BetterTrades Stock Market Summary - December 3, 2008

In what turned out to be another volatile day in the markets, the major indices withstood more dire economic news to trade higher into the close of the trading session. Battling through a trough during the afternoon session, the markets rallied to close at, or near, their highs for the day. By the sound of the closing bell, the Dow Jones Industrial average gained 172.60 points, or 2.05%, at 8,591.37, while the broader market indicators concluded the day in the green as well. The S&P 500 index garnered 21.87 points, or 2.58%, to finish the day at 870.70, while the NASDAQ composite index climbed 42.58 points, or 2.94%, to conclude the session at 1,492.38.

In what was viewed as a mixed report, the Labor Department released their date this morning that showed that worker productivity declined during the summer months, but managed to come in higher than expected. During the 3Q, productivity, which is used to gauge increases in the standards of living, advanced at an annual rate of 1.3%. Today’s reading comes in much lower than the 2Q’s reading of 3.6%, but higher than last month’s figure of 1.1%, and higher than the 0.9% rate that economists had expected.

Labor costs, also known as wage pressures, increased to an annual rate of 2.8% during the 3Q, following the 2Q’s decline of 2.6%. Today’s reading in labor costs, which came in below expectations of a 3.6% increase, was the highest increase since a 4.5% jump in last year’s 4Q.

In other economic related news, the Institute for Supply Management released their findings today that showed that the U.S. service sector shrank in November as retailers, hotels, and other industries were affected greatly by the recession. In their report, the ISM posted data showing the service index falling to 37.3 during the month, down from October’s reading of 44.4. Economists were expecting a reading of 42. Any reading below 50 indicates a contraction within the economy.

Regarding the private sector, the ADP Employment report revealed today that employers reduced their payrolls by 250,000 during November. Today’s showing was the largest drop in seven years. Leading the way, goods producing companies trimmed their staff by 158,000 jobs. Thus far, there have been some 1.2M jobs lost this year.

With only a handful of companies announcing earnings before the markets opening, one such company was Del Monte Foods Co. (DLM), manufacturer and distributor of premium quality, nutritious food products under Del Monte, Contadina and other brand names. In their announcement, Del Monte confirmed that for the 2Q, the company’s profits advanced as the company increased selling prices during the quarter. For the recent period, DLM posted net income of $50.4M, or $0.25 per share, compared to last year’s $25.9M, or $0.13 per share, nearly a 95% increase year-over-year. Overall sales for the quarter advanced as well, climbing from $808.2M a year ago to $901M, an 11.5% jump. On average, analysts within the food industry were anticipating that Del Monte would record earnings of $0.12 per share on total sales of $905M. With a better-than-expected earnings release, the company adjusted their sales targets upwards today, citing an 8% to 10% increased over 2008’s totals of $3.2B. The company had previously stated sales growth of only 6% to 8% increases. Del Monte maintained their guidance on their earnings per share, which currently stands between $0.58 and $0.62 per share. For the year, analysts are projecting earnings of $0.57 per share on overall revenues of $3.52B. At the close of the markets today, shares of DLM were higher, adding $0.98, or 17.7%, to end the session at $6.51 per share. Read more about Del Monte Foods at Reuters

As a diversified medical device company engaged in developing, designing, manufacturing and bringing to market medical devices for surgical and interventional treatment of disease, Synovis Life Technologies Inc. (SYNO) affirmed that the company’s earnings for the 4Q advanced on a surge in overall revenues. For the quarter, SYNO recorded net income of $1.9M, or $0.15 per share, versus last year’s tally of $1.1M, or $0.08 per share, a jump of nearly 73% year-over-year. With earnings increasing, so did total sales, which climbed from $10.3M a year ago to $12.7M during the recent quarter, an increase of more than 23%. Along with quarterly results, the company also offered full-year results for 2008, which showed that yearly profits jumped 85% year-over-year, from $3.3M, or $0.26 per share to $6.2M, or $0.48 per share. Total sales figures also surged, increasing 32% from last year’s total of $37.7M to $49.8M. With not much in the news of the company’s 2009 expectations, SYNO did state that they are anticipating revenue growth between 20% and 25%. On the day, shares of SYNO advanced in trading, adding $1.15, or 8.6%, to close out at $14.45 per share. Learn more about Synovis Life Technologies at Bloomberg

A leading provider of computer-based and e-learning instruction for kindergarten through adult learners, offering curricula in reading, writing, mathematics, science, social studies, and life and job skills, Plato Learning Inc. (TUTR) made it known before the markets opening today that the company’s loss for the 4Q increased over last year’s performance. For the quarter, Plato posted a net loss of $11.1M, or $0.46 per share, in contrast to a loss of $4M, or $0.17 per share in the prior year. However, the company took an impairment charge of more than $9M, which weighed heavily on earnings. Without the charge, the company would have posted a smaller loss of only $1.7M, or $0.07 per share. With the loss, revenues declined as well, falling from $18.2M last year to $17.4M this year, a 4% decline. Full-year totals were also released, showing a loss of $23.54M, or $0.99 per share, compared to a loss of $14.87M, or $0.63 per share in 2007. In lieu of a poor earnings release, shares of TUTR slipped in trading, falling $0.10, or 8.9%, to end the day at $1.02 per share. Find out more about Plato Learning at MarketWatch

With that being it for today’s earnings releases, there were several companies that reported after the close Tuesday evening. One is Marvell Technology Group Ltd. (MRVL), which announced that profits for the 3Q advanced on higher sales, despite taking a hefty charge. For the quarter, Marvell booked net income of $70.9M, or $0.11 per share, compared to a loss of $6.4M, or $0.01 per share from a year ago. During the recent quarter, Marvell took a charge resulting in a per share earnings hit of $0.12. Overall sales for the company edged higher by just over 4%, from $758.2M to $791M. In the meantime, analysts were looking for the chipmaker to post earnings of $0.21 per share on total revenues of $793M. By the close of today’s trading session, shares of MRVL were higher, gaining $1.04, or 20.4%, to conclude the session at $6.13 per share. Over the past year, shares of Marvell have traded in a range between $4.48 and $18.31 per share. Discover more about Marvell Technology Group at Yahoo! Finance

As a designer, developer and marketer of high performance, high quality and cost efficient semiconductor imaging devices for computing, communications and consumer electronics applications, OmniVision Technologies Inc. (OVTI), reported late Tuesday evening that the company’s 2Q performance resulted in a loss for the quarter, due mainly to impairment charges related to the decline in the company’s stock price. For the recent period, OVTI recorded a net loss for the 2Q of $5.3M, or $0.10 per share, compared to a profit of $20.5M, or $0.37 per share from a year ago. The charges, which amounted to more than $7M took its toll on the company’s net earnings and confidence in its investors. Furthermore, total revenues for the quarter plummeted, falling nearly 30% year-over-year, from $232.6M to $163.9M. Analysts, on average, were looking for the image sensor maker to book earnings of $0.18 per share on total sales figures of $166.4M. After closing lower in after market trading yesterday, shares of OVTI continued their downward trek today, slipping another $0.52, or 9.5%, to end the day at $4.96 per share. Read more about OmniVision Technologies at CNNMoney

Finally, as a designer, manufacturer and marketer of multimedia products for use with personal computers, Sigma Designs Inc. (SIGM), announced after the markets closed Tuesday evening that the company 3Q performance came in below market expectations, which pushed its shares close to its 52-week low in after hours trading. For the quarter, SIGM posted net income of $3.7M, or $0.14 per share, compared to last year’s results of $21M, or $0.72 per share, a decrease in earnings of more than 82% year-over-year. Meanwhile, total revenues for the company declined as well, falling from $66.2M to $46.8M, a decline of more than 29%. Analysts, on average, were projecting that the chip designer would post earnings of $0.29 per share on total revenues of $46.36M. Despite falling to in after hours trading, shares of SIGM rebounded in today’s session, adding $0.26, or 3%, to end the day at $9.07 per share. Learn more about Sigma Designs at Forbes

Coming off two straight trading sessions that saw the price of crude drop more than $7 a barrel, today’s session continued its downward trek to trade lower by the close. By the end of the session, the price for a barrel of light, sweet crude for January delivery slipped $0.17 to settle at $46.79 a barrel. Since reaching its high above $147 a barrel in July, the price for crude has plummeted nearly 67% since. In additional NYMEX trading, gasoline futures slipped $0.0186 to $1.0397 a gallon. Heating oil was higher by $0.0089 to $1.5840 a gallon while natural gas for January delivery dropped $0.077 to 6.347 per 1,000 cubic feet.

In their weekly inventory report, the Energy Department’s Energy Information Administration released data showing that for the week ending November 28, crude supplies decreased by 400,000 barrels to total just over 320M barrels. Meanwhile, supplies of gasoline were down 1.6M barrels to come in at 198.9M barrels, while inventories for distillates, that being diesel and heating oil, slipped 1.7M barrels to total 125M barrels.

With the European central banks set to reduce interest rates, the U.S. greenback took advantage, gaining on both the British pound and the Euro. By the end of late afternoon trading, the 15-nation Euro traded at $1.2671, down from last night’s price of $1.2714, while the British pound also lost value against the Dollar, slipping to $1.4780 from yesterday’s price of $1.4919. However, against the Japanese yen, the Dollar retreated, buying 93.26, down from Tuesday’s price of 93.18.

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