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
MMM 3M Company 183.37 0.42 0.23 1,736,243
UNH UnitedHealth Group Incorporated (DE) 160.57 2.95 1.87 5,415,337
LMT Lockheed Martin Corporation 265.66 0.31 0.12 957,087
ARO Aeropostale Inc. n/a n/a n/a n/a
PG Procter & Gamble Company (The) 91.67 0.58 0.64 9,017,430
GE General Electric Co 30.52 0.15 0.49 30,220,768
RIO Rio Tinto Plc 46.15 0.65 1.43 3,231,882
CVX Chevron Corporation 111.72 1.39 1.26 6,614,503
SO Southern Company (The) 48.28 0.48 1.00 8,672,812
PCG Pacific Gas & Electric Co. 64.64 0.72 1.13 1,829,562
TKR Timken Company (The) 44.75 0.25 0.56 671,306
JNJ Johnson & Johnson 119.66 0.80 0.67 8,594,888
WMT Wal-Mart Stores Inc. 71.45 2.08 3.00 22,409,776
AA Alcoa Inc. 36.71 0.50 1.38 3,392,155
INTC Intel Corporation 36.52 0.04 0.11 20,550,743
IBM International Business Machines Corp 180.26 -0.41 -0.23 4,479,328
D Dominion Resources Inc. 74.76 0.99 1.34 3,541,201
TRV The Travelers Companies Inc. 121.55 -0.40 -0.33 1,245,572
TASR TASER International Inc. 26.57 0.07 0.26 431,208
TIF Tiffany & Co. 88.41 2.23 2.59 2,776,277
XLNX Xilinx Inc. 60.27 0.21 0.35 2,233,278
BLOX Infoblox Inc. n/a n/a n/a 0
EIX Edison International 77.22 0.88 1.15 1,852,901
JAZZ Jazz Pharmaceuticals plc 135.93 -1.26 -0.92 684,631
RY.PR.A:CA Royal Bank of Canada Non-Cumulative First Preferre 25.16 -0.04 -0.16 7,026
GES Guess? Inc. 13.03 0.01 0.08 1,245,480
GFI Gold Fields Limited American Depositary Shares 3.25 -0.02 -0.61 8,596,618
JPM JP Morgan Chase 91.01 0.78 0.86 14,064,223
AXP American Express Company 79.97 0.26 0.33 3,504,962
BECN Beacon Roofing Supply Inc. 45.74 0.23 0.51 433,199
UTX United Technologies Corporation 112.50 0.35 0.31 2,136,895
TXN Texas Instruments Incorporated 77.08 0.64 0.84 5,104,743
BKS Barnes & Noble Inc. 10.60 0.10 0.95 750,804
VMW Vmware Inc. Class A 92.35 1.13 1.24 1,333,830
SMTC Semtech Corporation 35.40 0.50 1.43 300,025
CSCO Cisco Systems Inc. 34.13 0.39 1.16 26,989,205
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
DIS Walt Disney Company (The) 110.01 -0.05 -0.05 5,430,111
VZ Verizon Communications Inc. 49.43 0.24 0.49 19,200,534
WDAY Workday Inc. 88.64 0.21 0.24 1,082,852
NKE Nike Inc. 57.36 0.61 1.07 10,954,850
GM General Motors Company 37.81 0.59 1.59 14,509,663
BAC Bank of America Corporation 24.78 0.26 1.06 78,484,678
WX Wuxi Pharmatech Inc. ADS n/a n/a n/a 0
PSA Public Storage 227.73 1.97 0.87 832,781
GOOG Alphabet Inc. 831.66 3.59 0.43 1,259,162
MCD McDonald\'s Corporation 128.04 0.24 0.19 4,493,759
DHI D.R. Horton Inc. 30.90 0.41 1.34 3,336,192
ADM Archer-Daniels-Midland Company 44.81 0.12 0.27 4,991,770
DD E.I. du Pont de Nemours and Co. 77.18 -0.31 -0.40 2,054,080
ACRE Ares Commercial Real Estate Corporation 13.59 0.08 0.59 106,025
KSS Kohl\'s Corporation 41.78 -0.19 -0.45 4,799,832
ATVI Activision Blizzard Inc 45.34 0.01 0.02 6,672,518
MXIM Maxim Integrated Products Inc. 45.37 0.26 0.58 1,317,455
FRO Frontline Ltd 6.96 -0.03 -0.43 755,931
AVB AvalonBay Communities Inc. 181.10 2.56 1.43 609,889
TEU null n/a n/a n/a 0
HD Home Depot Inc. (The) 145.02 2.02 1.41 9,256,540
XOM Exxon Mobil Corporation 81.89 0.13 0.16 16,412,638
PFE Pfizer Inc. 33.62 0.00 0.00 24,089,012
ALTR Altera Corp. n/a n/a n/a 0
KSU Kansas City Southern 87.66 0.77 0.89 1,388,297
WFC Wells Fargo & Company 58.25 0.16 0.28 16,902,689
HPQ HP Inc. 16.13 0.18 1.13 17,315,851
BA Boeing Company (The) 175.56 2.85 1.65 4,230,503
MRK Merck & Company Inc. (new) 65.48 0.09 0.14 7,384,744
PIR Pier 1 Imports Inc. 7.07 0.16 2.32 2,024,690
LQDT Liquidity Services Inc. 8.35 -0.15 -1.76 191,732
NJR NewJersey Resources Corporation 38.45 0.60 1.59 292,695
EZCH EZchip Semiconductor Ltd n/a n/a n/a 0
FE FirstEnergy Corporation 31.33 0.32 1.03 5,190,475
NWY New York & Company Inc. 2.27 -0.08 -3.40 31,806
IACI IAC/InterActiveCorp n/a n/a n/a 0
CBRL Cracker Barrel Old Country Store Inc. 160.38 -8.31 -4.93 922,961
KO Coca-Cola Company (The) 41.46 0.23 0.56 17,068,719
KMX CarMax Inc 68.25 1.23 1.84 1,658,161
T AT&T Inc. 41.73 0.25 0.60 17,501,814
CAT Caterpillar Inc. 98.10 -0.75 -0.76 3,915,566
CREE Cree Inc. 27.14 0.65 2.45 1,384,631
DCIX Diana Containerships Inc. 2.67 -0.13 -4.64 343,823
NTAP NetApp Inc. 40.52 0.35 0.87 2,997,759
QCOM QUALCOMM Incorporated 56.75 0.29 0.51 9,865,788
EMC EMC Corporation n/a n/a n/a 0
MSFT Microsoft Corporation 64.49 -0.13 -0.20 20,643,084
LZB La-Z-Boy Incorporated 29.45 0.35 1.20 497,936
NRF NorthStar Realty Finance Corp. (New) n/a n/a n/a 0

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