The Federal Reserve said Tuesday the economy is “expanding moderately, notwithstanding some apparent slowing in global growth,” and noted there has been some improvement in the labor market. However, in leaving rates unchanged again, the central bank said the economy is still one with “significant downside risks.” ICSC-Goldman’s same store sales failed to snap back in the December 10 week, down 0.1%. Redbook offers a month-over-month reading coming in at -2.8%. Both readings have a year-over-year reading of 2.9% (down from 3.8% on ICSC and down from 3.2% on Redbook).
The Dow Jones Industrial Average weakened off a morning high of 12,147.70 to an afternoon low of 11,904.38, ending the day just above the 200- day simple moving average at 11,943. The NASDAQ weakened off a morning low of 2,639.74 to an afternoon low of 2,568.44, ending the day under the 50- day simple moving average at 2,610.
Asian stocks were down on Tuesday with the Nikkei 225 ending the day at 8,553 – down 1.17%, and the Hang Seng ending the day at 18,447 – down 0.69%. European stocks were mixed with the FTSE 100 ending the day at 5,490 – up 1.15%; the DAX ending the day at 5,774 – down 0.19%; and the CAC 40 ending the day at 3,079 – down 0.35%. Heading into the Federal Reserve announcement, the 10- Year yield weakened to a high yield of 2.059 before rallying to a low yield of 1.948 after the Fed announcement.
Gold weakened off a morning high of $1681.7 the Troy ounce to an afternoon low of $1625.5. Crude oil traded between $97.64 per barrel and $101.25, ending the day just above the $100 threshold. The euro versus the dollar weakened down to an afternoon low of 1.3013.
Energy
Robert W. Baird resumes Outperforms on Apache (APA), Forest Oil (FST), Exco Resources (XCO), Swift Energy (SFY), Pioneer Natural Resources (PXD), Chesapeake Energy (CHK), and Carrizo Oil & Gas (CRZO). It has new Neutrals on Anadarko Petroleum (APC), Cabot Oil & Gas (COG), Noble Energy (NBL), SM Energy (SM), Goodrich Petroleum (GDP), and Comstock (CRK). Patriot Coal (PCX) is a new Buy at CRT Capital. Marathon Oil (MRO), Hess (HES) and Murphy Oil (MUR) are all boosted to Buy from Hold at Deutsche Bank. In afternoon trading: Shares of Penn Virginia (PVA) are down about 12.75%. Shares of Forest Oil (FST) are down about 11%. Shares of DHT Holdings (DHT) are down about 10.5%.
Energy Select Sector SPDR (XLE) was trading at $67.91 at 4:00 PM on Tuesday, down 0.93% on the day – down 0.50% year-to-date.
Materials
The way is open for Rio Tinto (RIO) to take over Canada’s Ivanhoe Mines (IVN), in which it already owns 49%, after an arbitrator ruled that Ivanhoe’s “poison pill” takeover defense doesn’t apply to Rio. Intrepid Potash (IPI) gets a Neutral-from-Sell increase at Goldman. Southern Copper (SCCO) is reduced to Underweight from Equal Weight by Barclays. Scotts Miracle-Gro (SMG) gets lowered to Underperform from Neutral by Bank of America-Merrill Lynch. In afternoon trading: Shares of AM Castle (CAS) are down about 24.5%. Shares of Ivanhoe are down about 21.5%.
The Materials Select Sector SPDR (XLB) was trading at $32.73 at 4:00 PM on Tuesday, down 1.68% on the day – down 14.79% year-to-date.
Industrials
Sensata Technologies (ST) warned its Q4 revenue will fall $20M-$25M short of the mid-point of its prior guidance range, and its EPS $0.03-$0.05 short of its prior guidance mid-point. Boeing (BA) is a new Buy at and $84 price objective at Lazard. Spirit Aerosystems (SPR) is a new Buy and price objective of $25 at KeyBanc Capital. Fortune Brands Home & Security (FBHS) is a new Neutral at Goldman. Kratos Defense and Security (KTOS) is covered with a Perform recommendation at Oppenheimer. Robert Half International (RHI) is raised 180 degrees, to Overweight from Underweight at Morgan Stanley. Masco (MAS) is moved to Neutral from Sell at Goldman. Corrections Corporation of America (CXW) is boosted to Overweight from Equal Weight at Barclays. USG Corporation (USG) gets downgraded to Sell from Neutral at Goldman. RBC Capital reduces ratings on Norfolk Southern (NSC) and Canadian National Railway (CNI), each now Sector Perform from Outperform. In afternoon trading: Shares of Seaspan (SSW) are up about 18.25%. Shares of AMR Corp. (AMR) are up about 11.5%.
The Industrial Select Sector SPDR (XLI) was trading at $32.91 at 4:00 PM on Tuesday, down 1.32% on the day – down 5.62% year-to-date.
Consumer Discretionary
AirMedia Group (AMCN) is guiding for Q4 revenue of $84M-$86M, above the company’s prior guidance range of $79M-$81M, as well as a $78.4M consensus. Urban Outfitters (URBN) said in a regulatory filing its comparable retail segment net sales are “mid-single-digit positive” so far in Q4. Amazon.com (AMZN) is a new Neutral at Goldman Sachs. Jefferies begins Buys on Starbucks (SBUX) – $50 price objective, Dunkin Brands (DNKN) – $30 price objective, Peet’s Coffee & Tea (PEET) – $68 price objective, Einstein Noah Restaurant Group (BAGL) – $17 price objective, and Panera Bread (PNRA) – $165 price objective. FBR Capital establishes Outperforms on Dollar General (DG), Ross Stores (ROST), and TJX Companies (TJX) and assigns fresh Market Performs on Fred’s, Inc (FRED) and Dollar Tree (DLTR). Wells Fargo has fresh Outperforms on International Game Technology (IGT) and MGM Resorts (MGM). Its Market Performs include Ameristar Casinos (ASCA), Boyd Gaming (BYD), Bally Technologies (BYI), Las Vegas Sands (LVS), Wynn Resorts (WYNN), Penn National Gaming (PENN), Pinnacle Entertainment (PNK), and WMS Industries (WMS). Isle of Capri Casinos (ISLE) is a new Outperform and $7 price target at Imperial Capital. Ethan Allen (ETH) is a new Hold at Argus. Toll Brothers (TOL) is taken to Neutral from Buy at Citigroup. JAKKS Pacific (JAKK) is moved to Market Perform from Outperform at BMO Capital. In afternoon trading: Shares of K12 Inc. (LRN) are down about 22.5%. Shares of Best Buy (BBY) are down about 14.5%. Shares of Hovnanian (HOV) are down about 10%. Shares of Pandora (P) are up about 10.25%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.46 at 4:00 PM on Tuesday, down 1.96% on the day – up 2.81% year-to-date.
Consumer Staples
Bunge (BG) is a new Sell at Goldman. In afternoon trading: Shares of The Pantry (PTRY) are down about 10.25%. Shares of Green Mountain Coffee Roasters (GMCR) are down about 10%. Heavily Actives Stocks: Shares of Altria Group (MO) are up about 0.75%. Shares of Procter & Gamble (PG) are up about 1%. Shares of CVS Caremark (CVS) are down about 0.9%. Shares of Wal-Mart (WMT) are down about 1%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $31.65 at 4:00 PM on Tuesday, down 0.22% on the day – up 7.98% year-to-date.
Healthcare
Pfizer’s (PFE) Lipitor cholesterol pill lost about 15% of its market share in the first few days after its patent protection ended on November 30. Magellan Health (MGLN) guides for 2012 revenues of $3.2B-$3.4B and EPS of $3.25-$3.89; the former is above a Street consensus of $3.09B, but the latter is short of a consensus of $4.07. St. Jude Medical (STJ) gets cut to Hold from Buy at Jefferies. In afternoon trading: Sahres of Endocyte (ECYT) are down about 65%. Shares of Avanir Pharmaceuticals (AVNR) are down about 14%. Shares of Affymax (AFFY) are down about 10%. Shares of Alexza Pharmaceuticals (ALXA) are up about 26.5%. Shares of YM BioSciences (YMI) are up about 16.5%. Shares of Pharmacyclics (PCYC) are up about 11%.
The Health Care Select Sector SPDR (XLV) was trading at $33.36 at 4:00 PM on Tuesday, down slightly on the day – up 5.90% year-to-date.
Financials
Mortgage lenders and authorities could reach a deal this week in which banks will pay states $19B to settle claims of inappropriate repossession practices, and $25B if California is involved, The Wall Street Journal reports. Washington Mutual (WAMUQ) will soon be able to emerge from bankruptcy proceedings and distribute $7B to creditors after certain shareholders agreed to drop legal claims against settlement noteholders. Deutsche Boerse (DBOEY) and the NYSE (NYX) have formally offered to sell the London-based derivatives exchange, Liffe, in an effort to get their deal past the antitrust concerns of European regulators. Visa (V) and MasterCard (MA) are both begun with Buys at Nomura, which has new Neutrals on Cash America International (CSH) and Western Union (WU). Legg Mason (LM) is lowered to Neutral from Buy at Citigroup. In afternoon trading: Shares of Wamu are up about 32.5%. Shares of St. Joe (JOE) are up about 10%.
The Financial Select Sector SPDR (XLF) was trading at $12.61 at 4:00 PM on Tuesday, down 1.41% on the day – down 20.94% year-to-date.
Information Technology
Apple (AAPL) has finally found something to do with a fraction of its cash mountain: Reports out of Israel tip off that Apple is in advanced talks to buy flash storage firm Anobit for as much as $500M. AOL (AOL) CEO Tim Armstrong plans to revive the struggling company with a reorganization in which he will combine its dial-up Internet access operations with its Web services, including AOL Instant Messenger. Visa (V) and MasterCard (MA) are both begun with Buys at Nomura, which has new Neutrals on Cash America International (CSH) and Western Union (WU). Infineon (IFNNY) is a new Overweight at HSBC Securities. Rubicon Technology (RBCN) is raised to Neutral from Sell at Ticonderoga. ADTRAN (ADTN) is now Neutral from Buy at Mizuho with a new target of $35. In afternoon trading; Shares of Cabot Microelectronics (CCMP) are up about 16%.
The Technology Select Sector SPDR (XLK) was trading at $25.47 at 4:00 PM on Tuesday, down 0.93% on the day – up 1.11% year-to-date.
Telecommunications Services
A judge has given AT&T (T) until January 12 to decide whether it wants to continue with its $39B acquisition of T-Mobile USA (DTEGY). In reaction, AT&T said it was “considering whether and how to revise our current transaction to achieve the necessary regulatory approvals.” In afternoon trading: Heavily Active Stocks: Shares of Sprint Nextel (S) are flat, while shares of AT&T (T) are up slightly and shares of Verizon (VZ) are up slightly. Shares of Clearwire (CLWR) are up about 0.7%. Shares of Frontier Communications (FTR) are down about 2.5%.
The NASDAQ Telecommunications Index (IXTC) was trading at $197.88 at 4:00 PM on Tuesday, down 0.77% on the day – down 12.20% year-to-date.
Utilities
In afternoon trading: Heavily Active Stocks: Shares of Duke Energy (DUK) are up about 1.5%. Shares of Genon Energy (GEN) are down about 2.5%. Shares of AES Corp. (AES) are up slightly. Shares of Nicor (GAS) are up about 0.5%. Shares of PPL Corp. (PPL) are up about 0.4%. Shares of CenterPoint Energy (CNP) are down about 0.8%.
The Utilities Select Sector SPDR (XLU) was trading at $34.83 at 4:00 PM on Tuesday, up 0.37% on the day – up 11.14% year-to-date.
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