Equities Sector Coverage: Black Friday, EU Rumors Boost Market

Sector Recap |

Bull Wall StreetNew Home Sales rose by a less than expected 1.3% in October to an annual rate of 307,000, as the inventory stays at a record low of 162,000 units. On Tuesday Consumer Confidence should improve to 43.0 from 39.8 in November, but remember that 90 to 120 is the neutral zone for this data. On Wednesday Chicago PMI should improve to 60.0. On Thursday national manufacturing ISM should be 52.0 in November with Construction Spending up 0.1% in October. Then we have the drum-roll for November’s Employment Data with the economy creating 125,000 jobs with a 9.0% unemployment rate. The Dow Jones Industrial Average rebounded strongly to a morning high of 11,562.10, above its 50-day simple moving average at 11,538. Gains faded in afternoon trading with the Dow moving below 11,470 into the final hour of trading. The NASDAQ popped from 2509.07 to 2531.32 on Monday morning then consolidated those gains staying well below its 50-day simple moving average at 2584.

Asian stocks advanced on Monday on further euro rescue proposals and strong Black Friday shopping in the US. The Nikkei 225 gained 1.56% to 8,287 with the Hang Seng surging 1.97% to 18,038. European stocks followed Asia higher on Monday. The FTSE 100 rallied by 2.87% to 5,313, the DAX jumped 4.60% to 5,745 and the CAC 40 surged 5.46% to 3,013. The yield on the US Treasury 10-Year note moved higher from 1.986 percent to 2.080 moving above the 50-day simple moving average at 2.037, then declined to 1.951. Gold rebounded from $1684.0 the Troy ounce to $1722.4 moving above its 50-day simple moving average at $1702.5. Crude oil rebounded from $97.48 per barrel to $100.74 then declined to $97.13 above its 200-day simple moving average at $95.59, which held on weakness last week. The euro versus the dollar moved higher from 1.3276 to 1.3398 on Monday.

Energy

Anadarko's (APC) gas discoveries off the Mozambique coast could be twice as large as initially thought, which strengthens hopes that other firms might find large amounts of gas off East Africa. Those exploring in the region include BP (BP), Statoil (STO) and Exxon (XOM). Notable morning movers include; Arch Coal (ACI) up 6.7%, Anadarko Petroleum (APC) up 7.2%, Baker Hughes (BHI) up 5.4%, Patriot Coal (PCX) up 8.1%, Transocean (RIG) up 4.1%, and Schlumberger (SLB) up 4.4%.

Energy Select Sector SPDR (XLE) was trading at $65.77 into the final half hour of trading on Monday, up 3.04% on the day – down 3.63% year-to-date.

Materials

Small cap Avalon Rare Metals (AVL) was initiated as a Buy according to Citigroup. Potash (POT) is upgraded to Outperform from Sector Perform at Scotia. The fertilizer company Mosaic (MOS) has been downgraded to Hold from Buy at Canaccord Genuity. Canaccord also downgraded Agnico-Eagle Mines (AEM) to Hold from Buy. Notable morning movers include; Alcoa (AA) up 5.8%, AngloGold Ashanti (AU) up 3.1%, Cemex (CX) popped by 19.0%., Dow Chemical (DOW) was up 5.6%, International Paper (IP) gained 3.7%, Owens Illinois (OI) rallied by 4.7%, and US Steel (X) gained 8.1%.

The Materials Select Sector SPDR (XLB) was trading at $32.35 into the final half hour of trading on Monday, up 2.99% on the day – down 15.78% year-to-date.

Industrials

Fluor (FLR) has been upgraded to Outperform from Neutral with a $70 price target at Robert W. Baird. The company cites strong backlog trends and healthy balance sheet. Ryder System (R) is downgraded to Neutral from Buy at Suntrust. Notable morning movers include; Boeing (BA) gained 4.1%, Caterpillar (CAT) rebounded by 4.8%, Rockwell Collins (COL) was up 3.4%, FedEx (FDX) rebounded 5.2%, General Electric (GE) was up 3.2%, 3M Company (MMM) was up 2.3%, Northrop Grumman (NOC) gained 3.7%, and Raytheon (RTN) tacked on 2.5%.

The Industrial Select Sector SPDR (XLI) was trading at $32.04 into the final half hour of trading on Monday, up 2.82% on the day – down 8.12% year-to-date.

Consumer Discretionary

Deep discounts and midnight store openings sparked a stronger than expected Black Friday weekend. According to industry surveys Thanksgiving weekend sales jumped 16.4% to a record $52.4 billion. An estimated 226 million shoppers visited stores or Internet sites, up 6.6% from a year ago. Today’s Cyber Monday sales are projected to reach $1.2 billion. Foot Locker (FL) was upgraded to Buy from Neutral at UBS. The video game stock Electronic Arts (ERTS) was boosted to Buy from Neutral at Citi. Fossil (FOSL) is liked by The Benchmark Company on a more attractive valuation. The upscale grocery Whole Foods (WFM) is upgraded to Buy from Neutral at Northcoast. The casino company Wynn Resorts (WYNN) was upgraded to Buy from Hold with a $145 price target at Keybanc The Macau gaming market continues its robust growth as Las Vegas is shows signs of recovery. Coinstar (CSTR) was upgraded to Overweight from Neutral at JP Morgan. Amazon.com (AMZN) rallied 5.9% on strong sales of Kindle Fire.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.30 into the final half hour of trading on Monday, up 2.67% on the day – down 0.29% year-to-date.

Consumer Staples

Deep discounts and midnight store openings sparked a stronger than expected Black Friday weekend. According to industry surveys Thanksgiving weekend sales jumped 16.4% to a record $52.4 billion. An estimated 226 million shoppers visited stores or Internet sites, up 6.6% from a year ago. Today’s Cyber Monday sales are projected to reach $1.2 billion. PetSmart (PETM) has been initiated with a Buy rating and $57 price target at Needham. Netflix (NFLX) have been upgraded to Neutral from Negative with a price target of $60 at Susquehanna. Kellogg (K) has been downgraded to Market Perform from Outperform by BMO Capital.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.73 into the final half hour of trading on Monday, up 1.19% on the day – up 4.84% year-to-date.

Healthcare

Gilead Sciences (GILD) has been added to the Conviction Buy List at Goldman Sachs. Arena Pharmaceuticals (ARNA) has been upgraded to Overweight from Neutral at Piper Jaffray. Small cap PharmAthene (PIP) has been downgraded to Hold from Strong Buy at WBB Securities after a recent small pox legal ruling. Notable morning movers include; Johnson & Johnson (JNJ) gained 1.9%, Merck & Co (MRK) was up 3.0% and Pfizer (PFE) gained 2.9%.

The Health Care Select Sector SPDR (XLV) was trading at $32.40 into the final half hour of trading on Monday, up 2.18% on the day – up 2.86% year-to-date.

Financials

Yields on Italian bonds jumped to 7.3% in an inflation-linked auction of $758.4 million set to mature in 2023. The prior auction in March was 2.9%. More bonds are on the docket this week and there’s talk that the IMF is considering loaning Italy 600 billion in Euros. Wall Street pay will decline a sharp 30% in 2011 with bonuses down 40%. Fixed Income Desks are said to be hardest hit. Moneygram (MGI) is started as a Buy at Bank of America, while Wells Fargo assigns the company an Outperform. T. Rowe Price (TROW) is upgraded to Buy from Neutral at Ticonderoga, who set a $57 price target.  Banco Santander-Chile (SAN) is upgraded to Buy from Hold at Deutsche Bank. Unum Group (UNM) has been added to Citi’s Top Picks Live list. Genworth Financial (GNW) was upgraded to Buy from Neutral at Citi. American Express (AXP) has been downgraded to Equal Weight from Overweight at Morgan Stanley. Citigroup (C) gets cut to Equal Weight from Overweight at Morgan Stanley. MetLife (MET) has been removed from Citi’s list of Top Picks Live. Bank of New York Mellon (BK), Northern Trust (NTRS), and State Street (STT) have been downgraded to Underweight from Equal Weight at Morgan Stanley. Eaton Vance (EV) gets downgraded by Credit Suisse to Underperform from Neutral.

The Financial Select Sector SPDR (XLF) was trading at $12.02 into the final half hour of trading on Monday, up 2.04% on the day – down 24.64% year-to-date.

Information Technology

Google (GOOG) has been lifted to Buy from Neutral by Citigroup who sets a price target at $680. Salesforce.com (CRM) has been upgraded to Buy from Hold with a $125 target price at Needham. Notable morning movers include; Apple Inc (AAPL) was up 2.7%, Cisco Systems (CSCO) gained 2.9%, Dell Inc (DELL) popped by 5.2%, Hewlett-Packard (HPQ) was up 2.9%, Intel Corp (INTC) was up 3.3%, and Microsoft (MSFT) gained 2.0%.

The Technology Select Sector SPDR (XLK) was trading at $24.65 into the final half hour of trading on Monday, up 2.67% on the day – down 2.14% year-to-date.

Telecommunications Services

According to Bloomberg AT&T (T) may offer to sell up to 40% of T-Mobile USA’s assets in an effort to save their $39 billion deal. Verizon (VZ) has been upgraded to Buy from Neutral at UBS. Research In Motion (RIMM) was cut to Neutral from Buy at Sterne Agee. Ericsson (ERIC) has been downgraded to Hold from Buy at Société Générale. Notable morning movers include; Leap Wireless (LEAP) jumped by 14.2%, Metro PCS (PCS) gained 6.5%. and Sprint Nextel (S) rallied 5.5%.

The NASDAQ Telecommunications Index (IXTC) was trading at $193.14 into the final half hour of trading on Monday, up 2.66% on the day – down 14.30% year-to-date.

Utilities

Notable morning movers include; AES Corp (AEG) rallied by 4.2%, Consolidated Water (CWCO) gained 6.5%, Duke Energy (DUK) gained 1.4%, PG&E Corp (PCG) rebounded 2.1%, PPL Corp (PPL) rebounded 1.7%, and Sempra Energy (SRE) was up 1.6%.

The Utilities Select Sector SPDR (XLU) was trading at $33.77 into the final half hour of trading on Monday, up 1.02% on the day – up 7.75% year-to-date.

STOCKS: APC, BP, STO, XOM, ACI, BHI, PCX, RIG, SLB, AVL, POT, MOS, AEM, AA, AU, CX, DOW, IP, OI, X, FLR, R, BA, CAT, COL, FDX, GE, MMM, NOC, RTN, FL, ERTS, FOSL, WFM, WYNN, CSTR, AMZN, PETM, NFLX, K, GILD, ARNA, PIP, JNJ, MRK, PFE, MGI, TROW, SAN, UNM, GNW, AXP, C, BK, NTRS, STT, EV, GOOG, CRM, AAPL, CSCO, DELL, HPQ, INTC, MSFT, T, VZ, RIMM, ERIC, LEAP, PCS, S, AEG, CWCO, DUK, PCG, PPL, SRE

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.65 -0.03 -0.31 11,468,339
AAPL Apple Inc. 113.09 0.21 0.19 24,588,869
ACI Arch Coal Inc. n/a n/a n/a 0
AEG AEGON N.V. 3.84 -0.06 -1.54 2,370,834
AEM Agnico Eagle Mines Limited 54.05 -0.09 -0.17 1,434,224
AMZN Amazon.com Inc. 816.11 16.95 2.12 3,815,802
APC Anadarko Petroleum Corporation 58.27 -0.27 -0.46 6,082,482
ARNA Arena Pharmaceuticals Inc. 1.81 0.08 4.62 1,731,999
AU AngloGold Ashanti Limited 16.17 0.23 1.44 3,541,644
AXP American Express Company 64.28 0.86 1.36 3,899,117
BA Boeing Company (The) 131.32 0.75 0.57 1,938,348
BHI Baker Hughes Incorporated 48.06 -1.10 -2.24 3,307,311
BK Bank of New York Mellon Corporation (The) 39.50 -0.05 -0.13 8,473,961
BP BP p.l.c. 33.61 -0.07 -0.21 4,171,938
C Citigroup Inc. 46.37 0.48 1.05 16,165,634
CAT Caterpillar Inc. 82.88 0.51 0.62 4,295,422
COL Rockwell Collins Inc. 85.21 0.40 0.47 494,697
CRM Salesforce.com Inc 70.05 -0.14 -0.20 8,179,026
CSCO Cisco Systems Inc. 31.48 0.41 1.32 18,037,976
CWCO Consolidated Water Co. Ltd. 11.80 -0.08 -0.67 33,220
CX Cemex S.A.B. de C.V. Sponsored ADR 7.94 0.39 5.17 10,673,509
DUK Duke Energy Corporation (Holding Company) 81.43 -0.72 -0.88 2,268,288
ERIC Ericsson 6.81 -0.09 -1.30 5,744,777
EV Eaton Vance Corporation 38.64 -0.38 -0.97 650,164
FDX FedEx Corporation 177.30 1.96 1.12 2,132,427
FL Foot Locker Inc. 68.08 0.50 0.74 2,149,753
FLR Fluor Corporation 49.25 0.11 0.22 604,109
FOSL Fossil Group Inc. 28.75 -0.02 -0.07 504,856
GE General Electric Co 29.88 0.34 1.15 25,490,740
GILD Gilead Sciences Inc. 79.25 -1.37 -1.70 13,209,864
GNW Genworth Financial Inc 4.90 0.08 1.66 8,079,120
GOOG Alphabet Inc. 783.01 8.80 1.14 1,153,051
HPQ HP Inc. 15.34 0.32 2.13 9,061,231
INTC Intel Corporation 37.18 0.53 1.45 22,378,805
IP International Paper Company 47.50 0.14 0.30 2,658,123
JNJ Johnson & Johnson 119.22 1.44 1.22 5,349,461
K Kellogg Company 77.38 -0.01 -0.01 825,447
MGI Moneygram International Inc. 7.09 0.02 0.28 24,973
MMF.UN:CA Marret Multi-Strategy Income Fund n/a n/a n/a 0
MMM 3M Company 176.30 0.35 0.20 2,430,881
MOS Mosaic Company (The) 23.99 -0.15 -0.62 6,938,947
MRK Merck & Company Inc. (new) 62.57 0.42 0.68 7,340,756
MSFT Microsoft Corporation 57.95 1.05 1.85 28,031,181
NFLX Netflix Inc. 97.07 2.51 2.65 9,671,943
NOC Northrop Grumman Corporation 218.05 1.05 0.48 535,954
NTRS Northern Trust Corporation 67.55 0.09 0.13 1,004,126
OI Owens-Illinois Inc. 17.91 0.21 1.19 1,699,216
PCG Pacific Gas & Electric Co. 62.85 -1.05 -1.64 2,941,282
PFE Pfizer Inc. 33.83 0.19 0.56 15,580,175
PIP PharmAthene Inc 2.85 -0.03 -1.04 103,240
POT Potash Corporation of Saskatchewan Inc. 16.06 0.15 0.94 5,161,269
PPL PPL Corp 35.24 -0.52 -1.45 4,739,105
RIG Transocean Ltd (Switzerland) 9.42 -0.10 -1.05 12,205,644
RTN Raytheon Company 139.11 0.57 0.41 1,164,556
S Sprint Corporation 6.73 0.08 1.20 9,740,591
SAN Banco Santander SA ADR 4.35 0.02 0.46 4,596,136
SLB Schlumberger N.V. 75.33 -0.25 -0.33 6,456,803
SRE Sempra Energy 108.18 -1.83 -1.66 1,311,151
STO Statoil ASA 15.34 -0.20 -1.29 2,501,100
T AT&T Inc. 41.46 0.32 0.78 18,420,306
TROW T. Rowe Price Group Inc. 65.56 0.36 0.55 1,858,638
UNM Unum Group 34.85 0.41 1.19 1,817,533
VZ Verizon Communications Inc. 52.49 0.34 0.65 8,247,432
WFM Whole Foods Market Inc. 28.46 -0.19 -0.66 2,654,199
XOM Exxon Mobil Corporation 83.24 0.18 0.22 9,587,485

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