Replies to post #9193 on Sector Investing

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From Briefing.com: 4:30 pm : In the process of setting a fresh multiyear high the stock market scored its strongest percentage gain in a month as broad-based buying welcomed stocks to a new year.

The tone of today's trade was positive from start to finish. A robust gap up was extended through the first leg of trade so that the Nasdaq hit its highest level since December 2007 and the S&P 500 cleared 1275 for the first time since September 2008. The S&P 500 spent the next few hours hugging that line before it gradually drifted off of that mark in afternoon action.

Bank of America (BAC 14.19, +0.85) scored the biggest gains of any stock in the S&P 500. The company removed an element of uncertainty surrounding repurchase obligations of residential mortgage loans sold to GSEs after it announced plans to take a fourth quarter provision of approximately $3 billion related to the matter. The firm also noted that cost estimates related to additional claims, representations, and warranties have been included in the provision.

Strength in shares of BAC inspired buying among other diversified financial services plays, which helped drive the financial sector to a 2.3% gain. No other sector came close to matching its performance.

Alcoa (AA 15.80, +0.41) was the third best performing blue chip behind shares of Bank of America and JPMorgan Chase (JPM 43.58, +1.16). The stock was partly helped by a positive rating from analysts at Deutsche Bank ahead of Alcoa's earnings report next week. Other materials stocks saw their gains clipped as natural resource plays were pressured in late afternoon trade.

Consumer staples stocks lagged all session. They settled with a gain of just 0.2%, imbued by weakness in Clorox (CLX 61.57, -1.71), which dove after the firm issued downside guidance.

Solid data seemed to uphold this session's buying effort. Construction spending for November increased by 0.4%, which exceeded the Briefing.com consensus call for a 0.2% increase after spending had increased 0.7% the month before.

The ISM Manufacturing Index for December improved to 57.0 from 56.6, but the latest reading was still slightly below the 57.3 that had been expected, on average, among economists surveyed by Briefing.com.

Prior to the open participants were able to take the pulse of some overseas manufacturing activity. Germany's final Manufacturing PMI for December came in at 60.7, down from 60.9, but the broader eurozone's December reading improved to an eight-month high of 57.1. China's Manufacturing PMI for December eased back to 53.9 from 55.2 in the prior month, but its non-Manufacturing reading improved to 56.5 from 53.2 month over month.

Overseas markets staged strong gains amid the data. Germany's DAX advanced 1.1% while France's CAC climbed 2.5%. Britain's FTSE was closed. Hong Kong's Hang Seng ascended 1.7% and South Korea's Kospi tacked on 0.9%. Both Japan's Nikkei and China's Shanghai Composite remained closed.

The dollar advanced against several key currencies, namely the yen, euro, and pound. Strength in the greenback helped the Dollar Index climb as much as 0.7% before that gain was dashed. Still, the dollar managed to fend off efforts to take it into the red; it was up about 0.3% as of the close of trade.

Advancing Sectors: Financials (+2.3%), Telecom (+1.4%), Consumer Discretionary (+1.2%), Tech (+1.2%), Health Care (+1.0%), Energy (+1.0%), Materials (+0.7%), Industrials (+0.7%), Utilities (+0.5%), Consumer Staples (+0.2%)
Declining Sectors: (None)DJ30 +93.24 NASDAQ +38.65 NQ100 +1.6% R2K +1.9% SP400 +1.4% SP500 +14.23 NASDAQ Adv/Vol/Dec 2053/1.93 bln/636 NYSE Adv/Vol/Dec 2236/1.06 bln/791

4:31PM Monolithic Power announces the resignation of Chief Financial Officer and appoints new Chief Financial Officer (MPWR) 16.89 +0.37 : Co announces that Rick Neely has resigned from his position as Senior Vice President and CFO to pursue another opportunity at a private company. Meera Rao will assume the position and responsibilities as MPWR's Chief Financial Officer effective immediately.

4:13PM Corning, in an 8-K, announced its COO retired (GLW) 19.19 -0.13 : Co announced on December 31, 2010, Peter F. Volanakis retired as President and Chief Operating Officer of Corning Incorporated (the "Co"), following 28 years of distinguished service. As previously announced, Volanakis had retired from the Board of Directors and Finance and Executive Committees on December 1, 2010. Please refer to the Co's Forms 8-K filed on July 30, 2010 and December 1, 2010. As a result of Volanakis' retirement as President, the Co's Board of Directors elected Wendell P. Weeks as President effective December 31, 2010. Mr. Weeks will retain his role as Chief Executive Officer and Chairman of the Board.

3:23AM LDK Solar signs definitive agreement for minority stake in its polysilicon business (LDK) 10.12 : Co announces its wholly owned polysilicon manufacturing subsidiaries entered into a definitive agreement with China Development Bank Capital Corp and an investment fund affiliated with another major Chinese bank. the investors agreed to subscribe to an aggregate amount of $240 mln of series A redeemable convertible preferred shares of LDK Silicon & Chemical Technology, a wholly owned subsidiary of co which will hold and operate LDK Solar's polysilicon business. The preferred shares on an as-if-converted basis represent ~18.46% of the aggregate issued and outstanding share capital of the LDK Solar polysilicon subsidiary on a post-money basis.

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From Briefing.com: 4:25 pm : Sellers sent stocks from a positive start to a sizable loss by midsession, but their efforts eased in the afternoon so that the major averages ended the day with varied results.

Market participants initially appeared prepared to extend the prior session's advance amid renewed strength among overseas markets, but an absence of leadership made for untenable gains in the early going. Once selling started it quickly gained momentum.

Natural resource plays were picked on the most, for a time. The materials sector was down as much as 1.9% as Mosaic (MOS 75.00, -1.25) slid ahead of its earnings announcement this evening. Meanwhile, the energy sector was down 1.5% at its session low. The two sectors successfully trimmed those losses so that they ended the day down 0.5% and 0.6%, respectively.

As an asset class, small-cap stocks and mid-cap stocks were also hit hard, but they never really recovered. In turn, the Russell 2000 settled the day down 1.6% while the S&P 400 closed with a 1.1% loss.

Telecom stocks traded with relative strength for virtually the entire session. They gained 0.9%, collectively. Motorola shares officially broke into a consumer segment, Motorola Mobility (MMI 33.12, +2.88), and a professional segment, Motorola Solutions (MSI 39.77, +2.46), both of which debuted on the NYSE today. A few analysts gave MMI favorable reviews, but the interest in MSI was more tepid.

Automakers encountered mixed interest. For December, Ford (F 17.38, +0.13) reported that retail sales increased 17% from the prior year. General Motors (GM 37.90, +0.84) said that it saw total December sales climb 16% from the year before. Meanwhile, Toyota Motor (TM 79.86, +0.43) reported that its sales for December actually decreased by 2% year over year. Honda Motor (HMC 39.60, -0.42) said that its vehicle sales for December saw an increase of almost 26%. Nissan Motor (NSANY 19.76, +0.61) reported a 28% increase in U.S. sales during December.

Participants made no real reaction to news that factory orders for November increased 0.7% when a 0.3% decline had been widely expected to follow a 0.7% slide in the prior month.

Minutes from the most recent FOMC meeting were also shrugged off. The minutes indicate that some committee members are still concerned about downside risk, especially as it relates to housing, but that economic activity continues to increase at a moderate rate. Still, voting members view the progress toward fulfilling the Fed's dual mandate as disappointingly slow.

The dollar made a nice move out of the red for a 0.3% gain. This is the second straight day that the greenback has advanced against a collection of competing currencies following seven straight sessions of losses.

Advancing Sectors: Telecom (+0.9%), Utilities (+0.5%), Health Care (+0.4%), Tech (+0.1%)
Declining Sectors: Energy (-0.6%), Consumer Discretionary (-0.6%), Materials (-0.5%), Consumer Staples (-0.4%), Financials (-0.2%), Industrials (-0.1%)DJ30 +20.43 NASDAQ -10.27 NQ100 -0.1% R2K -1.6% SP400 -1.1% SP500 -1.67 NASDAQ Adv/Vol/Dec 844/2.02 bln/1805 NYSE Adv/Vol/Dec 1103/1.09 bln/1889

4:18PM Mattson provides preliminary Q4 results (MTSN) 2.56 -0.31 : Co sees Q4 rev of ~$41 mln vs $49.08 mln Thomson Reuters consensus. Co's fourth quarter guidance, established October 20, 2010, was $46-50 mln. Co's lowered guidance is due to a delay in the shipment of several tools scheduled for DRAM customersl.

4:09PM CalAmp to provide mobile data communications equipment for the State of Oregon Wireless Interoperability Network (CAMP) 2.93 -0.17 : Co announced its alliance partner, Harris Corporation (HRS), has been selected by the State of Oregon as the radio system and service provider for the Oregon Wireless Interoperability Network (OWIN). As a member of the project implementation team, CalAmp will provide its Dataradio base stations and mobile radios for the wireless data portion of this multi-phased project.

4:01PM Trident Microsystems lowers Q4 rev, operating income guidance due to order pushouts, cancelations and slower than expected ramp of set-top box products (TRID) 1.91 +0.01 : Co lowers Q4 rev and operating income guidance; co sees non-GAAP operating loss of $18-22 mln vs. a loss of $4-8 mln previously, may not compare to -$7.3 mln single est; co lowers Q4 rev guidance to $115-120 mln from $130-140 mln vs $135.00 mln single est. The revenue shortfall is primarily attributable to order push-outs and cancellations from TV customers in the seasonally weak fourth quarter as well as slower than expected program ramp-up and a weaker retail segment for the co's set-top box products. The co currently expects the factors that negatively impacted Q4 revs will be even more pronounced in the seasonally weak Q1 ending Mar. 31, 2011.

MIPS Technologies (MIPS) announced today that Ingenic Semiconductor has licensed the MIPS32 architecture for its mobile device SoCs. Ingenic is leveraging the MIPS architecture for devices targeting a broad range of mobile products including e-readers, tablets and smartphones leveraging the Android platform.

8:34AM Motorola Solutions confirms completion of separation, begins trading as MSI on NYSE (MSI) : MSI, formerly Motorola, confirmed completion the previously announced separation of Motorola Mobility Holdings. Motorola Solutions shares begin trading today on the New York Stock Exchange under the ticker symbol "MSI."

Cabot Microelectronics (CCMP) announced that it has broken ground on the construction of its planned South Korea manufacturing and research and development center. The center is expected to be completed by the end of calendar 2011, at a cost of ~$12 mln.

# Micron Technology (MU) unveiled a new portfolio of the industry's most advanced RealSSDTM solid-state drives for the fast growing flash-based notebook market.

# AMD (AMD) introduced a series of new products and services at the Consumer Electronics Show including AMD's fastest quad-core desktop processor its next generation mobile graphics technology, the AMD Radeon HD 6000M series.

# Dolby Laboratories (DLB) unveiled an entirely new suite of audio technologies as part of the fourth generation of the Dolby PC Entertainment Experience program.

# HP (HPQ) unveiled new business desktop PCs, thin clients and monitors that deliver performance and value, helping small businesses and large enterprise customers improve productivity and reduce the environmental impact of their technology.

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From Briefing.com: 4:19PM Intel beats by $0.06, reports revs in-line; guides Q1 revs above consensus (INTC) 21.29 -0.01 : Reports Q4 (Dec) earnings of $0.59 per share, $0.06 better than the Thomson Reuters consensus of $0.53; revenues rose 8.4% year/year to $11.46 bln vs the $11.37 bln consensus. Co issues upside guidance for Q1, sees Q1 revs of $11.1-11.9 bln vs. $10.73 bln Thomson Reuters consensus. Q4 gross margins of 67.5% vs 66.7% consensus; guides Q1 gross margins to 64%, plus or minus a couple percentage points vs 63.5% consensus; guides FY11 gross margins to 65%, plus or minus a couple percentage points vs 64.2% consensus. PC Client Group revenue flat, Data Center Group revenue up 15 percent, other Intel architecture group flat, and Intel Atom microprocessor and chipset revenue of $391 million flat, all sequentially. The average selling price (ASP) for microprocessors was slightly up sequentially.

4:25 pm : Stocks finished the day with modest losses after a choppy session, with commodities and related sectors pacing the downside. The decline in commodities comes despite weakness in dollar. Market participants also processed the latest dose of economic data, and prepared for the quarterly reports of a couple of bellwethers. While broad-based buying in the prior session sent the major averages to new two-year highs, the tone was less optimistic in today's trade.

Uninspiring initial jobless claims data set this tone before the open. For the week ended January 8, initial jobless claims totaled 445,000, which is more than the 415,000 expectation. Continuing claims dropped sharply to a two-year low of 3.88 million, but that is most likely due to the expiration of unemployment benefits... The Producer Price Index for December climbed a sharper-than-expected 1.1%, but core producer prices increased 0.2%, as had been expected... The November trade deficit received less attention. It totaled $38.3 billion, which is only slightly changed from the prior month.

Italy and Spain held the most recent auctions in a strong of successful sovereign debt offerings from the eurozone. While the results spurred Spain's IBEX sharply higher, the more widely-watched European bourses moved in mixed fashion as the European Central Bank (ECB) and Bank of England (BOE) both left their target lending rates unchanged, as expected. The BOE and left its asset purchase plan unaltered, also as expected... A combination of successful bond auctions in higher-risk regions, along with comments from ECB President Trichet, helped the euro trade sharply higher vs. the dollar. The euro is actually up 1.6% to $1.335. That has helped drive down the Dollar Index to a ~1% loss.

Fed Chairman Bernanke also made some intraday comments on CNBC intraday, noting that risks are more balanced now, as opposed to the downside a few months ago, and that 3-4% growth in 2011 seems reasonable. His comments didn't seem to impact the market. Corporate news flow has been light today, but earnings season is beginning to pick up with tonight's earnings from Intel (INTC 21.25, -0.06), which just hit the wires. Shares are +0.40 at ~21.70 in after-hours after beating consensus on the top and bottom lines, and issuing upside revenue guidance for Q1. Tomorrow morning, all eyes will be on JPMorgan Chase's (JPM 44.49, -0.22) earnings report before the bell.

Outside of earnings, pharmaceutical giant Merck (MRK 34.65, -2.50) fell more than 6% following the company's statement on changes to the clinical studies for vorapaxar, an investigational cardiovascular medicine.

9:13AM Tegal has received an order from the Fraunhofer Institute for Microelectronic Circuits and Systems for a Tegal 200 SE DRIE system equipped with the Tegal ProNova2 reactor (TGAL) 0.51 :

7:02AM TTM Tech raises Q4 EPS, rev guidance above consensus as a result of greater demand for its high technology products (TTMI) 14.62 : Co raises Q4 non-GAAP EPS guidance to $0.45-0.50 from $0.35-0.42 vs $0.39 Thomson Reuters consensus; revs to $375-378 mln from $351-367 mln vs $361.05 mln Thomson Reuters consensus, as a result of greater demand for its high technology products.

Canadian Solar (CSIQ) announced that the company was one of the module suppliers to Europe's largest capacity PV solar power plant, constructed by SunEdison, a subsidiary of MEMC Electronic Materials (WFR).

NVIDIA (NVDA) and TSMC (TSM) announced the shipment of the one-billionth GeForce graphics processor designed by NVIDIA and manufactured by TSMC. The key milestone reflects strong demand for NVIDIA graphics processors.

07:27 am Micron upgraded to Buy at Sterne Agee; tgt $12: . Sterne Agee upgrades MU to Buy from Neutral and sets target price at $12 as they think DRAM pricing will start to moderate and stabilize over the next couple of months. The firm believes the February quarter should mark a trough in DRAM pricing/margins, and position for a rebound.

07:26 am ON Semiconductor upgraded to Buy at Collins Stewart; tgt $14: . Collins Stewart upgrades ONNN to Buy from Hold and sets target price at $14 based on faster than anticipated integration of SANYO Semi in 9 months vs. 18 months; expectations for better than expected Q1 seasonality from the Intel Sandy Bridge launch with increasing content/share gains in new platforms; and improving fundamentals in Automotive.

09:44 am EXFO Guides Q2 Revs Well Above Consensus (EXFO)

EXFO (EXFO $10.12 +2.55) reported first quarter GAAP earnings of $0.23 per share, $0.02 better than the Thomson Reuters consensus of $0.21.

Revenues rose 63.0% year-over-year to $65.7 million versus the $64 million consensus.

For the second quarter, the company issued GAAP EPS of $0.03 to $0.07, in-line with the $0.04 Thomson Reuters consensus. On the top line, the company expects to see revenues of $70 million to $75 million, well above the $63.64 million Thomson Reuters consensus.

09:38 am LEDS Reports Q1 Results; Guides Q2 (LEDS)

SemiLEDs (LEDS $19.09 -9.54) reported first quarter non-GAAP EPS of $0.12 vs. $0.00 last yr (GAAP $0.11 vs. $0.00 last year).

Revenues rose 94% year-over-year to $13.0 million (no estimates).

For the second quarter, the company expects to see GAAP EPS of $0.06 to $0.09, with revenue of $10.5 million to $12.5 million. Second quarter GAAP gross margin is expected to be in the range of 44% to 46%.

Second quarter guidance reflects pricing pressure being experienced by the company during the quarter. GAAP gross margin for the first quarter of fiscal 2011 was 51.0%, compared with 27.4% in the first quarter of fiscal 2010. GAAP operating margin for the first quarter of fiscal 2011 was 37.7%, compared with 9.0% in the first quarter of fiscal 2010.

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From Briefing.com: 4:30 pm : Concerted selling sent the S&P 500 and the Nasdaq Composite to their worst single-session losses in almost two months, but the Dow finished only fractionally lower amid support from IBM.

Surprisingly strong earnings propelled shares of IBM (IBM 155.69, +5.04) to their best level on record. The 3% surge propped up the price-weighted Dow Jones Industrial Average for the entire session.

However, action in the S&P 500 and Nasdaq Composite was governed by aggressive selling.

The broad-based S&P 500 saw about 86% of its components close lower. Financials were among the hardest hit; they sank to a 2.2% loss. Marquee investment bank Goldman Sachs (GS 166.49, -8.19) posted better-than-expected earnings, but those were overshadowed by a smaller-than-expected revenue figure. The stock suffered its worst single-session loss in more than eight months and closed below its 50-day moving average.

Northern Trust (NTRS 52.49, -3.15) dropped to a one-month low after its earnings fell short of what had been expected. State Street (STT 48.00, -2.06) also slid, even though its exceeded earnings expectations. Diversified banks Wells Fargo (WFC 31.81, -0.68) and US Bancorp (USB 26.52, -0.79) were caught up in the financial sector's slide, regardless of generally solid reports.

Apple (AAPL 338.84, -1.81) had another blowout quarter and even issued a strong forecast. Given that the firm's forecasts are typically tepid, many wonder whether or not the outlook was intended to offset discontent over yesterday's news that Apple CEO Steve Jobs will take another medical leave of absence. Support for shares of AAPL faded so that the stock settled in the red with several other large-cap tech issues, which were the heaviest drags on the Nasdaq.

Defensive-oriented plays made up the only major sectors that suffered losses of less than 1%. Telecom and utilities were the best performers; they slipped only 0.1%.

Only a small dose of data was released this morning. It did nothing to drive broader market action. According to the latest data, housing starts for December fell 4.3% month over month to an annualized rate of 529,000, which is below the rate of 550,000 that had been expected, on average, among economists polled by Briefing.com. The December sales rate is also the lowest since October 2009. As for building permits, they spiked 16.7% month over month to an annualized rate of 635,000, which is well above the rate of 560,000 that had been widely expected. The December building permit rate is the highest since March 2010.

The dollar succumbed to further selling today. Its 0.5% loss marked its seventh downturn in eight sessions. The Dollar Index now sits near a two-month low.

4:25PM Xilinx beats by $0.06, reports revs in-line; guides Q4 revs in-line (XLNX) 31.02 -0.75 : Reports Q3 (Dec) earnings of $0.58 per share, $0.06 better than the Thomson Reuters consensus of $0.52; revenues rose 10.5% year/year to $567.2 mln vs the $569.7 mln consensus. Co issues in-line guidance for Q4, sees Q4 revs flat to +5% QoQ to ~$567.2-595.6 mln vs. $571.87 mln Thomson Reuters consensus, with gross margin ~64-66% vs. 64.9% consensus. Xilinx reports Q3 gross margin +160 bps YoY to 65.7% vs 65.0% consensus/guidance. "While we did not achieve a fifth consecutive quarter of record sales, I am pleased with the Company's continued focus on cost reduction and financial discipline."

4:08PM F5 Networks beats by $0.05, reports slight miss in revs; guides Q2 EPS in-line, revs below consensus (FFIV) 138.78 -3.00 : Reports Q1 (Dec) earnings of $0.88 per share, excluding non-recurring items, $0.05 better than the Thomson Reuters consensus of $0.83; revenues rose 40.6% year/year to $268.9 mln vs the $270.6 mln consensus. Co issues mixed guidance for Q2, sees EPS of $0.84-0.86, excluding non-recurring items, vs. $0.85 Thomson Reuters consensus; sees Q2 revs of $275-280 vs. $281.13 mln Thomson Reuters consensus. Q1 (Dec) GAAP gross margin 81.8% vs 81-82% prior guidance. "Product revenue was up nearly 44 percent from the first quarter of fiscal 2010, and service revenue grew more than 35 percent during the same period. On a regional basis, all geographies delivered sequential and year-over-year gains, led by Asia Pacific where revenue was up 11 percent from the prior quarter and 62 percent from the first quarter a year ago. Underpinning the continued strength in our service business, deferred revenue grew 10.9 percent to $287.8 million from the previous quarter."

4:06PM Plexus beats by $0.02, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY11 revs in-line (PLXS) 30.65 -0.29 : Reports Q1 (Dec) earnings of $0.61 per share, $0.02 better than the Thomson Reuters consensus of $0.59; revenues rose 31.5% year/year to $565.8 mln vs the $565.6 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.53-0.58, excluding excluding any restructuring charges, vs. $0.55 Thomson Reuters consensus; sees Q2 revs of $540-570 mln vs. $557.80 mln Thomson Reuters consensus. For FY11, co lowers expected revenue growth in the range of 10-13% over the prior fiscal year, which equates to ~$2.20-2.28 bln vs $2.34 bln consensus from 15% revs growth, which equates to ~2.32 bln. Co said, While this would be strong organic revenue growth, it is below both our enduring goal of 15% revenue growth and our expectations just a quarter ago."

2:13PM Zoran urges stockholders not to sign Ramius' consent solicitation (ZRAN) 5.62 -0.16 : Co responded to the filing of consent solicitation materials by Ramius Value and Opportunity Master Fund Ltd, by which Ramius is attempting to take control of Zoran's Board of Directors by removing all six of the Company's independent directors. The Board strongly advises stockholders not to sign any white Ramius consent card and to discard any materials they have received from Ramius. "We urge all stockholders to reject Ramius' efforts to take control of Zoran's Board and the Company through its consent solicitation... In 2010, in response to challenging market conditions and business-specific issues in the DTV and DVD business segments, Zoran's Board of Directors and management proactively implemented a number of aggressive strategic actions to better position the company for long-term growth and profitability. In the coming weeks, we are committed to updating stockholders on the performance of our business and the reasons to disregard Ramius' consent efforts.

11:00AM Agilent signs agreement to acquire assets of A2 Technologies; deal to expand Agilent's spectroscopy portfolio (A) 43.57 -0.78 : Co and A2 Technologies announces they have signed a definitive agreement for Agilent to acquire specific assets of A2 Technologies. The acquisition includes substantially all of A2 Technologies' intellectual property, technology, employees and its spectroscopy product portfolio. Transaction is expected to be final in mid-February. Financial details were not disclosed.

Diodes Incorporated (DIOD) announced the expansion of its patented Super Barrier Rectifier portfolio with the introduction of 12A and 15A rated devices in the compact PowerDI 5 package.

09:50 am CREE Guides Q3 Below Consensus (CREE)

Cree (CREE $54.12 -8.59) reported second quarter earnings of $0.55 per share, $0.03 worse than the Thomson Reuters consensus of $0.58.

Revenues rose 28.8% year-over-year to $257 million versus the $276.6 million consensus.

CREE reports Q2 operating margins 26.5% vs 27.3% Thomson Reuters consensus; Q1 31.3%. CREE reports Q2 gross margins of 47.1% vs 47.8% Thomson Reuters consensus; Q1 49.0%. Co issues downside guidance for Q3, sees EPS of $0.38-0.45 versus $0.58 Thomson Reuters consensus; sees Q3 revs of $245-265 vs. $288.33 million Thomson Reuters consensus.

CREE said, "Q2 results reflected continued growth in our LED lighting product line, but revenue and earnings were lower than our targets due primarily to lower sales to our LED component distributors in Asia... We are managing through an inventory correction in Asia in the near term, but the opportunity in LED lighting has not changed. Quarterly revenue increased 29% year-over-year and based on the market trends we are seeing, and the success of our own LED lighting business, we are more confident that we will see continued adoption of LED lighting over the next several years."

09:47 am IBM Guides FY11 In-line (IBM)

IBM (IBM $154.60 +3.95) reported fourth quarter earnings of $4.18 per share, $0.10 better than the Thomson Reuters consensus of $4.08.

Revenues rose 6.6% year-over-year to $29.02 billion versus the $28.26 billion consensus.

For the fiscal year 2011, the company expects to see GAAP EPS of at least $12.56 versus the $12.58 Thomson Reuters consensus. IBM said that it expects to deliver full-year 2011 GAAP earnings per share of "at least $12.56; and operating (non-GAAP) earnings per share of at least $13.00, which puts the company on track for the 2015 road map of at least $20 of operating (non-GAAP) earnings per share."

The 2011 operating (non-GAAP) earnings exclude $0.44 per share for the amortization of purchased intangible assets, other acquisition-related charges and certain retirement-related costs that the company has defined as non-operating. IBM's tax rate was 24.4%, down 0.2 points year over year.

Net income margin increased 0.4 points to 18.1 percent. The Americas' fourth-quarter revenues were $12.2 billion, an increase of 9% (9%, adjusting for currency) from the 2009 period. Revenues from Europe/Middle East/Africa were $9.5 billion, down 2 percent (up 4%, adjusting for currency). Asia-Pacific revenues increased 14 percent (7 percent, adjusting for currency) to $6.6 billion. OEM revenues were $784 million, up 21 percent compared with the 2009 fourth quarter.

09:36 am AAPL Guides Q2 Above Consensus (AAPL)

Apple (AAPL $347.04 +6.39) reported first quarter earnings of $6.43 per share, $1.04 better than the Thomson Reuters consensus of $5.39.

Revenues rose 70.5% year-over-year to $26.74 billion versus the $24.42 billion consensus.

AAPL reports first quarter iPod sales of 19.45 million compared to street expectations of approx.17.7 million. AAPL reports first quarter iPad sales of 7.33 million compared to street expectations of ~6.3 million.

AAPL reports first quarter iPhone sales of 16.24 million compared to street expectations of approx.15.6 million.

AAPL reports first quarter Mac sales of 4.13 million compared to street expectations of approx. 4.25 million.

For the second quarter, the company issued earnings guidance of $4.90, well above the $4.46 Thomson Reuters consensus. ON the top line, the company expects to see revenues of $22 billion versus the $20.71 billion Thomson Reuters consensus.

AAPL said, "We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales... We are firing on all cylinders and we've got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can't wait to get their hands on."

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InvestmentHouse Weekend Market Summary

http://www.investmenthouse.com/weekendmarketsummary.htm

- An extended rally gets a reason to sell and boy does it sell.
- Geopolitical events overshadow decent GDP and Sentiment news.
- What evil lurks in the shadows of the world? The bond market knows (or at least it knew something was up).
- Weekend will tell more of the world picture but Friday selling likely exaggerated by the uncertainty.
- Despite the overall slaughter, many positions held up very, very well.

MARKET OVERVIEW

Fund managers show their nervousness, using the Egypt story to sell and sell some more.

A picture is worth a thousand words. Looking at the indices, you can see that a nervous market finally got a trigger to sell. The market was trending higher, but the growth indices were starting to show cracks in their armor over the last few weeks. There were reversal days on the NASDAQ and the SP600. They managed to rally back over the last week but, as noted on Thursday, these indices now had the real test in trying to take out those prior highs.

There was something wrong with the market, but we could not put our finger on it. The trends were still good. There were still great moves in solid stocks, and even those solid stocks held up quite well on Friday. There was a problem overall, however, and it was being addressed by the bonds. The bond market refused to sell off even though it had every reason to. In other words, if the economy is improving as the Fed and others are saying, then it should be selling. Instead, it has been trying to bounce.

It has moved laterally for six weeks now. It has not broken out yet, not even with the Friday selling in the stock market and the advance in the bond market. It was showing a resilience that it should not have been. There was something out there. The bond market knows what evil lurks in the shadows of the world. It may not know exactly what that evil is, but it understands that there is something going on. It would not sell off, and it started to break back to the upside on Friday as the news hit.

What was the news? It was not the fact that GDP was decent with a 3.2% advance (even though 3.7% was expected). There were some good numbers inside of that, and they were much better than the headline indicated. Final sales rose 7.1%. Consumer consumption posted the highest move in four years with a 4.4% gain. Business spending was very solid at 4.4%. The government says that inflation is low, and I guess that is the case if you are just looking at flat screen TVs and computers. Unfortunately, we do not eat those items. We have to wear cotton, and we have to eat soy beans, milk you name it. It is all going higher. That is not up for debate at this moment, however, because the government tells us it is not a problem.

The Michigan Sentiment, the final for January, was better than expected at 74.2 with 73.2 expected. It continues to rise, and it somewhat reflects the consumer confidence report that rose more than expected a week ago. They are still at low levels. They are still not at levels commensurate with a decent economy, but they do continue that upward trajectory.

The news centered around Egypt and the growing unrest in that general part of the world. The Tunisian government dissolved when the army joined the protesters. Now in Egypt, President Mubarak has called for the government to resign in response to the protests and riots in the country. He is not to resign, of course, but the government should. He wants to buy time in order to install his son and make sure he has a foundation to take over control. There is a lot of worry surrounding Egypt, mainly because Mubarak is a friend of Israel. He continued the Anwar Sadat peace with Israel. If his government is gone and extremists take over, then Israel loses a backstop in the region. That adds to the volatility.

It was interesting how the day unfolded. Futures were holding up decently despite obvious problems in Egypt that were known before the market opened. Futures were knocked back on the GDP number, but they came back. The market posted gains early on and was looking decent. Then the bid ran dry about half an hour into the trade. Stocks turned down and sold sharply into the beginning of lunch on the east coast. There were a bunch of pictures released from Egypt. It was made known that the government had shut down cellular service and the internet, and possible outcomes looked generally bad.

It is never a good idea to see a government shut down all forms of communication. We better be very careful about that here in the US. There are calls for a national ID number a general password for internet access that you use everywhere. The government is also setting up a system whereby it can shut down the internet if it finds it necessary. We should NEVER agree to curtail the avenues for asserting our right of free speech. The internet has become integral in making sure that the true stories get out. It cannot be shut down. This is a good lesson to us in the states: Do not give the government the power the shut down the internet infrastructure. But I digress though not too much. All these themes played around the world because everyone took a look at themselves and said, "That could be us."

In any event, there was a massive selloff. It checked up and was actually able to move laterally into the close. We had several hours of range trading as the market limped home for the weekend. It was an impressive thumping a good, old fashioned tail kicking. There are other, less-polite phrases, but I will stop there. NASDAQ, -2.5%; SP500, -1.8%; Dow, -1.4%; SP600 -2.5%; SOX, -2.8%; NASDAQ 100, -2.6%.

The day was epitomized by Ford ticker symbol F. It got an 'F' on the day, no doubt. The company reported earnings, and the new Explorer apparently cost a lot more than anyone expected. It gapped lower, and then it just got silly. It crescendoed lower when the Egyptian stories grew over the day, and F was pasted. It was the poster child for the selloff because it is a well-known and highly publicized stock right now. It is the only non-government automobile stock in the US, and it was taken to the cleaners. The interesting thing was it managed to bounce off a support level. We will see how that plays out.

This underscores an important aspect of how I believe the day unfolded. Yes, the market was troubled, and it was bothering us for the last several sessions. I kept talking about something being wrong and trying to reconcile what the bond market was doing versus the stock market and other indicators. I knew something was up, but could not put my finger on it. The market was showing good action, so we could not really move against it. Then when some bad news hit, it showed there were a lot of fund managers that were nervous as well. They use it to take some gains, and things got out of hand on Friday.

That does not mean the market will not sell lower, but they got out of hand on Friday because the moves were magnified by the Egyptian story. We may see a modest recovery and bounce back as we saw on F at the end of the day. Some of that Friday action could be taken out of the stocks or put back into stocks if nothing major happens over the weekend. If that is the case, we can get a bit of a relief bounce. That would, at a minimum, gives us better exit points and gives stocks a chance to move back into their patterns and above support. We will have to see how that plays out.

It was definitely a factor on Friday. Things simply got out of hand because it was the weekend and the market had rallied for eight consecutive weeks to the upside. There was general nervousness because of the rally to that point. With the news out there, and the fact that it was still unfolding as the day went on, people wanted to avoid the Valentine's Day rush. They just had a little Valentine's Day massacre of the stock market ahead of time.

OTHER MARKETS

Dollar: As you would expect on this kind of day, the dollar was sought out as somewhat of a safe haven. The greenback bounced (1.3614 Euro versus 1.3726 Thursday). Of course that move was preceded by three weeks of straight downside that broke the dollar out of a small trading range. Now it has rebounded back up to what was a support level that it broke through on Tuesday through Thursday. It may be able to move back up. This did not change the character of the dollar at all. If the problems continue to crescendo in the Middle East and related regions, the dollar might continue to bounce higher as a safe haven.
Click to view the chart

Bonds: Bonds did bounce. The US 10 year was down premarket at 3.43%, but it reversed (3.33% versus 3.39% Thursday). Looking at the charts, the bond market did not necessarily break out of its six-week lateral consolidation, but it did bounce. It does continue to move laterally, and it was showing something was up. I heard Neil Cavuto say that this was unexpected. Perhaps this event was unexpected, but the bond market was building in something, and I kept wondering what it was. The bond market's moves were incongruous with the other data we received about the economies, the stock market, and what some of the other markets were showing.

Now we understand what was bothering bond traders. The bond market is one of the best handicappers of potential problems in the world. It was showing that again over the past few weeks. I knew there was a problem but did not know what it was, unfortunately. As events unfold, we will see whether it spreads or dies down and stocks and other markets can continue to move on their merry ways higher with improving economies. This is important stuff. This is another interesting time to be alive, just as it was when the Berlin Wall came down. This does not have those positive connotations, however. It could, but we have to see how it plays out.

A lot of this has to do with food-price inflation people are hungry in Egypt. Its second major source of income is from citizens, ex-citizens, or relatives sending money back to the country that is made in other parts of the world. Since 9/11, many of the countries have clamped down on money flows around the globe. It is hurting Egypt in receiving one of its primary sources of revenue. It has been under a lot of pressure, and the people are feeling that. Of course people take it out on the government. It just so happens they are REALLY taking it out on the government. We are having a French Revolution moment in that part of country. It was amazing what happened in Tunisia. The President (dictator would be better) slapped a street vendor who was just asking what he could do to help the people. That sparked the riot, and it brought the country down when the military did not side with the government. Interesting times, indeed, but I will get back on track.
Click to view the chart

Gold: We have trouble in the world, so gold naturally bounced. It was down early. It was ready to sell and was selling hard to begin the day, but then it reversed and closed to the upside, posting a fairly decent day ($1,337.70, +17.90). After hours it was streaking higher even further. Indeed, after hours, US futures were diving further, but then they closed. There will be a lot of changes between now in the market open on Monday. Gold recovered on an international crisis, but it also did not break its recent downtrend. It fell out of its trading range and sold off, and now it is trying to come back. It tapped resistance on the intraday high and faded back to close.
Click to view the chart

Oil: With Egypt's proximity and control of the Suez Canal, oil jumped back up. Oil had been clocked for over a week. It had come back from a double top spanning late December and early January. It sold off, breaking down below that range, but it recovered it in one bound. It surged sharply ($89.34, +3.70). Up almost 5% in one day. Quite is move by oil, but it is what you would expect to happen with an issue of this magnitude in that critical part of the world.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS

Volume. NASDAQ volume jumped almost 20% to 2.34B shares. NYSE volume jumped 36% to 1.34B shares.

Breadth. Breadth was a decidedly negative -5:1 on the NASDAQ. It was -4:1 on the NYSE. As you would expect, it was a tail-kicking as far as the internals.

CHARTS

SP500. There is the run from August, the November test, the second run up through this week, and then a reversal. This was a big one. This is what you call an engulfing pattern. It topped the high from Thursday, and it closed lower than the low on Thursday as well. It closed much lower. It broke near support from the 18 day EMA. That is no big deal given the five runs up the 10 and 18 day EMA. That is when it spells trouble and a deeper test. The 50 day EMA is sitting down at 1252. With a 1276 close, over the next several sessions, you could see the SP500 come back to test that just as it did in November when it had that correction. Note one little test to the 50 day EMA, a bounce, and then the second test of the 50 day EMA. Then it started the move anew.

Everyone got the you-know-what scared out of them on Friday, but look where we are. I have talked about this before, but I want to repeat it. There is a big base starting in late April of 2010, inverted head and shoulders during the summer, and a rally off of the August low. A test, and consolidation, and now the second run. Stock markets, indices, individual stocks whatever you are trading, this is not the end of the run unless there is a major game-changing event in progress.

The story in Egypt could be that, but it does not look like it at this juncture. It could expand over the weekend or next week, but not for now. Right now, we have a big base, a breakout, a test, and a second run. It is due for another correction, and the Egyptian story gave it the trigger. Now we will see the correction and test. After that, it should have another run to the upside. Wow, that sounds positive. I bet you are not hearing much of that on the financial stations.

NASDAQ. Same thing with NASDAQ. Base, breakout, November test, another run, and now a little double top coming back down. Boy, did it come back down big time. I wanted to touch on something that was very disturbing on Friday. We had downside plays on NASDAQ and on the small cap Russell. A problem occurred (seems like there were many problems on Friday) on the NASDAQ feeds early in the day, and they were erroneous. Indeed, you could not get a read for 15-20 minutes on the NASDAQ index itself. It just stood there, and a lot of NASDAQ stocks did the same. You could not get good feeds on them.

There was a problem on the NASDAQ site and with the Philadelphia exchange that means options. We were able to verify some, and we got into some plays to the downside (DECK, for instance), but you could not verify the others. We missed out on some good plays. We were looking to play the QID, but we could not get in on it. The options were messed up and NASDAQ was not showing an accurate read. By the time it was rectified, everything had gapped lower.

While the NASDAQ chart shows the actual trades being here, they were reconstructed because you could not get the feed in many places. We unfortunately missed out on really good trade, and that was quite disappointing. The NASDAQ rallied, made a light double top, and broke lower. Something of an engulfing pattern, although it did not take out the top from Thursday because the market never rallied that high to begin with. It was the same type of problem. Where will it go? The 50 day EMA is logical. There is a support level from December, and the November peak also looks logical. On the last test it came back toward the 50 day EMA to test.

SP600. We were trying to get on the small caps as well. There is a triple top here. It rolled over big time, unable to make a solid break through the trendline or the prior highs. Big reversal down. It looks like it will go below the 50 day EMA. You are shooting for this peak in late November or the peak in early November.

SOX. SOX took a hammering as well. Some double-top action here. It closed above the 18 day EMA, however, so it did show some strength. This will be one to watch. The semiconductors have been the market leaders in terms of tech and, indeed, across the market. How they perform over the next week will be important. Many of the semiconductors did just fine on Friday. Down but hardly out.

LEADERSHIP

Semiconductors. CYMI eased back, still holding above the 10 day EMA. BRKS is a recent strong stock. It was down but is also above the 10 day EMA. NVLS is the same kind of action. Most chip stocks held the day quite well.

Agriculture/chemicals. Agriculture might be interesting. It did not look great on Friday, but they were not getting nailed. Look how they game back. CF bounced back up off a test of the 50 day EMA, and AGU bounced off that level as well. These are possibilities because of food shortages, and there could be a push toward these once people figure out what was causing a lot of the problems on Friday.

Energy. You would think it would do well. CNQ is a stock that really plays off the price of oil. When oil shot higher, it bounced up off its 50 day EMA. That is something we will look at this weekend. Some of the service stocks did just fine. HAL added gains on the session. The commodities got life pumped into them, of course, because oil surged to the upside. Energy had a nice day.

Industrial. CAT was not bad. It was down on the day, but it just tapped the 10 day EMA on the low and bounced right back. CMI was not so good, struggling with another reversal day. There are some issues in some big-name industrials. JOYG is back down. It is trying to hold the 50 day EMA. It has some important tasks ahead of it and is trying to hang on.

Financial. JPM held up great. Still in its uptrend, and still working well. WFC has some cracks in the armor. It closed just below the 20 day EMA. It has been holding that on the way up. It has a roll top, but it is not necessarily definitive. EWBC had no issues.

Retail. Some retailers were having trouble. DECK formed a bear flag and turned to the downside. BBBY has been leading in retail but struggled. It sold down rather sharply, but it is still in its pattern.

Metals. Some of the precious metals stocks were able to move higher, such as PAAS. It is making a higher low and trying to bounce to the upside. Not bad action at all.

Miscellaneous. You can break stocks down into a few categories. There are stocks that have been leaders and managed to hold up just fine. Those are a lot of semiconductors and some of the financials. Then you have stocks that have been leaders and got beaten back but have managed to hold some support. BBBY is in that category. There were others that moved higher on the day. Some of the energy stocks did that, and they were able to perform quite well. The other category is stocks that were not able to hang on and got slaughtered. FDX was crushed on the day. SAPE was beaten town sharply as well. It is in business software, an area that has been performing rather well. STE moved up on the last few days but got reversed sharply.

There are three categories: Those that held up well, those that sold off sharply but managed to hold their patterns and support, and those that gave up the ghost. We were very surprised by the number of plays on the report that held up quite well, thank you very much. That is where the money has been flowing. They were not as quick to sell off, and we will see how they hold up next week. They will tell most of the tale for the market. Remember, this market has been one where money has been rotating around and not leaving. We will see next week whether money leaves the market.

THE MARKET

MARKET SENTIMENT

VIX. The VIX had one heck of a move, up 24% on the day. Nothing like a good geopolitical scare to send volatility screaming to the upside. It closed at 20, and that is still considered a low level. It is coming off a bounce of a long-term support level. If you pan back, it bounced off of this level in April of 2010. It is moving higher, but still very low historically. Does that mean it automatically has to move up? Of course not. Volatility and the market are behaving the way they should in an otherwise "healthy" stock market. As the market sold, volatility jumped higher.

Even though the market was rising, volatility was not rising before this move. It had been trailing off with this entire rally. You worry about major selloffs when volatility rises as the stock market rises. That was not the case here; it is acting normal. Big selloff in the market on geopolitical fears, hence you have a big surge in volatility. We have been buying cheap options, whether calls or puts. In terms of historical volatility, it has been very low. Even with today's surge in volatility, implied volatility and historical volatility remain very low parts of the option-pricing equation. Of course we have to see how it reacts and see if it surges back to the upside up into the 30's and 40's. If it does that, this will be a major selloff in the market. I do not see that being the case, but when you have geopolitical events in the shifting sands around the world, what seemed to be firm footing one day can be a quicksand quagmire the next.

VIX: 20.04; +3.89
VXN: 21.66; +3.83
VXO: 18.5; +3.91

Put/Call Ratio (CBOE): 1.08; +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: 55.1% versus 56.0%. Continuing the modest slide, down from 57.3% the prior week and 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: 19.1% versus 20.0%. With the market bounce the bears fell right back to the level hit three weeks back (19.1%). Down from 28.3% in September. 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: -68.39 points (-2.48%) to close at 2686.89
Volume: 2.349B (+18.45%)

Up Volume: 232.454M (-1.178B)
Down Volume: 2.147B (+1.588B)

A/D and Hi/Lo: Decliners led 4.97 to 1
Previous Session: Advancers led 1.06 to 1

New Highs: 106 (-53)
New Lows: 27 (+10)

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: -23.2 points (-1.79%) to close at 1276.34
NYSE Volume: 1.342B (+35.98%)

Up Volume: 168.08M (-419.804M)
Down Volume: 1.172B (+781.012M)

A/D and Hi/Lo: Decliners led 4.16 to 1
Previous Session: Advancers led 1.3 to 1

New Highs: 314 (-174)
New Lows: 49 (-1)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: -166.13 points (-1.39%) to close at 11823.7
Volume DJ30: 214M shares Friday versus 168M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

Earnings will continue and the parade gets even louder. There will be a lot more coming out. There will also be a lot of data which ends on Friday with the jobs report. We will have Personal Income and Spending on Monday, Chicago PMI on Tuesday. The ISM index is very important. Wednesday brings the jobs report warm up with the Challenger and the ADP employment report. The weekly claims and ISM services are on Thursday, and Friday is the jobs report.

As I said, one of the keys will be whether money is leaving the market after this. It has been rotating up until Friday, and we will see if it stays in or if new money uses the selling as an opportunity to move in on what is ostensibly an improving US economy. An interesting aspect to consider is that some money may move in from emerging markets into the US stock market as a safer market (or, as one analyst put it, one of the better places in a bad neighborhood). Perhaps the problems in Tunisia and Egypt will lead to money leaving emerging markets and coming home, so to speak, to markets that are considered safer.

Again, Friday the move was exaggerated by the worries about Egypt. The pictures coming from Egypt seemed to get worse and worse, and the market sold more and more as they hit early in the day. I think it was overdone, and there may be a rebound. The question is whether there will be new money coming in to drive stocks back up and continue the rally, or if it will just be a relief bounce from an overdone day on Friday.

If stocks bounce and they are unable to get back into their pattern or over a good support level, that is an invitation to close them. We will leave other stocks that hold their patterns. If the economy is still growing and this issue starts to dissipate (if it was an overreaction), then we should see a resumption of the upside move. Again, despite the overall slaughter in the market, many positions held up quite well. It would not take much for them to continue back to the upside.

Of course, it would not take much for them to sell further either. This looks like one day of selling on the SP500. As seen in November, there were three weeks of issues. It was all over within the first week and a half, and then it moved laterally. This is just day one, and there was an almost 2% decline on the SP500. NASDAQ has already put in a bit of downside. It rallied back up to that prior peak from the week before, and it was primed to fail. Boy, did it turn over and get busted, and it has more to come back. We will have to see how far.

We were able the pick up some downside, and that was sweet. We got some good entry points despite the issues with options. Some of them we missed, and that was a bitter pill to swallow. We were all over them, but we could not get there. We will look for some more. I am seeing a lot of stocks. This is just a preliminary view, however. I may have to eat crow on that if there are not so many, but I am seeing quite a few that held up well and look like they could be very good buys. As for the downside, we may still find some here. CRM continued higher on Friday, but look at that tombstone doji action below a resistance point. That is primed for a move back down, and we will see if it makes it. There will still be some downside opportunity despite the juggernaut to the downside through lunchtime.

If there is a bounce on Monday, we could get an opportunity for downside as stocks rebound and then fail at some resistance and roll back over. A lot of this depends on what happens this weekend, and we will have to keep a close eye on the news and see how things could be opening up come Sunday. I may have to put out some alerts before then just to let people know how things look.

In any event, it is been an interesting day. The rally finally got a little comeuppance. I hate to say that, but it was due to test and the bond market was showing something was up. Sure enough, it got the trigger and the blow torches were taken out. Some stocks were burned bad, but not all of them. A lot of stocks held up. I do not want to put any false hope out there. Things could still deteriorate, and the market still does need to test.

We are probably in for two to three weeks of testing whether we like it or not. In that situation, you look for good exit points on stocks that are struggling. You keep the good ones that are able the hold up, and you look for opportunities in them. If things get better, you look for opportunities in other stocks that have spent the time quietly basing under the radar. In the interim, we will try to make some money on the downside. We were buying into positions such as FCX and DECK on Friday.

We will try to take what the market gives. Looks like we will be in a pullback now, and it is just a matter of how severe it will be. We will try to ride through it, make some money to the downside, and look for opportunity when things move back up. Remember, that was just the second run in a good base. We want to look for more upside, particularly if the economic numbers keep coming in better.

Have a great weekend!

Support and Resistance

NASDAQ: Closed at 2686.89
Resistance:
2688 is the recent January low
2725 from July 2007 interim peak
2729 is the 127% Fibonacci extension of the August 2010 run
2735 from late 2007 interim peak
2766 is the January peak
2825 is the 2007 closing peak.
2862 is the 2007 peak

Support:
The 50 day EMA at 2647
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 2401

S&P 500: Closed at 1276.34
Resistance:
1278 is the 127% Fibonacci extension of the August 2010 run
1313 from the August 2008 interim peak
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:
The 50 day EMA at 1252
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
1156 is the Sept 2008 low
The 200 day SM A at 1156
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 11,823.70
Resistance:
11,867 from the August 2009 high and peak on that bounce in the selling.
11,893, from March 2008 closing low
12,110 from the March 2007 closing low
13,058 from the May 2008 peak on that bounce in the selling

Support:
The 18 day EMA at 11,794
11,734 from 11-98 peak
The 50 day EMA at 11,574
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 10,820
10,730 is the January 2010 peak

Economic Calendar

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

January 28 - Friday
- GDP-Advance, Q4 (08:30): 3.2% actual versus 3.7% expected, 2.6% prior
- Chain Deflator-Adv., Q4 (08:30): 0.3% actual versus 1.5% expected, 2.1% prior
- Employment Cost Index, Q4 (08:30): 0.4% actual versus 0.4% expected, 0.4% prior
- Michigan Sentiment -Final, January (09:55): 74.2 actual versus 73.2 expected, 72.7 prior

January 31 - Monday
- Personal Income, December (08:30): 0.5% expected, 0.3% prior
- Personal Spending, December (08:30): 0.6% expected, 0.4% prior
- PCE Prices - Core, December (08:30): 0.1% expected, 0.1% prior
- Chicago PMI, January (09:45): 65.0 expected, 66.8 prior (revised from 68.6)

February 01 - Tuesday
- Construction Spending, December (10:00): -0.5% expected, 0.4% prior
- ISM Index, January (10:00): 58.2 expected, 58.5 prior (revised from 57.0)
- Auto Sales, February (15:00): 3.90M prior
- Truck Sales, February (15:00): 5.56M prior

February 02 - Wednesday
- MBA Mortgage Purchases, 01/28 (07:00): -12.9% prior
- Challenger Job Cuts, January (07:30): -29.0% prior
- ADP Employment Change, January (08:15): 150K expected, 297K prior
- Crude Inventories, 01/29 (10:30): 4.84M prior

February 03 - Thursday
- Productivity-Preliminary, Q4 (08:30): 2.2% expected, 2.3% prior
- Unit Labor Costs, Q4 (08:30): 0.0% expected, -0.1% prior
- Initial Claims, 01/29 (08:30): 425K expected, 454K prior
- Continuing Claims, 01/29 (08:30): 3925K expected, 3991K prior
- Factory Orders, December (10:00): -0.7% expected, 0.7% prior
- ISM Services, January (10:00): 57.0 expected, 57.1 prior

February 04 - Friday
- Nonfarm Payrolls, January (08:30): 150K expected, 103k prior
- Nonfarm Private Payrolls, January (08:30): 163K expected, 113k prior
- Unemployment Rate, January (08:30): 9.6% expected, 9.4% prior
- Average Workweek, January (08:30): 34.3 expected, 34.3 prior
- Hourly Earnings, January (08:30): 0.2% expected, 0.1% prior

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From Briefing.com: Weekly Recap - Week ending 04-Feb-11The major indices posted sharp gains this week, bolstered by strong earnings reports. The S&P 500 rallied +2.7% in a broad-based advance. Realization that the U.S. economy is improving, the understanding that the Fed isn't going to withdraw its policy support anytime soon and the ability to shake off concerns about Egypt helped bolster stocks.

All 10 of the sectors gained, with eight advancing more than 2%.

Energy (+4.2%) and materials (+4.6%) outperformed thanks to better-than-expected results from Exxon Mobil (XOM, +5.4%) and Dow Chemical (DOW +5.6%).

Defensive sectors underperformed on a relative basis, with consumer staples gaining 0.9% and utilities climbing 0.2%.

A bevy of S&P 500 companies reported earnings this week. Of the 104 S&P 500 components that reported results, 70% topped EPS estimates and 68% topped revenue expectations.

Heavyweight Exxon Mobil reported a solid EPS beat as revenue rose 17.1% y/y. Exxon's advance of +5.4% led fellow energy stocks higher.

Among other Dow components, Pfizer (PFE +6.3%) acted as a positive influence on the market after the pharma giant posted slightly-better-than-expected earnings. Merck (MRK -0.5%) also topped earnings expectations, but traders sold the stock after the company issued fiscal year 2011 EPS guidance that was about 5% below the consensus estimate.

On the downside, CVS Caremark (CVS) sank 6.4% after issuing FY2011 EPS guidance that was about 4% below expectations. In addition, the company withdrew its previous long-term target of high single-digit non-GAAP EPS compound annual growth between 2009 and 2013.

Among big movers, Electronic Arts (ERTS +21.5%) surged 22% after the video game maker posted a bottom line beat and announced a share repurchase plan. JDS Uniphase (JDS +34.5%) was the top percent gainer in the wake of its strong earnings report.

Meanwhile, retailers posted better-than-expected monthly same-store sales results for January. In total, 17 of the 25 companies Briefing.com covers exceeded expectations last month.

In economic news, nonfarm payrolls increased by 36,000 while private sector payrolls increased by 50,000. Both figures were well below the Briefing.com consensus estimates of 148,000 and 163,000, respectively.

Weather issues created a lot of variability in consensus forecasts and a lot of noise around the actual report. On a related note, the BLS indicated the weather kept 886,000 American workers from getting to work in the payroll week.

The headlines for payrolls aren't good, but the market has been slow to take them at face value as a true, and deep, disappointment.

The January report was also clouded by updated population estimates. That explained why the unemployment rate dipped from 9.4% to 9.0% while the labor force participation rate remain unchanged at 64.2%.

As equities rallied, Treasuries on the long end of the curve got hammered. The 10-year interest rate spiked from 3.32% to 3.64%, the highest level since spring 2010.

Commodities gained about 1% as the dollar fell 0.1%.

 
 Index	  Started Week	Ended Week  Change % Change  YTD % 
 DJIA	    11823.70	 12092.15   268.45    2.3    4.4 
 Nasdaq	     2686.89	  2769.30    82.41    3.1    4.4 
 S&P 500	     1276.34	  1310.87    34.53    2.7    4.2 
 Russell 2000  775.40	   800.11    24.71    3.2    2.1

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InvestmentHouse Weekend Market Update:

http://www.investmenthouse.com/weekendmarketsummary.htm

- Muddled jobs report and still the market rises.
- NASDAQ pushes past January high, SOX surges, leaving the small caps odd man out.
- Unemployment rate dives and so do non-farm jobs. Things are better, things are worse, but you have to assume overall improvement, right?
- Oh Canada. Four times more jobs than expected.
- Bonds diving as the problem that was holding it in its range likely won't topple the recovery.
- Dollar recovering, but a long way to go to credibility.
- Irrepressible stock market continues to push higher, fueled by the Fed's liquidity supertanker.
- Retail, tech coming back around, starting to lead once more.

MARKET OVERVIEW

Jobs report snow job leaves market without the clear signal we wanted.

A muddled jobs report left us without the clear signal we wanted to see on the day. That is typically the way of the market; you think something has to show up and it does not. The market does what it will do, and it does it on its own time.

The jobs report was muddled. Unemployment fell to 9%. That makes the two-month decline from 9.8% to 9% the best in 60 years. But (and this is a big but) when there is such a decline, historically there is an accompaniment of a large number of jobs non-farm, private, you name it. We are not seeing that. The non-farm payrolls only rose 36K versus 148K expected. The private jobs only rose 50K versus 163K expected. Who can you trust? The market did not know what to do. At first it meandered around in the premarket. It was negative, but then it reversed and started to the upside. It continued to move higher most of the day. There was a mid-morning dip, as there frequently is, but it reversed, rallied, and the indices closed out near their session highs.

NASDAQ was finally able to take out its January peak. It shaved it by a gnat's butt, as we like to say around here. It did take it out, and thus it joined SP500 with a move above its prior peaks. The SOX was already there. It decided it would avoid the Christmas rush and surge up by itself, and it was rocking and rolling on Friday. That leaves the SP600 small caps by themselves, having not taken out the prior peaks in this trading range. Even the mid caps posted a new rally high on Friday. That leaves you wondering about the small caps and about the rally. Then again, maybe it is just that point in the economic move where the stock market starts to trend out of small cap growth and into the more staid and steady. That could be. There was a resumption in the move in technology as NASDAQ broke higher, and retail stocks started to move back up.

That is the theme to end the week. Some downtrodden techs reversed and started to rally, and retail that was down reversed and started rallying as well.

OTHER MARKETS

Dollar: The dollar is acting as if there is an economic recovery underway after imploding early in the weak indeed, over the past month in a sharp selloff from its trading range. The dollar was up again on Friday, and it is try to make things look respectable after the plunge from the June peak (1.3582 Euro versus 1.3633 Thursday). Improvement, but it is way off from where it was just in the summer.

There is economic improvement, but the dollar is not acting as though it is a major economic recovery. I have been talking about that all along. It is a recovery. You can't throw this kind of money at anything without getting some kind of asset price appreciation, but that is all it has been for the most part. Markets have shown a price appreciation while jobs have not followed. Those paper assets. What is Gordon Liddy always talking about? Gold! I am not necessarily advocating gold, but there is a difference between paper assets versus real things. I digress, but you understand why I am prone to wander off the straight and narrow in these times.
Click to view the chart

Bonds: Bonds are really acting as if something is improving economically. The 10 year tanked (3.64% versus 3.55% Thursday). Over the week, the 10 year gained 32BP as the bond itself tumbled in value. I am looking at the trading range in December and January where the bond market tried to hold up. The reason was because something was brewing out there. There was a storm ahead, but it was not necessarily the storm that the bond market was worried about. Maybe it was just uncertain. If the bond market had really been worried, it would have taken off to the upside. As it was, it was just moving laterally.

Something was wrong, but it was not sure exactly what. When it was Egypt, it tried to bounce back up when that news came out, but apparently it has become comfortable with what is going on in the Middle East. It does not anticipate any major collapses in Saudi Arabia or any other countries. Bonds have started to sell as they should have probably been doing all along given the improvement in the economic data over the past couple of months.

Bonds broke lower, and it looks like they will head lower still before anything happens that would turn them back up. Even Bill Gross saying the Fed would not do anything for 12 months could not stop bonds from falling. You would think it would because the Fed is basically trying to keep bond yields lower. It is printing a lot of money and buying bonds as part of Quantitative Easing, and that would tend to prop up the price of bonds and thus keep yields lower. It is not working right now. The Fed has a lot of power with its liquidity machine, or the "supertanker" as I like to call it. It is offloading liquidity into the economy as fast as it can. It is having an impact, but it cannot control everything by dumping money into the system.
Click to view the chart

Gold: Gold had a weaker session after a strong rebound this week. Thursday was very strong, and Friday it rallied up. It again tapped the 50 day EMA and stalled out, finishing down a bit ($1,349.50 - 3.50). It still has a big rounded top, looking head and shoulders-ish. Gold may not be the place to buy right now. Things have to set up a bit better.
Click to view the chart

Oil: Oil may not be a good commodity to buy into right now either. Oil is struggling after bouncing up to the top of its range. Quite volatile over the past three weeks. It was in freefall until the Egyptian news started to crescendo. Then on Friday and Monday it was right back to the top of the range. There were worries that the issues in Egypt would spread just as they spread from Tunisia to Egypt. There were fears it would go to Jordan, Saudi Arabia, et cetera. As those fears started to die back, however, oil started to fade once more.

It really picked up speed on Friday ($89.03, -1.51). It is coming back down. It looks like it will trade into this range, come back to the October peak and the January low. That will be the first real test for the commodity to see if it will hold up. Again, it was in freefall, and actually starting to break lower through that support level last Thursday before the news hit and shot oil to the upside. Oil and gold are probably coming back some more just as the dollar tries to rally and bonds sell off.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS

Volume. NASDAQ volume rallied up not even a point and a half to 1.9B shares. NYSE volume fell to 919M, off almost 8%. The early read looked as if NASDAQ volume was higher, but it was not. We had a quiet, boring session. That does not give you a lot of comfort with NASDAQ. It broke through to a new rally high, and it did not have any volume to push it.

Breadth. Decliners led by a hair on the NASDAQ, and they led by the same hair on the NYSE. You do not often see the same breadth readings. It was a very quiet, boring day. Even though we had plenty of important news, the market did not have the strength in it to put in a wild session after all the volatility.

CHARTS

SP500. SP500 continued its trend to the upside. It already broke through the prior peaks, and it continued higher Friday. No great volume, just grinding out the upside in a nice uptrend. As noted, the only problem it had was this one-day reversal, and it bounced right back up. You can give a stock or index a day, and it can recover and everything is fine. That is exactly what it looks like on SP500. I hate to sound complacent, but what do you do? It keeps moving up, no matter what. Hard to fight it. It is riding that liquidity wave.

NASDAQ. NASDAQ made all the headlines. I said it was the key and you needed to watch it. Sure enough, it broke to a new rally high, but it was an inauspicious break. Volume was no great shakes not any greater than it has been of late (indeed, less than several sessions). Breadth was nothing. It was all basically large caps. There really was not a lot of power behind to move. I would not bet the farm on this kind of breakout. It could still come back down on us. It is in this lateral move. It just peaked up over the top of it, and it is not showing the kind of strength you like to see. It may get shot back down. We will have to see.

The thing is that SP500 keeps forging ahead and NASDAQ though reluctant has followed. It is hard to complain about the move, especially when we see other tech stocks starting to come back to life after getting their heads cut off a few weeks back. It is amazing, indeed, how some of them are responding to the upside so aggressively after being hammered on their earnings.

SP600. The small caps have not broken out to a new rally high. Still moving laterally for the last five to six weeks in that trading range. They are bumping up at the top and making a higher low. Maybe they will make a breakout here and follow everyone else out. That would be nice to see. It would give a little credence to the economic rally continuing, and does it ever need to continue. Only part of the economy is actually doing anything, and it has nothing to do with the part of the economy that makes any jobs.

SOX. SOX was moving impressively to a new rally high, breaking out again. A little pennant triangle formed here. It broke out to the upside. The semiconductors continue to perform very well.

SP400. The mid-caps look very similar to NASDAQ. It made a break to a new rally high, something that the SP600 has been unable to do. Very solid and steady, right at the 20 day EMA. Now the odd man out is the small cap index. Can it follow? If the rest of the market is moving up, it will follow behind it just may not lead. The small caps are not perceived as being the growth leaders from here on in with this recovery. They will be following along and not holding the lead.

We are in February, and I suppose we have had a bit of January effect. That may be out of the system, and now the managers and other investors are looking to different names. That may be why we are seeing retail turn back up after getting thrashed as well as some of those techs that got slaughtered. They are turning back up, getting money as well. Maybe the money is allocating out of smaller caps and into other areas that were downtrodden but are now showing some life.

LEADERSHIP

Technology. FFIV surged to the upside off this little inverted head and shoulders. After crashing downside, buyers are piling back into it. ADTN had a nice, sharp break to the upside on Friday. Even when it looks like the move is capped out, they are finding new buyers. CRM is bouncing back to the upside. It looked like it was a definite downside play, but it is picking up speed to the upside. JNPR is another that was hammered back on earnings. It has reversed immediately. A reversal gap, an island, and now it is surging. Money is coming back in after a short hiatus.

Retail. LULU broke higher on strong volume Friday. UA broke higher on strong volume. NKE sold off, trying to make its move back to the upside. SKX has been hammered forever. The last couple of days were strong days, moving to the upside. SHLD is breaking upside. It had a strong week. ANF is trying to turn and move back to the upside, and ANN is trying to do the same. These are not gimme patterns for sure, but they are showing that money is coming in a big way as volume makes the turn back to the upside.

Semiconductors. Chips look solid as well. ARMH had a big week with earnings. It is moving higher and doing well. BRKS reported earnings after the close on Thursday. It was down early and reversed. Volume came in and shoved it back to a new rally high. NVLS has been steadily moving higher up the 10 day EMA. ONNN has had big runs. It has been moving laterally for three weeks, and it may be ready to make a new break to the upside. There is plenty of money flowing into areas that did not have it a short time ago.

THE ECONOMY

Jobs report gives on the one hand, takes away with the other.

When you look at the economy, you have to look at the jobs report. Of course, it was the game in town on Friday. We are looking at a tale of two cities. We have 36K non-farm payrolls, which is less than one-third of expectations. There were 50K private payrolls, and that was also less than one-third of what was expected. Pitiful. We lost 504K people. Since October, we have lost 1M people from the work force. That jives with what Bernanke is saying; the recovery is too weak for an increase in the number of jobs created. Then again, there was improvement. The real unemployment rate was at 16.1M, and that was below the 16.9M reported in December. There is improvement, but those private payrolls were the fewest produced since January of 2010. Yin and yang.

Looking at the trend of the weekly jobless claims, there is improvement without a doubt. Weather likely played a role, although it only impacted the non-farm numbers. It would not impact the household number because whether or not you can get to your job, you are still counted as employed. With the non-farm, if you cannot get to the job to get hired, you are not going to get hired. That is what the weather would have impacted. You can also say that the non-farm payrolls were artificially depressed, and they very well could have been. We could have been up to the 50K that was expected. Those who want jobs but cannot get them rose to 6.7M. If they were included in the unemployment rate, it would be over 13%.

Not looking too good on the home front for jobs, but if you dig a little deeper, hourly earnings rose 0.4%. That is twice the rate expected. Would hourly earnings be moving higher if jobs were basically nonexistent and companies did not need help? This is sometimes a signal that hiring is about to start. Workers are demanding more money because they are getting worked more. Productivity made a huge move up on Thursday. We are getting more out of our workers.

How long can that go on before they want more help or they're out of there? Then other companies start cherry picking your best people, so you have to get outside help. That is all part of the equation, and we are likely to see it start to break sooner than later. If this new SBA bill is passed, they might actually get the help they need to start hiring a few people. The economy could be ripe enough for them to want to do that.

The strange thing is that (here is that yin and yang again) the average workweek fell to 34.2 from 34.3. The average workweek should be going up if we are getting more out of our workers and getting to the point where they need to hire more people. You should be pushing them harder and making them work more hours. If they do not have to work those hours, why would you hire new people?

There are multiple dichotomies within the report. That is why some people were scratching their heads and ready to through this one out the window. On one hand, hourly earnings are up. You must have to pay them more, therefore things must be better. It must be tight and ready to hire. On the other hand, they are not working them anymore in fact, they are working them less. Many features of this are head scratchers, and we will not know much until the next couple of months when we see how the weather plays out in the numbers.

Overall, take away the fact that the trend is improving. There is no great job surge, and the fall in the unemployment rate was most probably incorrect. This economy is simply not that strong. It will bounce back when all of the numbers get ironed out from the storms, but the overall trend is improving. Things are getting better, but it does not mean they will be great. That is the tragedy of it all. We could be great, but we are pursuing policies that make us mediocre. Those policies make us like all the other countries that pursue debt and have issues.

Why do I bring that up? Canada reported its jobs number as well, and it created four times the number of jobs expected. It was just 62,900 jobs, but they beat the hell out of the US. They almost doubled up what we made in the non-farm number. Canada did not get carried away with debt and did not buy into the subprime nonsense. They are actually performing well. Iceland was the poster child for the problems in the financial crisis, and it took a different tack than the US and European countries. It made the creditors pay for the bailouts, not the taxpayers.

It was dicey. There were times when they did not know if they would make it, but they did. They put it on the line, they made it, and now they are growing at the same rate the US is growing, and maybe better. They also do not have any debt. We have $14T in debt, and they have virtually nothing because of how they handled their problems. They are growing at the same rate that we are. What position would you rather be in?

We have to think about this moving ahead. There are a lot of things happening in this country, and we are at a crossroads. Do we go with big government and push this healthcare that has been declared unconstitutional by a couple of courts? It will get to the Supreme Court. Do we submit to raising the debt ceiling even higher because we have to pay our bills?

There are some things we absolutely do not need and should stop doing. We need to get back to having the states handle things and not trying to provide everything for everybody. We are not a socialist country. We are not a country that is supposed to have a powerful government that doles everything out. We are supposed to be a group of states that control their own destiny and trade with each other. The federal government just protects our borders and makes sure the trade between the states is fair. I am talking probable heresy to many people, but we have seen what works and what does not.

This last financial crisis is another case study of how to handle problems. We are trying to cure debt problems with more debt, and we are getting bills now that we cannot pay. How will we solve the problem? It is becoming clearer and clearer. The answer is not to provide everything that we provide now. It will have to stop, but it will be an ugly fight to get there. There was a Civil War where they said bother fought against brother and father fought against son. The fight over these entitlements will be very similar to that. Father against son, brother against brother as everyone vies for the government handouts. It will have to stop or be dramatically curtailed. The question is who will get it and who will not. It could get ugly.

THE MARKET

MARKET SENTIMENT

VIX. The VIX has been as volatile as oil and gold over the past couple of weeks. The fear on the Egyptian story has subsided just as rapidly as it showed up, coming back down to the lows hit in late December. While low, that is not necessarily an aberration. I have talked about this many, many times, but there is so much discussion of the VIX that it needs to be brought out.

Volatility can stay low and trend lower for years, and that does not mean the market is about to turn over. When you are in a sustained rally, volatility falls to a certain level. It can continue to fall. Only when volatility rises as the stock market rises (as it did in 2000) do you have worries about a serious correction. Now we just see a pullback to where it has bottomed recently, and that has led to modest corrections in the stock market.

Volatility bounces, the stock markets corrects, and then it is right back to rallying once more. There is nothing nefarious in the VIX, just "ordinary times" action.

VIX: 15.93; -0.76
VXN: 17.91; -1.18
VXO: 14.67; -0.38
Put/Call Ratio (CBOE): 0.87; 0

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: 52.7% versus 55.1%. Bulls continue to wane as NASDAQ and the growth indices struggle to follow SP500. Down modestly 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: 22.0% versus 19.1%. Climbing back up after a quick dip down to 19.1% a month back. Down from 28.3% in September. 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: +15.42 points (+0.56%) to close at 2769.3
Volume: 1.902B (+1.41%)

Up Volume: 1.338B (+170.627M)
Down Volume: 611.89M (-144.189M)

A/D and Hi/Lo: Decliners led 1.06 to 1
Previous Session: Advancers led 1 to 1

New Highs: 171 (+30)
New Lows: 28 (+5)

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: +3.77 points (+0.29%) to close at 1310.87
NYSE Volume: 918.998M (-7.89%)

Up Volume: 470.022M (-125.404M)
Down Volume: 435.649M (+52.284M)

A/D and Hi/Lo: Decliners led 1.06 to 1
Previous Session: Advancers led 1.15 to 1

New Highs: 449 (+62)
New Lows: 56 (+26)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: +29.89 points (+0.25%) to close at 12092.15
Volume DJ30: 122M shares Friday versus 144M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

The news next week looks rather boring. There is not a lot coming out. We have the usual suspects and Michigan Sentiment on Friday. The rest of the week the economic data is not going to excite anyone that much. The stocks will be looking to the remaining earnings that are out there, as well as what is going on in the geopolitical world. We had a lot of good data on economics, and we had a lot of good data on earnings. We had a scare on the geopolitical scene, but it looks to be stabilizing. It should be nirvana for stocks at this point, right? We will have to see.

It has still been a long run, and there is still the possibility of a pullback. We cannot take that off the table despite the moves that the market has made, such as NASDAQ breaking up through its recent highs. It has been consolidating laterally, but it is not a very big consolidation. SP600 looks to have a better lateral consolidation ongoing than NASDAQ, but it has not been able to break higher as NASDAQ has.

Next week we may get out of the jobs picture and out of the economic data shadow. Maybe then we will see just how the indices will react given that NASDAQ just cracked through its high. I will not say NASDAQ will continue to move upside on this move. It may turn right back down in a vacuum of news with respect to the economy and earnings. That said, we have seen money flowing back into tech stocks. It was clearly there on Friday, and we will have to see if it continues and pushes the index higher.

If it does, that is fine. We will close out the QQQQ's we were just taking a chance on that anyway in the event that the Thursday turn to the downside got really ugly. As noted, buyers came right back in and pushed NASDAQ up. You could call this market irrepressible; it just does not want to fall back down. The Fed and its liquidity supertanker are pumping liquidity into the stock market. It is trying to build up the feeling of wealth by appreciating our financial assets. Therefore it has been trying to push the market higher so we would all feel wealthier and spend that money.

The problem is that the retail investor has not been into this stock market move very much. After getting burned in 2008 again and then getting burned by the flash crash in May, the retail investor has backed off again. The retail investor may not be feeling all that wealthy. That leaves it up to the big companies that have the stock holdings, and they got all the stimulus money anyway. We have seen what a rip-roaring recovery we get with them leading the way.

It has to be grass roots. One thing we should know in the US is that anything effective, widespread, and lasting has to be from the grassroots. That is where real change comes from, not from the big boys calling the shots and the government trying to pick winners and losers. It comes from the garages. It comes from the back study where those better ideas are hatched and then put into practice in our economy. Those are where the jobs come from.

There is encouraging news with the unemployment rate and the household survey. Maybe people are staying to hell with trying to find a job with these big guys who are still laying people off in this "great recovery." They may make their own jobs by starting their own businesses. If that is the case, then we will have some good growth ahead. The problem is the small cap stocks are not leading anymore, and that is where a lot of these companies would come from. Mixed signals, but the trend is better overall.

We will watch next week. We are concerned that NASDAQ will not be able to hold the break. It is good to be concerned, and we have been concerned all along. What has that gotten us? It keeps us honest. We have still been buying into upside plays because we are taking what the market gives. We are seeing downside plays set up. The problem is they will go down for a few days, but then they reverse and turn. The money keeps coming back in. Do be skeptical about moves. There is rotation ongoing, and at any time a certain sector could come under fire as a big mutual fund (or two or three or ten) start unloading shares in certain sectors and they start to sell off.

That money has been staying in the market. It has been moving somewhere else. We need to watch where it is moving just as we are now. We see a little tech coming back, and we were trying to pick up some tech this week. We are seeing retail come around. There may be other areas where it is trying to work its way back in, and we will have to move into those areas. Money is rotating around the market, so you follow it. You try to figure out where it is going, get in, and let it push your stocks to the upside.

We have been fortunate. We have been able to ride several positions for a long time. We will continue to do that as we look for new upside plays. I know this leg is extended. It has come a long way, but we just have to stick with the move as long as the plays keep turning up and giving us buy points. We have seen them give the buy points and then continue to move higher. That is the liquidity from the Fed.

Bernanke said again this week that he will stand by that. He believes that the unemployment rate is still too high. There are still too few jobs being created for any kind of self-sustaining recovery. He will keep that supertanker hooked up to the economy, and that would mean to the financial markets. He will keep pumping that liquidity in.

There will be times when the market stalls and comes back to test what has NASDAQ been doing for the past three weeks? It was unable to move and going laterally. After that, the liquidity kicks in again and you have another leg higher. We had the August to November leg, we had November which was basically a pullback, and then December on through January. Now a little three-week walk to the side. That is the pattern we have. We have a great base below this rally, and it still suggests that there is much more upside. Possibly two more of the kind of legs we have seen thus far.

It seems illogical. It does not seem like the market would run that much when it is just fueled by liquidity, but that is what liquidity does. How many times have we seen a stock or index run much further than we ever thought it could? With that in mind, I would like to use this quote from Bull Durham again because it is so relevant: You have to stick with the streak. Do not [censored] with the streak. If it is in place and working, go with it. Be wary, however. There is another quote I like from Field of Dreams: You have to watch out for in your ear when you are looking the other way. I know those are baseball quotes on a football weekend, but I could not think of any football movie quotes for the Super Bowl. If you think of any, send me an email and maybe I can use it in a supplemental report.

Have a great weekend!

Support and Resistance

NASDAQ: Closed at 2769.30
Resistance:
2825 is the 2007 closing peak.
2862 is the 2007 peak

Support:
2766 is the January peak
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 2665
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 2407

S&P 500: Closed at 1310.87
Resistance:
1313 from the August 2008 interim peak
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:
The 20 day EMA at 1287
1278 is the 127% Fibonacci extension of the August 2010 run
The 50 day EMA at 1259
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 1158
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 12,062.26
Resistance:
12,110 from the March 2007 closing low
13,058 from the May 2008 peak on that bounce in the selling

Support:
11,893, from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
The 20 day EMA at 11,867
11,734 from 11-98 peak
The 50 day EMA at 11,639
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 10,839
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 04 - Friday
- Nonfarm Payrolls, January (08:30): 36K actual versus 148K expected, 121K prior (revised from 103K)
- Nonfarm Private Payrolls, January (08:30): 50K actual versus 163K expected, 139K prior (revised from 113K)
- Unemployment Rate, January (08:30): 9.0% actual versus 9.5% expected, 9.4% prior
- Average Workweek, January (08:30): 34.2 actual versus 34.3 expected, 34.3 prior
- Hourly Earnings, January (08:30): 0.4% actual versus 0.2% expected, 0.1% prior

February 07 - Monday
- Consumer Credit, December (15:00): $2.5B expected, $1.3B prior

February 09 - Wednesday
- MBA Mortgage Purchas, 02/04 (07:00): 11.3% prior
- Crude Inventories, 02/05 (10:30): 2.59M prior

February 10 - Thursday
- Initial Claims, 02/05 (08:30): 413K expected, 415K prior
- Continuing Claims, 01/29 (08:30): 3900K expected, 3925K prior
- Wholesale Inventories, December (10:00): 0.7% expected, -0.2% prior
- Treasury Budget, January (14:00): -$50.0B expected, -42.6B prior

February 11 - Friday
- Trade Balance, December (08:30): -$40.7B expected, -$38.3B prior
- Michigan Sentiment, February (09:55): 75.5 expected, 74.2 prior

[ReturntoSender]

From Briefing.com: 4:30 pm : The absence of any real catalyst kept traders on the sidelines, but a big bounce by energy stocks led the broader market to a modest gain that has left it just a point shy of a 100% gain from its 2008 low.

Stocks chopped along listlessly in the early going. There were neither influential corporate announcements nor data to provide direction. Action abroad also failed to offer any kind of cue.

Although the broader market was mired in a relatively narrow range for most of the day, energy stocks surged. The sector settled with a 2.1% gain, even though energy commodity prices finished mixed -- March crude oil settled 0.9% lower at $84.81 per barrel, but March natural gas gained 0.5% to $3.93 per MMBtu. Oil and gas drillers (+3.0%) and refiners (+3.6%) were the sector's top performers.

Also natural resource plays, materials stocks found favor. The sector finished with a 1.0% gain in the face of a stronger dollar, which settled with a 0.2% gain after it had set a three-week high in the early going.

Every other major sectors was caught up in the broader market's lackluster trade. As a result, they finished mixed. Despite that, the S&P 500 was still able to muster a modest gain, which incrementally extended the stock market's two-year high. With today's gain, the S&P 500 is now up almost 100% from its March 2009 low just beneath 667.

Participation this session was paltry, though. Trading volume on the NYSE barely broke 800 million shares. That makes for the worst share volume total of this year.

Advancing Sectors: Energy (+2.1%), Materials (+1.0%), Health Care (+0.3%), Tech (+0.2%), Financial (+0.1%)
Declining Sectors: Industrials (-0.1%), Consumer Discretionary (-0.4%), Consumer Staples (-0.5%), Telecom (-0.5%), Utilities (-0.8%) DJ30 -5.07 NASDAQ +7.74 NQ100 +0.3% R2K +0.5% SP400 +0.5% SP500 +3.17 NASDAQ Adv/Vol/Dec 1439/1.97 bln/1231 NYSE Adv/Vol/Dec 1652/815 mln/1329

5:31PM Advanced Energy beats by $0.06, beats on revs; guides Q1 EPS in-line, revs in-line (AEIS) 15.79 +0.45 : Reports Q4 (Dec) earnings of $0.45 per share, $0.06 better than the Thomson Reuters consensus of $0.39; revenues rose 155.9% year/year to $148.7 mln vs the $145.3 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.32-0.38 vs. $0.34 Thomson Reuters consensus; sees Q1 revs of $132-142 mln vs. $136.29 mln Thomson Reuters consensus.

4:11PM Agilent beats by $0.02, misses on revs; guides Q2 EPS above consensus, revs above consensus; guides FY11 EPS above consensus, revs in-line (A) 12.57 +0.18 : Reports Q1 (Jan) earnings of $0.60 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of $0.58; revenues rose 25.2% year/year to $1.52 bln vs the $1.55 bln consensus. Co issues upside guidance for Q2, sees EPS of $0.63-0.65, excluding non-recurring items, vs. $0.60 Thomson Reuters consensus; sees Q2 revs of $1.59-1.61 bln vs. $1.56 bln Thomson Reuters consensus. Co issues mixed guidance for FY11, sees EPS of $2.53-2.63, excluding non-recurring items, vs. $2.50 Thomson Reuters consensus; sees FY11 revs of $6.3-6.4 bln vs. $6.32 bln Thomson Reuters consensus.

9:21AM Hewlett-Packard to acquire privately held Vertica; no terms were disclosed (HPQ) 48.64 : Co announces it has signed a definitive agreement to acquire Vertica, a privately held, real-time analytics platform co. The acquisition of Vertica will enhance HP capabilities for information optimization, adding sophisticated, real-time business analytics for large and complex sets of data in physical, virtual and cloud environments. Terms of the deal were not disclosed.

7:05AM KVH Industries misses by $0.03, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY11 revs below consensus (KVHI) 12.55 : Reports Q4 (Dec) earnings of $0.02 per share, $0.03 worse than the Thomson Reuters consensus of $0.05; revenues rose 2.7% year/year to $27 mln vs the $27.3 mln consensus. Co issues downside guidance for Q1, sees EPS of ($.05)-(0.10) vs. $0.13 Thomson Reuters consensus; sees Q1 revs of -5-10% YoY to $25.2-26.6 mln vs. $32.11 mln Thomson Reuters consensus. Co issues downside guidance for FY11, sees FY11 revs of +15-20% to ~$129.1-134.7 mln vs. $137.73 mln Thomson Reuters consensus. "However, we do anticipate challenges in the first quarter. Among these are the continued slow pace of FOG sales for remote weapon stations during the CROWS II to CROWS III transition period, a delay in resumption of LiveTV shipments until the second half of 2011, and the full cost impact of the mini-VSAT Broadband network buildout, including Brazil and some additional capacity for the continental U.S... We are on a solid path of executing our strategic plans to expand our VSAT, marine satellite TV, and FOG businesses. These efforts form the basis for building toward progressively stronger financial results with four- to five-year targets of annual revenue greater than $300 million, more than half of which would be generated by our VSAT business, along with operating margins of 15%."

# Juniper Networks (JNPR) announced the integration of its new Juniper Networks vGW Virtual Gateway with the Juniper Networks SRX Series Services Gateways to provide a consistent, virtualization-aware solution for private and public cloud deployments.

# PMC-Sierra (PMCS) announced its Universal Front End 4 silicon that enables OEMs to develop a range of high performance, highly integrated solutions for the growing mobile backhaul market segment.

# Marvell (MRVL) introduced it phone platform based on the Marvell PXA978 communications processor with Marvell HSPA modem.

Atmel (ATML) announced it is collaborating with NVIDIA (NVDA) to bring high-performance, multi-touch, large-format touchscreen solutions to market. SanDisk (SNDK)announced that several of the industry's major chipset vendors have selected SanDisk's iNAND embedded storage device for use in their new reference designs, the boards on which next-generation mobile phones and tablets are developed.

Texas Instruments (TXN) in collaboration with Azcom Technology announced the availability of a new small cell base station platform focused on 3G and 4G high speed data systems.

Powerwave Technologies (PWAV) announced the new LTE ultra-broadband Powerwave Picocell, which delivers up to 15 times greater overall system capacity at a much lower cost and complexity than adding standard macro cells to address "sore spots" of high data usage or weak signals in wireless networks.

Moser Baer Clean Energy and First Solar (FSLR) announced that MBCEL will procure 25 megawatts DC of First Solar's advanced thin-film modules for its solar power generation projects. Delivery is expected to take place by June 30, 2011.

* Sierra Wireless (SWIR) introduced two new 4G mobile hotspots to its line of AirCard Mobile Broadband Devices. Bothproducts are scheduled for commercial shipments in the second quarter of this year.

* Broadcom Corporation (BRCM) announced its newest wireless combination chip designed to support more media and data applications without impacting size or battery life for smartphones, tablets and other mobile devices.

2:32AM Tower Semicon reports EPS in-line, revs in-line; guides Q1 revs below consensus (TSEM) 1.41 : Reports Q4 (Dec) earnings of $0.14 per share, in-line with the Thomson Reuters consensus of $0.14; revenues rose 34.3% year/year to $135.1 mln vs the $135 mln consensus. Co issues downside guidance for Q1, sees Q1 revs of $120-125 mln vs. $131.40 mln Thomson Reuters consensus.

# Bridgewater Systems announced that Juniper Networks (JNPR) will resell Bridgewater's complete control plane portfolio globally, as an integral component of Juniper's MobileNext, the industry's first open mobile core for 2G/3G and LTE networks. Additionally, Openwave Systems (OPWV) announced that JNPR has selected the co as a strategic partner to integrate its Media Optimizer into JNPR's Media Flow solution for mobile video optimization.

# NVIDIA (NVDA) and Samsung Electronics announced the Galaxy Tab 10.1, a 10.1-inch screen tablet which uses the NVIDIA Tegra 2 mobile super chip to take full advantage of the Android 3.0 user interface.

09:44 am TSEM Guides Q1 Revs Below Consensus (TSEM)

Tower Semicon (TSEM $1.46 +0.05) reported fourth quarter earnings of $0.14 per share, in-line with the Thomson Reuters consensus of $0.14.

Revenues rose 34.3% year-over-year to $135.1 million versus the $135 million consensus.

For the first quarter, the company expects to see revenues in the range of $120 million to $125 million versus the $131.40 million Thomson Reuters consensus.

09:38 am STEC Guides Q1 Above Consensus (STEC)

STEC (STEC $25.06 +1.27) reported fourth quarter earnings of $0.35 per share, $0.02 better than the Thomson Reuters consensus of $0.33.

Revenues fell 11.4% year-over-year to $93.9 million versus the $90.3 million consensus.

For the first quarter, the company issued earnings guidance of $0.32 to $0.34, well above the $0.25 Thomson Reuters consensus. On the top line, the company expects to see revenue in the range of $90 million to $92 million versus the $85.57 million Thomson Reuters consensus.

[ReturntoSender]

From Briefing.com: 4:30 pm : Renewed selling pressure sent stocks to their second straight loss as $100 oil spooked participants. Technical support helped limit the downturn.

The mood among participants was mixed in the opening minutes of trade, but the tone quickly soured as oil prices extended their climb to new two-year highs amid ongoing concerns related to social and political turmoil in the Middle East and North Africa. At its session high, oil traded at $100 per barrel on the nose. Prices were backed down in afternoon trade so that the energy component settled pit trade with a 2.8% gain at $98.10 per barrel. Weekly oil inventory figures will be released tomorrow morning.

Oil's late morning and early afternoon climb induced renewed selling pressure among stocks. At its session low, the S&P 500 was down 1% to the 1300 line. However, support at that level combined with oil's pullback from the $100 mark so that stocks were able to catch some relief.

Trading volume was up sharply for the second straight session, but the 1.33 billion shares that exchanged hands today on the NYSE was the highest tally in two months.

Although the broad market closed comfortably above its session low, energy was the only major sector to finish with a gain. Higher oil prices helped energy stocks outperform for the entire session and settle with a 2.0% gain. Chesapeake Energy (CHK 34.33, +2.32) was one of the sector's top percentage gainers after it posted a better-than-expected earnings report.

At the other end of the spectrum, industrial stocks endured the sharpest selling. That sector shed 1.8% as FedEx (FDX 89.25, -4.04) fell more than 4% as investors considered the consequence of higher fuel costs on the operations of the global delivery company.

Retailers also had a rough session. They fell 1.8% as a group. TJX Co (TJX 48.81, -0.91) traded in line with the group after its disappointing outlook overshadowed an upside earnings surprise. Saks (SKS 11.86, -0.31) and home improvement retailer Lowe's (LOW 25.73, -0.26) also logged losses, despite their own upside earnings surprises. In contrast, Chico's FAS (CHS 13.15, +1.09) overcame an earnings miss to climb sharply to a six-month high.

Hewlett-Packard (HPQ 43.10, -5.13) tumbled almost 10% after its upside earnings surprise was ignored because of a light revenue figure and a disappointing forecast.

Toll Brothers (TOL 21.20, +0.44) had better-than-expected earnings and scored a gain. The stock will likely come back into focus tomorrow, which is when the latest new home sales report will be posted.

Existing home sales for January were reported today. They increased 2.7% month over month to an annualized rate of 5.36 million units, which is greater than the rate of 5.23 million units that had been expected, on average, among economists polled by Briefing.com.

In the face of further weakness among stocks, Treasuries at the short end of the yield curve lacked support. Pressure in the space picked up after a $35 billion auction of 5-year Notes drew a yield of 2.19%, a bid-to-cover of 2.69, and an indirect bidder participation rate of 34.2%. However, the 30-year Bond was able to advance so that its yield moved down to 4.58%.

Advancing Sectors: Energy (+2.0%)
Declining Sectors: Consumer Staples (-0.2%), Utilities (-0.4%), Financials (-0.4%), Materials (-0.7%), Health Care (-1.0%), Telecom (-1.0%), Tech (-1.3%), Consumer Discretionary (-1.5%), Industrials (-1.8%)DJ30 -107.01 NASDAQ -33.43 NQ100 -0.9% R2K -1.6% SP400 -1.4% SP500 -8.04 NASDAQ Adv/Vol/Dec 629/2.48 bln/1996 NYSE Adv/Vol/Dec 1062/1.33 bln/1959

6:52PM Interdigital Comm misses by $0.03, beats on revs (IDCC) 53.14 -2.68 : Reports Q4 (Dec) earnings of $0.76 per share, $0.03 worse than the Thomson Reuters consensus of $0.79; revenues rose 24.7% year/year to $95.3 mln vs the $93.9 mln consensus. InterDigital expects first quarter 2011 revenue contributions from existing agreements to be in the range of $76 million to $77 million. This range includes an increase in current patent licensing royalties from the same set of patent customers of 5% over fourth quarter 2010 and 15% year over year. The significant increase in current patent licensing royalties is due to increased royalties relating to our customers' sales of smartphone products.

4:56PM MEMC Elec intends to commence a private offering, subject to market and other conditions, of $500 million in aggregate principal amount of senior notes due 2019 (WFR) 13.64 :

4:30PM Conexant agrees to be acquired by Golden Gate Capital for $2.40 per share in chas and terminates merger agreement with SMSC (CNXT) 2.34 -0.18 : The transaction is expected to close in the second quarter of calendar 2011. Conexant also announced that it has terminated its previously announced agreement with Standard Microsystems Corporation and paid to Standard Microsystems Corporation the $7.7 mln termination fee provided for under that agreement.

4:17PM AXT Inc misses by $0.01, misses on revs; guides Q1 EPS, revs below consensus (AXTI) 8.36 -0.36 : Reports Q4 (Dec) earnings of $0.15 per share, $0.01 worse than the Thomson Reuters consensus of $0.16; revenues rose 51.1% year/year to $26.9 mln vs the $28.9 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.11-0.13 vs. $0.14 Thomson Reuters consensus; sees Q1 revs of $24-25 mln vs. $27.37 mln Thomson Reuters consensus. "While we are experiencing some near-term softness in the Taiwanese LED market and expect seasonality in our first quarter semi-insulating gallium arsenide revenues, we believe that we will see sequential growth in our business beginning again in the second quarter, driven by positive secular trends in the demand for wireless devices, LEDs and photovoltaics, as well as gains in our positioning within various customers in our market."

7:03AM Conexant: SMSC announces that it does not plan to increase its offer for Conexant above $2.25 per share (CNXT) 2.52 : SMSC announces that it does not plan to increase its offer for Conexant Systems above $2.25 per share in response to a proposal from Golden Gate Capital. SMSC also announced that it has agreed to waive the "match period" under the merger agreement. On February 21, 2011, the board of directors of Conexant informed SMSC that it had determined that a proposal from Golden Gate Capital to acquire Conexant constituted a "superior proposal" as such term is defined in the existing merger agreement. If Conexant terminates the merger agreement to accept the proposal from Golden Gate Capital, SMSC will be entitled to a termination fee of $7.7 mln.

09:50 am HPQ Lowers FY11 Revs Below Consensus (HPQ)

Hewlett-Packard (HPQ $42.99) reported first quarter earnings of $1.36 per share, excluding non-recurring items, $0.07 better than the Thomson Reuters consensus of $1.29.

Revenues rose 4% year/year to $32.3 billion versus the $32.95 billion consensus.

For the second quarter, the company see earnings of $1.19 to $1.21, excluding non-recurring items, vs. $1.25 Thomson Reuters consensus, and expects revenues to fall in the range of $31.4billion to $31.6 billion versus the $32.59 billion Thomson Reuters consensus.

For the fiscal year 2011 the company raised its earnings guidance to $5.20 to $5.28, excluding non-recurring items, from $5.16 to $5.26 versus the $5.24 Thomson Reuters consensus; lowers fiscal year 2011 revenues to $130 billion to $131.5 billion from $132 billion to $133.5 billion versus the $132.95 billion Thomson Reuters consensus. First quarter non-GAAP operating margin of 12.4% versus 11.7% Thomson Reuters consensus.

HP saw balanced growth in the first quarter across all regions in local currency, with accelerated growth in BRIC countries. Results were largely driven by momentum in the commercial sector as businesses continued to spend on technology. HP experienced uneven consumer performance across its geographies and product categories during the quarter. First quarter revenue was up 6% in the Americas to $14.4 billion.

Revenue was flat in Europe, the Middle East and Africa and up 7% in Asia Pacific to $12.1 billion and $5.8 billion, respectively. When adjusted for the effects of currency, revenue was up 5% in the Americas, up 4% in Europe, the Middle East and Africa and up 2% in Asia Pacific. Revenue from outside of the United States in the first quarter accounted for 65% of total HP revenue, with revenue in the BRIC countries increasing 11% while accounting for 11% of total HP revenue.

[ReturntoSender]

From Briefing.com: 4:30 pm : A lack of catalysts left the Dow and S&P 500 to chop their way to a flat finish, but the tech-rich Nasdaq logged a sizable loss as it lagged its counterparts once again.

Corporate news for today was limited to only a handful of earnings announcements. None of them was of concern for the broad market. Similarly, data was limited to a January wholesale inventory report that showed a slightly stronger-than-expected 1.1% increase, but that had no real impact on trade.

Market participants primarily took their early cues from oil, which opened pit trade at session highs then drifted down to $104.38 per barrel so that it closed with a 0.6% loss. Selling after the close has the commodity near $104 per barrel in electronic trade.

Weekly oil inventory data posted a bigger-than-expected build, but for the second week in a row the inventory report was met with a muted response. That suggests that the energy component is currently most concerned with the social and political events in the Middle East and North Africa.

Oil's early strength put stocks on the defensive, but as oil moved lower the major averages moved higher. However, every attempt by the S&P 500 to turn positive was repeatedly refused by lingering selling interest.

The broad market's inability to turn positive stemmed partly from a lack of leadership. Defensive-oriented stocks like telecom (+0.8%) and utilities (+1.1%) had the strongest gains, but make up the smallest share of market weight. Tech stocks (-0.6%), which represent the largest sector by market weight, retreated to a loss as semiconductor stocks slumped again.

The Philadelphia Semiconductor Index dropped 3.0% to close below its 50-day moving average for the first time since September. Ongoing weakness in the semiconductor space has the Index down 5.5% this week and the Nasdaq Composite trailing its counterparts.

A successful Treasury auction helped drive buying so that the yield on the 10-year Note fell to a five-session low of 3.45% before easing up a bit. The auction of 10-year Notes drew a bid-to-cover ratio of 3.32 for dollar demand of $69.7 billion. The indirect bidder participation rate came in at 53.0%. For comparison, the prior auction had a bid-to-cover of 3.23 and dollar demand of $77.5 billion with an indirect bidder participation rate of 71.3%.

Advancing Sectors: Utilities (+1.1%), Telecom (+0.8%), Consumer Staples (+0.5%), Consumer Discretionary (+0.2%), Health Care (+0.2%)
Declining Sectors: Financial (-0.1%), Industrials (-0.2%), Tech (-0.6%), Energy (-0.6%), Materials (-1.5%)DJ30 -1.29 NASDAQ -14.05 NQ100 -0.6% R2K -0.4% SP400 -0.2% SP500 -1.80 NASDAQ Adv/Vol/Dec 1079/2.00 bln/1536 NYSE Adv/Vol/Dec 1417/869 mln/1560

4:33PM Semtech beats by $0.06, beats on revs; guides Q1 EPS above consensus, revs above consensus (SMTC) 22.50 -1.42 : Reports Q4 (Jan) earnings of $0.47 per share, excluding non-recurring items, $0.06 better than the Thomson Reuters consensus of $0.41; revenues rose 36.0% year/year to $116.3 mln vs the $113.3 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.41-0.44, excluding non-recurring items, vs. $0.40 Thomson Reuters consensus; sees Q1 revs of $117-121 vs. $114.40 mln Thomson Reuters consensus.

4:05PM LSI Logic to sell external storage systems business to NetApp for $480 mln (see 16:01); Board authorizes new $750 mln stock repurchase program (LSI) 6.13 -0.12 : Co announced that it has signed a definitive agreement to sell its external storage systems business to NetApp (NTAP) for $480 million in cash. The company also announced today that its board of directors has authorized a new stock repurchase program of up to $750 mln. Under terms of the agreement, NetApp will purchase substantially all the assets of the LSI external storage systems business. The business being purchased generated revenues of $705 mln in 2010. As a result of the sale, LSI expects to eliminate $35-40 mln per quarter of operating expenses upon closing of the transaction.

3:11PM Intel displays some relative strength in recent trade, pushes 1% higher over last 25 min amid pickup in volume (INTC) 21.32 +0.20 : Stock set a new six week low this morning but has rebounded as much as 1.9% off the low to test its 50 sma at 21.35 (session high 21.34).

Nanometrics (NANO) announced that a leading Japanese semiconductor company has selected its IMPULSE integrated metrology solution for process control of advanced chemical mechanical polishing applications to be deployed as part of its new fab build-out.

9:05AM Cisco Systems intends to offer, subject to market and other conditions, senior notes under an automatic shelf registration (CSCO) 18.22 : Cisco intends to use the net proceeds from this offering for general corporate purposes. BofA Merrill Lynch, Goldman, Sachs & Co., J.P. Morgan, Citi, Morgan Stanley and Wells Fargo Securities are acting as joint book-running managers.

8:02AM Sunpower signs 48-megawatt solar power supply agreement with Toshiba (SPWRA) 15.71 : Co announces under a strategic supply agreement, Toshiba will order 48 megawatts of high-efficiency solar panels from SunPower during the 2011 Japanese fiscal year ending March 31, 2012. Toshiba will use the panels to support the company's residential solar offering in Japan, which was launched last year with a supply agreement for 32 megawatts of SunPower panels.

Microsemi (MSCC) announced the immediate availability of its LXMG1645 quad-lamp CCFL backlight inverters with the proven StayLITTM fault-management feature.

Nokia (NOK) plan to construct a $276 mln manufacturing facility near Hanoi.

Mattson Technology (MTSN) announced that a leading semiconductor manufacturer has placed a follow-on multi-system paradigmE order, the largest etch order in the Company's history.

Semiconductor Manufacturing International (SMI) and RDA Microelectronics (RDA) announced that RDA5802N, an FM receiver chip using SMIC's 55nm Low Leakage logic process and adopting Innopower's IP solution, is now in risk-production.

3:56AM Nokia Siemens Networks clarifies status on Motorola (MMI) transaction; closing will not be completed as previously targeted (NOK) 8.51 : Co announces the acquisition by Nokia Siemens Networks of Motorola's (MMI) wireless networks infrastructure assets is still pending anti-trust approval from the Chinese regulatory authorities. Closing activities will not be completed in the first quarter of 2011 as previously targeted. Nokia Siemens Networks remains committed to the acquisition but will provide no further guidance on when it is likely to be completed.

09:54 am FNSR Guides Q4 Below Estimates (FNSR)

Finisar (FNSR 25.80 -14.23) reported third quarter earnings of $0.47 per share, in-line with the consensus of $0.47.

Revenues rose 57.6% year-over-year to $263 million, above the $257.9 million consensus. Non-GAAP gross margin decreased to 34.7% of revenues from 35.5% in the preceding quarter but increased from 32.2% in the third quarter of the prior year.

The company issued downside guidance for the fourth quarter, seeing earnings of $0.31-0.35 per share, below the $0.48 consensus. The company sees fourth quarter revenues of $235-250 million, below the $268.55 million consensus.

For some background, FNSR supplies optical subsystems and components used to interconnect equipment in local area networks (LANs) and storage area networks (SANs) as well as longer distance metropolitan area networks (MANs), fiber-to-the-home networks (FTTx), cable television networks (CATV), and wide area networks (WANs). The stock has been a big momentum name over the past three months (rising over 100% since the end of Nov), as it is a play on the explosion in the demand for bandwidth due to the data-intensive nature of smartphone devices. Cisco (CSCO) is FNSR's largest customer at 16% of revenue in FY10 (ended April 2010).

09:19 am IBM tgt raised to $176 at RBC following Analyst Day: . RBC is raising their tgt to $176 from $165 after IBM provided a positive and upbeat assessment of the co's prospects at its analyst day. As expected, there were no major changes to the 2015 roadmap. However, progress has been faster than anticipated in some key areas, notably acquisitions. Additionally, mgmt possesses a number of clear options to drive upside beyond $20/shr if no cushion to the roadmap were needed to offset unanticipated macro pressures. While the continue to view shares as an attractive defensive oppty, they nonetheless prefer more pro-cyclical exposure at this stage of the expansion.

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From Briefing.com: 4:30 pm : Following a barrage of negative headlines the S&P 500 closed below its 50-day moving average for the first time in six months, but its one-month low of 1294 remained intact.

Stocks slumped at the start of trade as the tone turned decidedly negative among participants. The force of the sell-off was the culmination of several key headlines. Among them, China reported a surprise trade deficit of about $7 billion for February. Additionally, Japan revised its fourth quarter GDP downward to reflect a 1.3% drop. Asia's major averages all moved sharply lower and the yen lost ground against the greenback.

Europe also had a hand in stirring selling interest. Analysts at Moody's downgraded Spain's debt and issued a negative outlook. That sent Spain's IBEX to a 1.2% loss. The downgrade also weighed on Europe's other major bourses. Mixed industrial production data out of the continent and a downturn in Germany's trade balance to 10.1 billion euros during January didn't help the tone of trade there.

Selling in Europe extended to the continent's chief currency, the euro, which fell 0.8% to $1.379. The British pound was imbued by the weakness, such that it fell 0.9% to $1.605. The pound was uninspired by news that the Bank of England opted to keep its target interest rate at 0.5% and leave its 200 billion pound asset purchase plan intact.

As for domestic data, initial jobless claims for the week ended March 5 totaled 397,000. They had been expected, on average, among economists polled by Briefing.com to come in at 382,000. A negative bias among participants framed the tally as being greater than expected, rather than remaining below 400,000.

Trade deficit data didn't do anything to help improve the mood among traders. The deficit for January totaled $46.3 billion, up from $40.3 billion in the prior month. A $41.5 billion deficit had been widely expected.

Despite widespread weakness at the open of trade, stocks tried to gradually trim their losses. However, sellers redoubled their efforts and dropped the broad market to a session low when it was reported that shots were fired at protestors in Saudi Arabia. The reaction was indicative of the headline risk related to the social and political volatility in the Middle East and North Africa.

Prior to the report out of Saudi Arabia, oil prices had been under sharp pressure. The energy component had actually fallen below $101 per barrel, but quickly rallied back in response to the news. It still finished with a 1.6% loss at $102.70 per barrel. Though trade in recent sessions was largely determined by the price of oil, its drop today mattered less to a market that returned its focus toward macro-related headlines.

There weren't many advancing issues this session. In fact, about 95% of the names in the S&P 500 logged losses as the benchmark index settled near session lows, which were just above the key one-month low set about two weeks ago.

Advancing Sectors: (None)
Declining Sectors: Energy (-3.6%), Materials (-2.2%), Financial (-2.1%), Tech (-2.0%), Industrials (-2.0%), Health Care (-1.6%), Utilities (-1.2%), Consumer Discretionary (-1.0%), Consumer Staples (-0.7%), Telecom (-0.6%)DJ30 -228.48 NASDAQ -50.70 NQ100 -1.7% R2K -2.6% SP400 -1.9% SP500 -24.91 NASDAQ Adv/Vol/Dec 383/2.37 bln/2257 NYSE Adv/Vol/Dec 474/1.15 bln/2511

3:30 pm : Commodities finished lower across the board, with softs leading all decliners. May sugar prices fell 5.6% to close at $0.2781 per pound in the broad based sell off. Strength in the dollar also weighed on sugar prices.

April crude oil settled lower by 1.6% to $102.70 per barrel, well above its session lows at $100.62 per barrel. Crude oil spiked sharply in afternoon trade following reports that Saudi police in the eastern city of Qatif fired shots and stun grenades at several hundred protestors. Note that the eastern portion of the country is where the largest population of the minority Shiites is located. The protestors were defying a ban put in place by the Saudi government ahead of the planned "Day of Rage" rallies, one of which is scheduled for tomorrow. April natural gas shed 2.3% to close at $3.83 per MMBtu. This morning's smaller than expected draw down in sent prices to lows, and natural gas was never able to recover from there.

Weakness in the dollar and weakness in crude oil weighed on precious metals today. April gold finished lower by 1.1% to $1412.50 per ounce, while April silver dropped 2.4% to close at $35.27 per ounce. Both metals did spike on the heels of crude oil's rally, but finished largely lower on the day. DJ30 -221.14 NASDAQ -49.94 SP500 -23.85 NASDAQ Adv/Vol/Dec 387/1.9 bln/2219 NYSE Adv/Vol/Dec 450/793.3 mln/2531

9:31AM Ingram Micro signs agreement to sell, market and support Acronis' product suite of data backup and recovery solutions to resellers and managed service providers throughout the America (IM) 19.94 -0.28 :

Flextronics (FLEX) announced that it will expand its range of infrastructure capabilities to include services for data center I/O connectivity products through a new customer relationship with Emulex, the leader in converged networking solutions for the data center. Flextronics will provide Emulex with vertically integrated offerings, such as manufacturing, and configure to order services, primarily from Flextronics' Zhuhai, China location. Flextronics will also provide worldwide logistics support for Emulex.

Apple (AAPL) announced that iPad 2 will be available tomorrow at 5 p.m. local time at all 236 Apple retail stores in the US and through the Apple Store beginning at 1 a.m. iPad 2 with Wi-Fi will be available in the US on March 11 for a suggested retail price of $499 for the 16GB model, $599 for the 32GB model, $699 for the 64GB model. iPad 2 with Wi-Fi + 3G will be available for a suggested retail price of $629 for the 16GB model, $729 for the 32GB model and $829 for the 64GB model. iPad 2 with Wi-Fi + 3G compatible with the Verizon network will be available in the US only for a suggested retail price of $629 for the 16GB model, $729 for the 32GB model and $829 for the 64GB model.

JA Solar Holdings (JASO) announced that it has signed a strategic investment agreement with the city of Hefei, in China's Anhui province, to set up a new state-of-the-art photovoltaic production facility for solar cells and PV products.

8:01AM RF Monolithics appoints Farlin A. Halsey President, CEO and a director of co (RFMI) 1.55 : Co appoints Farlin A. Halsey President, CEO and a director of RFM. Halsey's prior position was Senior Vice President of Marketing and M2M Business. Halsey succeeds David M. Kirk, who will continue his employment until March 31, 2011 to facilitate the transition of his responsibilities to Halsey. Kirk resigned to become the President, CEO and a director of Murata Electronics North America, Inc., a subsidiary of Murata Manufacturing Co.

6:10AM Canadian Solar misses by $0.07, beats on revs; reaffirms FY11 shipment guidance (CSIQ) 13.70 : Reports Q4 (Dec) earnings of $0.58 per dilluted share, $0.07 worse than the Thomson Reuters consensus of $0.65; revenues rose 57.7% year/year to $452.7 mln vs the $417.6 mln consensus. Co reports Shipments of 237 MW for 4Q10, compared to shipments of 200 MW for 3Q10. Gross margin of 17.0% for 4Q10 compared to gross margin of 17.3% for 3Q10. With regard to 1Q11 Guidance: Co expects shipments will be approximately level with 4Q10, despite seasonality caused by unfavorable weather conditions in both Europe and North America. Co expects gross margin for 1Q11 to be between 14-15%, primarily due to declines in module ASP, higher costs in certain raw materials, and low production volume during the Chinese New Year holiday period. With regard to Full Year Guidance for 2011: Co reiterates previous guidance of shipments of ~1,200-1,300 MW.

Lenovo (LNVGY) and Intel (INTC) announced the Lenovo Classmate+ PC, a purpose-built laptop designed to improve learning for students in grades K-8.

1:29AM NXP Semi files for secondary offering of ~25 mln shares of common stock; no shares are being issued or sold by the co; will not receive any proceeds from this offering (NXPI) 27.78 :

1:27AM Logic Devices transitions to OTCQB marketplace effective March 10; ticker to remain LOGC (LOGC) 0.70 :

09:23 am IBM tgt raised to $189 at Davenport following Analyst Day: . Davenport is raising their tgt to $189 from $175 following the co's Analyst Day on Tuesday. They recommend the purchase of IBM, since the co should continue to benefit from strong corporate and emerging market demand for its hardware, software, and services and from market share gains in all of its business segments. They believe that the co has good potential to meet or exceed its fiscal 2015 operating EPS goal of $20 per share (11% per year growth) as it delivers on its growth objectives and reduces its operating costs by up to $8 bln.

10:43 am ESLR Misses Top-Line Expectations (ESLR)

Evergreen Solar (ESLR 1.87 -0.13) reported a fourth quarter loss of $11.99 per share, which including items, which may not be comparable to the consensus of ($0.85).

Revenues rose 19.9% year-over-year to $89.3 million, below the $97.5 million consensus.

Gross margin for the fourth quarter of 2010 was -84% compared to 7.5% in the third quarter of 2010. The decrease in gross margin resulted primarily from the write-down of prepaid inventory resulting from the decision to close the Devens manufacturing facility and the countervailing duties assessed on the co's imported aluminum frames, as previously disclosed.

The company stated "The decision to close the Devens facility was the direct result of rapid and dramatic changes in the underlying market that have taken place since the facility first began operations. We believe we are now better positioned to facilitate a rapid transition to a strategic supplier of low cost multi-crystalline silicon wafers by virtue of our proprietary wafer technology... Our Devens employees exceeded many of management's expectations and for this, they have our deepest appreciation."

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From Briefing.com: Weekly Recap - Week ending 11-Mar-11The S&P 500 ended the week lower as declines in heavyweight energy and tech stocks acted as a drag. Stocks pared some of the week's losses Friday even as overseas markets declined after Japan was hit by the fifth largest earthquake on record. Headline risk continues to drive volatility in the markets, especially in the commodity sector.

Six of the 10 sectors traded lower. Energy (-3.5%), materials and technology posted the biggest declines. Defense sectors outperformed, with telecom boosted by some M&A speculation.

Energy and material stocks fell as oil and other commodities took a sharp hit. Crude oil prices fell 3.6% and the CRB Index shed 3.1%.

Tech companies as a whole fell, with notable weakness in semiconductors (-5.5%) and equipment makers (-5.5%). Heavyweight Apple (AAPL) and Google (GOOG) fell 2.2% and 3.8%, respectively.

Company specific news acted as the main drivers of the top performing stocks this week. Starbucks (SBUX 10.4%) surged after the company announced a strategic relationship with Green Mountain Coffee (GMCR 41.0%).

In M&A news, Western Digital (WDC 14.6%) rallied on word that it will purchase Hitachi's (HIT -3.5%) storage business. The prospect of less competition also lifted up rival Seagate (STX 8.9%). Sprint Nextel (S 15.2%) spiked on reports that it is in talks regarding a potential merger with T-Mobile USA, which is owned by Deutsche Telecom.

The week was light on economic data. Initial jobless claims were worse than expected and retail sales met the Briefing.com consensus.

 
 Index	  Started Week	Ended Week  Change % Change YTD % 
 DJIA	    12169.88	 12044.40  -125.48   -1.0   4.0 
 Nasdaq	     2784.67	  2715.61   -69.06   -2.5   2.4 
 S&P 500	     1321.15	  1304.28   -16.87   -1.3   3.7 
 Russell 2000  824.99	   802.83   -22.16   -2.7   2.4

2:43PM Agilent reports operations in Japan remain unaffected by earthquake (A) 44.92 +0.04 :

8:41AM Corning: No damage was sustained to any Corning facility as a result of the earthquake (GLW) 21.32 : No Corning employees were injured at any of their Japan facilities. All glass-melting, forming, and finishing operations are running normally at both plants in Japan (Shizuoka and Sakai City). There is NO impact to their supply as a result of the earthquake. No damage was sustained to any Corning facility as a result of the earthquake.

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From Briefing.com: 4:30 pm : The stock market dropped dramatically in the early going as participants responded to a global sell-off, but buyers gradually stepped in with a bid that helped stocks slash losses.

The S&P 500 was down as much as 2.7% to a new two-month low this morning, but it settled the session with a more moderate loss on the order of 1%. The opening sell-off stemmed from widespread weakness among the major market averages abroad, namely Japan's Nikkei, which followed up its 6% loss in the prior session with an overnight dive of 10.6%. Explosions at nuclear facilities and threats of radiation have stoked selling in Japan and left the Nikkei to trade at a new one-year low.

The breadth of selling interest left few asset classes unscathed. As such, the CRB Commodity Index sank 3.6% to suffer its worst single-session loss since November. Among the more widely tracked commodities, oil prices dropped 4.0% to $97.18 per barrel. Weekly oil inventory data is due tomorrow morning. Not even precious metals were sparred from the sell-off; gold prices fell 2.2% to $1392.90 per ounce and silver slumped 4.8% to settle pit trade at $34.11 per ounce.

While many commodities came under severe pressure, basic materials stocks were actually leaders in the equity market's rally. The materials sector was down more than 3% at the open, but finished with a loss of less than 0.2%.

Netflix (NFLX 217.11, +15.91) distinguished itself by spiking to a gain of almost 8% as the rest of the market could only cut losses, let alone advance. The move was the stock's strongest in more than a month and was owed to an analyst upgrade at Goldman Sachs.

Amid the stock market's rebound the greenback gave back an early gain for a flat finish. Interestingly, the yen advanced despite the calamity in Japan. It was up 1.1% to 80.75 yen per dollar at the end of the day.

Early strength in Treasuries drove down the yield on the 10-year Note to a three-month low near 3.20%, but strength faded as the stock market rallied. The 10-year Note saw its yield rise to just above 3.30% by day's end.

The latest FOMC statement had little impact on trade. To no real surprise, the FOMC kept its key rate in the range 0.00% to 0.25%. It also announced that it will keep in place its plan to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011 and will continue to reinvest principal payments from its securities holdings.

Even though commodity prices have been coming down during the past few sessions, the FOMC made note that commodity prices are still up significantly since summer. Still, inflation expectations have remained stable and measures of underlying inflation have been subdued. The FOMC also made note that the recovery is on firmer footing and that overall conditions in the labor market appear to be improving gradually.

Advancing Sectors: (None)
Declining Sectors: Utilities (-1.9%), Tech (-1.6%), Financial (-1.2%), Industrials (-1.1%), Health Care (-1.1%), Consumer Staples (-1.0%), Telecom (-1.0%), Energy (-0.8%), Consumer Discretionary (-0.8%), Materials (-0.2%)DJ30 -137.74 NASDAQ -33.64 NQ100 -1.4% R2K -0.9% SP400 -0.7% SP500 -14.52 NASDAQ Adv/Vol/Dec 644/2.36 bln/1970 NYSE Adv/Vol/Dec 638/1.28 bln/2376

5:04PM First Solar announces that Mark Widmar will join the co as CFO (FSLR) 158.91 +12.00 : Co announced that Mark Widmar will join as Chief Financial Officer (CFO), responsible for the co's global financial operations. Widmar will succeed James Zhu, who has been interim CFO since Jan. 1, 2011. Zhu will retain his role as FSLR's Chief Accounting Officer. Widmar joins FSLR effective April 4, 2011, from Graftech International Ltd., a leading global manufacturer of advanced carbon and graphite materials, where he was CFO and President of the Engineered Solutions segment. Prior to joining Graftech in 2006, Widmar worked at NCR Corporation from 2003 as corporate controller and a business unit CFO

4:20PM NVIDIA announces resignation of Chief Financial Officer David White for personal reasons (NVDA) 17.66 -0.54 : Co announces that David White, chief financial officer, has resigned from the company for personal reasons. He will remain an employee through May 31, 2011. Karen Burns, who currently serves as corporate controller and vice president of tax, will serve as interim CFO.

4:15PM Rambus announces it has renewed its patent license agreement with Toshiba Corporation (RMBS) 19.62 +0.44 : Co announces it has renewed its patent license agreement with Toshiba Corporation. This five year agreement covers Toshiba's products with DRAM memory controllers for SDR, DDR, DDR2, DDR3, and other DRAM devices. Rambus will receive royalty payments based on the shipment of these memory controllers.

10:12AM MEMC Elec update following Japan earthquake: employees were safely evacuated; operations at the facility remain suspended; co expects that shipments from this facility will be delayed over the near term (WFR) 12.98 -0.39 :

8:04AM Sunpower comments on impact to business operations in Japan (SPWRA) 14.65 : Following recent events in Japan, SunPower has communicated with its Japanese suppliers in the affected regions. At this time, the suppliers have indicated that, while certain operations are currently disrupted due to infrastructure issues, they have not sustained major damage to their facilities. Polysilicon from SunPower's Japanese suppliers will account for less than 10 percent of the company's total polysilicon supply for the second quarter of 2011, and SunPower would seek to replace any polysilicon from alternate sources to the extent events in Japan warrant such action. As a result, the company does not expect any change in its 2011 production guidance as a result of this event.

8:02AM Chipmos Technology: ThaiLin elects to convert notes into common shares (IMOS) 8.22 : Co announced that ThaiLin Semiconductor, a 42.9%-owned subsidiary of the Company's majority owned subsidiary, ChipMOS Taiwan, has elected to convert an aggregate of US$19 million in principal amount of the Company's 10% and 8% Senior Convertible Bonds due 2014 into an aggregate of approximately 4.5 million common shares of ChipMOS after giving effect to the Company's 4 to 1 reverse stock split, at the adjusted conversion prices of US$6.0 per share and US$5.0 per share, respectively.

08:50 am Motorola Mobility: Missed tablet opportunity; reducing ests, tgt to $32 at Oppenheimer: . Oppenheimer is reducing its estimates to reflect more modest tablet sell-in assumptions. Firm is also reducing its tgt to $32 (from $36) to account for the missed opportunity. Sales of MMI's Xoom are still in their initial phase, but Opco believes MMI has missed an opportunity to make its mark in the market by initially targeting value vs. volume. And while some of the Xoom's challenges reflect an immature Android tablet OS and Apple's early mover advantage and aggressive pricing, it feels MMI could have done a better job. Its revised estimates (FY11 EPS to $0.22 from $0.35 vs $0.97 consensus) reflect an insignificant tablet contribution going forward.

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From Briefing.com: 4:30 pm : Soured sentiment amid ongoing headline risk caused stocks to set a new low for 2011. Although the market worked its way up from that point, it still suffered its seventh loss in nine sessions.

Market participants continue to grapple with threats of nuclear fallout in Japan and further instability surrounding the social and political turmoil in the Middle East and North Africa. Uncertainty regarding portfolio positioning amid those themes has made many become defensive, or even skittish.

Fret among investors became most apparent during an aggressive midday selling effort that dropped the S&P 500 to a new two-month low of 1249. The Volatility Index, often euphemistically dubbed the Fear Gauge, simultaneously spiked to its highest level since last summer.

Even though stocks logged another loss, the major averages were able to work their way off of session lows. Some participants continue to abide by the buy-the-dip philosophy that had frequently proven so successful in previous weeks.

While the dollar traded with strength amid losses in the stock market, the greenback actually lost ground against the yen. The Japanese currency actually hit 79.72 yen per dollar, which makes for its highest level in more than 15 years. Many pundits attribute the yen's strength to an unwind in the carry trade.

Data generally disappointed today. First on the list of releases is a housing starts report that showed a 22.5% drop in February to an annualized rate of 479,000 units, which is not only considerably less than the 575,000 units that had been forecasted, on average, by economists surveyed by Briefing.com, but also the slowest rate in almost two years. Building permits for February were also discouraging. They fell 8.2% from the prior month to an annualized rate of 517,000, which is less than the 573,000 that had been broadly expected.

Excluding food and energy, producer prices for February increased by 0.2%, as had been expected among economists polled by Briefing.com. However, the headline PPI number spiked 1.6%, which is far more than the 0.6% that had been broadly expected. DJ30 -242.12 NASDAQ -50.51 NQ100 -2.5% R2K -1.2% SP400 -1.0% SP500 -24.99 NASDAQ Adv/Vol/Dec 730/2.58 bln/1899 NYSE Adv/Vol/Dec 703/1.46 bln/2323

6:25PM ON Semiconductor: Update on impact to ON Semiconductor from Japan earthquake (ONNN) 9.58 -0.21 : Co announced the impact to operations in Japan from last Friday's 9.0 magnitude earthquake. The company has confirmed that there have been no on-site injuries to the SANYO Semiconductor division or other ON Semiconductor employees in Japan as a result of the earthquake and tsunami.

Sierra Wireless (SWIR) and PositiveID (PSID) announced that Sierra Wireless AirPrime intelligent embedded modules will power PositiveID's iglucose mobile health solution for real-time diabetes management.

08:14 am Apple tgt raised to $450 from $350 at BTIG: . BTIG raises AAPL's tgt to $450 from $350 following a strong acceptance of the iPad 2 over the weekend and their expectation of continued strong sales of the iPhone 4. They expect Apple to sell over 40 mln iPads in 2011 which is up from their prior estimate of 33 mln. They also increased their ASP assumptions based on their expectation of a larger mix of higher capacity models and the impact from smart cover sales.

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Amateur Investors Weekend Stock Market Analysis (3/26/11)

http://www.amateur-investor.net/Weekend_Market_Analysis_Mar_26_11.htm

For those that follow my daily updates I mentioned the possibility of an Expanding Diagonal pattern in the S&P 500. On Friday the S&P 500 did break above the top of its expanding channel.



However I also mentioned the Dow did the same thing back in early 1939 as it briefly broke above the top of its expanding channel to complete Wave 4 which was then followed by a sharp 5th Wave.



For this pattern to pan out the S&P 500 would have to reverse strongly back to the downside early next week with an eventual target for the 5th Wave around 1218. 1218 is at the 200 Day EMA (green line) and near the 38.2% Retracement Level from 1011 to 1344.



Meanwhile if the move down from the 1344 level is just a minor "abc" correction instead that means the S&P 500 still has a chance to make a new high as this was just a Wave 4 pullback which would be followed by the 5th Wave.



The longer term chart still suggests the rally from the March 2009 low of 667 is a larger "ABC" Zig Zag pattern corrective pattern. "C" Waves are supposed to be composed of 5 Waves so if the S&P 500 were to make a new high this Spring that should complete Wave 5 of "C" somewhere between 1353 and 1382. 1353 is where Wave "C" would have a length that is 61.8% of Wave "A". Meanwhile 1382 is the 78.6% Retrace (red line) from the October 2007 high of 1576 to the March 2009 low of 667. Also keep in mind if Wave 5 of "C" has a length similar to Wave 1 of "C" (118 points) that equals 1367.

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From Briefing.com: 4:30 pm : In contrast to the prior session, the stock market put together an impressive gain and held it into the close. The action in recent sessions is making for a strong finish to the first quarter.

Stocks are currently up almost 5% year to date. That puts the S&P 500 on track to tie last year's first quarter performance, which was actually the best first quarter that stocks had recorded since 1998. Buying interest in recent weeks hasn't come as a result of any particular catalyst or economic development, rather a fear among participants of missing out on further gains.

Buyers showed their willingness to step in with a bid once it was apparent that an early slip wasn't hit with any kind of follow through selling interest. Participants pretty much shrugged off news that analysts at Standard & Poor's trimmed Portugal's debt rating another notch lower to BBB-, which is barely above junk status. They also cut Greece's rating two notches to BB-.

Participants were also dismissive of the March Consumer Confidence Index, which came in at 63.4 when the consensus among economists was for a reading of 65.0 following the upwardly revised reading of 72.0 for the prior month.

Telecom put together the best performance for the second straight session. Integrated plays led the sector to a 1.5% gain, which extended the 1.4% advance that it had staged on Monday.

Energy stocks swung to a 1.0% gain after they had lagged in the early going. Schlumberger (SLB 94.36, +3.93) was a top performer. Even its peer Halliburton (HAL 49.00, +1.10) staged a gain. In fact, the stock set a fresh 52-week high despite comments that production interruptions in the Middle East and North Africa could cut into earnings.

Elsewhere in the corporate sphere, home improvement retailer and Dow component Home Depot (HD 37.70, +1.05) announced an accelerated $1 billion share repurchase plan that won its shares considerable support. Fellow consumer discretionary play Phillips-Van Heusen (PHV 65.20, +5.03) posted an upside earnings surprise and issued strong guidance, which helped its shares spike to a three-month high. However, shares of homebuilder Lennar (LEN 19.07, -0.68) sank even though the company posted a surprise profit of its own.

Financials lagged for the entire session, but were helped to a 0.3% gain on the back of broader market support. Insurers had bogged down the sector for most of the session.

Treasuries turned lower amid the stock market's strength and generally uninspiring results from an auction of 5-year Notes. The auction drew a bid-to-cover of 2.79, dollar demand of $97.7 billion, and an indirect bidder participation rate of 42.4%.

The end of the first quarter is quickly approaching. That usually brings an increase in trading activity as money managers rebalance portfolios, but participation remains paltry ahead of the official monthly nonfarm payrolls report on Friday. Today's trading volume on the NYSE totaled just 800 million shares.

Advancing Sectors: Telecom (+1.5%), Energy (+1.0%), Materials (+1.0%), Utilities (+0.9%), Consumer Discretionary (+0.9%), Industrials (+0.7%), Health Care (+0.6%), Tech (+0.6%), Consumer Staples (+0.4%), Financials (+0.3%)
Declining Sectors: (None)DJ30 +81.13 NASDAQ +26.21 NQ100 +1.0% R2K +0.9% SP400 +0.9% SP500 +9.25 NASDAQ Adv/Vol/Dec 1756/1.62 bln/864 NYSE Adv/Vol/Dec 2073/803 mln/924

5:59PM Texas Instruments' Japan factories on track for full recovery (TXN) 34.96 +0.47 : TXN reported that just over two weeks after a major earthquake in Japan, recovery at its manufacturing sites in Miho and Aizu is progressing well and is on schedule to return to full production. The site in Miho, about 40 miles northeast of Tokyo, achieved a significant milestone this past Sunday as repairs were completed on the infrastructure systems that deliver water, gases, chemicals and air, and recertified the cleanroom. Additionally, more than 90% of the equipment has been electrically checked out. TI now estimates that initial production lines at Miho will resume in mid-April, and full production will resume in mid-July. This translates to full shipment capability in September.

4:31PM SMTC Corp creates interim office of the CEO, names new Chairman of the Board (SMTX) 2.76 +0.06 : Co announces that following the planned retirements of the current Chair of the Board, Wayne McLeod, and President and Chief Executive Officer, John Caldwell, Alex Walker will be appointed Chairman of the Board and will also Chair a newly created Interim Office of the CEO, on which he will serve alongside fellow Director Claude Germain. Mr. Walker's and Mr. Germain's appointments are effective April 1, 2011. Mr. Walker has served as a member of the board of directors since June, 2008 and Mr. Germain was recently appointed to the board of directors in February, 2011.

4:02PM Emcore acquired certain assets of Soliant Energy, including equipment, inventory, software, licenses, intellectual property and tooling for rooftop solar energy product line; terms not disclosed (EMKR) 2.38 +0.07 :

JDSU (JDSU) and Amada announced plans to jointly develop a second generation suite of kilowatt class fiber lasers with up to 4 kilowatt output power. The lasers will be used in the Amada high-powered laser material processing system.

8:01AM Cisco Systems to acquire newScale; financial terms not disclosed (CSCO) 17.19 : Co announced its intent to acquire privately-held newScale Inc., a provider of software that delivers a service catalog and self-service portal for IT organizations to select and quickly deploy cloud services within their businesses. Based in San Mateo, Calif., newScale allows commercial and enterprise customers to initiate the provisioning of their own systems and infrastructure on an as-needed basis. Financial terms of the transaction are undisclosed. The acquisition is subject to various standard closing conditions and is expected to be complete in the second half of Cisco's fiscal year 2011. Upon the close of the acquisition, the newScale team will report into Cisco's Advanced Services organization.

7:31AM KVH Industries receives $2.7 million order for fiber optic gyros to use in remote weapon stations; delivery will begin immediately and span the next several months. (KVHI) 14.60 :

1:13AM Zoran terminates Hart-Scott-Rodino waiting period early for proposed merger with CSR (ZRAN) 10.30 : Co announces that the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements, applicable to co's proposed merger with CSR plc, was terminated early on March 24, 2011. Completion of the transaction remains subject to other customary closing conditions, including approval by both co's stockholders. ZRAN anticipates that the transaction will be completed in the second quarter of 2011.

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Monday Morning Outlook: From Double Tops to Double Lows, Technicals Still Reign
Heavy out-of-the-money puts could provide an expiration-week floor for the SPX
by Todd Salamone 4/9/2011 1:04 PM

http://www.schaeffersresearch.com/commentary/printpage.aspx?id=105857

The headlines last week seemed to suggest high drama in the market, as traders responded to the threat of a shutdown by the U.S. government, another earthquake for disaster-stricken Japan, and a flurry of monetary policy maneuvers from central banks around the globe. However, the major market indexes settled the week right where they started -- namely, on the wrong side of psychologically critical technical levels. As we stand on the cusp of both options expiration and a brand-new season of corporate earnings reports, Todd Salamone offers a few points to ponder about the level of engagement among hedge funds and retail level investors.

Following Todd's train of thought, Rocky White attempts to resolve conflicting signals from investor sentiment surveys and mutual fund flows. Finally, we wrap up with a few sectors of note, as well as a preview of the week ahead -- which includes a healthy dose of inflation data, along with earnings announcements from the likes of Alcoa and Bank of America.

Notes from the Trading Desk: Two Points to Ponder this Expiration Week
By Todd Salamone, Senior Vice President of Research

"For the Dow and other major market indexes, important resistance levels lie just overhead that could impact short-term trading patterns. The good news for bulls -- as we have discussed in previous weeks -- is that the sentiment backdrop is one that suggests there is still firepower on the sidelines to drive equities through these critical overhead levels..."

- Monday Morning Outlook, April 2, 2011

A rate hike by the European Central Bank (its first since 2008, and very much expected), another rate hike by the Chinese (which investors have grown to expect), domestic retail sales numbers that were generally well-received, and the prospect of a U.S. government shutdown amid partisan budget disagreements were the major headlines last week. While there was a lot to read and write about, equities did very little on a net basis during the week, with major technical resistance levels coming into play -- as anticipated.

For example, the Dow Jones Industrial Average (DJIA - 12,380.05) made a brief move above its February high in the 12,400 area, but closed the week below this round-number level.



The S&P 500 Index (SPX - 1,328.17) ventured above its March 2009 double-low in the 1,333 area, but a sustained move through this level continues to elude the index, which closed the week below 1,333 once again. In fact, there has been only one weekly close above 1,333 this year, which occurred in mid-February.



The Russell 2000 Index (RUT - 840.89) experienced an achievement of sorts, albeit a short-lived one. Last week, the RUT rallied above its all-time high of 856.48, set in July 2007 -- which also happens to be 150% above its March 2009 low. But the small-cap index immediately reversed course from its new record peak of 859.08, and closed the week below the 850 level.



Finally, the S&P 400 Midcap Index (MID - 987.62) made a valiant run at the 1,000 millennium mark -- but it wasn't to be, as the index was soundly rejected.



So it's quite clear that overhead technical levels are having a stifling impact at present, as the Dow and other indexes contend with everything from "double-top" to "double-low" to "round-number" resistance areas simultaneously.

In addition to revealing the market's reaction to the narrowly averted government shutdown, Monday also marks the unofficial start of earnings season, with Alcoa's (AA) first-quarter report due out after the closing bell. Moreover, since the first Friday of the month was on April 1, expiration week is upon us already, and trading will also be impacted by the expiration of equity and index options.

Look for 1,300 on the SPX to act as potential support on a decline. There is major put open interest getting set to expire at the 1,300 strike on SPX options, and at the 130 strike on SPDR S&P 500 ETF (SPY - 132.86) options, which could be supportive. On the upside, resistance comes into play in the 1,345 area, which marks this year's high.

The good news for bulls as we enter earnings season is that expectations appear to be low. An article in a popular financial publication captured the sentiment heading into the earnings season by pointing out that "investors will be scouring for signs of margin damage," and went on to note the unusually high number of downward revisions in earnings estimates. We'll begin to see the full impact of these reports into the last week of April and the beginning of May, as this time period is really the "heart" of earnings season, given the larger number of companies reporting.

Finally, from a bigger-picture perspective:

"The average hedge fund inched up 0.31 percent in March and is now up 1.99 percent for the year... The broader Standard & Poor's 500 stock index ended the first three months up 5.43 percent."

- Reuters, April 7, 2011

While the market continues to be challenged by overhead technical resistance in the short term, which could results in sideways action or a modest pullback, we continue to be encouraged by the potential sideline cash that could drive equities through resistance. Consider that:

1. The hedge fund industry is now back to its peak size at over $2 trillion dollars. However, the fact that these vehicles underperformed the SPX by such a broad measure in the first quarter suggests to us that they are very much underweight the U.S. equities market. Might discouraged investors pull money from these funds and opt for traditional long funds? Or, will hedge fund managers finally put money to work in a meaningful way in the stock market? Both scenarios have potentially bullish implications for U.S. equities.

2. In the first quarter of 2011, domestic equity funds experienced roughly $12.7 billion in inflows, reversing almost $330 billion in outflows from 2007 through 2010. As we have said before, while the retail investor's renewed interest in stocks is scary to some, the fact that we are potentially in the very early innings of this renewal could be a supportive factor.

The above factors have little to do with the short-term market gyrations, but it is certainly worth pondering for those with an intermediate- and longer-term perspective. We continue to see signs that a few hedge fund managers are dipping their toes back into the market, but they are not doing so in an aggressive manner.

Indicator of the Week: Sentiment Surveys Contradict Fund Flows
By Rocky White, Senior Quantitative Analyst

Foreword: Investors Intelligence (II) takes a survey of investment publications and determines the percentage that are bullish and percentage that are bearish (they can also designate a publication somewhere in between). Only a month ago, I wrote about the poll --which has been showing a lot of optimism. We contrarians, of course, typically interpret this as bearish, but I made the case that optimism was not necessarily as high as it could be, given the context of a very strong market. I pointed out that optimism is inevitable when the market goes on a two-year run like the one we've had. I also pointed out that optimism, according to the poll, had been falling since the beginning of the year, despite the market gaining about 5% in the first quarter.

Recent II Poll: Well, I can't make those points anymore. The most recent II poll showed an unexpected jump in optimism. The chart below shows the percentage of bullish publications, minus the bears. Note that the latest reading has crossed above the 40% mark, which is generally viewed as extreme optimism. The last time it reached that height was just in time to sell before the big crash. Should we turn bearish on the market now?

SPX vs. Bulls-Bears


Our Dilemma: How can we as contrarians not be shouting at everyone to sell right now? It's because there is other data that seems to conflict with the conclusions of the sentiment poll. Before I explain, we need to realize why exactly sentiment polls are contrarian indicators. The thinking goes that when the polls show overwhelmingly bullish sentiment, then it's assumed that everyone has bought into the market. Sideline cash is limited, which caps the upside potential, and the biggest risk is that suddenly everyone heads for the exit at once -- causing a crash. Similarly, when polls are very bearish, then it's assumed everyone has sold, so the market has nowhere to go but up.

Here's the dilemma, though: Other indicators suggest investors are still sitting on a lot of sideline cash. If this is the case, then the market has a lot further to go. Each leg up for the market makes the investors on the sidelines more aware that they are missing the rally. As they capitulate and buy into the market, it will continue to drive prices higher.

Fund Flows: For example, below is a chart of cumulative mutual fund flows using data from the Investment Company Institute (ICI). According to the data, about $280 billion left the market from the end of 2007 until March 2009, when the market bottomed. At that point, money began flowing back into the market -- until the May 2010 flash crash spooked investors, causing more outflows. All in all, of the $280 billion that fled the market during the crash, only about $30 billion (around 10%) has been returned into the market over the last two years. This suggests to me that there's still a lot of money that can potentially be invested back into the market.

SPX vs. Cumulative Fund Flows


The chart below also suggests the presence of money on the sidelines. It shows the total shares short for all stocks in our database. Rather than simply representing negative bets on the market, the data is an indicator of hedge fund activity. Hedge funds deploy many strategies that involve shorting stocks. When hedge funds heavily invest in equities, you naturally see short interest increase. That's why the S&P 500 Index (SPX) was powering higher before 2008, despite the heavy shorting.

You may notice that the shares short continued higher after equities began to fall. This is most likely because even when equities initially fell, hedge funds continued to deploy their capital into commodity stocks, which did not begin to fall until the middle of 2008. When commodities finally broke down and the crash was in full swing, hedge funds were forced to deleverage.

Currently, total shares short are at the lowest point since early 2007, suggesting hedge fund money that left equities has not returned. If/when it does, it could be a huge catalyst to propel the market higher.

SPX vs. shares short


Implications: Why does the data above seem to conflict? There are some potential explanations for this. The II sentiment poll that implies extreme optimism is a good gauge of the retail investor, while the fund flow indicators may be dominated by institutional money. Retail investors may be back into equities while the big money players are still sitting on the sidelines -- or, more likely, finding other places to put their money (bonds, currencies, etc.).

A bear could spin this by asking, "Would you rather have your money with the retail investor (dumb money) or with the big institutions and hedge funds (smart money)?" A bull could theorize that hedge funds that continue to miss the rally, causing their returns to suffer, will eventually have to capitulate and buy equities. It's the big-money players who can really drive the market, and wherever they go, you want to be there first and not be late.

This Week's Key Events: Alcoa Kicks Off First-Quarter Earnings Reports
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
* There are no major economic reports slated for Monday, but Chicago Fed President Charles Evans is scheduled to speak at the Annual Risk Conference. Earnings season unofficially begins with the release of Alcoa's (AA) first-quarter results after the close.

Tuesday
* Tuesday brings us the February trade balance, as well as import/export prices and the Treasury budget for March. Fastenal (FAST) is scheduled to report earnings.

Wednesday
* The Fed's Beige Book report for April is due out Wednesday, along with February's business inventories and the regularly scheduled update on crude inventories. On the earnings front, we'll hear from ASML Holding (ASML) and JPMorgan Chase (JPM).

Thursday
* As usual, weekly jobless claims are scheduled to hit the Street on Thursday. Inflation data also starts to roll in, with the release of the producer price index (PPI) and core PPI for March. Hasbro (HAS), Progressive (PGR), and Google (GOOG) are expected to report earnings.

Friday
* The week wraps up with a flurry of economic data, including industrial production, capacity utilization, the consumer price index (CPI) and core CPI for March, the preliminary April Reuters/University of Michigan sentiment survey, and the Empire State manufacturing index for April. There are also a few notable earnings announcements on the calendar, with quarterly reports due out from Bank of America (BAC), Mattel (MAT), and Infosys (INFY).

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From Briefing.com: 4:05 pm : Stocks finished near their worst levels of the session, and closed lower for a fourth consecutive day. Today's sell off pushed all three of the major averages to their lowest levels since March 23. Selling was paced by a 1.1% drop in both the S&P and Nasdaq while the Dow outperformed, slipping 0.5%.

Financials continue to underperform the broader market as today's 2.0% slide pushed the S&P 500 Financial Index to its lowest level since early December. Citigroup (C 38.07, -1.78) was the biggest decliner amongst heavyweights, losing 4.5%, but other banking giants like Bank of America (BAC 10.83, -0.45), Wells Fargo (WFC 26.26, -0.60), and JP Morgan Chase (JPM 40.53, -1.04) were also hit hard.

Energy shares were under pressure all session long, losing 2.0% collectively. Selling coincided with West Texas Intermediate crude oil slipping back below $100 per barrel to finish the day near $98.80. Exxon Mobil (XOM 80.29, -0.89) and Chevron (CVX 99.68, -1.32) were among the better performers in the space losing 1.1% and 1.3% respectively.

Apple (AAPL 338.04, -5.04) was back in the headlines today after making several announcements at the Apple Worldwide Developers Conference. Steve Jobs made his first public appearance since March and introduced the new OS X Lion operating system for Macs, as well as the iOS 5 operating system for mobile devices, and their new iCloud Internet media service. The stock remains range bound between $330 and $360 as it has for much of 2011.

Gold lost its luster with a late session slide as the yellow metal finished the day little changed near $1543 after hitting a session high of $1555. Shares of Newmont Mining (NEM 53.44, -1.31) were hit hard despite the flat finish in gold while Freeport-McMoran (FCX 49.79, -0.14) saw a modest loss.

Harley-Davidson (HOG 36.86, +0.99) gained 2.8% and finished as a top performer in the S&P 500 as rumors of a private equity takeover of the company pushed shares as high as $38.24 in early action.

An early morning sell off in the Treasury complex ran the 10-yr yield briefly above 3.04% before easing back to 3.00% over the final half hour of trading. Today's modest slide pushed the 10-yr yield up just one basis point.

The dollar index finished near its best levels of the session as a late-day sell off pushed the euro back below 1.46. The Australian dollar held steady near 1.0715 ahead of tonight's interest rate decision by the Reserve Bank of Australia. Analysts are expecting the central bank to hold its benchmark rate steady at 4.75%.DJ30 -61.30 NASDAQ -30.22 SP500 -13.99 NASDAQ Adv/Vol/Dec 587/1.65 bln/2013 NYSE Adv/Vol/Dec 628/726.2 mln/2385

Cree (CREE) announced that, as of April 2011, the co's RF business unit has shipped commercial GaN-on-SiC RF power transistor and MMIC products with more than 10,000,000 watts of combined RF output power.

Vishay Intertechnology (VSH) announced the passing of its founder and Executive Chairman of the Board, Chief Technical Officer and Chief Business Development Officer, Felix Zandman. He was 83 years old.

PMC-Sierra (PMCS) announced the industry's most advanced multi-port EPON OLT System-on-Chip solutions that address the need to increase network functionality, improve reliability and reduce power consumption.

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From Briefing.com: Weekly Recap - Week ending 05-Aug-11Aggressive selling this week took the S&P 500 more than 7% lower for its worst weekly performance in more than two years. The rout was rooted in concerns about the global economy, the lingering threat that the U.S. could lose its coveted AAA credit rating, and tenuous fiscal and financial conditions in Europe.

Efforts by legislative leaders to raise the debt ceiling and institute new fiscal measures were discarded early this week when a disappointing ISM Manufacturing Index reading of 50.9 was released. That was followed by an ISM Services Index reading of 52.7. The consensus among economists polled by Briefing.com had called for respective readings of 54.0 and 53.7.

The latest personal spending figures also disappointed. Spending reportedly slipped 0.2% during June, but had been broadly expected to increase by 0.1%. As a corollary, initial weekly jobless claims for the week ended July 23 failed to crack the 400,000 level. Still, by coming in at 400,000 on the nose, the tally remained below the upper bound (410,000) of the "Recovery Zone" for the second consecutive week.

The ADP Employment Change proved to be a directionally accurate indicator of the nonfarm payrolls report that was released on Friday. The 117,000 positions added to nonfarm payrolls during July exceeds the 84,000 job additions that had been broadly expected. More impressive is that private payrolls spiked by 154,000, which is greater than the consensus call for private payrolls to increase by 100,000.

The surprisingly strong pick up in hiring played a part in the headline unemployment rate's move to 9.1% from 9.2%, which is where it was widely expected to stay, but the dip is actually mostly due to a reduced labor force count.

The better-than-expected jobs data aren't necessarily enough to protect the U.S. from a debt rating downgrade by S&P, though. Even though the other agencies have affirmed their AAA rating on the U.S., S&P, which is the most influential outfit among the agencies, has yet to issue a decision. The threat that S&P could cut its rating on the U.S. was also factored into trade this week.

Fiscal and financial instability in the eurozone periphery not only spurred aggressive selling among the region's bourses, but imbued domestic trade as the threat of contagion exacerbated skittishness. Some of that concern was assuaged by an announcement on Friday that the European Central Bank will provide support to Spanish and Italian bonds if the two countries commit to specific reforms.

That announcement helped stocks rebound from the 2011 lows that were set during trade on Friday. From its early May high to its low on Friday, the S&P 500 was down almost 15%, which more than makes for an official correction. Even though the broad market measure was able to work its way up from the depths of its intraday low, it still suffered a weekly loss of more than 7%. That makes for its poorest weekly performance in since November 2008.

 
 Index	   Started Week  Ended Week  Change  %Change  YTD % 
 DJIA	     12143.20	  11444.61  -698.59   -5.8   -1.1 
 Nasdaq	      2756.38	   2532.41  -223.97   -8.1   -4.5 
 S&P 500	      1292.28	   1199.38   -92.90   -7.2   -4.6 
 Russell 2000   797.03	    714.63   -82.40  -10.3   -8.8

SunPower (SPWRA) announced plans to own and operate a solar panel manufacturing facility in Mexicali, Mexico to meet the demand of a growing North American solar market.

09:38 am SanDisk initiated with a Outperform at Oppenheimer; tgt $65: . Oppenheimer initiates SNDK with a Outperform and price target of $65 saying shares currently trade at ~9x their CY12E EPS, which they do not consider justified given SNDK's world-class technology leadership, a cash cushion and a royalty stream from IP that contributes handsomely to profits.

11:11 am MIPS Tech Misses Fourth Quarter Expectations (MIPS)

MIPS Tech (MIPS $4.36 -1.74) reported fourth quarter earnings of $0.04 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.07.

Revenues fell 24.5% year/year to $17.6 million versus the $19.7 million consensus.

"We had strong results for our fiscal year, but our fourth quarter proved to be more challenging than we expected. Despite macroeconomic uncertainty, we remain confident in the market opportunity, and we are taking the steps necessary to achieve long-term success."

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From Briefing.com: 4:20 pm : Equities finished today's session with firm gains and the S&P 500 settled higher by 0.8%. After starting the day on a positive note, the benchmark average spent the balance of the session in a six-point range.

An otherwise quiet session was interrupted by a brief morning stumble when Reuters cited a European lawmaker, who said the European parliament will push for depositors with more than EUR100,000 to face bail-ins under a new resolution law. The remark carried a similar tone to yesterday's comments from Eurogroup head Jeroen Dijsselbloem, who hinted the framework of the Cypriot rescue package may be used again in the future.

Although the major averages ended firmly higher, defensive sectors were the clear winners while economically-sensitive groups trailed behind the broader market.

The health care space showed strength at the open, and led the S&P 500 throughout the day. In addition, consumer staples and utilities also found themselves in the top half of today's sector rankings.

Energy was the only economically-sensitive group which settled among the leaders. Crude oil contributed to the sector strength as the energy component climbed 1.5% to $96.26. Meanwhile, the SPDR Energy Select Sector (XLE 79.28, +0.83) ended higher by 1.1%.

Outside of energy, other cyclical sectors saw more limited gains. The consumer discretionary sector underperformed after February new home sales and March consumer confidence missed expectations.

New home sales in February hit an annualized rate of 411,000, which was down from January's revised rate of 431,000, and worse than the rate of 426,000 that had been broadly expected by the Briefing.com consensus. The news caused homebuilders to miss out on today's rally, and the iShares Dow Jones US Home Construction ETF (ITB 23.98, -0.05) settled lower by 0.2%.

Elsewhere, retailers underperformed after March consumer confidence slipped to 59.7 (66.9 Briefing.com consensus) from February's reading of 69.0. The SPDR S&P Retail ETF (XRT 70.29, +0.02) ended flat after being down as much as 0.6% intraday.

Also of note, producers of basic materials lagged after being the weakest performing group in each of the past three sessions. As a result, the SPDR Materials Select Sector ETF (XLB 39.04, +0.27) is down nearly 1.5% since last Wednesday's close. Meanwhile, the S&P 500 has added five points in that same timeframe.

While the S&P 500 ended firmly higher, the Russell 2000 did not share that optimism. The small cap index spent the bulk of the day near its unchanged level before a late-afternoon bid contributed to a gain of 0.3%.

Today's volume was the second lowest of the year as just over 558 million shares changed hands on the floor of the New York Stock Exchange.

Looking back at the final sector rankings, health care (+1.2%), energy (+1.1%), utilities (+1.0%), and consumer staples (+0.9%) outperformed while industrials (+0.5%), consumer discretionary (+0.5%), and materials (+0.6%) lagged.

Reviewing today's remaining economic data, durable goods orders jumped 5.7% (Briefing.com consensus +3.8%) in February, led by a 21.7% increase in transportation equipment orders that totaled $74.4 billion. The improvement was paced by a 95.3% gain in nondefense aircraft and parts that flowed from a large pickup in orders at Boeing (BA 86.62, +1.77). Excluding transportation, orders declined 0.5% (Briefing.com consensus -0.2%).

The January Case-Shiller 20-city Home Price Index rose 8.1% while a 7.5% increase had been expected by the Briefing.com consensus. This follows the previous month's increase of 6.8%.

In tomorrow's economic news, the weekly MBA Mortgage Index will be reported at 7:00 ET and February pending home sales will be announced at 10:00 ET.

The U.S. Treasury will auction off $35 billion in 5-yr notes.DJ30 +111.90 NASDAQ +17.18 SP500 +12.08 NASDAQ Adv/Vol/Dec 1422/1.40 bln/1015 NYSE Adv/Vol/Dec 2067/558.3 mln/926

3:35 pm : Energy markets showed some solid gains today across the board with crude oil, natural gas, heating oil and RBOB gasoline futures all rising. In the precious metals space, however, losses continued to persist and both gold and silver closed lower.

Crude oil was in positive territory all session. The energy component extended gains into the close of floor trading and hit a new session one minute before the close at $96.45/barrel. Crude finished the day at $96.20/barrel, up 1.5%.

Natural gas futures rallied early/mid-morning to as much as $4.00/MMBtu. By the end of today's floor session, the May nat gas contract was 2.6% higher at $3.99/MMBtu.

May gold ended the day 0.6% lower at $1595.40/oz, while May silver declined 0.6% at $28.66/oz. May copper futures ultimately ended the day unchanged at $3.44/lb.DJ30 108.59 NASDAQ +15.64 SP500 +11.70 NASDAQ Adv/Vol/Dec 1328/1219.2 mln/1123 NYSE Adv/Vol/Dec 2011/401 mln/966

4:26PM Peregrine Semi files additional patent infringement action against RF Micro Devices (PSMI) 9.98 +0.18 : Co announced that it has filed a new lawsuit in U.S. District Court alleging the infringement of Peregrine patented intellectual property relating to RFICs and switching technology by RF Micro Devices, Inc. (RFMD). The suit filed in U.S. District Court for the Southern District of California claims that certain RFMD products infringe a newly issued Peregrine patent relating to silicon-on-insulator (SOI) technology for RFICs. Peregrine seeks, in addition to damages, to permanently enjoin RFMD from further infringement. This new legal action is in addition to an existing lawsuit filed against RFMD in February 2012 and currently pending in U.S. District Court. The new patent, U.S. Patent 8,405,147, concerns Peregrine's HaRP invention that significantly improves the linearity and circuit performance of RF SOI devices. Peregrine believes the HaRP invention is instrumental for RF SOI devices to successfully meet the demanding RF requirements of advanced mobile wireless applications such as 4G LTE.

11:49AM LDK Solar announces second sale of shares to Fulai Investments (LDK) 1.12 -0.05 : Co announced the sale of the remainder 12,000,000 newly issued ordinary shares of LDK Solar to Fulai Investments Limited, at a purchase price of $1.28 per share with an aggregate purchase price of $15,360,000, pursuant to the share purchase agreement dated January 21, 2013, as amended and supplemented by the parties. Pursuant to the terms of the share purchase agreement, Fulai Investments Limited has the right to designate two non-executive directors to the LDK Solar board now that the parties have consummated the transactions pursuant to the agreement. The net proceeds will be used for general corporate purposes in LDK Solar's operations.


Analyst comments: RFMD +4.9% (upgraded to Outperform from Perform at Oppenheimer),

Analog Devices (ADI) introduced the CN0267 demonstration circuit for a loop powered HART (Highway Addressable Remote Transducer) enabled smart transmitter, for industrial applications that need to operate within a set 3.5-mA power budget.

3:49AM STMicroelectronics signs EUR 350 mln loan agreement with the European Investment Bank (STM) 7.92 :

11:18 am S&P Information Tech Sector trading higher by +0.55%
The tech sector is trading higher today, inline with gains in the broader market. Semiconductors are showing slight relative strength as well with the SOX trading 0.6% higher. Within the chip index, RBCN (+5.2%) is a notable standout. Among other major indices, the SPY is trading 0.4% higher today, while the QQQ and the NASDAQ are trading 0.2% higher on the session. Among tech bellwethers, INTC (+1.6%) is showing notable strength, while AAPL (-0.5%) is under pressure.

There were no tech earnings of note. In news, Carl Icahn has discussed a potential alliance with BX (+1.1%) in ongoing DELL (+0.2%) private equity talks. Among rumors, AMZN (+0.8%) and YHOO (+0.6%) may be interested in Hulu, according to reports. Among notable analyst upgrades this morning in the tech space, EA (+1.7%) was upgraded to Overweight at Piper, Oppenheimer upgraded RFMD (+9.2%) to Outperform, BSFT (+4.7%) was upgraded to Mkt Perform at Raymond James, and AMX (+1.5%) was upgraded to Buy at BofA/Merrill. Among downgrades, TI (-5.1%) was downgraded to Equal Weight at Barclays and BofA/Merrill. SAI (-0.4%) is the only notable name in tech scheduled to report quarterly results today after the close.

09:06 am KLA-Tencor initiated with a Buy at Needham; tgt $61: . Needham initiates KLAC with a Buy and price target of $61. As the leading supplier of process control and yield mgmt solutions to the semi industry, KLA benefits from the growing use of process control at the leading edge due to the increased process complexity and the introduction of 3D device architectures. As the industry recovers, they believe margin expansion will drive upside to consensus ests throughout CY2013. Despite having the highest gross and operating margins among its peers, KLAC is trading at a discount on P/E due in their view to the perceived risk of its high exposure to logic/foundry; they expect the valuation gap to close.

09:06 am RF Micro Device upgraded to Outperform at Oppenheimer; tgt $7: . Oppenheimer upgrades RFMD to Outperform from Perform and sets target price at $7 on higher ests. They believe the co's checkered history of execution has helped skew risk/reward favorably. Mgmt appears to have repositioned RFMD well, diversifying the co across products and customers. Sustained content increases look likely, including at top customers Samsung (SSNLF) and AAPL. Emerging high-end tuning/switching opportunities (and recent Galaxy S4 gains) are behind their increased ests. RFMD appears well positioned to capitalize on expanding RF complexity with its "systems-level" approach; they would be buyers here.

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From Briefing.com: 4:10 pm : The major averages settled in the red as the S&P 500 lost 0.5% while Nasdaq shed 0.2%.

The three indices hovered near their respective flat lines for the majority of the day before sellers emerged in the afternoon, and drove equities to their first loss in five days.

Nine of ten sectors ended in the red with technology as the lone standout. The sector gained 0.7% and contributed to the outperformance of the Nasdaq. Better-than-expected earnings from Cisco Systems (CSCO 23.89, +2.68), and the relative strength of large components like Apple (AAPL 434.58, +5.73) and IBM (IBM 204.69, +1.37) provided support for the sector.

While technology boosted the Nasdaq, the index was held back by the weakness of biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 180.23, -3.79) fell 2.1% to trim its week-to-date gain to 0.1%. Although the biotech ETF has been the subject of some profit taking following its recent run, it remains higher by 4.6% in May.

Biotechnology also weighed on the health care space, which was the weakest defensively-oriented sector, shedding 1.0%.

Overall, the discretionary sector was the biggest laggard as homebuilders and retailers underperformed. The SPDR S&P Homebuilders ETF (XHB 31.90, -0.54) lost 1.7% after the April housing starts report missed expectations. Meanwhile, the SPDR S&P Retail ETF (XRT 76.93, -0.84) slid 1.1% after Dow component Wal-Mart (WMT 78.50, -1.36) missed on earnings and revenue.

Also of note, the Dow Jones Transportation Average appeared strong in early action, but the bellwether complex declined through the afternoon before ending with a loss of 0.8%.

In the Treasury market, the 10-yr note received notable interest after today's disappointing economic data. As a result, the 10-yr yield declined six basis points to 1.877%.

The CBOE Volatility Index (VIX 13.25, +0.44) ended higher by 3.5%, suggesting downside protection received some interest.

Today's economic data was plentiful, and largely disappointing.

Housing starts fell 16.5% in April to 853,000 from a downwardly revised 1.021 million (from 1.036 million) in March. That was the smallest number of starts since November 2012. The Briefing.com consensus expected housing starts to fall to 970,000.

Multifamily construction, which tends to be highly volatile, fell to 243,000 in April from 398,000 in March. The drop is likely a reversion to the mean as multifamily construction has been running much hotter than its 12-month average.

The initial claims level jumped to 360,000, the highest level since February (excluding the volatility from the Easter holiday problems), for the week ending May 11 from an upwardly revised 328,000 (from 323,000) for the week ending May 4. The Briefing.com consensus expected the initial claims level to increase to 330,000.

The CPI fell 0.4% in April after declining 0.2% in March. The Briefing.com consensus expected consumer prices to fall 0.2%. Excluding food and energy, core CPI increased 0.1% for a second consecutive month. The consensus expected these prices to increase 0.2%.

The Philadelphia Fed's Business Outlook showed that manufacturing activity in the Philadelphia region contracted in May. The index fell to -5.2 from 1.3 in April. The Briefing.com consensus expected the Philly Fed Index to increase to 2.5.

Tomorrow, the preliminary May Michigan Consumer Sentiment Survey and April leading indicators will be reported at 9:55 ET and 10:00 ET, respectively.DJ30 -42.47 NASDAQ -6.37 SP500 -8.31 NASDAQ Adv/Vol/Dec 1065/1.87 bln/1418 NYSE Adv/Vol/Dec 1191/684.4 mln/1827

3:30 pm :

June crude oil extended yesterday's gains as the dollar index traded lower. The energy component briefly dipped into the red and to a session low of $94.08 per barrel but quickly recovered. It advanced to a session high of $95.57 per barrel in late morning action and eventually settled at $95.18 per barrel, booking a gain of 1.0%.
June natural gas on the other hand, slid deeper into negative territory following bearish inventory data that showed a build of 99 bcf when a build of 95 bcf was anticipated. It touched a session low of $3.91 per MMBtu after trading as high as $4.06 per MMBtu in early morning floor trade. Unable to gain momentum, it settled 3.4% lower at $3.93 per MMBtu.
June gold declined for a sixth consecutive session as the World Gold Council said that first quarter total gold demand fell by 13%. The yellow metal touched a session low of $1373.20 per ounce at floor trade open but managed to inch higher as the session progressed. It settled 0.7% lower at $1387.10 per ounce, slightly below its session high of $1389.10 per ounce.
July silver lifted off its session low of $22.28 per ounce set at pit trade open and trended higher for most of its session. It spent afternoon action chopping around near the unchanged line and settled just one penny lower at $22.65 per ounce.

4:09PM Applied Materials beats by $0.03, beats on revs; guides Q3 EPS in-line (AMAT) 14.66 -0.14 : Reports Q2 (Apr) earnings of $0.16 per share, ex items, $0.03 better than the Capital IQ Consensus Estimate of $0.13; revenues fell 22.3% year/year to $1.97 bln vs the $1.92 bln consensus.

Co issues guidance for Q3, sees EPS of $0.16-0.20 vs. $0.19 Capital IQ Consensus Estimate; sees Q3 revs of up slightly QoQ (Q2 Sales $1.97 bln Q3 Capital IQ consensus: $2.12 bln)

Applied generated orders of $2.27 bln, up 7 percent from the prior quarter, with Silicon Systems Group orders up 14 percent from the first quarter and Display orders up 41 percent sequentially. Net sales were $1.97 bln, up 25 percent sequentially. Gross margin was 43.2% on a non-GAAP adjusted basis, up from 39.8 percent in the prior quarter reflecting higher net sales and lower inventory charges. GAAP gross margin was 41.0 percent. For the third quarter of fiscal 2013, Applied expects net sales to be up slightly from the previous quarter.

"For the second quarter in a row, Applied had strong order performance of over $2 bln...We are seeing increasing pull from some of our largest strategic customers for our key enabling technologies. We remain committed to driving profitable growth."

Guidance Details: Applied expects net sales to be up slightly from the previous quarter. The company expects non-GAAP adjusted EPS to be in the range of $0.16 to $0.20. The non-GAAP adjusted EPS outlook excludes known charges related to completed acquisitions of ~$0.04 per share but does not exclude other non-GAAP adjustments that may arise subsequent to this release.

4:05PM Dell misses by $0.14, beats on revs (DELL) 13.43 -0.02 : Reports Q1 (Apr) earnings of $0.21 per share, excluding non-recurring items, $0.14 worse than the Capital IQ Consensus Estimate of $0.35; revenues fell 2.4% year/year to $14.07 bln vs the $13.49 bln consensus. Note that Dow JOnes on Wednesday reported co would report EPS of $0.20 with rev consistent with expectations.

Given the company's announcement on Feb. 5 of a definitive merger agreement to take Dell private, the co is not providing an outlook for Q2.

Enterprise Solutions Group revenue was $3.1 billion, a 10% increase. Operating income for the quarter was $136 million, a 71% increase. Dell server and networking revenue increased 16% as the company gained share in the calendar first quarter. Dell networking continued to deliver strong growth, with a 24% revenue increase, including a 46% growth in the company's Force10 business. Dell storage revenue declined 10%.

Dell Services revenue grew 2% to $2.1 billion driven by an 11% increase in revenue for infrastructure, cloud and security services. Support and deployment revenue increased 2% and applications and business process services declined 15%. Operating income was $370 million, a 10% increase.

Dell Software revenue was $295 million, resulting in an operating loss. Dell enhanced its software capabilities during the quarter, investing in additional sales capability and research and development. Consistent with the company's business strategy when it acquired Quest Software, this business is on track to be accretive to earnings in the first quarter of fiscal year 2015.

End User Computing revenue was $8.9 billion in the quarter, a 9% decrease. Operating income for the quarter was $224 million, a 65% decrease. Dell desktop and thin-client revenue declined 2%, mobility revenue declined 16%, and software from third parties and peripherals revenue declined 6%.

Large Cap Gainers

CSCO (23.86 +12.49%): Beat on EPS by $0.02, reported revs in-line; sees Q4 revs +4-7% yoy (~$12.16-12.51 bln) vs $12.48 bln Capital IQ Consensus Estimate, sees Q4 EPS $0.50-0.52 vs $0.51 Capital IQ Consensus Estimate; target raised at Wunderlich, Raymond James, Evercore, Nomura, RBC Capital Mkts, and at MKM Partners.
NTAP (38.96 +7.56%): Elliot Management's most recent qtrly filing (13F) reveals a ~403K share stake in NTAP (down from ~686K held at the end of 2012), as well as calls (~437K) and puts (~911K) at the end of Q1.

AMD (3.77 -13.93%): Downgraded to Sell from Neutral at Goldman; Bloomberg discussed cautious comments on AMD; Bernstein analyst said 'worried about core business'.

10:29AM Freescale Semi subsidiary plans to offer $750 mln aggregate principal amount of senior secured notes (FSL) 16.89 +0.39 : Co announced that Freescale Semiconductor, its wholly owned indirect subsidiary, plans to offer, subject to market and other conditions, $750 million aggregate principal amount of senior secured notes to extend a portion of its debt maturities and reduce its interest expense. Freescale intends to use the net proceeds from the offering of the Notes to redeem all of its outstanding 10.125% Senior Secured Notes due 2018 in accordance with the indenture governing those notes, and to pay the related premium and fees. The foregoing does not constitute a notice of redemption for any outstanding notes.

ANADIGICS (ANAD) announced that its AWL9581 802.11ac front-end IC, AWT6651 ProEficient power amplifier, AWT6624 HELP4 PA, and AWC6323 HELP3E dual-band PA enable wireless connectivity in the Samsung (SSNLF) Galaxy S 4.
Riverbed Technology (RVBD) announced that its Cascade Profiler 9.6, Cascade Shark 9.6, Cascade Gateway 9.6, and Cascade Pilot 9.6, from its Riverbed Performance Management product family, have achieved an EAL3+ certification under the Common Criteria for Information Technology Security Evaluation and Certification Scheme.

8:03AM Axcelis receives significant order for high performance upgrade from leading chip manufacturer (ACLS) 1.43 : Co announced that it has received a multiple system upgrade order from a leading semiconductor manufacturer based in Asia for Axcelis' new GSD Series High Performance End Station upgrade, designed to significantly enhance system productivity and process performance. The order is valued over $1.4 million. The foundry deployed the upgrade to increase manufacturing capacity in order to meet customer demand, and immediately realize lower operating costs.

6:00AM JA Solar repays $119 mln of its convertible notes due May 2013 (JASO) 5.72 : Co announced that it has repaid at maturity a total of $119 million, comprising the principal amount and accrued interest, of its 4.5% convertible notes due May 15, 2013.

Micron Technology (MU) announced the Tokyo High Court's issuance of an order dismissing creditor appeals of the Tokyo District Court's approval of Elpida Memory, Inc.'s reorganization plan. Elpida's reorganization plan calls for Micron to sponsor the reorganization under which Elpida will join the Micron group of companies.

Dell (DELL) announced an expanded and stronger Dell Precision workstation portfolio that includes the smallest tower workstation chassis in its class, the Dell Precision T1700 small form-factor, and the Dell Precision R7610. In addition, the Dell Precision family features a more powerful and reliable Dell Precision T1700 Mini-Tower

Mellanox Tech (MLNX) to acquire Kotura at a total cash purchase price of approximately $82 million; expects transaction to be accretive to full fiscal year 2014 earnings by approximately $0.01 to $0.03 per share on a non-GAAP basis.

Glu Mobile (GLUU) announced immediate support for Google (GOOG) Play game services, a cross-platform game service enabling new in-game features and cross screen gaming. Immediately live in Glu's Eternity Warriors 2, Google Play game services leverages player login through Google+ to connect a global audience of mobile gamers.

Cisco Systems (CSCO) reported third quarter earnings of $0.51 per share, excluding non-recurring items, $0.02 better than the Capital IQ consensus of $0.49, while revenues rose 5.4% year/year to $12.22 billion versus the $12.18 bln consensus. Cash flows from operations were $3.1 bln for the third quarter of fiscal 2013, compared with $3.3 billion for the second quarter of fiscal 2013, and compared with $3.0 bln for the third quarter of fiscal 2012. Cash and cash equivalents and investments were $47.4 billion at the end of the third quarter of fiscal 2013, compared with $46.4 bln at the end of the second quarter of fiscal 2013, and compared with $48.7 billion at the end of fiscal 2012. Cisco repurchased ~41 mln shares of common stock under the stock repurchase program at an average price of $20.85 per share for an aggregate purchase price of $860 mln. As of April 27, 2013, Cisco had repurchased and retired 3.8 bln shares of Cisco common stock at an average price of $20.35 per share for an aggregate purchase price of approximately $77.7 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is ~$4.3 bln with no termination date. "Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the US and other parts of the world which are encouraging. We have the right products, the right solutions and our customers are coming to us to solve their biggest business problems. The pace of change is increasing and Cisco is well positioned."

NQ Mobile (NQ) reported first quarter earnings of $0.19 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.19, while revenues rose 108.0% year/year to $33.24 million versus the $32.98 million consensus. Cumulative registered user accounts were 326.6 million as of March 31, 2013, compared with 172.0 million as of March 31, 2012 and 283.4 million as of December 31, 2012. Average monthly active user accounts for the quarter ended March 31, 2013 were 111.1 million, compared with 60.1 million for the corresponding period of 2012 and 97.7 million for the quarter ended December 31, 2012. Average monthly paying user accounts for the quarter ended March 31, 2013 were 9.2 million, compared with 6.5 million for the corresponding period of 2012 and 8.9 million for the quarter ended December 31, 2012.Co issues upside guidance for Q2, sees Q2 revs of $38.5-38.8 million versus the $38.31 million consensus. The company issued in-line guidance for fiscal year 2013 with revenues of $179-184 million (raised from $178-183 million) versus the $179.19 million consensus.

Acxiom (ACXM) reported fourth quarter earnings of $0.19 per share, excluding non-recurring items, $0.03 better than the Capital IQ consensus of $0.16, while revenues fell 3.5% year/year to $277.13 million versus the $280.14 mln consensus. The company issued downside guidance for fiscal year 2014 with EPS of flat at $0.76 versus the $0.80 consensus and revenues of $1.099 billion versus the $1.12 billion consensus.

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Amateur Investors Weekend Stock Market Analysis (6/22/13)

http://www.amateur-investor.net/Weekend_Market_Analysis_June_22_2013.htm

As I have alluded to before back in the 1960's and 1970's the S&P 500 formed a large Broadening Top pattern. Once the final 5th Wave completed a large correction followed (-48%) in which the S&P 500 eventually tested the lower trend line connecting Waves 2 & 4 by late 1974.



Meanwhile taking a look at the chart of the Dow one could certainly argue that a similar pattern has developed since the late 1990's as the move up from the 2009 low would be the final 5th Wave.



If the Dow were to eventually test its lower trend line connecting Waves 2 & 4 that would lead to a potential drop back back to the 6000 level. Overall that would be a 60% correction from the most recent high. I know some will laugh at this potential projection but this pattern has occurred before and shouldn't be ignored.