Equities Sector Coverage: Financials Fall As Market Pare Losses

Sector Recap |

Jamie Dimon JPMThe Trade Deficit came in at $45.6 billion in August. Initial Jobless Claims came in at 404,000 still well above the 350,000 recessionary threshold. The Dow Jones Industrial Average declined to 11,377.82 Thursday morning nearly 250 points below Wednesday’s high at 11,625.30 with the post-August 9th high at 11,716.84. The afternoon trading saw a high above 11,500. The NASDAQ declined to 2588.71 Thursday morning versus Wednesday high at 2629.48 and its post-August 9th high at 2643.37.

Asian stocks were mixed on Thursday with the Nikkei 225 up 0.97% to 8,823 and the Hang Seng higher by 2.34% to 18,758. European stocks traded lower on Thursday as Euroland debt plan takes shape. The FTSE 100 declined 0.94% to 5,391 with the DAX down 1.55% to 5,901 and the CAC 40 slumping by 1.33% to 3,187. The US Treasury 10-Year yield declined from 2.224 percent to 2.121 on Thursday as traders awaited today’s auction. Yields are significantly above the September 23rd all time low at 1.671 percent for the 10-Year note. The US Treasury auctioned $13 billion in 30-Year bonds at 3.120 with a bid to cover at 2.94 times with an Indirect Bid of 28.7%. Gold traded lower from $1686.1 the Troy ounce to $1654.3 on Thursday. Crude oil traded down from $85.39 per barrel to $83.17 versus its 200-week simple moving average at $83.57 and below its 50-day at $84.85. The euro versus the dollar declined from 1.3825 to 1.3689 on Thursday.

Energy

The afternoon rebound was above 2625. Tesoro Logistics LP (TLLP) is begun with a Buy and $27.50 price objective at Wunderlich. In afternoon trading: Shares of Range Resources (RRC) are up about 7.75%. Shares of Lucas Energy (LEI) are up about 7.25%. Shares of Callon Petroleum (CPE) are up about 6.75%. Shares of RPC Inc. (RES) are up about 6%. Shares of Cal Dive International (DVR) are down about 8%. Shares of Frontline (FRO) are down about 6.25%.

Energy Select Sector SPDR (XLE) was trading at $64.04 at 4:00 PM on Thursday, down slightly on the day – down 6.17% year-to-date.

Materials

The afternoon rebound was above 2625. Freeport-McMoRan Copper & Gold (FCX) is begun with a Buy at BB&T Capital. Akzo Nobel N.V. (AKZOY) is initiated with an Underperform at Credit Suisse. Louisiana-Pacific (LPX) is lifted to Outperform from Sector Perform at RBC Capital. Mercer International (MERC) is moved to Sector Perform from Outperform at RBC Capital. In afternoon trading: Shares of Walter Energy (WLT) are up about 10%. Shares of Cemex (CX) are up about 9%. Shares of Owens Illinois (OI) are up about 7.25%. Shares of Mercer International are down about 8.5%.

The Materials Select Sector SPDR (XLB) was trading at $32.62 at 4:00 PM on Thursday, down 0.52% on the day – down 15.07% year-to-date.

Industrials

The afternoon rebound was above 2625. Armstrong World Industries (AWI) is assigned an Overweight at Barclays. Healthcare Services Group (HCSG) is downgraded to Hold from Buy at Duncan-Williams. Goodrich (GR) gets cut to Sector Perform from Outperform at RBC Capital. In afternoon trading: Shares of A123 Systems (AONE) are down about 7.5%. Shares of Lindsay (LNN) are down about 6%. Shares of Beacon Power (BCON) are up about 7.75%. Shares of Broadwind Energy (BWEN) are up about 7.25%. Shares of Mistras Group (MG) are up about 7%. Shares of Spirit Airlines (SAVE) are up about 6.75%. Shares of Wesco Aircraft (WAIR) are up about 6.25%.

The Industrial Select Sector SPDR (XLI) was trading at $31.62 at 4:00 PM on Thursday, down 0.85% on the day – down 9.32% year-to-date.

Consumer Discretionary

The afternoon rebound was above 2625. Instead of the typical July-September rise in shipments ahead of the holiday season, the Port of Long Beach reports 2 months of declines (and #3 expected soon) as retailers take a conservative stance on orders. Guess? (GES) is a new Neutral at Bank of America-Merrill Lynch. Johnson Controls (JCI) is resumed with a Buy and $40 target price at Needham. Barclays begins Overweights on Lennar (LEN), Pulte Group (PHM), and Toll Brothers (TOL). Grupo Televisa (TV) is established at an Underweight by Barclays. Williams-Sonoma (WSM) is upgraded to Buy from Hold at BB&T Capital. Dick’s Sporting Goods (DKS) is boosted to Buy from Hold at ThinkEquity. Clear Channel Outdoor (CCO) is cut to Average from Above Average at Caris & Co. In afternoon trading: Shares of BB Liquidating – formerly Blockbuster (BLOAQ) are down about 87.5%

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.05 at 4:00 PM on Thursday, down slightly on the day – up 1.71% year-to-date.

Consumer Staples

The afternoon rebound was above 2625. Carrefour (CRRFY) warns Q4 profit will miss expectations, as a slowing economy adds to the company's self-inflicted wounds. Kroger (KR) gets downgraded to Hold from Buy at Jefferies.  In afternoon trading: Shares of Zhongpin (HOGS) are up about 9.75%. Shares of Coffee Holding (JVA) are up about 8.75%. Shares of Supervalu (SVU) are up about 6%. Shares of Carrefour are down about 5.25%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.63 at 4:00 PM on Thursday, down 0.29% on the day – up 4.50% year-to-date.

Healthcare

The afternoon rebound was above 2625. Volcano (VOLC) gets picked up with a Neutral at Goldman Sachs. Onyx Pharmaceuticals (ONXX) is moved to Outperform from Market Perform by BMO Capital. In afternoon trading: Shares of Dendreon (DNDN) are up about 8.75%. Shares of Vertex Pharmaceuticals (VRTX) are up about 8.5%. Shares of Akorn (AKRX) are up about 8.5%. Shares of Brookdale Senior Living (BKD) are up about 6%. Shares of Thoratec (THOR) are up about 6%.

The Health Care Select Sector SPDR (XLV) was trading at $32.57 at 4:00 PM on Thursday, down slightly on the day – up 3.40% year-to-date.

Financials

The afternoon rebound was above 2625. Continuing to unload banking assets in tough market conditions and to limit federal oversight, MetLife (MET) is exploring a sale of its mortgage operation. Bailed-out American International Group (AIG) improves its credit terms with $4.5 billion in new facilities - a $3 billion four-year deal, and a $1.5 billion 365-day arrangement - to replace $3.18 billion in lines under less favorable terms. JPMorgan (JPM) reported a quarterly profit of $1.02 / share (versus expectations of $0.93 / share). Blackstone (BX) is removed from Citigroup’s Top Picks Live list. Legg Mason (LM) and Hatteras Financial (HTS) are each lowered to Neutral from Outperform at Macquarie. Primerica (PRI) is reduced to Perform from Outperform at Raymond James. In afternoon trading: Shares of Ambac Financial Group (ABKFQ) are down about 9%. Shares of Lehman Brothers (LEHMQ) are up about 8%.

The Financial Select Sector SPDR (XLF) was trading at $12.45 at 4:00 PM on Thursday, down 2.31% on the day – down 21.94% year-to-date.

Information Technology

The afternoon rebound was above 2625. Bloomberg reports 2 people familiar with the matter characterizing a rumor Akamai (AKAM) is to be acquired by Google (GOOG) as baseless. The email, IM, and Internet outages for Research in Motion's (RIMM) Blackberry spread to North America, but the company reports "significant" improvement in service in Europe, the Middle East, India, and Africa. Netease.com (NTES) is now Overweight from Neutral at Piper Jaffray. Broadcom (BRCM) is raised to Outperform from Neutral by brokers Robert W. Baird with a new target of $46. Infineon (IFNNY) is increased to Add from Neutral at WestLB. Rackspace (RAX) gets a Buy-from-Neutral upgrade at Goldman. Alliance Data Systems (ADS) is now Neutral from Buy at Suntrust. Altera (ALTR) is taken to Neutral from Outperform at Robert W. Baird with a new target of $35 from $46. Rightnow Technologies (RNOW) is reduced to Hold from Buy at Needham. In afternoon trading: Shares of TriQuint Semiconductor (TQNT) are up about 24%. Shares of Sina (SINA) are up about 18%. Shares of Fairchild Semiconductor (FCS) are up about 11.5%. Shares of JinkoSolar (JKS) are up about 11.5%.

The Technology Select Sector SPDR (XLK) was trading at $25.55 at 4:00 PM on Thursday, up 1.11% on the day – up 1.43% year-to-date.

Telecommunications Services

The afternoon rebound was above 2625. In afternoon trading: Shares of Clearwire (CLWR) are up about 28.5%. Shares of Sprint Nextel (S) are up about 8%. Shares of MetroPCS (PCS) are up about 5%. Shares of Leap Wireless (LEAP) are up about 4.5%. Shares of NII Holdings (NIHD) are up about 4.5%. Actives: Shares of AT&T (T) are up about 0.3%. Shares of Verizon (VZ) are up about 1.1%. Shares of Level 3 Communications (LVLT) are down about 2.25%. Shares of Frontier Communications (FTR) are down about 0.6%. Shares of Vodafone (VOD) are up about 1.4%.

The NASDAQ Telecommunications Index (IXTC) was trading at $195.38 at 4:00 PM on Thursday, up 0.99% on the day – down 13.31% year-to-date.

Utilities

The afternoon rebound was above 2625. York Water (YORW) is a new Neutral at boutique brokerage firm Boenning & Scattergood. In afternoon trading: Actives: Shares of Duke Energy (DUK) are up slightly. Shares of Genon Energy (GEN) are down about 5.25%. Shares of FirstEnergy (FE) are down about 2.8%. Shares of AES Corp (AES) are down about 0.7%. Shares of PG&E (PCG) are up about 1.1%. Shares of Exelon (EXC) are up slightly. Shares of PSE&G (PEG) are down slightly.

The Utilities Select Sector SPDR (XLU) was trading at $33.66 at 4:00 PM on Thursday, unchanged on the day – up 7.40% year-to-date.

STOCKS: TLLP, RRC, LEI, CPE, RES, DVR, FRO, FCX, AKZOY, LPX, MERC, WLT, CX, AWI, HCSG, GR, AONE, LNN, BCON, BWEN, MG, SAVE, WAIR, GES, JCI, LEN, PHM, TOL, TV, WSM, DKS, CCO, BLOAQ, CRRFY, KR, HOGS, JVA, SVU, MET, AIG, JPM, BX, LM, HTS, PRI, ABKFQ, LEHMQ, AKAM, GOOG, RIMM, NTES, BRCM, IFNNY, RAX, ADS, ALTR, RNOW, TQNT, SINA, FCS, JKS, CLWR, S, PCS, LEAP, NIHD, T, VZ, LVLT, FTR, VOD, YORW, DUK, GEN, FE, AES, PCG, EXC, PEG

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
ADS Alliance Data Systems Corporation 213.47 2.03 0.96 485,538
AES The AES Corporation 13.08 -0.04 -0.30 4,674,105
AIG American International Group Inc. New 58.51 0.26 0.45 5,388,315
AKAM Akamai Technologies Inc. 52.65 0.89 1.72 1,562,407
ALTR Altera Corp. n/a n/a n/a 0
AWI Armstrong World Industries Inc 41.00 -0.30 -0.73 543,505
BRCM Broadcom Corp. n/a n/a n/a 0
BWEN Broadwind Energy Inc. 4.16 -0.07 -1.65 43,379
BX The Blackstone Group L.P. Representing Limited Par 25.00 -0.46 -1.81 5,416,835
CCO Clear Channel Outdoor Holdings Inc. Class A 6.05 0.09 1.51 146,926
CPE Callon Petroleum Company 13.55 -0.51 -3.63 3,548,232
CX Cemex S.A.B. de C.V. Sponsored ADR 7.94 0.39 5.17 10,700,198
DKS Dick\'s Sporting Goods Inc 60.42 0.41 0.68 1,687,301
DUK Duke Energy Corporation (Holding Company) 81.43 -0.72 -0.88 2,268,288
EXC Exelon Corporation 34.18 -0.64 -1.84 4,765,713
FCS Fairchild Semiconductor International Inc. n/a n/a n/a 0
FCX Freeport-McMoRan Inc. 10.21 -0.30 -2.85 24,690,612
FE FirstEnergy Corporation 33.67 -0.91 -2.63 5,301,436
FRO Frontline Ltd 7.05 -0.04 -0.56 760,241
FTR Frontier Communications Corporation 4.34 -0.02 -0.46 13,582,166
GEN Genesis Healthcare Inc. 2.76 0.05 1.85 80,070
GES Guess? Inc. 14.25 -0.01 -0.07 900,154
GOOG Alphabet Inc. 783.01 8.80 1.14 1,153,312
HCSG Healthcare Services Group Inc. 38.75 -0.05 -0.13 251,821
HTS Hatteras Financial Corp n/a n/a n/a 0
JCI Johnson Controls Inc. 44.98 0.69 1.56 9,300,756
JKS JinkoSolar Holding Company Limited American Deposi 15.49 0.46 3.06 482,526
JPM JP Morgan Chase 66.36 0.58 0.88 13,711,601
JVA Coffee Holding Co. Inc. 5.48 -0.01 -0.16 25,260
KR Kroger Company (The) 29.90 -0.18 -0.60 9,877,324
LEI Lucas Energy Inc. 3.38 -0.02 -0.59 21,436
LEN Lennar Corporation Class A 42.72 -0.23 -0.54 1,946,235
LM Legg Mason Inc. 33.37 0.35 1.06 708,814
LNN Lindsay Corporation 72.14 -0.13 -0.18 52,601
LPX Louisiana-Pacific Corporation 18.95 0.20 1.07 926,962
LVLT Level 3 Communications Inc. 47.06 0.03 0.06 2,645,564
MERC Mercer International Inc. 8.31 -0.04 -0.48 64,438
MET MetLife Inc. 43.75 0.35 0.81 5,914,029
MG Mistras Group Inc 23.21 0.20 0.87 158,973
NIHD NII Holdings Inc. 3.21 0.00 0.00 322,151
NTES NetEase Inc. 244.15 2.94 1.22 1,032,059
PCG Pacific Gas & Electric Co. 62.36 -1.05 -1.66 2,941,282
PEG Public Service Enterprise Group 42.80 -0.70 -1.61 1,869,792
PHM PulteGroup Inc. 19.89 0.12 0.61 3,538,439
PRI Primerica Inc. 54.09 0.23 0.43 750,331
RAX Rackspace Hosting Inc 31.59 0.03 0.10 1,684,002
RES RPC Inc. 15.61 -0.09 -0.57 1,397,926
RRC Range Resources Corporation 36.97 -1.56 -4.05 4,375,091
S Sprint Corporation 6.73 0.08 1.20 9,741,591
SAVE Spirit Airlines Inc. 41.95 0.82 1.99 1,887,112
SINA Sina Corporation 77.73 1.98 2.61 1,170,316
SVU SuperValu Inc. 4.57 -0.02 -0.44 2,374,887
T AT&T Inc. 41.46 0.32 0.78 18,453,500
TLLP Tesoro Logistics LP representing Limited Partner I 48.01 0.03 0.06 159,624
TOL Toll Brothers Inc. 29.30 0.03 0.10 1,571,253
TV Grupo Televisa S.A. 25.79 0.45 1.78 1,991,119
VOD Vodafone Group Plc 29.27 0.20 0.69 4,175,410
VZ Verizon Communications Inc. 52.49 0.34 0.65 8,259,782
WAIR Wesco Aircraft Holdings Inc. 13.52 0.05 0.37 242,332
WSFS WSFS Financial Corporation 36.39 0.42 1.17 89,987
WSM Williams-Sonoma Inc. (DE) 50.56 0.78 1.57 2,359,542
YORW The York Water Company 30.02 -0.14 -0.46 19,342

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