Equities Sector Coverage: Google Weighs on Wall Street

Sector Recap  |

Initial 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 202.09 3.15 1.58 378,341 Trade
MLNX Mellanox Technologies Ltd. 72.17 0.28 0.38 58,186 Trade
PG Procter & Gamble Company (The) 80.46 0.33 0.41 1,957,245 Trade
GE General Electric Company 12.25 0.10 0.82 23,605,900 Trade
HOG Harley-Davidson Inc. 41.01 0.30 0.74 268,904 Trade
CVX Chevron Corporation 117.40 0.46 0.39 1,394,435 Trade
ABT Abbott Laboratories 70.02 1.32 1.92 1,125,053 Trade
SO Southern Company (The) 44.60 0.38 0.86 827,231 Trade
PCG Pacific Gas & Electric Co. 48.67 0.83 1.73 2,183,687 Trade
SON Sonoco Products Company 52.31 0.50 0.97 89,006 Trade
BAX Baxter International Inc. 71.10 0.23 0.32 577,328 Trade
JNJ Johnson & Johnson 136.32 2.37 1.77 2,774,675 Trade
WMT Walmart Inc. 95.78 1.96 2.09 3,707,581 Trade
AA Alcoa Corporation 35.80 0.46 1.29 421,508 Trade
INTC Intel Corporation 45.25 0.72 1.62 4,093,417 Trade
IBM International Business Machines Corporation 142.82 1.69 1.20 1,534,208 Trade
ETH Ethan Allen Interiors Inc. 21.02 0.33 1.60 70,691 Trade
D Dominion Energy Inc. 72.48 0.87 1.21 469,783 Trade
TRV The Travelers Companies Inc. 124.18 0.79 0.64 229,036 Trade
EBAY eBay Inc. 32.12 0.26 0.82 1,332,318 Trade
XLNX Xilinx Inc. 77.15 1.61 2.13 907,981 Trade
S Sprint Corporation 6.38 0.10 1.59 1,211,259 Trade
MNRO Monro Inc. 66.11 -0.78 -1.17 31,366 Trade
POZN Pozen Inc. n/a n/a n/a 0 Trade
EIX Lightstream Resources Ltd. 69.46 0.58 0.84 625,619 Trade
MS Morgan Stanley 45.46 1.99 4.58 8,076,978 Trade
JPM JP Morgan Chase & Co. 108.19 1.85 1.74 5,463,047 Trade
AXP American Express Company 103.57 0.95 0.93 598,211 Trade
LRCX Lam Research Corporation 144.28 1.77 1.24 1,107,092 Trade
UTX United Technologies Corporation 131.38 1.05 0.81 601,236 Trade
SWK Stanley Black & Decker Inc. 129.51 1.65 1.29 197,882 Trade
DB Deutsche Bank AG 11.15 0.12 1.09 1,142,691 Trade
CSCO Cisco Systems Inc. 45.28 0.61 1.37 5,201,006 Trade
LUV Southwest Airlines Company 58.39 0.71 1.23 560,553 Trade
COP ConocoPhillips 73.77 0.50 0.68 1,091,912 Trade
DIS The Walt Disney Company 115.57 2.13 1.88 1,731,960 Trade
BWEN Broadwind Energy Inc. 2.13 -0.02 -0.93 5,789 Trade
BSX Boston Scientific Corporation 37.62 1.19 3.27 2,251,475 Trade
VZ Verizon Communications Inc. 53.36 -0.24 -0.45 3,586,460 Trade
BBT BB&T Corporation 46.70 -0.09 -0.19 1,023,384 Trade
SCSS SNBR Select Comfort Corporation n/a n/a n/a n/a
SVU SuperValu Inc. 32.46 -0.01 -0.02 941,231 Trade
BAC Bank of America Corporation 28.23 0.31 1.11 33,334,469 Trade
LNN Lindsay Corporation 95.19 0.31 0.32 6,806 Trade
USB U.S. Bancorp 50.65 0.14 0.28 1,761,659 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 5.44 0.15 2.74 8,141,428 Trade
MCD McDonald's Corporation 164.00 0.33 0.20 713,360 Trade
NE Noble Corporation (UK) 6.73 -0.14 -2.04 1,190,797 Trade
WERN Werner Enterprises Inc. 33.46 0.72 2.20 311,561 Trade
WCC WESCO International Inc. 53.62 0.05 0.09 143,192 Trade
DO Diamond Offshore Drilling Inc. 18.87 -0.58 -2.98 461,633 Trade
DHR Danaher Corporation 103.59 1.60 1.57 405,323 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
SNA Snap-On Incorporated 171.25 2.05 1.21 254,811 Trade
PM Philip Morris International Inc 83.44 -0.05 -0.06 755,125 Trade
PPHM CDMO Peregrine Pharmaceuticals Inc. n/a n/a n/a n/a
HD Home Depot Inc. (The) 191.29 0.12 0.06 877,973 Trade
XOM Exxon Mobil Corporation 80.97 0.15 0.19 2,389,092 Trade
PFE Pfizer Inc. 43.15 0.03 0.07 4,894,588 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
ALGN Align Technology Inc. 325.65 8.22 2.59 282,940 Trade
IRM Iron Mountain Incorporated (Delaware)Common Stock REIT 32.05 0.22 0.69 393,457 Trade
HPQ HP Inc. 23.71 0.15 0.64 1,700,497 Trade
BA The Boeing Company 363.01 4.13 1.15 651,699 Trade
AEGR Aegerion Pharmaceuticals Inc. n/a n/a n/a 0 Trade
PRU Prudential Financial Inc. 97.78 0.38 0.39 315,741 Trade
MRK Merck & Company Inc. (new) 70.50 1.04 1.50 1,392,884 Trade
Z Zillow Group Inc. 40.14 1.20 3.08 334,230 Trade
RGA Reinsurance Group of America Incorporated 136.82 0.61 0.45 23,061 Trade
FE FirstEnergy Corp. 37.67 0.26 0.70 598,199 Trade
KO Coca-Cola Company (The) 45.34 0.43 0.96 2,204,570 Trade
T AT&T Inc. 32.20 -0.16 -0.49 6,590,998 Trade
CAT Caterpillar Inc. 142.85 1.05 0.74 1,170,655 Trade
HAL Halliburton Company 40.25 0.45 1.12 1,540,961 Trade
AEO American Eagle Outfitters Inc. 21.31 -0.30 -1.39 719,345 Trade
DUK Duke Energy Corporation (Holding Company) 81.02 0.89 1.11 575,617 Trade
UFPI Universal Forest Products Inc. 33.42 0.61 1.86 47,249 Trade
SYK Stryker Corporation 172.91 3.50 2.07 256,194 Trade
MNKD MannKind Corporation 1.81 0.16 9.69 1,875,502 Trade
MSFT Microsoft Corporation 109.86 2.26 2.10 7,758,200 Trade
CMCSA Comcast Corporation Class A Common Stock 35.54 0.45 1.28 5,045,184 Trade
STLD Steel Dynamics Inc. 40.75 0.08 0.20 690,992 Trade

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