Equities Daily Stocks Sector Coverage

Sector Recap |

Stock Market Wall StreetU.S. stocks slipped slightly last week with the Dow Jones Industrial Average down 38 points to 12,342. The NASDAQ was down 15 points last week to 2765. After the close last Friday, the FDIC closed another six community banks, bringing the year-to-date total failures to 34 and to 356 since the end of 2007. Stocks were weaker overnight because of raised reserve requirements in China and fears of a Greek debt default. Just before the U.S. open, Standard & Poor's downgraded the U.S. debt outlook to negative. The yield on the 10-Year U.S. Treasury note declined 17.5 basis points last week to 3.408, and spiked as high as 3.456 on the S&P call, then declined to 3.358 on a flight to quality. Gold rallied $12.30 per Troy ounce last week to an all-time closing high of $1488.2, and set another intra-day high at $1498.6 on Monday. Crude oil declined $3.65 a barrel last week to $109.50, and traded as low as $106.54 on Monday.

The euro versus the dollar could not sustain gains above 1.45 last week and traded below 1.420 on Monday. This morning we learned that the National Association of Home Builders Housing Market Index declined a notch to 16, well below the neutral 50. This index has been 20 and below since September 2007. This is a big week on the earnings front including 11 Dow components and key NASDAQ stocks, Intel (INTC) and Apple (AAPL). The Dow Jones Industrial Average traded as low as 12,094 on Monday with the NASDAQ as low as 2707. A last hour rebound pulled the Dow above 12,200 with the NASDAQ above 2735.

Energy

Halliburton (HAL) beat estimates by 3 cents and revenue by $300M. CNOOC Ltd (CEO) is initiated with an Underperform at Jefferies. Total SA (TOT) is taken to Underperform from Neutral at Credit Suisse. In afternoon trading: Shares of Golar LNG (GLNG) are down about 7%. Shares of McDermott International (MDR) are down about 6.9%. Shares of General Maritime (GMR) are down about 6%.

The Energy Select Sector SPDR (XLE) was trading at $76.04 at 4:00 PM on Monday, down 1.49% on the day – up 11.41% year-to-date.

Materials

Arcelor Mittal (MT) is lifted to Buy from Neutral at Goldman Sachs. In afternoon trading: Shares of Yongye International (YONG) are up about 9.25%. Shares of Hecla Mining (HL) are down about 8.1%. Shares of China Shen Zhou (SHZ) are down about 6.1%.

The Materials Select Sector SPDR (XLB) traded at $38.81 at 4:00 PM on Monday, down 1.40% on the day – up 1.04% year-to-date.

Industrials

Philips' (PHG) Q1 2011 net profit plunged 31% year-on-year to €138M ($198.3M) and came in below analyst forecasts even though revenues rose to €5.26B from €4.98B. Net income reflects an after-tax loss of €87M from the results of Philips' television business, which it now plans to spin-off into a joint venture with Hong Kong-based TPV Technology (TPVTF.PK). A123 Systems, Inc. (AONE) is lifted to Buy from Neutral boost at Goldman Sachs. Norfolk Southern (NSC) is lifted to Buy from Hold at BB&T Capital with a price objective of $80. Knoll (KNL) is cut to Market Perform from Strong Buy at Raymond James. Iron Mountain (IRM) is cut to Hold from Buy at Citigroup. In afternoon trading: Shares of Genco Shipping (GNK) are down about 11.7%. Shares of Knoll are down about 7.5%. Shares of A123 are up about 11.25%.

The Industrial Select Sector SPDR (XLI) traded at $36.60 at 4:00 PM on Monday, down 1.43% on the day – up 4.96% year-to-date.

Consumer Discretionary

KB Home (KBH) is lifted to Neutral from Underperform at Credit Suisse. Papa John’s International (PZZA) is downgraded to Hold at from Buy at Stifel Nicolaus due to valuation. Gap Inc (GPS) is lowered to Sell from Neutral at Goldman Sachs. Best Buy (BBY) is downgraded to Hold from Buy at KeyBanc Capital. In afternoon trading: Shares of Blockbuster (BLOAQ) are up about 42.5%. Shares of E-Commerce China Dangdang (DANG) are up about 8.2%. Shares of American Apparel (APP) are up about 7.1%. Shares of Porsche (POAHF) are down about 7.5%.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $38.90 at 4:00 PM on Monday, down 0.89% on the day – up 3.98% year-to-date.

Consumer Staples

Kraft Foods Inc (KFT) is lowered to Equal Weight from Overweight at Morgan Stanley. In afternoon trading: Shares of Star Scientific (CIGX) are down about 7.5%. Shares of Nestle (NSRGY) are down about 4.6%. Shares of Synutra International (SYUT) are up about 6.6%. Shares of China-Biotics (CHBT) are up about 5.2%.

The Consumer Staples Select Sector SPDR (XLP) traded at $30.67 at 4:00 PM on Monday, down 0.55% on the day – up 4.64% year-to-date.

Healthcare

Community Health Systems (CYH) plans to convert its $3.3B bid for Tenet Healthcare (THC) into an all-cash $6/share offer in an effort to sidestep potential complications of a lawsuit filed by Tenet. Shares in Synthes jumped 7% in early Zurich trading after it confirmed it's in talks with Johnson & Johnson (JNJ) 'about a potential business combination transaction.' This followed reports at the end of last week that J&J is looking to buy the Swiss-U.S. medical device maker for $20B. Eli Lilly (LLY) beat estimates by 8 cents and revenue by $200M; fueled by overseas sales of its prescription medicines. Thoratec Corp. (THOR) is lifted to Buy from Neutral at Lazard. Cyberonics (CYBX) gets lifted to Neutral from Reduce at Suntrust. Tenet Healthcare (THC) is taken up to Buy from Gradually Accumulate at Soleil Securities. In afternoon trading: Shares of Amarin (AMRN) are up nearly 95% on hopes that its drug candidate to treat high triglyceride levels might prove to be a far bigger commercial success than originally expected, if and when it is approved.

The Health Care Select Sector SPDR (XLV) traded at $33.54 at 4:00 PM on Monday, down 1.12% on the day – up 6.48% year-to-date.

Financials

NYSE Euronext (NYX) would probably demand an antitrust 'reverse break-up fee' of up to $2B from Nasdaq (NDAQ) and IntercontinentalExchange (ICE) before it is willing to start talks about their $11.3B takeover offer. KeyCorp (KEY) reported Q1 EPS of $0.21 versus consensus of $0.16. Bank of the Ozarks (OZRK) is begun with a Market Perform at Raymond James. Torchmark (TMK) and Reinsurance Group of America (RGA) are both reduced to Market Perform from Outperform at Raymond James. In afternoon trading: Shares of AEGON (AEG) are down about 6%.

The Financial Select Sector SPDR (XLF) traded at $15.92 at 4:00 PM on Monday, down 1.36% – down 0.19% year-to-date.

Information Technology

Philips' (PHG) Q1 2011 net profit plunged 31% year-on-year to €138M ($198.3M) and came in below analyst forecasts even though revenues rose to €5.26B from €4.98B. Net income reflects an after-tax loss of €87M from the results of Philips' television business, which it now plans to spin-off into a joint venture with Hong Kong-based TPV Technology (TPVTF.PK). Texas Instruments (TXN), Intel (INTC) and AMD (AMD) are all due to report earnings this week, when investors and analysts are expected to focus on the impact of Japan's earthquake and tsunami on the semiconductor industry. Commvault Systems (CVLT) is downgraded to Sell from Neutral at Goldman. Marvell (MRVL) is moved to Neutral from Positive at Susquehanna. BMC Software (BMC) is downgraded to Hold from Buy at Citigroup. In afternoon trading: Shares of Shanda Interactive Entertainment (SNDA) are up about 17%. Shares of Youku.com (YOKU) are up about 8.75%. Shares of Sina (SINA) are up about 8.5%. Shares of Cirrus Logic (CRUS) are down about 9.75%. Shares of Evergreen Solar (ESLR) are down about 8.5%.

The Technology Select Sector SPDR (XLK) traded at $25.51 at 4:00 PM on Monday, down 0.89% on the day – up 1.27% year-to-date.

Telecommunications Services

France Telecom (FTE) and Deutsche Telekom (DTEGY.PK) plan to form a 50-50 joint venture to buy network equipment, mobile phones and other information technology in a move that could save about €1.3B ($1.9B) annually after three years. In afternoon trading: Shares of USA Mobility (USMO) are down about 5.7%. Shares of Level 3 Communications (LVLT) are down about 5.5%. Shares of Global Crossing (GLBC) are down about 5%. Shares of Millicom International Cellular (MICC) are down about 4.75%.

The NASDAQ Telecommunications Index (IXTC) traded at $217.42 at 4:00 PM on Monday, down 1.21% on the day – down 3.53% year-to-date.

Utilities

PG&E Corp (PCG) is upgraded to Outperform from Neutral at Credit Suisse. In afternoon trading: Shares of Huaneng Power International (HNP) are down about 4.5%. Actives: Shares of PPL (PPL) are down about 0.6%. Shares of Duke Energy (DUK) are down about 0.9%.

The Utilities Select Sector SPDR (XLU) traded at $31.82 at 4:00 PM on Monday, down 0.87% on the day – up 1.53% year-to-date.

STOCKS COVERED: HAL, CEO, TOT, GLNG, MDR, GMR, MT, YONG, HL, SHZ, PHG, TPVTF, AONE, NSC, KNL, IRM, GNK, KBH, PZZA, GPS, BBY, BLOAQ, DANG, APP, POAHF, KFT, CIGX, NSRGY, SYUT, CHBT, CYH, THC, JNJ, LLY, THOR, CYBX, AMRN, NYX, NDAQ, ICE, KEY, OZRK, TMK, RGA, AEG, TXN, INTC, AMD, CVLT, MRVL, BMC, SNDA, YOKU, SINA, CRUS, ESLR, FTE, DTEGY, USMO, LVLT, GLBC, MICC, PCG, HNP, PPL, DUK

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Companies

Symbol Name Price Change % Volume
ISR IsoRay Inc. 0.58 0.02 2.88 311,092

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