Initial Jobless Claims remain elevated at 414,000 and well above the recessionary threshold of 350,000. Housing Starts rose by 3.5% to 560,000 in May, but this release was trumped by yesterday’s report that the National Association of Home Builders Housing Market Index slumped three points to an extremely depressed reading of 13 on a scale of zero to 100. The manufacturing sector took another hit in June with the Philly Fed Index declining to -7.7 when a positive reading of 5.0 was expected. The Dow Jones Industrial Average traded higher to 11,990 on Thursday morning then slipped into the red around 2:45 pm, then moved back into the green in the final hour of trading. The NASDAQ traded up from an opening low of 2622 to above its 200-day simple moving average at 2639 on Thursday, but slipped significantly to a new low for the day at 2600 in afternoon trading, and closed below its 200-day for the second day in a row.
The Dow Industrial Average declined by 179 points on Wednesday to 11,897 up only 2.8% year to date and down 7.6% since its May 2nd high at 12,876. The NASDAQ plunged 48 points to 2631 on Wednesday, down 0.8% year to date and down 8.9% since its May 2nd high at 2887.75.
Asian stocks slumped on Thursday with the Nikkei 225 down 1.7% to 9,411 and the Hang Seng down 1.75%. European stocks declined across the board on Thursday, but shaved losses as US stocks rebounded mid-morning. The FTSE 100 was down 0.8%. The DAX was down just 0.1%. The CAC 40 was down 0.4%. The yield on the 10-Year US Treasury note declined from 2.985 percent to a new low for the move to 2.880 as the flight to quality trumped the debt ceiling concerns. Comex gold traded up from $1524.5 the Troy ounce to $1534.0 on Thursday, then dipped to $1522.0 before consolidating within the day’s trading range. Nymex crude oil traded down from $95.75 per barrel to $94.29. The euro versus the US dollar declined to 1.4076 then rebounded to 1.4199 on Thursday then consolidated that within that trading range.
Energy
Energy Transfer (ETE) has agreed to buy Southern Union (SUG) for $7.9B, including the acquisition of $3.7B of debt. The $33 a share offer is a 17% premium to Southern Union’s $28.26 close yesterday. Gran Tierra Energy (GTE) gets picked up with a Buy at Ticonderoga. Longwei Petroleum (LPH) is launched with an Outperform at Rodman & Renshaw. Energen (EGN) is a new Buy at KeyBanc Capital. Whiting Petroleum (WLL) is now Positive from Neutral at Susquehanna. OAO Gazprom (OGZPY) gets upgraded to Buy from Sell at ING Group. In afternoon trading: Shares of Southern Union are up about 17.5%. Shares of Teaty Energy (TECO) are up about 15%. Shares of Longwei Petroleum are up about 14.25%.
Energy Select Sector SPDR (XLE) was trading at $72.13 at 4:00 PM on Thursday, up slightly on the day – up 5.68% year-to-date.
Materials
In afternoon trading: Shares of China Agritech (CAGC) are down about 11%. Shares of Yongye International (YONG) are down about 10.5%. Shares of China Shen Zhou Mining (SHZ) are down about 8.5%. Shares of Georgia Gulf (GGC) are down about 7.75%. Shares of Rare Element (REE) are down about 6.75%. Shares of IAMGOLD (IAG) are down about 6.25%. Shares of China Shengda Packaging Group (CPGI) are UP about 6.5%.
The Materials Select Sector SPDR (XLB) traded at $36.85 at 4:00 PM on Thursday, down 0.98% on the day – down 4.07% year-to-date.
Industrials
Textron (TXT) is a new Hold at EarlyBirdCapital. Korn/Ferry (KFY) is cut to Neutral from Outperform at Robert W. Baird. In afternoon trading: Shares of Harbin Electric (HRBN) are down about 55% as Citron Research reported that they believe the purported $24 per share buyout off is a sham. Shares of Fushi Copperweld (FSIN) are down about 16.75%. Shares of Insituform Technologies (INSU) are down about 13.25%. Shares of Capstone Turbine (CPST) are down about 7%. Shares of Hill International (HIL) are UP about 7.5%.
The Industrial Select Sector SPDR (XLI) traded at $35.47 at 4:00 PM on Thursday, up 0.35% on the day – up 1.72% year-to-date.
Consumer Discretionary
The enthusiasm for Internet IPOs sent shares in Pandora Media (P) soaring 63% in the first few hours of its debut yesterday. However, concerns about the Internet music company’s ability to eventually make a profit and wider market negativity caused the stock to lose much of its gains and close up only a mere 8.9%. Pier 1 Imports (PIR) beat estimates by a penny with revenue in-line with estimates. UBS initiates coverage of the U.S. hardline retail sector. It has Buys on Dicks Sporting Goods (DKS) – $44 price objective, Home Depot (HD) – $41 price objective, Lowe’s Companies (LOW) – $28 price objective, O’Reilly Automotive Inc (ORLY) – $70 price objective, Petsmart (PETM) – $52 price objective and Staples (SPLS) – $19 price objective. It assigns new Neutrals on Advance Auto Parts (AAP) – $60 price objective, Autozone (AZO) – $305 price objective, Bed Bath & Beyond (BBBY) – $58 price objective, Life Time Fitness (LTM) – $37 price objective, Williams Sonoma (WSM) – $38 price objective, Best Buy (BBY) – $32 price objective, Officemax (OMX) – $7 price objective, Radioshack Corp (RSH) – $13 price objective. It sets a Sell rating and $3 price objective on Office Depot (ODP). MGM Resorts (MGM) is a new Outperform – $17 target at FBR Capital. Porsche (POAHF) is upgraded to Buy from Hold at Deutsche Bank. DineEquity (DIN) is moved Overweight from Neutral at JPMorgan. Virgin Media (VMED) is downgraded to Neutral from Outperform at Macquarie.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $37.80 at 4:00 PM on Thursday, down 0.24% on the day – up 1.04% year-to-date.
Consumer Staples
Hershey (HSY) has given interim CEO John Bilbrey the job on a permanent basis and said it is on track to meet its 2011 financial goals. Smithfield Foods (SFD) beat estimates by 3 cents, but missed revenue by $80M. General Mills (GIS) gets downgraded to Neutral from Buy at Goldman. In afternoon trading: Shares of Yuhe International (YUII) are down over 50% as the company provided incremental documentation relating to the acquisition conducted in December 2009. Shares of Zhongpin (HOGS) are down about 12%. Shares of Darling International (DAR) are down about 8.5%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.16 at 4:00 PM on Thursday, up 0.81% on the day – up 6.31% year-to-date.
Healthcare
Catalyst Health Solutions (CHSI) is covered with a Buy and $74 target price at Citigroup. Mettler-Toledo (MTD) is upgraded to Buy from Hold with a $185 objective at Auriga. Omega Health (OHI) gets hoisted to Buy from Hold at Jefferies with a new target of $24. In afternoon trading: Shares of Biodel (BIOD) are up about 16%. Shares of NeuroMetrix (NURO) are up about 10.75%. Shares of Biostar Pharmaceuticals (BSPM) are up about 6.75%. Shares of Depomed (DEPO) are down about 7.75%. Shares of MAKO Surgical (MAKO) are down about 6.25%. Shares of Avanir Pharmaceuticals (AVNR) are down about 6.25%. Shares of Elan (ELN) are down about 6%.
The Health Care Select Sector SPDR (XLV) traded at $34.86 at 4:00 PM on Thursday, up slightly on the day – up 10.67% year-to-date.
Financials
Citigroup (C) said last night that hackers gained access to the details of over 360,000 North American credit cards, a far higher figure than the bank indicated when it first disclosed the breach last week. Meanwhile, outsourcing firm Automatic Data Processing (ADP) has reported a data breach that affected one client. HSBC’s (HBC) and Citigroup’s (C) hopes of entering the fast-growing Chinese corporate bond market gained a boost after they received initial approval to underwrite company debt. Deutsche Bank has a Hold on Willis Group (WSH) and begins KKR Financial (KFN) at a Buy. Sabra Healthcare REIT (SBRA) is raised to Buy from Hold at Jefferies. Lexington (LXP) is lifted to Buy from Hold at Stifel Nicolaus. Solar Capital (SLRC) is slashed to Hold from Buy at Citigroup. Moody’s (MCO) is lowered to Neutral from Buy at Lazard.
The Financial Select Sector SPDR (XLF) traded at $14.81 at 4:00 PM on Thursday, up 0.54% on the day – down 7.15% year-to-date.
Information Technology
AMD (AMD) has approached at least four candidates to replace deposed CEO Dirk Meyer but has been turned down by all of them. The enthusiasm for Internet IPOs sent shares in Pandora Media (P) soaring 63% in the first few hours of its debut yesterday. However, concerns about the Internet music company’s ability to eventually make a profit and wider market negativity caused the stock to lose much of its gains and close up only a mere 8.9%. Research in Motion (RIMM) is expected to report EPS of $1.32 on revenues of $5.4B when it releases FQ1 results after the market closes today. HP (HPQ) is suing Oracle (ORCL) over the latter’s decision to discontinue developing software for an Intel (INTC) microprocessor as a once close relationship deteriorates rapidly. On the other hand, HP will partner with Toshiba (TOSBF:US) on cloud computing services to support public networks, including power, water, gas and information technology systems. Renren (RENN) is resumed with a Hold and $9 target at Jefferies. Advanced Micro (AMD) is moved to Outperform from Market Perform with a $12 target at FBR Capital. Brightpoint (CELL) is boosted to Buy from Hold at Jefferies. Youku.com (YOKU) is lifted to Buy from Neutral at Goldman Sachs, which also adds it to their Conviction Buy List. Ceragon (CRNT) is upgraded to Buy from Hold at Brigantine. Intel (INTC) is downgraded to Market Perform from Outperform at FBR Capital with a new target of $26. Finisar (FNSR) is now Neutral from Outperform at Credit Suisse. In afternoon trading: Shares in Finisar are down about 16% after the telecom components maker said it expects FQ1 EPS of $0.16-$0.20 on revenue of $221M-$236M, way below analyst forecasts of $0.36 and $251M respectively. Shares of Travelzoo (TZOO) are down about 11.5%. Shares of MediaMind Technologies (MDMD) are up about 37.5% on news that advertising distribution company DG FastChannel Inc (DGIT) will acquire the company for about $418 million in cash ($22 per share – a 38% premium to yesterday’s close).
The Technology Select Sector SPDR (XLK) traded at $24.57 at 4:00 PM on Thursday, down 0.24% on the day – down 2.46% year-to-date.
Telecommunications Services
In afternoon trading: Actives: Shares of Sprint Nextel (S) are down about 1.8%. Shares of Level 3 Communications (LVLT) are down about 1.6%. Shares of AT&T (T) are down slightly. Shares of Verizon (VZ) are up slightly. Shares of Frontier Communications (FTR) are up about 0.4%. Shares of Windstream (WIN) are up about a 1%.
The NASDAQ Telecommunications Index (IXTC) traded at $203.22 at 4:00 PM on Thursday, down 0.59% on the day – down 9.83% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about 1.3%. Shares of AES (AES) are up about 0.75%. Shares of Genon Energy (GEN) are down about 1.6%. Shares of Exelon (EXC) are up about 0.8%. Shares of Southern (SO) are up about 0.5%. Shares of PPL (PPL) are up about 0.5%. Shares of NRG Energy (NRG) are down about 0.4%.
The Utilities Select Sector SPDR (XLU) traded at $33.10 at 4:00 PM on Thursday, up 0.79% on the day – up 5.62% year-to-date.
STOCKS: ETE, SUG, GTE, LPH, EGN, WLL, OGZPY, TECO, CAGC, YONG, SHZ, GGC, REE, IAG, CPGI, TXT, KFY, HRBN, FSIN, INSU, CPST, HIL, P, PIR, DKS, HD, LOW, ORLY, PETM, SPLS, AAP, AZO, BBBY, LTM, WSM, BBY, OMX, RSH, ODP, MGM, POAHF, DIN, VMED, HSY, SFD, GIS, YUII, HOGS, DAR, CHSI, MTD, OHI, BIOD, NURO, BSPM, DEPO, MAKO, AVNR, ELN, C, ADP, HBC, WSH, KFN, SBRA, LXP, SLRC, MCO, AMD, RIMM, HPQ, ORCL, INTC, TOSBF, RENN, CELL, YOKU, CRNT, FNSR, TZOO, MDMD, DGIT, S, LVLT, T, VZ, FTR, WIN, DUK, AES, GEN, EXC, SO, PPL, NRG
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