If you create a application with a single .s file then the .build directory isn't created, see
http://www.xcore.com/forum/viewtopic.php?f=3&t=2101
It only appears to be .s files that are affected, .S files work OK.
Here's an example error:
$ make
No modules used.
Compiling foo.s
ERROR: Unable to open output file '../.build_Release/src/foo.s.o' for writing elf
make[1]: *** [.build_Release/src/foo.s.o] Error 1