Equities Sector Coverage: Financials Lead Decliners As Market Plunges

Sector Recap |

Bank of America BACNonfarm Payrolls were flat in August and the levels for June and July were revised lower by 58,000. The unemployment rate remained at 9.1%. The private sector only added 17,000 jobs. The average workweek declined 0.1 hours to 34.2 hours. The Dow Jones Industrial Average traded down to 11,244.76 in reaction to the weaker than expected payrolls data. After a rebound to 11,340 the Dow traded to an afternoon low at 11,211.35. The NASDAQ traded down to 2489.07 in reaction to the jobs data. After a rebound to 2512.78 the downside accelerated to an afternoon low at 2469.65.

Asian stocks traded lower on Friday following the losses on Wall Street. The Nikkei 225 declined by 1.21% to 8,951. The Hang Seng fell by 1.81% to 20,213. In Europe the markets traded lower with losses accelerating following the weak jobs data in the US.  The FTSE 100 declined 2.34% to 5,292. The DAX slumped 3.36% to 5,538. The CAC 40 tumbled by 3.59% to 3,149. The yield on the 10-Year US Treasury declined to 1.987 percent stretching towards the low end of the post-FOMC range of 2.360 to 1.973. Gold rebounded from $1826.9 the Troy ounce to $1887.4 on the weaker than expected payrolls data. Crude oil traded down from $88.99 per barrel to $85.42 as the rally remains below its 50-day and 200-day simple moving averages at $91.47 and $95.27. The euro versus the US dollar declined from 1.4286 to 1.4187 on Friday.


In afternoon trading: Shares of Trina Solar (TSL) are down about 10.2%. Shares of First Solar (FSLR) are down about 8.1%. Shares of W&T Offshore (WTI) are down about 8%. Shares of Solazyme (SZYM) are down about 8%. Shares of Canadian Solar (CSIQ) are down about 7.9%. Shares of Carrizo Oil & Gas (CRZO) are down about 7.9%. Shares of BPZ Resources (BPZ) are down about 7.8%. Shares of Precision Drilling (PDS) are down about 7.4%. Shares of ATP Oil & Gas (ATPG) are down about 7%. Shares of Suntech Power Holdings (STP) are down about 7%.

Energy Select Sector SPDR (XLE) was trading at $66.22 at 4:00 PM on Friday, down 2.79% on the day – down 2.97% year-to-date.


Cargill and other major U.S. agribusinesses have increased restrictions on accepting Syngenta's (SYT) popular Agrisure Viptera corn as part of curbs against genetically modified grain not yet approved in major foreign markets such as China and the EU. Koppers Holdings (KOP) is a new Hold at KeyBanc. A.M. Castle (CAS) is assumed with a Buy and $17 target price at Jefferies. Globe Specialty Metals (GSM) is begun with a Buy and $25 target at Jefferies. In afternoon trading: Shares of Silvercorp Metals (SVM) are down about 13.1%. Shares of Mechel OAO (MTL) are down about 8.5%. Shares of AcelorMittal (MT) are down about 6.7%. Shares of LyondellBassell Industries (LYB) are down about 6.1%. Shares of Golden Star Resources (GSS) are up about 9.2%. Shares of Silver Standard Resources (SSRI) are up about 6.8%.

The Materials Select Sector SPDR (XLB) was trading at $33.97 at 4:00 PM on Friday, down 2.55% on the day – down 11.56% year-to-date.


Esterline Technologies’ (ESL) FQ3 earnings missed estimates across-the-board. Net income came in at $37.7M, -4.5% Y/Y on weakness in its defense contracting business due to cuts in government spending. The company reiterates at the lower-end of guidance consensus. Boeing (BA) is begun with a Buy at CRT Capital, which assigns identical ratings on Precision Castparts (PCP), HEICO (HEI), TransDigm (TDG), Hexcel (HXL), Goodrich (GR), and BE Aerospace (BEAV). It resumes Rockwell Collins (COL) and Spirit AeroSystems (SPR) ratings of Fair Value. Carlisle Cos (CSL) is initiated with a Hold at KeyBanc Capital, which establishes a price objective of $55. United Parcel Service (UPS) is upgraded to Outperform from Neutral at Credit Suisse. Old Dominion (ODFL) is upgraded to Outperform from Neutral at Credit Suisse. Credit Suisse cuts FedEx (FDX) and Canadian Pacific (CP) to Neutral from Outperform. In afternoon trading: Shares of Esterline Technologies (ESL) are down about 13.3%.

The Industrial Select Sector SPDR (XLI) was trading at $30.85 at 4:00 PM on Friday, down 3.20% on the day – down 11.53% year-to-date.

Consumer Discretionary

Liberty Media's (LSTZA) Starz has broken off contract-renewal talks with Netflix (NFLX) over differences in pricing and packaging, saying it will end programming as of March 2012. H&R Block (HRB) beat estimates by 3 cents, but missed revenue by $268M. Quiksilver (ZQK) posted a mixed FQ3, missing on EPS due to tighter margins but beating overall revenue projections. Profits grew 26% Y/Y on an 11% jump in U.S. demand, and a favorable currency helped boost gains in Europe by over 16%. Quiksilver (ZQK) is raised to Outperform from Perform with a $6 target at brokers Robert W. Baird. Education Management (EDMC) is moved to Equal Weight from Underweight at Morgan Stanley. In afternoon trading: Shares of H&R Block are down about 12.7%. Shares of Talbots (TLB) are down about 10.4%. Shares of Netflix are down about 9.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $36.06 at 4:00 PM on Friday, down 2.83% on the day – down 3.61% year-to-date.

Consumer Staples

Campbell Soup (CPB) beat estimates by 5 cents and revenue by $40M. Heineken (HINKY) is downgraded to Hold from Buy at Citigroup. In afternoon trading: Shares of China-Biotics (CHBT) are down about 12.5%. Shares of Synutra International (SYUT) are down about 7.9%. Shares of Seneca Foods (SENEA) are down about 7%. Shares of Pilgrim’s Pride (PPC) are down about 6.1%. Shares of Revlon (REV) are down about 5.9%. Shares of Elizabeth Arden (RDEN) are down about 5.9%. Shares of Central European Distribution (CEDC) are up about 8.3%. Shares of Yuhe International (YUII) are up about 7.1%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.34 at 4:00 PM on Friday, down 1.43% on the day – up 3.51% year-to-date.


AstraZeneca's (AZN) blockbuster cholesterol drug Crestor has failed to significantly beat Pfizer's (PFE) Lipitor in a head-to-head study. In afternoon trading: Shares of Geron Corp (GERN) are down about 10.6%. Shares of Biostar Pharmaceuticals (BSPM) are down about 10.3%. Shares of Dendreon (DNDN) are down about 9.5%. Shares of Inhibitex (INHX) are down about 8.8%. Shares of Peregrine Pharmaceuticals (PPHM) are down about 8.8%. Shares of Achillion Pharmaceuticals (ACHN) are down about 8.7%. Shares of Pacific Biosciences (PACB) are down about 8.2%. Shares of Complete Genetics (GNOM) are down about 8.1%. Shares of Regeneron Pharmaceuticals (REGN) are up about 8%.

The Health Care Select Sector SPDR (XLV) was trading at $32.45 at 4:00 PM on Friday, down 2.20% on the day – up 3.02% year-to-date.


The Federal Housing Finance Agency could file lawsuits seeking billions of dollars in compensation from a dozen large banks for misrepresenting the quality of mortgage bonds they sold during the housing bubble. These suits will argue that the banks, which include Bank of America (BAC), JPMorgan (JPM), Goldman Sachs (GS) and Deutsche Bank (DB), didn't undertake the due diligence required by law. With its potential legal liabilities piling up, Bank of America (BAC) has received a request from the Fed about what it could do if its financial situation worsens. The London Stock Exchange (LDNXF) said it is in early talks to buy LCH Clearnet in a deal that the FT says could value the clearing house at €1B ($1.43B). Allianz SE (AZSEY) gets a Buy-from-Hold boost at brokerage Collins Stewart. Toronto-Dominion Bank (TD) is taken to Outperform from Neutral at Credit Suisse. Eaton Vance (EV) is now Sell from Neutral with a $20 price target at Ticonderoga. In afternoon trading: Shares of MGIC Investment (MTG) are down about 10.8%. Shares of FelCor Lodging Trust (FCH) are down about 9.1%. Shares of Bank of America (BAC) are down about 8.6%.

The Financial Select Sector SPDR (XLF) was trading at $12.54 at 4:00 PM on Friday, down 4.13% on the day – down 21.38% year-to-date.

Information Technology

A U.S. judge has overturned Oracle's (ORCL) $1.3B verdict against SAP for theft of intellectual property, saying that the amount was "grossly excessive" and that the maximum value of the damages proved is just $272M. Amazon (AMZN) has offered to invest in Californian distribution centers and create 7,000 full-time jobs by 2015 in exchange for a reprieve from the state's new Internet sales tax law until 2014. Mitel Networks’ (MITL) FQ1 swung to a loss on restructuring costs, but beats overall estimates on a 14% jump in revenues from its DataNet segment. The company reiterates guidance at the high-end of analysts' forecasts. Finisar (FNSR) beat estimates by 3 cents with revenue in-line with estimates, and expects FQ2 Revenue at $235M-$250M, GAAP OM at 5.5%-7.0%, Non-GAAP OM at 8.5%-10.0% and Non-GAAP EPS at $0.20-$0.24. Liquidity Services (LQDT) is upgraded to Outperform from Perform at Oppenheimer with a new target of $38. Blue Coat (BCSI) is lifted to Neutral from Sell at Lazard. Motorola Mobility (MMI) is moved to Equal Weight from Overweight at Morgan Stanley. In afternoon trading: Shares of Oclaro Inc. (OCLR) are up about 11.5%. Shares of Finisar are up about 9.7%. Shares of JinkoSolar (JKS) are down about 11%.

The Technology Select Sector SPDR (XLK) was trading at $23.62 at 4:00 PM on Friday, down 2.28% on the day – down 6.23% year-to-date.

Telecommunications Services

AT&T (T) could have to sell up to 25% of T-Mobile's (DTEGY) business, including airwaves and customers, to overcome government antitrust fears about the carriers' tie-up. In afternoon trading: Shares of Leap Wireless (LEAP) are down about 8.5%. Shares of Radcom (PDCM) are down about 7.4%. Shares of Neutral Tandem (TNDM) are down about 7.2%. Shares of Towerstream (TWER) are down about 6.8%. Shares of Shenandoah Telecommun (SHEN) are down about 6.8%. Shares of MetroPCS (PCS) are down about 6.2%. Shares of Cincinnati Bell (CBB) are down about 5.5%. Shares of Sprint Nextel (S) are down about 5%.

The NASDAQ Telecommunications Index (IXTC) was trading at $187.28 at 4:00 PM on Friday, down 2.80% on the day – down 16.90% year-to-date.


In afternoon trading: Shares of Dynegy (DYN) are up about 7.3%. Shares of Tri-Tech Holding (TRIT) are down about 6.6%. Actives: Shares of Duke Energy (DUK) are relatively unchanged. Shares of Southern (SO) are relatively unchanged. Shares of Genon Energy (GEN) are down about 1.6%. Shares of AES Corp (AES) are down about 3%. Shares of Exelon (EXC) are down about 0.7%. Shares of Dominion Resources (D) are down about 0.8%.

The Utilities Select Sector SPDR (XLU) was trading at $33.29 at 4:00 PM on Friday, down 1.13% on the day – up 6.22% year-to-date.


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


Symbol Name Price Change % Volume
GSS Golden Star Resources Ltd 0.71 -0.01 -0.71 237,365
HRB H&R Block Inc. 28.13 0.24 0.86 201,855 Trade
ORCL Oracle Corporation 46.59 -0.62 -1.31 6,157,839 Trade
UPS United Parcel Service Inc. 116.28 -0.80 -0.68 530,408 Trade
EV Eaton Vance Corporation 57.05 -1.01 -1.74 237,630 Trade
GEN Genesis Healthcare Inc. 2.03 0.04 2.01 491,130 Trade
FCH FelCor Lodging Trust Incorporated n/a n/a n/a 0 Trade
BEAV B/E Aerospace Inc. n/a n/a n/a 0 Trade
GSM Ferroglobe PLC 11.97 0.62 5.46 1,007,043 Trade
IO Ion Geophysical Corporation 25.93 -0.08 -0.29 44,685 Trade
SO Southern Company (The) 43.71 0.27 0.61 1,546,308 Trade
TD Toronto Dominion Bank (The) 59.63 0.77 1.31 404,493 Trade
ODFL Old Dominion Freight Line Inc. 150.32 -0.79 -0.52 89,473 Trade
CRZO Carrizo Oil & Gas Inc. 28.17 0.26 0.93 1,623,201 Trade
D Dominion Energy Inc. 63.99 0.27 0.42 810,028 Trade
ESL Esterline Technologies Corporation 78.00 -0.75 -0.96 46,593 Trade
HEI Heico Corporation 90.77 -1.00 -1.09 32,382 Trade
SYT Syngenta AG n/a n/a n/a 0 Trade
CBB Cincinnati Bell Inc. 16.93 -0.08 -0.44 210,165 Trade
S Sprint Corporation 5.23 0.07 1.36 3,875,356 Trade
MITL Mitel Networks Corporation 11.04 0.01 0.05 299,286 Trade
CSL Carlisle Companies Incorporated 108.30 1.07 1.00 98,193 Trade
OCLR Oclaro Inc. 9.22 0.17 1.92 479,007 Trade
JPM JP Morgan Chase & Co. 113.76 1.61 1.44 2,979,363 Trade
FNSR Finisar Corporation 17.05 -0.03 -0.18 1,096,415 Trade
RDEN Elizabeth Arden Inc. n/a n/a n/a 0 Trade
CAS Castle (A.M.) & Co. n/a n/a n/a n/a
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) n/a n/a n/a 0 Trade
PDS Precision Drilling Corporation 4.08 0.02 0.49 480,469 Trade
AMZN Amazon.com Inc. 1,580.28 -5.18 -0.33 775,459 Trade
CPB Campbell Soup Company 34.78 1.20 3.57 3,736,275 Trade
MTL Mechel PAO American Depositary Shares (Each rep. 1) 3.73 -0.01 -0.13 45,593 Trade
DB Deutsche Bank AG 12.98 0.27 2.09 1,882,094 Trade
AES The AES Corporation 12.20 0.14 1.12 1,204,551 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 118.38 0.85 0.72 541,235 Trade
GS Goldman Sachs Group Inc. (The) 240.01 2.31 0.97 777,038 Trade
SZYM Solazyme Inc. n/a n/a n/a 0
SHEN Shenandoah Telecommunications Co 31.55 0.15 0.48 33,286 Trade
GERN Geron Corporation 3.82 0.19 5.23 1,869,824 Trade
BAC Bank of America Corporation 30.83 0.28 0.92 18,246,485 Trade
KOP Koppers Holdings Inc. 40.70 -0.25 -0.61 16,759 Trade
REV Revlon Inc. 17.32 -0.48 -2.69 54,064 Trade
BSPM Biostar Pharmaceuticals Inc. 2.47 0.01 0.41 7,294 Trade
SSRI Silver Standard Resources Inc. n/a n/a n/a 0 Trade
PPC Pilgrim's Pride Corporation 21.01 0.22 1.06 212,250 Trade
ACHN Achillion Pharmaceuticals Inc. 3.71 0.05 1.23 210,993 Trade
JKS JinkoSolar Holding Company Limited American Depositary Shares (each representing 4) 19.68 -0.08 -0.40 45,759 Trade
PPHM Peregrine Pharmaceuticals Inc. n/a n/a n/a n/a
PFE Pfizer Inc. 36.03 0.23 0.63 4,846,013 Trade
FSLR First Solar Inc. 70.71 -0.21 -0.30 290,557 Trade
SYUT Synutra International Inc. n/a n/a n/a 0 Trade
TDG Transdigm Group Incorporated Inc. 328.75 -3.95 -1.19 48,487 Trade
MT Arcelor Mittal NY Registry Shares NEW 35.38 0.79 2.28 1,312,822 Trade
CSIQ Canadian Solar Inc. 17.65 -0.08 -0.45 151,935 Trade
FDX FedEx Corporation 254.52 -0.14 -0.05 334,523 Trade
AZN Astrazeneca PLC 37.20 0.41 1.11 2,682,644 Trade
WTI W&T Offshore Inc. 8.61 -0.07 -0.81 2,376,582 Trade
NFLX Netflix Inc. 332.90 1.08 0.33 3,289,319 Trade
BA The Boeing Company 359.56 -4.36 -1.20 1,488,764 Trade
PACB Pacific Biosciences of California Inc. 2.61 -0.02 -0.81 175,523 Trade
LQDT Liquidity Services Inc. 5.65 -0.05 -0.88 9,858 Trade
REGN Regeneron Pharmaceuticals Inc. 298.01 1.41 0.48 97,153 Trade
EXC Exelon Corporation 39.89 0.25 0.63 1,028,887 Trade
CP Canadian Pacific Railway Limited 184.58 1.03 0.56 143,938 Trade
T AT&T Inc. 32.72 0.13 0.40 7,961,546 Trade
DUK Duke Energy Corporation (Holding Company) 74.19 0.51 0.69 915,621 Trade
PCP Precision Castparts n/a n/a n/a 0 Trade
MMI Marcus & Millichap Inc. 37.84 0.07 0.17 34,078 Trade
MTG MGIC Investment Corporation 10.71 0.04 0.37 1,446,467 Trade
TWER Towerstream Corp 1.99 0.08 4.19 700
HXL Hexcel Corporation 72.15 0.18 0.25 54,927 Trade
SENEA Seneca Foods Corp. Class A Common Stock 29.40 0.15 0.51 21,722 Trade


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