The Dow Jones Industrial Average traded up from 11,965.23 up to 12,051.28 versus its 200-day simple moving average at 11,975 then declined to 11,880.69 before recovering above the 200-day into the final hour of trading. The NASDAQ traded up to 2693.94 versus its 200-day at 2690 then declined to 2649.06 before rebounding back to its 200-day in the final hour of trading.
Asian stocks slumped on Monday with the Nikkei 225 down 0.39% to 8,767 and the Hang Seng losing 0.83% to 19,678. European stocks were slightly lower on Monday as Greek leaders resume talks to pick a new prime minister. The FTSE 100 lost 0.34% to 5,508 with the DAX slipped by 0.63% to 5,928 and the CAC 40 down by 0.64% to 3,104. The US Treasury 10-Year yield declined from 2.082 percent to 1.959 then rose back to 2.000 versus its 50-day simple moving average at 2.048. Gold traded up from $1754.0 the Troy ounce to $1797.3. Crude oil traded above its 200-day simple moving average at $94.90 with a morning high of $95.66 after trading as low as $93.23. Oil traded to a day’s high of $95.88 in afternoon trading closing above the 200-day. The euro versus the dollar traded down from 1.3817 to 1.3685 versus its 50-day simple moving average at 1.3767. US Treasury supply is an issue this week with auctions of $32 billion 3-Year notes on Tuesday, $24 billion 10-Year notes on Wednesday and $16 billion 30-Year bonds on Thursday.
Energy
BP (BP) said it was unconcerned by the weekend collapse of a $7.1B deal to sell its 60% stake in Argentine crude firm Pan American Energy to Bridas, a JV involving Cnooc (CEO). Quicksilver Resources (KWK) missed estimates by 3 cents, while beating revenue by $38M. Eagle Rock Energy (EROC) is moved to Outperform from Market Perform with Wells Fargo. Frontline (FRO) is taken to Hold from Buy at Deutsche Bank. Spectra Energy LP (SEP) is lowered to Market Perform from Outperform at Morgan Keegan. Sunpower (SPWRA) is now Sell from Hold at Auriga. In afternoon trading: Shares of Tesco Corp. (TESO) are down about 17%. Shares of DHT Holdings (DHT) are down about 9.5%. Shares of Quicksilver Resources are down about 9.25%.
Energy Select Sector SPDR (XLE) was trading at $71.65 at 4:00 PM on Monday, up 0.55% on the day – up 4.98% year-to-date.
Materials
In afternoon trading: Shares of China Shen Zhou Mining (SHZ) are up about 19%. Shares of China GengSheng Minerals (CHGS) are up about 16%. Shares of Horsehead Holding (ZINC) are up about 8%. Shares of Rare Element (REE) are up about 8%. Shares of Golden Star Resources (GSS) are up about 7.25%. Shares of Silver Standard Resources (SSRI) are up about 6.25%.
The Materials Select Sector SPDR (XLB) was trading at $35.28 at 4:00 PM on Monday, up 0.86% on the day – down 8.15% year-to-date.
Industrials
Fluor (FLR) reported Q3 EPS of $0.78 (well below Street expectations). Fluor also lowered 2012 EPS estimates to $3.40-$3.80. Fluor is moved to Buy from Neutral at Lazard. In afternoon trading: Shares of Force Protection (FRPT) are up about 30.5% after General Dynamics Corp. (GD) said it would buy armored-truck maker in a $360 million deal. Shares of A-Power Energy (APWR) are down about 16.5%. Shares of Houston Wire & Cable (HWCC) are down about 12.25%. Shares of Beacon Power (BCON) are down about 12.25%.
The Industrial Select Sector SPDR (XLI) was trading at $33.68 at 4:00 PM on Monday, up 0.24% on the day – down 3.41% year-to-date.
Consumer Discretionary
Best Buy (BBY) has agreed to buy out U.K. company Carphone Warehouse in their 50-50 mobile-phone joint venture in the U.S., with the American retailer to pay $1.3B. DISH Network (DISH) missed estimates by a penny and revenue by $50M. Groupon (GRPN) is begun with a Buy and $32 target price at The Benchmark Company. Pier 1 Imports (PIR) is a new Outperform at Wells Fargo. Home Depot (HD) is raised to Outperform from Sector Perform at RBC Capital. Lumber Liquidators (LL) is lifted to Buy from Neutral at Goldman Sachs. Toll Brothers (TOL) is moved to Buy from Neutral at Citigroup. DR Horton (DHI) is now Neutral from Buy at Citigroup. 7 Days Group (SVN) is cut to Hold from Buy at T.H. Capital. In afternoon trading: Shares of Dreamworks Animation (DWA) are up about 8.25%. Shares of Dangdang (DANG) are down about 7%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $39.17 at 4:00 PM on Monday, up 0.64% on the day – up 4.70% year-to-date.
Consumer Staples
Archer-Daniels-Midland (ADM) is a new Neutral at Ticonderoga. CVS Caremark (CVS) gets upgraded to Outperform from Sector Perform at RBC Capital. Kellogg (K) is cut to Market Perform from Outperform by brokers William Blair. In afternoon trading: Shares of Diamond Foods (DMND) are down about 16%. Actives: Shares of CVS Caremark are relatively unchanged. Shares of Kraft Foods (KFT) are down about a quarter of a percent. Shares of Altria Group (MO) are down slightly. Shares of Wal-Mart (WMT) are down about 0.4%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $31.25 at 4:00 PM on Monday, down 0.84% on the day – up 6.62% year-to-date.
Healthcare
Acorda Therapeutics (ACOR) reported Q3 revenue of $93M and EPS of $0.40 (the latter missed by 33 cents, while the former beat by $2.2M). WebMD (WBMD) issued a lower full-year revenue outlook of $555M-$565M (from $580M-$600M). Mylan Labs (MYL) is a new Market Perform at Leerink Swann. Quest Diagnostics (DGX) is increased to Outperform from Sector Perform at RBC Capital. Smith & Nephew (SNN) is now Neutral from Outperform at Credit Suisse. Vertex Pharmaceutics (VRTX) is downgraded to Sector Perform from Outperform at RBC Capital. In afternoon trading: Shares of Inhibitex (INHX) are up about 17.75%. Shares of Gentiva Health Services (GTIV) are up about 14.75%. Shares of Idenix Pharmaceuticals (IDIX) are up about 13.25%. Shares of Optimer Pharmaceuticals (OPTR) are down about 11.25%. Shares of Merge Healthcare (MRGE) are down about 10%.
The Health Care Select Sector SPDR (XLV) was trading at $33.58 at 4:00 PM on Monday, up 1.18% on the day – up 6.60% year-to-date.
Financials
Bank of America (BAC) may further reduce its stake in China Construction Bank (CICHY), a report says, having sold around half its 10% holding in August for $8.3B. Berkshire Hathaway (BRK.A) invested $23.9B in Q3 2011, more than in any quarter in the last 15 years. CFTC Chairman Gary Gensler has recused himself from the MF Global (MFGLQ) probe in order to remove perceptions of a conflict of interest given that he and Jon Corzine had ties at Goldman Sachs (GS) and in the Senate, where Gensler was an aide. Hospitality Properites Trust (HPT) missed estimates by 2 cents, while beating revenue by $25M. Berkshire Hathaway (BRK.A) beat estimates by $513. LivePerson (LPSN) reported Q3 revenue of $34.3M and EPS of $0.09 (the former was in-line, but the latter beat by a penny), while issuing Q4 guidance for revenue of $36.5M-$37M and EPS of $0.08-$0.10 (slightly below Street estimates). Financial Federal (FIF) is a new Neutral and $22 price objective at Brokerage Robert W. Baird. ING Group NV (ING) gets downgraded to Hold from Buy at Societe Generale, which slashes German competitor Commerzbank AG (CRZBY) to Sell from Hold. In afternoon trading: Shares of MF Global are down about 13.25%.
The Financial Select Sector SPDR (XLF) was trading at $13.36 at 4:00 PM on Monday, up 0.56% on the day – down 16.24% year-to-date.
Information Technology
Companies boost capital spending. Major U.S. corporations have increased their capital investment this year, possibly signalling a belief that the U.S. will avoid a double-dip recession. Apple (AAPL) more than doubled expenditures to $1.6B in Q3 2011 from a year earlier, while IBM’s (IBM) spending jumped 55% to $1.3B. NeoPhotonics (NPTN) reported Q3 revenue of $44M and EPS of -$0.13 (missing consensus by $2.7M and $0.03). RealNetworks (RNWK) reported Q3 revenue of $84.4M and EPS of -$0.15 (missing consensus by $1.8M and $0.04). WebMD (WBMD) issued a lower full-year revenue outlook of $555M-$565M (from $580M-$600M). Immersion (IMMR) reported Q3 revenue of $6.5M and EPS of -$0.05 (missing consensus by $1M and $0.05). Rosetta Stone (RST) reported Q3 revenue of $64.2M and EPS of -$0.06 (the latter beat by $0.07, but the former missed by $2.9M). Quest Software (QSFT) reported Q3 revenue of $220.4M and EPS of $0.41 (soundly beating consensus by $5.9M and $0.05). VeriFone (PAY) is a new Buy at Citigroup. IAC/InterActiveCorp. (IACI) is a new Hold at Needham. Wright Express (WXS) is initiated with a Neutral at Citigroup. DragonWave (DRWI) is raised to Buy from Hold at Jefferies. Alcatel-Lucent (ALU) is cut to Sell from Neutral at Citigroup. Amphenol (APH) is moved to Sell from Neutral at Ticonderoga with a $38 target price. In afternoon trading: Shares of Ceragon Networks (CRNT) are down about 16.25%. Shares of Omnivision Technologies (OVTI) are down about 15.25%. Shares of Universal Display (PANL) are down about 10%. Shares of Alcatel-Lucent are down about 9.25%.
The Technology Select Sector SPDR (XLK) was trading at $26.21 at 4:00 PM on Monday, up 0.61% on the day – up 4.05% year-to-date.
Telecommunications Services
In afternoon trading: Actives: Shares of Sprint Nextel (S) are down about 0.4%. Shares of AT&T (T) are up about 0.4%. Shares of Verizon (VZ) are down slightly. Shares of Frontier Communications (FTR) are up about 1.7%. Shares of Windstream (WIN) are up about 0.7%. Shares of Vodafone (VOD) are up slightly. Shares of Clearwire (CLWR) are up about 1.1%.
The NASDAQ Telecommunications Index (IXTC) was trading at $203.39 at 4:00 PM on Monday, up 0.24% on the day – down 9.75% year-to-date.
Utilities
Nstar (NST) beat estimates by a penny. Veolia Environnement (VE) is moved to Underweight from Neutral at JPMorgan. In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about a half of a percent. Shares of AES Corp. (AES) are up slightly. Shares of Exelon (EXC) are up about 1.2%. Shares of Genon Energy (GEN) are down about 1.1%. Shares of PG&E (PCG) are down about 2%. Shares of Nextra Energy (NEE) are down about 0.75%.
The Utilities Select Sector SPDR (XLU) was trading at $35.17 at 4:00 PM on Monday, up 0.54% on the day – up 12.22% year-to-date.
STOCKS: BP, CEO, KWK, EROC, FRO, SEP, SPWRA, TESO, DHT, SHZ, CHGS, ZINC, REE, GSS, SSRI, FLR, FRPT, GD, APWR, HWCC, BCON, BBY, DISH, GRPN, PIR, HD, LL, TOL, DHI, SVN, DWA, DANG, ADM, CVS, K, DMND, KFT, MO, WMT, ACOR, WBMD, MYL, DGX, SNN, VRTX, INHX, GTIV, IDIX, OPTR, MRGE, BAC, CICHY, BRK.A, MFGLQ, GS, HPT, LPSN, FIF, ING, CRZBY, AAPL, IBM, NPTN, RNWK, WBMD, IMMR, RST, QSFT, PAY, IACI, WXS, DRWI, ALU, APH, CRNT, OVTI, PANL, S, T, VZ, FTR, WIN, VOD, CLWR, NST, VE, DUK, AES, EXC, GEN, PCG, NEE
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