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

Sector Recap |

Alcoa AAThere 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. 9.93 0.09 0.91 2,101,722
FII Federated Investors Inc. 27.68 -0.19 -0.68 967,952
GEN Genesis Healthcare Inc. 3.56 0.00 0.00 76,462
TSN Tyson Foods Inc. 57.05 0.88 1.57 3,617,929
KTOS Kratos Defense & Security Solutions Inc. 7.94 0.48 6.43 1,886,107
ARO Aeropostale Inc. n/a n/a n/a n/a
IO Ion Geophysical Corporation 7.30 -0.65 -8.18 56,629
TI Telecom Italia S.P.A. New 7.67 0.22 2.95 106,834
AOCIF AutoCanada Inc. 15.20 0.00 0.00 0
YNDX Yandex N.V. 18.42 -0.19 -1.02 1,892,197
TEF Telefonica SA 8.18 -0.05 -0.61 1,298,546
AA Alcoa Inc. 29.04 0.16 0.55 3,870,822
VLO Valero Energy Corporation 61.46 0.93 1.54 5,295,670
CNP CenterPoint Energy Inc (Holding Co) 24.10 0.30 1.26 4,181,472
URRE Uranium Resources Inc. 1.36 -0.08 -5.56 590,941
EXPE Expedia Inc. 121.00 -1.01 -0.83 1,467,838
C Citigroup Inc. 56.02 -1.25 -2.18 25,110,311
S Sprint Corporation 7.98 0.04 0.50 8,775,180
MS Morgan Stanley 41.83 -0.33 -0.78 11,288,363
SKH Skilled Healthcare Group n/a n/a n/a 0
PCLN The Priceline Group Inc. 1,473.00 -6.66 -0.45 336,892
JPM JP Morgan Chase 81.60 -0.19 -0.23 16,931,504
ALXA Alexza Pharmaceuticals Inc n/a n/a n/a 0
WPP Wausau Paper n/a n/a n/a 0
MTL Mechel PAO American Depositary Shares (Each rep. 1 5.40 -0.27 -4.76 492,386
PRGN Paragon Shipping Inc n/a n/a n/a 0
ERIC Ericsson 5.16 0.04 0.78 4,465,404
LVLT Level 3 Communications Inc. 55.82 0.63 1.14 1,860,229
COP ConocoPhillips 48.12 -0.10 -0.21 5,804,976
AES The AES Corporation 11.18 0.15 1.36 5,521,035
SLG SL Green Realty Corporation 107.42 2.05 1.95 958,217
JBLU JetBlue Airways Corporation 20.93 0.53 2.60 6,989,104
GS The Goldman Sachs Group Inc. 223.36 -3.27 -1.44 5,297,420
LM Legg Mason Inc. 31.37 -0.80 -2.49 2,000,362
VZ Verizon Communications Inc. 49.81 -0.06 -0.12 10,650,716
CLDT Chatham Lodging Trust (REIT) of Beneficial Interes 19.22 -0.12 -0.62 514,176
YRCW YRC Worldwide Inc. 13.51 0.36 2.74 920,968
BAC Bank of America Corporation 21.23 -0.27 -1.26 128,468,708
YUM Yum! Brands Inc. 62.42 -0.27 -0.43 2,048,499
GNK Genco Shipping & Trading Limited New (Marshall Isl 8.40 -0.40 -4.55 40,585
SYNA Synaptics Incorporated 52.30 0.08 0.15 467,272
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0
MCD McDonald\'s Corporation 118.24 -0.23 -0.19 3,348,723
BSPM Biostar Pharmaceuticals Inc. 3.12 -0.01 -0.32 83,876
SBUX Starbucks Corporation 57.21 -1.30 -2.22 16,869,957
IPHI Inphi Corporation $0.001 par value 40.01 -0.08 -0.20 2,007,230
JVA Coffee Holding Co. Inc. 4.91 -0.02 -0.41 16,535
VECO Veeco Instruments Inc. 26.20 0.20 0.77 213,843
GIS General Mills Inc. 60.94 0.35 0.58 2,349,860
WFC Wells Fargo & Company 53.58 -0.76 -1.40 21,894,686
MT ArcelorMittal 7.82 0.15 1.96 18,061,802
DEPO Depomed Inc. 18.94 0.39 2.10 1,320,311
NFLX Netflix Inc. 120.81 3.59 3.06 8,953,590
NMM Navios Maritime Partners LP Representing Limited P 1.67 -0.02 -1.18 312,017
PACB Pacific Biosciences of California Inc. 6.90 -0.20 -2.82 1,056,291
Z Zillow Group Inc. 33.87 0.02 0.06 774,759
SAP SAP SE ADR (Sponsored) 81.92 0.01 0.01 1,253,488
EXC Exelon Corporation 33.01 0.84 2.61 7,811,789
SNE Sony Corporation 28.06 -0.16 -0.57 952,644
T AT&T Inc. 38.61 -0.27 -0.69 16,102,161
DUK Duke Energy Corporation (Holding Company) 73.42 0.67 0.92 3,754,148
SYK Stryker Corporation 112.08 0.33 0.30 1,211,110
NUE Nucor Corporation 63.03 1.08 1.74 2,060,306
GPI Group 1 Automotive Inc. 73.02 -1.35 -1.82 141,235
GEVO Gevo Inc. 0.31 0.00 0.29 3,939,114
ZAGG ZAGG Inc 6.50 0.05 0.78 209,073

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