Equities Sector Coverage: Financials, Energy and Utilities Stocks Up Big

Sector Recap  |

Transocean RIGThe New York Fed Empire manufacturing survey came in weaker than expected at -7.72 where 0.00 is neutral. The National Association of Home Builders Housing Market Index remained depressed in August with an unchanged reading of 15. The NAHBHMI is neutral at 50. The Dow Jones Industrial Average opened higher trading up to 11,442.07 in morning trading then traded to a new day’s high above 11,470 into the final hour of trading. The NASDAQ traded up from 2522 to 2546 in morning trade, and was trading above 2545 into the half hour of trading.

Asian stocks rebounded smartly on Monday as the Japanese economic growth was not as negative as expected. The Nikkei 225 rallied 1.37% to 9,086 with the Hang Seng surging by 3.26% to 20,260. European stocks opened higher and held onto modest gains. The FTSE 100 gained 0.57% to 5,351. The DAX tacked on 0.41% to 6,022. The CAC 40 added 0.78% to 3,239. The yield on the 10-Year US Treasury note traded down from 2.294 percent to 2.234 then traded up to 2.301 into the final hour of trading. Gold stayed below last Thursday’s all time high at $1817.6 the Troy ounce with a trading range between $1730.8 and $1750.5 in morning trading, then moved to a new day’s high in afternoon trading at $1767.8. Crude oil traded up from $84.40 to $88.05 per barrel staying above its 200-week simple moving average at $83.95. The euro versus the US dollar traded higher from 1.4267 and 1.4471.

Energy

Transocean (RIG) has agreed to buy Aker Drilling for 7.93B Norwegian Kroner (26.50 Kroner / share – 98.5% premium) ($1.43B) in a deal that will provide Transocean with $1B in backlog, which suffered following the Gulf oil spill last year. National Oilwell (NOV) has won the largest booking in its history, a $1.5B deal to supply drilling equipment for seven drillships to Brazilian shipyard company Estaleiro Atlantico Sul. Sunoco (SUN) is now Outperform from Neutral at Macquarie. In afternoon trading: Shares of North American Energy Partners (NOA) are up about 16%. Shares of General Maritime (GMR) are up about 14.5%. Shares of Uranium Resources (URRE) are up about 12.75%. Shares of Solazyme (SZYM) are up about 8.5%. Shares of Uranium Energy (UEC) are up about 8.5%. Shares of LDK Solar (LDK) are up about 8%. Shares of Yingli Green Energy (YGE) are up about 8%.

Energy Select Sector SPDR (XLE) was trading at $69.22 at 4:00 PM on Monday, up 3.38% on the day – up 1.42% year-to-date.

Materials

Keybanc Capital cuts AK Steel (AKS) and Metals USA (MUSA) to Hold from Buy. In afternoon trading: Shares of Zagg (ZAGG) are up about 8.25%. Shares of China GengSheng Minerals (CHGS) are up about 8%. Shares of Texas Industries (TXI) are up about 8%. Shares of Fibria Celulose (FBR) are up about 7.5%. Shares of Cemex (CX) are up about 7.5%. Shares of Alumina (AWC) are up about 7%. Shares of Headwaters (HEAD) are up about 6.25%. Shares of Horsehead Holding (ZINC) are up about 6.25%. Shares of Vulcan Materials (VMC) are up about 6%.

The Materials Select Sector SPDR (XLB) traded at $34.39 at 4:00 PM on Monday, up 1.60% on the day – down 8.90% year-to-date.

Industrials

Canadian National Rail (CNI) is now Outperform from Market Perform at Raymond James. Armstrong World Industries (AWI) is hoisted to Buy from Hold at BB&T Capital. NF Energy Saving (NFEC) is now Market Perform from Outperform at Rodman & Renshaw. In afternoon trading: Shares of DryShips (DRYS) are up about 14.75%. Shares of Swisher Hygiene (SWSH) are up about 11.75%. Shares of Greenbrier (GBX) are up about 9.75%. Shares of JetBlue (JBLU) are up about 8.5%. Shares of US Airways (LCC) are up about 7.25%. Shares of AMR (AMR) are up about 7%.

The Industrial Select Sector SPDR (XLI) traded at $31.87 at 4:00 PM on Monday, up 1.50% on the day – down 8.60% year-to-date.

Consumer Discretionary

Time Warner Cable (TWC) could announce today a deal to buy Midwest operator Insight Communications from Carlyle Group for around $3B. The purchase comes as cable providers lose customers to telecom carriers such as Verizon (VZ) and to online video. Home improvement retailer Lowe's (LOW) missed forecasts in Q2 as diluted EPS rose to $0.64 from $0.58 a year earlier and revenues nudged 1.3% higher to $14.54B. General Motors (GM) gets taken to Buy from Neutral at Ticonderoga with a target price of $42. Bed Bath & Beyond (BBBY) is boosted to Outperform from Neutral at Cowen. Hot Topic (HOTT) is lifted to Neutral from Underweight at Piper Jaffray. Family Dollar (FDO) is upgraded to Buy from Neutral at Goldman. Quiksilver (ZQK) is upgraded to Perform from Underperform at FBR Capital with a $4 target. Panasonic (PC) is cut to Underperform from Outperform at Credit Agricole. In afternoon trading: Shares of China XD Plastics (CXDC) are up about 38.5%. Shares of Beazer Homes (BZH) are up about 14%. Shares of Morgans Hotel Group (MHGC) are up about 11%. Shares of Exide Technologies (XIDE) are up about 10.5%.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $36.60 at 4:00 PM on Monday, up 1.47% on the day – down 2.17% year-to-date.

Consumer Staples

After last week's wild swings, investors hope earnings results from Wal-Mart (WMT), Dell (DELL), HP (HPQ) and other major firms will provide some stability this week. ConAgra Foods (CAG) is considering its next steps after Ralcorp (RAH) rejected a strengthened $5.17B offer ($94.00 / share – 19% premium), with the latter saying it prefers to continue its plan to spin off its Post Foods arm. SABMiller PLC (SBMRY) is boosted to Buy from Reduce at Nomura. In afternoon trading: Shares of Central European Distribution (CEDC) are up about 10.25%. Shares of Pilgrim’s Pride (PPC) are up about 7%. Shares of Susser Holdings (SUSS) are up about 6.75%. Shares of The Pantry (PTRY) are up about 6.25%. Shares of Estee Lauder (EL) are DOWN about 7%.

The Consumer Staples Select Sector SPDR (XLP) traded at $29.96 at 4:00 PM on Monday, up 1.42% on the day – up 2.22% year-to-date.

Healthcare

AmerisourceBergen (ABC) is increased to Buy from Hold with a $49 target price at Stifel Nicolaus. Waters (WAT) is raised to Buy from Hold at Auriga with a price objective of $103. Diageo plc (DEO) is downgraded to Neutral from Buy at Nomura.  Heineken NV (HINKY) is lowered to Reduce from Neutral at Nomura. Endo Pharmaceuticals (ENDP) is downgraded to Hold from Buy at Duncan-Williams. In afternoon trading: Shares of Dendreon (DNDN) are up about 20.5%. Shares of Complete Genetics (GNOM) are up about 16.5%. Shares of Five Star Quality Care (FVE) are up about 14%. Shares of EXACT Sciences (EXAS) are up about 13.5%. Shares of Gentiva Health Services (GTIV) are up about 13.25%. Shares of Sun Healthcare Group (SUNH) are up about 12.75%. Shares of Impax Laboratories (IPXL) are up about 12.25%.

The Health Care Select Sector SPDR (XLV) traded at $32.17 at 4:00 PM on Monday, up 1.68% on the day – up 2.13% year-to-date.

Financials

Visa (V) is added to the Conviction Buy List at Goldman Sachs. RBC Capital boosts both Cathay Bancorp (CATY) and Zions Bancorp (ZION) to Outperform from Sector Perform. TCF Financial (TCB) is boosted to Market Perform from Underperform at FBR Capital. In afternoon trading: Shares of The PMI Group (PMI) are up about 23.5%. Shares of Commerzbank AG (CRZBY) are up about 12.25%. Shares of Hersha Hospitality Trust (HT) are up about 10.5%. Shares of Cathay Bancorp are up about 9.25%. Shares of Bank of America (BAC) are up about 8.5%. Shares of TCF Capital (TCB) are up about 8.5%. Shares of CapitalSource (CSE) are up about 7.75%.

The Financial Select Sector SPDR (XLF) traded at $13.19 at 4:00 PM on Monday, up 3.21% on the day – down 17.30% year-to-date.

Information Technology

Time Warner Cable (TWC) could announce today a deal to buy Midwest operator Insight Communications from Carlyle Group for around $3B. The purchase comes as cable providers lose customers to telecom carriers such as Verizon (VZ) and to online video. After last week's wild swings, investors hope earnings results from Wal-Mart (WMT), Dell (DELL), HP (HPQ) and other major firms will provide some stability this week. Google Inc. (GOOG) is buying cell phone maker Motorola Mobility for $12.5 billion in cash ($40.00 / share – 63% premium) in what is by far the company’s biggest acquisition to date. Oracle (ORCL) is placed on the Top Picks list at FBR Capital. Syntel (SYNT) is picked up with a Hold and $52 price objective at Jefferies. International Business Machines (IBM) gets a Buy-from-Neutral boost at Goldman Sachs. NetApp (NTAP) is now Overweight from Neutral at Piper Jaffray. VMware (VMW) is moved to Outperform from Neutral at Credit Suisse. F5 Networks (FFIV) gets upgraded to Neutral from Sell at Goldman. Lexmark (LXK) is lowered to Sell from Neutral at Goldman Sachs, which similarly slashes Brocade (BRCD) and moves Juniper Networks (JNPR) to Neutral from Buy. In afternoon trading: Shares of Evergreen Solar (ESLR) are down about 62% after filing for chapter 11 bankruptcy. Shares of Motorola Mobility are up about 55.5%. Shares of Motricity (MOTR) are up about 21.25%. Shares of Nokia (NOK) are up about 17.5%.

The Technology Select Sector SPDR (XLK) traded at $24.55 at 4:00 PM on Monday, up 1.78% on the day – down 2.54% year-to-date.

Telecommunications Services

Time Warner Cable (TWC) could announce today a deal to buy Midwest operator Insight Communications from Carlyle Group for around $3B. The purchase comes as cable providers lose customers to telecom carriers such as Verizon (VZ) and to online video. In afternoon trading: Shares of Cable & Wireless Worldwide (CBWWF) are up about 15%. Shares of Leap Wireless (LEAP) are up about 13.5%. Shares of Partner Communications (PTNR) are up about 8.25%. Shares of Sprint Nextel (S) are up about 7.5%. Shares of MetroPCS (PCS) are up about 6.25%.

The NASDAQ Telecommunications Index (IXTC) traded at $194.06 at 4:00 PM on Monday, up 2.12% on the day – down 13.89% year-to-date.

Utilities

In afternoon trading: Actives: Shares of Genon Energy (GEN) are up about 0.7%. Shares of Duke Energy (DUK) are up about 2.7%. Shares of Southern (SO) are up about 2.5%. Shares of PPL Corp (PPL) are up about 2.5%. Shares of Exelon (EXC) are up about 3.25%. Shares of AES Corp (AES) are up about 3.7%. Shares of American Electric Power (AEP) are up about 4%.

The Utilities Select Sector SPDR (XLU) traded at $32.78 at 4:00 PM on Monday, up 3.41% on the day – up 4.59% year-to-date.

STOCKS: RIG, NOV, SUN, NOA, GMR, URRE, SZYM, UEC, LDK, YGE, AKS, MUSA, ZAGG, CHGS, TXI, FBR, CX, AWC, HEAD, ZINC, VMC, CNI, AWI, NFEC, DRYS, SWSH, GBX, JBLU, LCC, AMR, TWC, VZ, LOW, GM, BBBY, HOTT, FDO, ZQK, PC, CXDC, BZH, MHGC, XIDE, WMT, DELL, HPQ, CAG, RAH, SBMRY, CEDC, PPC, SUSS, PTRY, EL, ABC, WAT, DEO, HINKY, ENDP, DNDN, GNOM, FVE, EXAS, GTIV, SUNH, IPXL, V, CATY, ZION, TCB, PMI, CRZBY, HT, BAC, TCB, CSE, TWC, VZ, GOOG, ORCL, SYNT, IBM, NTAP, VMW, FFIV, LXK, BRCD, JNPR, ESLR, MOTR, NOK, CBWWF, LEAP, PTNR, S, PCS, GEN, DUK, SO, PPL, EXC, AES, AEP

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
UEC Uranium Energy Corp. 1.61 -0.09 -5.29 1,164,630
ORCL Oracle Corporation 47.84 -0.39 -0.81 14,091,512 Trade
GEN Genesis Healthcare Inc. 1.50 -0.12 -7.41 365,397 Trade
GSM Ferroglobe PLC 6.83 -0.22 -3.12 501,834 Trade
DEO Diageo plc 140.73 -2.58 -1.80 422,662 Trade
SO Southern Company (The) 47.15 0.43 0.92 6,350,109 Trade
AKS AK Steel Holding Corporation 4.08 -0.10 -2.39 14,919,903 Trade
RIG Transocean Ltd (Switzerland) 10.70 -0.86 -7.44 28,297,185 Trade
TWC Time Warner Cable Inc n/a n/a n/a 0 Trade
DRYS DryShips Inc. 4.29 -0.32 -6.94 1,109,123 Trade
WMT Walmart Inc. 90.22 -0.63 -0.69 8,617,030 Trade
SYNT Syntel Inc. 40.69 0.04 0.10 866,567 Trade
IBM International Business Machines Corporation 143.91 0.55 0.38 4,241,526 Trade
NOV National Oilwell Varco Inc. 43.72 -1.48 -3.27 3,244,484 Trade
WAT Waters Corporation 186.44 -1.90 -1.01 410,244 Trade
URRE WWR Uranium Resources Inc. n/a n/a n/a n/a
ABC AmerisourceBergen Corporation 85.12 0.69 0.82 1,377,130 Trade
FVE Five Star Senior Living Inc. 1.15 -0.03 -2.13 172,593 Trade
EL Estee Lauder Companies Inc. (The) 133.53 0.48 0.36 1,956,271 Trade
EXAS Exact Sciences Corporation 48.29 -1.53 -3.07 1,359,337 Trade
S Sprint Corporation 6.01 -0.10 -1.64 9,447,306 Trade
PPL PPL Corporation 29.20 -0.07 -0.24 6,172,071 Trade
BZH Beazer Homes USA Inc. 12.48 -0.43 -3.33 383,005 Trade
V Visa Inc. 139.71 -0.84 -0.60 5,288,740 Trade
LOW Lowe's Companies Inc. 96.83 -1.57 -1.60 3,979,161 Trade
AWI Armstrong World Industries Inc 69.90 -0.20 -0.29 568,622 Trade
VMW Nautilus Minerals Inc. 152.04 -0.21 -0.14 859,894 Trade
CATY Cathay General Bancorp 41.54 -0.57 -1.35 272,250 Trade
AES The AES Corporation 13.49 -0.01 -0.07 7,684,842 Trade
JBLU JetBlue Airways Corporation 18.50 0.18 0.98 3,904,781 Trade
FBR Fibria Celulose S.A. 19.14 -0.29 -1.49 846,858 Trade
HT Hersha Hospitality Trust Class A of Beneficial Interest 21.74 0.18 0.83 164,932 Trade
VZ Verizon Communications Inc. 53.24 0.37 0.70 16,473,346 Trade
SZYM Solazyme Inc. n/a n/a n/a 0
GM General Motors Company 35.94 -0.26 -0.72 10,720,693 Trade
GBX Greenbrier Companies Inc. (The) 56.80 -1.75 -2.99 334,592 Trade
BAC Bank of America Corporation 30.36 -0.43 -1.40 59,749,376 Trade
ZINC Horsehead Hldg Corp n/a n/a n/a 0
CXDC China XD Plastics Company Limited 3.45 -0.10 -2.82 15,142 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 5.09 -0.11 -2.12 12,781,272 Trade
GOOG Alphabet Inc. 1,214.38 -27.72 -2.23 1,829,084 Trade
JNPR Juniper Networks Inc. 26.84 -0.06 -0.22 2,836,219 Trade
YGE Yingli Green Energy Holding Company Limited ADR n/a n/a n/a n/a
NFEC NF Energy Saving Corporation 4.52 0.57 14.43 332,778 Trade
BBBY Bed Bath & Beyond Inc. 18.48 0.07 0.38 3,154,915 Trade
CNI Canadian National Railway Company 88.08 -1.16 -1.30 593,439 Trade
PPC Pilgrim's Pride Corporation 17.73 0.15 0.85 658,806 Trade
IPXL AMRX Impax Laboratories Inc. n/a n/a n/a 0
VMC Vulcan Materials Company (Holding Company) 109.82 -1.54 -1.38 984,429 Trade
NOA North American Construction Group Ltd. (no par) 7.30 -0.20 -2.67 145,529 Trade
HPQ HP Inc. 24.03 -0.12 -0.50 6,318,655 Trade
ENDP Endo International plc 16.06 -0.04 -0.25 6,661,977 Trade
SUN Sunoco LP representing limited partner interests 26.55 -0.40 -1.48 409,451 Trade
MUSA Murphy USA Inc. 86.07 0.76 0.89 274,885 Trade
TCB TCF Financial Corporation n/a n/a n/a 0
PTNR Partner Communications Company Ltd. 3.86 0.07 1.85 5,018 Trade
EXC Exelon Corporation 43.63 0.28 0.65 5,868,473 Trade
DUK Duke Energy Corporation (Holding Company) 80.93 0.64 0.80 3,683,801 Trade
CAG ConAgra Brands Inc. 37.06 0.19 0.52 5,116,676 Trade
NTAP NetApp Inc. 82.47 -0.29 -0.35 3,549,454 Trade
CX Cemex S.A.B. de C.V. Sponsored ADR 6.79 -0.27 -3.82 9,166,701 Trade
LXK Lexmark International Inc. n/a n/a n/a 0 Trade
MHGC Morgans Hotel Group Co. n/a n/a n/a 0 Trade
AEP American Electric Power Company Inc. 71.77 0.75 1.06 2,352,932 Trade
ZION Zions Bancorporation 52.72 -0.85 -1.59 2,054,131 Trade
FFIV F5 Networks Inc. 178.96 -2.59 -1.43 563,356 Trade
ZAGG ZAGG Inc 14.60 -0.40 -2.67 227,773 Trade
SWSH Swisher Hygiene Inc n/a n/a n/a 0

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