Equities Sector Coverage: Google Weighs on Wall Street

Sector Recap |

Google Weighs on Wall StreetInitial Jobless Claims rose to a higher than expected 388,000 back above the 350,000 recessionary threshold. The Philly Fed Index rose to 5.7 in October. The Index of Leading Indicators rose by 0.6% in September, the largest gain since February. The Dow Jones Industrial Average traded down to 13,520.68 then rebounded to 13,588.73 before declining to 13,510.93 versus the October 5 high at 13,661.87. The NASDAQ traded up to 3102.56 then down to 3065.24 after Google (GOOG) went off its fiscal cliff with an early mistake in releasing disappointing earnings versus its 50-day simple moving average at 3097.53.

Asian stocks were higher again on Thursday. The Nikkei 225 closed at 8,983 – up 2.00%. The Hang Seng closed at 21,519 – up 0.48%. European exchanges had a mixed open but with higher closes. The FTSE 100 ended the day at 5,917 – up 0.10%. The DAX ended the day at 7,437 – up 0.58%. The CAC 40 ended the day at 3,535 – up 0.22%. The yield on the 10-Year US Treasury declined to 1.782% then rose to 1.836% with the 50-day and 200-day simple moving averages at 1.701% and 1.802%.

Comex gold traded down from $1753.4 the Troy ounce to $1739.0 staying above its 50-day simple moving average at $1718.6 and well below the 2012 high at $1798.1 set on October 5. Nymex crude oil traded down to $90.66 per barrel then rose to $92.59 staying below its 50-day and 200-day simple moving averages at $93.90 and $95.76. The euro versus the dollar traded down from 1.3127 to 1.3058 staying below its September 17 high at 1.3170.

Energy

Sonoco Products (SON) beat estimates by 3 cents with revenue in-line with estimates. Diamond Offshore (DO) beat estimates by 27 cents, while missing revenue by $5M. Kinder Morgan Energy Partners (KMP) beat estimates by 66 cents and revenue by $70M. Noble (NE) missed estimates by 4 cents and revenue by $16M. McMoRan Exploration (MMR) is a new Buy at Guggenheim. ConocoPhillips (COP) is now Neutral from Sell at Goldman Sachs. SeaDrill (SDRL) is taken to Buy from Neutral at Goldman. Halliburton (HAL) is downgraded to Equal Weight from Overweight at Stephens. Dow components – Chevron (CVX) is down about 0.7%. Exxon Mobil (XOM) down about 0.3%. Energy Select Sector SPDR (XLE) was trading at $74.90 at 3:30 PM on Thursday, down 0.16% on the day – up 8.35% year-to-date.

Materials

Steel Dynamics (STLD) beat estimates by 2 cents, while missing revenue by $660M. ThyssenKrupp (TYEKF) gets a Neutral-from-Underperform boost at BNP Paribas. Potash (POT) is reduced to Sector Perform from Outperform at RBC Capital. Dow Components – Alcoa (AA) is up about 0.2%. DuPont (DD) is up about 1%. The Materials Select Sector SPDR (XLB) was trading at $37.89 at 3:30 PM on Thursday, up 0.07% on the day – up 13.10% year-to-date.

Industrials

Snap-On (SNA) beat estimates by 3 cents and revenue by $5M. Southwest Airlines (LUV) reported Q3 EPS of $0.13 (in-line), while missing revenue by $50M. Danaher (DHR) missed estimates by 2 cents and revenue by $90M. Werner (WERN) missed estimates by a penny and revenue by $17M. Universal Forest Products (UFPI) missed estimates by 17 cents, while beating revenue by $4M. Lindsay Corp. (LNN) is lifted to Outperform from Market Perform by William Blair. Stanley Black & Decker (SWK) is moved to Market Perform from Outperform at Raymond James. Big Movers – SatCon Technology (SATC) is up about 57%. A123 Systems (AONE) is up about 42%. Broadwind Energy (BWEN) is up about 28%. WESCO International (WCC) is up about 13%. Iron Mountain (IRM) is down about 10%. Dow components – Boeing Co (BA) is up about 0.7%. Caterpillar (CAT) is up slightly. General Electric (GE) is up slightly. 3M Company (MMM) is down slightly. United Technologies (UTX) is up about 0.7%. The Industrial Select Sector SPDR (XLI) was trading at $37.47 at 3:30 PM on Thursday, up 0.42% on the day – up 11.02% year-to-date.

Consumer Discretionary

Sprint (S) is trying to cut a deal with other major Clearwire investors - including Comcast (CMCSA) and Intel (INTC) - that would allow it to appoint a majority of directors to Clearwire's board. Select Comfort (SCSS) beat estimates by 5 cents with revenue in-line with estimates. Monro Muffler Brake (MNRO) is a Hold at ISG Group. American Eagle Outfitters (AEO) is increased to Outperform from Market Perform with Wells Fargo. Harley-Davidson (HOG) gets moved to Buy from Neutral at Goldman. Skullcandy (SKUL) is slashed to Market Perform from Strong Buy at Raymond James. Big Movers – Orient-Express Hotels (OEH) is up about 23%. Ethan Allen Interiors (ETH) is up about 19%. Dow Components – Disney (DIS) is up about 0.2%. Home Depot (HD) is down slightly. McDonalds (MCD) is down about 1%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.38 at 3:30 PM on Thursday, down 0.04% on the day – up 21.42% year-to-date.



Consumer Staples

SUPERVALU (SVU) missed estimates by 13 cents with revenue in-line with estimates. Philip Morris (PM) missed estimates by a penny and revenue by $320M. Dow components – Coca Cola (KO) is up about 0.6%. Procter & Gamble (PG) is relatively unchanged. Wal-Mart (WMT) is down about 1%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.16 at 3:30 PM on Thursday, down 0.48% on the day – up 11.30 year-to-date.

Health Care

Boston Scientific (BSX) beat estimates by 5 cents, while missing revenue by $20M. Baxter (BAX) reported Q3 EPS of $1.14 (in-line), while missing revenue by $40M. Stryker (SYK) missed estimates by a penny with revenue in-line with estimates. The company lowers its FY12 expectations, now seeing an EPS of $4.04 - $4.07 (below the Street view of $4.09). For FY13, it expects EPS of $4.25 - $4.40 (below the consensus of $4.45). Abbott Labs (ABT) is lowered to Market Perform from Outperform at Raymond James. St. Jude Medical (STJ) gets moved to Market Perform from Outperform by William Blair. Stryker (SYK) is taken to Perform from Outperform at Oppenheimer. Big Movers – Align Technology (ALGN) is down about 24.5%. MannKind (MNKD) is down about 23.75%. Peregrine Pharmaceuticals (PPHM) is down about 13.5%. Aegerion Pharmaceuticals (AEGR) is up about 12.25%. Dow Components – Johnson & Johnson (JNJ) is up about 1.7%. Merck (MRK) is up about 1.2%. Pfizer (PFE) is up about 0.7%. United Health Group (UNH) is up slightly. The Health Care Select Sector SPDR (XLV) was trading at $41.33 at 3:30 PM on Thursday, unchanged on the day – up 19.14% year-to-date.

Financials

Verizon (VZ) is transferring $7.5B of the $30B in obligations held by its management pension plan to Prudential (PRU), a move that affects around 41,000 retirees. The Travelers (TRV) beat estimates by 61 cents and revenue by $720M. Morgan Stanley (MS) beat estimates by 3 cents, while missing revenue by $1.2B. BB&T (BBT) missed estimates by 5 cents, while beating revenue by $30M. American Express (AXP) reported Q3 EPS of $1.09 (in-line) and revenue of $7.9B (in-line). Excel Trust (EXL) is begun with a Buy recommendation at Cantor Fitzgerald. Zillow (Z) is a new Buy at Goldman Sachs. US Bancorp (USB) is boosted to Positive from Neutral at Susquehanna. Deutsche Bank (DB) is downgraded to Underweight from Neutral at JPMorgan. Big Mover – Reinsurance Group of America (RGA) is down about 10.5%. Dow Components – American Express (AXP) is down about 3.25%. Bank of America (BAC) is up about 0.4%. JP Morgan Chase (JPM) is down about 1%. The Travelers Companies (TRV) is up about 3.8%. The Financial Select Sector SPDR (XLF) was trading at $16.305 at 3:30 PM on Thursday, up 0.06% on the day – up 25.42% year-to-date.

Information Technology

Sprint (S) is trying to cut a deal with other major Clearwire investors - including Comcast (CMCSA) and Intel (INTC) - that would allow it to appoint a majority of directors to Clearwire's board. Nokia (NOK) swung to an underlying loss of $0.07 in Q3 from a profit of $0.03 a year earlier, but that was not as bad as expected, while revenue dropped 19% to €7.23B. Microsoft's (MSFT) FQ1 EPS is expected to fall to $0.56 from $0.68 a year earlier, with revenue dropping 5.5% to $16.42B. In contrast, Google's EPS is expected to increase to $10.65 from $9.72 and as revenue surges 58% to $11.87B. Mellanox (MLNX) is guiding on its Q3 earnings call for Q4 revenue of $145M-$150M (below a $153.1M consensus). eBay (EBAY) beat estimates by a penny with revenue in-line with estimates. The company is issuing Q4 guidance: Revenue of $3.85B-$4B and EPS of $0.66-$0.69 (versus consensus of $3.94B and $0.68). Xilinx (XLNX) beat estimates by 5 cents, while missing revenue by $3.7M. Lam Research (LRCX) beat estimates by 12 cents and revenue by $3M. Tibco Software (TIBX) is taken to Outperform from Neutral at Macquarie. Dow Components – Cisco Systems (CSCO) is down about 0.7%. Hewlett-Packard (HPQ) is up about 0.5%. IBM (IBM) is down about 3%. Intel Corp (INTC) is down about 0.4%. Microsoft (MSFT) is down about 0.4%. The Technology Select Sector SPDR (XLK) was trading at $29.955 at 3:30 PM on Thursday, down 1.20% the day – up 17.70% year-to-date.

Telecommunication Services

Sprint (S) is trying to cut a deal with other major Clearwire investors - including Comcast (CMCSA) and Intel (INTC) - that would allow it to appoint a majority of directors to Clearwire's board. Verizon (VZ) is transferring $7.5B of the $30B in obligations held by its management pension plan to Prudential (PRU), a move that affects around 41,000 retirees. Verizon (VZ) met expectations as net profit climbed 15.5% to $1.59B, EPS came in at $0.64 and revenue edged up 3.9% to $29.01B. Wireless revenue rose 7.3% to $19B, boosted by price rises and the launch of the iPhone 5, with the unit adding 1.8M net new subscribers. Dow Components – AT&T (T) is up about 0.8%. Verizon (VZ) is up about 2.2%. The NASDAQ Telecommunications Index (IXTC) was trading at $195.04 at 3:30 PM on Thursday, down 0.52% on the day – down 0.96% year-to-date.

Utilities

Duke Energy (DUK) is raised to Buy from Neutral at Citigroup. Suez Environment (SZEVY) is now Underweight from Neutral at HSBC Securities. The Big Names – Dominion Resources (D) is up about 0.4%. Edison International (EIX) is up about 0.4%. First Energy (FE) is up about 0.8%. PG&E Corp (PCG) is down about 0.4%. Southern Company (SO) is up about 0.7%. The Utilities Select Sector SPDR (XLU) was trading at $37.38 at 3:30 PM on Thursday, up 0.37% on the day – up 3.89% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, SON, DO, KMP, NE, MMR, COP, SDRL, HAL, STLD, TYEKF, POT, SNA, LUV, DHR, WERN, UFPI, LNN, SWK, SATC, AONE, BWEN, WCC, IRM, S, CMCSA, INTC, SCSS, MNRO, AEO, HOG, SKUL, OEH, ETH, SVU, PM, BSX, BAX, SYK, ABT, STJ, ALGN, MNKD, PPHM, AEGR, VZ, PRU, TRV, MS, BBT, AXP, EXL, Z, USB, DB, RGA, NOK, MSFT, MLNX, EBAY, XLNX, LRCX, TIBX, DUK, SZEVY

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
MMM 3M Company 210.73 -0.03 -0.01 1,609,155 Trade
MLNX Mellanox Technologies Ltd. 46.55 0.40 0.87 631,043 Trade
SDRL Seadrill Limited (Bermuda) 0.39 0.00 0.54 12,859,192 Trade
PG Procter & Gamble Company (The) 92.72 0.48 0.52 6,436,162 Trade
GE General Electric Co 25.11 0.24 0.97 42,487,988 Trade
HOG Harley-Davidson Inc. 48.95 0.71 1.47 1,326,825 Trade
CVX Chevron Corporation 117.99 0.70 0.60 5,980,338 Trade
ABT Abbott Laboratories 52.61 0.10 0.19 9,778,116 Trade
SO Southern Company (The) 49.03 0.21 0.43 4,518,274 Trade
PCG Pacific Gas & Electric Co. 69.29 0.39 0.57 1,959,707 Trade
SON Sonoco Products Company 48.59 -0.03 -0.06 517,756 Trade
BAX Baxter International Inc. 62.76 -0.75 -1.18 1,678,990 Trade
JNJ Johnson & Johnson 131.17 -0.22 -0.17 6,017,418 Trade
WMT Wal-Mart Stores Inc. 79.15 -0.38 -0.48 8,547,808 Trade
AA Alcoa Inc. 45.29 -0.09 -0.20 3,071,319 Trade
INTC Intel Corporation 37.16 -0.02 -0.05 23,180,838 Trade
IBM International Business Machines Corp 145.87 0.74 0.51 5,213,144 Trade
ETH Ethan Allen Interiors Inc. 30.65 0.05 0.16 215,609 Trade
D Dominion Resources Inc. 78.02 0.98 1.27 2,325,741 Trade
TRV The Travelers Companies Inc. 122.67 0.63 0.52 1,136,487 Trade
EBAY eBay Inc. 37.78 -0.51 -1.33 7,420,267 Trade
XLNX Xilinx Inc. 69.45 0.12 0.17 1,990,785 Trade
S Sprint Corporation 7.82 -0.70 -8.22 38,970,068 Trade
POT Potash Corporation of Saskatchewan Inc. 19.31 0.03 0.16 3,077,849 Trade
MNRO Monro Muffler Brake Inc. 54.05 1.70 3.25 441,374 Trade
POZN Pozen Inc. n/a n/a n/a 0 Trade
EIX Edison International 79.27 0.99 1.26 2,080,513 Trade
MS Morgan Stanley 47.74 -0.48 -1.00 7,205,180 Trade
JPM JP Morgan Chase 94.12 -0.71 -0.75 10,463,432 Trade
AXP American Express Company 88.21 -0.19 -0.21 2,863,068 Trade
LRCX Lam Research Corporation 170.17 -6.56 -3.71 2,212,987 Trade
UTX United Technologies Corporation 114.29 -0.72 -0.63 3,700,056 Trade
SWK Stanley Works 150.40 -0.82 -0.54 732,596 Trade
DB Deutsche Bank AG 16.04 -0.59 -3.55 8,184,557 Trade
CSCO Cisco Systems Inc. 33.72 0.35 1.05 32,396,906 Trade
LUV Southwest Airlines Company 55.12 0.19 0.35 3,498,113 Trade
COP ConocoPhillips 49.98 0.90 1.83 6,800,079 Trade
DIS Walt Disney Company (The) 99.57 0.97 0.98 7,492,545 Trade
BWEN Broadwind Energy Inc. 3.14 -0.11 -3.38 96,333 Trade
BSX Boston Scientific Corporation 28.75 -0.10 -0.35 4,361,872 Trade
VZ Verizon Communications Inc. 49.90 0.00 0.00 13,698,567 Trade
BBT BB&T Corporation 45.33 0.11 0.24 3,237,459 Trade
SCSS Select Comfort Corporation 29.35 -0.30 -1.01 423,971 Trade
SVU SuperValu Inc. 21.60 0.33 1.55 467,628 Trade
BAC Bank of America Corporation 24.76 -0.26 -1.04 62,361,746 Trade
LNN Lindsay Corporation 91.69 1.19 1.31 55,300 Trade
USB U.S. Bancorp 53.61 -0.06 -0.11 4,482,047 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 5.93 -0.07 -1.17 10,402,354 Trade
MCD McDonald\'s Corporation 156.26 -2.65 -1.67 3,661,538 Trade
NE Noble Corporation (UK) 4.45 0.32 7.75 15,803,712 Trade
WERN Werner Enterprises Inc. 34.80 -0.75 -2.11 1,247,190 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
WCC WESCO International Inc. 57.35 1.20 2.14 523,692 Trade
DO Diamond Offshore Drilling Inc. 14.47 1.20 9.04 4,716,801 Trade
DHR Danaher Corporation 86.00 -0.78 -0.90 2,202,686 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
SNA Snap-On Incorporated 149.06 -0.26 -0.17 746,945 Trade
PM Philip Morris International Inc 113.25 0.74 0.66 4,734,890 Trade
PPHM Peregrine Pharmaceuticals Inc. 3.19 0.04 1.27 288,298 Trade
HD Home Depot Inc. (The) 161.10 1.13 0.71 4,897,741 Trade
XOM Exxon Mobil Corporation 80.98 1.06 1.33 10,496,637 Trade
PFE Pfizer Inc. 35.51 -0.45 -1.25 22,181,960 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
ALGN Align Technology Inc. 184.89 -3.11 -1.65 605,678 Trade
IRM Iron Mountain 40.08 -0.05 -0.12 935,891 Trade
HPQ HP Inc. 19.85 -0.09 -0.45 9,338,989 Trade
BA Boeing Company (The) 254.32 -2.13 -0.83 3,479,166 Trade
AEGR Aegerion Pharmaceuticals Inc. n/a n/a n/a 0 Trade
PRU Prudential Financial Inc. 105.36 0.36 0.34 1,865,938 Trade
MRK Merck & Company Inc. (new) 65.18 0.05 0.08 5,573,399 Trade
Z Zillow Group Inc. 39.11 0.01 0.03 2,538,823 Trade
RGA Reinsurance Group of America Incorporated 137.20 0.50 0.37 296,984 Trade
FE FirstEnergy Corporation 31.11 0.22 0.71 3,211,472 Trade
KO Coca-Cola Company (The) 45.69 0.20 0.44 9,215,326 Trade
T AT&T Inc. 39.12 0.53 1.37 36,179,101 Trade
CAT Caterpillar Inc. 124.32 -0.11 -0.09 3,268,466 Trade
HAL Halliburton Company 44.69 0.44 0.99 11,540,118 Trade
AEO American Eagle Outfitters Inc. 14.06 0.21 1.52 4,206,404 Trade
DUK Duke Energy Corporation (Holding Company) 85.14 0.89 1.06 2,117,308 Trade
UFPI Universal Forest Products Inc. 95.90 1.25 1.32 198,826 Trade
SYK Stryker Corporation 140.14 -0.75 -0.53 917,166 Trade
MNKD MannKind Corporation 1.95 -0.03 -1.52 1,808,886 Trade
MSFT Microsoft Corporation 73.26 -1.15 -1.55 24,149,163 Trade
CMCSA Comcast Corporation Class A Common Stock 37.91 -0.19 -0.50 21,601,830 Trade
STLD Steel Dynamics Inc. 33.14 -0.09 -0.27 2,813,213 Trade

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