Equities Update: Tech, Builders Pressure Markets

4:08 PM, Nov 20, 2009 --

• DJIA down 14.28 (0.14%) to 10,318.16.
• S&P 500 down 3.52 (0.32%) to 1,091.38.
• Nasdaq down 10.78 (0.50%) to 2,146.04.

GLOBAL SENTIMENT

• Hang Seng down 0.83%
• Nikkei down 0.54%
• FTSE down 0.31%

UPSIDE MOVERS

(+) VRGY beats with Q4 results and forecasts smaller-than-expected Q1 loss.

(+) KIRK tops Q3 estimates.

(+) INO reports positive animal H1N1 study.

(+) ZUMZ turns up despite guiding for Q4 below Street.

DOWNSIDE MOVERS

(-) DELL extending losses after evening earnings miss.

(-) ADCT disappointing Q4 guidance.

(-) AGEN says European CHMP gives negative opinion on Oncophage.

(-) EFUT swings to Q2 loss.

(-) ANN beats with earnings, misses with sales.

(-) NVAX prices shares.

(-) LOGM prices shares.

(-) DHI shrinks loss despite lower revenue.

(-) DRYS prices convertible note offering.

(-) WCRX prices shares.

(-) BCRX prices shares.

(-) NOK cutting jobs.

MARKET DIRECTION

Weaker-than-expected results from Dell (DELL) pushed the tech sector lower Friday, which in turn sent the broad market skidding into the red. Disappointing results from builder D.R. Horton (DHI) also weighed on sentiment, adding to worries the real estate market will continue to hamper a recovery in the U.S. economy. European Central Bank President Jean-Claude Trichet spooked the markets as well today after saying the the bank could soon begin unwinding stimulus measures that were installed during the peak of the financial crisis. The U.S. greenback spiked higher against the euro on the report, and commodities such as oil turned lower as a result.

Next week will see trade in the U.S. shortened by the Thanksgiving day holiday on Thursday. Markets will be closed Thursday and equities will trade for just a half-day on Friday.

There will still be plenty of news-drivers for traders to play in the days leading up to Thanksgiving. On Monday, Hewlett-Packard (HPQ), Brocade Communications (BRCD), LDK Solar (LDK) and Tyson Foods (TSN) will issue quarterly results. On Tuesday, American Eagle Outfitters (AEO), Barnes & Noble (BKS), Blue Coat Systems (BCSI), Borders Group (BGP), Coldwater Creek (CWTR), Heinz (HNZ), J Crew Group (JCG) and Medtronic (MDT) are slated to post financials. Wednesday will see the release of quarterly reports from Deere & Co. (DE) and Tiffany & Co. (TIF).

On the economic front, existing home sales data are due on Monday, and GDP, the Case Shiller 20 City Index, consumer confidence, and the FHFA Home Price Index are set for release on Tuesday. On Wednesday, personal income/spending, initial claims, durable orders, Michigan sentiment, new home sales, and crude inventories data will be distributed.

Dell reported Thursday night Q3 earnings of $0.17 per share, including $0.06 per share in items, down from $0.37 per share a year ago. Revs were $12.89 bln, down from $15.1 bln in the year ago quarter. The Street view was earnings of $0.28 per share on sales of $13.1 bln.

For Q4, Dell expects seasonal demand improvement in its Consumer business, while demand in Public is typically lower during the quarter. The company expects fouth quarter revenue to improve over the third quarter.

ADC Telecom (ADCT) was also an active decliner after the company reported late Thursday Q4 adjusted EPS of $0.06 vs $0.17 a year earlier, but ahead of the Thomson Reuters mean analyst estimate for $0.04. Revenue of $183.9 million compared to a Street estimate for $170 million.

The company guided for a GAAP loss of $0.15 to $0.05, which includes non-cash
amortization expense of $0.05 per share and excludes potential non-cash
charges or restructuring that the company cannot estimate at this time. The
ex-items Street view was for $0.11.

D.R. Horton tumbled lower after the company reported a loss of $231.9 million, or 73 cents per share, compared with a loss of $799.9 million, or $2.53 per share, a year earlier. Inventory writedowns and other expenses totaled $192.6 million pretax, versus $1.1 billion in 2008. Analysts surveyed by Thomson Reuters called a loss of 30 cents per share, ex items. Revenue fell 42% to $1.01 billion from $1.75 billion; analysts were looking for $1.11 billion.

Comments

[einstein p fleet]

ADCT. Well, it was a Cramer pick for the new age telephone 3G play at around 7 or 8. That didn't work, so now it's a Cramer pick under 6. Bought it at 5.50 and sold it at 6.15 today, deciding that even a broken clock is right twice a day. Thanks, Jim.

2009 Nov 23 09:12 PM

[Wisdom vs. Information]

well, einstein, adct will probly drop back under 6, then you can pick up a great little networking stock cheap, and maybe you can even buy it for a reason that has nothing to do with a TV windbag, if you bother to learn something about networking

2009 Nov 23 11:10 PM