The New York Empire State Index slumped to 11.88 in May versus 21.7 in April as another sign of a weakening U.S. economy. The National Association of Home Builders (NAHB) Housing Market Index stayed depressed with a reading of 16 on a scale of zero to 100. The Dow Jones Industrial Average traded to a low of 12533.8 before ending Monday down 0.36%. The NASDAQ traded to a high of 2828.14 before ending Monday down 1.63%.
Asian stocks were lower on Monday with the Nikkei 225 down another 0.9% to 9,558. The FTSE 100 ended Monday at 5,923.69 (down only 2.18), while the DAX was down 0.21% and the CAC 40 was down 0.72%. Despite some severe reversal-oriented market volatility last week US Treasury yields, Comex gold, Nymex crude oil, and most equity averages were little changed on the week. A warning is the decline of the euro which fell from 1.4350 to 1.4098 last week. The Dow Industrial Average lost 43 points last week to 12,596 still up 8.8% year to date. The NASDAQ was unchanged at 2828 up 6.6% year to date.
The Regional Banking Index (BKX) which includes banks considered “too big to fail” ended last week down 5.2% year to date. The yield on the 10-Year note traded between 3.167 and 3.149 overnight, and rose to 3.20 this morning before ending the day at 3.15. Gold stayed below $1500 the Troy ounce overnight, but rebounded above $1500 during the US session, but ended the day at $1490.8. Nymex crude oil stayed below $100 a barrel overnight and throughout the trading session before ending the day at $97.00. The euro versus the dollar stayed well below its 50-day simple moving average at 1.4310 overnight and throughout the trading session, before ending the day at 1.4175.
Energy
Mining equipment maker Joy Global (JOYG) has agreed to acquire LeTourneau Technologies from Rowan Companies (RDC) for $1.1B in cash. Cenovus Energy (CVE) is raised to Outperform from Sector Perform at RBC Capital. CONSOL Energy (CNX) is increased to Buy from Hold at Citigroup. In afternoon trading: Shares of Treaty Energy (TECO) are down about 9.75%. Shares of Gastar Exploration (GST) are down about 6.7%. Shares of GeoMet (GMET) are down about 5.2%. Shares of Atlas Energy (ATLS) are down about 5%.
The Energy Select Sector SPDR (XLE) was trading at $73.23 at 4:00 PM on Monday, down 0.76% on the day – up 7.30% year-to-date.
Materials
DuPont (DD) has completed its tender offer for all the outstanding shares in Danish food-ingredients and enzymes maker Danisco (DNSCY.PK) in a deal valued at 34.3B kroner ($6.49B). Quaker Chemical (KWR) gets begun with a Buy and $49 price target at Jefferies. China Shengda Packaging (CPGI) is cut to Perform from Outperform at Oppenheimer. In afternoon trading: Shares of ADA-ES (ADES) are down about 6.1%. Shares of Avalon Rare Metals (AVL) are down about 5.7%. Shares of China GengSheng (CHGS) are down about 5.4%. Shares of Zagg (ZAGG) are down about 5.3%. Shares of China Shen Zhou (SHZ) are down about 4.9%.
The Materials Select Sector SPDR (XLB) traded at $38.51 at 4:00 PM on Monday, down 0.36% on the day – up 0.26% year-to-date.
Industrials
Mining equipment maker Joy Global (JOYG) has agreed to acquire LeTourneau Technologies from Rowan Companies (RDC) for $1.1B in cash. JetBlue Airways (JBLU) and AMR Corporation (AMR) are both upgraded to Overweight from Neutral at JP Morgan this morning. Jacobs Engineering Group (JEC) gets raised to Outperform from Neutral by brokers Robert W. Baird with a new target price of $55. EnerNOC (ENOC) gets lifted to Outperform from Neutral at Credit Suisse. Knight Transportation (KNX) and Heartland Express (HTLD) are both now Neutral from Outperform at Robert W. Baird. In afternoon trading: Shares of EnerNOC are up about 23.7% after forecasting PJM sales will reach $275M in 2014. Shares of JetBlue are up about 6.2%. Shares of AMR are up about 5.8%. Shares of US Airways (LCC) are up about 5.2%. Shares of Corrections Corp of America (CXW) are up about 9.1%. Shares of SatCon Tech (SATC) are up about 9.1%.
The Industrial Select Sector SPDR (XLI) traded at $37.54 at 4:00 PM on Monday, down 0.37% on the day – up 7.66% year-to-date.
Consumer Discretionary
Chrysler (DDAIF) is expected to restructure its proposed $6B refinancing package after investors showed hesitation over the $3.5B loan portion of the transaction but gave a strong response to the $2.5B bond element. Sony (SNE) has resumed partial operation of its PlayStation Network and Qriocity entertainment services in the U.S. and Europe after suspending them for almost a month ago due to an intrusion that led to a breach of data on over 100M users. Lowe’s (LOW) missed estimates by 2 cents and revenue by $300M. China XD Plastics (CXDC) is picked up with an Outperform rating and $6 price objective at Oppenheimer. Ford Motor (F) is moved to Buy from Hold at Citigroup. Jefferies raises its Ameristar Casinos (ASCA) and MGM Resorts (MGM) recommendations to Buy from Hold. American Eagle (AEO) is now Positive from Neutral at Susquehanna. Magna (MGA) is downgraded to Hold from Buy at Citigroup.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.02 at 4:00 PM on Monday, down 1.33% on the day – up 6.98% year-to-date.
Consumer Staples
DuPont (DD) has completed its tender offer for all the outstanding shares in Danish food-ingredients and enzymes maker Danisco (DNSCY.PK) in a deal valued at 34.3B kroner ($6.49B). Sara Lee Corp. (SLE) is lifted to Overweight from Neutral at JP Morgan. Imperial Sugar (IPSU) is upgraded to Buy from Neutral at BWS Financial. In afternoon trading: Actives: Shares of Altria Group (MO) are up about a half of a percent. Shares of Wal-Mart (WMT) are up about 0.3%.
The Consumer Staples Select Sector SPDR (XLP) traded at $32.12 at 4:00 PM on Monday, up slightly on the day – up 9.59% year-to-date.
Healthcare
Amylin (AMLN) has filed a suit against Eli Lilly (LLY), alleging Lilly “is engaging in anticompetitive activity and breaching its strategic alliance agreements with Amylin to maximize commercialization of exenatide,” which is currently marketed as Byetta. Tranzyme (TZYM) is picked up with a Buy rating at Canaccord. In afternoon trading: Shares of Biostar Pharmaceuticals (BSPM) are down about 13.75%. Shares of Ventrus Biosciences (VTUS) are down about 8%. Shares of Tranzyme are up about 9%.
The Health Care Select Sector SPDR (XLV) traded at $36.14 at 4:00 PM on Monday, up 0.17% on the day – up 14.73% year-to-date.
Financials
Nasdaq (NDAQ) and ICE (ICE) said they’re withdrawing their bid for NYSE Euronext (NYX) because “it became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies.” The London Stock Exchange (LDNXF.PK) said today it remains committed to its $3B merger with TMX Group (TMXGF.PK) after a group of Canadian banks and pension funds made a preliminary $3.7B counter offer. AIG’s (AIG) $9B stock sale has attracted indications of interest from investors for about half the offering. Most of the indications were at an average price of about $30 a share, above the Treasury’s breakeven price of $28.70 and close to AIG’s Friday closing price of $30.42. Signature Bank (SBNY) is moved to Overweight from Neutral at JP Morgan. Hallmark Capital Corp. (HALL) is now Neutral from Overweight at Piper Jaffray. In afternoon trading: Shares of FXCM (FXCM) are down about 12.4%. Shares of NYSE Euronext are down about 11%.
The Financial Select Sector SPDR (XLF) traded at $15.75 at 4:00 PM on Monday, down slightly on the day – down 1.25% year-to-date.
Information Technology
Yahoo (YHOO) and China’s Alibaba (ALBCF.PK), in which the U.S. company holds 43%, yesterday attempted to assuage market concerns about their strained relationship. STEC, Inc (STEC) gets a Buy-from-Hold boost with a $21 target at The Benchmark Company. Accenture (ACN) is now Buy from Neutral at UBS. Qualcomm (QCOM) is boosted to Outperform from Market Perform by BMO Capital with a new target of $69. In afternoon trading: Shares of Vanceinfo Technologies (VIT) are down about 8.4%. Shares of Dice Holdings (DHX) are down about 7.9%. Shares of CryptoLogic (CRYP) are down about 7%. Shares of Youku.com (YOKU) are down about 7.1%. Shares of Monster Worldwide (MWW) are down about 6.5%. Shares of Motricity (MOTR) are dodn about 6%.
The Technology Select Sector SPDR (XLK) traded at $26.08 at 4:00 PM on Monday, down 1.44% on the day – up 3.53% year-to-date.
Telecommunications Services
Turkcell (TKC) is now Sell from Neutral at Goldman Sachs. In afternoon trading: Actives: Shares of Sprint Nextel (S) are up about 0.6%. Shares of AT&T (T) are down about 0.8%. Shares of Level 3 Communications (LVLT) are up about a quarter of a percent. Shares of Windstream (WIN) are up about 0.7%. Shares of Frontier Communications (FTR) are up about 0.6%. Shares of Verizon (VZ) are down about 0.6%.
The NASDAQ Telecommunications Index (IXTC) traded at $220.44 at 4:00 PM on Monday, down 1.37% on the day – down 2.19% year-to-date.
Utilities
In afternoon trading: Shares of Tokyo Electric Power (TKECF) are down about 7.2%. Shares of FirstEnergy (FE) are up about 5.3%. Actives: Shares of Genon Energy (GEN) are up about 0.3%. Shares of Exelon (EXC) are up about 0.6%. Shares of Duke Energy (DUK) are up about a half of a percent.
The Utilities Select Sector SPDR (XLU) traded at $33.95 at 4:00 PM on Monday, up slightly on the day – up 8.33% year-to-date.
STOCKS: JOYG, RDC, CVE, CNX, TECO, GST, GMET, ATLS, DD, DNXCY, KWR, CPGI, ADES, AVL, CHGS, ZAGG, SHZ, JBLU, AMR, JEC, ENOC, KNX, HTLD, LCC, CXW, SATC, DDAIF, SNE, LOW, CXDC, F, ASCA, MGM, AEO, MGA, DD, DNSCY, SLE, IPSU, MO, WMT, AMLN, LLY, TZYM, BSPM, VTUS, NDAQ, ICE, NYX, LDNXF, TMXGF, AIG, SBNY, HALL, FXCM, YHOO, ALBCF, STEC, ACN, QCOM, VIT, DHX, CRYP, YOKU, MWW, MOTR, TKC, S, T, LVLT, WIN, FTR, VZ, TKECF, FE, GEN, EXC, DUK
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