From Briefing.com: 4:15 pm : The stock market began the new trading week on a defensive note after tensions between Russia and Ukraine escalated over the weekend. The Dow Jones Industrial Average (-0.9%) paced the decline while the S&P 500 lost 0.8% with all ten sectors ending in the red.
Over the weekend, Russian troops increased their presence around several key strategic points located in the Crimean peninsula in Southern Ukraine. The troop deployment was authorized by the Russian parliament while Ukrainian authorities described the actions as an 'invasion.'
Another concerning headline crossed in the late morning when Ukraine's Defense Minister said that troops in the Crimea have been given an ultimatum to surrender by 22:00 ET or 'face a storm.' The news knocked the market to fresh lows, but was followed by comments from Russia's Ministry of Defense, claiming no such ultimatum had been presented.
With plenty of uncertainty abound, equities sold off broadly while traditional safe-haven assets received a bid. Treasuries settled on their highs with the benchmark 10-yr yield down five basis points at 2.60% while the Dollar Index (80.08, +0.39) gained 0.5%.
Elsewhere, commodities saw interest with crude oil climbing 2.4% to $105.00/bbl while gold futures settled higher by 2.2% at $1350.40/ozt. In turn, the strength in gold gave a boost to miners, sending the Market Vectors Gold Miners ETF (GDX 26.30, +0.42) higher by 1.6%.
The outperformance of miners helped the materials sector (-0.2%) finish ahead of the broader market. Outside of materials, consumer staples (-0.5%), energy (-0.6%), health care (-0.7%), and telecom services (-0.5%) were able to outperform the S&P 500.
On the downside, the technology sector (-0.9%) spent the entire session behind the remaining nine groups. Strikingly, the largest sector component, Apple (AAPL 527.76, +1.52), eked out a modest gain of 0.3% while other large components like Google (GOOG 1202.69, -12.69), Oracle (ORCL 38.51, -0.60), Microsoft (MSFT 37.78, -0.53), and SAP (SAP 77.74, -2.55) lost between 1.1% and 3.2%.
With stocks under considerable pressure, participants showed significant interest in volatility protection as indicated by the CBOE Volatility Index (VIX 16.29, +2.29), which ended at levels last seen in early February.
Economic data included three reports:
Construction spending increased 0.1% in January after increasing an upwardly revised 1.4% (from 0.1%) in December. The Briefing.com consensus expected construction spending to decline 0.1%. It is difficult to reconcile the increase in January construction spending and the theory that the recent downturn in economic activity was weather related. If weather was negatively impacting the economy, then construction -- which largely takes place outside -- should have felt the brunt of the negative effects. The fact that construction spending held up relatively well in January, especially considering the huge upward revision to December data, tells us that the weather theory is overblown.
In a role reversal, the ISM Manufacturing Index improved in February to 53.2 from 51.3 in January while the Briefing.com consensus expected an increase to 51.3. In January, the Federal Reserve regional manufacturing surveys showed stronger manufacturing conditions. Yet, the national ISM Index recorded its biggest one-month fall since October 2008. In February, those same regional manufacturing surveys deteriorated. In a hint of irony, the national index showed sizable growth this month. As the trends clearly show, the national and regional indicators do not serve as a good guide on manufacturing levels.
Personal income increased 0.3% in January after being unchanged in December. That was exactly what the consensus expected. Personal spending levels increased 0.4% in January after increasing a downwardly revised 0.1% (from 0.4%) in December. The Briefing.com consensus expected personal spending to increase 0.1%.
There is no economic data on tomorrow's schedule.
Nasdaq Composite +2.4% YTD
Russell 2000 +1.3% YTD
S&P 500 -0.2% YTD
Dow Jones Industrial Average -2.5% YTD
DJ30 -153.68 NASDAQ -30.82 SP500 -13.72 NASDAQ Adv/Vol/Dec 967/1.94 bln/1631 NYSE Adv/Vol/Dec 1009/670.7 mln/2009
3:30 pm :
Further gains in the S&P GSCI today put commodities at a level not seen in six months
Precious metals and crude oil traded higher despite a stronger dollar index as investors reacted to escalating tension between Ukraine and Russia.
Over the weekend, Russian forces took control of strategic points around the Crimean peninsula, citing the need to protect the ethnic Russian population in the region as well as the country's borders. The act was seen as an "invasion" by Ukrainian officials who have called on Russia to pull back its forces.
Apr gold rose above the $1350 per ounce level, advancing to a session high of $1354.90 per ounce. It eventually settled with a 2.2% gain at $1350.40 per ounce.
May silver rose to a session high of $21.67 per ounce in mid-morning action. It pulled back slightly heading into the close and settled at $21.49 per ounce, or 1.3% higher.
Apr crude oil rose as high as $105.22 per barrel in late morning action, its highest level since September 2013. The energy component eventually settled with a 2.4% gain at $105.00 per barrel.
Apr natural gas, on the other hand, pulled back from its session high of $4.71 per MMBtu set in early morning pit trade and slipped into negative territory .Unable to find buying support, it settled at its session low of $4.48, or 3.0% lower.
4:07PM Silicon Labs acquires acquisition of the full product portfolio and intellectual property of California-based Touchstone Semiconductor for $1.5 mln (SLAB) 51.62 -0.35
12:19PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
LO (51.06 +4.08%): See reports that Reynolds (RAI) may make a bid for the company
MGA (92.31 +3.58%): Reported FY13 EPS of $6.79 vs $6.38 estimate, revs $34.84 bln vs $34.46 bln estimate; sees FY14 revs of $33.8-35.5 bln vs $35.81 bln estimate
ISRG (454.87 +2.26%): Co awarded ~$142 mln contract from U.S. Department of Veterans Affairs
Large Cap Losers
YNDX (32 -14.67%): Weakness in Russian related companies: MBT, VIP, ING also lower
HTZ (26.98 -3.68%): Announced it plans to file form 12b-25 with the SEC to obtain additional time to file its annual report on Form 10-K for 2013; co identified certain adjustments relating to prior periods which will require the revision of certain previously issued financial statements; revisions not expected to have a material impact
CX (12.62 -3.52%): Announced conversions of ~ $280 mln of its 4.875% Convertible Subordinated Notes due 2015
Mid Cap Gainers
USM (39.68 +9.95%): Upgraded to Overweight from Neutral at JP Morgan; TDS also upgraded to Overweight from Neutral at JP Morgan
QCOR (65.2 +7.33%): Co disclosed it is engaged with the SEC regarding negative publications about the company
BVN (13.2 +4.76%): Strength in mid-cap gold companies: GOLD, GFI, EGO also higher
Mid Cap Losers
QIWI (40.74 -12.63%): Weakness in Russian related companies
AKRX (23.28 -9.84%): Reported Q4 EPS of $0.14 (in-line), revs rose 18.9% yoy to $85 mln vs $83.4 mln estimate; sees FY14 EPS of $0.76-0.79 ex items vs $0.86 estimate, revs of $540-560 mln vs $500.99 mln estimate; co filed to delay 10-K due to control deficiencies
HSC (23.34 -7.09%): Announced that Patrick K. Decker has stepped down as President and Chief Executive Officer and member of the Board of Directors, effective immediately, to become CEO of Xylem; downgraded to Hold at Keybanc
12:00PM ON Semiconductor announces the digital application specific integrated circuit design flow methodology it employs fully supports the stringent requirements of commercial aircraft manufacturers that need to obtain DO-254 certification (ONNN) 9.23 -0.11 :
10:03AM Apple and Volvo Car Group (VOLVY) forge global alliance; cos are joining forces to make Apple's operating system available to drivers (AAPL) 528.79 +2.55 : Apple CarPlay is new service that will bring all the features and services familiar to iPad, iPhone or iPod users directly into the car via Volvo's large centre console touch screen display. The first car to offer Apple CarPlay will be the all new XC90 SUV which will be introduced later in 2014, one of the most anticipated cars of recent years, replacing the original XC90, which redefined the SUV and became the best selling model in Volvo's history.
9:26AM LDK Solar confirms sppointment of joint provisional liquidators in Cayman Islands (still halted) (LDK) 1.01 :
Co announces that the Grand Court of the Cayman Islands appointed Tammy Fu and Eleanor Fisher, both partners of Zolfo Cooper as joint provisional liquidators ("JPLs") for the Company on February 27, 2014.
While the Cayman court ordered that no suit, action or proceeding may be brought or commenced against the Company without the permission of the Cayman court, the JPLs have been jointly and severally granted authority, among other things, to (i) promote a scheme of arrangement to present to the Company's creditors and (ii) bring or defend any action or legal proceeding in any jurisdiction in the name and on behalf of the Company. The court order also required the consent of the JPLs and the prior sanction of the Cayman court for the Company to enter into any restructuring support agreement ("RSA") or loan agreement.
Mellanox Technologies (MLNX) announced a collaboration with the University of Cambridge for the Square Kilometer Array project. The University of Cambridge selected the co's Virtual Protocol Interconnect solution, consisting of ConnectX-3 adapter cards, SwitchX-2 based SX1036 36-port switches and cables, to provide it with leading interconnect performance and protocol flexibility for SKA test-bed clusters.
8:35AM O2Micro granted a patent by the Japanese Patent Office for its Driving Circuit topology (OIIM) 3.75 : Co announced that its Selector Circuit for Power Management in Multiple Battery Systems invention was patented by the Japanese Pate
8:00AM Skyworks announces plans to initiate quarterly dividend program; Co plans to initiate a quarterly dividend of $0.11/share sometime within its third fiscal quarter of 2014, which begins on April 1, 2014 (SWKS) 35.46 :
7:22AM SolarCity: There will be a reallocation of overhead expenses from leased systems to system sales, affecting 2012/13 GAAP numbers (SCTY) 84.96 : Co announced that there will be a reallocation of overhead expenses from leased systems to system sales, which will affect the 2013 and 2012 GAAP financial statements. The estimated changes are described below and final, audited statements will be filed on or before Tuesday, March 18, 2014.
During an internal review of fourth quarter financial statements, we discovered an error in the formula for allocating overhead expenses between Operating Lease assets and the cost of Solar Energy System Sales originating in Q1 2012. We reported this to our auditors, who agreed with our assessment that a correction needed to be made. It is important to note that overhead expenses in total will not be amended and that these changes do not affect the net cash flows or any forward financial guidance of the company.
The GAAP impact is expected to be a downward adjustment on the balance sheet primarily in Solar Energy Systems, Leased and to Be Leased of ~ 2.5%-3.0% as of September 30, 2013.
We also expect an increase in the cost of Solar Energy Systems Sales of ~$16-$20 million on the statement of operations for the nine month period ended September 30, 2013 and an increase of ~$20-$23 million to the same line item for the full-year 2012, while we are currently evaluating the materiality of the impact on 2011.
There is no change to net cash flows. Our cash balance was $577.1 million as of December 31, 2013.
These adjustments have no impact on the key operating metrics already reported:
Estimated Nominal Contracted Payments Remaining as of the end of 2013 was $1,989 million. Retained Value forecast as of the end of 2013 was $1,052 million. Full-Year Guidance MW deployed of 475 MW -- 525 MW and positive net cash flow in 2014 is reiterated.
7:05AM JA Solar to supply 7.8MW of high-efficiency full square mono modules to British solar renewables (JASO) 10.26 :
Shipments of the JAM6R 270W P-Type modules in a 60-cell format are expected to be completed during the first quarter of 2014.
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