Equities Sector Coverage: Investor Optimism Returns to Wall Street

Sector Recap  |

Initial Jobless Claims for the week ending March 3 was 362,000, an increase of 8,000 from the previous week's revised figure of 354,000. The Dow Jones Industrial Average rallied to an afternoon high of 12937, but failed to hold above the key 21- day simple moving average at 12914, which keeps the daily cycle negative. The NASDAQ rallied to an afternoon high of 2976.05, back above the key 21- day simple moving average at 2947, which shifted the daily cycle to neutral.

Asian stocks traded higher on Thursday. The Nikkei 225 ended their session at 9,569 – up 2.01% on the day. The Hang Seng ended their session at 20,901 – up 1.32%. European stocks also traded higher. The FTSE 100 ended their session at 5,860 – up 1.18% on the day, the DAX ended their session at 6,835 – up 2.45%, and the CAC 40 ended their session at 3,478 – up 2.54% on the day.

The yield on the 10-Year US Treasury weakened from a morning low yield of 1.969 to an afternoon high yield of 2.024. Gold rallied to a high of $1704.8 the Troy ounce (back above the key 50-day and 200-day simple moving averages at $1691.7 and $1674.8. Crude oil traded between $105.84 per barrel and $107.20. The euro versus the dollar rallied from a morning low of 1.3138 to an afternoon high of 1.3289.

Energy

The Senate may vote today on two rival measures related to TransCanada's (TRP) Keystone pipeline, but both face difficulty in receiving the 60 votes necessary to pass. Global Partners (GLP) beat estimates by 6 cents and revenue by $500M. Canadian Natural Resource (CNQ) reported Q4 EPS of C$0.89 (versus consensus of C$0.87). Union Drilling (UDRL) reported Q4 EPS of $0.09 (versus consensus of $0.06), while missing revenue by $3.5M. Anadarko Petroleum (APC) is a new Add at Capital One. WPX Energy (WPX) is a new Neutral at JPMorgan. DCP Midstream (DPM) is lifted to Buy from Neutral at Bank of America-Merrill Lynch. American Midstream Partners (AMID) is lowered to Neutral from Buy at Bank of America-Merrill Lynch.
Energy Select Sector SPDR (XLE) was trading at $74.26 at 4:00 PM on Thursday, up 0.81% on the day – up 7.42% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%

Heavily Traded: (VLO) +6.5%.

Materials

Flotek Industries (FTK) beat estimates by 5 cents and revenue by $1M. Quaker Chemical (KWR) reported Q4 EPS of $0.75 (versus consensus of $0.78) with revenue in-line with estimates.
The Materials Select Sector SPDR (XLB) was trading at $36.63 at 4:00 PM on Thursday, up 1.67% on the day – up 9.34% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.

Big Mover: (FTK) +10%.
Heavily Traded: (AA) +2.7%, (FCX) +1.1%, (VALE) -1.8%.

Industrials

Navistar International (NAV) missed estimates by $1.80 with revenue in-line with estimates. Fly Leasing (FLY) beat estimates by 38 cents, while missing revenue by $11M. A123 Systems (AONE) missed estimates by 16 cents and revenue by $13M. Kratos Defense & Security Solutions (KTOS) beat estimates by 15 cents, while missing revenue by $12M. The company issued an upbeat forecast for FY12, as it now expects revenue to be around $950M - $1B (above Street estimates of $939M). Korn/Ferry (KFY) FQ3 beat on revenue but misses on a per share basis. The company also issued a cautious outlook for the current-quarter, now projecting to earn between $0.24 - $0.30 (falling short of consensus estimates of $0.31). Pall (PLL) missed estimates by a penny, while beating revenue by $14M. Standard Parking (STAN) beat estimates by 2 cents. MYR Group (MYRG) beat estimates by 2 cents and revenue by $31M. Nielsen (NLSN) is a new Outperform at Macquarie. Cintas (CTAS) is upgraded to Overweight from Neutral at JPMorgan. Gibraltar Industries (ROCK) is raised to Buy from Hold at Keybanc Capital. Kratos Defense and Security (KTOS) is boosted to Buy from Hold at Keybanc Capital. Seaspan (SSW) is taken is taken to Underperform from Neutral at Credit Suisse, which downgrades Danaos (DAC) to Neutral from Outperform.
The Industrial Select Sector SPDR (XLI) was trading at $36.94 at 4:00 PM on Thursday, up 1.43% on the day – up 9.45% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Mover: (MWA) +21.5%.

Consumer Discretionary

The Department of Justice believes that Apple (AAPL) and five major publishers have been colluding to raise prices on ebooks in order to undermine Amazon (AMZN), and plans to sue, The Wall Street Journal reports. The publishers include Simon & Schuster (CBS), Penguin (PSO), and HarperCollins (NWSA). Core Mark (CORE) beat estimates by 9 cents, while missing revenue by $60M. Mac-Gray (TUC) beat estimates by 2 cents and revenue by $1M. Dixie Group (DXYN) missed estimates by a penny with revenue in-line with estimates. Stein Mart (SMRT) missed estimates by 4 cents with revenue in-line with estimates. Buckle (BKE) beat estimates by 5 cents and revenue by $5M. Kirkland's (KIRK) reported Q4 EPS of $0.78 (versus consensus of $0.74) with revenue in-line with estimates. Fuel Systems Solutions (FSYS) missed estimates by 8 cents, while beating revenue by $14M. Williams-Sonoma (WSM) beat estimates by 4 cents with revenue in-line with estimates. Stewart Enterprises (STEI) missed estimates by 2 cents and revenue by $7M. AFC Enterprises (AFCE) reported Q4 EPS of $0.24 (in-line) and revenue of $36.3M (in-line). Men's Wearhouse (MW) beat estimates by 8 cents with revenue in-line with estimates. The company issues cautious guidance for the current quarter however, now seeing an EPS of $0.53 - $0.54 on revenue growth of 2% - 2.5% (below estimates of $0.62 on revenue growth of 4%). ChinaEdu (CEDU) reported Q4 EPS of $0.02 (in-line), while beating revenue by $1.7M. Coldwater Creek (CWTR) beat estimates by a penny and revenue by $3M. H&R Block (HRB) missed estimates by 5 cents and revenue by $37M. Jamba (JMBA) beat estimates by 2 cents and revenue by $3M. Hot Topic (HOTT) beat estimates by a penny with revenue in-line with estimates. American Eagle Outfitters (AEO) is boosted by both Goldman Sachs (added to the Conviction Buy List) and Nomura (Buy from Neutral). Cablevision (CVC) is added to Citigroup’s Top Picks Live list. Adidas (ADDYY) gets downgraded to Hold from Buy at Société Générale.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.73 at 4:00 PM on Thursday, up 1.02% on the day – up 12.07% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.

Big Movers: (BONT) +19.5%, (HOTT) +13.25%, (HOV) +11.75%.

Consumer Staples

Smithfield Foods (SFD) beat estimates by 5 cents with revenue in-line with estimates. Anheuser-Busch InBev (BUD) reported Q4 net profit +91% to $1.85B (vs. forecasts of $1.61B), EBITDA +8.8% to $4.24B (vs. forecasts of $4.14B), and revenues +4.2% to $9.87B.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.36 at 4:00 PM on Thursday, up 0.69% on the day – up 2.68% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.

Big Mover: (CEDC) +13.5%.
Heavily Traded: (RAD) +4.75%, (SLE) +2.5%, (MO) +1.2%.

Health Care

Cantel Medical (CMN) beat estimates by 2 cents and revenue by $2.8M. U.S. Physical Therapy (USPH) beat estimates by a penny and revenue by $2M. Hi-Tech Pharmacal (HITK) missed estimates by 8 cents with revenue in-line with estimates. Assisted Living Concepts (ALC) reported Q4 EPS of $0.27 (versus consensus of $0.25) with revenue in-line with estimates. RadNet (RDNT) beat estimates by 5 cents and revenue by $7M. Optimer Pharmaceuticals (OPTR) reported Q4 EPS of $0.29 (versus consensus of $0.51), while beating revenue by $21M. Sequenom (SQNM) missed estimates by 4 cents with revenue in-line with estimates. Neurocrine Biosciences (NBIX) is a new Outperform at Leerink Swann. Halozyme Therapeutics (HALO) is assigned an Overweight by Barclays.

The Health Care Select Sector SPDR (XLV) was trading at $36.32 at 4:00 PM on Thursday, up 1.11% on the day – up 4.70% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.

Big Movers: (SQNM) +14.5%, (MDVN) +14%, (ITMN) +11.75%, (ZLTQ) -12.25%.

Financials

Simon Property (SPG) is buying a 28.7% stake in Klepierre (KLPEF) from BNP Paribas (BNPQY) for €1.5B ($2B), making Simon the biggest shareholder in the French EU mall owner. Simon is also acquiring the stake of joint-venture partner Farallon in 26 U.S.-wide assets for $1.5B. Wells Fargo (WFC) has started charging customers a monthly checking-account fee of $7 in six more states after implementing the tariff last year in a few western states with less backlash than Bank of America's (BAC) infamous debit-card fiasco. NGP Capital Resources (NGPC) missed estimates by 2 cents with revenue in-line with estimates. Technology Investment Capital (TICC) reported Q4 EPS of $0.26 (versus consensus of $0.25). E-House (China) Holdings (EJ) beat estimates by a penny and revenue by $14M. China Real Estate Information (CRIC) missed estimates by 6 cents, while beating revenue by $5M. Compass Diversified (CODI) reported Q4 EPS of $0.36 (versus consensus of $0.33), while beating revenue by $51M. Triangle Capital (TCAP) beat estimates by 4 cents. Royal Bank of Scotland (RBS) is raised to Buy from Add. Macerich (MAC) is moved to Buy from Hold at Jefferies. RLJ Lodging Trust (RLJ) is taken to Buy from Neutral at Janney Montgomery Scott. Vornado Realty Trust (VNO) is lowered to Hold from Buy at Argus.

The Select Sector SPDR (XLF) was trading at $14.77 at 4:00 PM on Thursday, up 0.96% on the day – up 13.62% year-to-date. The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Apple (AAPL) introduced the new iPad, yesterday. Piper Jaffray's Gene Munster called the new device a "significant upgrade," while UBS's Maynard Um wrote that a faster timeline for shipping the new model could help beat his 12M estimate for iPad sales in the March quarter. However, Jefferies' Peter Misek was less enamored, though, noting the lack of Siri. The Department of Justice believes that Apple (AAPL) and five major publishers have been colluding to raise prices on ebooks in order to undermine Amazon (AMZN), and plans to sue, The Wall Street Journal reports. The publishers include Simon & Schuster (CBS), Penguin (PSO), and HarperCollins (NWSA). Facebook has increased its financial firepower ahead of its IPO to $8B, replacing a $2.5B credit line with one worth $5B and obtaining a one-year $3B bridge loan. JinkoSolar (JKS) reported Q4 EPS of -$2.61 (versus consensus of $-2.01), while missing revenue by $14M. Suntech Power (STP) missed estimates by 45 cents, while beating revenue by $76M. Sigma Designs (SIGM) missed estimates by 14 cents and revenue by $2M. Semtech (SMTC) beat estimates by 2 cents and revenue by $7M. The company now expects sales in the range of $102M - $108M (below the Street view of $113M) and Q1 EPS in the range of $0.28 - $0.32 (versus expectations of $0.36 per share). Angie’s List (ANGI) is begun with a Buy at Canaccord Genuity, which has Holds on HomeAway (AWAY) and Zynga (ZNGA). Glu Mobile (GLUU) gets begun with a Buy recommendation and $7 price objective at Canaccord Genuity. Ciena (CIEN) gets a Buy-from-Hold hoist at Stifel Nicolaus, which sets a $20 target price. STMicroelectronics (STM) is boosted to Neutral from Underperform by BNP Paribas. Aruba Networks (ARUN) is increased to Outperform from Market Perform by brokers William Blair. ARM Holdings (ARMH) is moved to Overweight from Equal Weight at Morgan Stanley. AXIS Capital (AXIS) is hoisted to Buy from Hold at Deutsche Bank. DTS Inc (DTSI) is now Neutral from Underweight at JPMorgan. Kopin (KOPN) is slashed to Hold from Buy with Wunderlich, which trims its target by $1.50 to $5.00. Synnex (SNX) is cut to Hold from Buy at Stifel Nicolaus.

The Technology Select Sector SPDR (XLK) was trading at $29.05 at 4:00 PM on Thursday, up 1.01% on the day – up 14.15% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.

Big Movers: (FFN) +17.5%, (OCLR) +13.5%, (MOTR) +13%, (SIGM) -10%.

Telecommunication Services

The NASDAQ Telecommunications Index (IXTC) was trading at $210.65 at 4:00 PM on Thursday, up 1.12% on the day – up 6.97% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.

Heavily Traded: (S) +7.8%, (T) +0.4%, (VZ) +1%, (CCI) +2.5%, (FTR) +0.9%, (CLWR) +0.9%.

Utilities

Dynegy (DYN) reported Q4 EPS of -$11.29 (versus consensus of $-10.71), while missing revenue by $334.6M.

The Utilities Select Sector SPDR (XLU) was trading at $35.03 at 4:00 PM on Thursday, up 0.32% on the day – down 2.64% year-to-date. The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: (DUK) +0.7%, (CNP) +0.6%, (GEN) +4.2%, (AES) +1.3%, (CPN) +2.5%, (EXC) flat, (DYN) -4%.

STOCKS: TRP, GLP, CNQ, UDRL, APC, WPX, DPM, AMID, VLO, FTK, KWR, AA, FCX, VALE, NAV, FLY, AONE, KTOS, KFY, PLL, STAN, MYRG, NLSN, CTAS, ROCK, SSW, DAC, MWA, AAPL, AMZN, CBS, PSO, NWSA, CORE, TUC, DXYN, SMRT, BKE, KIRK, FSYS, WSM, STEI, AFCE, MW, CEDU, CWTR, HRB, JMBA, HOTT, AEO, CVC, ADDYY, BONT, HOV, SFD, BUD, CEDC, RAD, SLE, MO, CMN, USPH, HITK, ALC, RDNT, OPTR, SQNM, NBIX, HALO, MDVN, ITMN, ZLTQ, SPG, KLPEF, BNPQY, WFC, BAC, NGPC, TICC, EJ, CRIC, CODI, TCAP, RBS, MAC, RLJ, VNO, JKS, STP, SIGM, SMTC, ANGI, AWAY, ZNGA, GLUU, CIEN, STM, ARUN, ARMH, AXIS, DTSI, KPON, SNX, FFN, OCLR, MOTR, S, T, VZ, CCI, FTR, CLWR, DYN, DUK, CNP, GEN, AES, CPN, EXC

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
HRB H&R Block Inc. 27.76 -0.12 -0.43 3,472,248 Trade
MW Men's Wearhouse Inc (The) n/a n/a n/a 0 Trade
WPX WPX Energy Inc. 12.56 -0.19 -1.49 4,760,046 Trade
CBS CBS Corporation Class B 48.24 -1.52 -3.05 3,967,758 Trade
STM STMicroelectronics N.V. 13.58 0.20 1.49 2,579,795 Trade
GEN Genesis Healthcare Inc. 1.67 -0.01 -0.60 298,169 Trade
FTR Frontier Communications Corporation 2.86 -0.12 -4.03 5,094,780 Trade
KTOS Kratos Defense & Security Solutions Inc. 14.65 0.08 0.55 1,178,119 Trade
DAC Danaos Corporation 0.85 0.01 1.19 129,054 Trade
GLUU Glu Mobile Inc. 8.08 0.55 7.30 4,769,880 Trade
FLY Fly Leasing Limited 12.19 -0.15 -1.22 115,901 Trade
VALE VALE S.A. American Depositary Shares Each Representing one 13.01 0.15 1.17 27,275,390 Trade
TCAP BBDC Triangle Capital Corporation n/a n/a n/a n/a
ARMH ARM Holdings plc n/a n/a n/a 0 Trade
KFY Korn/Ferry International 44.90 1.31 3.01 689,893 Trade
AA Alcoa Corporation 28.43 0.11 0.39 2,490,557 Trade
VLO Valero Energy Corporation 73.27 -0.11 -0.15 4,749,377 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.78 0.32 1.12 5,297,948 Trade
KBIO Kalobios Pharmaceuticals Inc n/a n/a n/a n/a
RAD Rite Aid Corporation 0.97 -0.01 -1.31 6,812,174 Trade
GLP Global Partners LP representing Limited Partner Interests 16.75 -0.16 -0.95 76,609 Trade
MO Altria Group Inc. 53.95 0.59 1.11 9,348,132 Trade
BKE Buckle Inc. (The) 18.80 0.12 0.64 434,641 Trade
AAPL Apple Inc. 168.63 -0.97 -0.57 47,281,665 Trade
HALO Halozyme Therapeutics Inc. 15.46 -0.06 -0.39 348,250 Trade
CVC Cablevision Systems Corporation Class A n/a n/a n/a 0 Trade
BONT Bankers Petroleum Ltd. n/a n/a n/a n/a
S Sprint Corporation 5.94 0.01 0.17 7,749,337 Trade
NLSN Nielsen N.V. 26.05 0.06 0.23 2,128,685 Trade
SPG Simon Property Group Inc. 187.45 1.35 0.73 1,608,425 Trade
SSW Seaspan Corporation 9.43 0.12 1.29 456,588 Trade
TICC OXSQ Cincinnati Tick n/a n/a n/a 0
CORE Core-Mark Holding Company Inc. 25.21 0.24 0.96 267,839 Trade
VNO Vornado Realty Trust 69.98 -0.17 -0.24 609,383 Trade
KIRK Kirkland's Inc. 10.54 0.19 1.84 110,890 Trade
WSM Williams-Sonoma Inc. (DE) 52.44 -0.80 -1.50 1,796,391 Trade
AMZN Amazon.com Inc. 1,643.24 2.21 0.13 6,244,695 Trade
HOV Hovnanian Enterprises Inc. Class A 1.10 -0.02 -1.79 1,497,087 Trade
ROCK Gibraltar Industries Inc. 34.19 -0.09 -0.26 168,125 Trade
SMTC Semtech Corporation 47.60 0.79 1.69 460,929 Trade
MYRG MYR Group Inc. 28.04 -0.49 -1.72 43,281 Trade
FSYS Fuel Systems Solutions Inc. n/a n/a n/a 0 Trade
AES The AES Corporation 15.74 -0.03 -0.19 7,325,834 Trade
SQNM Sequenom Inc. n/a n/a n/a 0 Trade
MDVN Medivation Inc. n/a n/a n/a 0 Trade
VZ Verizon Communications Inc. 58.85 0.58 1.00 14,991,438 Trade
NWSA News Corporation 12.46 -0.07 -0.56 2,465,034 Trade
RDNT RadNet Inc. 12.54 0.00 0.00 94,242 Trade
CODI Compass Diversified Holdings Shares of Beneficial Interest 14.15 -0.32 -2.21 239,273 Trade
BAC Bank of America Corporation 24.58 -0.18 -0.73 78,545,015 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 5.01 -0.11 -2.15 2,920,854 Trade
DXYN The Dixie Group Inc. 1.12 -0.03 -2.61 15,356 Trade
NAV Navistar International Corporation 27.31 0.00 0.00 460,115 Trade
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 70.37 -0.18 -0.26 4,454,265 Trade
FCX Freeport-McMoRan Inc. 10.76 0.07 0.65 19,184,215 Trade
PSO Pearson Plc 11.52 0.00 0.00 287,132 Trade
NBIX Neurocrine Biosciences Inc. 85.76 -0.05 -0.06 508,886 Trade
CIEN Ciena Corporation 31.59 -0.27 -0.85 2,978,185 Trade
APC Anadarko Petroleum Corporation 51.64 0.88 1.73 6,957,019 Trade
MAC Macerich Company (The) 49.32 -0.72 -1.44 1,556,714 Trade
CTAS Cintas Corporation 170.43 -1.11 -0.65 668,201 Trade
AWAY HomeAway Inc. n/a n/a n/a 0 Trade
CMN Cantel Medical Corp. n/a n/a n/a n/a
JKS JinkoSolar Holding Company Limited American Depositary Shares (each representing 4) 12.19 0.18 1.50 430,478 Trade
ZNGA Zynga Inc. 3.64 -0.03 -0.82 12,912,968 Trade
WFC Wells Fargo & Company 47.76 -1.04 -2.13 32,388,554 Trade
TRP TransCanada Corporation 39.46 0.10 0.25 1,721,872 Trade
AMID American Midstream Partners LP representing Limited Partner Interests 4.61 -0.03 -0.65 131,662 Trade
RLJ RLJ Lodging Trust of Beneficial Interest $0.01 par value 18.96 -0.21 -1.10 1,166,415 Trade
KWR Quaker Chemical Corporation 194.24 2.10 1.09 65,893 Trade
EXC Exelon Corporation 46.89 -0.11 -0.23 5,193,649 Trade
CNQ Canadian Natural Resources Limited 25.99 -0.85 -3.17 3,680,506 Trade
SNX Synnex Corporation 80.28 0.11 0.14 632,606 Trade
T AT&T Inc. 29.70 -0.21 -0.70 49,563,330 Trade
MWA MUELLER WATER PRODUCTS 10.05 -0.03 -0.30 879,334 Trade
FTK Flotek Industries Inc. 1.24 0.02 1.64 1,302,620 Trade
AEO American Eagle Outfitters Inc. 19.03 -0.49 -2.51 7,888,154 Trade
DUK Duke Energy Corporation (Holding Company) 90.79 0.28 0.31 4,706,975 Trade
DPM DCP Midstream Partners LP Partnership LP n/a n/a n/a 0
USPH U.S. Physical Therapy Inc. 112.06 0.90 0.81 103,677 Trade
CCI Crown Castle International Corp. (REIT) 116.14 0.04 0.03 1,732,630 Trade
EJ E-House (China) Holdings Limited American Depositary Share n/a n/a n/a 0 Trade
DTSI DTS Inc. n/a n/a n/a 0 Trade
ZLTQ ZELTIQ Aesthetics Inc. n/a n/a n/a 0 Trade
ANGI ANGI Homeservices Inc. 16.62 -0.07 -0.42 410,191 Trade

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