The University of Michigan Consumer Sentiment reading was slightly below expectations at 71.5. The national reading for manufacturing ISM came in better than expected at 55.3 in June. May’s reading for Construction Spending was weaker than expected at -0.6%. This is the 6th consecutive monthly decline for construction spending, and is at the lowest level in more than a decade. US stocks gained significant upward momentum after the ISM data. The Dow Jones Industrial Average traded up almost to 12,600 into the final hour of trading. The NASDAQ traded above 2815 into the final hour of trading.
U.S. stocks remained in rally mode on Thursday with the Dow Industrial Average up 153 points to 12,414, up 7.2% year to date and down 3.6% since its May 2nd high at 12,876.00. The NASDAQ gained 34 points on Thursday to 2774 up 4.6% year to date and down 3.9% since its May 2nd high at 2887.75.
Asian stocks rose on Friday with the Nikkei 225 up just 0.5% to 9,868. The Hang Seng was on holiday. European stocks were mixed on Friday around the flat line in early trading then rebounded on the positive ISM data in the US. The FTSE 100 gained another 0.7%. The DAX pricked up 0.5%. The CAC 40 rallied 0.6%. The yield on the 10-Year US Treasury note is above its 50-day and 200-day simple moving averages at 3.105 percent and 3.131 percent following the weak auctions this week and the end of QE2 on Thursday. This yield reached 3.223 on Friday. Comex gold tumbled below $1500 the Troy ounce on Friday to a low of $1478.3. Crude oil stayed above its 200-day simple moving average at $93.14 as oil declined from a day’s high at $95.14 to $93.45 then rebounded to $95.39. The euro versus the US dollar traded as high as 1.4549 Friday morning then drifted back and forth around 1.45.
Marathon Petroleum (MPC) is initiated with a Buy rating at Deutsche Bank and an Outperform with a $55 price target at Credit Suisse. Linn Energy (LINE) is initiated with a Buy rating at Wunderlich Securities and the stock was up 0.6% Friday morning. Murphy Oil (MUR) is upgraded to Neutral from Underperform at JP Morgan. Patriot Coal (PCX) gained 2.6% by mid-day. Chevron (CVX) was a 0.8% winner mid-day with Exxon Mobil (XOM) up 0.3%.
Energy Select Sector SPDR (XLE) was trading at $76.09 at 4:00 PM on Friday, up 0.98% on the day – up 11.49% year-to-date.
Southern Copper (SCCO) is initiated with a Neutral rating by Goldman Sachs and shares dipped 0.3% Friday morning. CGGVeritas (CGV) is reduced to Neutral from Buy at Goldman. With gold trading lower Barrick Gold (ABX) was down 1.9% mid-day. AngloGold Ashanti (AU) lost 2.1%. Eldorado Gold (EGO) fell 3.5%. Harmony Gold (HMY) lost 3.1%. Mercer International (MERC) gained 5.75%. Alcoa (AA) was a 2.0% winner mid-day, so the stock is building in a positive Q2 earnings report. DuPont (DD) was up 0.9% mid-day.
The Materials Select Sector SPDR (XLB) traded at $39.77 at 4:00 PM on Friday, up 1.02% on the day – up 3.54% year-to-date.
Activist investor Carl Icahn sent shares in Oshkosh (OSK) 8.1% higher after disclosing that he purchased a 9.5% stake in what he described as an undervalued specialty truck and vehicle manufacturer. Oshkosh added to gains and was up 11.5% mid-day. Briggs & Stratton Corp (BGG) rallied 3.8% on Friday mid-day. Caterpillar (CAT) was a 1.9% winner mid-day. General Electric (GE) was up 1.3% mid-day. United Technology (UTX) was up a 1.3% mid-day.
The Industrial Select Sector SPDR (XLI) traded at $37.97 at 4:00 PM on Friday, up 1.96% on the day – up 8.89% year-to-date.
Kodak (EK) plunged nearly 15% after the International Trade Commission ruled that Apple (AAPL) and Research In Motion (RIMM) did not violate its image-preview technology patents. A favorable ruling could have resulted in $1 billion in royalties for Kodak. Apollo Group (APOL) beat EPS estimates by 18 cents but revenue declined 7.3% year over year and shares popped 7.4% Friday morning. Darden Restaurants (DRI) reported in-line EPS and shares rallied 4.8% Friday morning. Foot Locker (FL) is initiated with an Outperform at BMO Capital with a price target of $25 and shares rallied 1.4% Friday morning. International Speedway (ISCA) is upgraded to Outperform from Underperform at Raymond James with a $35 price target. Central European Media (CETV) is downgraded to Sell from Neutral by Goldman. Brunswick Corp (BC) added another 3.6% mid-day on Friday.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $41.06 at 4:00 PM on Friday, up 2.11% on the day – up 9.76% year-to-date.
General Mills (GIS) has been downgraded to Hold from Buy at Argus following fiscal 2012 EPS guidance that is below estimates on weak volume and double-digit cost inflation. IAC/InterActiveCorp (IACI) Match.com is cut to Neutral from Buy at Bank of America on valuation with its shares already up 33% year-to-date. Kraft Foods (KFT) was up 0.4% mid-day. Coca Cola (KO) was up 0.6% mid-day. Proctor and Gamble (PG) was up 0.7% mid-day.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.51 at 4:00 PM on Friday, up 0.90% on the day – up 7.51% year-to-date.
Advisory Board (ABCO) has been downgraded to Hold from Buy at Deutsche Bank. Biomimetic Therapeutics (BMTI) is downgraded to Neutral from Buy at JP Morgan. Dendreon Corp (DNDN) gained 3.5% mid-day Friday. Elan Corp (ELN) rallied 3.9% mid-day Friday. Johnson & Johnson (JNJ) added 0.5% mid-day. Merck & Co (MRK) was also up 0.5% mid-day. Pfizer (PFE) was down fractionally.
The Health Care Select Sector SPDR (XLV) traded at $35.97 at 4:00 PM on Friday, up 1.24% on the day – up 14.19% year-to-date.
First Pactrust Bancorp (FPTB) and First California Financial Group (FCAL) are started with Buy ratings at Sterne Agee – FPTB has an $18 price target and FCAL has a $4.50 price target. Westpac Banking Corp (WBK) is upgraded to Buy from Hold at UBS. Barclay’s Bank (BCS) gained 4.0% mid-day Friday. Citigroup (C) was up 3.2% at mid-day. Visa (V) was up another 5.1% mid-day Friday. American Express (AXP) was up 1.2% mid-day. Bank of America (BAC) was up 1.1% mid-day. JP Morgan (JPM) rebounded by 1.0% mid-day.
The Financial Select Sector SPDR (XLF) traded at $15.64 at 4:00 PM on Friday, up 1.89% on the day – down 1.94% year-to-date.
Kodak (EK) plunged nearly 15% after the International Trade Commission ruled that Apple (AAPL) and Research In Motion (RIMM) did not violate its image-preview technology patents. A favorable ruling could have resulted in $1 billion in royalties for Kodak. TriQuint Semiconductor (TQNT) is initiated with a Neutral rating at UBS and shares fell 1.4% Friday morning. Calix Networks (CALX) is initiated by Morgan Keegan at Market Perform with a $22 target. The demand for higher capacity network connections should fuel long-term spending. Polypore International (PPO) is initiated with a Buy rating and $80 price target at Capstone. Sonus Networks (SONS) is initiated with a Hold rating at Capstone. NetApp (NTAP) is upgraded to Outperform from Market Perform at Atlantic Equities. Riverbed Technology (RVBD) is downgraded to Neutral from Buy at SunTrust Robinson Humphrey. Cisco Systems (CSCO) rebounded by 1.8% at mid-day. Hewlett-Packard (HPQ) gained 1.5% at mid-day. Intel (INTC) was up 1.4%. Microsoft (MSFT) was up 0.3% mid-day.
The Technology Select Sector SPDR (XLK) traded at $26.16 at 4:00 PM on Friday, up 1.79% on the day – up 3.85% year-to-date.
Crown Castle (CCI) gained 3.6% mid-day Friday. Leap Wireless (LEAP) was up 3.3%. Vodafone (VOD) slipped 0.7%. AT&T (T) was up about 0.5%. Verizon (VZ) was up about 1.4%. Cincinnati Bell (CBB) lost 0.3%. Clearwire Corp (CLWR) gained 0.5%. Sprint Nextel (S) declined by 1.2% mid-day on Friday.
The NASDAQ Telecommunications Index (IXTC) traded at $215.85 at 4:00 PM on Friday, up 1.69% on the day – down 4.22% year-to-date.
AES Corp (AES) was up about 1.1% mid-day Friday. Duke Energy (DUK) was up 0.8% mid-day. Exelon Corp (EXC) was up 1.0%. NRG Energy (NRG) was up 0.5%. PG & E Corp (PCG) was up 0.9% mid-day. Progress Energy (PGN) was up 0.8%. Southern Co (SO) was up 0.5% Sempra Energy (SRE) was up 0.7%.
The Utilities Select Sector SPDR (XLU) traded at $33.93 at 4:00 PM on Friday, up 1.34% on the day – up 8.26% year-to-date.
STOCKS: MPC, LINE, MUR, PCX, CSX, XOM, SCCO, CGV, ABX, AU, EGO, HMY, MERC, AA, DD, OSK, BGG, CAT, GE, UTX, EK, APOL, DRI, FL, ISCA, CETV, BC, GIS, IACI, KFT, KO, PG, ABCO, BMTI, DNDN, ELN, JNJ, MRK, PFE, FPTB, FCAL, WBK, BCS, C, V, AXP, BAC, JPM, TQNT, CALX, PPO, SONS, NTAP, RVBD, CSCO, HPQ, INTC, MSFT, CCI, LEAP, VOD, T, VZ, CBB, CLWR, S, AES, DUK, EXC, NRG, PCG, PGN, SO, SRE