Equities Sector Coverage: Dow Closes Above 13,000 As Investors Shrug Off More Cliff News

Sector Recap |

Wall Street Stock MarketInitial Jobless Claims came in at 393,000 in the latest week, well above the 350,000 recessionary threshold. The Dow Jones Industrial Average rebounded to 13,062.56 then dipped to 12,961.92 then moved back and forth around its 200-day simple moving average at 12,993.05. The Nasdaq rebounded to 3017.18 then dipped to 2996.30 staying above its 200-day SMA at to 2986.02.

Asian stocks were higher on Thursday. The Nikkei 225 closed at 9401 – up 0.99%. The Hang Seng closed at 21,923 – up 0.99%. European exchanges closed higher on Thursday. The FTSE 100 ended the day at 5,870 – up 1.14%. The DAX ended the day at 7,398 – up 0.75%. The CAC 40 ended the day at 3,569 – up 1.53%. The yield on the 10-Year US Treasury declined from 1.645% to 1.608% staying below the 50-day and 200-day simple moving averages at 1.685% and 1.763%. The Preliminary Real GDP for Q3 has been revised to +2.7%, below estimates.

Comex gold rebounded from $1717.7 the Troy ounce to $1729.0 below the 50-day simple moving average at $1739.8 with the 200-day SMA at $1665.6. Nymex crude oil rebounded from $86.55 per barrel to $88.69 still below its 50-day and 200-day simple moving averages at $88.68 and $93.88. The euro versus the dollar rebounded from 1.2942 to 1.3011 back above its 50-day simple moving average at 1.2903 and above the 200-day simple moving average at 1.2795.

Energy

Rio Tinto (RIO) intends to slash $7B of costs, including $5B of operating expense over the next two years and a further $2B in spending cuts mostly at its struggling aluminum and Australian coal operations. Frontline (FRO) missed estimates by 14 cents on revenue of $126.8M. Linn Energy (LINE) is a new Buy at Citigroup. Big Mover – Hercules Offshore (HERO) is up about 10%. Dow components – Chevron (CVX) is up about 0.3%. Exxon Mobil (XOM) is up about 0.2%. Energy Select Sector SPDR (XLE) was trading at $71.01 at 3:30 PM on Thursday, up 0.07% on the day – up 2.72% year-to-date.

Materials

South Africa's Gold Fields (GFI) plans to spin off two mines that were beset by violent strikes in recent months. The KDC and Beatrix mines will be placed under the control of a new company called Sibanye Gold, which will be listed in February. Dow Components – Alcoa (AA) is up about 0.25%. DuPont (DD) is up about 0.75%. The Materials Select Sector SPDR (XLB) was trading at $36.62 at 3:30 PM on Thursday, up 0.55% on the day – up 9.31% year-to-date.

Industrials

Activist fund Relational Investors and the Calpers pension fund yesterday disclosed a combined 6.4% stake in Timken (TKR) and called on the company to spin off its steel business. Lockheed Martin's (LMT) F-35 fighter program is years behind schedule, while expenses have run out of control. The price to build each plane is $137M vs $69M in 2001, and the program will cost $396B if the Pentagon keeps to a plan to build 2,443 jets by the late 2030s. Beacon Roofing (BECN) reported FQ4 EPS of $0.60 (in-line), while missing revenue by $1.5M. Pall (PLL) beat estimates by 11 cents, while missing revenue by $6M. Kansas City Southern (KSU) is a new Equal Weight at Barclays. Box Ships (TEU) and Diana Containerships (DCIX) are both begun with Equal Weights at Barclays. Taser International (TASR) is taken to Neutral from Overweight at JPMorgan. Dow components – Boeing Co (BA) is up slightly. Caterpillar (CAT) is up about 1.5%. General Electric (GE) is up about 0.2%. 3M Company (MMM) is down slightly. United Technologies (UTX) is up slightly. The Industrial Select Sector SPDR (XLI) was trading at $37.17 at 3:30 PM on Thursday, up 0.46% on the day – up 10.13% year-to-date.

Consumer Discretionary

One of GM's (GM) Chinese joint ventures, SAIC-GM-Wuling, intends to invest $1B to build a third commercial-vehicle plant in the southwest of the country. Meanwhile, GM is opening the second phase of a global R&D center in Shanghai as it looks to exploit the vast quantity of engineers in China. Cracker Barrel's (CBRL) Q3 saw comparable store restaurant sales gain 3.3% on a modest lift in store traffic and 2.5% jump in average check. For FY13, the restaurant operator sets lukewarm guidance for total revenue of $2.6B-$2.65B and EPS of $4.50-$4.70. Tiffany (TIF) missed estimates by 14 cents and revenue by $4M. The company sees FY12 EPS of $3.20-$3.40 (lower than prior guidance of $3.55-$3.70 and short of the consensus mark of analysts calling for $3.60). Pier 1 Imports (PIR) reported Q3 EPS of $0.25 (in-line), while beating revenue by $10.1M. Aeropostale (ARO) beat estimates by 2 cents and revenue by $4M. The company now sees Q4 earnings of $0.36 to $0.41 per share (compared with analysts’ expectations of $0.54). La-Z-Boy (LZB) missed estimates by 8 cents and revenue by $3M. Coldwater Creek (CWTR) beat estimates by 30 cents and revenue by $8M. New York & Co. (NWY) beat estimates by a penny and revenue by $4M. Guess (GES) missed estimates by a penny, while beating revenue by $4M. CarMax (KMX) gets increased to Buy from Neutral at Goldman Sachs. DR Horton (DHI) is now Neutral from Sell at Compass Point. Guess Inc. (GES) gets upgraded to Overweight from Neutral at Piper Jaffray. Nike (NKE) gets upgraded to Overweight from Neutral at HSBC Securities. British Sky Broadcasting (BSYBY) gets moved to Underperform from Perform at Jefferies. Big Movers – Coldwater Creek (CWTR) is up about 19.5%. Barnes & Noble (BKS) is down about 11%. La-Z-Boy (LZB) is down about 11%. Kohls (KSS) is down about 10.5%. Dow Components – Disney (DIS) is up about 1.2%. Home Depot (HD) is down about 0.7%. McDonalds (MCD) is down slightly. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.48 at 3:30 PM on Thursday, up 0.25% on the day – up 21.68% year-to-date.

Consumer Staples

Archer Daniels Midland (ADM) is an Equal Weight at Stephens. Dow components – Coca Cola (KO) is up about 0.9%. Procter & Gamble (PG) is up about 0.3%. Wal-Mart (WMT) is up about 0.6%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.845 at 3:30 PM on Thursday, up 0.35% on the day – up 10.33% year-to-date.

Health Care

Jazz Pharmaceuticals (JAZZ) is a new Buy at Citigroup. WuXi PharmaTech (WX) is a new Overweight at Barclays. Dow Components – Johnson & Johnson (JNJ) is up slightly. Merck (MRK) is up about 0.25%. Pfizer (PFE) is up about 0.9%. United Health Group (UNH) is up about 3.2%. The Health Care Select Sector SPDR (XLV) was trading at $40.17 at 3:30 PM on Thursday, up 0.65% on the day – up 15.80% year-to-date.

Financials

The SEC has dropped a long-running investigation into whether Wells Fargo (WFC) misled investors in the sale of mortgage bonds. Still, the SEC did recently win settlements totaling over $400M from JPMorgan (JPM) and Credit Suisse (CS). Ares Commercial Real Estate (ACRE) is begun with a Buy at MLV & Co. AvalonBay (AVB) is raised to Market Perform from Underperform by BMO Capital. Northstar Realty (NRF) is now Outperform from Market Perform at FBR Capital. Public Storage (PSA) is hoisted the company to Hold from Underweight. Dow Components – American Express (AXP) is up about 1.2%. Bank of America (BAC) is up about 1%. JP Morgan Chase (JPM) is up about 1.1%. The Travelers Companies (TRV) is up about 0.5%. The Financial Select Sector SPDR (XLF) was trading at $15.76 at 3:30 PM on Thursday, up 0.38% on the day – up 21.23% year-to-date.

Information Technology

Dell (DELL) is the latest American corporation to be linked with a possible investment in Sharp (SHCAF), adding to speculation of talks between the struggling Japanese firm and Intel (INTC) and Qualcomm (QCOM). Sycamore Networks (SCMR) missed estimates by 7 cents, while beating revenue by $1.5M. Infoblox (BLOX) issued FQ2 guidance for revenue of $50M-$51.5M and EPS of $0.03-$0.04 (above a consensus of $48.3M and $0.01). FY13 guidance is for revenue of $204M-$208M and EPS of $0.17-$0.21 (above a consensus of $199M and $0.06). Workday (WDAY) beat estimates by 20 cents and revenue by $8.6M. The company expects FQ4 revenue of $75M-$79M (above a $70.5M consensus). TiVo (TIVO) reported Q3 EPS of $0.44 (may not be comparable to consensus of by -$0.21), while beating revenue by $22M. EMC Corp. (EMC) is a new Buy at Buckingham. RDA Microelectronics (RDA) is resumed with a Neutral at HSBC Securities. SunTrust starts Maxim Integrated Products (MXIM) with a Buy, has new Neutrals on Altera (ALTR) and Xilinx (XLNX), and resumes Texas Instruments (TXN). Crédit Agricole covers NetApp (NTAP) at Underperform and begins VMware (VMW) with a Buy. Google (GOOG) gets a Buy-from-Hold upgrade at Oracle Research. IAC/InterActiveCorp. (IACI) is moved to Outperform from Market Perform at Wells Fargo. Infoblox (BLOX) is boosted to Outperform from Perform with Wedbush. Micros Systems (MCRS) is moved to Buy from Neutral at Compass Point. Research In Motion (RIMM) is boosted to Buy from Neutral at Goldman Sachs. Activision Blizzard (ATVI) is now Neutral from Buy at Sterne Agee. Cree Inc. (CREE) is cut to Hold from Buy at Deutsche Bank. EZchip (EZCH) is slashed to Sell from Hold at Chardan Capital. Big Movers – OCZ Technology Group (OCZ) is up about 26.5%. Semtech (SMTC) is up about 12%. Liquidity Services (LQDT) is down about 16.5%. Dow Components – Cisco Systems (CSCO) is up about 1.25%. Hewlett-Packard (HPQ) is up about 1.1%. IBM (IBM) is down about 0.3%. Intel Corp (INTC) is down about 2.5%. Microsoft (MSFT) is down about 1.6%. The Technology Select Sector SPDR (XLK) was trading at $29.15 at 3:30 PM on Thursday, up 0.45% the day – up 14.54% year-to-date.

Telecommunication Services

Dow Components – AT&T (T) is up about 1%. Verizon (VZ) is up about 0.9%. The NASDAQ Telecommunications Index (IXTC) was trading at $194.94 at 3:30 PM on Thursday, up 1.05% on the day – down 1.01% year-to-date.

Utilities

New Jersey Resources (NJR) missed estimates by a penny, while beating revenue by $13M. The Big Names – Dominion Resources (D) is up about 0.4%. Edison International (EIX) is up about 0.9%. First Energy (FE) is flat. PG&E Corp (PCG) is up about 0.5%. Southern Company (SO) is up about 1.1%. The Utilities Select Sector SPDR (XLU) was trading at $34.92 at 3:30 PM on Thursday, up 0.49% on the day – down 2.95% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KO, PG, WMT, JNJ, MRK, PFE, UNH, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, RIO, FRO, LINE, HERO, GFI, TKR, LMT, BECN, PLL, KSU, TEU, DCIX, TASR, DELL, SHCAF, INTC, QCOM, GM, CBRL, TIF, PIR, ARO, LZB, CWTR, NWY, GES, KMX, DHI, GES, NKE, BSYBY, BKS, KSS, ADM, JAZZ, WX, WFC, JPM, CS, ACRE, AVB, NRF, PSA, SCMR, BLOX, WDAY, TIVO, EMC, RDA, MXIM, ALTR, XLNX, TXN, NTAP, VMW, GOOG, IACI, MCRS, RIMM, ATVI, CREE, EZCH, OCZ, SMTC, LQDT, NJR

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. 9.68 -0.08 -0.82 10,111,624
ACRE Ares Commercial Real Estate Corporation 12.62 -0.12 -0.94 107,372
ADM Archer-Daniels-Midland Company 41.90 -0.57 -1.34 1,540,430
ALTR Altera Corp. n/a n/a n/a 0
ARO Aeropostale Inc. n/a n/a n/a n/a
ATVI Activision Blizzard Inc 43.98 -0.38 -0.86 4,426,552
AVB AvalonBay Communities Inc. 183.48 0.71 0.39 797,340
AXP American Express Company 63.42 -0.43 -0.67 6,946,585
BA Boeing Company (The) 130.57 -1.21 -0.92 2,219,885
BAC Bank of America Corporation 15.09 -0.43 -2.77 94,972,090
BECN Beacon Roofing Supply Inc. 42.18 -0.48 -1.13 613,278
BKS Barnes & Noble Inc. 10.96 -0.02 -0.18 674,046
BLOX Infoblox Inc. 26.36 0.01 0.04 1,553,950
CAT Caterpillar Inc. 82.37 -0.07 -0.08 3,340,788
CBRL Cracker Barrel Old Country Store Inc. 136.29 -1.85 -1.34 576,520
CREE Cree Inc. 24.89 -0.08 -0.32 416,622
CSCO Cisco Systems Inc. 31.07 -0.27 -0.86 20,361,549
CVX Chevron Corporation 98.78 -0.44 -0.44 5,781,775
D Dominion Resources Inc. 76.60 -0.41 -0.53 2,521,747
DCIX Diana Containerships Inc. 3.41 -0.11 -3.12 2,649
DD E.I. du Pont de Nemours and Co. 66.52 -0.25 -0.37 2,440,441
DHI D.R. Horton Inc. 29.92 -0.26 -0.86 6,189,393
DIS Walt Disney Company (The) 91.96 -1.31 -1.40 10,449,325
EIX Edison International 75.55 -0.07 -0.09 1,565,066
EMC EMC Corporation n/a n/a n/a 0
EZCH EZchip Semiconductor Ltd n/a n/a n/a 0
FE FirstEnergy Corporation 34.58 0.09 0.26 3,341,708
FRO Frontline Ltd 7.09 -0.02 -0.28 1,075,137
GE General Electric Co 29.54 -0.35 -1.17 25,905,794
GES Guess? Inc. 14.26 -0.67 -4.49 1,221,852
GFI Gold Fields Limited American Depositary Shares 4.93 -0.01 -0.20 3,799,082
GM General Motors Company 31.80 -0.32 -1.00 12,700,900
GOOG Alphabet Inc. 774.21 -12.69 -1.61 1,533,206
HD Home Depot Inc. (The) 125.45 -2.34 -1.83 5,338,465
HPQ HP Inc. 15.02 -0.07 -0.46 7,484,534
IACI IAC/InterActiveCorp n/a n/a n/a 0
IBM International Business Machines Corp 153.98 -1.00 -0.65 2,533,325
INTC Intel Corporation 36.65 -0.54 -1.45 25,518,796
JAZZ Jazz Pharmaceuticals plc 123.79 -3.40 -2.67 731,065
JNJ Johnson & Johnson 117.78 -1.03 -0.87 5,998,854
JPM JP Morgan Chase 65.78 -1.47 -2.19 16,408,130
KMX CarMax Inc 53.59 -0.15 -0.28 2,371,025
KO Coca-Cola Company (The) 42.05 -0.69 -1.61 15,036,043
KSS Kohl\'s Corporation 42.68 -0.68 -1.57 3,236,155
KSU Kansas City Southern 90.10 0.45 0.50 1,376,844
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a n/a
LMT Lockheed Martin Corporation 245.53 -0.31 -0.13 880,702
LQDT Liquidity Services Inc. 10.40 0.11 1.07 143,631
LZB La-Z-Boy Incorporated 25.66 -0.38 -1.46 500,905
MCD McDonald\'s Corporation 116.53 -0.64 -0.55 3,022,356
MMM 3M Company 175.95 -1.44 -0.81 1,820,997
MRK Merck & Company Inc. (new) 62.15 -0.81 -1.29 6,983,821
MSFT Microsoft Corporation 56.90 -0.53 -0.92 21,688,720
MXIM Maxim Integrated Products Inc. 38.65 -0.35 -0.90 2,170,935
NJR NewJersey Resources Corporation 34.45 -0.40 -1.15 454,573
NKE Nike Inc. 54.40 -0.75 -1.36 11,629,568
NRF NorthStar Realty Finance Corp. (New) 12.86 0.01 0.08 986,076
NTAP NetApp Inc. 35.18 -0.48 -1.35 3,486,666
NWY New York & Company Inc. 2.27 -0.10 -4.22 49,403
PCG Pacific Gas & Electric Co. 63.90 -0.30 -0.47 2,099,864
PFE Pfizer Inc. 33.64 -0.62 -1.81 29,525,632
PG Procter & Gamble Company (The) 87.85 0.09 0.10 60,276,563
PIR Pier 1 Imports Inc. 4.11 -0.25 -5.73 1,944,522
PSA Public Storage 223.95 1.83 0.82 600,089
QCOM QUALCOMM Incorporated 62.31 -0.44 -0.70 6,207,366
RIO Rio Tinto Plc 32.17 -0.24 -0.74 2,134,276
SMTC Semtech Corporation 27.26 -0.32 -1.16 230,049
SO Southern Company (The) 53.31 -0.22 -0.41 4,689,555
T AT&T Inc. 41.14 -0.14 -0.34 16,647,231
TASR TASER International Inc. 28.30 0.20 0.71 696,104
TEU null n/a n/a n/a 0
TIF Tiffany & Co. 71.35 -1.34 -1.84 984,736
TKR Timken Company (The) 33.62 0.36 1.08 666,194
TRV The Travelers Companies Inc. 113.94 -1.37 -1.19 1,617,972
TXN Texas Instruments Incorporated 68.42 -0.56 -0.81 3,475,623
UNH UnitedHealth Group Incorporated (DE) 139.72 -0.79 -0.56 2,636,458
UTX United Technologies Corporation 102.23 -0.33 -0.32 3,354,625
VMW Vmware Inc. Class A 73.44 0.06 0.08 1,259,531
VZ Verizon Communications Inc. 52.15 -0.41 -0.78 10,559,019
WDAY Workday Inc. 88.32 -1.19 -1.33 1,503,498
WFC Wells Fargo & Company 44.88 -0.86 -1.88 30,937,973
WMT Wal-Mart Stores Inc. 71.62 -0.73 -1.01 5,948,719
WX Wuxi Pharmatech Inc. ADS n/a n/a n/a 0
XLNX Xilinx Inc. 52.58 -0.54 -1.02 1,410,251
XOM Exxon Mobil Corporation 83.06 -0.39 -0.47 10,860,320

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