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

Sector Recap  |

Initial 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
MMM 3M Company 197.46 -0.86 -0.43 1,752,952 Trade
UNH UnitedHealth Group Incorporated (DE) 267.22 0.69 0.26 3,093,105 Trade
LMT Lockheed Martin Corporation 292.15 -6.25 -2.09 1,764,498 Trade
ARO Manulife Financial Corporation n/a n/a n/a n/a
PG Procter & Gamble Company (The) 93.91 0.88 0.95 8,739,134 Trade
GE General Electric Company 6.76 -0.17 -2.45 124,459,601 Trade
RIO Rio Tinto Plc 46.29 0.98 2.16 2,923,646 Trade
CVX Chevron Corporation 115.47 0.53 0.46 5,760,974 Trade
SO Southern Company (The) 47.56 0.34 0.72 5,526,434 Trade
PCG Pacific Gas & Electric Co. 26.06 0.17 0.66 4,839,622 Trade
TKR Timken Company (The) 37.64 0.34 0.91 1,279,307 Trade
JNJ Johnson & Johnson 146.50 1.24 0.85 8,272,025 Trade
WMT Walmart Inc. 93.85 -0.09 -0.10 6,438,814 Trade
AA Alcoa Corporation 28.43 0.11 0.39 2,490,507 Trade
INTC Intel Corporation 47.38 0.17 0.36 20,956,599 Trade
IBM International Business Machines Corporation 120.89 -0.24 -0.20 4,806,171 Trade
D Dominion Energy Inc. 76.25 -0.02 -0.03 3,990,716 Trade
TRV The Travelers Companies Inc. 120.97 -2.03 -1.65 1,877,235 Trade
TASR TASER International Inc. n/a n/a n/a n/a
TIF Tiffany & Co. 84.18 -0.93 -1.09 1,801,110 Trade
XLNX Xilinx Inc. 88.13 0.50 0.57 2,735,819 Trade
BLOX Infoblox Inc. n/a n/a n/a 0 Trade
EIX Edison International 58.89 0.05 0.08 1,292,648 Trade
JAZZ Jazz Pharmaceuticals plc 140.38 0.73 0.52 824,691 Trade
RY.PR.A:CA Royal Bank of Canada Non-Cumulative First Preferred Shares Series AA 24.98 0.16 0.64 1,442
GES Guess? Inc. 21.64 -0.21 -0.94 628,030 Trade
GFI Gold Fields Limited American Depositary Shares 3.11 0.02 0.65 4,467,853 Trade
JPM JP Morgan Chase & Co. 100.37 -0.99 -0.98 16,837,197 Trade
AXP American Express Company 105.40 -0.39 -0.37 3,132,235 Trade
BECN Beacon Roofing Supply Inc. 32.25 -0.45 -1.38 1,351,243 Trade
UTX United Technologies Corporation 118.93 -0.48 -0.40 4,261,983 Trade
TXN Texas Instruments Incorporated 94.54 0.74 0.79 7,721,470 Trade
BKS Barnes & Noble Inc. 7.13 0.11 1.57 626,547 Trade
VMW Vmware Inc. Class A 164.50 1.14 0.70 1,939,030 Trade
SMTC Semtech Corporation 47.60 0.79 1.69 460,495 Trade
CSCO Cisco Systems Inc. 47.09 0.23 0.49 25,063,425 Trade
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
DIS The Walt Disney Company 111.97 0.11 0.10 6,861,110 Trade
VZ Verizon Communications Inc. 58.85 0.58 1.00 14,903,207 Trade
NKE Nike Inc. 73.57 1.06 1.46 6,949,676 Trade
GM General Motors Company 34.69 0.27 0.78 12,223,028 Trade
BAC Bank of America Corporation 24.58 -0.18 -0.73 78,446,821 Trade
WX WuXi PharmaTech (Cayman) Inc ADR (Sponsored) Repstg Ord Shs n/a n/a n/a 0 Trade
PSA Public Storage 210.74 -1.20 -0.57 1,622,982 Trade
GOOG Alphabet Inc. 1,051.75 12.20 1.17 1,354,751 Trade
MCD McDonald's Corporation 183.59 -1.06 -0.57 2,669,676 Trade
DHI D.R. Horton Inc. 35.74 -0.18 -0.50 2,961,478 Trade
ADM Archer-Daniels-Midland Company 44.55 -0.04 -0.09 4,443,144 Trade
ACRE Ares Commercial Real Estate Corporation 14.19 0.19 1.36 216,219 Trade
KSS Kohl's Corporation 62.95 -0.27 -0.43 2,183,382 Trade
ATVI Activision Blizzard Inc 48.20 0.32 0.67 10,663,997 Trade
MXIM Maxim Integrated Products Inc. 53.09 -0.24 -0.45 4,731,318 Trade
FRO Frontline Ltd. 6.40 -0.24 -3.61 620,500 Trade
AVB AvalonBay Communities Inc. 187.92 0.47 0.25 478,913 Trade
TEU Box Ships n/a n/a n/a 0
HD Home Depot Inc. (The) 172.21 0.52 0.30 4,747,621 Trade
XOM Exxon Mobil Corporation 76.68 0.14 0.18 12,954,746 Trade
PFE Pfizer Inc. 44.01 -0.39 -0.88 22,656,508 Trade
ALTR Altair Engineering Inc. 28.84 -0.76 -2.57 184,381 Trade
KSU Kansas City Southern 98.04 0.24 0.25 867,065 Trade
WFC Wells Fargo & Company 47.76 -1.04 -2.13 32,330,502 Trade
HPQ HP Inc. 22.55 -0.38 -1.66 13,026,956 Trade
BA The Boeing Company 322.03 -4.32 -1.32 3,563,021 Trade
MRK Merck & Company Inc. (new) 77.11 -0.31 -0.40 13,183,916 Trade
PIR Pier 1 Imports Inc. 1.23 -0.02 -1.60 548,988 Trade
LQDT Liquidity Services Inc. 6.14 -0.42 -6.40 1,002,565 Trade
NJR NewJersey Resources Corporation 50.67 0.51 1.02 514,417 Trade
EZCH EZchip Semiconductor Ltd n/a n/a n/a 0 Trade
FE FirstEnergy Corp. 39.61 0.07 0.18 3,071,131 Trade
NWY RTW New York & Company Inc. n/a n/a n/a n/a
IACI IAC/InterActiveCorp n/a n/a n/a 0 Trade
CBRL Cracker Barrel Old Country Store Inc. 172.50 -1.87 -1.07 469,398 Trade
KO Coca-Cola Company (The) 49.54 0.30 0.61 16,543,316 Trade
KMX CarMax Inc 63.19 0.85 1.36 1,824,734 Trade
T AT&T Inc. 29.70 -0.21 -0.70 44,363,059 Trade
CAT Caterpillar Inc. 123.24 -0.15 -0.12 4,447,113 Trade
CREE Cree Inc. 44.92 0.79 1.79 1,021,795 Trade
DCIX Diana Containerships Inc. 0.77 0.02 2.94 544,458 Trade
NTAP NetApp Inc. 64.20 -1.43 -2.18 4,351,451 Trade
QCOM QUALCOMM Incorporated 57.35 0.11 0.19 13,057,400 Trade
EMC EMC Corporation n/a n/a n/a 0 Trade
MSFT Microsoft Corporation 108.59 1.00 0.93 42,346,937 Trade
LZB La-Z-Boy Incorporated 26.32 -0.40 -1.50 497,663 Trade
NRF NorthStar Realty Finance Corp. (New) n/a n/a n/a 0 Trade

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