|From Briefing.com: 4:30 pm : Natural resource plays led the broader market to another session of strong gains. Data had little sway with traders, though.|
Buying abroad overnight and this morning helped bring buyers back into action after the prior session's slip. The stock market's ability to bounce right back from that loss was also indicative that a buy-the-dip mentality continues to permeate trade.
Positive responses to the latest quarterly results from Comcast (CMCSA 25.13, +0.97), Dell (DELL 15.56, +1.65), and Deere (DE 95.86, +2.24) also helped perpetuate an upbeat tone.
Other corporate news included word that Genzyme (GENZ 75.10, +0.80) has agreed to be purchased by Sanofi-Aventis (SNY 34.95, +0.46) for $74 per share plus a Contingent Value Right. That announcement overshadowed disappointing results from GENZ.
Shares of discount retailers benefited from a strong bid after Trian Group issued a proposal to acquire Family Dollar (FDO 53.54, +9.58) for a price in the range of $55 to $60 per share in cash. The specified range represents a premium of at least 25% over FDO's prior session closing price.
Energy stocks and materials stocks made up the two strongest performing sectors. They both snapped back from sizable losses in the prior session to record gains of 1.3% and 1.2%, respectively. Both sectors steadily outperformed for virtually all of the session.
At its session high, the S&P 500 was up 0.7%, but some mid-session selling slashed that gain to less than 0.2%. Pressure intensified around the same time that Reuters reported the planned presence of two Iranian warships in the Suez Canal. Concern about potential geopolitical implications of such a move were pushed aside, at least for now, so that stocks could gradually recoup most of their gains and settle at new two-year closing highs.
Market participants had a relatively muted response to minutes from the latest FOMC meeting, even though the record indicated that the Fed has raised its economic forecast and noted that risks to GDP growth have diminished.
As for data, producer prices for January increased by 0.8%, which is slightly greater than the 0.7% increase that had been generally expected among economists surveyed by Brieifng.com. Producer prices had increased 1.1% in the prior month. As for core producer prices, they increased a more tepid 0.5% month over month, but that is still sharper than the 0.2% increase that had been widely expected after a 0.2% increase in the prior month.
Housing starts for January had been expected, on average, among economists polled by Briefing.com to hit an annualized rate of 540,000, but instead they spiked 14.6% month over month to an annualized rate of 596,000. The surge makes for a sharp rebound from the downwardly revised 5.1% decline that was reported for the prior month.
Building permits for January dropped 10.4% from the prior month to an annualized rate of 562,000. After a 15.3% jump in the prior month, January building permits had been widely expected to come in at 575,000.
Industrial production for January was just posted. It fell 0.1%, which contrasts with the Briefing.com consensus call for a 0.6% increase.
Advancing Sectors: Energy (+1.3%), Materials (+1.2%), Consumer Discretionary (+0.8%), Tech (+0.8%), Financial (+0.6%), Health Care (+0.5%), Industrials (+0.4%), Consumer Staples (+0.2%)
Declining Sectors: Telecom (-0.3%), Utilities (-0.3%)DJ30 +61.53 NASDAQ +21.21 NQ100 +0.7% R2K +1.0% SP400 +0.7% SP500 +8.31 NASDAQ Adv/Vol/Dec 1745/2.28 bln/904 NYSE Adv/Vol/Dec 2256/926 mln/745
5:02PM Teradyne reached an agreement to sell its Automotive Diagnostic Solutions unit to SPX Corporation (SPW) (TER) 18.92 +1.05 : Co has reached an agreement to sell its Automotive Diagnostic Solutions unit to SPX Corporation. Diagnostic Solutions, which serves transportation OEMs, tier-one suppliers and independent service providers is based in Manchester, England and has other major operations in Munich and Detroit. The terms of the sale were not disclosed. Completion of the transaction is expected no later than the second quarter 2011.
4:11PM Rubicon Tech beats by $0.14, beats on revs; guides Q1 EPS upside, revs in-line (RBCN) 21.11 +0.71 : Reports Q4 (Dec) earnings of $0.64 per share, $0.14 better than the Thomson Reuters consensus of $0.50; revenues rose 247.1% year/year to $29.5 mln vs the $26.8 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.62-0.65 vs. $0.52 Thomson Reuters consensus; sees Q1 revs of $34-36 mln vs. $31.30 mln Thomson Reuters consensus.
4:07PM NetApp beats by $0.02, reports revs in-line; guides Q4 EPS below consensus, revs in-line (NTAP) 58.54 +0.10 : Reports Q3 (Jan) earnings of $0.52 per share, excluding non-recurring items, $0.02 better than the Thomson Reuters consensus of $0.50; revenues rose 25.3% year/year to $1.27 bln vs the $1.28 bln consensus. Co issues guidance for Q4, sees EPS of $0.49-0.53, excluding non-recurring items, vs. $0.54 Thomson Reuters consensus; sees Q4 revs +15-20% YoY to $1.36-1.41 bln vs. $1.38 bln Thomson Reuters consensus.
4:02PM Cray beats by $0.19, beats on revs; guides Q1 revs above consensus; guides FY11 revs below consensus (CRAY) .26 +0.15 : Reports Q4 (Dec) earnings of $1.46 per share, $0.19 better than the Thomson Reuters consensus of $1.27; revenues rose 148.8% year/year to $219.4 mln vs the $213.3 mln consensus. Co issues upside guidance for Q1, sees Q1 revs of $35-40 mln vs. $35.00 mln Thomson Reuters consensus. Co issues downside guidance for FY11, sees FY11 revs of $320-340 mln vs. $340.34 mln Thomson Reuters consensus. For the year, gross margins are expected to be in the range of 2010 levels and operating expenses are expected to be higher than 2010, driven primarily by lower anticipated R&D co-funding credits. Based on this outlook, the co expects to be profitable for 2011. Cash balances are expected to increase significantly from fourth quarter levels by the end of the first quarter of 2011.
9:51AM F5 Networks slips back into the red after slightly firmer start (FFIV) 125.10 -1.27 : Stock surged more than 26% off its Jan to to test its 50 sma yesterday off the open. It pulled back and finished in the red Tuesday and this morning it has slipped after a limited push higher off the open. Its 50 ema at 124.50 has provided a support thus far today with its 20 day ema at 123.40.
# STMicroelectronics (STM) and LifeNexus , announced that STMicroelectronics will produce the iChip microprocessor for the LifeNexus Personal Health Card.
# Texas Instruments (TXN) introduced a serial-controlled, 16-channel constant-current sink LED driver with four-channel grouped delay.
# Maxim (MXIM) introduced sampling of the MAX2550-MAX2552, a family of multiband transceivers specifically designed for a new range of dongle, module, and stand-alone femto base stations.
# Agilent (A) announced that they have entered into a licensing agreement with Qualcomm (QCOM) for factory test technology.
08:41 am Dell tgt raised to $18 at Stifel following earnings: . Stifel is raising their tgt to $18 from $16 on higher ests following earnings last night. With a setup where they viewed investor sentiment to largely reflect limited/no directional expectations, they believe Dell's Q4 results and FY12 outlook should result in a healthy share reaction and potential reengagement among value investors. While investors will be left to gauge the impact of decelerating favorable component cost dynamics on the co's GM% story thru FY12 (expect favorable trends to continue thru 1H12), they believe Dell's operational/supply-chain realignment, solutions mix shift, and increased comfort in pricing discipline are viewed as positives.
08:27 am Hewlett-Packard target raised to $55 at Wedbush: . Wedbush raises their HPQ tgt to $55 from $50 saying they that HPQ should be able to modestly beat the January quarter top line Street estimate of $32.96B and materially beat the bottom line Street estimate of $1.29. Firm says the corporate refresh cycle is still going strong and they expect HP to benefit from strength in the enterprise as well as commercial refresh cycles. For the January quarter, they expect material upside to gross margin estimates primarily due to lower component costs and increasing revenue contribution from higher margin businesses such as networking and storage.
10:57 am DELL Guides FY12 Revs Above Consensus (DELL)
Dell (DELL $15.22 +1.31) reported fourth quarter earnings of $0.53 per share, $0.16 better than the Thomson Reuters consensus of $0.37.
Revenues rose 5.3% year-over-year to $15.69 billion versus the $15.71 billion consensus.
Reports fourth quarter non-GAAP operating margins of 6.5% versus 6.3% Thomson Reuters consensus. Dell sees FY12 rev +5% to +9% versus +4.7% consensus (equates to approx. $64.6 billion to $67.0 billion versus $64.43 billion Thomson Reuters consensus).
Dell sees FY12 non-GAAP operating income growth of 6-12%, may not compare to +5.6% consensus.
For its fiscal-year 2012, Dell expects revenue growth of 5 to 9 percent, non-GAAP operating income growth of 6% to 12%, and continued strong execution on cash flow with cash flow from operations exceeding net income.
In its first quarter of fiscal-year 2012, Dell expects normal seasonal declines in its consumer and public businesses and, as such, a slight sequential decline in revenue (consensus calls for -1.5% quarter-over-quarter).