Initial Jobless Claims were higher than expected in the latest week at 428,000. Remember that the Recessionary Threshold is 350,000. The Chicago PMI rose to a stronger than expected reading of 61.1 in June. U.S. stocks continued higher on Thursday with the Dow Jones Industrial Average trading above its 50-day simple moving average at 12,370 following the Chicago PMI report. The Dow traded as high as 12,427 going into the final half hour of trading. The NASDAQ also traded above its 50-day at 2762 and traded as high as 2777 going into the final half hour of trading. U.S. stocks continued a strong rebound on Wednesday with the Dow Industrial Average up 72 points to 12,261, up 5.9% year to date and down 4.8% since its May 2nd high at 12,876.00. The NASDAQ gained 11 points on Wednesday to 2740 up 3.3% year to date and down 5.1% since its May 2nd high at 2887.75.
Asian stocks rose on Thursday with the Nikkei 225 up just 0.2% to 9,816. The Hang Seng surged 1.5% to 22,398. European stocks were higher on Thursday as Greece were set for a final vote on austerity measures unpopular by citizens but demanded by creditors. The FTSE 100 gained another 1.5%. The DAX pricked up 1.1%. The CAC 40 rallied 1.5%.
The yield on the 10-Year U.S. Treasury note is above its 200-day simple moving average at 3.129 percent on Thursday. Yields are higher because three U.S. Treasury auctions were weaker than expected this week and QE2 ends today. This yield traded as high at 3.221 on Thursday. Comex gold stayed above $1500 the Troy ounce on Thursday but also stayed below its 50-day simple moving average at $1519.8. Crude oil stayed above its 200-day simple moving average at $93.04 with a day’s high at $95.82. The euro versus the US dollar traded as high as 1.4536 on Thursday above its 50-day simple moving average at 1.4401.
Energy
Double Eagle Petroleum (DBLE) is initiated with a Buy rating with an $11.50 price target at C.K. Cooper. Linn Energy (LINE) is initiated with a Buy rating at Wunderlich with a $44 price target. Avian initiates select solar stocks; First Solar (FSLR) has a positive rating as does JinkoSolar (JKS). FSLR was up 4.1% in mid-afternoon. Arch Coal (ACI) was up 4.5% in mid-afternoon. Peabody Energy (BTU) was up 1.4% mid-afternoon. Chevron (CVX) was a 1.1% winner mid-afternoon with Exxon Mobil (XOM) up 0.8%.
Energy Select Sector SPDR (XLE) was trading at $75.36 at 4:00 PM on Thursday, up 1.49% on the day – up 10.42% year-to-date.
Materials
Mercer International (MERC) has been downgraded to Outperform from Strong Buy at Raymond James, and share price was down 4.1% mid-afternoon. Alcoa (AA) was a 0.7% winner mid-afternoon, which is a focus for the beginning of the second quarter earnings season in early July. DuPont (DD) was up 1.2% mid-afternoon. Cliffs Natural Resources (CLF) was a 2.9% winner mid-afternoon. Freeport McMoRan (FCX) had a 2.2% gain mid-afternoon. Molycorp (MCP) was a 6.9% winner mid-afternoon.
The Materials Select Sector SPDR (XLB) traded at $39.40 at 4:00 PM on Thursday, up 1.31% on the day – up 2.58% year-to-date.
Industrials
Boeing (BA) and Airbus (EADSY:US) are in negotiations with American Airlines (AMR) about a deal to sell up to 280 planes worth over $22 billion at list prices. American Airlines had been a Boeing only fleet, so a partial entry by Airbus could hurt Boeing, who is trying to decide on a successor to the 737. Boeing shares were up 1.7% mid-afternoon. Caterpillar (CAT) was a 2.3% winner mid-afternoon. General Electric (GE) was up 1.5% mid-afternoon. Ingersoll-Rand (IR) rallied by 3.5% mid-afternoon. Trinity Industries (TRN) was up 4.0%. United Technology (UTX) was up a solid 2.3% mid-afternoon.
The Industrial Select Sector SPDR (XLI) traded at $37.30 at 4:00 PM on Thursday, up 1.75% on the day – up 6.97% year-to-date.
Consumer Discretionary
Sotheby’s (BID) has been initiated as a Buy at Merriman and share were 3.1% higher mid-day. CBS Corporation (CBS) is initiated with a Hold rating at Stifel Nicolaus. TJX Cos. (TJX) is now a new Buy from Neutral at Nomura. Liberty Media Capital (LCAPA) has been upgraded to Buy from Hold at Deutsche Bank with a price target at $100, up from $68 and shares rebounded by 6.4% at mid-day. Lululemon Athletica (LULU) a recent high flier has been downgraded to Neutral from Buy at Sterne Agee. KB Home (KBH) has been downgraded to Neutral from Buy at Ticonderoga saying more focus is needed on profitability and the balance sheet with less emphasis on growth. California is implementing an Internet sales tax tomorrow and this has Amazon.com (AMZN) down 0.7% in mid-morning trading, but the stock later rebounded into the green. Brunswick Corp (BC) was up 3.6% mid-afternoon. Coach Inc. (COH) was higher by 3.1% mid-afternoon.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.23 at 4:00 PM on Thursday, up 0.85% on the day – up 7.54% year-to-date.
Consumer Staples
The British government approved the News Corp (NWS) purchase of British Sky Broadcasting (BSYBY:US) eliminating a possible prolonged antitrust investigation. As part of the deal BSkyB will spin off Sky News and NWS will still own 40% in Sky News and provide its main funding. Separately, News Corp sold struggling Myspace to Specific Media LLC for a rumored $35 million after paying $580 million for the music site six years ago. Corn Products (CPO) is a new Hold at KeyBanc Capital. Dr. Pepper Snapple (DPS) was up 1.2% mid-afternoon. Kraft Foods (KFT) was up 1.2% mid-afternoon. Coca Cola (KO) was up 0.7% mid-afternoon. Proctor and Gamble (PG) was up 1.2% mid-afternoon.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.23 at 4:00 PM on Thursday, up 0.77% on the day – up 6.55% year-to-date.
Healthcare
Eli Lilly (LLY) plans to boost R&D spending to 25% of sales between 2011 and 2014, up from 21% to maintain its edge against pending competition from generic drugs. The company’s strategy is in contrast with that of rivals such like Pfizer (PFE) who has cut their research budget. PFE shares were down 0.4% mid-day. Roche (RHHBY:US) received EU authorization this morning to broaden the current usage of Avastin in breast cancer patients just a day after an FDA advisory panel unanimously voted to revoke approval for the drug’s use in breast cancer. Hansen Medical (HNSN) is upgraded to Overweight from Neutral at Piper Jaffray. Johnson & Johnson (JNJ) was flat mid-afternoon. Merck & Co (MRK) was up 0.6% mid-afternoon.
The Health Care Select Sector SPDR (XLV) traded at $35.52 at 4:00 PM on Thursday, up 0.28% on the day – up 12.76% year-to-date.
Financials
Visa (V) and MasterCard (MA) surged 15% and 11.3% Wednesday afternoon after the Federal Reserve capped debit cards at $0.21 per transaction nearly double the original $0.12 proposal. The Fed will give banks until October 1st to comply with these new rules. Visa shares were down 2.1% in afternoon trading. Lloyds (LYG) jumped 8.6% in London trading after it announced a program to cut another 15,000 jobs, which is 4% of its workforce. LYG extended its gain to 10.4% mid-afternoon in the USA. Tanger Factory (SKT) is initiated as an Outperform at Credit Suisse. American Express (AXP) was up 1.5% mid-afternoon. Bank of America (BAC) was down 1.8% mid-afternoon. JP Morgan (JPM) rebounded by 1.0% in mid-afternoon.
The Financial Select Sector SPDR (XLF) traded at $15.35 at 4:00 PM on Thursday, up 0.39% on the day – down 3.76% year-to-date.
Information Technology
eBay (EBAY) climbed 6.6% Wednesday afternoon after the Federal Reserve capped debit card fees at $0.21 per transaction instead of the original proposal of $0.12. EBAY is also upgraded to Buy from Hold at Citigroup with a $38 price target. The gain on EBAY was 3.9% mid-afternoon. Yahoo (YHOO) was initiated with a new Buy rating at Needham with a price target at $19. Qualcomm (QCOM) is initiated with a Buy rating and a $70 price target at Susquehanna. Silicon Labs (SLAB) is initiated with a Buy rating at UBS. MercadoLibre (MELI) “the eBay of Latin America” is upgraded to Buy from Hold at ThinkEquity. Alcatel-Lucent (ALU) has been upgraded to Buy from Neutral by UBS. Arrow Electronics (ARW) and Celestica (CLS) are upped to Buy from Hold at Deutsche Bank. Cisco Systems (CSCO) rebounded by 1.4% in mid-afternoon. Hewlett-Packard (HPQ) gained a solid 2.8% at mid-afternoon. Intel (INTC) was up 3.8%. Microsoft (MSFT) was up 1.2% mid-afternoon.
The Technology Select Sector SPDR (XLK) traded at $25.70 at 4:00 PM on Thursday, up 1.26% on the day – up 2.02% year-to-date.
Telecommunications Services
Vodafone PLC (VOD) is upgraded to Buy from Hold at Royal Bank of Scotland, but shares were flat at mid-afternoon. Shares of AT&T (T) were up about 0.3%. Shares of Verizon (VZ) are up about 1.2%. Cincinnati Bell (CBB) gained 0.5%. Clearwire Corp (CLWR) lost 3.9%. Leap Wireless (LEAP) was down 1.0%. Sprint Nextel (S) as up 2.9%.
The NASDAQ Telecommunications Index (IXTC) traded at $212.35 at 4:00 PM on Thursday, up 1.31% on the day – down 5.78% year-to-date.
Utilities
Shares of AES Corp (AES) were up about 1.0% mid-afternoon. Duke Energy (DUK) was flat at mid-afternoon. Exelon Corp (EXC) was also flat at mid-afternoon. NRG Energy (NRG) was up 1.0%. PG & E Corp (PCG) was up 1.0% mid-afternoon. Progress Energy (PGN) was up fractionally. Southern Co (SO) was also up slightly. Sempra Energy (SRE) was up 1.0%.
The Utilities Select Sector SPDR (XLU) traded at $33.48 at 4:00 PM on Thursday, up 0.21% on the day – up 6.83% year-to-date.
STOCKS: DBLE, LINE, FSLR, JKS, ACI, BTU, CSX, XOM, MERC, AA, CLF, FCX, DD, MCP, BA, EADSY.PK, AMR, CAT, GE, UTX, IR, TRN, BID, CBS, TJX, LCAPA, LULU, KBH, AMZN, BC, COH, NWS, BSYBY.PK, CPO, DPS, KFT, KO, PG, LLY, PFE, HNSN, JNJ, MRK, V, MA, LYG, SKT, AXP, BAC, JPM, EBAY, YHOO, QCOM, MELI, ALU, ARW, CLS, CSCO, HPQ, INTC, MSFT, VOD, T, VZ, CBB, CLWR, LEAP, S, AES, DUK, EXC, NRG, PCG, PGN, SO
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