|From Briefing.com: 4:30 pm : The major equity averages started the session near the neutral line, but a lack of support left stocks to slide into negative territory. They settled only modestly above session lows as participants prepared for a highly anticipated payrolls report after receiving a mixed batch of data.|
Sentiment improved slightly ahead of the open when it was learned that 365,000 initial jobless claims were filed for the week ended April 28, down from the prior week total of 392,000 and less than the 375,000 claims that had been broadly expected, but the accompanying bid proved temporary. Many simply shrugged off a 2.0% increase in first quarter unit labor costs and a 0.5% decline in productivity -- the Briefing.com consensus called for an increase of 3.0% and a decline of 0.8%, respectively.
Stocks chopped along without much direction in the opening minutes of trade, but sellers were stirred by the latest. ISM Non-Manufacturing Index. After a print of 56.0 in the prior month it pulled back to 53.5 for April. Many had expected a more modest decline to 55.5.
Given the lack of actual leadership, stocks were unable to sustain a mid-morning rebound effort. Sectors with meaningful market weight, like Tech, Financials, and Energy, were weak all afternoon. Each suffered a loss of roughly 1% or more.
For the second straight session Energy stocks were the worst performers. Collectively, they declined 1.5% after a 1.6% slide in the prior session.
Suffering a 1.1% loss, Materials stocks also succumbed to stiff selling pressure. Weakness among natural resource plays was likely exacerbated by a drop in commodity prices -- the CRB Commodity Index fell 0.9% after a 1.3% loss in the prior session.
The drop by commodities came even though the dollar mustered only a modest gain today. As of the close it was up just 0.1% against a basket of major foreign currencies. It was flat versus the euro, which moved modestly earlier in the day amid hawkish commentary from European Central Bank President Draghi.
Earnings were given little regard in the broader market, but quarterly reports provided fodder for traders of individual stocks. Visa (V 116.41, -5.78), General Motors (GM 22.37, -0.56), and Prudential (PRU 54.62, -6.32) all posted upside surprises, but still suffered losses. Allstate (ALL 34.23, +1.32) staged a strong climb after it announced.
Even amid the headlines of the day market participants remained mindful that tomorrow morning brings the government's official nonfarm payrolls report. Earlier this week a glimpse of what monthly payrolls might look like was provided by the ADP Employment Report, which suggested that fewer jobs were added in April than what many had expected. Economists polled by Briefing.com expect, on average, that nonfarm payrolls officially grew by roughly 160,000 in April.
Advancing Sectors: Consumer Staples +0.1%, Telecom +0.1%
Declining Sectors: Health Care -0.4%, Utilities -0.6%, Consumer Discretionary -0.7%, Financials -0.9%, Industrials -0.9%, Tech -1.0%, Materials -1.1%, Energy -1.5%DJ30 -61.98 NASDAQ -35.55 NQ100 -1.1% R2K -1.5% SP400 -1.7% SP500 -10.74 NASDAQ Adv/Vol/Dec 643/1.84 bln/1897 NYSE Adv/Vol/Dec 900/844 mln/2094
4:42PM Sierra Wireless beats by $0.08, beats on revs; guides Q2 EPS above consensus, revs above consensus (SWIR) 7.04 +0.16 : Reports Q1 (Mar) earnings of $0.16 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of $0.08; revenues rose 4.2% year/year to $150.3 mln vs the $145.35 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.18-0.21, excluding non-recurring items, vs. $0.12 Capital IQ Consensus Estimate; sees Q2 revs of $157-162 mln vs. $152.48 mln Capital IQ Consensus Estimate. "Overall I am very pleased with our Q1 results and trajectory. We have strengthened our operating model and have good visibility to growth drivers in both M2M and Mobile Computing."
4:15PM QLogic beats by $0.02, misses on revs (QLGC) : Reports Q4 (Mar) earnings of $0.34 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.32; revenues fell 11.3% year/year to $135.1 mln vs the $137.58 mln consensus.
4:08PM TriQuint Semi announces $50 mln stock repurchase program (TQNT) 4.60 -0.29 :
4:08PM First Solar misses by $0.69, misses on revs; guides FY12 EPS in-line (FSLR) 18.07 +0.25 : Reports Q1 (Mar) loss of $0.08 per share, excluding non-recurring items, $0.69 worse than the Capital IQ Consensus Estimate of $0.61; revenues fell 12.3% year/year to $497 mln vs the $688.57 mln consensus. Co issues in-line guidance for FY12, sees EPS of $4.00-4.50 vs. $4.03 Capital IQ Consensus Estimate.
"First Solar's performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future," said Mike Ahearn, Chairman of the Board. "Looking forward, we are confident we have the right long-term strategy and the right platform to enable long-term growth and value creation. We believe that by executing our strategic roadmaps and completing our restructuring program we can achieve our targets of 2.6 to 3.0 GW of sales in sustainable markets, earning a return on invested capital of 13 to 17 percent by 2016."
Based on reductions in First Solar's ongoing cost structure related to our restructuring initiatives, the Company is increasing 2012 guidance as follows: Earnings per fully diluted share guidance to $4.00-$4.50, compared to prior guidance of $3.75-$4.25, in each case excluding restructuring and impairment charges, and costs in excess of normal warranty expense; Operating cash flow guidance to $850-$950 million, compared to prior guidance of $800-$900 million.
4:06PM Power Integrations beats by $0.09, beats on revs; guides Q2 revs above consensus (POWI) 37.21 -0.93 : Reports Q1 (Mar) earnings of $0.36 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus Estimate of $0.27; revenues fell 6.5% year/year to $71.8 mln vs the $67.26 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $78-84 mln vs. $74.42 mln Capital IQ Consensus Estimate. For Q2, Non-GAAP gross margin is expected to increase by approximately one percentage point compared with the first quarter (calculated by excluding from GAAP cost of revenues approximately $0.3 million of stock-based compensation, $0.5 million of amortization of acquisition-related intangible assets and $1.5 million of amortization of the write-up of acquired inventory). GAAP gross margin is expected to be approximately 47 percent.
TSMC (TSM) announced its 28nm high performance ARM Cortex-A9 dual-core processor test chip achieved 3.1GHz performance under typical conditions.
ON Semiconductor (ONNN $8.83 +0.52) reported first quarter earnings of $0.12 per share, $0.03 better than the Capital IQ Consensus of $0.09, while revenues fell 14.5% year/year to $744.4 million versus the $742.89 million consensus. Gross margin was 32.9%. The company issued in-line guidance for the second quarter revenues of $745-785 million versus the $783.97 million consensus Co states, "Backlog levels for 2Q12 represent approximately 80 to 85% of our anticipated second quarter 2012 revenues. We expect that average selling prices for the second quarter of 2012 will be down approximately one to two percent when compared to the first quarter of 2012. The non-GAAP outlook for the second quarter of 2012 includes stock-based compensation expense of approximately $8 to $10 million."
JDS Uniphase (JDSU $11.87 -0.14) Reports Q3 (Mar) earnings of $0.11 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.11, while revenues fell 9.9% year/year to $409.2 million versus the $420.28 million consensus. The company issued downside guidance for the fourth quarter with revenues of $415-435 million versus the $458.08 million consensus.
09:20 am Atmel downgraded to Hold at Capstone Investments: . Capstone Investments downgrades ATML to Hold from Buy as they believe growth within Touch ICs has likely plateaued. Firm says with limited upside from prior two leading customers they are more concerned about future growth prospects from touch IC products. They have noted recent OEM decisions to swap-out one touch IC vendor for another suggesting limited differentiation among touch offerings.
10:48 am Information Technology sector declines along with overall market
The tech sector is trading lower today, inline with losses in the broader market. Semiconductors are showing relative weakness with the Philly Semi Index trading 0.7% lower. WFR (-3.3%) is a notable laggard in that chip index. Among other major indices, the SPY is trading 0.4% lower today, while the QQQ is down 0.3% and the NASDAQ is trading 0.5% lower on the session.
Among tech bellwethers, GOOG (+0.7%) is showing notable strength. In earnings last night, ONNN (+4.3%) posted a quarterly beat and issued inline guidance and TDC (+6.5%) posted a beat and raise. Elsewhere, JDSU (-3.6%) and MITK (-48.1%) reported misses and downside guidance, while APKT (+0.4%) posted a miss but reaffirmed guidance. This morning, AMT (+2.6%) posted a beat, while KITD (-21.8%) preannounced downside guidance. In news, NOK (0.0%) has filed a patent related lawsuits against RIMM (-5.1%) and HTC, according to reports. Among rumors, there is renewed takeover chatter on FIO (-0.7%) making the rounds.
Among notable analyst upgrades this morning, CRM (+1.9%) was upgraded to Outperform at Credit Suisse and ONNN (+4.3%) was upgraded to Outperform at Pacific Crest. While in downgrades, NVTL (-17.1%) was downgraded to Market Perform at BMO Capital following last night's dissapointing results. LNKD (+1.3%), and MCHP (+.01%) are a few notable names in tech scheduled to report quarterly results today after the close.