Equities Sector Coverage: Europe's Pervasive Cloud of Uncertainty Looms on Wall Street

Sector Recap |

Fitch-RatingsThe Labor Department reported that the Unemployment Rate remained at 9.1% in September. Meanwhile the economy added 103,000 jobs, which was better than expected, but below levels of enough job creation to avoid a double-dip recession. The Dow Jones Industrial Average traded up from 11,123.33 to 11,232.05 versus its five-week modified moving average at 11,249. After Fitch downgraded Italy and Spain the Dow swooned to 11,051.13. The Dow rebounded back above 11,200 in the final half hour of trading. The NASDAQ traded down from 2509.61 to 2492.26 then up to 2512.14 versus its five-week modified moving average at 2520. The low after the Fitch downgrade was 2468.60, but the NASDAQ rebounded back above 2500 in the final half hour of trading.

Asian stocks moved higher on Friday with the Nikkei 225 up 0.98% to 8,606 and the Hang Seng higher by 3.11% to 17,707. European stocks drifted higher on Friday. The FTSE 100 gained 0.23% to 5,303 with the DAX up 0.54% to 5,677 and the CAC 40 higher by 0.66% to 3,096. The yield on the 10-Year US Treasury rose from 1.971 percent to 2.118 moving further away from its September 23rd all time low at 1.671 percent. Gold declined from $1668.0 the Troy ounce to $1627.6 on Friday. Crude oil traded back and forth between $81.36 and $84.00 on Friday with a weekly close below its 200-week simple moving average at $83.58. The euro versus the dollar declined to 1.3406 then rallied to 1.3523 before declining to 1.3364 on a Fitch downgrade of Italy and Spain.

Energy

Bank of America-Merrill Lynch launches Yingli Green Energy (YGE) with a Buy and assigning Underperforms on LDK Solar (LDK), JA Solar (JASO), and SunPower (SPWRA). Chesapeake Energy (CHK) is moved to Outperform from Market Perform at Wells Fargo. In afternoon trading: Shares of Trina Solar (TSL) are down about 13.25%. Shares of Canadian Solar (CSIQ) are down about 9.5%. Shares of Yingli Green Energy are down about 8.75%. Shares of Patriot Coal (PCX) are down about 8.25%. Shares of Suntech Power (STP) are down about 7.75%. Shares of First Solar (FSLR) are down about 7%.

Energy Select Sector SPDR (XLE) was trading at $60.90 at 4:00 PM on Friday, down 1.23% on the day – down 10.77% year-to-date.

Materials

In afternoon trading: Shares of Tronox (TROX) are up about 15.25%. Shares of Georgia Gulf (GGC) are down about 6.75%. Shares of Noranda Aluminum (NOR) are down about 6.5%. Shares of Jaguar Mining (JAG) are down about 6.25%. Actives: Shares of Alcoa (AA) are down about 2%. Shares of Freeport McMoran (FCX) are down about 2.9%. Shares of Vale (VALE) are down about 2.5%. Shares of Dow Chemical (DOW) are down about 2.9%. Shares of Cemex (CX) are down about 3.8%. Shares of Yamana Gold (AUY) are down about 1.8%.

The Materials Select Sector SPDR (XLB) was trading at $31.12 at 4:00 PM on Friday, down 1.52% on the day – down 18.98% year-to-date.

Industrials

Southwest Airlines (LUV) is a new Neutral and $16 price objective at Sterne Agee. US Airways Group (LCC) is also a Neutral with a $12 target. Its Buys are JetBlue Airways (JBLU) - $10 target, AMR Corp (AMR) - $6 target, Delta Air Lines (DAL) - $18 target, and newly merged United Continental Holdings (UAL) - $38 target. Nielsen (NLSN) is initiated with an Outperform at Raymond James. In afternoon trading: Shares of Broadwind Energy (BWEN) are down about 11%. Shares of SatCon Tech (SATC) are down about 7.8%. Shares of Republic Airways (RJET) are down about 6.75%. Shares of DryShips (DRYS) are down about 6.75%. Shares of Box Ships (TEU) are up about 9%. Shares of A-Power Energy (APWR) are up about 7%.

The Industrial Select Sector SPDR (XLI) was trading at $30.34 at 4:00 PM on Friday, down 0.23% on the day – down 12.99% year-to-date.

Consumer Discretionary

Gannett (GCI) Chairman and CEO Craig Dubow has resigned due to health issues, with company President and COO Gracia Martore becoming CEO. JP Morgan rolls out Overweight coverage on Walt Disney (DIS), Time Warner (TWX), and Viacom (VIA.B). It has a new Neutral on Discovery Communications (DISCA). Wynn Resorts (WYNN) is upgraded to Outperform from Neutral at Credit Suisse. Zumiez (ZUMZ) is upgraded to Equal Weight at Barclays. Collective Brands (PSS) is upgraded to Positive from Neutral at Susquehanna. Scripps Networks Interactive (SNI) is now Neutral from Overweight at JP Morgan. In afternoon trading: Shares of OfficeMax (OMX) are down about 7.75%. Shares of Smith & Wesson (SWHC) are up about 7.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $36.35 at 4:00 PM on Friday, down slightly on the day – down 2.83% year-to-date.

Consumer Staples

Dean Foods (DF) is upgraded to Outperform from Market Perform at Bernstein. In afternoon trading: Shares of AgFeed (FEED) are up about 18.5%. Shares of Coffee Holding (JVA) are up about 8.25%. Shares of PriceSmart (PSMT) are up about 6.75%. Shares of Imperial Sugar (IPSU) are down about 8.25%. Shares of Rite Aid (RAD) are down about 7.75%. Shares of Central European Distribution (CEDC) are down about 6.75%. Shares of The Pantry (PTRY) are down about 6.5%. Shares of Pilgrim’s Pride (PPC) are down about 6%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.07 at 4:00 PM on Friday, up 0.57% on the day – up 2.59% year-to-date.

Healthcare

Cardinal Health (CAH) is upgraded to Positive from Neutral at Susquehanna. Illumina (ILMN) is downgraded to Neutral from Outperform at Macquarie. In afternoon trading: Shares of Illumina are down about 31.75%. Shares of Pacific Biosciences (PACB) are down about 13.25%. Shares of Complete Genetics (GNOM) are down about 9.5%. Shares of PerkinElmer (PKI) are down about 7.5%. Shares of Mettler Toledo (MTD) are down about 7.5%. Shares of Amedisys (AMED) are down about 7%.

The Health Care Select Sector SPDR (XLV) was trading at $31.90 at 4:00 PM on Friday, down slightly on the day – up 1.27% year-to-date.

Financials

Moody's has downgraded 12 U.K. financial institutions, citing the lowering or removal of government support. The agency cut Lloyds TSB (LYG) and Santander U.K. (STD) by a notch, and RBS (RBS) by two notches. S&P has downgraded the core components of Dexia (DXBGF) by a notch to A-/A-2, citing the company's problems in obtaining financing and its need for more collateral. Shares in Bank of America (BAC), Morgan Stanley (MS) and other major banks rose yesterday after Timothy Geithner told the Senate Banking Committee that there is "absolutely" no chance that another U.S. financial institution would fail. New Holds at Deutsche Bank include Automatic Data Processing (ADP), Fiserv (FISV), Fidelity National Information Services (FIS), Paychex (PAYX), VeriFone Systems (PAY), and Western Union (WU). It begins Buys on Accenture (ACN), Global Payments (GPN), and Green Dot (GDOT). Visa (V) and MasterCard (MA) are both begun with a Buy at Deutsche Bank. Invesco (IVZ) is boosted to Buy from Neutral at Bank of America-Merrill Lynch. AvalonBay (AVB) and BRE Properties (BRE) both get Buy-from-Hold boosts at Deutsche Bank. Legg Mason (LM) is lowered to Underperform from Neutral at Bank of America-Merrill Lynch. IntercontinentalExchange (ICE) is moved to Market Perform from Outperform at Keefe Bruyette.

The Financial Select Sector SPDR (XLF) was trading at $11.83 at 4:00 PM on Friday, down 3.59% on the day – down 25.83% year-to-date.

Information Technology

Oracle (ORCL) has agreed to pay $199.5M to settle a lawsuit accusing it of overcharging the U.S. government for nine years. Samsung Electronics (SSNLF), the world's second-largest maker of mobile phones, has estimated that its Q3 2011 operating profit fell to 4.2T won ($3.6B) from 4.86T won a year earlier but beat forecasts of over 3.7T won. An outpouring of emotion following the death of Steve Jobs on Wednesday could shape demand for Apple's (AAPL) iPhone 4S, which today became available for preorders in the U.S., U.K. and several other major countries. Activision Blizzard (ATVI) is initiated with a Outperform and $15 target at brokers Robert W. Baird. Gamestop (GME) is an Outperform, and Neutrals are assigned on Electronic Arts (ERTS) and Take-Two Interactive (TTWO). New Holds at Deutsche Bank include Automatic Data Processing (ADP), Fiserv (FISV), Fidelity National Information Services (FIS), Paychex (PAYX), VeriFone Systems (PAY), and Western Union (WU). It begins Buys on Accenture (ACN), Global Payments (GPN), and Green Dot (GDOT). Visa (V) and MasterCard (MA) are both begun with a Buy at Deutsche Bank. Bank of America-Merrill Lynch launches Yingli Green Energy (YGE) with a Buy and assigning Underperforms on LDK Solar (LDK), JA Solar (JASO), and SunPower (SPWRA). Finisar (FNSR) is a new Outperform at Morgan Keegan. Wipro (WIT) is a new Underweight at Barclays. Advanced Micro Devices (AMD) is upgraded to Perform from Underperform at Oppenheimer. Harris (HRS) is now Hold from Buy at The Benchmark Company with a target of $38. In afternoon trading: Shares of JA Solar are down about 10.25%.

The Technology Select Sector SPDR (XLK) was trading at $24.30 at 4:00 PM on Friday, down 0.37% on the day – down 3.53% year-to-date.

Telecommunications Services

In afternoon trading: Shares of Clearwire (CLWR) are down about 31.75% after partner Sprint Nextel (S) said it planned to shift its customers away from Clearwire’s current technology. Shares of Sprint Nextel are down about 12.5%. Shares of Leap Wireless (LEAP) are down about 7.75%. Shares of MetroPCS (PCS) are down about 7%. Shares of China Mobile (CHL) are down about 5.25%. Actives: Shares of Level 3 Communications (LVLT) are up about 3.1%. Shares of AT&T (T) are up slightly, while shares of Verizon (VZ) are up about 0.9%.

The NASDAQ Telecommunications Index (IXTC) was trading at $186.50 at 4:00 PM on Friday, down 1.26% on the day – down 17.25% year-to-date.

Utilities

ONEOK (OKE) is upgraded to Buy from Hold at Citigroup. Veolia Environnement SA (VE) is downgraded to Sell from Neutral at UBS. ITC Holdings (ITC) is downgraded to Hold from Buy at Deutsche Bank.  In afternoon trading: Shares of Dynegy (DYN) are down about 8.5%. Actives: Shares of Duke Energy (DUK) are up about 0.4%. Shares of Genon Energy (GEN) are up about 0.6%. Shares of Exelon (EXC) are up about 1.5%. Shares of AES Corp (AES) are down about 2%. Shares of PPL Corp (PPL) are up about 0.3%. Shares of Southern (SO) are up slightly.

The Utilities Select Sector SPDR (XLU) was trading at $33.40 at 4:00 PM on Friday, up 0.42% on the day – up 6.57% year-to-date.

STOCKS: YGE, LDK, JASO, SPWRA, CHK, TSL, CSIQ, PCX, STP, FSLR, TROX, GGC, NOR, JAG, AA, FCX, VALE, DOW, CX, AUY, LUV, LCC, JBLU, AMR, DAL, UAL, NLSN, BWEN, SATC, RJET, DRYS, TEU, APWR, GCI, DIS, TWX, VIA.B, DISCA, WYNN, ZUMZ, PSS, SNI, OMX, SWHC, DF, FEED, JVA, PSMT, IPSU, RAD, CEDC, PTRY, PPC, CAH, ILMN, PACB, GNOM, PKI, MTD, AMED, LYG, STD, RBS, DXBGF, BAC, MS, ADP, FISV, FIS, PAYX, PAY, WU, CAN, GPN, GDOT, V, MA, IVZ, AVB, BRE, LM, ICE, ORCL, SSNLF, AAPL, ATVI, GME, ERTS, TTWO, FNSR, WIT, AMD, HRS, CLWR, S, LEAP, PCS, CHL, LVLT, T, VZ, OKE, VE, ITC, DYN, DUK, GEN, EXC, AES, PPL, SO

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
ORCL Oracle Corporation 40.52 0.17 0.42 11,219,098
GEN Genesis Healthcare Inc. 4.14 0.13 3.24 304,082
UAL United Continental Holdings 75.17 2.43 3.34 5,148,603
ICE Intercontinental Exchange Inc. 59.66 0.20 0.34 2,170,533
SO Southern Company (The) 47.94 0.53 1.12 5,025,251
ADP Automatic Data Processing Inc. 98.22 0.03 0.03 3,350,650
DAQ.A:CA Dundee Acquisition Ltd. Class A Restricted Voting 9.97 0.00 0.00 100,000
GPN Global Payments Inc. 72.19 0.41 0.57 1,174,530
AMED Amedisys Inc 42.05 0.49 1.18 320,318
WIT Wipro Limited 9.34 -0.01 -0.11 1,221,270
VALE VALE S.A. American Depositary Shares Each Represen 8.78 -0.16 -1.79 26,109,176
FISV Fiserv Inc. 104.79 0.08 0.08 799,023
DRYS DryShips Inc. 4.05 -0.23 -5.37 7,731,748
AA Alcoa Inc. 32.05 0.74 2.36 4,344,295
RAD Rite Aid Corporation 8.44 0.29 3.56 36,613,328
NOR Noranda Aluminum Holding n/a n/a n/a 0
AAPL Apple Inc. 113.95 1.83 1.63 34,402,627
PSMT PriceSmart Inc. 91.60 -0.55 -0.60 89,636
DF Dean Foods Company 20.90 0.80 3.98 1,254,876
S Sprint Corporation 8.48 -0.26 -2.97 19,560,796
PPL PPL Corp 33.51 0.40 1.21 4,871,078
DAL Delta Air Lines Inc. 51.78 0.43 0.84 8,526,732
NLSN Nielsen N.V. 42.72 0.73 1.74 3,558,841
OKE ONEOK Inc. 57.01 -0.90 -1.55 1,492,318
MS Morgan Stanley 43.73 0.15 0.34 12,115,063
TWX Time Warner Inc. New 95.23 0.68 0.72 5,134,033
FNSR Finisar Corporation 33.41 -0.72 -2.11 11,860,096
AMD Advanced Micro Devices Inc. 10.34 0.00 0.00 60,600,759
V Visa Inc. 79.14 -0.14 -0.18 10,728,310
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 9.82 0.01 0.10 1,625,180
ITC ITC Holdings Corp. n/a n/a n/a 0
MTD Mettler-Toledo International Inc. 421.74 3.04 0.73 233,126
LVLT Level 3 Communications Inc. 56.24 -0.01 -0.02 4,011,586
LUV Southwest Airlines Company 49.79 0.19 0.38 6,700,895
AES The AES Corporation 11.92 0.08 0.68 4,492,687
DIS Walt Disney Company (The) 104.86 1.48 1.43 12,173,909
JBLU JetBlue Airways Corporation 21.90 0.07 0.32 8,950,074
LM Legg Mason Inc. 33.40 0.06 0.18 1,974,911
BWEN Broadwind Energy Inc. 4.20 0.03 0.72 10,143
PAY Verifone Systems Inc. 16.46 -0.13 -0.78 3,135,322
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,101,462
GDOT Green Dot 25.32 0.13 0.52 163,862
BAC Bank of America Corporation 23.09 0.14 0.61 130,590,406
RBS Royal Bank of Scotland Group Plc New (The) ADS 5.49 -0.11 -1.96 1,604,001
ILMN Illumina Inc. 123.20 -0.28 -0.23 1,387,998
FCX Freeport-McMoRan Inc. 15.75 0.15 0.96 25,150,243
YGE Yingli Green Energy Holding Company Limited ADR 3.12 0.02 0.65 78,603
AUY Yamana Gold Inc. (Canada) 2.89 -0.13 -4.30 13,338,946
LYG Lloyds Banking Group Plc American Depositary Share 3.14 -0.05 -1.57 4,423,285
GME Gamestop Corporation 26.02 0.05 0.19 2,451,667
HRS Harris Corporation 105.51 -0.40 -0.38 671,121
TROX Tronox Limited Class A $0.01 par 11.77 0.07 0.60 1,014,647
PPC Pilgrim\'s Pride Corporation 19.15 0.85 4.64 3,351,545
JVA Coffee Holding Co. Inc. 4.90 0.09 1.87 11,750
ATVI Activision Blizzard Inc 36.79 -0.60 -1.60 9,203,144
JASO JA Solar Holdings Co. Ltd. 5.22 0.01 0.19 415,653
AVB AvalonBay Communities Inc. 169.05 0.28 0.17 533,775
TEU null n/a n/a n/a 0
FSLR First Solar Inc. 33.54 0.37 1.12 2,052,860
CSIQ Canadian Solar Inc. 12.78 0.13 1.03 1,279,339
SWHC Smith & Wesson Holding Corporation 21.07 -0.16 -0.75 1,817,068
PACB Pacific Biosciences of California Inc. 6.95 -0.07 -1.00 759,367
IVZ Invesco Ltd 32.79 -0.37 -1.12 2,636,911
TTWO Take-Two Interactive Software Inc. 49.78 0.12 0.24 796,344
EXC Exelon Corporation 34.90 0.70 2.05 10,118,837
T AT&T Inc. 40.38 -0.03 -0.07 17,105,180
DUK Duke Energy Corporation (Holding Company) 75.82 1.09 1.46 3,196,119
PKI PerkinElmer Inc. 53.56 0.51 0.96 526,808
CHL China Mobile Limited 54.26 -0.15 -0.28 714,234
CAH Cardinal Health Inc. 73.04 1.93 2.71 3,048,168
CX Cemex S.A.B. de C.V. Sponsored ADR 8.77 -0.16 -1.79 11,913,975
WU Western Union Company (The) 22.01 -0.13 -0.59 3,246,645
CHK Chesapeake Energy Corporation 7.72 0.12 1.58 44,636,985
RJET Republic Airways Holdings Inc. n/a n/a n/a 0
FIS Fidelity National Information Services Inc. 75.56 0.44 0.59 1,456,379
SNI Scripps Networks Interactive Inc 71.72 -1.22 -1.67 1,044,868
PAYX Paychex Inc. 60.16 -0.11 -0.18 1,381,310
ZUMZ Zumiez Inc. 25.60 -0.35 -1.35 502,920
GCI Gannett Co Inc (New) 10.24 0.21 2.09 1,039,259

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