This week’s economic data includes New Home Sales on Tuesday, Durable Goods Orders on Wednesday and Preliminary GDP for Q2 and Michigan Consumer Sentiment on Friday. The Dow Jones Industrial Average plunged 451 points last week to 10,818, down 6.6% year to date but above the 200-week simple moving average at 10,729. The Dow’s opening high on Monday was 11,020.55 followed by a dip to 10,829.64 then stayed within that range. The NASDAQ staggered with a loss of 166 points last week to 2342, down 11.7% year to date but above its August 9th low at 2331.65. The NASDAQ’s opening high was 2397.34 followed by a dip to 2337.28 then stayed within that range.
Asian stocks were mixed on Monday despite U.S. recession fears. The Nikkei 225 traded lower by 1.04% to 8,628 with the Hang Seng gaining 0.45% to 19,487. European stocks opened lower but quickly moved into the green on Monday, but faded to mixed closes. The FTSE 100 gained 1.03% to 5,093; the DAX slipped 0.11% to 5,474 and the CAC 40 rallied by 1.14% to 3,051. The yield on the 10-Year US Treasury note rose from 2.050 percent to 2.134 then consolidated as the market sets up this week’s auctions; $35 billion 2-Year notes on Tuesday, $35 billion 5-Year notes on Wednesday, and $29 billion 7-Year notes on Thursday. Yields will be sensitive to Fed Chairman Bernanke’s speech at Jackson Hole on Friday. Gold rallied to another new record high at $1898.6 the Troy ounce on Monday, consolidated to $1862.8 then rebounded to another new record high at $1899.4. Crude oil rebounded from $81.13 per barrel to $84.30, faded to $82.40 then rebounded to $84.67. The euro versus the US dollar traded up from 1.4350 to 1.4433 then consolidated.
Energy
South Korean trading firm Samsung C&T said it is considering buying Parallel Petroleum from Apollo Global Management (APO), with a media report saying a deal for the U.S. oil firm might be worth almost $1B. Sunpower (SPWRA) is increased to Hold from Sell at Auriga with a price objective of $14. Yingli Green Energy (YGE) is upgraded to Neutral from Underweight at HSBC Securities. Yanzhou Coal Mining (YZC) is cut to Neutral from Overweight at HSBC Securities. In afternoon trading: Shares of Gevo Inc. (GEVO) are down about 11.75%. Shares of BPZ Resources (BPZ) are down about 8.75%. Shares of ATP Oil & Gas (ATPG) are down about 7.25%. Shares of Cal Dive International (DVR) are down about 7%. Shares of Sandridge Energy (SD) are down about 7%. Shares of ENI SPA (E) are up about 7.75%.
Energy Select Sector SPDR (XLE) was trading at $62.37 at 4:00 PM on Monday, down 1.38% on the day – down 8.62% year-to-date.
Materials
Alcoa (AA) is upgraded to Buy from Neutral at Davenport. Ecolab (ECL) is lifted to Buy from Hold at Citigroup. Newmont Mining (NEM) is now Buy from Hold at Citigroup. Potash (POT) is taken to Outperform from Sector Perform at Scotia. Eldorado Gold (EGO) is taken to Buy from Action List Buy at TD Newcrest. In afternoon trading: Shares of Endeavour Silver (EXK) are up about 9.75%. Shares of Golden Star Resources (GSS) are up about 8.75%. Shares of Pan American Silver (PAAS) are up about 8.5%. Shares of Silver Standard Resources (SSRI) are up about 8.25%. Shares of Harmony Gold (HMY) are up about 8%.
The Materials Select Sector SPDR (XLB) was trading at $32.00 at 4:00 PM on Monday, unchanged on the day – down 16.69% year-to-date.
Industrials
Looking to end a long-running bidding war and uncertainty over its future, Dollar Thrifty (DTG) has told Hertz (HTZ) and Avis (CAR) to make “best and final” acquisition offers by early October. Swift Transportation (SWFT) is lifted to Buy from Hold at Capstone. Ingersoll-Rand (IR) is downgraded to Underweight from Neutral at Atlantic Equities. In afternoon trading: Shares of Energy Recovery (ERII) are up about 8.75%. Shares of Federal Signal (FSS) are up about 6.75%. Shares of Swift Transportation are up about 6.75%. Shares of Elbit Systems (ESLT) are up about 6.5%. Shares of Genco Shipping (GNK) are down about 7.5%.
The Industrial Select Sector SPDR (XLI) was trading at $29.24 at 4:00 PM on Monday, up 0.38% on the day – down 16.15% year-to-date.
Consumer Discretionary
Lowe’s (LOW) has authorized a $5B share buyback and said it expects to complete the program over the next two-to-three years. Under Armour (UA) is begun with a Buy at Canaccord Genuity. Hibbett Sporting (HIBB) is boosted to Strong Buy from Buy at Needham with a target price of $47. American Public Education (APEI) is moved to Outperform from Market Perform at BMO Capital. News Corp (NWS) is now Hold from Buy at Needham. New York & Co (NWY) is cut to Neutral from Overweight at Piper Jaffray. In afternoon trading: Shares of New York & Co are down about 22%. Shares of E-Commerce China Dangdang (DANG) are down about 14.25%. Shares of Eastman Kodak (EK) are down about 10%. Shares of 99 Cents Only Stores (NDN) are up about 10%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $34.15 at 4:00 PM on Monday, up 0.29% on the day – down 8.71% year-to-date.
Consumer Staples
In afternoon trading: Shares of Yuhe International (YUII) are up about 15.5%. Shares of Prestige Brands Holdings (PBH) are up about 7.75%. Shares of Chiquita Brands International (CQB) are up about 4.5%. Shares of China-Biotics (CHT) are down about 10.5%. Shares of Feihe International (ADY) are down about 8%. Shares of The Pantry (PTRY) are down about 7%. Shares of Zhongpin Inc. (HOGS) are down about 4.75%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $29.64 at 4:00 PM on Monday, up 0.30% on the day – up 1.13% year-to-date.
Healthcare
ConvaTec has reportedly made an offer for rival Kinetic Concepts (KCI) that tops the wound-care company’s $6.3B agreement with a consortium comprising Apax Partners and two Canadian pension funds. Adolor (ADLR) is initiated with an Outperform rating by brokers William Blair. Roche Holding (RHHBY) is raised to Buy from Hold at the Royal Bank of Scotland. Stryker (SYK) is lifted to Buy from Hold with a $60 target at Lazard. In afternoon trading: Shares of Adolor are down about 11.5%. Shares of Biostar Pharmaceuticals (BSPM) are down about 8.25%. Shares of XOMA Ltd. (XOMA) are down about 7.25%. Shares of Avanir Pharmaceuticals (AVNR) are down about 6.25%.Sharees of Kindred Healthcare (KND) are down about 6.25%. Shares of YM BioSciences (YMI) are down about 6%.
The Health Care Select Sector SPDR (XLV) was trading at $31.01 at 4:00 PM on Monday, down slightly on the day – down 1.56% year-to-date.
Financials
As the Fed fought to save the global financial system in 2008, lending to banks under seven programs tallied by Bloomberg reached a peak of $1.2T early in the December, almost three times the U.S. budget deficit that year. The largest borrower was Morgan Stanley (MS) with up to $107.3B in loans, while Citigroup (C) took $99.5B and BofA (BAC) $91.4B. Bank of America (BAC) has not told China Construction Bank (CICHF) that it plans to sell any of its $17B holding in the Asian company, CCB Chairman Guo Shuqing. South Korean trading firm Samsung C&T said it is considering buying Parallel Petroleum from Apollo Global Management (APO), with a media report saying a deal for the U.S. oil firm might be worth almost $1B. South Korean prosecutors have charged four Deutsche Bank (DB) employees and the bank’s brokerage in the country for manipulating stock prices and making “unfair” profits during a one-day stock rout in November that wiped $27B in value from South Korean shares. SLM Corp (SLM) is now Outperform from Neutral at Credit Suisse. Stifel hoists Dime Community Bancshares (DCOM), First Commonwealth Financial (FCF), Fulton Financial (FULT), and Hudson Valley Holding (HVB) all to Buy from Hold. In afternoon trading: Shares of The PMI Group (PMI) are down about 29%. Shares of E House China Holdings (EJ) are up about 10%.
The Financial Select Sector SPDR (XLF) was trading at $11.98 at 4:00 PM on Monday, down 1.24% on the day – down 24.89% year-to-date.
Information Technology
Demandtec (DMAN) is launched at an Outperform and $7.50 price target at Barrington Research. Hewlett-Packard (HPQ) is boosted to Buy from Hold at Auriga. Microsoft (MSFT) is now Neutral from Buy at Davenport. In afternoon trading: Shares of Universal Display (PANL) are up about 23% after announcing an OLED-equipped smartphone, set for a European debut in mid-September. Shares of Allot Communications (ALLT) are up about 13.25%. Shares of Demand Media (DMD) are up about 8%. Shares of Energy Conversion Devices (ENER) are down about 12.5%. Shares of Global Cash Access Holdings (GCA) are down about 9.75%. Shares of Powerwave Tech (PWAV) are down about 9%. Shares of OCZ Technology Group (OCZ) are down about 9%.
The Technology Select Sector SPDR (XLK) was trading at $22.64 at 4:00 PM on Monday, up 0.53% on the day – down 10.12% year-to-date.
Telecommunications Services
Verizon (VZ) looks set to avoid losses from a prolonged walkout, with 45,000 workers due to start returning to work this evening after a 15-day strike. However, the stoppage will end without unions obtaining a deal over the telecom carrier’s demands for concessions on pensions, health care and job security. In afternoon trading: Shares of TerreStar (TSTRQ) are up about 36.5%. Shares of Telecom Italia (TI) are up about 5.5%. Actives: Shares of Sprint Nextel (S) are down about 2.3%. Shares of AT&T (T) are up about 1.9%. Shares of Level 3 Communications (LVLT) are down about 0.9%. Shares of Verizon (VZ) are up about 0.7%.
The NASDAQ Telecommunications Index (IXTC) was trading at $177.64 at 4:00 PM on Monday, down slightly on the day – down 21.18% year-to-date.
Utilities
Public Service (PEG) is lifted to Buy from Hold at Citigroup. In afternoon trading: Shares of Dynegy (DYN) are up about 7.25%. Shares of Tri-Tech Holding (TRIT) are down about 7%. Actives: Shares of Duke Energy (DUK) are up about a half of a percent. Shares of Genon Energy (GEN) are down about 4.4%. Shares of Southern Co. (SO) are up slightly. Shares of AES Corp. (AES) are up about 0.6%. Shares of PPL Corp. (PPL) are down about 0.4%. Shares of Calpine (CPN) are down about 1.7%. Shares of NiSource (NI) are down about 0.4%.
The Utilities Select Sector SPDR (XLU) was trading at $32.31 at 4:00 PM on Monday, down 0.25% on the day – up 3.10% year-to-date.
STOCKS: APO, SPWRA, YGE, YZC, GEVO, BPZ, ATPG, DVR, SD, E, AA, ECL, NEM, POT, EGO, EXK, GSS, PAAS, SSRI, HMY, DTG, HTZ, CAR, SWFT, IR, ERII, FSS, ESLT, GNK, LOW, UA, HIBB, APEI, NWS, NWY, DANG, EK, NDN, YUII, PBH, CQB, CHT, ADY, PTRY, HOGS, KCI, ADLR, RHHBY, SYK, BSPM, XOMA, AVNR, KND, YMI, MS, C, BAC, CICHF, DB, SLM, DCOM, FCF, FULT, HVB, PMI, EJ, DMAN, HPQ, MSFT, PANL, ALLT, DMD, ENER, GCA, PWAV, OCZ, VZ, TSTRQ, TI, S, T, LVLT, PEG, DYN, TRIT, DUK, GEN, SO, AES, PPL, CPN, NI
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