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. 1.34 0.04 3.08 802,815
ORCL Oracle Corporation 45.26 0.06 0.13 6,899,725 Trade
GEN Genesis Healthcare Inc. 1.86 -0.06 -3.13 91,356 Trade
GSM Ferroglobe PLC 10.76 0.19 1.80 621,681 Trade
DEO Diageo plc 121.37 -0.49 -0.40 318,177 Trade
BRCD Brocade Communications Systems Inc. 12.63 -0.02 -0.16 4,782,423 Trade
SO Southern Company (The) 50.45 -0.05 -0.10 3,265,939 Trade
AKS AK Steel Holding Corporation 5.80 -0.14 -2.36 9,098,231 Trade
RIG Transocean Ltd (Switzerland) 9.56 -0.09 -0.93 13,992,971 Trade
TWC Time Warner Cable Inc n/a n/a n/a 0 Trade
DRYS DryShips Inc. 2.83 -0.22 -7.21 2,777,753 Trade
WMT Wal-Mart Stores Inc. 78.13 -0.18 -0.23 6,125,781 Trade
SYNT Syntel Inc. 18.16 -0.33 -1.78 245,347 Trade
IBM International Business Machines Corp 152.49 -0.71 -0.46 2,443,507 Trade
NOV National Oilwell Varco Inc. 32.77 0.17 0.52 2,412,235 Trade
WAT Waters Corporation 178.07 -0.53 -0.30 274,471 Trade
URRE Uranium Resources Inc. 1.48 -0.02 -1.33 337,537 Trade
ABC AmerisourceBergen Corporation 91.00 -0.11 -0.12 892,137 Trade
FVE Five Star Quality Care Inc. 1.80 -0.05 -2.70 58,377 Trade
EL Estee Lauder Companies Inc. (The) 93.70 0.45 0.48 852,849 Trade
EXAS Exact Sciences Corporation 33.32 0.13 0.39 1,368,072 Trade
S Sprint Corporation 8.40 0.07 0.84 6,651,970 Trade
PPL PPL Corp 39.86 -0.04 -0.10 2,144,829 Trade
BZH Beazer Homes USA Inc. 12.90 -1.17 -8.32 1,401,502 Trade
V Visa Inc. 94.67 -0.37 -0.39 4,133,942 Trade
LOW Lowe\'s Companies Inc. 80.91 -0.42 -0.52 4,571,571 Trade
AWI Armstrong World Industries Inc 42.00 0.65 1.57 531,710 Trade
VMW Vmware Inc. Class A 96.81 0.04 0.04 823,821 Trade
CATY Cathay General Bancorp 36.79 -0.12 -0.33 281,646 Trade
AES The AES Corporation 11.79 0.01 0.08 2,565,130 Trade
JBLU JetBlue Airways Corporation 22.95 0.14 0.61 4,881,281 Trade
FBR Fibria Celulose S.A. 11.14 -0.03 -0.27 2,260,737 Trade
HT Hersha Hospitality Trust Class A of Beneficial Int 18.71 0.01 0.05 149,316 Trade
VZ Verizon Communications Inc. 45.32 0.01 0.02 5,999,937 Trade
SZYM Solazyme Inc. n/a n/a n/a 0
GM General Motors Company 33.07 0.47 1.44 16,813,681 Trade
GBX Greenbrier Companies Inc (The) 44.65 -0.20 -0.45 204,861 Trade
BAC Bank of America Corporation 23.24 -0.01 -0.04 50,399,458 Trade
ZINC Horsehead Hldg Corp n/a n/a n/a 0
CXDC China XD Plastics Company Limited 4.73 0.03 0.64 363 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 6.38 -0.02 -0.31 11,264,076 Trade
GOOG Alphabet Inc. 971.47 1.93 0.20 1,252,010 Trade
JNPR Juniper Networks Inc. 29.32 -0.12 -0.41 2,904,277 Trade
YGE Yingli Green Energy Holding Company Limited ADR 2.21 -0.01 -0.45 98,871 Trade
NFEC NF Energy Saving Corporation 0.86 -0.04 -4.11 14,724 Trade
BBBY Bed Bath & Beyond Inc. 34.85 0.08 0.23 1,820,479 Trade
CNI Canadian National Railway Company 77.01 -0.47 -0.61 928,145 Trade
PPC Pilgrim\'s Pride Corporation 23.53 0.30 1.29 1,085,760 Trade
IPXL Impax Laboratories Inc. 15.25 -0.60 -3.79 2,398,394 Trade
VMC Vulcan Materials Company (Holding Company) 126.43 -1.32 -1.03 996,771 Trade
NOA North American Energy Partners Inc. (no par) 4.60 0.05 1.10 64,011 Trade
HPQ HP Inc. 18.47 0.10 0.54 14,525,992 Trade
ENDP Endo International plc 13.12 0.23 1.78 3,907,440 Trade
SUN Sunoco LP representing limited partner interests 30.35 -0.13 -0.43 371,460 Trade
MUSA Murphy USA Inc. 68.37 -0.19 -0.28 363,251 Trade
TCB TCF Financial Corporation n/a n/a n/a 0
PTNR Partner Communications Company Ltd. 5.16 -0.03 -0.58 633 Trade
EXC Exelon Corporation 35.82 -0.21 -0.58 5,699,892 Trade
DUK Duke Energy Corporation (Holding Company) 85.07 -0.07 -0.08 2,023,992 Trade
CAG ConAgra Foods Inc. 39.03 0.21 0.54 1,865,282 Trade
NTAP NetApp Inc. 40.24 -0.72 -1.76 3,637,559 Trade
CX Cemex S.A.B. de C.V. Sponsored ADR 8.38 0.02 0.24 4,724,073 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 70.87 0.07 0.10 3,464,774 Trade
ZION Zions Bancorporation 40.45 -0.43 -1.05 2,195,873 Trade
FFIV F5 Networks Inc. 127.16 -0.42 -0.33 354,104 Trade
ZAGG ZAGG Inc 8.20 0.05 0.61 142,650 Trade
SWSH Swisher Hygiene Inc n/a n/a n/a 0

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