Equities Sector Coverage: Financial Stocks Fall 7 Percent In Market Sell-Off

Sector Recap |

Frustrated Stock TraderThe Dow Jones Industrial Average traded down to 10,604.07 then up to 11,244.01 following the FOMC meeting on Tuesday and stayed within this range on Wednesday between 10,771.55 and 11,228.00. Similarly the NASDAQ traded between 2331.65 and 2483.66 post-FOMC on Tuesday and stayed within that range Wednesday. The NASDAQ traded between 2390.60 and 2432.95 on Wednesday.

Asian stocks followed U.S. stocks higher on Wednesday with the Nikkei 225 up 1.05% to 9,039. The Hang Seng gained 2.34% to 19,784. European stocks traded higher at their open despite the unrest in the U.K. and the cut in the growth rate by the Bank of England, but issues among French banks caused a major reversal. The FTSE 100 was down 3.05% to 5,007. The DAX plunged 5.15% to 5613. The CAC 40 slumped 5.45% to 3,003.

The yield on the 10-Year US Treasury note declined to 2.038 percent after the FOMC stated that the 0 to 0.25% funds rate will last at least through mid-2013. Today this yield is above that level trading between 2.326 and 2.090. The US Treasury auctioned $24 billion 10-Year notes at 2.14 percent with a solid 3.22 bid to cover ratio. The Indirect Bid which includes foreign central banks was a reasonable 35.4% of the issue. The Treasury auctions $16 billion in 30-Year bonds on Thursday. Gold traded to yet another all time high at $1801.0 on Wednesday. Crude oil, which traded as low as $75.71 per barrel on Tuesday traded down from $82.90 to $79.53 the consolidated on lower than expected energy inventories. The euro versus the US dollar traded down from 1.4399 to 1.4167.


The SEC has subpoenaed Quicksilver Resources (KWK) for documents related to its shale gas output forecasts following reports "questioning the projected decline curves and economics of shale-gas wells." Ultra Petroleum (UPL) beat estimates by a penny, but missed revenue by $49M. SunPower's (SPWRA) sees Q3 revenue at $700M-$750M and non-GAAP EPS $0.05-$0.15 (versus $0.21), and sees full-year revenue at $2.8B-$2.95B (versus $2.76B) and non-GAAP EPS of $0.75-$1.25 (versus $0.70). Ur-Energy (URG) is initiated with a Market Outperform and price objective at $2.52 at Rodman & Renshaw. First Solar (FSLR) is upgraded to Buy from Hold at Jefferies with a new target of $132. Frontline (FRO) is cut to Market Perform from Outperform at FBR Capital. In afternoon trading: Shares of Cheniere Energy Partners (CQP) are up about 16.25%. Shares of EV Energy Partners (EVEP) are up about 9.25%. Shares of General Maritime (GMR) are down about 17%. Shares of Uranerz Energy (URZ) are down about 9.5%. Shares of James River Coal (JRCC) are down about 9%.

Energy Select Sector SPDR (XLE) was trading at $63.19 at 4:00 PM on Wednesday, down 3.45% on the day – down 7.41% year-to-date.


Mosaic (MOS) is moved to Buy from Neutral at Ticonderoga. In afternoon trading: Shares of Golden Star Resources (GSS) are up about 12.75%. Shares of Endeavour Silver (EXK) are up about 8%. Shares of Headwaters (HW) are down about 11.5%. Shares of CRH Public (CRH) are down about 9.5%. Shares of ArcelorMIttal (MT) are down about 8.75%. Shares of Ferro (FOE) are down about 8.75%. Shares of OMNOVA Solutions (OMN) are down about 8.25%.

The Materials Select Sector SPDR (XLB) traded at $32.61 at 4:00 PM on Wednesday, down 3.44% on the day – down 15.10% year-to-date.


BAE Systems (BAESY) is raised to Buy from Neutral at UBS. US Airways (LCC) gets taken to Buy from Neutral at Ticonderoga with a $9 target. In afternoon trading: Shares of Quad Graphics (QUAD) are down about 25.5%. Shares of SatCon Technology (SATC) are down about 25%. Shares of KAR Auction Services (KAR) are down about 15.5%. Shares of EnerNOC (ENOC) are down about 12%. Shares of YRC Worldwide (YRCW) are down about 11.25%. Shares of Mistras Group (MG) are up about 10%.

The Industrial Select Sector SPDR (XLI) traded at $29.40 at 4:00 PM on Wednesday, down 5.10% on the day – down 15.69% year-to-date.

Consumer Discretionary

Walt Disney (DIS) beat estimates by 6 cents and revenue of $200M. Disney's FQ3 net profit rose 15% to $0.77 a share as the early booking of revenue at ESPN and growth at its theme parks and consumer products operations overshadowed a disappointing performance at its movie studio and interactive unit. Polo Ralph Lauren (RL) beat estimates by 44 cents and revenue by $70M. Macy's (M) beat estimates by 4 cents and revenue by $70M. PriceSmart (PSTM) is begun with a Buy rating and $70 target price at the Benchmark Company. Fossil (FOSL) is boosted to Buy from Hold at Benchmark. Walt Disney (DIS) is downgraded to Hold from Buy with Wunderlich after earnings with a new target of $39. Jefferies takes Home Depot (HD), Lowe's (LOW), Target (TGT), Costco (COST), Kohl's (KSS), Staples (SPLS), United Stationers (USTR), and PetSmart (PETM) all to Hold from Buy. In afternoon trading: Shares of McCormick & Schmicks Seafood Restaurants (MSSR) are down about 14.5%. Shares of Office Depot (ODP) are down about 13.75%. Shares of Beazer Homes (BZH) are down about 11.5%. Shares of KB Home (KBH) are down about 9.75%. Shares of Standard Pacific (SPF) are down about 9.1%.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $34.12 at 4:00 PM on Wednesday, down 4.26% on the day – down 8.79% year-to-date.

Consumer Staples

Nestle's (NSRGY) H1 net profit came in mostly in-line with expectations, but fell 13% to 4.7B Swiss francs ($6.52B) because of rising raw-material prices and the surging franc. Nestle beat estimates by 70M francs, but missed revenues by 60M francs, and sees FY organic growth at top end of 5%-6% range. In afternoon trading: Shares of Inter Parfums (IPAR) are down about 15.5%. Shares of Synutra International (SYUT) are down about 13.25%. Shares of Winn-Dixie (WINN) are down about 10.5%. Shares of Alliance One International (AOI) are down about 8%. Shares of Yuhe International (YUII) are up about 15%.

The Consumer Staples Select Sector SPDR (XLP) traded at $28.35 at 4:00 PM on Wednesday, down 3.83% on the day – down 3.28% year-to-date.


Eli Lilly (LLY) is lifted to Buy from Hold at Argus based on valuation. PerkinElmer (PKI) is upgraded to Outperform from Neutral at Mizuho. Fresenius Medical (FMS) is moved to Add from Neutral at WestLB. Endo Pharmaceuticals (ENDP) is upgraded to Overweight from Neutral at Piper Jaffray. In afternoon trading: Shares of Epocrates (EPOC) are down about 40.25%. Shares of Gentiva Health Services (GTIV) are down about 10.5%. Shares of Arena Pharmaceuticals (ARNA) are down about 10.25%. Shares of Skilled Healthcare (SKH) are down about 10.25%.

The Health Care Select Sector SPDR (XLV) traded at $29.96 at 4:00 PM on Wednesday, down 4.22% on the day – down 4.89% year-to-date.


As expected, Capital One (COF) is to acquire HSBC's (HBC) U.S. credit-card business for a premium of about $2.6B. The SEC is investigating whether Goldman Sachs (GS) broke bribery laws, looking at the bank's dealings with Libya's sovereign-wealth fund. Goldman also faces several lawsuits over mortgage-backed securities, including from AIG (AIG), Manulife Financial (MFC) and Allstate (ALL). Amid a gyrating stock and mounting mortgage liabilities, Bank of America (BAC) CEO Brian Moynihan is set to face an investor conference call today with Fairholme Capital, which owns around 92M shares in the bank. Wells Fargo (WFC) has reportedly won an auction for Bank of Ireland's (IRE) $1.4B U.S. commercial-real-estate loan portfolio, with Wells paying almost face value. Brookfield Asset Management (BAM) beat estimates by $1.02 and revenue by $300. MBIA (MBI) beat estimates by 62 cents and revenue by $37M. Barclays PLC (BCS) is boosted to Buy from Add at WestLB. FBR Capital upgraded Regency (REG) and Prologis (PLD) to Outperform from Market Perform, and raised Equity Residential (EQR) to Market Perform from Underperform. In afternoon trading: Shares of First Commonwealth Financial (FCF) are down about 11%. Shares of Barclays (BCS) are down about 10.75%. Shares of Deutsche Bank (DB) are down about 10.25%. Shares of Walter Investment Management (WAC) are up about 12.5%. Shares of Xinyuan Real Estate (XIN) are up about 12.25%.

The Financial Select Sector SPDR (XLF) traded at $12.19 at 4:00 PM on Wednesday, down 6.95% on the day – down 23.57% year-to-date.

Information Technology

Avnet (AVT) beat estimates by 7 cents, but missed revenue by $40M. Demand Media (DMD) announced Q2 earnings that largely beat estimates and announced a three-year renewal and expansion of an ongoing advertising partnership with Google (GOOG). Rovi Corp. (ROVI) beat estimates by 3 cents with revenue in-line with estimates, and sees FY11 adj. pro forma revenue at $770M-$810M, raises adj. pro forma EPS guidance at $2.35-$2.60. Nuance Communications (NUAN) beat estimates by a penny, but missed revenue by $10M. SanDisk (SNDK) is initiated with an Outperform at Bernstein, which has a new Market Perform on Micron (MU). Cisco Systems (CSCO) is now Buy from Neutral at Gleacher. OpenTable (OPEN) is lifted to Buy from Hold boost at Citigroup. VMware (VMW) is upgraded to Outperform from Market Perform at FBR Capital. Check Point Software (CHKP) is upgraded to Outperform from Neutral at Macquarie. RF Micro Device (RFMD) and TriQuint Semi (TQNT) are both upgraded to Buy from Hold at Needham. In afternoon trading: Shares of Motricity’s (MOTR) are down about 58% after missing estimates by 5 cents and revenue by $2.4M. The company now expects revenue in the range of $31.5 to $32.5M (far below expectations of $45M). Shares of Computer Sciences (CSC) are down about 12.5%. Shares of THQ (THQI) are down about 10.5%. Shares of Cree (CREE) are up about 17.5%.

The Technology Select Sector SPDR (XLK) traded at $23.07 at 4:00 PM on Wednesday, down 3.92% on the day – down 8.42% year-to-date.

Telecommunications Services

In afternoon trading: Shares of TerreStar (TSTRQ) are down about 19%. Shares of Partner Communications (PTNR) are down about 13.25%. Shares of Premiere Global Services (PGI) are down about 9.5%. Shares of Towerstream (TWER) are down about 9.25%. Shares of General Communications (GNCMA) are down about 7.5%. Shares of Telefonica (TEF) are down about 7.5%. Shares of Leap Wireless (LEAP) are down about 7%. Shares of Turkcell Iletisim Hizmetleri (TKC) are down about 7%.

The NASDAQ Telecommunications Index (IXTC) traded at $173.41 at 4:00 PM on Wednesday, down 4.09% on the day – down 23.06% year-to-date.


In afternoon trading: Shares of Tokyo Electric Power (TKECF) are up about 15%. Shares of Tri-Tech Holding (TRIT) are up about 13.5%. Shares of E ON AG (EONGY) are down about 11.75%. Shares of Dynegy (DYN) are down about 10%. Heavily Actives: Shares of Duke Energy (DUK) are down about 2.5%. Shares of AES Corp (AES) are down about 1%. Shares of Genon Energy (GEN) are down about 4%. Shares of Southern (SO) are relatively unchanged.

The Utilities Select Sector SPDR (XLU) traded at $30.60 at 4:00 PM on Wednesday, down 1.89% on the day – down 2.36% year-to-date.


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Symbol Name Price Change % Volume
AES The AES Corporation 12.02 -0.03 -0.25 4,317,496
AIG American International Group Inc. New 60.00 -0.07 -0.12 4,218,319
ALL Allstate Corporation (The) 67.55 -0.68 -1.00 2,279,190
AOI Alliance One International Inc. 17.10 -1.15 -6.30 29,465
ARNA Arena Pharmaceuticals Inc. 1.57 -0.02 -1.26 597,931
AVT Avnet Inc. 42.01 0.19 0.45 743,781
BAC Bank of America Corporation 16.67 0.11 0.66 77,954,926
BAM Brookfield Asset Management Inc. 35.77 0.03 0.08 566,524
BCS Barclays PLC 8.92 0.01 0.11 4,366,701
BZH Beazer Homes USA Inc. 11.17 -0.07 -0.62 380,602
CHKP Check Point Software Technologies Ltd. 77.67 0.57 0.74 788,845
COF Capital One Financial Corporation 74.89 0.38 0.51 3,947,431
COST Costco Wholesale Corporation 148.97 -1.07 -0.71 2,188,029
CQP Cheniere Energy Partners LP 28.37 -1.19 -4.03 154,721
CREE Cree Inc. 22.12 -0.19 -0.85 2,220,561
CRH CRH PLC American Depositary Shares 33.10 0.11 0.33 668,305
CSCO Cisco Systems Inc. 30.15 -0.01 -0.03 15,140,452
DB Deutsche Bank AG 14.31 -0.06 -0.42 5,318,893
DIS Walt Disney Company (The) 93.03 1.00 1.09 13,814,538
DMD Demand Media Inc. 5.95 0.00 0.00 38,848
DUK Duke Energy Corporation (Holding Company) 78.02 -0.40 -0.51 2,133,129
ENDP Endo International plc 20.81 0.28 1.36 3,770,942
ENOC EnerNOC Inc. 5.41 -0.19 -3.39 62,450
EQR Equity Residential of Beneficial Interest 61.03 0.00 0.00 1,867,480
EVEP EV Energy Partners L.P. 2.25 -0.05 -2.17 360,878
EXK Endeavour Silver Corporation (Canada) 4.58 -0.02 -0.43 1,015,679
FCF First Commonwealth Financial Corporation 9.91 0.00 0.00 154,888
FMS Fresenius Medical Care AG 41.48 -0.49 -1.17 107,698
FNFG First Niagara Financial Group Inc. n/a n/a n/a 0
FOE Ferro Corporation 13.45 -0.06 -0.44 311,837
FOSL Fossil Group Inc. 28.40 -0.15 -0.53 316,382
FRO Frontline Ltd 7.71 -0.15 -1.91 424,471
FSLR First Solar Inc. 42.25 0.17 0.40 2,664,511
GEN Genesis Healthcare Inc. 2.65 0.01 0.38 50,988
GNCMA General Communication Inc. Class A Common Stock 15.02 0.13 0.87 60,534
GOOG Alphabet Inc. 799.37 2.40 0.30 1,266,181
GS The Goldman Sachs Group Inc. 174.67 0.16 0.09 2,004,401
GSS Golden Star Resources Ltd 0.83 0.01 1.78 2,270,425
HD Home Depot Inc. (The) 126.60 0.35 0.28 3,234,121
HW Headwaters Incorporated 17.00 0.01 0.06 460,324
IPAR Inter Parfums Inc. 31.45 0.15 0.48 32,593
KAR KAR Auction Services Inc 43.35 -0.36 -0.82 814,910
KBH KB Home 14.74 -0.37 -2.45 2,753,000
KSS Kohl\'s Corporation 45.05 1.03 2.34 3,749,592
LLY Eli Lilly and Company 78.25 -0.49 -0.62 3,214,971
LOW Lowe\'s Companies Inc. 70.65 0.76 1.09 5,724,968
M Macys Inc. 36.51 0.64 1.78 3,349,076
MBI MBIA Inc. 8.09 0.08 1.00 988,348
MFC Manulife Financial Corporation 14.62 -0.05 -0.34 1,468,962
MG Mistras Group Inc 21.00 -0.13 -0.62 78,074
MOS Mosaic Company (The) 24.31 -0.38 -1.54 4,099,652
MT ArcelorMittal 6.68 0.15 2.30 23,140,217
MU Micron Technology Inc. 16.94 -0.27 -1.54 18,710,303
NUAN Nuance Communications Inc. 13.85 0.13 0.95 1,356,344
ODP Office Depot Inc. 3.26 -0.06 -1.81 8,909,492
OMN OMNOVA Solutions Inc. 8.30 0.05 0.61 136,620
PGI Premiere Global Services n/a n/a n/a 0
PKI PerkinElmer Inc. 52.69 -0.24 -0.45 419,807
PLD ProLogis Inc. 52.40 -0.31 -0.59 2,199,359
PNTR Pointer Telocation 7.60 -0.08 -1.04 5,555
QUAD Quad Graphics Inc Class A 24.89 -0.18 -0.72 168,333
REG Regency Centers Corporation 73.76 -0.28 -0.38 330,178
RL Ralph Lauren Corporation 96.63 -0.96 -0.98 642,552
ROVI Rovi Corporation n/a n/a n/a 0
SKH Skilled Healthcare Group n/a n/a n/a 0
SNDK SanDisk Corp. n/a n/a n/a 0
SO Southern Company (The) 50.53 -0.19 -0.37 3,342,677
SPF null n/a n/a n/a 0
SPLS Staples Inc. 7.54 -0.01 -0.13 12,016,049
SYUT Synutra International Inc. 4.64 0.01 0.22 21,163
TEF Telefonica SA 9.86 -0.08 -0.80 1,776,289
TGT Target Corporation 68.23 0.52 0.77 3,121,799
TKC Turkcell Iletisim Hizmetleri AS 8.00 -0.08 -0.99 249,613
TWER Towerstream Corporation 1.15 -0.05 -4.17 164,643
UPL Ultra Petroleum Corp. n/a n/a n/a 0
URG Ur Energy Inc (Canada) 0.48 -0.00 -0.78 136,603
VMW Vmware Inc. Class A 72.91 -0.35 -0.48 1,054,416
WAC Walter Investment Management Corp. 5.35 -0.30 -5.31 288,269
WFC Wells Fargo & Company 45.09 0.16 0.36 21,490,816
XIN Xinyuan Real Estate Co Ltd American Depositary Sha 5.55 -0.12 -2.12 173,379
YRCW YRC Worldwide Inc. 12.44 0.02 0.16 244,137


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