The Dow Jones Industrial Average ended the week up 4.9% year to date but down 5.6% from its May 2nd high at 12,876. The NASDAQ ended last week up just 3.0% year to date and down 5.4% from its May 2nd high at 2887.75. On Monday the Dow traded as low as 12,071 in the final hour and stayed in the red all day. The NASDAQ traded as low as 2703 in the final hour.
Asian stocks were lower on Monday with the Nikkei 225 down 1.2% to 9,380. The Hang Seng Index was closed. European stocks were mixed on Monday with the FTSE 100 up just 0.1%, the DAX down 0.3% and the CAC 40 down 0.7%. The yield on the 10-Year U.S. Treasury note rose from 2.980 to 3.041 on Monday then consolidated back to 3%. This week the U.S. Treasury auctions $32 billion 3-Year notes on Tuesday, $21 billion 10-Year notes on Wednesday and $13 billion 30-Year bonds on Thursday.
Comex gold traded up from $1541.6 to $1555.0 on Monday then closed closer to the day’s low. Nymex crude oil traded down from $100.68 to $98.55 on Monday. The euro traded lower from a high of 1.4657 to 1.4560. Last week the Dow Industrial Average slumped by 291 points to 12,151 with the NASDAQ down 64 points to 2733.
Energy
Statoil (STO) has agreed to sell a 24.1% stake in a European natural gas transport venture called Gassled for 17.35B kroner ($3.25B). Oasis Petroleum (OAS) is initiated with Market Perform at BMO Capital. W&T Offshore (WTI) is upgraded to Market Perform from Underperform at BMO Capital. Baytex Energy Trust (BTE) is downgraded to Hold from Buy at TD Newcrest. North American Energy (NOA) is now Market Perform from Outperform at Raymond James. In afternoon trading: Shares of BPZ Resources (BPZ) are down about 9.25%. Shares of Magnum Hunter (MHR) are down about 6.75%. Shares of Western Refining (WNR) are down about 6%.
The Energy Select Sector SPDR (XLE) was trading at $73.56 at 4:00 PM on Monday, down 2.26% on the day – up 7.78% year-to-date.
Materials
Olympic Steel (ZEUS) is lifted to Buy from Neutral at Davenport. Scotts Miracle-Gro (SMG) gets moved to Neutral from Buy at Longbow. In afternoon trading: Shares of ADA-ES (ADES) are up over 53% after announcing the sale of a 15.8% equity interest in Clean Coal Solutions for $60 million. Shares of Southern Copper (SCCO) are down about 11.25%. Shares of Endeavour Silver (EXK) are down about 7%. Shares of Gold Fields (GFI) are down about 7%. Shares of Molycorp (MCP) are down about 6.5%.
The Materials Select Sector SPDR (XLB) traded at $37.70 at 4:00 PM on Monday, down 1.00% on the day – down 1.85% year-to-date.
Industrials
The International Air Transport Association has slashed its 2011 net profit outlook for airlines to $4B from an estimate of $8.6B three months ago, due to the Middle East unrest, oil price volatility and the disasters in Japan. Dollar Thrifty’s (DTG) board has unanimously recommended that shareholders not tender their stock in Hertz’s (HTZ) $72 a share offer, citing “uncertainty surrounding the length and outcome of the regulatory process.” Capstone Turbine (CPST) is initiated with an Outperform at FBR Capital. DigitalGlobe (DGI) is upgraded to Outperform from Market Perform by brokers Morgan Keegan. In afternoon trading: Shares of TBS International (TBSI) are down about 9.25%. Shares of A-Power Energy Generation (APWR) are down about 7.25%. Shares of Beacon Power (BCON) are down about 6.75%.
The Industrial Select Sector SPDR (XLI) traded at $35.84 at 4:00 PM on Monday, down 0.72% on the day – up 2.78% year-to-date.
Consumer Discretionary
Starbucks (SBUX) is upgraded to Outperform from Market Perform at BMO Capital. American Eagle (AEO) is upgraded to Hold from Sell at Brean Murray. Boyd Gaming (BYD) is boosted to Neutral from Underweight at JP Morgan. Airmedia (AMCN) is now Overweight from Neutral at Piper Jaffray. Xueda Education (XUE) is raised to Outperform from Neutral with a $12 price objective at Robert W. Baird. MakeMyTrip (MMYT) is moved to Outperform from Market Perform at Oppenheimer with a $32 target. Lowe’s (LOW) is downgraded to Neutral from Overweight at JP Morgan. In afternoon trading: Shares of China MediaExpress (CCME) are up about 13%. Shares of Morton’s Restaurant (MRT) are up about 6.5%. Shares of Exide Techologies (XIDE) are down about 7%. Shares of Focus Media (FMCN) are down about 5.75%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $38.51 at 4:00 PM on Monday, down 1.05% on the day – up 2.94% year-to-date.
Consumer Staples
Danone (DANOY:US) is added to the Most Preferred List at UBS. Nestlé (NSRGY:US) is removed the Most Preferred List at UBS. Lorillard (LO) gets lowered to Neutral from Buy at Davenport. In afternoon trading: Shares of China-Biotics (CHBT) are down about 14.75%. Shares of Star Scientific (CIGX) are down about 8.5%. Shares of Lorillard are down about 7%. Shares of American Oriental Bioengineering (AOB) are down about 5%. Shares of The Pantry (PTRY) are up about 8.5%. Shares of Yuhe International (YUII) are up about 7%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.15 at 4:00 PM on Monday, down 0.51% on the day – up 6.28% year-to-date.
Healthcare
Bayer’s (BAYRY:US) prostate treatment Alpharadin showed such good results in a late-stage trial that the study was stopped early to allow patients receiving a placebo to be offered the new medicine. At the annual meeting of the American Society of Clinical Oncology, other companies also presented positive results: Roche (RHHBY:US) with Plexxikon, Bristol-Myers Squibb (BMY), Pfizer (PFE) with Aromasin, Novartis (NVS) with Gleevec and Eli Lilly (LLY) with Alimta. Akorn (AKRX) is a new Overweight at Piper Jaffray. Complete Genomics (GNOM) is resumed with a Buy at Jefferies with a new higher price target of $20. Alexion Pharmaceuticals (ALXN) is resumed with Buy at ThinkEquity. ArthroCare (ATRC) is increased to Positive from Neutral at Susquehanna. WellPoint (WLP), Coventry Health Care (CVH), CIGNA (CI) are all now Neutral from Add at Citadel. Corcept Therapeutics (CORT) is cut to Market Perform at Leerink Swann. In afternoon trading: Shares of Exelixis (EXEL) are down about 18.5%. Shares of Orexigen (OREX) are down about 12.5%. Shares of Gen-Probe (GPRO) are down about 11.25%. Shares of Amarin (AMRN) are down about 9.5%. Shares of Nektar (NKTR) are down about 9%. Shares of Impax (IPXL) are down about 8%.
The Health Care Select Sector SPDR (XLV) traded at $34.98 at 4:00 PM on Monday, down 0.60% on the day – up 11.05% year-to-date.
Financials
Battered by a scathing Senate report that has sparked a number of investigations into its role in the financial crisis, Goldman Sachs (GS) may release documents that show the report contains sloppy math and incomplete analysis. Apartment-building operator AvalonBay Communities (AVB) has named company president, Timothy Naughton, as CEO to replace Bryce Blair, who will step down at the end of the year. HSBC Holdings (HBC), Lloyds TSB plc (LYG), and Royal Bank of Scotland (RBS) are all new Neutrals at Credit Suisse, which begins Barclays PLC (BCS) at an Outperform. ProLogis (PLD) gets picked up with a Neutral at Credit Suisse. Stifel Financial (SF) is upgraded to Outperform from Market Perform at Keefe Bruyette. Wells Fargo (WFC) is downgraded to Sell from Neutral at Rochdale. Kohlberg Kravis Roberts & Co. (KKR) is removed from the Top Picks Live list at Citigroup. In afternoon trading: Shares of China Real Estate (CRIC) are down about 9%. Shares of First Marblehead (FMD) are down about 6%. Shares of Nara Bancorp (NARA) are down about 5.7%. Shares of Regions (RF) are down about 5.5%.
The Financial Select Sector SPDR (XLF) traded at $14.93 at 4:00 PM on Monday, down 1.91% on the day – down 6.39% year-to-date.
Information Technology
Steve Jobs, at Apple’s (AAPL) annual developer conference in San Francisco, previewed the company’s new iCloud online storage service. Texas Instruments (TXN) is initiated with a Buy at ThinkEquity. Red Hat (RHT) gets raised to Overweight from Market Weight at Evercore. Telvent (TLVT) is now Neutral from Overweight at Piper Jaffray. SolarWinds (SWI) is downgraded to Equal Weight from Overweight at Evercore. In afternoon trading: Shares of SouFun (SFUN) are down about 13%. Shares of Sequans (SQNS) are down about 13%. Shares of Progress Software (PRGS) are down about 9%. Shares of Netease.com (NTES) are down about 8.3%.
The Technology Select Sector SPDR (XLK) traded at $25.35 at 4:00 PM on Monday, down 0.74% on the day – up 0.64% year-to-date.
Telecommunications Services
France Telecom (FTE) is taken to Hold from Buy at Citigroup. MetroPCS (PCS) is cut to Sector Perform from Outperform at RBC Capital. In afternoon trading: Actives: Shares of Sprint Nextel (S) are down about 0.6%. Shares of Level 3 (LVLT) are down about a half of a percent. Shares of AT&T (T) are down about 0.75%. Shares of Frontier (FTR) are down about 1.6%. Shares of Verizon (VZ) are down about a full percent. Shares of MetroPCS (PCS) are down about 2.3%.
The NASDAQ Telecommunications Index (IXTC) traded at $215.58 at 4:00 PM on Monday, down 1.01% on the day – down 4.34% year-to-date.
Utilities
In afternoon trading: Shares of Tokyo Electric Power (TKECF:US) are down over 25% after a report the company faces a massive loss this fiscal year. Actives: Shares of Duke Energy (DUK) are down about 0.4%. Shares of Genon Energy (GEN) are down slightly. Shares of AES (AES) are down about 1.3%. Shares of CenterPoint Energy (CNP) are up slightly. Shares of Exelon (EXC) are up about 0.4%. Shares of PPL (PPL) are down about 0.8%. Shares of American Electric Power (AEP) are up slightly.
The Utilities Select Sector SPDR (XLU) traded at $33.04 at 4:00 PM on Monday, down 0.45% on the day – up 5.42% year-to-date.
STOCKS: STO, OAS, WTI, BTE, NOA, BPZ, MHR, WNR, ZEUS, SMG, ADES, SCCO, EXK, GFI, MCP, DTG, HTZ, CPST, DGI, TBSI, APWR, BCON, SBUX, AEO, BYD, AMCN, XUE, MMYT, LOW, CCME, MRT, XIDE, FMCN, DANOY, LO, CHBT, CIGX, AOB, PTRY, YUII, BAYRY, RHHBY, BMY, PFE, NVS, LLY, AKRX, GNOM, ALXN, ATRC, WLP, CVH, CI, CORT, EXEL, OREX, GPRO, AMRN, NKTR, IPXL, GS, AVB, HBC, LYG, RBS, BCS, PLD, SF, WFC, KKR, CRIC, FMD, NARA, RF, AAPL, TXN, RHT, TLVT, SWI, SFUN, SQNS, PRGS, NTES, FTE, PCS, S, LVLT, T, FTR, VZ, PCS, TKECF, DUK, GEN, AES, CNP, EXC, PPL, AEP
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