Tech Shares Turn Lower Near Bell; Senator Questions Fed Subsidies for Solar City After Barron's Article
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Technology stocks went from little changed as a group earlier today to shares of technology companies in the S&P 500 now slipping 0.4% just ahead of the closing bell.
In company news, Solar City Corp ( SCTY ) is well off its intra-day low but remains down 8% at $46.70 a share after U.S. Sen. Jeff Sessions (R-Ala.) sent a letter to Treasury Secretary Jacob Lew questioning taxpayer-funded grants received by the company.
SCTY shares tumbled over 10% to $45.60 apiece this afternoon after Barron's and the Senate website posted copies of the letter. The correspondence followed a weekend article in Barron's saying SCTY reports "fair market values" for its solar panels - which are used to determine federal subsidies - that are higher than the company's actual costs to install the panels.
The magazine said it reviewed over 150,000 contracts between the company and homeowners in California and Arizona to determine the values were inflated. In part because of uncertainty over those subsidies, Barron's urged investors to be wary of SCTY stock, while Sessions in his letter wrote that "over-inflating the cost of solar products is not only detrimental to the government, but to investors as well."
In other sector news,
(+) DAKT, Shares reach best price in nearly three years after the scoreboard and display company earns $0.27 per share in fiscal Q2, dispatching the Capital IQ consensus by $0.06. Revenue rose 7.8% year over year to $161.6 mln, topping Street view by $9.63 mln.
(-) CCIH, Reverses $0.09 per non-GAAP ADS profit last year with adjusted Q3 net loss of $0.11 per ADS, $0.09 wider than Street view. Net revenue rises 31.6% to $45 mln, beating estimates by $3.9 mln. Guides Q4 revenue in-line with analyst expectations.