The Dow Jones Industrial Average opened higher and worked its way above 12,759.23 during the session then faded to 12,600 in the afternoon. The NASDAQ worked its way back up to 2859.25 intraday then faded to 2819 in the afternoon. Non-farm Payrolls rose by a more than expected 244,000, but the unemployment rate increased to 9.0%.
On Thursday the Dow Industrial Average declined 140 points to 12,584. The NASDAQ ended Thursday down 13 points at 2815. The yield on the 10-Year US Treasury, which was as low as 3.150 percent before the employment data rose to 3.241 on the report, then declined to 3.128 in the afternoon as the flight to quality continues. Comex gold which traded as low as $1462.5 on Thursday traded as high as $1498.5 the Troy ounce on Friday, but closed the week below last week’s low at $1492.0.
Nymex crude oil which was as low as $94.63 per barrel overnight rebounded to $102.38 on Friday then faded back below $98.00, and well below last week’s low at $110.71. The euro versus the US dollar traded as low as 1.4461 overnight rebounded to 1.4587 then weakened in the afternoon to 1.4318 ending the week below last week’s low at 1.4496. Gold, crude oil and the euro thus had “key reversal” weeks, by setting a new high last Monday then closed below the prior week’s low.
Stocks were lower in Asia overnight with the Nikkei 225 down 1.5% to 9859. Stocks were mixed in Europe until the employment report turned the markets around.
Energy
Canadian Natural Resource (CNQ) missed estimates by 20 cents, but beat revenue by $700M. Kodiak Oil (KOG) beat estimates by a penny, but missed revenue by $4M. Matrix Service Company (MTRX) beat estimates by a penny, but missed revenue by $7M. SandRidge Energy (SD) missed estimates by 4 cents, but beat revenue by $10M. Sunoco (SUN) reported Q1 EPS of -$1.01 (vs. consensus of -$0.07). Tenaris (TS) beat estimates by a penny and revenue by $100M. Natural Resource (NRP) is now Outperform from Market Perform with Wells Fargo. Rosetta Resources (ROSE) is raised to Buy from Neutral at Suntrust. Concho Resources (CXO) is boosted to Hold from Sell at Citigroup. Penn Virginia (PVA) is now Buy from Hold at Canaccord Genuity. Swift Energy (SFY) is now Buy from Hold at Jefferies.
The Energy Select Sector SPDR (XLE) was trading at $74.80 at 4:00 PM on Friday, up 0.44% on the day – up 9.60% year-to-date.
Materials
A doubling of iron-ore prices due to increased demand from China and India, and the sale of assets, helped boost Vale’s (VALE) Q1 2011 net profit more than fourfold to a record $6.83B. Vale posted a $1.5B gain in the quarter after it sold its bauxite and alumina assets to Norwegian aluminum producer Norsk Hydro (NHYDY.PK). CF Industries (CF) beat estimates by 65 cents. Eldorado Gold (EGO) missed estimates by 2 cents and revenue by $1M. FMC Corp (FMC) gets begun with a Buy ($104 price objective) at Jefferies. In afternoon trading: Shares of Horsehead Holding (ZINC) are down about 11%. Shares of Endeavour Silver (EXK) are up about 9.25%. Shares of CF Industries (CF) are up about 7%.
The Materials Select Sector SPDR (XLB) traded at $39.35 at 4:00 PM on Friday, up 0.82% on the day – up 2.45% year-to-date.
Industrials
Fluor (FLR) report Q1 EPS of $0.78 (in-line), while missing revenue by $500M. Lufthansa AG (DLAKY) is lifted to Buy from Neutral at UBS. Copa Holdings (CPA) is upgraded to Buy ($77 target) at Dahlman Rose. Vestas Wind (VWDRY) is cut to Neutral from Buy at Goldman Sachs. In afternoon trading: Shares of 51Job (JOBS) are up about 13.5%. Shares of Fluor (FLR) are up about 7.1%. Shares of Mistras Group (MG) are up about 6.5%.
The Industrial Select Sector SPDR (XLI) traded at $38.07 at 4:00 PM on Friday, up 0.87% on the day – up 9.18% year-to-date.
Consumer Discretionary
Live Nation (LYV) beat estimates by 15 cents and revenue by $85M. Mohawk Industries (MHK) reported Q1 EPS of $0.42 (in-line) and revenue of $1.3B (in-line). Priceline.com (PCLN) beat estimates by 20 cents and revenue by $30M. Barnes & Noble (BKS) is begun with a Buy at Janney Montgomery Scott. Electrolux (ELUXY) is now Neutral from Sell at Goldman. Sally Beauty (SBH) is boosted to Outperform from Neutral at Robert W. Baird. Priceline.com (PCLN) is now Neutral from Buy at Goldman Sachs. Family Dollar (FDO) is lowered to Neutral from Buy at Cowen & Company. In afternoon trading: Shares of American Apparel (APP) are up about 12.75%. Shares of Barnes & Noble are up about 10.25%. Shares of Timberland (TBL) are up about 8%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.29 at 4:00 PM on Friday, up slightly on the day – up 7.70% year-to-date.
Consumer Staples
Kraft’s (KFT) Q1 2011 net income fell to $802M from $1.88B a year earlier, when the sale of its frozen pizza operations boosted its profit. Excluding items, Q1 2011 EPS was $0.52 (vs. estimates of $0.47), while net revenue rose 11% to $12.6B. CVS Caremark (CVS) received a subpoena from the SEC in February requesting information about public disclosures it made in 2009 on its struggling Caremark pharmacy-benefits-management division and its Medicare Part D business. CVS made the disclosure yesterday after reporting that Q1 2011 net profit fell 7.5% to $713M due to higher costs and that net revenues increased 8.9% to $25.9B. PepsiCo (PEP) is upgraded to Outperform from Market Perform at Credit Suisse. Heineken (HINKY) is slashed to Sell from Neutral at UBS. In afternoon trading: Shares of Hansen Natural (HANS) are up about 6.2% after beating estimates by 10 cents and revenue by $84M.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.44 at 4:00 PM on Friday, up 0.26% on the day – up 7.27% year-to-date.
Healthcare
PerkinElmer (PKI) beat estimates by 3 cents and revenue by $23M. Sequenom (SQNM) is started with a Buy ($7 target price) at Auriga U.S.A. Savient Pharmaceuticals (SVNT) is moved to Neutral from Overweight at JP Morgan. Obagi Medical (OMPI) is lowered to Neutral from Outperform at Brokerage Robert W. Baird. In afternoon trading: Shares of Obagi Medical are down about 24.5%. Shares of Sunrise Senior Living (SRZ) are down about 6.3%. Shares of Cadence Pharmaceuticals (CADX) are down about 6%. Shares of Sequenom are up about 13.5%. Shares of WellCare Health (WCG) are up about 9.5%. Shares of Regeneron Pharmaceuticals (REGN) are up about 8.1%.
The Health Care Select Sector SPDR (XLV) traded at $35.50 at 4:00 PM on Friday, up 0.71% on the day – up 12.70% year-to-date.
Financials
The SEC has subpoenaed JPMorgan Chase (JPM) over failed mortgages, as part of investigations by authorities into the actions of banks from before the financial crisis. Last week, Credit Suisse (CS) received an SEC subpoena, according to information in a court filing by MBIA Insurance yesterday. AIG’s (AIG) Q1 2011 net income slumped to $269M from $1.8B; ongoing operations lost more than $1B after the insurer took a $2.4B charge over an early loan repayment to the NY Fed. AIG reported Q1 EPS of -$0.35 (vs. consensus of $-0.15). HSBC (HBC) CEO Stuart Gulliver plans to announce a strategic revamp next week aimed at exploiting the potential of a bank dragged down by high expenses and the aftermath of the subprime crisis. Triangle Capital (TCAP) is taken to Outperform from Neutral at Robert W. Baird. Public Storage (PSA) is downgraded to Hold from Buy at Stifel Nicolaus due to valuation.
The Financial Select Sector SPDR (XLF) traded at $16.11 at 4:00 PM on Friday, up 0.50% on the day – up 1.00% year-to-date.
Information Technology
Visa’s (V) FQ2 earnings beat expectations by 3 cents as net profit jumped to $881M from $713M a year earlier and revenue rose 15% to $2.25B, with the credit card company benefiting from a recovery in consumer spending on travel and other discretionary items. Microchip Technology (MCHP) beat estimates by 2 cents and revenue by $6M. QLogic (QLGC) beat estimates by 3 cents and revenue by $1M. Youku.com (YOKU) beat estimates by a penny and revenue by $3M. Total System (TSS) gets taken up to Buy from Sell at Goldman Sachs. JDS Uniphase (JDSU) is upgraded to Buy from Hold ($27 target) at Argus. Silicon Labs (SLAB) is lifted to Outperform from Market Perform at JMP Securities. Dolby Labs (DLB) is lowered to Hold from Buy at Canaccord Genuity. Alliance Data Systems (ADS) is downgraded to Sell from Neutral at Goldman. In afternoon trading: Shares of GSI Technology (GSIT) are down about 22.25% after missing estimates by 3 cents and revenue by $2.1M. Shares of Spreadtrum Communications (SPRD) are down about 9.1%. Shares of Echelon (ELON) are up about 16.7%. Shares of Sapient (SAPE) are up about 13.3% after beating estimates by 5 cents and revenue by $10M.
The Technology Select Sector SPDR (XLK) traded at $26.48 at 4:00 PM on Friday, up 0.19% on the day – up 5.12% year-to-date.
Telecommunications Services
In afternoon trading: Shares of Cincinnati Bell (CBB) are up about 9%. Actives: Shares of Sprint Nextel (S) are up about 0.6%. Shares of Level 3 Communications (LVLT) are up about 2.5%. Shares of AT&T (T) are flat. Shares of Frontier Communications (FTR) are up about 0.6%. Shares of Verizon (VZ) are down about 1.2%.
The NASDAQ Telecommunications Index (IXTC) traded at $224.89 at 4:00 PM on Friday, up 0.29% on the day – down 0.21% year-to-date.
Utilities
Constellation Energy Group (CEG) beat estimates by 33 cents, but missed revenue by $550M. Consolidated Edison (ED) missed estimates by a penny. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 0.2%. Shares of PSE&G (PEG) are up about 1%. Shares of PPL (PPL) are down about 0.4%.
The Utilities Select Sector SPDR (XLU) traded at $33.29 at 4:00 PM on Friday, up 0.57% on the day – up 6.22% year-to-date.
STOCKS: CNQ, KOG, MTRX. SD, SUN, TS, NRP, ROSE, CXO, PVA, SFY, VALE, NHYDY, CF, EGO, FMC, ZINC, EXK, CF, FLR, DLAKY, CPA, VWDRY, JOBS, FLR, MG, LYV, MHK, PCLN, BKS, ELUXY, SBH, FDO, APP, TBL, KFT, CVS, PEP, HINKY, HANS, PKI, SQNM, SVNT, OMPI, SRZ, CADX, WCG, REGN, JPM, CS, AIG, HBC, TCAP, PSA, V, MCHP, QLGC, YOKU, TSS, JDSU, SLAB, DLB, ADS, GSIT, SPRD, ELON, SAPE, CBB, S, LVLT, T, FTR, VZ, CEG, ED, DUK, PEG, PPL
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