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
AA Alcoa Inc. 9.65 -0.03 -0.31 8,533,875
ABT Abbott Laboratories 42.24 0.56 1.34 3,778,793
AEGR Aegerion Pharmaceuticals Inc. 2.76 0.11 4.15 347,815
AEO American Eagle Outfitters Inc. 18.02 0.16 0.90 1,259,933
ALGN Align Technology Inc. 94.41 1.32 1.42 321,914
AXP American Express Company 64.32 0.90 1.42 2,456,579
BA Boeing Company (The) 131.54 0.97 0.74 1,159,357
BAC Bank of America Corporation 15.30 0.21 1.42 58,343,733
BAX Baxter International Inc. 47.26 0.06 0.13 2,558,036
BBT BB&T Corporation 37.39 0.36 0.97 2,809,036
BSX Boston Scientific Corporation 23.71 -0.03 -0.11 7,673,708
BWEN Broadwind Energy Inc. 4.25 0.02 0.47 23,448
CAT Caterpillar Inc. 82.68 0.31 0.37 3,002,261
CMCSA Comcast Corporation Class A Common Stock 66.36 0.55 0.84 5,651,981
COP ConocoPhillips 39.51 -0.52 -1.29 5,352,182
CSCO Cisco Systems Inc. 31.60 0.53 1.71 10,794,930
CVX Chevron Corporation 99.09 0.31 0.31 4,415,166
D Dominion Resources Inc. 75.96 -0.64 -0.84 1,492,428
DB Deutsche Bank AG 11.89 0.04 0.34 13,864,001
DD E.I. du Pont de Nemours and Co. 67.20 0.68 1.02 983,641
DHR Danaher Corporation 77.61 1.01 1.32 1,950,461
DIS Walt Disney Company (The) 91.69 -0.27 -0.29 5,944,663
DO Diamond Offshore Drilling Inc. 15.92 -0.14 -0.87 1,797,991
DUK Duke Energy Corporation (Holding Company) 81.57 -0.58 -0.71 1,329,975
EBAY eBay Inc. 31.93 0.26 0.82 4,200,547
EIX Edison International 74.53 -1.02 -1.35 1,180,612
ETH Ethan Allen Interiors Inc. 33.53 0.27 0.81 62,809
FE FirstEnergy Corporation 33.81 -0.77 -2.23 3,365,911
GE General Electric Co 29.91 0.37 1.24 16,726,063
HAL Halliburton Company 40.79 -0.59 -1.43 8,858,860
HD Home Depot Inc. (The) 126.40 0.95 0.76 2,855,384
HOG Harley-Davidson Inc. 52.04 0.35 0.67 665,039
HPQ HP Inc. 15.33 0.31 2.06 5,420,933
IBM International Business Machines Corp 156.40 2.42 1.57 1,855,314
INTC Intel Corporation 37.06 0.41 1.12 12,599,624
IRM Iron Mountain 37.98 0.12 0.32 653,678
JNJ Johnson & Johnson 119.13 1.35 1.14 3,123,942
JPM JP Morgan Chase 66.28 0.50 0.76 9,362,124
KO Coca-Cola Company (The) 42.54 0.49 1.17 7,096,552
LNN Lindsay Corporation 72.04 -0.24 -0.33 28,171
LRCX Lam Research Corporation 92.62 1.21 1.32 942,557
LUV Southwest Airlines Company 38.41 1.54 4.18 7,144,719
MCD McDonald\'s Corporation 116.86 0.33 0.28 2,143,683
MLNX Mellanox Technologies Ltd. 42.56 0.64 1.53 344,120
MMM 3M Company 176.56 0.61 0.35 1,400,987
MNKD MannKind Corporation 0.62 0.05 7.89 5,848,259
MNRO Monro Muffler Brake Inc. 61.50 -0.03 -0.05 245,290
MRK Merck & Company Inc. (new) 62.66 0.51 0.82 4,011,831
MS Morgan Stanley 31.42 0.39 1.24 6,440,578
MSFT Microsoft Corporation 58.00 1.10 1.92 18,211,657
NE Noble Corporation (UK) 5.46 -0.12 -2.15 5,407,625
NOK Nokia Corporation Sponsored American Depositary Sh 5.71 0.09 1.51 4,025,425
PCG Pacific Gas & Electric Co. 63.12 -0.78 -1.22 2,005,336
PFE Pfizer Inc. 33.84 0.20 0.59 10,721,911
PG Procter & Gamble Company (The) 88.48 0.63 0.71 47,382,039
PM Philip Morris International Inc 99.05 -0.09 -0.09 1,857,589
POT Potash Corporation of Saskatchewan Inc. 16.01 0.10 0.63 3,612,481
POZN Pozen Inc. n/a n/a n/a 0
PPHM Peregrine Pharmaceuticals Inc. 0.44 0.02 4.82 7,565,269
PRU Prudential Financial Inc. 80.55 1.14 1.44 1,552,218
RGA Reinsurance Group of America Incorporated 107.92 0.59 0.55 77,959
S Sprint Corporation 6.72 0.07 1.05 6,588,482
SCSS Select Comfort Corporation 25.08 -0.03 -0.12 130,967
SDRL Seadrill Limited (Bermuda) 1.92 -0.09 -4.25 4,607,645
SKUL Skullcandy Inc. 6.34 -0.01 -0.16 82,996
SNA Snap-On Incorporated 150.96 -0.02 -0.01 258,982
SO Southern Company (The) 52.89 -0.42 -0.79 3,986,460
SON Sonoco Products Company 52.84 0.32 0.60 162,417
STJ St. Jude Medical Inc. 79.85 0.79 1.00 1,251,565
STLD Steel Dynamics Inc. 25.25 0.34 1.36 1,701,262
SVU SuperValu Inc. 4.54 -0.05 -1.09 1,046,893
SWK Stanley Works 121.80 0.90 0.74 474,204
SYK Stryker Corporation 117.47 1.26 1.08 413,222
T AT&T Inc. 41.41 0.27 0.66 12,941,732
TRV The Travelers Companies Inc. 114.51 0.57 0.50 867,736
UFPI Universal Forest Products Inc. 100.96 0.16 0.16 134,606
USB U.S. Bancorp 42.90 0.43 1.00 4,534,363
UTX United Technologies Corporation 102.38 0.15 0.14 2,854,345
VZ Verizon Communications Inc. 52.45 0.30 0.58 5,271,769
WCC WESCO International Inc. 58.47 0.68 1.18 151,823
WERN Werner Enterprises Inc. 22.65 -0.07 -0.31 435,920
WMT Wal-Mart Stores Inc. 72.27 0.65 0.91 4,123,278
XLNX Xilinx Inc. 53.28 0.70 1.33 743,549
XOM Exxon Mobil Corporation 83.11 0.05 0.06 5,974,800
Z Zillow Group Inc. 35.50 0.40 1.14 342,016

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