12:10pm (EST)
The market is trading lower as the bulls take a little breather following 3-straight sessions of gains. The bears have made a little push back to support which was prior resistance as both sides battle over key technical levels. Economic news has been light today but there have been some pleasant earnings surprises which have provided some strength to some sectors.
The U.S. trade deficit for March increased to $48.2 billion from $45.4 billion in the prior month. Expectations were for a deficit of $47.7 billion. The Treasury budget for April will be released later today.
Rovi (ROVI, $60.05, up $10.37) reported profits of $17 million, or $0.15 a share, versus $68 million, or $0.64 a share, in the year-ago period. This was a steep 75% drop-off from last year’s quarter which included a huge tax bonus so it isn’t as bad as it sounds. Excluding one-time items, profits would have been $0.61 a share for the just reported quarter. Sales came in at $161.5 million, up from from $129 million.
The suit-and-ties were expecting earnings of $0.52 a share on revenue of $179.8 million.
Of course, shares are rebounding and the revenue miss was overlooked after Rovi raised its full-year guidance on its acquisition of Sonic Solutions. The synergies must be working because Rovi now expects to generate $2.25-$2.55 a share for 2011. Analysts were looking for $2.38. The option pits have been active, especially the May 65 calls (ROVI110521C00065000, $0.40, up $0.30) which were left for dead but have rebounded strongly today, up 300%.
As far as the market, the Dow is currently down 77 points to 12,682 while the S&P 500 is lower by 7 points to 1,349. The Nasdaq is showing a decline of 9 points to 2,863.
The bulls will be looking for an afternoon rally while the bears try to make further progress to the downside. The final hour of trading has been active lately so the action could pick up over the second half of trading. Subscribers, check the Members Area for the updates.
