New home sales rose 7.3% in April to a meager 323,000 annual pace with the inventory of new homes at a record low of 175,000 as community banks remain stingy on extending Construction & Development loans. New home sales are down 23.1% year over year. The FDIC released its Quarterly Banking Profile for the first quarter of 2011 headlined with their list of problem banks upped to 888 FDIC-insured financial institutions. The Dow Jones Industrial Average opened higher consolidating Monday’s loss with a Tuesday high at 12,422. The Dow traded back and forth around the flat line in afternoon trading with a low of 12,350 before closing down 25 points. The NASDAQ traded from a morning high of 2767 to an afternoon low of 2744 before closing down 13 points.
Asian stocks moved sideways to up on Tuesday with the Nikkei 225 up just 0.17% to 9,477. The Hang Seng Index was up a minute 0.09%. European stocks recovered some of Monday’s losses on Tuesday with the FTSE 100 up 0.4%, the DAX up 0.4% and the CAC 40 up 0.3%. The yield on the U.S. Treasury 10-Year note rose slightly to 3.162 then declined to 3.112 in afternoon trading. The catalyst was a successful 2-Year note auction. The US Treasury auctioned $35 billion in 2-Year notes at 0.56% with a strong 3.46 bid to cover ratio. Comex gold moved higher to $1529.0 the Troy ounce on Tuesday with Nymex crude oil back trading as high as $100.09 per barrel. The euro which traded below 1.40 on Monday moved back above 1.41 intraday on Tuesday. On Monday the Dow declined 131 points to 12,381 closing below its 50-day simple moving average at 12,390, which lowers its year to date gain to 6.9%. The NASDAQ lost 44 points to 2759 gapping below its 50-day simple moving average at 2780, which shaved its year to date gain to 4.0%.
Energy
Southern Union (SUG) is a new Buy with a $33.50 target price at Jefferies. CONSOL Energy (CNX) is a Buy at Davenport with a $59 target. Carrizo Oil & Gas (CRZO) gets upgraded to Outperform from Market Perform with Wells Fargo. Rosetta Resources (ROSE) is raised to Positive from Neutral at Susquehanna with a new target of $57. Lukoil (LUKOY) gets lowered to Neutral from Buy at Goldman. Diamond Offshore (DO) is removed from the Conviction Buy List at Goldman. OAO Gazprom (OGZPY) gets downgraded to Neutral from Buy at Goldman. In afternoon trading: Shares of General Maritime (GMR) are down about 7.9%. Shares of Overseas Shipholding Group (OSG) are down about 7.4%. Shares of Frontline (FRO) are down about 6.7%. Shares of Carrizo Oil are up about 7.5%. Shares of El Paso (EP) are up about 6.3%. Shares of Clean Energy Fuels (CLNE) are up about 5.2%.
The Energy Select Sector SPDR (XLE) was trading at $74.51 at 4:00 PM on Tuesday, up 1.42% on the day – up 9.17% year-to-date.
Materials
Mosaic (MOS) is picked up at Outperform by Credit Suisse. Ternium S.A. (TX) is taken to Hold from Buy at Deutsche Bank. BASF AG (BASFY) is slashed to Sell from Buy at brokers Collins Stewart. In afternoon trading: Shares of ADA-ES (ADES) are up about 10.7%. Shares of Endeavour Silver (EXK) are up about 7.25%. Shares of NovaGold (NG) are up about 6.5%. Shares of New Gold (NGD) are up about 5%. Shares of Molycorp (MCP) are up about 4.5%.
The Materials Select Sector SPDR (XLB) traded at $38.30 at 4:00 PM on Tuesday, up 0.50% on the day – down 0.29% year-to-date.
Industrials
The ash cloud from the eruption on Saturday of Iceland’s Grimsvotn volcano has hit air travel to and from Scotland and closed a part of Danish airspace. Around 250 flights have been cancelled so far, including those of British Airways (ICAGY.PK), KLM (KLMR.PK), easyJet (EJETF.PK) and Ryanair (RYAAY). Zipcar (ZIP) is a new Neutral at both JP Morgan and Goldman Sachs, while Cowen and Oppenheimer assign more bullish Outperforms. Box Ships (TEU) is begun with Buy at UBS. KBR Inc. (KBR) gets added to the Conviction Buy List at Goldman. Rolls Royce Group PLC (RYCEY) is cut to Neutral from Outperform at Credit Suisse. In afternoon trading: Shares of Box Ships are up about 5.8%.
The Industrial Select Sector SPDR (XLI) traded at $36.65 at 4:00 PM on Tuesday, down 0.52% on the day – up 5.10% year-to-date.
Consumer Discretionary
Toyota (TM) should include foreigners on its board and appoint a CEO for its North American operations to better prevent and respond to safety and quality problems, an independent panel has recommended. Office Depot (ODP) has appointed interim Chairman and CEO Neil Austrian to the positions on a permanent basis, seven months after the abrupt departure of predecessor Steve Odland. AutoZone (AZO) beat estimates by 31 cents and revenue by $70M. AutoNation (AN) is a new Neutral at Davenport. The broker is more bullish on Sonic Automotive (SAH), beginning with a Buy and $18 target. Arcos Dorados (ARCO) is a new Buy at Citigroup. Bon-Ton Stores (BONT) is upgraded to Buy at CRT Capital. ITT Educational (ESI), Education Management (EDMC) and DeVry (DV) are all raised to Outperform from Market Perform at William Blair. Deer Consumer Products (DEER) gets moved to Market Perform from Outperform at BMO Capital. In afternoon trading: Shares of DSW (DSW) are up about 18% after the shoe retailer posted EPS of $0.87 (beating estimates by 12 cents), on revenue of $503.6M (versus estimates of $486.5M). Shares of Krispy Kreme (KKD) are up about 7%. Shares of Cracker Barrel (CRBL) are down about 9.6%. Shares of Coldwater Creek (CWTR) are down about 8.2%. Shares of China MediaExpress (CCME) are down about 7%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $39.69 at 4:00 PM on Tuesday, down 0.50% on the day – up 6.09% year-to-date.
Consumer Staples
Boston Beer Co (SAM) is a fresh Hold at Capstone. Campbell Soup (CPB) is moved to Neutral from Underperform at Credit Suisse. Campbell Soup is downgraded to Neutral from Overweight at JPMorgan. In afternoon trading: Shares of China-Biotics (CHBT) are down about 12.3%. Shares of Susser Holdings (SUSS) are up about 6.5%> Shares of Dole Food Company (DOLE) are up about 5.2%.
The Consumer Staples Select Sector SPDR (XLP) traded at $32.07 at 4:00 PM on Tuesday, down slightly on the day – up 9.42% year-to-date.
Healthcare
Antares Pharma (AIS) is initiated with an Outperform at Oppenheimer. NABI Biopharma (NABI) is a new Outperform at Leerink Swann. Gentiva Health Services (GTIV) is upgraded to Market Perform from Underperform at FBR Capital. Mylan Labs (MYL) is lifted to Buy from Hold at Argus. In afternoon trading: Shares of Pacira Pharmaceuticals (PCRX) are up about 13.4%. Shares of Questcor Pharmaceuticals (QCOR) are up about 8%. Shares of Biosante Pharmaceuticals (BPAX) are up about 5.7%. Shares of GTx Inc (GTXI) are up about 5.25%. Shares of ARIAD Pharmaceuticals (ARIA) are DOWN about 5.25%.
The Health Care Select Sector SPDR (XLV) traded at $35.57 at 4:00 PM on Tuesday, down 0.28% on the day – up 12.92% year-to-date.
Financials
The Treasury is set to make a small profit on some of its 92% stake in AIG (AIG) today with the offering of $8.7B worth of shares. The government and AIG intend to sell a combined 300M shares at $29-$29.30 each, above the Treasury’s breakeven price of $28.73 but below yesterday’s close of $29.98. Moody’s is placing 14 U.K. banks on review for downgrades, including Lloyds (LYG) and Royal Bank of Scotland (RBS), due to the authorities indicating that they will be less likely to bail out the banks in the future. The SEC is examining whether Bank of New York Mellon (BK) and State Street (STT) fairly charged pension-fund clients for currency trading. Meanwhile, New York AG Eric Schneiderman has extended his probe into mortgage practices at leading banks to include Royal Bank of Scotland (RBS), UBS (UBS), JPMorgan Chase (JPM) and Deutsche Bank (DB), bringing to seven the number of firms under scrutiny. Bank of America (BAC) has won tentative court approval for a $410M settlement with 1M customers over claims they were overcharged for overdrafts. Other banks involved in related lawsuits include Citigroup (C), JPMorgan (JPM) and Wells Fargo (WFC). Cincinnati Fincancial (CINF) is covered at Market Perform by Keefe Bruyette. Longtop Financial (LFT) is lowered to Market Perform from Outperform at BMO Capital Markets. East West Banc (EWBC) is now Neutral from Outperform at Credit Suisse. In afternoon trading: Shares of FPIC Insurance Group (FPIC) are up about 29% after announcing that they have entered into an agreement to be acquired by The Doctors Co. for about $362 million, or about $42 a share in cash (about a 31% premium).
The Financial Select Sector SPDR (XLF) traded at $15.48 at 4:00 PM on Tuesday, down slightly on the day – down 2.95% year-to-date.
Information Technology
Russian search engine Yandex (YNDX) is set to debut on Nasdaq today after it raised $1.3B in its IPO by selling 52.2M shares at $25 each. GT Solar International (SOLR) beat estimates by 7 cents and revenue by $47M. Motorola Solutions (MSI) gets picked up with a Buy rating and $57 objective at Goldman. LogMeIn (LOGM) is an Outperform at Morgan Keegan. KVH Industries (KVHI) is boosted to Buy from Neutral at Merriman. Salesforce.com (CRM) is moved to Overweight from Equal Weight at Morgan Stanley. TiVo Inc (TIVO) is upgraded to Buy from Neutral at Lazard. Research In Motion (RIMM) is reduced to Hold from Buy with Wunderlich. Ingram Micro (IM) is moved to Neutral from Buy at Goldman. Hewlett-Packard (HPQ) is cut to Equal Weight from Overweight at Morgan Stanley. In afternoon trading: Shares of Perfect World (PWRD) are up about 8.8%. Shares of Vanceinfo Technology (VIT) are down about 6.5%. Shares of QLogic (QLGC) are down about 5.5%.
The Technology Select Sector SPDR (XLK) traded at $25.72 at 4:00 PM on Tuesday, down 0.31% on the day – up 2.10% year-to-date.
Telecommunications Services
In afternoon trading: Shares of Abovenet (ABVT) are up about 10.3%. Shares of Global Crossing (GLBC) are up about 6.7%. Shares of SureWest Communications (SURW) are up about 6%. Shares of Level 3 Communications (LVLT) are up about 6%. Shares of Sprint Nextel (S) are up about 4.5%. Shares of Cogent Communications (CCOI) are up about 4%.
The NASDAQ Telecommunications Index (IXTC) traded at $218.24 at 4:00 PM on Tuesday, down 0.48% on the day – down 3.16% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Genon Energy (GEN) are up about 2.6%. Shares of AES (AES) are down about 0.3%. Shares of Duke Energy (DUK) are down about a quarter of a percent. Shares of American Electric Power (AEP) are up about 1%. Shares of PPL (PPL) are down about 0.7%. Shares of Exelon (EXC) are up about a half of a percent.
The Utilities Select Sector SPDR (XLU) traded at $33.70 at 4:00 PM on Tuesday, down slightly on the day – up 7.53% year-to-date.
STOCKS: SUG, CNX, CRZO, ROSE, LUKOY, DO, OGZPY, GMR, OSG, FRO, EP, CLNE, MOS, TX, BASFY, ADES, EXK, NG, NGD, MCP, ICAGY, KLMR, EJETF, RYAAY, ZIP, TEU, KBR, RYCEY, TM, ODP, AZO, AN, SAH, ARCO, BONT, EDMC, DV, DEER, DSW, KKD, CRBL, CWTR, CCME, SAM, CPB, CHBT, SUSS, DOLE, AIS, NABI, GTIV, MYL, PCRX, QCOR, BPAX, GTXI, ARIA, AIG, LYG, RBS, BK, STT, RBS, UBS, JPM, DB, BAC, C, JPM, WFC, CINF, LFT, EWBC, FPIC, YNDX, SOLR, MSI, LOGM, KVHI, CRM, TIVO, RIMM, IM, HPQ, PWRD, VIT, QLGC, ABVT, GLBC, SURW, LVLT, S, CCOI, GEN, AES, DUK, AEP, PPL, EXC
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