Last week the Dow Jones Industrial Average declined 84 points to 12,512 up 8.1% year to date. The NASDAQ fell 25 points to 2803 up 5.7% year to date. The Dow slumped to a low of 12,332 on Monday and ended the session just under its 50-day simple moving average at 12,390. The NASDAQ gapped below its 50-day simple moving average at 2780 at the open and traded as low as 2751.
Asian stocks were hit hard overnight on Monday with the Nikkei 225 down 1.5% to 9,461. The Hang Seng Index slumped 2.1%. European stocks were hit by renewed worries about debt issues and concerns about the global growth story. On the session, the FTSE 100 lost 1.9% with the DAX down 2.0% and CAC 40 down 2.1%. The yield on the 10-Year US Treasury declined to 3.090 on Monday as the flight to quality is trumping the possibility of default.
Treasury supply is put to the test this week with auctions of $35 billion 2-Year notes on Tuesday, $35 billion 5-Year notes on Wednesday and $29 billion 7-Year notes on Thursday. Comex gold stayed firm on Monday despite the stronger dollar as gold holds above $1500 the Troy ounce and trades as high as $1519. Nymex crude oil dipped below $97.00 to $96.37 a barrel then closed above $97.00. The euro traded below 1.40 for the first time since March 17th with a low of 1.3972, but closed above 1.40.
Energy
Martin Midstream Partners LP (MMLP) is begun with a Neutral rating and $39 target price by brokers Robert W. Baird. Janney Montgomery Scott starts Kinder Morgan Management (KMR), Kinder Morgan Partners (KMP), and Enbridge Management (EEQ) with Buys on all. BP Plc (BP) is raised to Buy from Hold at Societe Generale. Yingli Green Energy (YGE) is hoisted to Hold from Sell at Citigroup. OAO Gazprom (OGZPY) is cut to Underperform from Market Perform at Credit Suisse. LDK Solar (LDK) gets lowered to Hold from Buy at Auriga, which also pulls the stock from its favored Focus List. In afternoon trading: Shares of Treaty Energy (TECO) are up about 9%. Shares of Parker Drilling (PKD) are down about 5.2%. Shares of ENI SPA (E) are up about 5%. Shares of ION Geophysical (IO) are down about 4.8%. Shares of Patriot Coal (PCX) are down about 4.6%.
The Energy Select Sector SPDR (XLE) was trading at $73.47 at 4:00 PM on Monday, down 1.55% on the day – up 7.65% year-to-date.
Materials
Cliffs Natural Resources (CLF) is resumed with an Overweight at JPMorgan. CF Industries (CF) is moved to Overweight from Neutral at JP Morgan. Mosaic (MOS) is moved to Overweight from Equal Weight at JPMorgan. In afternoon trading: Shares of China Agritech (CAGC) are down about 27.6%. Shares of U.S. Energy (USEG) are down about 6.1%. Shares of Mercer International (MERC) are down about 5.1%. Shares of Teck Resources Limited (TCK) are down about 5.1%. Shares of CF Industries (CF) are up about 5.6%.
The Materials Select Sector SPDR (XLB) traded at $38.11 at 4:00 PM on Monday, down 1.04% on the day – down 0.78% year-to-date.
Industrials
Shares in airline stocks fell in European trading after a warning that ash from an erupting Icelandic volcano could hit North Scotland on Tuesday, and France and Spain on Thursday or Friday, although experts believe the impact on air travel won’t be as great as the $1.7B worth of disruption caused by an eruption in 2010. Tetra Tech (TTEK) gets assigned an Outperform at Oppenheimer, which has Performs on Clean Harbors (CLH), Insituform Tech (INSU), and Esco Tech (ESE). In afternoon trading: Shares of China Fire & Security (CFSG) are up about 16.1%. Shares of SmartHeat (HEAT) are down about 15.25%. Shares of YRC Worldwide (YRCW) are down about 8%. Shares of SatCon Technology (SATC) are down about 6.2%.
The Industrial Select Sector SPDR (XLI) traded at $36.84 at 4:00 PM on Monday, down 1.42% on the day – up 5.65% year-to-date.
Consumer Discretionary
Sony (SNE) estimates it made a net loss of ¥260B ($3.2B) in the year ending March 2011 after initially predicting that it would make a profit of ¥70B, with the company suffering a major hit from the earthquake in Japan. Urban Outfitters (URBN) is assigned a Market Perform at BMO Capital. Walt Disney (DIS) is boosted to Buy from Hold at Stifel Nicolaus. Gap Inc (GPS) gets raised Hold from Sell at Deutsche Bank. iRobot (IRBT) is also boosted to Overweight from Equal Weight at JPMorgan. Pinnacle (PNK) is now Outperform from Neutral at Credit Suisse. Limited (LTD) is boosted to Neutral from Sell at Goldman. Buckle (BKE) gets downgraded to Sell from Neutral at Goldman. In afternoon trading: Shares of Krispy Kreme (KKD) are up about 26.25% after announcing revenue surged 13.6% and income more than doubled in the three months ending May 1, compared to a year ago. Shares of Hermes (HESAF) are up about 13.2%. Shares of MakeMyTrip (MMYT) are down about 9.1%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $39.89 at 4:00 PM on Monday, down 0.94% on the day – up 6.63% year-to-date.
Consumer Staples
TreeHouse Foods (THS) is lifted to Buy from Neutral at SunTrust. In afternoon trading: Shares of Imperial Sugar (IPSU) are up about 6.3%. Shares of American Oriental Bioengineering (AOB) are up about 5.5%. Actives: Shares of Altria Group (MO) are up about 0.3%. Shares of Procter & Gamble (PG) are down about 0.6%. Shares of Kraft Foods (KFT) are down about 0.7%. Shares of Archer Daniels Midland (ADM) are down about 0.6%. Shares of Wal-Mart (WMT) are flat.
The Consumer Staples Select Sector SPDR (XLP) traded at $32.10 at 4:00 PM on Monday, down 0.69% on the day – up 9.51% year-to-date.
Healthcare
UnitedHealth (UNH) is raised to Buy from Hold at Jefferies. Acorda Therapeutics (ACOR) gets lifted to Neutral from Underweight at Piper Jaffray. In afternoon trading: Shares of Biosante Pharmaceuticals (BPAX) are up about 8.4%. Shares of Tranzyme (TZYM) are down about 7%. Simcere Pharmaceutial Group (SCR) are down about 6.7%. Shares of GTx Inc (GTXI) are down about 6.5%. Shares of Biostar Pharmaceuticals (BSPM) are down about 5.75%.
The Health Care Select Sector SPDR (XLV) traded at $35.67 at 4:00 PM on Monday, down 1.03% on the day – up 13.24% year-to-date.
Financials
Congressional investigators plan to expand a stock-trading probe into hedge-fund SAC Capital Advisors to include its activities in the options market. Shares in Commerzbank (CRZBY.PK) disclosed plans to raise about €5.3B ($7.5B) by selling 2.44B new shares at €2.18 each as it looks to pay down state aid. Nara Bancorp (NARA) is now Outperform from Market Perform with a $10 target at FBR Capital. In afternoon trading: Shares of Lehman Brothers (LEHMQ) are up about 17.7%. Shares of The PMI Group (PMI) are down about 5%.
The Financial Select Sector SPDR (XLF) traded at $15.50 at 4:00 PM on Monday, down 1.40% on the day – down 2.82% year-to-date.
Information Technology
Russian Internet company Yandex has raised the price range for its Nasdaq IPO to $24-$25 a share from an earlier guidance of $20-$22. LinkedIn (LNKD) said it would introduce measures to strengthen its security ‘in the coming months’ after an India-based expert at the weekend revealed flaws in the site that enable hackers to breach user accounts without needing their passwords. Google (GOOG) was repeatedly warned by regulators that many of the online pharmaceuticals providers that have been advertising on its network violate U.S. laws. Silicon Labs (SLAB) is a new Buy at Needham with a price objective of $51. Maxim Integrated (MXIM) gets moved to Neutral from Sell at Goldman Sachs. Ericsson AB (ERIC) is downgraded to Underperform from Neutral by Bank of America-Merrill Lynch. ViaSat (VSAT) is now Neutral from Buy at Merriman. ON Semiconductor (ONNN) is cut to Neutral from Buy at Goldman. Demandtec (DMAN) is downgraded to Market Perform from Outperform at JMP Securities. In afternoon trading: Shares of Evergreen Solar (ESLR) are down about 14.25%. Shares of AsiaInfo-Linkage (ASIA) are down about 7.75%. Shares of Powerwave Tech (PWAV) are down about 6.8%. Shares of China Transinfo Technology (CTFO) are up about 7.2%.
The Technology Select Sector SPDR (XLK) traded at $25.89 at 4:00 PM on Monday, down 1.41% on the day – up 2.42% year-to-date.
Telecommunications Services
In afternoon trading: Actives: Shares of Level 3 Communications (LVLT) are up about 1.3%. Shares of Sprint Nextel (S) are up about 2.2%. Shares of AT&T (T) are down about 0.75%. Shares of Clearwire (CLWR) are up about 1.3%. Shares of Frontier Communications (FTR) are down about 1.2%. Shares of Verizon (VZ) are down about 0.75%.
The NASDAQ Telecommunications Index (IXTC) traded at $219.29 at 4:00 PM on Monday, down 1.45% on the day – down 2.70% year-to-date.
Utilities
PG&E Corp (PCG) is reduced to Hold from Buy at Jefferies. In afternoon trading: Shares of Tokyo Electric Power (TKECF) are down about 8.3%. Actives: Shares of Duke Energy (DUK) are down about 1.1%. Shares of Genon Energy (GEN) are up about a quarter of a percent. Shares of AES (AES) are down about 3.7%. Shares of Exelon (EXC) are down about a half of a percent.
The Utilities Select Sector SPDR (XLU) traded at $33.73 at 4:00 PM on Monday, down 1.17% on the day – up 7.63% year-to-date.
STOCKS: MMLP, KMR, KMP, EEQ, BP, YGE, OGZPY, LDK, TECO, PKD, E, IO, PCX, CLF, CF, MOS, CAGC, USEG, MERC, TCK, CF, TTEK, CLH, INSU, ESE, CFSG, HEAT, YRCW, SATC, SNE, URBN, DIS, GPS, IRBT, PNK, LTD, BKE, KKD, HESAF, MMYT, THS, IPSU, AOB, MO, PG, KFT, ADM, WMT, UNH, ACOR, BPAX, TZYM, SCR, GTXI, BSPM, CRZBY, NARA, LEHMQ, PMI, LNKD, GOOG, SLAB, MXIM, ERIC, VSAT, ONNN, DMAN, ESLR, ASIA, PWAV, CTFO, LVLT, S, T, CLWR, FTR, VZ, PCG, TKECF, DUK, GEN, AES, EXC
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