Import Prices rose by 0.3% in July and by 14% year over year. Housing Starts fell 1.5% in July to an annual rate of 604,000 with single family starts down 4.9% to 425,000. Building Permits declined 3.2% to 597,000. Industrial Production rose by 0.9% in July, stronger than expected. Capacity Utilization increased to 77.5% the highest since August 2008. The Dow Jones Industrial Average ended Monday 8.3% above the post-FOMC low at 10,604 with the NASDAQ up 9.6% off its week ago low at 2332. The Dow traded lower Tuesday morning down to 11,352.58 then up to 11,488.01 following the press conference by French President Nicolas Sarkozy and Germany Chancellor Angela Merkel saying they will support the euro. Upon second thought the real reaction to the press conference was a market reversal to an afternoon low at 11,292.63. The NASDAQ traded down from 2531.99 to 2515.76 then up to 2546.74 then down to 2494.55. Both the Dow and NASDAQ entered the last half hour of trading closer to the day’s highs.
Asian stocks were mixed on Tuesday after strong opens following the Dow’s 214 point gain on Monday. The Nikkei 225 ended up just 0.23% to 9,107 with the Hang Seng down 0.24% to 20,212. European stocks opened lower following news that Germany’s latest GDP report showed a rise of just 0.1%. As the European sessions progressed markets recovered losses ending mixed. The FTSE 100 inched up 0.13% to 5,358. The DAX shed 0.45% to 5,995. The CAC 40 slipped 0.25% to 3,231. The yield on the 10-Year US Treasury note traded down from 2.317 percent to 2.198 on a modest flight to quality. Gold stayed below last Thursday’s all time high at $1817.6 the Troy ounce with a trading range between $1763.6 and $1789.8 with a close near the day’s high. Crude oil traded down from $87.69 to $85.62 then up to $87.93 then closed about mid-range. The euro versus the US dollar traded down from 1.4454 to 1.4357 then up to 1.4466 then consolidated.
Energy
Carl Icahn reported new stakes In Vector Group (VGR) and El Paso (EP). Hess (HES) is hoisted to Buy from Sell at The Benchmark Company with a new target of $70. Cal Dive International (DVR) is moved to Outperform from Perform at Morgan Keegan. In afternoon trading: Shares of Denison Mines (DNN) are down about 9%. Shares of GMX Resources (GMXR) are down about 8.75%. Shares of Key Energy Services (KEG) are down about 7.25%. Shares of Uranium Resources (URRE) are down about 7%.
Energy Select Sector SPDR (XLE) was trading at $68.07 at 4:00 PM on Tuesday, down 1.66% on the day – down 0.26% year-to-date.
Materials
Albemarle (ALB) is downgraded to Underperform from Perform at Oppenheimer. In afternoon trading: Shares of China GengSheng Minerals (CHGS) are down about 10.5%. Shares of US Energy (USEG) are down about 9.25%. Shares of Albemarle are down about 8.75%. Shares of Avalon Rare Metals (AVL) are down about 7%. Shares of ArcelorMittal (MT) are down about 5.5%. Shares of Stillwater Mining (SWC) are down about 5%.
The Materials Select Sector SPDR (XLB) traded at $34.43 at 4:00 PM on Tuesday, down 1.60% on the day – down 10.36% year-to-date.
Industrials
Berkshire Hathaway’s (BRK.A) latest 13-F filing showed it bought stakes in Verisk Analytics (VRSK) and Dollar General (DG). Berkshire also increased its holdings in Wells Fargo (WFC) and Mastercard (MA), but reduced its position in Kraft (KFT). KAR Auction Services (KAR) is upgraded to Outperform from Market Perform at Barrington Research. Watsco (WSO) is raised to Buy from Hold at BB&T Capital. In afternoon trading: Shares of American Superconductor (AMSC) are down about 8.25%. Shares of SatCon Tech (SATC) are down about 7.25%. Shares of Terex (TEX) are down about 6.5%. Shares of The Manitowoc Company (MTW) are down about 6%.
The Industrial Select Sector SPDR (XLI) traded at $31.42 at 4:00 PM on Tuesday, down 1.41% on the day – down 9.89% year-to-date.
Consumer Discretionary
Home Depot’s (HD) Q2 earnings beat expectations as net profit climbed to $0.86 per diluted share from $0.72 and sales increased 4.2% to $20.2B. Home Depot also raised its 2011 profit guidance and now expects EPS “to be up approximately 16% to $2.34” vs. consensus of $2.30. Berkshire Hathaway’s (BRK.A) latest 13-F filing showed it bought stakes in Verisk Analytics (VRSK) and Dollar General (DG). Berkshire also increased its holdings in Wells Fargo (WFC) and Mastercard (MA), but reduced its position in Kraft (KFT). John Paulson slashed his holdings in Bank of America (BAC) and Comcast (CMCSA) but increased his positions in Capital One (COF) and Wells Fargo (WFC). Saks (SKS) beat estimates by 4 cents and revenue by $6.3M. Dick’s Sporting Goods (DKS) beat estimates by 2 cents, but missed revenue by $10M, and sees FY11 EPS of $1.94-1.96. Home Depot (HD) beat estimates by 4 cents and revenue by $240M, and raised FY11 EPS guidance to $2.34 from $2.24 earlier. Urban Outfitters (URBN) beat estimates by 3 cents and revenue by $5M. Priceline.com (PCLN) is initiated with a Reduce at Nomura, which has new Neutrals on Expedia (EXPE) and Orbitz (OWW). Toll Brothers (TOL) is upgraded to Hold from Sell at Stifel Nicolaus. Time Warner Cable (TWC) is taken to Neutral from Outperform at Macquarie. In afternoon trading: Shares of SodaStream International (SODA) are down about 21.75%. Shares of E-Commerce China Dangdang (DANG) are down about 14.5%. Shares of Urban Outfitters are down about 8.25%. Shares of Fossil (FOSL) are down about 8%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $36.40 at 4:00 PM on Tuesday, down 0.55% on the day – down 2.70% year-to-date.
Consumer Staples
Wal-Mart (WMT) beat estimates by a penny in Q2 as diluted EPS rose 12.4% to $1.09 and revenues climbed 5.5% to $108.6B. Walmart International increased its net sales 16.2% to $30.1B, although U.S. sales fell 0.9%. The retailer raised its full year EPS guidance range to $4.41-$4.51. Berkshire Hathaway’s (BRK.A) latest 13-F filing showed it bought stakes in Verisk Analytics (VRSK) and Dollar General (DG). Berkshire also increased its holdings in Wells Fargo (WFC) and Mastercard (MA), but reduced its position in Kraft (KFT). Carl Icahn reported new stakes In Vector Group (VGR) and El Paso (EP). Constellation Brands (STZ) is covered with a Buy at Capstone. Unilever PLC (UN) is upgraded to Outperform from Underperform at BNP Paribas. Estee Lauder (EL) is increased to Outperform from Market Perform by BMO Capital with a new target of $115. Spectrum Brands (SPB) is now Buy from Neutral at Suntrust. In afternoon trading: Shares of Central European Distribution (CEDC) are down about 7%. Shares of Prestige Brands (PBH) are down about 7.25%. Shares of USANA Health Sciences (USNA) are down about 6.5%.
The Consumer Staples Select Sector SPDR (XLP) traded at $30.03 at 4:00 PM on Tuesday, up 0.23% on the day – up 2.46% year-to-date.
Healthcare
Carlyle is in talks to buy Pharmaceutical Product Development (PPDI), a drug R&D outsourcing firm, for up to $4.3B, versus a closing price of $31.51 (valuing the company at $3.59B). Allergan (AGN) is upgraded to Outperform from Neutral at Credit Suisse. Alnylam Pharma (ALNY) is increased to Overweight from Neutral at Piper Jaffray. Charles River Laboratories (CRL) is lifted to Neutral from Sell at Lazard. In afternoon trading: Shares of Complete Genetics (GNOM) are down about 10.5%. Shares of Corcept Therapeutics (CORT) are dowm about 6.75%. Shares of Five Star Quality Care (FVE) are down about 6.5%. Shares of ImmunoGen (IMGN) are down about 6%. Shares of XOMA Ltd. (XOMA) are UP about 8%.
The Health Care Select Sector SPDR (XLV) traded at $32.14 at 4:00 PM on Tuesday, down slightly on the day – up 2.03% year-to-date.
Financials
Berkshire Hathaway’s (BRK.A) latest 13-F filing showed it bought stakes in Verisk Analytics (VRSK) and Dollar General (DG). Berkshire also increased its holdings in Wells Fargo (WFC) and Mastercard (MA), but reduced its position in Kraft (KFT). John Paulson slashed his holdings in Bank of America (BAC) and Comcast (CMCSA) but increased his positions in Capital One (COF) and Wells Fargo (WFC). Macquarie rolls out Outperforms on Arthur J. Gallagher (AJG), Aon (AON), and Marsh & McLennan (MMC). Entertainment Properties (EPR) gets picked up at a Neutral by Goldman Sachs. In afternoon trading: Shares of NYSE Euronext (NYX) are down about 10%. Shares of Intercontinental Exchange (ICE) are down about 5.5%. Shares of Radian Group (RDN) are down about 5.5%.
The Financial Select Sector SPDR (XLF) traded at $12.93 at 4:00 PM on Tuesday, down 1.97% on the day – down 18.93% year-to-date.
Information Technology
Handset makers that use Android [Samsung (SSNLF), Sony Ericsson (SNE) (ERIC), HTC (HTCKF) and LG Electronics] have released statements supporting Google’s (GOOG) proposed $12.5B purchase of Motorola Mobility (MMI) amid reassurances from Google it won’t show favoritism to the unit. Evergreen Solar (ESLR) filed for Chapter 11 bankruptcy, surrendering in its battle against strong Chinese competition and slumping European demand. Netlist (NLST) reported that Q2 easily topped estimates on a 197% jump in flash drive shipments. Agilent Technologies (A) beat estimates by 4 cents with revenue in-line with estimates, and expects Q4FY11 revenue at $1.74B-$1.79B and Non-GAAP EPS at $0.79-$0.81 and expects FY11 revenue at $6.64B-$6.66B and Non-GAAP EPS at $2.90-$2.92. Germany software giant SAP AG (SAP) is a new Market Perform at Morgan Keegan, which assigns identical ratings on Concur Tech (CNQR) and Informatica (INFA). The broker begins Salesforce.com (CRM) at Outperform – $165 price objective and Oracle (ORCL) at Outperform – $33 target price. Open Text (OTEX) is a new Outperform at Morgan Keegan. Research In Motion (RIMM) is reduced to Sell from Hold at Societe Generale. Motorola Mobility (MMI) is moved to Neutral from Buy at Goldman. SinoHub (SIHI) is downgraded to Perform from Outperform at Rodman & Renshaw. In afternoon trading: Shares of Vanceinfo Technologies (VIT) are down about 31% after issuing disappointing earnings and guidance. Shares of Youku.com (YOKU) are down about 11.25%. Shares of Fabrinet (FN) are up about 17.5%. Shares of Netlist are up about 10.25%.
The Technology Select Sector SPDR (XLK) traded at $24.37 at 4:00 PM on Tuesday, down 0.73% on the day – down 3.26% year-to-date.
Telecommunications Services
Sprint Nextel (S) is now Buy from Neutral with a $5 price target at Collins Stewart. In afternoon trading: Shares of Leap Wireless (LEAP) are up about 7.5%. Actives: Shares of Sprint Nextel are up about 4%. Shares of AT&T (T) are down about 0.4%. Shares of Level 3 Communications (LVLT) are down about 3.5%. Shares of Verizon (VZ) are down about 0.8%. Shares of Frontier Communications (FTR) are down about 1.1%. Shares of Vodafone (VOD) are down about 0.6%. Shares of MetroPCS (PCS) are down about 0.6%.
The NASDAQ Telecommunications Index (IXTC) traded at $192.35 at 4:00 PM on Tuesday, down 0.88% on the day – down 14.65% year-to-date.
Utilities
Edison International (EIX) is now Buy from Neutral at Goldman. Goldman also adds both El Paso Electric (EE) and PPL Corp (PPL) to its Conviction Buy List. Foreign energy firms E ON AG (EONGY) and RWE AG (RWEOY) are both boosted to Buy from Neutral at Goldman. PG&E (PCG) gets pulled from the Conviction Buy List at Goldman. Tri-Tech Holding (TRIT) is taken to Hold from Buy at Brean Murray. In afternoon trading: Shares of Tri-Tech Holding are down about 12.25%. Shares of RWE AG are down about 7.1%. Shares of Veolia Environment (VE) are down about 6.4%. Shares of Tokyo Electric Power (TKECF) are down about 5.1%.
The Utilities Select Sector SPDR (XLU) traded at $32.74 at 4:00 PM on Tuesday, down slightly on the day – up 4.47% year-to-date.
STOCKS: VGR, EP, HES, DVR, DNN, GMXR, KEG, URRE, ALB, CHGS, USEG, AVL, MT, SWC, BRK.A, VRSK, DG, WFC, MA, KFT, KAR, WSO, AMSC, SATC, TEX, MTW, HD, BAC, CMCSA, COF, WFC, SKS, DKS, URBN, PCLN, EXPE, OWW, TOL, TWC, SODA, DANG, FOSL, WMT, VGR, EP, STZ, UN, EL, SPB, CEDC, PBH, USNA, PPDI, AGN, ALNY, CRL, GNOM, CORT, FVE, IMGN, XOMA, AJG, AON, MMC, EPR, NYX, ICE, RDN, SSNLF, SNE, ERIC, GOOG, MMI, ESLR, NLST, A, SAP, CNQR, INFA, CRM, ORCL, OTEX, RIMM, SIHI, VIT, YOKU, FN, S, LEAP, T, LVLT, VZ, FTR, VOD, PCS, EIX, EE, PPL, EONGY, RWEOY, PCG, TRIT, VE, TKECF
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