Stocks were mixed last week with the Dow Jones Industrial Average down 69 points to 11,935 and with the NASDAQ up 37 points to 2653. The Dow is up 3.1% year to date and is down 7.3% since its May 2nd high at 12,876.00. The NASDAQ is dead flat year-to-date and is down 8.1 percent since its May 2nd high at 2887.75. Personal Income came in a weaker than expected 0.3% in May with flat consumer spending, which was the weakest reading for these measures since June 2010. The Dow Industrial Average rebounded above 12,000 on Monday to an afternoon high just below 12,100. The NASDAQ rebounded from an opening low of 2648 to an afternoon high just below 2700.
Asian stocks were lower on Monday with the Nikkei 225 down 1.0% to 9,578 and the Hang Seng down 0.6%. European stocks were mixed on Monday as the Greek parliament began debating the harsh new austerity measures. The FTSE 100 gained 0.4%. The DAX lost 0.2%. The CAC 40 was gained 0.3%. The yield on the 10-Year US Treasury note rose on Monday from 2.840 to 2.896 as these low yields are a continued flight to quality. The US Treasury auctioned $35 billion in new 2-Year notes at 0.395 percent. The bid to cover was weaker than normal at 3.08 and the Indirect Bid was weak at 22%. The Indirect Bids include foreign central banks. The yield on the 10-Year note rose to 2.934 percent after this auction. Comex gold rebounded from $1491.7 the Troy ounce to $1506.1 on Monday well below its 50-day simple moving average at $1519.0. Gold then set a fresh afternoon low at $1490.8. Crude oil fell declined from $91.30 per barrel to $89.61 then consolidated that range staying well below its 200-day simple moving average at $92.78. The euro versus the US dollar rebounded on Monday from 1.4106 to 1.4293.
Energy
Enbridge Energy (EEP) and Enbridge Energy Management (EEQ) are each upgraded to Buy from Hold at Ladenburg Thalmann. In afternoon trading: Shares of Exco Resources (XCO) are down about 8.4%. Shares of LDK Solar (LDK) are up about 7.1%. Actives: Shares of Exxon Mobil (XOM) are up about 1.5%. Shares of Weatherford International (WFT) are down about 1.6%.
Energy Select Sector SPDR (XLE) was trading at $71.31 at 4:00 PM on Monday, up 0.54% on the day – up 4.48% year-to-date.
Materials
Ball Corp (BLL) is begun with a Neutral at JP Morgan. Crown Holdings (CCK) is covered with an Overweight at JP Morgan. Owens-Illinois (OI) is a new neutral at JP Morgan. Sonoco Products (SON) is initiated with a Neutral at JP Morgan. Anglo American (AAUKY) is upgraded to Overweight from Neutral at HSBC Securities, which takes Antofagasta plc (ANFGY) to Neutral from Underweight and boosts BHP Billiton (BHP) to Overweight from Neutral. In afternoon trading: Shares of China Shen Zhou Mining (SHZ) are down about 8.6%. Actives: Shares of ALCOA (AA) are up about 0.6%. Shares of Freeport-McMoran (FCX) are down about a quarter of a percent.
The Materials Select Sector SPDR (XLB) traded at $37.55 at 4:00 PM on Monday, up 0.21% on the day – down 2.24% year-to-date.
Industrials
Stanley Black & Decker (SWK) has made a $1.2B bid to buy Swedish security and surveillance company Niscayah (NSYHF:US). Siemens (SI) said it’s still in negotiations to sell a stake in Nokia Siemens Networks after The Wall Street Journal reported that Siemens and Nokia (NOK) have failed to reach an agreement with bidders for the sale of a controlling holding in the JV. Expeditors International (EXPD) is raised to Outperform from Neutral with a $60 valuation at brokers Robert W. Baird. United Continental (UAL) is raised to Overweight from Equal Weight at Evercore, which also takes Republic Airways (RJET) to Overweight from Equal Weight. Philips Electronics (PHG) is cut to Neutral from Buy on Monday at Nomura. Air France-KLM (AFLYY) is cut to Hold from Buy at the Royal Bank of Scotland. In afternoon trading: Shares of YRC Worldwide (YRCW) are up about 39%. Shares of Air China (AIRYY) are up about 13.5%. Shares of Republic Airways are up about 13.5%. Shares of China Ritar Power (CRTP) are down about 21%.
The Industrial Select Sector SPDR (XLI) traded at $35.91 at 4:00 PM on Monday, up 0.79% on the day – up 2.98% year-to-date.
Consumer Discretionary
Stanley Black & Decker (SWK) has made a $1.2B bid to buy Swedish security and surveillance company Niscayah (NSYHF:US). Microsoft (MSFT) is leading a consortium of multinationals investigating whether spectrum originally designated for digital TV, but now not needed, could be used to create super WiFi networks. Microsoft is due to start a trial this week in the U.K. with British Sky Broadcasting (BSYBY:US), BT (BT), Nokia (NOK), Samsung (SSNLF:US) and the BBC. Deckers Outdoor (DECK) is upgraded to Buy from Hold at Capstone with a target price of $98. Target (TGT) is taken to Neutral from Buy at Janney Montgomery Scott. In afternoon trading: Shares of Blockbuster (BLOAQ) are up about 11.8%. Shares of China MediaExpress (CCME) are up about 8.9%. Shares of Pandora Media (P) are up about 7.5%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $38.97 at 4:00 PM on Monday, up 1.22% on the day – up 4.17% year-to-date.
Consumer Staples
ConAgra (CAG) gets a Buy-from-Neutral increase at Goldman Sachs. Delhaize Group (DEG) is downgraded to Underweight from Neutral on Monday at J.P. Morgan Cazenove. In afternoon trading: Shares of Zhongpin (HOGS) are down about 12.5%. Shares of Star Scientific (CIGX) are down about 5.5%. Actives: Shares of Kraft Foods (KFT) are down about a quarter of a percent. Shares of Rite Aid (RAD) are up about 2.5%. Shares of Wal-Mart (WMT) are up about a quarter of a percent. Shares of Kroger (KR) are down about 1%. Shares of Altria Group (MO) are relatively unchanged.
The Consumer Staples Select Sector SPDR (XLP) traded at $30.75 at 4:00 PM on Monday, up 0.46% on the day – up 4.91% year-to-date.
Healthcare
Five Star Quality Care (FVE) is begun with a Buy and $7.50 target at Jefferies. In afternoon trading: Shares of XOMA (XOMA) are up about 17.5%. Shares of Accretive Health (AH) are up about 8.5%. Shares of Nabi Biopharmaceuticals (NABI) are up about 5.75%. Shares of Amylin Pharmaceuticals (AMLN) are up about 5.7%. Shares of Anacor Pharmaceuticals (ANAC) are down about 7.4%. Shares of Orexigen Therapeutics (OREX) are down about 6.4%. Shares of GTx Inc (GTXI) are down about 5.7%.
The Health Care Select Sector SPDR (XLV) traded at $34.86 at 4:00 PM on Monday, up 0.52% on the day – up 10.67% year-to-date.
Financials
The French government announced the outline of an agreement with the country’s banks to roll over their Greek debt, after which German bankers voiced their interest in the “French model.” Bank shares seem to be ignoring a proposal made at the weekend that up to 30 of the world’s biggest banks will have to hold 1%-2.5% of extra capital as a percentage of their “risk-weighted assets” by 2019. Banks that will have to hold the extra capital include Bank of America (BAC), Citigroup (C), JPMorgan (JPM), with Barclays (BCS), Deutsche Bank (DB), UBS (UBS) and HSBC (HBC) also expected to be on the list. The Bank for International Settlements has said central banks around the world should raise interest rates to control inflation and “ward off financial stability risks.” Westpac Banking Corp. (WBK) is upgraded to Outperform from Neutral at Macquarie. First Commonwealth (FCF) is raised to Outperform from Market Perform at FBR Capital. Hartford Financial (HIG) is hoisted to Outperform from Market Perform at FBR Capital. Hudson City Banc (HCBK) is upgraded to Market Perform from Underperform at FBR Capital. EZCORP (EZPW) is upgraded to Buy at Sterne Agee. Hatteras Financial (HTS) gets hoisted to Outperform from Market Perform at JMP Securities, which also raises American Capital Agency (AGNC) to Outperform from Market Perform.
The Financial Select Sector SPDR (XLF) traded at $14.91 at 4:00 PM on Monday, up 1.02% on the day – down 6.52% year-to-date.
Information Technology
Siemens (SI) said it’s still in negotiations to sell a stake in Nokia Siemens Networks after The Wall Street Journal reported that Siemens and Nokia (NOK) have failed to reach an agreement with bidders for the sale of a controlling holding in the JV. Microsoft (MSFT) is leading a consortium of multinationals investigating whether spectrum originally designated for digital TV, but now not needed, could be used to create super WiFi networks. Microsoft is due to start a trial this week in the U.K. with British Sky Broadcasting (BSYBY:US), BT (BT), Nokia (NOK), Samsung (SSNLF:US) and the BBC. LinkedIn (LNKD) is launched with an Overweight rating and $75 price objective at Global Equities Research. NetApp (NTAP) is a new Buy and $60 target price at Brean Murray. Sina Corp (SINA) shares are up before the bell after bring upgraded to Neutral from Sell at Goldman. SuccessFactors (SFSF) is lifted to Buy from Hold at Canaccord Genuity. Sapient (SAPE) is now Neutral from Sell at UBS. Cisco Systems (CSCO) is downgraded to Neutral from Outperform at Cowen & Company. Molex (MOLX) is moved to Sell from Hold with a $20 target at Ticonderoga. In afternoon trading: Shares of Evergreen Solar (ESLR) are up about 25.75%. Shares of Renren (RENN) are up about 12.25%.
The Technology Select Sector SPDR (XLK) traded at $24.87 at 4:00 PM on Monday, up 1.34% on the day – down 1.27% year-to-date.
Telecommunications Services
Microsoft (MSFT) is leading a consortium of multinationals investigating whether spectrum originally designated for digital TV, but now not needed, could be used to create super WiFi networks. Microsoft is due to start a trial this week in the U.K. with British Sky Broadcasting (BSYBY:US), BT (BT), Nokia (NOK), Samsung (SSNLF:US) and the BBC. In afternoon trading: Actives: Shares of Sprint Nextel (S) are up about 2.9%. Shares of Level 3 Communications (LVLT) are up about 0.4%. Shares of AT&T (T) are up about 1.5%. Shares of Verizon (VZ) are up about 1.25%.
The NASDAQ Telecommunications Index (IXTC) traded at $206.40 at 4:00 PM on Monday, up 1.00% on the day – down 8.42% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Genon Energy (GEN) are down about 0.8%. Shares of PPL Corp (PPL) are up about 0.6%. Shares of Duke Energy (DUK) are up about 0.5%. Shares of Exelon Corp (EXC) are up about 0.7%. Shares of AES Corp (AES) are up about a half of a percent. Shares of CenterPoint Energy (CNP) are up about 1.4%. Shares of Southern Co (SO) are up about 1.2%.
The Utilities Select Sector SPDR (XLU) traded at $33.04 at 4:00 PM on Monday, up 0.73% on the day – up 5.42% year-to-date.
STOCKS: EEP, EEQ, XCO, LDK, XOM, WFT, BLL, CCK, OI, SON, AAUKY, ANFGY, BHP, SHZ, AA, FCX, SWK, NSYHF, SI, NOK, EXPD, UAL, RJET, PHG, AFLYY, YRCW, AIRYY, CRTP, MSFT, BSYBY, BT, SSNLF, DECK, TGT, BLOAQ, CCME, P, CAG, DEG, HOGS, CIGX, KFT, RAD, WMT, KR, MO, FVE, XOMA, AH, NABI, AMLN, ANAC, OREX, GTXI, BAC, C, JPM, BCS, DB, UBS, HBC, WBK, FCF, HIG, HCBK, EZPW, HTS, AGNC, LNKD, NTAP, SINA, SFSF, SAPE, CSCO, MOLX, ESLR, RENN, S, LVLT, T, VZ, GEN, PPL, DUK, EXC, AES, CNP, SO
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