|From Briefing.com: 4:30 pm : Stocks settled with sizable losses near session lows following a mid-session swoon.|
The tone ahead of the open was actually positive. Premarket participants were encouraged by news that China intends to expand its investment in Europe, although enthusiasm was tempered by a negative response to headlines that eurozone officials may wait to doll out bailout funds to Greece due to doubts about sincerity of the flagging country's commitment to new austerity measures which were approved by its parliament this past weekend.
The first half of the session was mostly mixed with the S&P 500 chopping along with a modest gain, the Dow down because of lackluster action among blue chips, and the Nasdaq sporting an enviable gain with help from tech stocks.
Apple (AAPL 497.67, -11.79) was also a source of support for the Nasdaq. However, a sudden and concerted shift in sentiment sent the stock sliding from an all-time high above $525, which reflected a climb of more than 25% since it reported earnings less than one month ago, into the red on strong volume. Given the stock's size and influence -- it is the single greatest stock by market cap -- it weighed heavily on broad market action and prompted many participants to slap on sell orders. The retreat took the major equity averages into the red. None could recover.
Upside earnings surprises from Comcast (CMCSA 28.52, +1.27) and Teva Pharma (TEVA 45.04, +1.52) helped their shares maintain impressive gains in the face of the sell-off. Despite better-than-expected results of its own, Deere & Co. (DE 84.28, -4.77) shares dropped sharply to a new monthly low. Strikingly, Abercrombie & Fitch (ANF 48.30, +3.71) shares surged to a new two-month high after the apparel retailer unveiled earnings that came short of the consensus. Encouraging commentary from company management was credited for restoring confidence in the stock.
Economic data wasn't altogether exciting. The Empire Manufacturing Survey hit 19.5 in February, up from 13.5 in the prior month. It also exceeded the reading of 14.0 that had been widely anticipated.
Industrial production for January proved disappointing. Data showed no change, which contrasts with the 0.6% increase that had been broadly expected to follow a 1.0% increase in the prior month.
The Housing Market Index impressed some participants by stretching to 29 in February from 25 in the prior month. Many thought that it would improve to just 26.
Minutes from the most recent FOMC meeting failed to induce any meaningful broad market action. However, Regional Fed President Lacker dissented in regard to the description of the time period over which economic conditions were likely to warrant exceptionally low levels of the federal funds rate, which stands at 0.00% to 0.25%, because he expects a tightening of monetary policy to prevent inflation projections or expectations prior to the end of 2014.
The dollar didn't see a great deal of action today. Instead, it generally held near the flat line, which is right about where it was by session's end. That said, the euro shed about 0.5% against the greenback to trade at $1.31. Concerns about Greece appeared to overshadow some eurozone GDP data that was generally better than what many had predicted. The headline numbers for fourth quarter GDP featured a 0.3% decline for the eurozone, a 0.2% decline in Germany, and a 0.2% increase in France. Just the other day analysts at Moody's announced they had assigned a negative outlook to France's credit rating.
Although it appeared that the risk trade was turned off, oil prices finished pit trade at $101.78 per barrel for a 1.0% gain. Buying interest was bolstered by concerns about Iran's armament efforts and possible plans by the country to cut its exports.
Advancing Sectors: (None)
Declining Sectors: Health Care -0.2%, Consumer Staples -0.2%, Energy -0.3%, Consumer Discretionary -0.5%, Telecom -0.5%, Financials -0.6%, Utilities -0.6%, Tech -0.6%, Industrials -1.4%DJ30 -97.33 NASDAQ -16.00 NQ100 -0.8% R2K -0.8% SP400 -0.3% SP500 -7.27 NASDAQ Adv/Vol/Dec 940/2.02 bln/1595 NYSE Adv/Vol/Dec 1276/806 mln/1736
4:37PM MEMC Elec misses by $0.05, misses on revs; guides Q1 revs in-line (WFR) 4.65 -0.07 : Reports Q4 (Dec) loss of $0.21 per share, $0.05 worse than the Capital IQ Consensus Estimate of ($0.16); revenues fell 15.6% year/year to $717.8 mln vs the $770.64 mln consensus. MEMC Elec sees Q1 revs down 10-15% sequentially; consensus calls for a ~15% decline (Q1 revs of approx $609-645 mln vs. $623.52 mln Capital IQ Consensus Estimate).
For the first quarter 2012: Semiconductor cycle bottom in Q1 2012 Expecting 10% - 15% lower revenue in Q1 2012 vs. Q4 2011, Orders picking up for Q2 2012; Solar energy systems interconnection volume of less than 100 MW Approximately, 50 MW will be recognized for non-GAAP revenue, Approximately 45 MW of balance sheet projects; Solar energy systems average pricing of approximately $4.25/watt; Operating expenses less than $110 million; Capital spending less than $50 million; Interest / other expense less than $25 million; Non-GAAP tax rate of approximately 30%.
For the full year 2012: Semiconductor revenue flat year-over-year, Revenue in second half 2012 stronger than in first half 2012, Solar energy systems sales volume greater than 400 MW; Solar energy systems average pricing of approximately $3.75/watt; Operating expenses less than $375 million; Capital spending less than $175 million; Interest/other expense less than $100 million; Non-GAAP tax rate of approximately 30%.
4:32PM Photronics reports EPS in-line, misses on revs (PLAB) 7.53 +0.08 : Reports Q1 (Jan) earnings of $0.09 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.09; revenues fell 7.1% year/year to $112.2 mln vs the $113.72 mln consensus.
4:20PM NVIDIA -- Earnings Mover (NVDA) 16.17 : Negative initial reaction to earnings as price sinks down roughly $0.50-0.75 down into the $15.50 zone. Initial after hours spike low down near $15.20.
4:12PM Agilent reports EPS in-line, revs in-line; guides Q2 EPS below consensus, revs below consensus; guides FY12 EPS in-line, revs in-line (A) 43.64 -0.14 : Reports Q1 (Jan) earnings of $0.69 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.69; revenues rose 7.6% year/year to $1.64 bln vs the $1.65 bln consensus. Co issues downside guidance for Q2, sees EPS of $0.71-0.73, excluding non-recurring items, vs. $0.78 Capital IQ Consensus Estimate; sees Q2 revs of $1.70-1.72 bln vs. $1.75 bln Capital IQ Consensus Estimate. Co issues in-line guidance for FY12, sees EPS of $3.13-3.23, excluding non-recurring items, vs. $3.16 Capital IQ Consensus Estimate; sees FY12 revs of $6.92-7.02 bln vs. $6.97 bln Capital IQ Consensus Estimate.
4:07PM NetApp reports EPS in-line, revs in-line; guides AprQ in-line (NTAP) 39.88 +0.76 : Reports Q3 (Jan) earnings of $0.58 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.58; revenues rose 21.4% year/year to $1.57 bln vs the $1.56 bln consensus. Co issues in-line guidance for Q4 (Apr), sees EPS of $0.60-0.65, excluding non-recurring items, vs. $0.63 Capital IQ Consensus Estimate; sees Q4 revs of $1.645-1.725 bln vs. $1.68 bln Capital IQ Consensus Estimate.
SanDisk (SNDK) announced it has entered into a worldwide, exclusive agreement with Diskeeper Corp. to license its caching software solutions for solid state disk drives.
8:55AM SanDisk announced it agrees to Acquire FlashSoft; financial terms not disclosed (SNDK) 47.00 : Co intends to sell FlashSoft's products as standalone software, as well as offer these software products in combination with its growing portfolio of SAS, PCIe and SATA enterprise solutions. The FlashSoft acquisition is expected to be neutral to SanDisk's earnings in 2012 and accretive in 2013. Additional details of the acquisition were not released.
8:07AM Chipmos Technology reported revenue for the month of January 2012 was NT$1,443.0 mln or US$48.7 mln, a decrease of 1.2% from the month of December 2011 and a decrease of 6.8% from the same period in 2011 (IMOS) 8.62 :
12:54 pm S&P Tech Sector Shows Modest Gains, But Is Outperforming The S&P 500
The tech sector is trading higher today, outpacing minor losses in the broader market. Semiconductors are showing relative strength in the tech space; the Philly Semi Index is trading 1.3% higher. CREE (+4.6%) is a notable leader in the chip index. Among other major indices, the SPY is trading 0.1% lower, while the NASDAQ is 0.2% higher and the QQQ is trading 0.3% higher on the session. Among tech bellwethers, AAPL (-0.3%) is showing strength, while T (-0.5%) is under pressure.
In earnings last night, ZNGA (-12.6%) posted a slight beat with inline guidance, while QSFT (-8.8%) reported a mixed qtr and guided above consensus. In news, Third Point, which owns 5.56% of YHOO (-0.8%), disclosed last night its intention to nominate 4 to the Board of YHOO. Elsewhere, SNDK (+2.6%) announced this morning it will acquire FlashSoft, which is expected to become accretive in 2013. Among rumors, LNKD (-0.2%) is reportedly in talks to enter China.
Among notable analyst upgrades this morning, The Benchmark Company upgraded FIO (+3.4%) to Buy and FIS (+1.7%) was upgraded to Neutral at JP Morgan.
Among downgrades, ZNGA (-12.6%) was downgraded at Robert W. Baird, BofA/Merrill, and Barclays. Also, PWAV (-14.6%) was downgraded to Underweight at JP Morgan, RAX (-0.3%) was downgraded to Market Perform at Raymond James, ASIA (-1.8%) was downgraded to Sell at UBS, ORCL (+0.1%) was downgraded to Above Average at Caris, and DELL (-0.1%) was downgraded to Underperform at Sterne Agee.
A (+0.9%), CTL (+0.3%), NTAP (+2.3%), and NVDA (+0.4%) are some notable names in tech scheduled to report results today after the close.