Retail Sales rose by a less than expected 0.4% in January. Ex-autos the gain was 0.7%. Import Prices rose 0.3% in January. Business Inventories rose by 0.4% in December. The Dow Jones Industrial Average declined from 12,872.37 to 12,786.93 on Tuesday. The NASDAQ traded down to 2911.60 from an opening high at 2928.36. The S&P 500, Dow Transports and Russell 2000 continue to lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.
Asian stocks closed higher on Tuesday with the Nikkei 225 ending their session 9,052 – up 0.59% on the day. The Hang Seng closed at 20,918 – up 0.15% on the day. European stocks traded around the flat line as the Greek bailout became less than a sure thing. The FTSE 100 ended their session at 5,900 – down 0.10% on the day; the DAX ended their session at 6,728 – down 0.15% on the day; and the CAC 40 ended their session at 3,376 – down 0.26% on the day.
The yield on the 10-Year US Treasury traded down from 1.984 percent and 1.914 versus its 50-day simple moving average at 1.944.
Gold declined to $1713.8 the Troy ounce then rallied to $1729.9 then consolidated. Crude oil rebounded from $100.37 per barrel to $101.84 then declined to $100.28 well above the 50-day simple moving average at $99.25. The euro versus the dollar declined from 1.3215 to 1.3083 well above its 50-day at 1.3030.
Energy
BHP (BHP) and Rio Tinto (RIO) are to invest a combined $4.5B to expand the Escondida mine in Chile, the world’s largest copper mine, as they look to boost output to meet the growing demands from China and other emerging nations. Transcananda Pipelines (TRP) missed estimates by 2 cents, while beating revenue by $170M. Deutsche Bank has Holds on El Paso (EP), Williams Partners (WPZ), Chesapeake Midstream (CHKM), and TransCanada (TRP). It begins Buys on Rose Rock Midstream (RRMS), Enbridge Inc (ENB), and Spectra Energy (SE). Murphy Oil (MUR) is begun with a Buy and assigned a $71 price objective by Brean Murray. HollyFrontier (HFC) is added to Goldman’s Conviction Buy list. Arch Coal (ACI) is taken to Hold from Buy at Argus. Cloud Peak Energy (CLD) is cut to Underweight from Equal Weight at Barclays. Yingli Green Energy (YGE) and Trina Solar (TSL) are each taken to Hold from Buy at Auriga. In afternoon trading: Shares of Yingli Green Energy (YGE) are down about 10.25%. Shares of Trina Solar (TSL) are down about 9.5%. Shares of LDK Solar (LDK) are down about 9.5%. Shares of Overseas Shipholding Group (OSG) are up about 9.5%.
Energy Select Sector SPDR (XLE) was trading at $73.75 at 4:00 PM on Tuesday, up 0.18% on the day – up 6.68% year-to-date. The January change was +2.26%. The 2011 change was -1.29%.
Materials
BHP (BHP) and Rio Tinto (RIO) are to invest a combined $4.5B to expand the Escondida mine in Chile, the world’s largest copper mine, as they look to boost output to meet the growing demands from China and other emerging nations. In afternoon trading: Heavily Traded Stocks: Shares of Alcoa (AA) are down about 1.9%. Shares of Freeport McMoran (FCX) are down about 4.1%. Shares of Vale SA (VALE) are down about 2.7%. Shares of Cemex SAB (CX) are down about 4.4%. Shares of United States Steel (X) are down about 5.4%.
The Materials Select Sector SPDR (XLB) was trading at $36.67 at 4:00 PM on Tuesday, down 1.29% on the day – up 9.46% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.
Industrials
The EU’s controversial carbon emissions tax could erode more than 30% of the airline industry’s profits, IATA chief Tony Tyler has warned. The first year of implementation could cost $1.2B, with worldwide profit pegged at $3.5B this year. In afternoon trading: Shares of Paragon Shipping (PRGN) are up about 20.5%. Shares of Eagle Bulk Shipping (EGLE) are up about 15.5%. Shares of DryShips (DRYS) are up about 13%. Shares of Zipcar (ZIP) are down about 13.5%. Shares of SatCon Tech (SATC) are down about 12.75%. Shares of Masco (MAS) are down about 12.5%.
The Industrial Select Sector SPDR (XLI) was trading at $37.29 at 4:00 PM on Tuesday, down 0.35% on the day – up 10.49% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.
Consumer Discretionary
Spartan Motors (SPAR) missed estimates by 2 cents, while beating revenue by $4M. BorgWarner (BWA) beat estimates by 3 cents with revenue in-line with estimates. Fossil (FOSL) beat estimates by 10 cents, while missing revenue by $11M. Goodyear Tire & Rubber (GT) beat estimates by 24 cents, while missing revenue by $200M. Host Hotels & Resorts (HST) reported Q4 FFO of $0.31 (in-line) and revenue of $1.66B (in-line). Domino’s Pizza (DPZ) is a new Hold at Miller Tabak with a $36 price target. Caesars Entertainment (CZR) is an Outperform at Imperial Capital. Its objective is $16.20. Google (GOOG) gets assigned a Buy at Capstone, which starts TripAdvisor (TRIP) with an even more bullish Strong Buy. Meanwhile it picks up Pandora Media (P) at Hold. Gap Inc (GSP) is now Buy from Neutral at Citigroup. Regal Entertainment (RGC) is raised to Overweight from Neutral at Piper Jaffray. Williams-Sonoma (WSM) is upgraded to Buy from Neutral at Citigroup. Bed Bath & Beyond (BBBY) is lowered to Neutral from Buy at Citigroup. Intercontinental Hotels Group (IHG) gets cut to Hold from Buy at Jefferies. Lumber Liquidators (LL) is slashed to Sell from Neutral at Janney Montgomery Scott. Stoneridge (SRI) is cut to Hold from Buy at KeyBanc Capital. In afternoon trading: Shares of Michael Kors Holdings (KORS) are up about 25.5%. Shares of Fossil (FOSL) are up about 13%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.60 at 4:00 PM on Tuesday, down 0.12% on the day – up 9.17% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.
Consumer Staples
Avon (AVP) swung to a net loss of $400K (versus a profit of $229.5M a year earlier) due to a $263M goodwill charge and an increased tax rate. Morgan Stanley starts Hershey (HSY) and Kellogg (K) with Equal Weights on each. It assigns Overweights on Kraft Foods (KFT), General Mills (GIS), and Mead Johnson Nutrition (MJN). Underweights are established for HJ Heinz (HNZ) and Campbell Soup (CPB). In afternoon trading: Shares of AgFeed (FEED) are down about 25.75%. Shares of Rite Aid (RAD) are up about 8.5%. Shares of Central European Distribution (CEDC) are up about 7.25%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $32.83 at 4:00 PM on Tuesday, up 0.24% on the day – up 1.05% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.
Health Care
Charles River Laboratories (CRL) beat estimates by 14 cents and revenue by $9M, and reafirms FY12 guidance. Health Management Associates (HMA) beat estimates by 5 cents with revenue in-line with estimates. Ariad Pharmceuticals (ARIA) is resumed with an Outperform at RBC Capital Markets. Biogen Idec (BIIB) gets picked up at a Market Perform with Wells Fargo. Eli Lilly (LLY) is a fresh Hold at ISI Group. Mylan Labs (MYL) is lifted to Buy from Neutral at Goldman Sachs. Roche Holding (RHHBY) is downgraded to Neutral from Buy at Citigroup. AthenaHealth (ATHN) is lowered to Market Perform from Outperform at Leerink Swann. In afternoon trading: Shares of MedAssets (MDAS) are up about 16.75%. Shares of Complete Genetics (GNOM) are down about 12%.
The Health Care Select Sector SPDR (XLV) was trading at $36.23 at 4:00 PM on Tuesday, up 0.42% on the day – up 4.44% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.
Financials
The Fed yesterday again postponed a decision on whether to approve Capital One Financial’s (COF) proposed $9B acquisition of ING’s (ING) U.S. online bank, the second delay within a week. Marsh & McLennan (MMC) beat estimates by a penny with revenue in-line with estimates. Barclays (BCS) is boosted to Outperform from Neutral at BNP Paribas. Bank of America (BAC) is now Neutral from Buy at Citigroup. CBOE Holdings (CBOE) is now Neutral from Outperform at Credit Suisse. SunTrust Banks (STI) gets downgraded to Sell from Hold at ISI Group. In afternoon trading: Shares of Washington Mutual (WAMUQ) are up about 9%. Shares of Fidelity National Information Services (FIS) are up about 7%.
The Financial Select Sector SPDR (XLF) was trading at $14.56 at 4:00 PM on Tuesday, down 0.95% on the day – up 12.00% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.
Information Technology
U.S. and EU regulators have approved Google’s (GOOG) $12.5B acquisition of Motorola (MMI) but said they would ensure that IP that is vital to the telecom sector would be licensed at fair prices. Google (GOOG) gets assigned a Buy at Capstone, which starts TripAdvisor (TRIP) with an even more bullish Strong Buy. Meanwhile it picks up Pandora Media (P) at Hold. Rackspace (RAX) is lifted to Buy from Hold at The Benchmark Company with a new target price of $60. Yingli Green Energy (YGE) and Trina Solar (TSL) are each taken to Hold from Buy at Auriga. In afternoon trading: Shares of Energy Conversion Devices (ENER) are down about 81%. Shares of Yingli Green Energy (YGE) are down about 10.5%. Shares of CyberDefender (CYDE) are up about 53%. Shares of LivePerson (LPSN) are up about 18.75%. Shares of Rackspance Hosting (RAX) are up about 14.5%. Shares of Ultra Clean Holdings (UCTT) are up about 12.25%.
The Technology Select Sector SPDR (XLK) was trading at $28.26 at 4:00 PM on Tuesday, up 0.18% on the day – up 11.04% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.
Telecommunication Services
In afternoon trading: Shares of TerreStar (TSTRQ) are down about 15.75%. Heavily Traded Stocks: Shares of Frontier Communications (FTR) are down about 1%. Shares of Sprint Nextel (S) are down about 1.3%, while shares of AT&T (T) are down about 0.3% and shares of Verizon (VZ) are down about 0.8%. Shares of Clearwire (CLWR) are up about 0.9%. Shares of Vodafone (VOD) are down about 0.9%.
The NASDAQ Telecommunications Index (IXTC) was trading at $216.12 at 4:00 PM on Tuesday, relatively unchanged on the day – up 9.74% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.
Utilities
In afternoon trading: Heavily Traded Stocks: Shares of Calpine (CPN) are down about 5%. Shares of Genon Energy (GEN) are up about 0.9%. Shares of Duke Energy (DUK) are down about 0.2%. Shares of Exelon (EXC) are down about 0.8%. Shares of AES Corp (AES) are up about 2.4%. Shares of CenterPoint Energy (CNP) are down about 1.5%.
The Utilities Select Sector SPDR (XLU) was trading at $34.77 at 4:00 PM on Tuesday, relatively unchanged on the day – down 3.36% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
STOCKS: BHP, RIO, TRP, EP, WPZ, CHKM, RRMS, ENB, SE, MUR, HFC, ACI, CLD, YGE, TSL, LDK, OSG, AA, FCX, VALE, CX, X, PRGN, EGLE, DRYS, ZIP, SATC, MAS, SPAR, BWA, FOSL, GT, HST, DPZ, CZR, GOOG, TRIP, P, GSP, RGC, WSM, BBBY, IHG, LL, SRI, KORS, AVP, HSY, K, KFT, GIS, MJN, HNZ, CPB, FEED, RAD, CEDC, CRL, HMA, ARIA, BIIB, LLY, MYL, RHHBY, ATHN, MDAS, GNOM, COF, ING, MMC, BCS, BAC, CBOE, STI, WAMUQ, FIS, MMI, RAX, ENER, CYDE, LPSN, UCTT, TSTRQ, FTR, S, T, VZ, CLWR, VOD, CPN, GEN, DUK, EXC, AES, CNP
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