Market Wrap: Marvell Hit on Infringement Verdict; Home Prices Rise; Holiday Sales in Limbo

December 26, 2012 4:58 PM EST Send to a Friend
Market wrap-up for December 26th

End of the Day: S&P 500 down 6.8 to 1,419.83; Dow Jones down 24.5 to 13,114.59; Nasdaq down 22.4 to 2,990.16

The following is a brief summary of events moving markets today:

* Marvell Technology (Nasdaq: MRVL) shares were slammed in late trading following a verdict in that U.S. District Court for the Western District of Pennsylvania that it infringed on patents held by Carnegie Mellon University. If the verdict stands, Marvell could find itself shelling out $1.169 billion to the university. Patents the university alleges Marvell infringed on cover technology associated with "noise predictive detection," which increases accuracy in retrieving data from high-speed disk drives.

Shares ended the session down 10.3 percent and are lower in late trading. One thing is for sure, Greenlight Capital's David Einhorn isn't happy about the verdict.

* Japan's newly-elected prime minister, Shinzo Abe, took office today, bolstering sentiment of tighter locks on inflation and curbing of rampant inflation. For more on Abe, click here.

* The S&P/Case-Shiller 20-city index rose 4.3 percent year-over-year in October, the largest 12-month gain since May 2010. The Street was looking for a more modest 3.9 percent rise.

Seasonally-adjusted home prices rose 0.7 percent in October. Las Vegas showed a 2.4 percent gain, leading the 20-city index, while Chicago fell 0.7 percent and was the overall laggard.

For more color, click here.

* Toyota (NYSE: TM) is flat late Wednesday following reports that it settled a class action suit over unintended acceleration. In the settlement, Toyota will take a $1.1 billion pre-tax charge in the third quarter. For more color, click here.

* Retailers were pressured on Wednesday as MasterCard's SpendingPulse unit reported just a 0.7 percent increase in U.S. sales for the two months ended Christmas Eve. Numbers include MasterCard sales and estimates for cash payments. Excluded are auto purchases, groceries, and gasoline. For more on the data, click here.

* According to the latest data from International Data Corporation's (IDC) Semiconductor Applications Forecaster (SAF), chip sales in 2012 are expected to reach $304 billion, up just 1 percent from 2011.

However, growth is expected to rocket about 4.9 percent in 2013 to $319 billion and log a compound annual growth rate (CAGR) of 4.1 percent from 2011-2016, reaching $368 billion in 2016.

For more color, click here.

* S&P and Moody's are making some rapid cuts on corporate bond ratings, doing so at the fastest pace since 2009. Bloomberg reported today that the ratio of downgrades to upgrades rose to 1.85 times this year, versus 1.23 last year. S&P data also has defaults rising to 80 issuers, from 52 last year.

The rating agencies largely point to record borrowing the the global economic slowdown throughout the year on the actions. About $3.93 trillion of corporate debt was sold in an effort to take advantage of low rates (hitting 3.27 percent last week). Debt-to-EBITDA has moved up to 1.5 times at non-financial investment grade, the highest since 2009.

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