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 221.32 2.08 0.95 1,612,732 Trade
MLNX Mellanox Technologies Ltd. 43.65 0.35 0.81 343,652 Trade
SDRL Seadrill Limited (Bermuda) 0.29 0.00 1.69 2,702,886 Trade
PG Procter & Gamble Company (The) 88.25 -3.34 -3.65 19,759,627 Trade
GE General Electric Co 23.83 0.25 1.06 188,356,333 Trade
HOG Harley-Davidson Inc. 49.50 1.41 2.92 2,661,580 Trade
CVX Chevron Corporation 118.64 0.44 0.37 4,855,550 Trade
ABT Abbott Laboratories 56.32 0.32 0.57 5,427,604 Trade
SO Southern Company (The) 52.21 0.21 0.40 4,096,215 Trade
PCG Pacific Gas & Electric Co. 57.86 0.86 1.51 7,737,698 Trade
SON Sonoco Products Company 53.11 1.08 2.08 814,327 Trade
BAX Baxter International Inc. 63.59 0.12 0.19 2,721,424 Trade
JNJ Johnson & Johnson 142.40 0.36 0.25 5,556,486 Trade
WMT Wal-Mart Stores Inc. 87.44 1.04 1.20 8,200,167 Trade
AA Alcoa Inc. 47.93 1.39 2.99 4,199,187 Trade
INTC Intel Corporation 40.43 0.34 0.85 17,556,316 Trade
IBM International Business Machines Corp 162.07 1.17 0.73 7,817,707 Trade
ETH Ethan Allen Interiors Inc. 31.25 0.25 0.81 180,923 Trade
D Dominion Resources Inc. 80.00 0.05 0.06 2,178,911 Trade
TRV The Travelers Companies Inc. 133.32 0.15 0.11 1,821,870 Trade
EBAY eBay Inc. 37.61 0.32 0.86 14,821,200 Trade
XLNX Xilinx Inc. 72.17 -0.25 -0.35 1,894,790 Trade
S Sprint Corporation 6.93 -0.14 -1.98 15,080,381 Trade
POT Potash Corporation of Saskatchewan Inc. 19.27 0.02 0.10 1,585,502 Trade
MNRO Monro Muffler Brake Inc. 51.20 -1.10 -2.10 456,690 Trade
POZN Pozen Inc. n/a n/a n/a 0 Trade
EIX Edison International 79.60 0.13 0.16 1,784,395 Trade
MS Morgan Stanley 50.68 0.89 1.79 7,716,998 Trade
JPM JP Morgan Chase 99.51 1.40 1.43 15,160,760 Trade
AXP American Express Company 92.09 0.19 0.21 4,220,447 Trade
LRCX Lam Research Corporation 205.34 4.36 2.17 3,016,427 Trade
UTX United Technologies Corporation 120.89 1.40 1.17 2,001,202 Trade
SWK Stanley Works 160.12 2.96 1.88 1,066,182 Trade
DB Deutsche Bank AG 16.98 0.11 0.65 2,940,110 Trade
CSCO Cisco Systems Inc. 34.25 0.50 1.48 24,055,435 Trade
LUV Southwest Airlines Company 59.37 0.74 1.26 4,883,098 Trade
COP ConocoPhillips 50.25 0.54 1.09 5,955,970 Trade
DIS Walt Disney Company (The) 99.40 0.39 0.39 5,890,174 Trade
BWEN Broadwind Energy Inc. 2.94 0.21 7.69 65,432 Trade
BSX Boston Scientific Corporation 29.70 0.13 0.42 4,032,524 Trade
VZ Verizon Communications Inc. 49.53 0.32 0.65 15,852,032 Trade
BBT BB&T Corporation 47.50 0.76 1.63 5,122,139 Trade
SCSS Select Comfort Corporation 34.01 1.72 5.33 2,123,998 Trade
SVU SuperValu Inc. 15.03 -0.67 -4.27 4,599,186 Trade
BAC Bank of America Corporation 27.17 0.59 2.22 83,141,931 Trade
LNN Lindsay Corporation 91.22 0.48 0.53 72,859 Trade
USB U.S. Bancorp 54.09 0.50 0.93 6,797,329 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 6.08 0.26 4.47 18,356,801 Trade
MCD McDonald\'s Corporation 166.30 -0.20 -0.12 5,549,338 Trade
NE Noble Corporation (UK) 3.78 -0.16 -4.06 5,461,357 Trade
WERN Werner Enterprises Inc. 35.65 0.05 0.14 1,804,265 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
WCC WESCO International Inc. 60.80 0.60 1.00 251,438 Trade
DO Diamond Offshore Drilling Inc. 15.28 -0.06 -0.39 2,451,229 Trade
DHR Danaher Corporation 90.79 0.69 0.77 3,967,840 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
SNA Snap-On Incorporated 160.12 3.93 2.52 2,089,129 Trade
PM Philip Morris International Inc 109.52 1.37 1.27 6,067,036 Trade
PPHM Peregrine Pharmaceuticals Inc. 4.08 -0.05 -1.21 107,822 Trade
HD Home Depot Inc. (The) 163.43 0.19 0.12 4,055,333 Trade
XOM Exxon Mobil Corporation 83.11 0.37 0.45 9,181,179 Trade
PFE Pfizer Inc. 36.42 0.18 0.50 16,966,184 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
ALGN Align Technology Inc. 200.85 4.00 2.03 2,798,585 Trade
IRM Iron Mountain 40.90 -0.06 -0.15 697,377 Trade
HPQ HP Inc. 22.02 0.06 0.27 8,550,975 Trade
BA Boeing Company (The) 264.75 5.71 2.20 3,909,866 Trade
AEGR Aegerion Pharmaceuticals Inc. n/a n/a n/a 0 Trade
PRU Prudential Financial Inc. 110.78 1.18 1.08 1,510,563 Trade
MRK Merck & Company Inc. (new) 63.88 0.13 0.20 9,961,066 Trade
Z Zillow Group Inc. 41.25 0.06 0.15 505,781 Trade
RGA Reinsurance Group of America Incorporated 145.00 -0.44 -0.30 319,572 Trade
FE FirstEnergy Corporation 32.13 -0.17 -0.53 2,399,121 Trade
KO Coca-Cola Company (The) 46.38 -0.21 -0.45 9,491,224 Trade
T AT&T Inc. 35.54 -0.15 -0.42 36,985,698 Trade
CAT Caterpillar Inc. 131.36 0.59 0.45 3,051,250 Trade
HAL Halliburton Company 43.33 -0.09 -0.21 10,132,835 Trade
AEO American Eagle Outfitters Inc. 13.50 0.53 4.09 3,925,845 Trade
DUK Duke Energy Corporation (Holding Company) 87.93 0.08 0.09 1,981,081 Trade
UFPI Universal Forest Products Inc. 108.86 0.47 0.43 177,734 Trade
SYK Stryker Corporation 150.49 1.17 0.78 1,256,620 Trade
MNKD MannKind Corporation 4.11 0.15 3.79 11,400,931 Trade
MSFT Microsoft Corporation 78.81 0.90 1.16 22,520,742 Trade
CMCSA Comcast Corporation Class A Common Stock 37.22 0.32 0.87 14,245,739 Trade
STLD Steel Dynamics Inc. 38.90 1.12 2.96 4,046,719 Trade

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