Equities Sector Coverage: Investor Optimism Returns to Wall Street

Sector Recap |

will markets keep rising, is economy recovering, will dow keep risingInitial 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
AA Alcoa Inc. 9.62 -0.07 -0.67 6,774,574
AAPL Apple Inc. 112.86 -0.02 -0.02 14,350,846
AEO American Eagle Outfitters Inc. 17.95 0.09 0.50 823,065
AES The AES Corporation 13.09 -0.03 -0.23 2,239,508
AMID American Midstream Partners LP representing Limite 14.27 -0.35 -2.39 31,474
AMZN Amazon.com Inc. 814.30 15.14 1.89 2,146,871
ANGI Angie\'s List Inc. 10.15 0.10 1.00 83,842
APC Anadarko Petroleum Corporation 58.28 -0.26 -0.44 3,461,121
ARMH ARM Holdings plc n/a n/a n/a 0
AWAY HomeAway Inc. n/a n/a n/a 0
BAC Bank of America Corporation 15.20 0.11 0.72 45,852,888
BKE Buckle Inc. (The) 24.25 -0.36 -1.46 104,795
BONT The Bon-Ton Stores Inc. 1.65 -0.01 -0.60 7,608
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 132.16 -0.04 -0.03 986,103
CBS CBS Corporation Class B 51.99 0.86 1.68 2,371,914
CCI Crown Castle International Corp. (REIT) 95.86 0.25 0.26 793,742
CIEN Ciena Corporation 22.41 0.38 1.72 711,127
CMN Cantel Medical Corp. 80.11 -0.17 -0.21 69,271
CNP CenterPoint Energy Inc (Holding Co) 24.26 0.00 0.00 973,372
CNQ Canadian Natural Resources Limited 29.14 -0.41 -1.39 1,379,015
CODI Compass Diversified Holdings 17.04 -0.04 -0.23 25,715
CORE Core-Mark Holding Company Inc. 36.58 0.18 0.49 73,417
CPN Calpine Corporation 13.42 -0.26 -1.87 1,768,684
CTAS Cintas Corporation 113.40 0.21 0.19 268,488
CVC Cablevision Systems Corp. n/a n/a n/a 0
DAC Danaos Corporation 2.81 -0.07 -2.43 16,172
DPM DCP Midstream Partners LP Partnership LP 33.63 -0.25 -0.74 75,199
DTSI DTS Inc. 42.48 0.07 0.17 44,979
DUK Duke Energy Corporation (Holding Company) 82.01 -0.14 -0.17 979,898
DXYN The Dixie Group Inc. 4.76 0.00 0.00 20,467
EJ E-House (China) Holdings Limited American Deposita n/a n/a n/a 0
EXC Exelon Corporation 34.49 -0.33 -0.95 2,483,176
FCX Freeport-McMoRan Inc. 10.18 -0.34 -3.19 15,437,078
FLY Fly Leasing Limited 11.54 0.00 0.00 50,438
FSYS Fuel Systems Solutions Inc. n/a n/a n/a 0
FTK Flotek Industries Inc. 12.65 -0.31 -2.39 342,031
FTR Frontier Communications Corporation 4.36 0.00 0.00 7,700,164
GEN Genesis Healthcare Inc. 2.72 0.01 0.37 35,814
GLP Global Partners LP representing Limited Partner In 16.57 -0.26 -1.54 44,209
GLUU Glu Mobile Inc. 2.21 0.02 0.91 418,540
HALO Halozyme Therapeutics Inc. 12.36 0.38 3.17 627,830
HOV Hovnanian Enterprises Inc. Class A 1.69 -0.03 -1.46 518,281
HRB H&R Block Inc. 22.82 0.04 0.18 848,512
JKS JinkoSolar Holding Company Limited American Deposi 15.54 0.51 3.39 277,745
JMBA Jamba Inc. 10.89 0.29 2.74 81,849
KBIO Kalobios Pharmaceuticals Inc 3.18 -0.37 -10.42 29,247
KFY Korn/Ferry International 20.78 -0.12 -0.57 224,078
KIRK Kirkland\'s Inc. 12.46 0.02 0.16 41,582
KTOS Kratos Defense & Security Solutions Inc. 6.64 0.15 2.31 181,811
KWR Quaker Chemical Corporation 103.79 2.39 2.36 42,780
MAC Macerich Company (The) 82.86 -0.08 -0.10 171,312
MDVN Medivation Inc. 81.46 0.04 0.05 1,796,845
MO Altria Group Inc. 63.33 0.30 0.48 2,047,122
MW Men's Wearhouse, Inc. (The) n/a n/a n/a 0
MWA MUELLER WATER PRODUCTS 12.53 0.17 1.38 169,586
MYRG MYR Group Inc. 29.55 0.35 1.18 47,218
NAV Navistar International Corporation 21.27 -0.72 -3.25 696,241
NBIX Neurocrine Biosciences Inc. 52.91 -0.34 -0.64 299,156
NLSN Nielsen N.V. 53.43 0.28 0.53 648,735
NWSA News Corporation 13.93 0.11 0.76 872,313
OCLR Oclaro Inc. 8.88 0.19 2.16 2,122,422
PSO Pearson Plc 9.83 0.37 3.86 538,023
RAD Rite Aid Corporation 8.04 0.00 0.00 4,160,765
RBS Royal Bank of Scotland Group Plc New (The) ADS 4.61 0.00 0.00 1,458,116
RDNT RadNet Inc. 7.18 -0.06 -0.83 36,801
RLJ RLJ Lodging Trust of Beneficial Interest $0.01 par 21.26 -0.36 -1.67 371,189
ROCK Gibraltar Industries Inc. 37.72 0.36 0.96 35,720
S Sprint Corporation 6.72 0.07 1.05 4,550,717
SIGM Sigma Designs Inc. 7.84 0.16 2.08 146,938
SMTC Semtech Corporation 27.43 0.17 0.62 98,722
SNX Synnex Corporation 115.41 9.23 8.69 475,108
SPG Simon Property Group Inc. 214.04 -0.72 -0.34 419,697
SQNM Sequenom Inc. n/a n/a n/a 0
SSW Seaspan Corporation 13.45 -0.11 -0.81 186,468
STM STMicroelectronics N.V. 8.02 0.02 0.25 984,985
T AT&T Inc. 41.64 0.50 1.22 9,883,427
TCAP Triangle Capital Corporation 19.30 0.09 0.47 74,522
TICC TICC Capital Corp. 5.81 0.10 1.75 88,056
TRP TransCanada Corporation 47.20 0.09 0.19 291,415
USPH U.S. Physical Therapy Inc. 61.79 0.15 0.24 33,210
VALE VALE S.A. American Depositary Shares Each Represen 5.40 0.02 0.28 6,064,141
VLO Valero Energy Corporation 54.81 0.52 0.96 2,795,930
VNO Vornado Realty Trust 103.35 -0.62 -0.60 402,615
VZ Verizon Communications Inc. 52.55 0.40 0.77 4,111,280
WFC Wells Fargo & Company 45.03 0.15 0.32 14,481,842
WPX WPX Energy Inc. 11.48 -0.35 -2.96 8,021,862
WSM Williams-Sonoma Inc. (DE) 50.35 0.57 1.15 867,427
ZLTQ ZELTIQ Aesthetics Inc. 39.20 -0.56 -1.41 343,574
ZNGA Zynga Inc. 2.83 0.00 0.00 7,077,027

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