range of $2.21-2.29 billion. "The second quarter was a strong finish to a solid first half of 2013 for VMware," said Pat Gelsinger, chief executive officer, VMware.

"We see a significant market opportunity in the second half of 2013 and beyond. VMware continues to succeed because we are uniquely positioned to help customers move from the client-server era to the mobile-cloud era of computing. As we help them bridge to this new world, we're empowering businesses to capture new levels of efficiency, control and agility."

07:51 am Broadcom shares plunge 10% following disappointing guidance
Broadcom (BRCM $28.75 -3.08) reported second quarter earnings of $0.70 per share, which was better than expected. "Broadcom delivered solid revenue and gross margins in Q2 with tightly managed sequential growth in operating expenses. This combination of financial discipline and in-line revenue enabled us to deliver non-GAAP earnings per share ahead of First Call consensus," said Scott McGregor, Broadcom's President and Chief Executive Officer. "Looking forward, we see continued growth driven by our industry leading portfolio of wired and wireless communication platforms."

The company issued third quarter revenue guidance of $2.05-220 billion which was below expectations.

07:49 am Apple shares rise 4.6% following better than expected earnings
Apple (AAPL $438.31 +19.32) reported third quarter earnings of $7.47 per share, which was better than expected, while revenues rose 0.9% year/year to $35.32 billion which was better than expected. consensus.

Q3 gross margin 36.9% vs Street estimate of 36.6% and 36-37% guidance.
31.2 million iPhones sold in Q3 vs Street estimate of ~26 million. 14.6 million iPads sold in Q3 vs Street estimate of ~17 million.
3.8 million Macs sold in Q3 vs Street estimate of approximately 4 million.
The company issued guidance for the fourth quarter with revenues of $34-37 billion which was near consensus, with gross margin 36-37% versus 36.6% Street estimate.

Apple (AAPL) reported third quarter earnings of $7.47 per share, which was better than expected, while revenues rose 0.9% year/year to $35.32 billion which was better than expected. Q3 gross margin 36.9% versus Street estimate of 36.6% and 36-37% guidance. 31.2 million iPhones sold in Q3 vs Street estimate of ~26 million. 14.6 million iPads sold in Q3 vs Street estimate of ~17 million. 3.8 million Macs sold in Q3 vs Street estimate of approximately 4 million. The company issued guidance for the fourth quarter with revenues of $34-37 billion which was near consensus, with gross margin 36-37% versus 36.6% Street estimate.

RF Micro Device (RFMD) reported first quarter earnings of $0.09 per share, ex items, which was better than expected, while revenues rose 44.5% year/year to $293 million versus which was also better than anticipated. The company issued in-line guidance for the second quarter with EPS of $0.10-0.11 versus which was in line with expectations, with revenues of $305-310 million which is in line with expectations. On a non-GAAP basis, gross margin expanded by 70 basis points sequentially and 100 basis points year-over-year to 35.1% "RFMD is capitalizing on the expanding demand for data-rich mobile applications, and our products are at the heart of the high-speed data connections enabling always-on, broadband mobility -- both in the devices and consumer premises equipment, and within the supporting network infrastructure. We are executing on multiple opportunities to increase our dollar content generation-over-generation in the world's leading smartphones, and we are benefiting from increasing participation in the high estimate volume entry-level platforms and reference designs."

VMware (VMW) reported second quarter earnings of $0.79 per share, which was better than expected, while revenues rose 10.4% year/year to $1.24 billion which was in line with expectations. The company issued guidance for the third quarter with revenues of $1.27-1.30 billion which is line with expectations. Sees license revenues in the range of $535-55 million. The company issued in-line guidance for fiscal year 2013 with revenues of $5.12-5.26 billion (Prior $5.12-5.24 billion) which is line with expectations, and the company also sees license revenues in the range of $2.21-2.29 billion. "The second quarter was a strong finish to a solid first half of 2013 for VMware," said Pat Gelsinger, chief executive officer, VMware. "We see a significant market opportunity in the second half of 2013 and beyond. VMware continues to succeed because we are uniquely positioned to help customers move from the client-server era to the mobile-cloud era of computing. As we help them bridge to this new world, we're empowering businesses to capture new levels of efficiency, control and agility."

Broadcom (BRCM) reported second quarter earnings of $0.70 per share, which was better than expected. "Broadcom delivered solid revenue and gross margins in Q2 with tightly managed sequential growth in operating expenses. This combination of financial discipline and in-line revenue enabled us to deliver non-GAAP earnings per share ahead of First Call consensus," said Scott McGregor, Broadcom's President and Chief Executive Officer. "Looking forward, we see continued growth driven by our industry leading portfolio of wired and wireless communication platforms." The company issued third quarter revenue guidance of $2.05-220 billion which was below expectations.

Juniper Networks (JNPR) reported second quarter earnings of $0.29 per share, which was better than expected, revenues rose 7.2% year/year to $1.15 billion which is better than expected. The company issued guidance for the third quarter with EPS of $0.29-0.32 which is line with expectations, with revenues of $1.14-1.18 billion which is line with expectations. Juniper's outlook for the September quarter reflects its expectation of good service provider demand and signs of improving enterprise demand. The Company expects its routing and switching businesses to remain strong while the security business continues to stabilize.

[ReturntoSender]

From Briefing.com: 4:15 pm : Equities began the session in mixed fashion before an afternoon rally helped lift the S&P 500 into the green. The benchmark index added 0.3% while the Nasdaq outperformed with a gain of 0.7%.

The tech-heavy Nasdaq displayed strength throughout the session after Biogen (BIIB 227.48, +0.87), Facebook (FB 34.36, +7.85), and Qualcomm (QCOM 63.42, +2.03) reported solid quarterly results. The relative strength of Biogen helped the health care sector finish among the leaders, but the outperformance of Facebook and Qualcomm had a limited effect on the technology sector, which ended little changed.

Chipmakers were able to shake off their early losses during afternoon action. The PHLX Semiconductor Index advanced 0.6%.

The afternoon rally was fueled by gains in energy, materials, and utilities. The energy sector climbed 0.5% after displaying weakness yesterday. Meanwhile, crude oil added 0.3% to $105.68 per barrel.

Elsewhere, the materials sector rose 0.9% amid broad strength. Dow Chemical (DOW 34.99, +0.62) settled higher by 1.8% after beating on earnings.

Also of note, the utilities space gained 0.9% after finishing yesterday's session at the bottom of the leaderboard.

While the Nasdaq spent the entire day in the green, the S&P's gains were limited by the underperformance of influential discretionary and industrial sectors.

Discretionary shares ended near their highs, but home builders registered losses across the board. During its earnings conference call, DR Horton's (DHI 19.38, -1.82) Chief Executive Officer commented on the recent run up in rates, saying traffic count has slowed since mortgage rates began to rise. In addition, cancellations rose to 24.0% of all orders from 19.0% reported in the prior period. DR Horton fell 8.6% while the broader iShares Dow Jones US Home Construction ETF (ITB 21.82, -0.73) dropped 3.2%.

The industrial sector was the lone decliner as transportation-related names weighed. The Dow Jones Transportation Average shed 0.1% after being down as much as 1.3% intraday. Alaska Air (ALK 60.37, -0.79) and United Continental (UAL 34.30, -0.67) registered respective losses of 1.3% and 1.9% after reporting earnings. United Continental topped its earnings estimates while Alaska Air reported a bottom-line miss on in-line revenue.

Today's economic data was limited to weekly initial claims and June durable orders.

The initial claims level increased to 343,000 for the week ending July 20 from an upwardly revised 336,000 (from 334,000) for the week ending July 13. The Briefing.com consensus expected the initial claims level to increase to 340,000. Over the past few weeks, the Department of Labor has acknowledged that its seasonal adjustments are failing to correct for layoffs in the auto and education sectors. This has caused unusual volatility in the headline claims level.

Separately, durable goods orders rose 4.2% in June after increasing an upwardly revised 5.2% (from 3.7%) in May. The Briefing.com consensus expected orders to increase 1.8%. The durables report serves as a perfect example of a strong headline number masking significant weakness that is taking effect across almost every sector.

As expected from Boeing's (BA 106.70, -0.25) orders report, transportation orders were strong in June. Orders rose 12.8% as defense and nondefense aircraft orders increased 29.2%. Outside of transportation, however, nearly every durables sector fell in June. Only machinery (+2.4%) and fabricated metals products (+0.1%) showed positive growth.

That left durable goods orders excluding transportation flat for the month after increasing 1.0% in May. The consensus expected these orders to increase 0.3%.

Tomorrow, the final Michigan Consumer Sentiment Survey for July will be released at 9:55 ET. On the earnings front, Aon (AON 67.55, +0.67), LyondellBasell (LYB 68.05, +0.63), and Wipro (WIT 8.24, +0.07) will report their quarterly results before the opening bell.DJ30 +13.37 NASDAQ +25.59 SP500 +4.31 NASDAQ Adv/Vol/Dec 1653/2.03 bln/843 NYSE Adv/Vol/Dec 1723/680.6 mln/1307

3:30 pm :

Sep crude oil fell to a session low of $104.08 per barrel in early morning floor trade. However, buyers stepped in and pushed prices up, thus erasing earlier losses. The energy component climbed to a session high of $105.87 per barrel and settled with a 5 cent gain at $105.49 per barrel
Aug natural gas spiked to a session high of $3.76 per MMBtu as inventory data showed a build of 41 bcf when a build of 45-46 bcf was anticipated. However, it quickly slid into the red where it spent the remainder of pit trade. It brushed a session low of $3.64 per MMBtu and settled at $3.65 per MMBtu,or 1.1% lower
Precious metals rose for the first time in three sessions as they got a boost from a weaker dollar index. Aug gold rose from a session low of $1317.60 per ounce and touched a session high of $1331.90 per ounce. It settled at $1328.70 per ounce, booking a gain of 0.7%
Sep silver advanced to a session high of $20.20 per ounce and eventually closed with a 0.7% gain at $20.16 per ounce

7:17PM Lattice Semi correction: Co beats by $0.01, beats on revs; guides Q3 revs in-line (LSCC) 5.03 0.00 : Earlier we compared a GAAP result to a non-GAAP estimate and said the company missed by $0.02 when, in fact, the company beat by $0.01. See corrected info below:

Reports Q2 (Jun) earnings of $0.04 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.03; revenues rose 19.6% year/year to $84.7 mln vs the $83.6 mln consensus.

Co issues in-line guidance for Q3, sees Q3 revs +/-2% sequentially, which equates to $83.0-86.4 mln vs. $83.60 mln Capital IQ Consensus Estimate.
Gross margin percentage is expected to be approximately 52% plus or minus 2%.
Total operating expenses are expected to be approximately $36.9 million, including approximately $0.8 million of expenses associated with our Q3 San Jose office move.

4:38PM Multi-Fineline lowers Q3 rev guidance; guides Q4 rev in-line (MFLX) 16.96 +0.27 : Co issues downside guidance for Q3 (Jun), lowers Q3 (Jun) rev to ~$136 mln from $155-185 mln vs. $171.83 mln Capital IQ Consensus Estimate. As a result of the lower revenues, gross margin during the third quarter of fiscal 2013 is expected to be ~(3.1) percent, compared to the Company's guidance of approximately breakeven. The Company expects to report cash and cash equivalents of $114.1 million, or $4.76 per diluted share, and $73.6 million in inventory.

Co issues guidance for Q4 (Sep), sees Q4 (Sep) revs of $195-215 mln vs. $211.93 mln Capital IQ Consensus Estimate and gross margin to range between 1 to 3 percent based on production build plans, projected sales volume and anticipated product mix.

4:22PM Microsemi beats by $0.02, reports revs in-line; guides Q4 EPS in-line, revs in-line (MSCC) 23.93 +0.39 : Reports Q3 (Jun) earnings of $0.49 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.47; revenues fell 6.4% year/year to $242.6 mln vs the $242.35 mln consensus.

GAAP gross margin was 57.0 percent, improving 30 basis points sequentially and 120 basis points over the prior year quarter. Book-to-bill was greater than 1.1, and operating cash flow was $52.6 mln.

Guidance: Co issues in-line guidance for Q4, sees EPS of $0.51-$0.55 vs. $0.52 Capital IQ Consensus Estimate; sees Q4 revs growing 2-4% sequentially, which equates to approximately $247.5-$252.3 mln vs. $251.00 mln Capital IQ Consensus Estimate.

4:00PM Microsemi awarded its largest USG contract to develop high-performance integrated circuits; co currently expects the initial award of $75 mln will contribute to revenues over the next two years (MSCC) 23.93 +0.39 :

4:17PM KLA-Tencor beats by $0.03, beats on revs (KLAC) 59.79 : Reports Q4 (Jun) earnings of $0.82 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.79; revenues fell 19.3% year/year to $720 mln vs the $705.21 mln consensus.

4:17PM QLogic beats by $0.04, reports revs in-line (QLGC) : Reports Q1 (Jun) earnings of $0.18 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.14; revenues fell 13.3% year/year to $113.1 mln vs the $113.66 mln consensus.

4:11PM Freescale Semi beats by $0.02, beats on revs; guides Q3 revs in-line (FSL) 16.30 +0.42 : Reports Q2 (Jun) earnings of $0.09 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.07; revenues rose 0.9% year/year to $1.04 bln vs the $1.02 bln consensus. Co issues in-line guidance for Q3, sees Q3 revs of $1.05-1.09 bln vs. $1.05 bln Capital IQ Consensus Estimate.

4:08PM Flextronics beats by $0.04, beats on revs; guides Q2 EPS in-line, revs in-line (FLEX) 8.14 +0.01 : Reports Q1 (Jun) adjusted earnings of $0.18 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.14; revenues fell 3.1% year/year to $5.79 bln vs the $5.48 bln consensus.

Guidance: Co issues in-line guidance for Q2, sees adjusted EPS of $0.19-$0.22 vs. $0.21 Capital IQ Consensus Estimate; sees Q2 revs of $6.1-$6.4 bln vs. $6.13 bln Capital IQ Consensus Estimate.

Share Repurchase Plan: The company recently completed its prior share repurchase plan. In addition, the Board has authorized, subject to shareholder approval at the Extraordinary General Meeting on July 29, 2013, a new share repurchase plan. Repurchases under the company's share repurchase plans are subject to an aggregate limit under Singapore law of 10% of the Company's outstanding ordinary shares as of the date of the Company's Extraordinary General Meeting. This new authorization would permit, subject to shareholder approval, the repurchase of ordinary shares up to the current maximum under the 10% limitation. Share repurchases, if any, will be made in the open market. The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable legal requirements

4:05PM Maxim Integrated misses by $0.03, misses on revs; guides Q1 EPS below consensus, revs below consensus; Authorizes new $1.0 bln share repurchase program, Quarterly dividend increased 8% to $0.26/share (MXIM) 27.42 +0.26 : Reports Q4 (Jun) earnings of $0.44 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.47; revenues rose 0.5% year/year to $608.2 mln vs the $625.78 mln consensus.

Co issues downside guidance for Q1, sees EPS of $0.37-0.41, excluding non-recurring items, vs. $0.50 Capital IQ Consensus Estimate; sees Q1 revs of $570-600 mln vs. $653.60 mln Capital IQ Consensus Estimate.

4:05PM Integrated Device beats by $0.01, beats on revs (IDTI) 8.99 +0.12 : Reports Q1 (Jun) earnings of $0.05 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.04; revenues fell 9.4% year/year to $117.98 mln vs the $115.84 mln consensus.

4:03PM Cirrus Logic beats by $0.06, misses on revs; guides Q2 revs in-line (CRUS) 20.32 +0.91 : Reports Q1 (Jun) earnings of $0.56 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of $0.50; revenues rose 56.6% year/year to $155 mln vs the $160.43 mln consensus.

Co issues in-line guidance for Q2, sees Q2 revs of $170-190 mln vs. $183.01 mln Capital IQ Consensus Estimate.

Co reported Q1 Gross margin of 51.2 percent.

Co sees Q2 Gross margin between 46 percent and 48 percent.

"During the quarter, we added new customers in portable audio and expanded into more SKUs in LED lighting. We are especially excited about the lineup of custom and general market products we currently have in development."

Large Cap Gainers

FB (32.93 +24.21%): Beat on EPS by $0.05, beat on revs; tgt raised to $40 from $35 at Cantor Fitzgerald; tgt raised to $37 from $33 at Needham; upgraded to Mkt Outperform at JMP Securities; upgraded to Overweight from Equal Weight at Evercore; upgraded to Neutral at BTIG Research; tgt raised to $40 at Cantor Fitzgerald; tgt to $46 from $40 at Goldman.
BSX (10.68 +11.13%): Beat on EPS by $0.01, beat on revs; guided Q3 revs in-line; guided FY13 revs in-line; received FDA 510(k) clearance for the Rhythmia Mapping System.
BIDU (124.5 +9.82%): Beat on EPS by $0.01, beat on revs; guided Q3 revs above consensus; upgraded to Buy from Underperform at Credit Agricole; heard upgraded to Overweight from Equal Weight at Barclays; tgt raised to $95 from $75 at Maxim.

Large Cap Losers

WDC (63.34 -6.2%): Beat on EPS by $0.15, beat on revs; guided Q1 revs to $3.7-3.8 bln vs $3.76 bln Capital IQ Consensus Estimate; guided non-GAAP Q1 EPS to $1.95-2.05 vs $2.03 Capital IQ Consensus Estimate; downgraded to Sell at Craig Hallum; target raised to $77 at Stifel.
CAM (59.94 -5.71%): Beat on EPS by $0.01, missed on revs; guided Q3 EPS below consensus; guided FY13 EPS below consensus.
SI (104.22 -5.41%): Lowered margin expectations; reports out related to potential blade breakage costs.

Mid Cap Gainers

OKE (49.86 +16.41%): Announced plan to separate its natural gas distribution business into a new publicly traded company to be called One Gas; increased quarterly dividend by 6% to $0.38 per share from $0.36 per share.
TRIP (69.54 +13.74%): Beat on EPS by $0.03, beat on revs; target raised to $80 at Monness Crespi & Hardt; heard positive comments at Pacific Crest citing TRIP comments on pay-per-book offerings; target raised to $65 at RBC Capital Mkts.
CSGP (147.92 +10.41%): Beat on EPS by $0.09, beat on revs; guided Q3 EPS above consensus, revs above consensus; raised FY13 EPS above consensus, revs above consensus.

Mid Cap Losers

PHM (16.72 -9.38%): Missed on EPS by $0.03, missed on revs; declared $0.05 quarterly dividend; increased share repurchase authorization to $352 mln from $250 mln; heard defended at UBS.
TKR (55.42 -7.54%): Missed on EPS by $0.04, missed on revs; guided FY13 EPS below consensus, revs below consensus.
DHI (19.82 -6.51%): Beat on EPS by $0.09, missed on revs.

10:40AM TriQuint Semi (+16%) trades to near 2 year high after beat and raise last night (TQNT) 7.84 +1.05 :

10:39AM Applied Micro (+19%) trades to near 7 year high after beating Q1 EPS last night (AMCC) 12.64 +2.03 :

9:03AM Interdigital Comm beats by $0.07, reports revs in-line (IDCC) 38.71 : Reports Q2 (Jun) earnings of $0.22 per share, $0.07 better than the Capital IQ Consensus Estimate of $0.15; revenues fell 5.8% year/year to $67.7 mln vs the $68.18 mln consensus.

The majority of the fixed-fee amortized royalty revenue decrease was due to the expiration of the 3G portion of our patent license agreement with Samsung at the end of 2012, which was partially offset by the addition of fixed-fee amortized royalty revenue from the Sony patent license agreement signed in fourth quarter 2012. Per-unit royalty revenue decreased $1.3 mln due to lower shipments from our Japanese per-unit licensees and one of our licensees with concentrations in the smartphone market.

Axcelis Technologies (ACLS) received an order for its Optima HDx high current implanter from one of the world's leading foundries.

8:10AM KEMET misses by $0.16, misses on revs (KEM) 4.69 : Reports Q1 (Jun) loss of $0.38 per share, excluding non-recurring items, $0.16 worse than the Capital IQ Consensus Estimate of ($0.22); revenues fell 9.3% year/year to $202.7 mln vs the $205.4 mln consensus.

Co says revenue was right on forecast and indicators point to a slight increase in Q2 (Sep), CapIQ consensus for Q2 is $211.4 mln. "This quarter saw the full impact on our financial results of the raw material supply chain disruption that occurred in our last quarter. However, we have corrections underway and this area is under our control....I expect to see good improvement in our operating margins this next quarter as we get our Tantalum raw material supply back on track and our European business rolls into its final stage of reorganizing into low-cost countries. A little assistance from an improving economy would be appreciated, but we expect a significant positive change to our financial results this fiscal year even with the economy just moving sideways."

8:08AM Silicon Labs reports EPS in-line, misses on revs; guides Q3 revs below consensus (SLAB) 44.65 : Reports Q2 (Jun) earnings of $0.50 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.50; revenues rose 4.3% year/year to $141.5 mln vs the $143.61 mln consensus. Co issues downside guidance for Q3, sees Q3 revs of $144-149 mln vs. $152.21 mln Capital IQ Consensus Estimate.

8:04AM Ixys misses by $0.07, reports revs in-line (IXYS) 11.94 : Reports Q1 (Jun) earnings of $0.06 per share, $0.07 worse than the Capital IQ Consensus Estimate of $0.13; revenues fell 12.0% year/year to $71.2 mln vs the $70.81 mln consensus.

"We see signs of muted recovery in global markets, led by resumption of spending trends in the U.S. and select European countries. Optimism in the marketplace inevitably leads to customer confidence, as evidenced by our recent two quarters of sales growth. If markets continue to follow this trend, we can expect revenues for the September 2013 quarter to be 10% to 12% higher than those of the June 2013 quarter,"

F5 Networks (FFIV 88.25, +6.83) is +8.4% after beating on earnings and revenue.

Qualcomm (QCOM 62.99, +1.60) is +2.6% after reporting in-line earnings on better-than-expected revenue.

Western Digital (WDC 64.20, -3.33) is -4.9% after the company's cautious first quarter guidance overshadowed its earnings and revenue beat.

Xilinx (XLNX) announced that its 7 Series GTH transceiver successfully completed testing for 10GBASE-KR LogiCORE IP at the University of New Hampshire InterOperability Laboratory, validating that it fully meets UNH-IOL's receiver and transmitter electrical and protocol compliance tests for backplane applications.

7:04AM Benchmark Elec beats by $0.04, beats on revs; guides Q3 EPS in-line, revs above consensus (BHE) 21.54 : Reports Q2 (Jun) earnings of $0.31 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.27; revenues fell 3.6% year/year to $607.52 mln vs the $573.39 mln consensus. Co issues guidance for Q3, sees EPS of $0.28-0.32, excluding non-recurring items, vs. $0.29 Capital IQ Consensus Estimate; sees Q3 revs of $590-620 mln vs. $582.34 mln Capital IQ Consensus Estimate.

10:58 am Labor Market Conditions Remain Steady Amid Volatile Initial Claims Data
The initial claims level increased to 343,000 for the week ending July 20 from an upwardly revised 336,000 (from 334,000) for the week ending July 13. The Briefing.com consensus expected the initial claims level to increase to 340,000.Over the past few weeks, the DOL has acknowledged that its seasonal adjustments are failing to correct for layoffs in the auto and education sectors. This has caused unusual volatility in the headline initial claims level.Smoothing out the data, however, reveals steady labor market conditions that are primed for payroll growth in the neighborhood of 175,000 -- 200,000 jobs each month.The continuing claims level fell from 3.116 mln for the week ending July 6 to 2.997 mln for the week ending July 13. The consensus expected the continuing claims level to fall to 2.993 mln.

10:58 am Strong Demand for Aircraft Masks an Otherwise Disappointing Durables Report
Durable goods orders rose 4.2% in June after increasing an upwardly revised 5.2% (from 3.7%) in May. The Briefing.com consensus expected orders to increase 1.8%.The durables reports is a perfect example where a strong headline number can mask significant weakness that is taking effect across almost every sector.As expected from Boeing's (BA) orders report, transportation orders were strong in June. Orders rose 12.8% as defense and nondefense aircraft orders increased 29.2%.Outside of transportation, however, nearly every durables sector fell in June. Only machinery (+2.4%) and fabricated metals products (+0.1%) showed positive growth.That left durable goods orders excluding transportation flat for the month after increasing 1.0% in May. The consensus expected these orders to increase 0.3%.Business investment demand remained on a positive track due to the strong gain in machinery orders. Orders of nondefense capital goods excluding aircraft rose 0.7% in June after increasing 2.2% in May. Unfortunately, that gain will likely not translate into stronger second quarter GDP numbers. Shipments of these goods, which factor into GDP, fell 0.9% after increasing 1.9% in May.There is some hope for stronger-than-expected growth in Q3 2013. The level of unfilled orders of nondefense capital goods excluding aircraft rose 1.7% in June after increasing 1.2% in May. Unless firms see sizable cancelations over the next few months, that should give producers ample space to ramp up production.

08:53 am Sequenom shares plunge 36% following miss on earnings
Sequenom (SQNM $2.98 -1.72) reported a second quarter loss of $0.27 per share, which missed expectations, while revenues rose 91.0% year/year to $34.85 million which also missed expectations. "Along with many other companies in the diagnostics industry, Sequenom CMM experienced delays in receipt of payments as a result of molecular diagnostics coding changes adopted by CMS, Medicaid and third party payors. These changes include the elimination and replacement of certain molecular diagnostics billing codes.

Several payors are requesting additional information to process claims for services, and certain payors, including most state Medicaid plans, have not implemented the new codes, or in some cases are no longer providing coverage for certain tests. In addition to the impact of these coding changes, Sequenom CMM transitioned from an out-sourced billing provider to an in-house billing system during the quarter, and lower than expected collections by the external billing provider also contributed to the decline in diagnostic revenues."

08:51 am Visa shares rise 2% following better than expected earnings
Visa (V $190.50 +3.75) reported third quarter earnings of $1.88 per share, which was ahead of estimates, while revenues rose 17.0% year/year to $3 billion which was also ahead of expectations. Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2013, on which fiscal third quarter service revenue is recognized, was 9% over the prior year at $1.0 trillion. Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2013, was 13% over the prior year at $1.1 trillion. Cross-border volume growth, on a constant dollar basis, was 11% for the three months ended June 30, 2013.

Total processed transactions, which represent transactions processed by VisaNet, for the three months ended June 30, 2013, were 15.0 billion, a 14% increase over the prior year. The company raised fiscal year 2013 EPS to lows 20s % growth from ~20, net rev growth to ~13% from low double digits. The company affirmed fiscal year 2014 financial outlook: Annual net revenue growth: Low double digits; Adjusted annual diluted class A common stock earnings per share growth: Mid to high teens; and Annual free cash flow: About $5 billion. In addition, the Board of Directors has authorized a new $1.5 billion class A share repurchase program. The authorization will be in place through July 2014, and is subject to further changes at the discretion of the Board.

08:50 am Facebook shares soar 26% as the market likes its earnings beat and mobile metrics
Facebook (FB $33.59 +7.07) reported second quarter earnings of $0.19 per share, which was better than expected, while revenues rose 53.1% year/year to $1.81 billion which was ahead of expectations.

Key Metrics:

Daily active users (DAUs) were 699 million on average for June 2013, an increase of 27% year-over-year.
Monthly active users (MAUs) were 1.15 billion as of June 30, 2013, an increase of 21% year-over-year.
Mobile MAUs were 819 million as of June 30, 2013, an increase of 51% year-over-year. Mobile DAUs were 469 million on average for June 2013.
Mobile advertising revenue represented ~41% of advertising revenue for the second quarter of 2013 versus expectations of ~32.5%.
GAAP operating margin was 31% for the second quarter of 2013, compared to negative 63% in the second quarter of 2012.
Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 44% for the second quarter of 2013, compared to 43% for the second quarter of 2012.

08:48 am Bidu shares soar 17% following beat on earnings
Baidu.com (BIDU $133.02 +19.65) reported second quarter earnings of $1.22 per share, which was better than expected, while revenues rose 43.6% year/year to $1.23 billion which also topped expectations. The company issued guidance for the third quarter with revenues of $1.422-1.460 billion which is ahead of expectations. Online marketing revenues for the second quarter of 2013 were RMB7.539 billion ($1.228 billion), representing a 38.3% increase from the corresponding period in 2012. Baidu had about 468,000 active online marketing customers in the second quarter of 2013, representing a 33.0% increase from the corresponding period in 2012 and a 14.1% increase from the first quarter of 2013.

Revenue per online marketing customer for the second quarter was approximately RMB16,100 ($2,623), a 3.9% increase from the corresponding period in 2012 and an 11.0% increase compared to the first quarter of 2013. Traffic acquisition cost (TAC) as a component of cost of revenues was RMB880.0 million ($143.4 million), representing 11.6% of total revenues, as compared to 8.3% in the corresponding period in 2012 and 10.2% in the first quarter of 2013. The increase mainly reflected increased contextual ads contributions and hao123 promotions through our network. Bandwidth costs as a component of cost of revenues were RMB457.3 million ($74.5 million), representing 6.0% of total revenues, compared to 4.4% in the corresponding period in 2012.

Depreciation costs as a component of cost of revenues were RMB357.0 million ($58.2 million), representing 4.7% of total revenues, compared to 4.5% in the corresponding period in 2012. The increase was mainly due to an increase in network infrastructure capacity. Content costs as a component of cost of revenues were RMB150.7 million ($24.5 million), representing 2.0% of total revenues, compared to 0.6% in the corresponding period in 2012, and 1.6% in the previous quarter. The year-over-year increase was mainly due to the inclusion of iQiyi's content costs.

08:46 am Qualcomm shares rise 4% following beat on revenues
Qualcomm (QCOM $61.39 ) reported third quarter earnings of $1.03 per share, which is in line with expectations, while revenues rose 35.0% year/year to $6.24 billion which was also ahead of estimates. The company issued guidance for the fourth quarter with adjusted EPS of $1.02-1.10 which is in line with expectations with revenues of $5.9-6.6 billion which is also in line with expectations.

Q3 Key Business Metrics MSM chip shipments: 172 million units, up 22 percent y-o-y and down 1 percent sequentially. March quarter total reported device sales: ~$56.5 billion, up 18 percent y-o-y and down 8 percent sequentially. March quarter estimated 3G/4G device shipments: ~244 to 248 million units, at an estimated average selling price of approximately $227 to $233 per unit.

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 02-Aug-13

Dow +30.34 at 15658.36, Nasdaq +13.84 at 3689.59, S&P +2.80 at 1709.67

The S&P 500 ended today's session with a modest gain of 0.2% after spending the entire day in a slow climb off its opening lows. The opening slip took place as investors reacted to a weaker-than-expected July jobs report.

Nonfarm payrolls added 162,000 jobs after adding a downwardly revised 188,000 (from 195,000) in June. The Briefing.com consensus expected 175,000 new payrolls. The report proved to be a disappointment as not only did payroll growth come in below expectations, but the average workweek dropped to 34.4 hours from 34.5 and average hourly earnings declined 0.1%. Altogether, aggregate wages fell 0.3%, which will put substantial downside pressure on retail sales growth.

Meanwhile, the unemployment rate dropped to 7.4% from June's rate of 7.6%. The consensus expected the unemployment rate to fall to 7.5%. However, the labor participation rate fell to 63.4% from June's 63.5%, causing about half of the decline in the unemployment rate.

Although stocks moved lower initially, the S&P erased almost all of its early losses as participants fell back on the Federal Reserve's pledge to provide support to the markets for as long as economic data continues to paint a lukewarm picture.

Treasuries appeared to be in agreement with this assessment as the benchmark 10-yr yield fell 12 basis points to 2.60%, erasing all of yesterday's spike.

The recovery effort in equities was assisted by the relative strength of consumer discretionary, materials, and technology sectors. The three groups gained between 0.5% and 0.7% with the discretionary space in the lead as home builders displayed broad strength. Ryland Group (RYL 41.14, +1.82) was the top performer among major builders while the broader iShares Dow Jones US Home Construction ETF (ITB 22.71, +0.44) advanced 2.0%.

Elsewhere, the materials sector rose 0.6% as steelmakers rallied. The Market Vectors Steel ETF (SLX 41.44, +0.24) added 0.6% to extend its climb off late June lows to 13.7%.

Technology shares traded in-line with the broader market at the open, but the sector's daylong climb off lows helped the Nasdaq outperform with a gain of 0.4%. The top sector (and Nasdaq) component, Apple (AAPL 462.54, +5.86), did its part in the rebound, climbing 1.3%. However, chipmakers sat out the tech rally and the PHLX Semiconductor Index dropped 0.7%.

While the S&P 500 managed to erase its opening losses, the index was held back from additional gains by the underperformance of the energy sector, which dropped 0.6% as crude oil slid 1.1% to $106.74 per barrel. On the earnings front, Dow component Chevron (CVX 124.95, -1.49) fell 1.2% after missing on earnings and revenue.

In today's remaining data, June personal income increased 0.3% while the Briefing.com consensus expected income levels to increase 0.5%. Separately, spending increased 0.5% in June against the consensus expectation of a 0.4% increase. The personal income and spending data for June were already incorporated in the Q2 2013 GDP data. None of these data will have any impact on future revisions.

On Monday, the July ISM Services report will cross the wires at 10:00 ET.

Week in Review: S&P 500 Overtakes 1,700

On Monday, the S&P 500 settled lower by 0.4% as eight of ten sectors registered losses. Equities began the session in negative territory after the third consecutive decline in Japan's Nikkei contributed to the cautious sentiment. With few earnings of note and no market-moving economic data, the session proved to be relatively quiet as investors prepared for an active week of economic data.

Tuesday's session saw little change in the S&P 500 while the Nasdaq advanced 0.5%. The S&P notched its high at the open before spending the rest of the session in a steady retreat. The selling intensified during afternoon action, sending the S&P into the red as participants displayed caution ahead of Wednesday's advance second quarter GDP report and the latest policy statement from the Federal Reserve. Energy and materials lagged from the open, and they finished behind the remaining cyclical sectors.

The S&P 500 ended Wednesday flat after being unable to clear the 1,700 level, which has presented stern resistance over the past few sessions. Stocks held slim gains into the afternoon when the latest policy directive from the Federal Open Market Committee sent the Nasdaq and S&P to fresh highs. The two indices were unable to maintain those levels into the close as broad-based weakness pressured the major averages to their lows. The FOMC policy statement did not offer many surprises. As expected, the Committee decided to maintain its current policy stance in order to continue supporting the economic recovery. The Committee also said it expects a pick-up in growth from the recent pace, and that inflation below the Fed's 2.0% target could present a risk to economic performance. On a related note, the advance second quarter GDP report surpassed expectations with a reading of 1.7% against a downwardly revised first quarter growth rate of 1.1%. The Briefing.com consensus expected the second quarter reading to come in at 1.1%.

On Thursday, the major averages settled near their highs as better-than-expected Manufacturing PMI data out of China (50.3 actual, 49.9 expected), the eurozone (50.3 actual, 50.1 expected), and the U.S. (53.7 actual, 53.1 expected) helped entice investors into bidding up global equities. The S&P 500 jumped above 1,700, a level the index had struggled with in the past few sessions, and registered a record high close of 1706.81. After jumping above 1,700 shortly after the opening bell, the S&P spent the remainder of the session trading in a seven-point range. Growth-oriented sectors displayed broad strength with financials and industrials pacing the advance.

 
 Index	    Started Week  Ended Week  Change  %Change  YTD % 
 DJIA	     15558.83	  15658.36    99.53	0.6   19.5 
 Nasdaq	      3613.16	   3689.59    76.43	2.1   22.2 
 S&P 500	1691.65	   1709.67    18.02	1.1   19.9 
 Russell 2000  1047.66	   1059.84    12.18	1.2   24.8

This week's top 20 % gainers

Technology: ATVI (18.08 +19.89%), GIB (33.88 +13.65%), SYMC (26.52 +10.1%), CTRX (58.23 +9.19%), FB (38.05 +9.11%)
Services: MW (30.86 +13.5%), LTD (58.4 +8.08%), MPEL (26.19 +8.05%)
Industrial Goods: CNH (48.37 +9.28%), ROK (100.1 +8.52%), FAST (50.24 +8.37%)
Healthcare: ALXN (117.28 +8.97%)
Financial: PFG (44.37 +10.85%), MA (645.57 +7.91%)
Consumer Goods: BUD (98.15 +10.14%), TSLA (138 +9.25%)
Basic Materials: PXD (181.21 +12.53%), CHK (24.95 +10.45%), EMN (82.41 +9.05%), CF (193.34 +8.81%)

Thsi week's top 20 % losers

Technology: VIT (10.19 -5.91%), CCI (69.3 -5.52%)
Services: HTZ (24.99 -7%)
Healthcare: VRTX (79.44 -7.87%)
Financial: BCS (17.46 -11.01%), V (184 -7.93%), HCP (42.81 -6.84%), HDB (33.35 -6.52%), VTR (64.95 -6.41%), ING (7.97 -5.68%), IBN (32 -5.49%)
Consumer Goods: COH (53.33 -10.46%)
Basic Materials: POT (28.91 -21.26%), MOS (40.98 -19.86%), JAG (6.64 -8.29%), TAT (1.25 -6.72%), RDS-B (66.75 -6.07%), TLM (11.19 -5.88%), HDY (3.22 -5.85%), REN (12.82 -5.8%)

1:43PM Dell: Icahn issues statement; says 'we will continue to vigorously pursue our lawsuit in the Delaware Court of Chancery' (DELL) 13.65 +0.69 : Carl C. Icahn issued the following statement regarding Dell: "In every war there are many battles. We are pleased today to have won yet another battle, but the war regarding Dell is far from over. Through its actions today, the Special Committee has finally acknowledged publicly what we have been saying all along - that Michael Dell's offer substantially undervalues the company. Obviously Mr. Dell's previous characterization of his offer as "best and final" was neither. However, we are not satisfied - we believe that an increase of a mere 13 cents is an insult to shareholders. And promising shareholders an additional 8-cent dividend that we were already entitled to, and pretending that it is some sort of gift, is a further slap in the face. We also continue to believe that the Special Committee is improperly putting its thumb on the scales in favor of Mr. Dell's offer by changing the voting rules midstream and by refusing to hold the Special Meeting and the Annual Meeting on the same date and time - the only mechanism that would give shareholders a true choice. As such, we will continue to vigorously pursue our lawsuit in the Delaware Court of Chancery. We believe this lawsuit has now become of paramount importance. It is crucial that the Special Meeting and the Annual Meeting be held on the same date and time and that the same record date be used for both meetings. This is particularly significant due to the large number of shares that are now in the hands of arbitrageurs."

Large Cap Gainers

LNKD (235.91 +10.76%): Beat quarterly EPS by $0.07 ($0.38 ex items vs $0.31 estimate), revs rose 59.4% yoy to $363.7 mln vs $354.26 mln estimate; sees Q3 revs of $367-373 mln vs $384.37 mln estimate; sees FY13 revs of $1.455-1.475 bln (raised from $1.43-1.46 bln) vs $1.50 bln estimate; upgraded at Cantor Fitzgerald; target raised at Goldman, Piper Jaffray, among others
MYL (36.46 +7.30%): Upgraded to Outperform from Market Perform at Cowen; upgraded to Overweight from Equal-Weight at Morgan Stanley; downgraded to Buy from Strong Buy at Needham, target raised to $40 from $34
VIAB (78.7 +5.84%): Missed quarterly EPS by $0.01 ($1.29 vs $1.30 estimate), revs rose 13.9% yoy to $3.69 bln vs $3.58 bln estimate

Large Cap Losers

ETN (65.86 -5.82%): Missed quarterly EPS by $0.02 ($1.09 vs $1.11 estimate), revs rose 37.7% yoy to $5.6 bln vs $5.77 bln estimate; sees Q3 EPS of $1.05-1.15 ex items vs $1.22 estimate; sees FY13 EPS of $4.05-4.25 ex items (lowered from $4.05-4.45) vs $4.35 estimate
MPC (71.75 -4.45%): Missed quarterly EPS by $0.03 ($1.95 vs $1.98 estimate), revs rose 26.9% yoy to $25.7 bln vs $23.12 bln estimate; downgraded to Neutral from Outperform at Macquarie
WPZ (50.05 -3.97%): Priced offering of 21.5 mln common units representing limited-partner interest at $49 per unit

Mid Cap Gainers

YELP (57.56 +11.77%): Continued strength followin strong Q2 earnings and multiple analyst upgrades and price target raises
TRQ (4.87 +9.19%): Reuters reporting that Rio Tinto does not need to seek Mongolian parliamentary approval to finance the development of an underground mine at the Oyu Tolgoi copper project; Oyu Tolgoi is 66% owned by TRQ
SEE (30.23 +8.42%): Beat quarterly EPS by $0.10 ($0.35 ex items vs $0.25 estimate), revs rose 1.9% yoy to 41.96 bln vs $1.97 bln estimate; reaffirmed FY13 EBITDA and EPS guidance toward high end of previously provided ranges

Mid Cap Losers

WTW (38.35 -18.46%): Beat quarterly EPS by $0.10 ($1.39 ex items vs $1.09 estimate), revs fell 4.1% yoy to $465.1 mln vs $460.41 mln estimate; sees FY13 EPS of $3.55-3.70 (lowered from $3.60-3.90) vs $3.70 estimate
MRC (23.85 -12.15%): Beat quarterly EPS by $0.05 ($0.43 vs $0.38 estimate), revs fell 11.4% yoy to $1.27 bln vs $1.29 bln estimate; sees FY13 EPS of $1.65-1.85 (lowered from $2.10-2.30) vs $1.94 estimate, sees FY13 revs of $5.1-5.3 bln (lowered from $5.75-5.95 bln) vs $5.52 bln estimate; downgraded to Market Perform from Outperform at Raymond James
CFN (35.51 -8.83%): Smiths confirmed that it has terminated discussions with CFN regarding a potential agreement for Smiths' Medical devision

9:48AM Market View: Semis a notable laggard in the tech. sector early with SMH now -1% & SOXX now -0.90% as XLNX, BRCM, INTU, MCHP, LLTC, & STX weigh in the NDX 100 (TECHX) :

[ReturntoSender]

InvestmentHouse Weekend Market Summary:

http://www.investmenthouse.com/weekendmarketsummary.htm

- Another session of feeling out near support, looking a bit top heavy.
- Indices finish the week still testing, unable to find the buyers to make the bounce.
- The news was just about as exciting as the session: China make believe data, Japan's debt marvel, wholesale inventories not moving.
- Leadership shows some breaks, but there are still a lot of great looking leaders in pullbacks to support.
- Investors now have to decide if the economy can make it on its own without $85B/month.

Definition of a boring session: Friday. Oh it had promise. Yes futures were lower after Thursday's bounce from three down sessions, but they moved up into the open and indeed stocks rallied to positive as trade opened up. Then, once again, the bids dried up and so did the gains. An hour and one-half later and stocks were negative. So much for Thursday's thrust upward.

But even the sellers didn't want to hang around Friday. Stocks bounced back though never made it to positive. They hit the afternoon recovery high right after lunch and then just wandered back down into the close. No bids, no sellers, just late summer Friday blahs.

SP500 -6.06, -0.36%
NASDAQ -9.01, -0.25%
DJ30 -72.81, -0.47%
SP400 0.05%
RUTX -0.10%
SOX -0.54%

Volume: At least it slipped on the session. -6.8% NYSE, -13% NASDAQ.
Breadth: Flat and that is that. But not a bad showing, matching the market.

THE NEWS

The news was along the lines of the overall session: not enough to get a rise out of anyone.

China reported stronger industrial production that topped expectations. That combined with the higher export data from Thursday managed to provide . . . no lift. It would appear that China has overinflated its data just a few too many times for anyone to really believe it. Thus the underwhelming response.

More earnings were out but with the season all but over the damage/gains were pretty much specific to the stocks reporting. Thus far SP500, with 442 SP500 companies reported, has 72% beating the bottom line and 56% beating the top line. Once again its all about cost cutting and not much about sales growth.

Japan's debt reached past one quadrillion yen (1,000,000,000,000,000). Impressively bad news.

June Wholesale inventories fell 0.2%. Perhaps buying surged, emptying out inventories? Well the inventory to sales ratio did fall to 1.17 from 1.18 months, but sales were meager at 0.4%. No surge in buying as there was 1.5% in May. Kind of makes you wonder about all that surging manufacturing and exports and general economic surge we are supposedly enjoying. Just a little bit. Nothing to get worried over. Nothing at all.

THE MARKET

OTHER MARKETS

Dollar rebounded modestly: 1.3341 versus 1.3384 versus 1.3341 versus 1.3305 versus 1.3259 euro. Modest gain as the dollar bounces off support after a week of getting drummed.

Bonds ticked higher: 2.58% versus 2.59% versus 2.60% versus 2.64% versus 2.64% versus 2.60% ten year. Modest moved higher all week, but just edging upside. Relief move and rather contrary to the notion the Fed will start a taper soon.

Oil rebounded after selling: 105.97, +2.57. Jumped after the Thursday tap of the 50 day EMA and rebound.

Gold adds a bit: 1312.20, +2.30. Not much left after a good blast higher Thursday.

TECHNICAL SUMMARY

INTERNALS

NASDAQ
Stats: -9.02 points (-0.25%) to close at 3660.11
Volume: 1.531B (-12.76%)

Up Volume: 712.73M (-307.27M)
Down Volume: 812.38M (+166.22M)

A/D and Hi/Lo: Decliners led 1.5 to 1
Previous Session: Advancers led 1.44 to 1

New Highs: 128 (-7)
New Lows: 24 (+1)

S&P
Stats: -6.06 points (-0.36%) to close at 1691.42
NYSE Volume: 575M (-6.81%)

Up Volume: 1.48B (-920M)
Down Volume: 1.5B (+652.71M)

A/D and Hi/Lo: Advancers led 1.03 to 1
Previous Session: Advancers led 2.1 to 1

New Highs: 157 (-33)
New Lows: 162 (+8)

DJ30
Stats: -72.81 points (-0.47%) to close at 15425.51

THE CHARTS

As for the indices it was more of the same, but that was not necessarily good for all. Most of the indices look heavy, and the risk/reward right here is not as good. Still holding the trends, but has rallied well and the move has slowed to a crawl as volume falls as the late summer doldrums hit with the indices at a peak.

SP500: Fine with a third straight test of the 20 day EMA and a third straight bounce off that level. Some buyers are still there pushing at that near support even if the index didn't turn back to positive. Now SP500 has basically the same pattern as RUTX and SP400 in that short head and shoulders, working on what could be the right shoulder. These things often don't fully develop, but the bottom line is that the recent action is heavy even if SP500 is still holding its near support and its trend. Hanging in the uptrend but it still has to show it can overcome the heaviness and continue.

NASDAQ: Held the 10 day EMA also for the third session. Just below the upper channel line, also holding in its trend. Last time NASDAQ moved over the upper channel line in May, that was the peak of that leg and it put in a four week pullback. MACD put in a lower high on the last peak similar to the other indices. NASDAQ remains in its uptrend and near its recovery highs, but it too is heavy.

DJ30: Sold further below the 50 day EMA and indeed reached toward the 50 day EMA before rebounding to cut the losses. That rebound brought the Dow back to the mid-May closing highs. A great place for the Dow to hold and continue higher, and that move would help break up any potential head and shoulders.

SP400: Modest gain for the second session, again nothing really to change the pattern. Looks decent holding the 20 day EMA and can put in a higher low here, but it also has not broken up the potential head and shoulders. Trying to bounce off near support, still in the uptrend, but thus far not ready to really try to move higher again. Indeed it gave up the last break higher similar to SP500.

RUTX: Very similar to SP400, but showing a second tight doji at the 20 day EMA. Also the potential head and shoulders, but also those often don't consummate. Just heavy, however, with the lower MACD and the inability to hold the break higher from just over a week back.

SOX: Lost some more ground and fell to close just below the 50 day EMA. Still can put in a higher low over the late July low, but as with the other indices, SOX is heavier right now, unable to launch off support. Indeed, it is not really trying just now, as its hands are full simply trying to hang on.

LEADERSHIP

There were some breakdowns, e.g. WWWW and others look heavy, e.g. WWW, SLB, MNKD, LOPE.

At the same time, there are leaders that are setting up beautifully. Recall we said a test would set up some solid names in position. It is. Now these leaders need to live up to their leader status and make the new upside break and make it stick.

AMZN, EVR; ATHN; CELG; KKD; NFLX; NUS; SBUX; VMW; VRX; WBMD; YNDX; ZMH. They are out there.

SENTIMENT INDICATORS

VIX: 13.41; +0.68
VXN: 13.63; +0.37
VXO: 12.63; +0.96

Put/Call Ratio (CBOE): 0.9; +0.14

Bulls and Bears:

Bulls faded just a bit while bears again held basically steady as both sides wait out the consolidation in the market after that last run. Good break upside Thursday in the midst of the caution.

Bulls: 48.4% versus 51.5% versus 52.1% versus 46.9% versus 43.8% versus 41.7% versus 46.8% versus 43.8% versus 45.8% versus 52.1% versus 54.2% versus 52.1% versus 47.9% versus 44.3% versus 47.4% versus 50.5%.

Background: Undercut 35%, the threshold for bullishness, in early June. As noted, hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 19.6% versus 19.6% versus 19.8% versus 22.9% versus 25.0% versus 21.9% versus 22.9% versus 20.8% versus 19.8% versus 19.8% versus 19.8% versus 18.8% versus 19.6% versus 20.6% versus 20.6% versus 19.4% versus 19.6% versus 18.6% versus 18.8% versus 21.1% versus 21.1% versus 22.1% versus 21.1% versus 21.1% versus 22.3% versus 22.3% versus 23.4% versus 24.5% versus 24.5% versus 23.4% versus 25.5% versus 27.7% versus 27.7% versus 28.7% versus 27.7%.

Summary: Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

MONDAY

It is late summer, hot, people are on vacation, earnings are mostly done, the major economic data for the month is out, and the general consensus is the Fed starts to taper sooner than thought (except for us, right?), likely in September. As you recall, we figured investors would have to come around to that conclusion and our worry was it would not be a pretty thing for the market if it was not determined until the meeting. This 'early' realization helps it prepare, and indeed the loss to this point has been very well contained.

The fate of the market, more or less, is this: do investors and the new money coming into the market believe that without $85B/month that the economy can 'continue' to 'grow' and thus allow for pricing in future earnings growth versus future QE injections being needed to keep things afloat? That is the key question. Can the economy sustain, as a first step, the limited economic growth it has 'enjoyed' during huge QE injections, and, as would be necessary, actually grow beyond it.

For now the market is pondering that question as it fades. Again it is holding up nicely all things considered, but it has not answered this test yet as the modest Thursday bounce and sluggish Friday nothing session left them in the same near term heavy position. Leadership is hanging in as well, but it is spotty and the leaders are themselves testing. Again, the risk/reward is not that great for the upside right now until this test and these near term bearish patterns resolve.

Have a great weekend!

Support and resistance

NASDAQ: Closed at 3660.11

Resistance:
3676 is the upper channel line for the November 2012 to present uptrend.
Next major resistance is around 4100 as NASDAQ hits 13 year highs

Support:
The 10 day EMA at 3652
The July 2013 intraday high at 3625
3591 is the November 2012 up trendline
The 50 day EMA at 3538
3532 is the May intraday high
3521 is the August 2000 low.
3502 is the May 2013 closing high
The 2011 up trendline at 3324
3295 is the June 2013 low selloff
The 200 day SMA at 3250
3227 is the April 2000 intraday low
3197 is the September 2012 post-bear market high
3171 is the October intraday high

S&P 500: Closed at 1691.42

Resistance:
The November up trendline at 1724

Support:
The 20 day EMA at 1686
1687 is the May high and post-bear market high
The 50 day EMA at 1661
1654 is the June 2013 peak
1576 from October 2007, the prior all-time high
1569.48 is the 78% Fibonacci retracement of the April to May 2013 run
1560 is the June 2013 reversal low
1556 from July 2007
The 200 day SMA at 1543
1541 is the April 2013 closing low in that pullback inside the uptrend
1539 from June 2007
1531 is the recent high
1499 from January 2008
1475 is the September 2012 high
1471 is the October 2012 intraday high
1466 is the September 2012 closing peak and rally closing high
1440 from November 2007 closing lows

Dow: Closed at 15,423.15

Resistance:
15,542 is the May 2013 intraday high
The November up trendline at 16,029

Support:
15,318 is the June closing high
The 50 day EMA at 15,308
14,888 is the April peak and prior all-time high
14,844 is the June intraday low
14,551 is the June 2013 intraday low on the selloff
The 200 day SMA at 14,285
14,198 from the October 2007 high
14,149 is the February 2013 high
14,022 from 7-07 peak
14,010 from the early February 2013 consolidation

Economic Calendar

August 9 - Friday
- Wholesale Inventories, June (10:00): -0.2% actual versus 0.4% expected, -0.6% prior (revised from -0.5%)

August 12 - Monday
- Treasury Budget, July (14:00): -$96.0B expected, -$69.6B prior

August 13 - Tuesday
- Retail Sales, July (8:30): 0.2% expected, 0.4% prior
- Retail Sales ex-auto, July (8:30): 0.3% expected, 0.0% prior
- Export Prices ex-ag., July (8:30): -0.2% prior
- Import Prices ex-oil, July (8:30): -0.3% prior
- Business Inventories, June (10:00): 0.1% expected, 0.1% prior

August 14 - Wednesday
- MBA Mortgage Index, 08/10 (7:00): 0.2% prior
- PPI, July (8:30): 0.3% expected, 0.8% prior
- Core PPI, July (8:30): 0.2% expected, 0.2% prior
- Crude Inventories, 08/10 (10:30): -1.320M prior

August 15 - Thursday
- Initial Claims, 08/10 (8:30): 339K expected, 333K prior
- Continuing Claims, 08/03 (8:30): 3000K expected, 3018K prior
- CPI, July (8:30): 0.2% expected, 0.5% prior
- Core CPI, July (8:30): 0.2% expected, 0.2% prior
- Empire Manufacturing, August (8:30): 6.0 expected, 9.46 prior
- Net Long-Term TIC Fl, June (9:00): -$27.2B prior
- Industrial Production, July (9:15): 0.4% expected, 0.3% prior
- Capacity Utilization, July (9:15): 78.0% expected, 77.8% prior
- Philadelphia Fed, August (10:00): 10.0 expected, 19.8 prior
- NAHB Housing Market , August (10:00): 57 expected, 57 prior
- Natural Gas Inventor, 08/10 (10:30): 96 bcf prior

August 16 - Friday
- Housing Starts, July (8:30): 895K expected, 836K prior
- Building Permits, July (8:30): 934K expected, 911K prior
- Productivity-Preliminary, Q2 (8:30): 0.0% expected, 0.5% prior
- Unit Labor Costs, Q2 (8:30): -0.3% expected, -4.3% prior
- Michigan Sentiment, August preliminary (9:55): 85.1 expected, 85.1 prior

[ReturntoSender]

From Briefing.com: 4:20 pm : The major averages settled on their lows after broad-based selling persisted throughout the session. Sellers were in control, reacting to the increased likelihood of U.S. military involvement in Syria.

In addition, investors exhibited caution amid news indicating the debt ceiling will be reached in mid-October and that Congress has yet to begin budget negotiations ahead of the new fiscal year, which begins October 1.

The S&P 500 fell 1.6% to end below its 100-day moving average for just the second time this year. Small caps endured even more selling as the Russell 2000 lost 2.4%.

Global equities sold off ahead of the U.S. open while commodities received an overnight bid that held throughout the session. Concerns over possible supply interruptions helped crude oil end at its highest level in more than a year, climbing 2.8% to $108.84 per barrel. Elsewhere, gold futures rose 1.6% and silver advanced 2.0% to $1415.50 and $24.50 per troy ounce, respectively.

Similar to oil and precious metals, Treasuries were on the receiving end of safe-haven flows with the benchmark 10-yr yield sliding eight basis points to 2.72%.

The retreat in yields helped rate-sensitive telecom services and utilities end little changed. However, other sectors were not as fortunate as six groups lost more than 1.0%, and two of those six fell more than 2.0% apiece.

Intraday rebound attempts never gathered steam as two top-weighted sectors, financials and technology, led to the downside with respective losses of 2.4% and 2.0%. The weakness in technology was notable as the sector had provided notable leadership in recent days.

Elsewhere, industrials also finished among the laggards as transportation-related companies underperformed. The Dow Jones Transportation Average fell 2.6% as airlines displayed significant weakness. Delta Air Lines (DAL 19.11, -1.16) and United Continental (UAL 27.71, -2.15) tumbled 5.7% and 7.2%, respectively.

While most cyclical sectors ended behind the broader market, the energy space outperformed with a loss of 0.6% as the surge in crude contributed to the sector's strength.

Broad losses across the major averages sent the CBOE Volatility Index (VIX 16.76, +1.77) to its highest level since early July as investors scrambled to buy protection.

Today's session was the most active since August 16, and fifth most active this month, as 683 million shares changed hands on the floor of the New York Stock Exchange.

Looking back at the day's economic data, consumer confidence improved in August as the Conference Board's Consumer Confidence Index increased to 81.5 from an upwardly revised 81.0 (from 80.3) in July. The Briefing.com consensus expected the index to fall to 77.0.

A sharp drop in equity prices along with weak payroll growth were expected to weigh on the Consumer Confidence Index. Instead, confidence strengthened on the back of better layoff numbers and generally positive economic media reports. It is unlikely that confidence will improve again in September. Heated budget and debt ceiling negotiations took their toll on sentiment indicators in 2011. As the media once again highlights the negative effects of a potential default or government shut down, sentiment will probably decline.

Separately, the June Case-Shiller 20-city Home Price Index rose 12.1% while a 12.0% increase had been expected by the Briefing.com consensus. This follows the previous month's increase of 12.2%.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET and July pending home sales will cross the wires at 10:00 ET.DJ30 -170.33 NASDAQ -79.05 SP500 -26.30 NASDAQ Adv/Vol/Dec 324/1.59 bln/2228 NYSE Adv/Vol/Dec 605/683.2 mln/2463

3:30 pm : A weaker dollar index and increased concerns over possible military action against Syria gave crude oil and precious metals a boost today.

The biggest gain came from Oct crude oil as the energy component climbed to a new high of the year of $109.32 per barrel, extending gains for a fourth consecutive session. It chopped around near the $109.00 per barrel level for most of today's floor trade and settled there with a solid 3.0% gain.
Dec gold traded as high as $1424.00 per ounce, its highest level since June. It booked a 2.0% gain as it closed at $1420.20 per ounce. Sep silver also advanced today and touched a session high of $24.70 per ounce. It eventually settled 2.8% higher at $24.66 per ounce.
Natural gas began floor trade in negative territory, trading as low as $3.48 per MMBtu. However, it climbed higher and erased earlier losses, closing with a 0.3% gain at $3.57 per MMBtu.

Large Cap Gainers

DCM (16.45 +1.86%): Japan related ADRs trading higher; SNE also higher.
MRO (33.66 +1.02%): Co's CFO Janet F. Clark to retire Oct. 1, 2013; Board of Directors elected John R. Sult to succeed Clark.
DTV (57.93 +0.77%): Initiated with an Outperform at Raymond James.

Large Cap Losers

RBS (10.25 -4.74%): Weakness in select EU financial names; BBVA and DB also lower.
NOK (4.01 -3.72%): Heard cautious comments at Bernstein related to cash position.
AMGN (109.78 -3.49%): Tgt raised to $115 at Barclays following ONXX purchase; Barron's profiled positive view on co.

Mid Cap Gainers

DSW (87.75 +7.91%): Beat on EPS by $0.17, reported revs in-line; reaffirmed FY14 EPS guidance; Lone Pine Capital reported 5.6% passive stake in 13G filing out last night after the close.
UBNT (34.37 +4.56%): Co won legal victory in china; counterfeiter faces long jail term.
XEC (84.36 +2.49%): Upgraded to Outperform at FBR Capital; tgt raised to $120.

Mid Cap Losers

SPWR (21.33 -6.32%): Trading lower following disappointing LDK earnings.
CIEN (20.13 -4.94%): MKM Partners reiterated its Buy rating and $28 price tgt in front of FY3Q13 due out 9/4 pre-market.
SSYS (104.25 -5.26%): Weakness attributed to Digitimes story out before the open indicating that Kinpo-Compal has released a 3D printer.

Mellanox Technologies (MLNX) announced its SX1036 36-port 40GbE switch system has been selected by Russia's BaltInfoCom as the Ethernet switch of choice to provide customers with 10GbE connectivity to servers and 40/56GbE uplinks for the next level of aggregation switching.

6:04AM JA Solar to develop 300 MW of solar power projects in Xingtai City, Hebei Province (JASO) 8.31 : Co announced that it plans to develop three solar power projects totaling 300 MW in Xingtai City in China's Hebei Province. The projects, located in Xingtai City's Lincheng, Neiqiu and Xingtai counties, will each have a capacity of 100 MW. The co has obtained approval from the Hebei Provincial Development and Reform Commission to develop the first 50 MW phase of the Lincheng County project. The Company has also signed framework agreements with local authorities pertaining to the projects in Neiqiu and Xingtai counties, and expects to receive rights to develop such projects by the end of this year
07:36 am LDK Solar shares lower 2% miss on earningsLDK Solar (LDK $1.71 -0.03) reported second quarter loss of $0.97 per share, which missed expectations, while revenues fell 51.3% year/year to $114.7 million which is below expectations. Q2 Metrics: Shipped 303.9 megawatts (MW) of wafers Shipped 35.3 MW of cells and modules in the second quarter. Guidance: The company issued in-line guidance for the third quarter with revenues of $140-180 million which is line with expectations. The company sees wafer shipments between 350-450 MW and cell and module shipments between 60-80 MW.

InvenSense (INVN): Maxim notes INVN guided to Sept. qtr revs of $68-70 mln or up 22-25% Q/Q. The company indicated solid visibility with much of the quarter in backlog. Firm estimates that half of the increase is share gains with the residual being seasonal trends. The significant sales increase of the 3-axis product suggests that Apple (APPL) will be the new customer. The 2-axis revenue growth is from optical image stabilization (OIS) while the 6-axis is being driven by new smartphone platforms. Tgt to $20 from $18.

Relm Wireless (RWC) announced that over the past week orders totaling ~$1.7 mln from several U.S. federal public safety agencies have been received. The orders are primarily for RELM's KNG-Series Digital P-25 VHF, UHF and 800MHz mobile and portable radios, some of which include trunking. The orders also include the Company's legacy D-Series products. It is anticipated that the orders will be fulfilled during the third quarter of 2013.

Chart for NASDAQ Composite Index (^IXIC)
Chart for Dow Jones Industrial Average Index (^DJI)
Symbol Last Change
Dow 14,776.13 Down 170.33 (1.14%)
Nasdaq 3,578.52 Down 79.05 (2.16%)
S&P 500 1,630.48 Down 26.30 (1.59%)
10-Yr Bond 2.7210% Down 0.0840
NYSE Volume 0
Nasdaq Volume... 0
Indices: US - World | Most Actives
Advances & Declines
NYSE NASDAQ
Advances 915 (22%) 321 (12%)
Declines 3,194 (76%) 2,221 (85%)
Unchanged 77 (2%) 77 (3%)
Up Vol* 501 (14%) 178 (11%)
Down Vol* 3,130 (86%) 1,411 (88%)
Unch. Vol* 24 (1%) 10 (1%)
New Hi's 35 52
New Lo's 191 48
*in millions
more...
Most Actives
NYSE LAST CHANGE
BAC 14.11 Down 2.62%
JCP 13.17 Down 1.35%
VXX 16.53 Up 8.11%
AMD 3.39 Down 5.31%
GE 23.18 Down 1.82%
Nasdaq LAST CHANGE
FB 39.64 Down 4.11%
MSFT 33.26 Down 2.61%
SIRI 3.56 Down 2.86%
MU 13.18 Down 4.36%
CSCO 23.49 Down 1.45%