Equities Sector Coverage: Investors Stay Quiet Ahead of Key Votes in U.S., Europe

Sector Recap  |

There were no economic data points on Tuesday and tomorrow we get the minutes of the last FOMC meeting. The Dow Jones Industrial Average, which closed at 11,433 on Monday dipped to 11,365.67 on Tuesday then rebounded to 11,447.86 above its 50-day at 11,211. The NASDAQ traded down from 2568.52 to 2551.94 then rebounded to 2587.28 above its 50-day at 2504.

Asian stocks moved higher on Tuesday with the Nikkei 225 up 1.95% to 8,774 and the Hang Seng higher by 2.43% to 18,142. European stocks were mixed on Tuesday. The FTSE 100 lost just 0.06% to 5,396 with the DAX up just 0.30% to 5,865 and the CAC 40 down 0.25% to 3,154. The US Treasury 10-Year yield rose to 2.183 on Tuesday well above its September 23rd all time low at 1.671 percent. It appears that the 30-Year fixed rate mortgage will move back above 4.00% as the Fed’s “Operation Twist” is factored into the yield environment. The US Treasury auctioned $32 billion in new 3-Year notes at 0.544 with a bid-to-cover at 3.30 times and Indirect Bid at 37.8%. Gold declined from $1686.7 the Troy ounce to $1655.4 on Tuesday. Crude oil traded down from $85.70 to $83.97 then up to $86.64 above its 200-week simple moving average at $83.57 and its 50-day at $85.14. The euro versus the dollar declined from 1.3671 to 1.3568 then up to 1.3683 on Tuesday.

Energy

Samson Investment, one of the largest privately held oil and gas explorers in the U.S., is considering a full or partial sale, as well as joint venture options, as it looks to raise funds to finance more shale drilling, The Wall Street Journal reports. Valero (VLO) is lifted to Overweight from Equal Weight at Barclays with a new price target of $35. ConocoPhillips (COP) is cut to Underperform from Neutral at Macquarie. In afternoon trading: Shares of Gevo (GEVO) are up about 18.25%. Shares of General Maritime (GMR) are up about 15.75%. Shares of Uranium Resources (URRE) are up about 8.5%. Shares of ION Geophysical (IO) are up about 7.75%. Shares of Overseas Shipholding (OSG) are up about 7.25%. Shares of Suntech Power (STP) are down about 8.75%.

Energy Select Sector SPDR (XLE) was trading at $63.79 at 4:00 PM on Tuesday, up 0.20% on the day – down 6.53% year-to-date.

Materials

As always, Alcoa (AA) will unofficially kick off earnings season after the bell today, when it is expected to report that Q3 2011 EPS grew to $0.23 from $0.06 a year earlier and that revenue increased to $6.26B from $5.3B. Dow Chemical (DOW) is initiated with a Buy and $39 price objective at Ticonderoga. Arcelor Mittal (MT) and Nucor (NUE) are both boosted to Buy from Hold at Dahlman Rose. Wausau Paper (WPP) is upgraded to Buy from Hold at Deutsche Bank. In afternoon trading: Shares of Wausau Paper are up about 6.5%. Shares of Zagg (ZAGG) are up about 5.25%. Shares of Mechel (MTL) are down about 5.25%.

The Materials Select Sector SPDR (XLB) was trading at $32.47 at 4:00 PM on Tuesday, up slightly on the day – down 15.46% year-to-date.

Industrials

In afternoon trading: Shares of Paragon Shipping (PRGN) are up about 10%. Shares of US Airways (LCC) are up about 8.5%. Shares of Exel Maritime (EXM) are up about 7.5%. Shares of YRC Worldwide (YRCW) are up about 7%. Shares of Genco Shipping (GNK) are up about 6.75%. Shares of Kratos Defense (KTOS) are up about 6.5%. Shares of AMR (AMR) are up about 6.25%. Shares of Navios Maritime (NMM) are up about 6.25%. Shares of JetBlue (JBLU) are up about 5.75%.

The Industrial Select Sector SPDR (XLI) was trading at $31.49 at 4:00 PM on Tuesday, up 0.29% on the day – down 9.69% year-to-date.

Consumer Discretionary

The outlook for Sony (SNE) in Europe and North America for the end-of-year shopping season is "murky," CFO Masaru Kato has told Reuters, adding, "We don't see any reasons for optimism." Innkeepers is in negotiations to sell most of its hotels to Cerberus for lower than the $1.12B initially agreed upon, The Wall Street Journal reports. The discussions led Innkeepers to yesterday delay by at least a day the start of a trial in which it is suing Cerberus and Chatham (CLDT) for backing out of the original deal. McDonald’s (MCD) is begun with a Buy at Credit Agricole, which assigns an identical rating on rival YUM! Brands (YUM) and starts an Underperform on Starbucks (SBUX). Priceline.com (PCLN) is a new Equal Weight at Evercore, which establishes an Underweight on Orbitz (OWW) and an Overweight on Expedia (EXPE). Aeropostale (ARO) is upgraded to Buy from Hold at Jefferies. Netflix (NFLX) is hoisted to Hold from Sell at Hudson Square Research. Hennes & Mauritz AB (HNNMY) gets a Buy-from-Neutral boost at Citigroup. Group 1 Automotive (GPI) is lifted to Buy from Hold at ThinkEquity. In afternoon trading: Shares of Dangdang (DANG) are up about 10.25%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.74 at 4:00 PM on Tuesday, up 0.43% on the day – up 0.88% year-to-date.

Consumer Staples

General Mills (GIS) gets a Buy-from-Neutral upgrade at Goldman Sachs, which also adds it to their list of Conviction Buys. Sara Lee (SLE) is boosted to Outperform from Market Perform with Wells Fargo. Smithfield Foods (SFD) and Tyson Foods (TSN) are both taken to Buy from Underperform at Bank of America-Merrill Lynch. In afternoon trading: Shares of Coffee Holding (JVA) are up about 27%. Shares of AgFeed (FEED) are up about 6.5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.48 at 4:00 PM on Tuesday, down 0.20% on the day – up 3.99% year-to-date.

Healthcare

Stryker (SYK) is moved to Buy from Neutral at Bank of America-Merrill Lynch. In afternoon trading: Shares of Biostar Pharmaceuticals (BSPM) are up about 13.25%. Shares of Depomed (DEPO) are up about 10.5%. Shares of Skilled Healthcare (SKH) are up about 7%. Shares of Alexza Pharmaceuticals (ALXA) are up about 6.5%. Shares of Gentiva Health Services (GTIV) are up about 6.5%. Shares of Pacific Biosciences (PACB) are down about 6.25%. Shares of Complete Genetics (GNOM) are down about 5.9%.

The Health Care Select Sector SPDR (XLV) was trading at $32.58 at 4:00 PM on Tuesday, down slightly on the day – up 3.43% year-to-date.

Financials

A settlement between states and major lenders over inappropriate foreclosure practices is close although some issues could "frustrate the agreement," Iowa AG Tom Miller has told Bloomberg. The banks involved are Bank of America (BAC), JPMorgan (JPM), Citigroup (C), Wells Fargo (WFC) and Ally Financial. New York could lose almost 10,000 securities jobs by the end of next year, city Comptroller Thomas DiNapoli has predicted in a report. The prediction is not a surprise given that leading banks such as HSBC (HBC) and Bank of America (BAC) have announced major cutbacks. The Federal Deposit Insurance Corp. will today officially release its proposed version of the Volcker rule, which is expected to ban banks from trading for their own profit in securities, derivatives and certain other financial instruments. The law contains some exemptions, and the way these are formulated will significantly affect large banks such as Goldman Sachs (GS) and Morgan Stanley (MS). SL Green Realty (SLG) gets upgraded to Buy from Neutral at UBS. Legg Mason (LM) and Federated Investors (FII) are each lowered to from Neutral at Sterne Agee, with respective price objectives of $32 and $21.

The Financial Select Sector SPDR (XLF) was trading at $12.43 at 4:00 PM on Tuesday, down slightly on the day – down 22.07% year-to-date.

Information Technology

Zillow (Z) is initiated with a Market Perform and $26 price target at Morgan Keegan. SAP AG (SAP) is begun as a Buy at Citigroup. Synaptics (SYNA) is upgraded to Buy from Neutral with a $40 price target at Collins Stewart. LM Ericsson (ERIC) is upgraded to Add from Neutral at WestLB. Veeco Instruments (VECO) is now Neutral from Overweight at Piper Jaffray. STMicroelectronics (STM) is cut 180 degrees, to Sell from Buy at Citigroup. In afternoon trading: Shares of Motricity (MOTR) are up about 17.75%. Shares of Yandex (YNDX) are up about 12.75%. Shares of INPHI (IPHI) are up about 11%.

The Technology Select Sector SPDR (XLK) was trading at $25.16 at 4:00 PM on Tuesday, up 0.44% on the day – down 0.12% year-to-date.

Telecommunications Services

AT&T (T) is removed from FBR Capital’s Top Picks list. Telecom Italia (TI) is taken to Sell from Neutral at Goldman Sachs, which also cuts Spain’s Telefonica S.A. (TEF) to Neutral from Buy. In afternoon trading: Actives: Shares of Sprint Nextel (S) are up about 5.9%. Shares of Level 3 Communications (LVLT) are down about 1.7%. Shares of AT&T are down about 1.4%. Shares of Verizon (VZ) are down about 0.9%.

The NASDAQ Telecommunications Index (IXTC) was trading at $191.87 at 4:00 PM on Tuesday, down slightly on the day – down 14.86% year-to-date.

Utilities

Iberdrola SA (IBDRY) is lowered to Sell from Neutral cut at Goldman Sachs. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 1.4%. Shares of CenterPoint Energy (CNP) are down about 2.2%. Shares of Exelon (EXC) are down about 1.2%. Shares of Constellation Energy Group (CEG) are down about a half of a percent. Shares of AES Corp (AES) are down about 1.1%. Shares of Genon Energy (GEN) are up about 3.1%.

The Utilities Select Sector SPDR (XLU) was trading at $33.74 at 4:00 PM on Tuesday, down 0.91% on the day – up 7.66% year-to-date.

STOCKS: VLO, COP, GEVO, GMR, URRE, IO, OSG, STP, AA, DOW, MT, NUE, WPP, ZAGG, MTL, PRGN, LCC, EXM, YRCW, GNK, KTOS, AMR, NMM, JBLU, SNE, CLDT, MCD, YUM, SBUX, PCLN, OWW, EXPE, ARO, NFLX, HNNMY, GPI, DANG, GIS, SLE, SFD, TSN, JVA, FEED, SYK, BSPM, DEPO, SKH, ALXA, GTIV, PACB, GNOM, BAC, JPM, C, WFC, HBC, GS, MS, SLG, LM, FII, Z, SAP, SYNA, ERIC, VECO, STM, MOTR, YNDX, IPHI, T, TI, TEF, S, LVLT, VZ, IBDRY, DUK, CNP, EXC, CEG, AES, GEN

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
STM STMicroelectronics N.V. 14.55 0.42 2.97 2,499,027 Trade
FII Federated Investors Inc. 26.43 0.44 1.69 883,603 Trade
GEN Genesis Healthcare Inc. 1.64 -0.01 -0.61 175,818 Trade
TSN Tyson Foods Inc. 60.96 1.57 2.64 3,630,191 Trade
KTOS Kratos Defense & Security Solutions Inc. 14.63 0.48 3.39 977,825 Trade
ARO Manulife Financial Corporation n/a n/a n/a n/a
IO Ion Geophysical Corporation 9.72 1.37 16.41 339,277 Trade
TI Telecom Italia S.P.A. New 5.54 -0.32 -5.46 233,203 Trade
AOCIF AutoCanada Inc 7.97 0.00 0.00 0
YNDX Yandex N.V. 30.82 -0.21 -0.68 1,383,899 Trade
TEF Telefonica SA 8.79 0.10 1.15 1,193,592 Trade
AA Alcoa Corporation 29.27 -0.32 -1.08 6,601,167 Trade
VLO Valero Energy Corporation 82.59 2.10 2.61 5,110,692 Trade
CNP CenterPoint Energy Inc (Holding Co) 29.44 -0.10 -0.34 6,719,809 Trade
URRE WWR B2Gold Corp. n/a n/a n/a n/a
EXPE Expedia Group Inc. 118.48 1.77 1.52 973,515 Trade
C Citigroup Inc. 63.12 0.65 1.04 19,947,263 Trade
S Sprint Corporation 6.07 0.06 1.00 8,620,239 Trade
MS Morgan Stanley 43.69 1.16 2.73 20,614,355 Trade
SKH Skilled Healthcare Group n/a n/a n/a 0 Trade
PCLN BKNG Calfrac Well Services Ltd. n/a n/a n/a n/a
ALXA Alexza Pharmaceuticals Inc n/a n/a n/a 0
MTL Mechel PAO American Depositary Shares (Each rep. 1) 2.33 0.00 0.00 45,982 Trade
PRGN Paragon Shipping Inc n/a n/a n/a 0
ERIC Ericsson 8.55 0.10 1.18 9,003,003 Trade
COP ConocoPhillips 67.90 0.84 1.25 6,073,857 Trade
AES The AES Corporation 15.55 0.06 0.39 4,663,188 Trade
SLG SL Green Realty Corp 89.24 0.27 0.30 625,603 Trade
JBLU JetBlue Airways Corporation 17.60 0.15 0.86 2,240,594 Trade
GS Goldman Sachs Group Inc. (The) 202.54 3.45 1.73 5,650,934 Trade
LM Legg Mason Inc. 29.09 0.63 2.21 753,166 Trade
VZ Verizon Communications Inc. 57.09 0.26 0.46 16,802,516 Trade
CLDT Chatham Lodging Trust (REIT) of Beneficial Interest 19.73 -0.16 -0.80 254,918 Trade
YRCW YRC Worldwide Inc. 5.90 0.22 3.87 1,102,243 Trade
BAC Bank of America Corporation 29.30 0.31 1.07 97,928,158 Trade
YUM Yum! Brands Inc. 92.36 1.66 1.83 2,041,782 Trade
GNK Genco Shipping & Trading Limited New (Marshall Islands) 8.90 0.44 5.20 180,740 Trade
SYNA Synaptics Incorporated 39.53 0.76 1.96 216,531 Trade
DANG E-Commerce China Dangdang Inc. American Depositary Shares each representing five Class A n/a n/a n/a 0 Trade
MCD McDonald's Corporation 182.57 1.46 0.81 3,497,959 Trade
SBUX Starbucks Corporation 64.70 0.42 0.65 9,835,199 Trade
IPHI Inphi Corporation $0.001 par value 34.89 0.13 0.37 676,838 Trade
JVA Coffee Holding Co. Inc. 4.45 0.03 0.68 8,045 Trade
VECO Veeco Instruments Inc. 8.85 0.18 2.08 260,990 Trade
GIS General Mills Inc. 43.47 0.50 1.16 5,564,755 Trade
WFC Wells Fargo & Company 50.01 0.78 1.58 36,380,310 Trade
MT Arcelor Mittal NY Registry Shares NEW 22.63 0.50 2.26 2,280,536 Trade
DEPO ASRT Depomed Inc. n/a n/a n/a n/a
NFLX Netflix Inc. 339.10 -14.09 -3.99 26,621,040 Trade
NMM Navios Maritime Partners LP Representing Limited Partner Interests 1.22 0.04 3.39 517,183 Trade
PACB Pacific Biosciences of California Inc. 7.34 0.06 0.82 1,353,470 Trade
Z Zillow Group Inc. 34.00 0.45 1.34 1,982,800 Trade
SAP SAP SE ADS 105.74 2.11 2.04 484,358 Trade
EXC Exelon Corporation 46.08 0.06 0.13 4,821,555 Trade
SNE Sony Corporation 50.18 0.67 1.35 889,437 Trade
T AT&T Inc. 30.96 0.32 1.04 43,249,105 Trade
DUK Duke Energy Corporation (Holding Company) 85.60 -0.04 -0.05 2,842,639 Trade
SYK Stryker Corporation 167.55 3.14 1.91 2,021,972 Trade
NUE Nucor Corporation 58.73 0.99 1.71 3,000,513 Trade
GPI Group 1 Automotive Inc. 61.38 0.94 1.56 134,956 Trade
GEVO Gevo Inc. 2.86 -0.02 -0.69 14,092,769 Trade
ZAGG ZAGG Inc 11.11 0.01 0.09 132,418 Trade
JPM JP Morgan Chase & Co. 104.59 1.67 1.62 16,428,710 Trade

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