Equities Sector Coverage: Bulls Get the Green Light

Sector Recap |

Bulls Get the Green LightInitial Jobless Claims fell 12,000 to 365,000 still above the 350,000 recessionary threshold. Non-manufacturing ISM came in at 53.7 in August, just above expectations. The Dow Jones Industrial Average spiked higher at the open trading up to a day’s high at 13,291.38, which is shy of the year to date high at 13,336.66 set on May 1st. The NASDAQ surged to a day’s high at 3135.64, which sets a new year to date high.

Asian stocks were flat to higher on Thursday. The Nikkei 225 ended the day at 8,681 – up 0.01%. The Hang Seng ended the day at 19,209 – up 0.34%. European exchanges surged on the ECB’s new bond buying program. The FTSE 100 ended the day at 5,777 – up 2.11%. The DAX ended the day at 7,167 – up 2.91%. The CAC 40 ended the day at 3,510 – up 3.06%. The yield on the 10-Year US Treasury rose from 1.589% to 1.682% above the 50-day simple moving average at 1.590%.

Comex gold traded up from $1693.7 the Troy ounce to $1716.9 well above the 200-day simple moving average at $1645.8. Nymex crude oil rebounded from $95.73 per barrel to $97.71 then faded to $94.90 trading back and forth around its 200-day simple moving average at $96.63. The euro versus the dollar rebounded from 1.2564 to 1.2649 staying between its 50-day and 200-day simple moving averages at 1.2373 and 1.2842.

Energy

Gazprom (OGZPY) says FQ1 net profit fell 23.5% Y/Y on lower exports and retroactive payments to European customers that negotiated discounts. Mitcham Industries (MIND) beat estimates by 3 cents and revenue by $1.4M. Matrix Service (MTRX) beat estimates by 2 cents, while missing revenue by $3M. Atwood Oceanics (ATW) is covered at Outperform at BMO Capital. Big Movers – Heckmann Corp (HEK) up 9.82%. Dow components – Chevron (CVX) up 1.96%, Exxon Mobil (XOM) up 1.88%. Energy Select Sector SPDR (XLE) was trading at $71.97 at 3:30 PM on Thursday, up 1.78% on the day – up 4.11% year-to-date.

Materials

Harry Winston Diamond (HWD) missed estimates by 6 cents on revenue of $176.9M. AK Steel (AKS) is boosted to Buy from Neutral at Longbow. Randgold Resources (GOLD) gets upgraded to Overweight from Neutral at JPMorgan. Yara International (YARIY) is now Overweight from Neutral at HSBC Securities. Cliffs Natural Resources (CLF) is now Neutral from Buy at UBS. Harmony Gold Mining (HMY) is now Neutral from Overweight at JPMorgan. Big Movers – Owens Illinois (OI) up 10.14%. Dow Components – Alcoa (AA) up 2.82%, DuPont (DD) up 2.20%. The Materials Select Sector SPDR (XLB) was trading at $36.15 at 3:30 PM on Thursday, up 2.26% on the day – up 7.91% year-to-date.

Industrials

Met-Pro (MPR) missed estimates by 3 cents, while beating revenue by $1.5M. Navistar International (NAV) beat estimates by $2.56 and revenue by $360M. The company expects to save $70M-$80M annually with reduced size of workforce. UTI Worldwide (UTIW) missed estimates by 3 cents and revenue by $130M. Layne Christensen (LAYN) missed estimates by 18 cents and revenue by $3M. ABM Industries (ABM) missed estimates by 5 cents with revenue in-line with estimates. FuelCell Energy (FCEL) missed estimates by 2 cents and revenue by $2M. Korn/Ferry International (KFY) beat estimates by 4 cents and revenue by $15M. NCI Building Systems (NCS) beat estimates by 10 cents, while missing revenue by $10M. Sparton (SPA) beat estimates by 12 cents, while missing revenue by $1.2M. AeroVironment (AVAV) missed estimates by 3 cents and revenue by $5M. Flowserve (FLS) is a fresh Market Perform with William Blair. Stanley Black & Decker (SWK) is moved to Overweight from Equal-Weight at Morgan Stanley. Ingersoll-Rand (IR) is moved to Equal Weight from Overweight at Morgan Stanley.

Big Movers – Navistar International (NAV) up 15.97%, AAR Corp (AIR) up 11.65%, FuelCell Energy (FCEL) down 9.94%.

Dow components – Boeing Co (BA) up 1.06%, Caterpillar (CAT) up 2.32%, General Electric (GE) up 2.78%, 3M Company (MMM) up 1.37%, United Technologies (UTX) up 1.26%.

The Industrial Select Sector SPDR (XLI) was trading at $36.615 at 3:30 PM on Thursday, up 2.05% on the day – up 8.49% year-to-date.

Consumer Discretionary

Apple's (AAPL) TV and set-top ambitions remain bogged down in a morass of pay-TV industry intransigence. Disagreements include Apple's control of the user interface, its ability to sell directly to consumers rather than leasing hardware, and content deals. However, Apple has compromised over the latter issue, and is "furthest along" in talks with Time Warner Cable (TWC). Men's Wearhouse (MW) beat estimates by 3 cents with revenue in-line with estimates. The company also ups its FY12 guidance, now seeing earnings of $2.74 to $2.80 a share and revenue growth of 4.8% to 5.6%. For the current quarter, it sees sales growth coming in around 8.8% to 9.3%. Street estimates project revenue growth of 6%. Stewart Enterprises (STEI) beat estimates by 2 cents and revenue by $2.7M. Delta Apparel (DLA) missed estimates by 11 cents, while beating revenue by $10M. Hooker Furniture (HOFT) beat estimates by 5 cents with revenue in-line with estimates. H&R Block (HRB) reported FQ1 EPS of -$0.38 (in-line), while missing revenue by $5M. FQ1 meets on its EPS estimate but comes up short on its top line as total revenue dipped slightly Y/Y. Pep Boys-Manny Moe & Jack (PBY) is a new Neutral at Credit Suisse.



Big Movers – The Men’s Warehouse (MW) up 15.52%. Dow Components – Disney (DIS) up 1.75%, Home Depot (HD) up 1.25%, McDonalds (MCD) up 1.53%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.48 at 3:30 PM on Thursday, up 2.13% on the day – up 19.12% year-to-date.

Consumer Staples

General Mills (GIS) sees FQ1 results in-line with company expectations, putting its adjusted EPS below last year’s first-quarter results. Big Movers – Snyders-Lance (LNCE) up 11.60%. Dow components – Kraft (KFT) up 1.20%, Coca Cola (KO) up 1.24%, Procter & Gamble (PG) up 1.30%, Wal-Mart (WMT) up 1.29%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.96 at 3:30 PM on Thursday, up 0.98% on the day – up 10.68% year-to-date.

Health Care

Arena Pharmaceuticals (ARNA) is an Underperform at Credit Suisse. Cardiovascular Systems (CSII) is launched with an Outperform at Leerink Swann. Dendreon (DNDN) is initiated with a Buy at WallachBeth. Geron (GERN) gets initiated with a Market Perform at JMP Securities. ImmunoCellular Therapeutics (IMUC) is initiated with a Buy at Maxim Group. Jazz Pharmaceuticals (JAZZ) is a new Neutral at Cowen. Orexigen (OREX) is initiated with an Outperform at Credit Suisse.

Big Movers – Orexigen (OREX) up 17.72%, Merge Healthcare (MRGE) up 10.56%, Warner Chilcott (WCRX) down 10.33%.

Dow Components – Johnson & Johnson (JNJ) up 1.06%, Merck (MRK) up 1.44%, Pfizer (PFE) up 1.38%.

The Health Care Select Sector SPDR (XLV) was trading at $39.51 at 3:30 PM on Thursday, up 1.49% on the day – up 13.89% year-to-date.

Financial

American Capital Mortgage (MTGE) is initiated with a Buy at Wunderlich. Cash America International (CSH) is a new Market Perform at JMP Securities. CIT Group (CIT) is a new Perform at Oppenheimer. Harris & Harris (TINY) is begun with a Buy at Ascendiant Capital Markets. SunTrust Banks (STI) is moved to Overweight from Neutral at JP Morgan. Barclays (BCS) is moved to Neutral from Outperform at Credit Suisse.

Big Movers – Radian Group (RDN) up 18.48%, MGIC Investment (MTG) up 0.65%.

Dow Components – American Express (AXP) up 0.89%, Bank of America (BAC) up 4.15%, JP Morgan Chase (JPM) up 4.28%, Travelers (TRV) up 1.41%.

The Financial Select Sector SPDR (XLF) was trading at $15.49 at 3:30 PM on Thursday, up 2.18% on the day – up 19.15% year-to-date.

Information Technology

Apple's (AAPL) TV and set-top ambitions remain bogged down in a morass of pay-TV industry intransigence. Disagreements include Apple's control of the user interface, its ability to sell directly to consumers rather than leasing hardware, and content deals. However, Apple has compromised over the latter issue, and is "furthest along" in talks with Time Warner Cable (TWC). Following the unveiling of smartphones by Nokia (NOK) and Motorola (GOOG) yesterday, Amazon (AMZN) is due to hold an event today. A TV ad has already depicted a "Paperwhite" backlit Kindle e-reader, a 7-inch Kindle Fire, (most intriguingly) a bigger Fire, and perhaps its rumored smartphone. OCZ Technology (OCZ) warns it expects FQ2 revenue of $110M-$120M, below guidance of $130M-$140M and a consensus of $134.4M. SeaChange International (SEAC) missed estimates by 4 cents with revenue in-line with estimates. VeriFone (PAY) beat estimates by 5 cents, while missing revenue by $5M. FQ4 guidance is for revenue of $495M-$500M and EPS of $0.75-$0.77 versus a consensus of $520.2M and $0.74. Verint Systems (VRNT) beat estimates by 7 cents and revenue by $8M. Sigma Designs (SIGM) beat estimates by 19 cents and revenue by $3.3M. Activision Blizzard (ATVI) is upgraded to Overweight from Neutral at Piper Jaffray. Wright Express (WXS) is now Buy from Neutral at Janney Capital. ASML Holding (ASML) is slashed to Hold from Buy at Société Générale. Nokia (NOK) is now Sell from Hold at Deutsche Bank. OCZ Technology (OCZ) is downgraded to Hold from Buy at Needham. Seagate Technology (STX) is slashed to Hold from Strong Buy at Needham.

Big Movers – OCZ Technology Group (OCZ) down 17.35%, Verifone Systems (PAY) down 11.39%, First Solar (FSLR) up 10.35%.

Dow Components – Cisco Systems (CSCO) up 3.60%, Hewlett-Packard (HPQ) up 1.45%, IBM (IBM) up 2.07%, Intel Corp (INTC) up 2.34%, Microsoft (MSFT) up 2.91%.

The Technology Select Sector SPDR (XLK) was trading at $31.095 at 3:30 PM on Thursday, up 2.08% on the day – up 22.18% year-to-date.

Telecommunication Services

MagicJack Vocaltec (CALL) increased its guidance due to lower costs and robust sales of its new MagicJack Plus product. The company expects FY EPS of $1.70-$2 versus a previous estimate of $1.50-$1.80 and consensus of $1.53, and forecasts revenue growth of 35%-45% versus 25%-40% prior. Q3 guidance comes in at EPS $0.55-$0.80 versus forecasts of $0.39 and revenue of $40M-$41M versus $39.5M. NTT DoCoMo (NTT) gets downgraded to Neutral from Buy at Goldman Sachs.

Dow Components – AT&T (T) up 1.06%, Verizon (VZ) down 0.18%.

The NASDAQ Telecommunications Index (IXTC) was trading at $199.52 at 3:30 PM on Thursday, up 2.86% on the day – up 1.32% year-to-date.

Utilities

OGE Energy (OGE) is upgraded to Outperform from Market Perform by BMO Capital. Iberdrola (IBDRY) gets downgraded to Underperform by BNP Paribas. The Big Names – Dominion Resources (D) up 1.85%, Edison International (EIX) up 0.73%, First Energy (FE) up 0.86%, PG&E Corp (PCG) up 0.58%, Southern Company (SO) up 1.30%.

The Utilities Select Sector SPDR (XLU) was trading at $36.68 at 3:30 PM on Thursday, up 0.96% on the day – up 1.95% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, OGZPY, MIND, MTRX, ATW, HEK, HWD, AKS, GOLD, YARIY, CLF, HMY, OI, MPR, NAV, UTIW, LAYN, ABM, FCEL, KYF, NCS, SPA, AVAV, FLS, SWK, IT, NAV, AIR, FCEL, AAPL, TWC, MW, STEI, DLA, HOFT, HRB, PBY, MW, GIS, LNCE, ARNA, CSII, DNDN, GERN, IMUC, JAZZ, OREX, OREX, MRGE, WCRX, MTGE, CSH, CIT, TINY, STI, BCS, RDN, MTG, AAPL, TWC, NOK, GOOG, AMZN, OCZ, SEAC, PAY, VRNT, SIGM, ATVI, WXS, ASML, NOK, OCZ, STX, OCZ, PAY, FSLR, CALL, NTT, OGE, IDBRY

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Companies

Symbol Name Price Change % Volume
DLA Delta Apparel Inc. 19.43 0.17 0.88 10,544
IMUC ImmunoCellular Therapeutics Ltd. 0.27 0.01 1.96 1,011,429
HRB H&R Block Inc. 26.82 0.67 2.56 2,282,237 Trade
MW Men's Wearhouse, Inc. (The) n/a n/a n/a 0 Trade
NTT Nippon Telegraph and Telephone Corporation n/a n/a n/a 0
MMM 3M Company 237.02 1.02 0.43 1,616,681 Trade
CIT CIT Group Inc (DEL) 54.14 0.77 1.44 565,208 Trade
NCS NCI Building Systems Inc. New 16.85 0.10 0.60 238,381 Trade
AVAV AeroVironment Inc. 50.19 0.19 0.38 93,531 Trade
ASML ASML Holding N.V. 196.82 3.53 1.83 741,726 Trade
PG Procter & Gamble Company (The) 81.05 0.21 0.26 10,321,844 Trade
GE General Electric Co 14.49 -0.01 -0.07 52,912,587 Trade
CVX Chevron Corporation 112.59 2.70 2.46 6,460,219 Trade
SO Southern Company (The) 44.07 1.05 2.44 5,647,999 Trade
PCG Pacific Gas & Electric Co. 41.14 1.05 2.62 3,304,563 Trade
AKS AK Steel Holding Corporation 5.50 -0.12 -2.14 12,950,769 Trade
TWC Time Warner Cable Inc n/a n/a n/a 0 Trade
ATW Atwood Oceanics Inc. n/a n/a n/a 0 Trade
FLS Flowserve Corporation 44.26 0.68 1.56 799,168 Trade
UTIW UTi Worldwide Inc. n/a n/a n/a 0 Trade
ABM ABM Industries Incorporated 36.75 0.61 1.69 417,552 Trade
JNJ Johnson & Johnson 132.02 2.11 1.62 5,126,832 Trade
WMT Wal-Mart Stores Inc. 92.89 0.12 0.13 12,791,460 Trade
AA Alcoa Inc. 46.70 -1.31 -2.73 3,097,983 Trade
INTC Intel Corporation 47.73 1.93 4.21 26,040,911 Trade
IBM International Business Machines Corp 155.52 2.34 1.53 3,256,074 Trade
D Dominion Resources Inc. 75.52 1.94 2.64 2,055,756 Trade
TRV The Travelers Companies Inc. 139.74 2.10 1.53 2,006,265 Trade
AAPL Apple Inc. 175.50 3.00 1.74 33,812,360 Trade
BCS Barclays PLC 11.72 0.04 0.34 4,012,260 Trade
EXP Eagle Materials Inc 104.37 0.96 0.93 295,037 Trade
EIX Edison International 62.17 2.43 4.07 3,884,370 Trade
RDN Radian Group Inc. 21.33 0.27 1.29 695,152 Trade
CSH Cash America International Inc. n/a n/a n/a 0 Trade
JAZZ Jazz Pharmaceuticals plc 147.46 3.04 2.11 267,402 Trade
SIGM Sigma Designs Inc. 5.93 -0.03 -0.42 214,273 Trade
SPA Sparton Corporation 23.02 0.10 0.44 33,953 Trade
LNCE Snyder\'s-Lance Inc. 49.91 0.04 0.08 875,721 Trade
JPM JP Morgan Chase 117.31 2.33 2.03 12,162,523 Trade
STX Seagate Technology 53.29 1.93 3.76 3,214,483 Trade
AXP American Express Company 98.80 1.45 1.49 2,440,553 Trade
MTGE MTGE Investment Corp. 17.75 0.30 1.72 470,727 Trade
UTX United Technologies Corporation 133.15 -0.43 -0.32 4,604,590 Trade
ARNA Arena Pharmaceuticals Inc. 39.97 -0.88 -2.15 671,525 Trade
OI Owens-Illinois Inc. 21.92 0.23 1.06 1,112,091 Trade
AMZN Amazon.com Inc. 1,500.00 14.66 0.99 4,418,103 Trade
SWK Stanley Black & Decker, Inc. 160.94 1.19 0.74 897,391 Trade
CSCO Cisco Systems Inc. 44.00 1.06 2.47 25,781,446 Trade
DIS Walt Disney Company (The) 107.25 2.01 1.91 6,101,126 Trade
PAY Verifone Systems Inc. 16.67 -0.05 -0.30 926,667 Trade
VZ Verizon Communications Inc. 48.29 0.42 0.88 26,371,397 Trade
AIR AAR Corp. 43.62 0.41 0.95 128,253 Trade
TINY Harris & Harris Group Inc. n/a n/a n/a 0 Trade
OREX Orexigen Therapeutics Inc. 1.18 -0.07 -5.60 1,296,148 Trade
GERN Geron Corporation 2.23 0.00 0.00 1,493,304 Trade
BAC Bank of America Corporation 32.03 0.34 1.07 53,626,263 Trade
NAV Navistar International Corporation 39.16 -0.84 -2.10 519,885 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 5.80 0.09 1.58 16,355,612 Trade
GOOG Alphabet Inc. 1,126.79 20.16 1.82 1,260,968 Trade
MCD McDonald\'s Corporation 163.06 2.40 1.49 4,272,364 Trade
VRNT Verint Systems Inc. 39.90 0.60 1.53 312,452 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
CSII Cardiovascular Systems Inc. 22.38 0.46 2.10 368,221 Trade
ATVI Activision Blizzard Inc 72.07 2.58 3.71 5,842,100 Trade
HD Home Depot Inc. (The) 188.35 2.88 1.55 4,315,388 Trade
XOM Exxon Mobil Corporation 77.53 1.67 2.20 13,378,795 Trade
GIS General Mills Inc. 52.98 -1.97 -3.59 11,895,823 Trade
PFE Pfizer Inc. 36.26 0.52 1.46 17,020,895 Trade
FSLR First Solar Inc. 61.79 -4.49 -6.77 6,223,991 Trade
HPQ HP Inc. 22.13 0.74 3.46 22,297,347 Trade
BA Boeing Company (The) 356.66 0.74 0.21 3,355,378 Trade
OGE OGE Energy Corporation 32.95 1.48 4.70 3,445,711 Trade
MRK Merck & Company Inc. (new) 54.87 0.30 0.55 9,064,097 Trade
PBY Pep Boys-Manny Moe & Jack n/a n/a n/a 0 Trade
CLF Cliffs Natural Resources Inc 7.49 -0.03 -0.40 8,289,247 Trade
FE FirstEnergy Corporation 33.80 0.88 2.67 5,105,674 Trade
SEAC SeaChange International Inc. 3.15 0.02 0.64 91,331 Trade
CALL magicJack VocalTec Ltd 8.40 0.05 0.60 23,684 Trade
MTRX Matrix Service Company 15.30 0.15 0.99 157,841 Trade
KO Coca-Cola Company (The) 44.04 0.52 1.19 8,277,178 Trade
HMY Harmony Gold Mining Company Limited 2.11 -0.01 -0.47 6,100,917 Trade
T AT&T Inc. 36.72 0.25 0.69 17,446,314 Trade
CAT Caterpillar Inc. 162.41 3.55 2.23 4,450,847 Trade
LAYN Layne Christensen Company 16.13 -0.03 -0.19 247,103 Trade
FCEL FuelCell Energy Inc. 1.73 0.02 1.17 920,091 Trade
MTG MGIC Investment Corporation 14.28 0.25 1.78 1,208,422 Trade
MSFT Microsoft Corporation 94.06 2.33 2.54 26,329,226 Trade
HOFT Hooker Furniture Corporation 39.25 1.35 3.56 38,963 Trade
MIND Mitcham Industries Inc. 3.56 0.16 4.71 1,906 Trade
IT Gartner Inc. 116.99 1.45 1.26 558,207 Trade
STI SunTrust Banks Inc. 71.29 0.95 1.35 2,011,415 Trade

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