Companies are gearing up for reporting season, with Microchip Technology warning its quarterly earnings and sales expectations are suffering because of the downturn in the US housing and consumer markets. Shares tanked 12.67% to $31.98 and at least five brokerages cut their price targets on the stock.
Some companies are already reporting earnings, one of which is Yum! Brands - the parent company of KFC and Pizza Hut. Yum! shares jumped 5.02% to $38.11 after it reported an unexpected 17 per cent rise in quarterly earnings based on international sales. The company also announced it would buy back up to $4b in stock over the next two years.
Shares in Sprint Nextel shed 1.19% to $18.28 on the New York Stock Exchange. The number 3 US mobile-phone service warned it would not meet financial expectations for the year and that it expects to lose over 300,000 subscribers in the third quarter. The results forced Sprint's chief executive to step down.
To the beleaguered mortgage sector, where Thornburg Mortgage shares fell 8.69% to $12.29 after the lender said a loss from asset sales was 27 per cent bigger than expected, which could resulting a more than $1 billion hit in the third quarter. The news came as further proof the housing market is far from healed.
Turning to the best and worst performers in the Nasdaq Top 100. XM Satellite Radio topped the list after Citigroup raised its price target sending shares up 6.87% to $15.24. Akamai Technologies and Express Scripts also drove the Nasdaq.
Microchip Technology took a beating for the aforementioned reason. Sears Holdings and Sandisk also performed poorly.
