Wall Street regained heavy losses today as news broke that Greece had reached a new austerity plan with the European Union and International Monetary Fund. Stocks had been trading significantly lower as the U.S. Announced the release of 30 million barrels of oil from reserves, with an additional 30 million to be released by other foreign countries to counter the disruption of supplies from Libya. Poor economic outlook also weighed on the stock market.
Initial Jobless Claims were higher than expected in the latest week at 429,000 well above the 350,000 recessionary threshold. New Home Sales fell 2.1% in May to an annual rate of just 319,000 units. The inventory of new homes is at a record low of 166,000. The price of a new home at $222,600 is down 3.4% year over year. The Dow Jones Industrial Average traded as low as 11,875 and then consolidated that loss. The rebound into the final hour put the Dow above 12,000. The NASDAQ declined to 2627, back below its 200-day simple moving average at 2650. The afternoon rebound put the NASDAQ back above that key level trading into the green above 2670 in the final hour of trading.
The oversold rally for US stocks ended on Wednesday after Fed Chief Bernanke’s press conference was viewed as an FOMC downgrade to the US economy. The Dow Industrial Average lost 60 points to 12,110 up 4.6% year to date and down 5.9% since its May 2nd high at 12,876.00. The NASDAQ gave up 18 points to 2669 up just 0.6% year to date and down 7.6% since its May 2nd high at 2887.75.
Asian stocks were lower on Thursday with the Nikkei 225 down 0.3% and with the Hang Seng down 0.5%. European stocks opened lower and ended their sessions significantly lower. The FTSE 100 declined 1.7%. The DAX lost 1.8%. The CAC 40 was the biggest loser down 2.2%. The yield on the 10-Year US Treasury note declined from 2.993 percent to 2.887 on Thursday as the flight to quality returned as the euro slumped. Comex gold traded down from $1549.6 to $1511.5 the Troy ounce, below the 50-day simple moving average at $1517.5. Gold closed above the 50-day. Nymex crude oil fell from $94.47 to below its 200-day simple moving average at $92.62 per barrel to $89.69 on Thursday, as the International Energy Agency makes 60 million barrels of oil available to offset Libyan disruption. Of this amount is 30 million barrels from the US Strategic Petroleum Reserve. Oil rebounded but closed below the 200-day. The euro versus the US dollar traded down from 1.4357 down to 1.4131 on Thursday then rebounded above 1.4200.
Energy
First Solar (FSLR) and Suntech Power (STP) are both started with Sells at Maxim Group, which has a Hold on Yingli Green Energy (YGE) and begins a Buy on Trina Solar (TSL). Transocean (RIG) is taken to Buy from Hold with a $75 target at Weeden. Gevo (GEVO) is now Buy from Neutral at UBS. Cameco (CCJ) is moved to Outperform from Market Perform at BMO Capital. BP Plc (BP) is upgraded to Buy from Add at Evolution Securities. Nabors Industries (NBR) is now Hold from Buy at Weeden with a lower price target of $28. In afternoon trading: Shares of Frontline (FRO) are down about 9%.
Energy Select Sector SPDR (XLE) was trading at $72.30 at 4:00 PM on Thursday, down 1.09% on the day – up 5.93% year-to-date.
Materials
Maxim Group begins STR Holdings (STRI) as a Buy. Georgia Gulf (GGC) gets picked up at a Neutral by Goldman Sachs. Kraton Performance Polymers (KRA) is a new Neutral at Goldman Sachs. Sims Metal Management (SMS) gets moved to Neutral from Underperform at Credit Suisse. Nalco (NLC) is now Sell from Neutral at Goldman. In afternoon trading: Shares of China Shen Zhou (SHZ) are up about 8.75%. Shares of Harmony Gold (HMY) are down about 6.5%. Shares of Golden Star (GSS) are down about 6%. Shares of Gold Fields (GFI) are down about 5.5%.
The Materials Select Sector SPDR (XLB) traded at $37.71 at 4:00 PM on Thursday, down slightly on the day – down 1.82% year-to-date.
Industrials
In one of the biggest ever orders for civilian aircraft, Airbus (EADSY:US) has received a $17B booking from low-cost Malaysian airline AirAsia (AIABF:US) for 200 A320neo jets plus an option for 100 more. Air Lease (AL) is launched with an Outperform and $28 target at FBR Capital. FedEx (FDX) is hoisted to Buy from Hold with an $111 price objective at Argus. CSX Corp (CSX) is cut to Neutral from Buy at Sterne Agee. In afternoon trading: Shares of YRC Worldwide (YRCW) are up about 17%. Shares of Broadwind Energy (BWEN) are up about 7%. Shares of Fushi Copperweld (FSIN) are down about 8%.
The Industrial Select Sector SPDR (XLI) traded at $36.04 at 4:00 PM on Thursday, down 0.22% on the day – up 3.36% year-to-date.
Consumer Discretionary
Bed Bath & Beyond (BBBY) beat estimates by 10 cents as net profit rose to $180.6M from $137.6M and revenue increased 9.7% to $2.11B. Same-store sales at the department store company climbed 7%. Bed Bath increased its forecast for fiscal-year growth to 15%-20% from a prediction in April of 10%-15%. GM’s (GM) disappointing share performance is delaying the sale of the government’s remaining 27% stake in the automaker. The shares have fallen from GM’s IPO price of $33 in November to close yesterday at $29.97. Viacom (VIA) and Time Warner Cable (TWC) have halted their lawsuits against each other as they attempt to settle litigation over broadcasting rights on portable electronic devices. TWC had sought a ruling that its contract with Viacom allows it to deliver the latter’s channels, including MTV and Comedy Central, to customers’ iPads and other devices. Lennar (LEN) beat estimates by 2 cents and revenue by $96.9M. Saks (SKS) is initiated with an Outperform at Credit Agricole, which begins Nordstrom (JWN) at a Buy. China’s Dangdang (DANG) is a new Neutral at Susquehanna. Deckers Outdoor (DECK) is boosted to Buy from Hold at BB&T Capital. Lumber Liquidators (LL) is lifted to Buy from Hold at Stifel Nicolaus with a $31 target. Time Warner (TWX) and Discovery Communications (DISCA) are each taken to Neutral from Buy at UBS. In afternoon trading: Shares of Vitacostcom (VITC) are up about 13.5%. Shares of Blockbuster (BLOAQ) are up about 11%. Shares of Deer Consumer Products (DEER) are up about 8.5%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $38.88 at 4:00 PM on Thursday, up 0.36% on the day – up 3.93% year-to-date.
Consumer Staples
In afternoon trading: Shares of Treehouse Foods (THS) are down about 7.5%. Shares of Zhongpin (HOGS) are down about 6.75%. Actives: Shares of Wal-Mart (WMT) are down about 0.3%. Shares of Rite Aid (RAD) are up about 3.2%. Shares of ConAgra Foods (CAG) are down about 1.25%. Shares of Altria Group (MO) are down about 1.9%.
The Consumer Staples Select Sector SPDR (XLP) traded at $30.86 at 4:00 PM on Thursday, down 0.90% on the day – up 5.29% year-to-date.
Healthcare
Pfizer (PFE) and Bristol-Myers Squibb (BMY) plan to file for regulatory approval of their apixaban drug by the end of the year after a successful Phase III trial involving 18,206 patients. SXC Health Solutions (SXCI) is a fresh Outperform and $69 target at FBR Capital. Fresenius Medical (FMS) is initiated with an Overweight at Piper Jaffray. Cross Country (CCRN) is now Neutral from Negative at Susquehanna. Sagent Pharma (SGNT) is now Hold from Buy at Needham due to valuation. St. Jude Medical (STJ) is downgraded to Market Perform from Outperform at Bernstein. In afternoon trading: Shares of GTx Inc (GTXI) are down about 9.2%.
The Health Care Select Sector SPDR (XLV) traded at $35.09 at 4:00 PM on Thursday, down slightly on the day – up 11.40% year-to-date.
Financials
Cullen/Frost Bankers (CFR) is covered at Market Perform by Keefe Bruyette. NYSE Euronext (NYX) is a new Outperform and $44 target at BMO Capital, which has Market Performs on Nasdaq (NDAQ) and IntercontinentalExchange (ICE). In afternoon trading: Shares of Sterling Financial (STSA) are down about 7.4%. Shares of First PacTrust Bancorp (FPTB) are down about 6.6%. Shares of Banco Bilbao (BBVA) are down about 6.1%. Shares of China Real Estate (CRIC) are up about 6.4%.
The Financial Select Sector SPDR (XLF) traded at $14.85 at 4:00 PM on Thursday, down 1.00% on the day – down 6.90% year-to-date.
Information Technology
Video game company Electronic Arts (ERTS) is in late-stage discussions to buy PopCap Games for over $1B. The acquisition would enable EA to break into mobile and social gaming, where the company has fared less well than in the console arena. Oracle (ORCL) is expected to report that FQ4 EPS excluding items grew to $0.71 from $0.60 a year earlier when it releases its earnings after the close of trade today. Paychex (PAYX) reported FQ4 EPS of $0.33 (in-line) and beat revenue by $8M. Red Hat (RHT) beat estimates by 2 cents and revenue by $11M. EMC Corp (EMC) is started with a Strong Buy and $33 price objective at Raymond James, which has an Outperform and $57 target price on NetApp (NTAP) and begins MicroStrategy (MSTR) with a Buy and an objective of $190. Sina Corp (SINA) is begun with a Buy rating and $189 price objective at T. H. Capital. iSoftStone (ISS) is upgraded to Buy from Neutral at UBS. Cavium Networks (CAVM) is lifted to Buy from Neutral boost at UBS. F5 Networks (FFIV) gets moved to Neutral from Overweight at JP Morgan. In afternoon trading: Shares of Motricity (MOTR) are up about 10%.
The Technology Select Sector SPDR (XLK) traded at $24.97 at 4:00 PM on Thursday, up 0.69% on the day – down 0.87% year-to-date.
Telecommunications Services
In afternoon trading: Actives: Shares of Sprint Nextel (S) are down about 1.25%. Shares of AT&T (T) are down about 1.25%. Shares of Level 3 Communications (LVLT) are up about 0.9%. Shares of Verizon (VZ) are down about a quarter of a percent. Shares of Vodafone Group (VOD) are down about 0.75%. Shares of Frontier Communications (FTR) are down about 1.25%.
The NASDAQ Telecommunications Index (IXTC) traded at $208.56 at 4:00 PM on Thursday, up 1.41% on the day – down 7.46% year-to-date.
Utilities
Connecticut Water (CTWS) is covered with a Buy rating and $30 target at Brean Murray. Middlesex Water (MSEX) is a new Neutral at Ladenburg Thalmann. Portland General Electric (POR) is downgraded to Neutral from Overweight at JPMorgan. In afternoon trading: Actives: Shares of AES Corp (AES) are down about 1.9%. Shares of Genon Energy (GEN) are down about a half of a percent. Shares of Duke Energy (DUK) are down about 1.3%. Shares of PPL Corp (PPL) are down about 0.75%. Shares of Exelon (EXC) are down about 1.3%.
The Utilities Select Sector SPDR (XLU) traded at $32.70 at 4:00 PM on Thursday, down 0.85% on the day – up 4.34% year-to-date.
STOCKS: FSLR, STP, YGE, TSY, RIG, GEVO, CCJ, BP, NBR, FRO, STRI, GGC, KRA, SMS, NLC, SHZ, HMY, GSS, GFI, EADSY, AIABF, AL, FDX, CSX, YRCW, BWEN, FSIN, BBBY, GM, VIA, TWC, LEN, SKS, JWN, DANG, DECK, LL, TWX, DISCA, VITC, BLOAQ, DEER, THS, HOGS, WMT, RAD, CAG, MO, PFE, BMY, SXCI, FMS, CCRN, SGNT, STJ, GTXI, CFR, NYX, NDAQ, ICE, STSA, FPTB, BBVA, CRIC, ERTS, ORCL, PAYX, RHT, EMC, NTAP, MSTR, SINA, ISS, CAVM, FFIV, MOTR, S, T, LVLT, VZ, VOD, FTR, CTWS, MSEX, POR, AES, GEN, DUK, PPL, EXC
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