Equities Sector Coverage: Late Surge Helps Wall Street Close Flat

Sector Recap |

Stocks BalanceRetail 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

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
RRMS Rose Rock Midstream L.P. Representing Limited Part n/a n/a n/a 0
GEN Genesis Healthcare Inc. 3.98 0.31 8.45 187,160
FTR Frontier Communications Corporation 3.67 0.07 1.81 16,259,970
CRL Charles River Laboratories International Inc. 73.50 1.05 1.45 329,463
VALE VALE S.A. American Depositary Shares Each Represen 8.94 -0.23 -2.46 34,897,288
GT The Goodyear Tire & Rubber Company 31.88 0.42 1.34 1,718,152
DRYS DryShips Inc. 4.36 -0.24 -5.22 8,138,547
FOSL Fossil Group Inc. 34.54 0.61 1.80 768,227
AA Alcoa Inc. 31.33 0.43 1.38 2,736,017
ATHN athenahealth Inc. 94.34 1.29 1.38 1,134,346
RGC Regal Entertainment Group Class A 21.84 -0.25 -1.11 946,750
CNP CenterPoint Energy Inc (Holding Co) 24.06 -0.03 -0.12 3,982,363
VERPRF VEREIT n/a n/a n/a 0
CLD Cloud Peak Energy Inc 6.34 -0.17 -2.54 1,039,648
RAD Rite Aid Corporation 8.15 0.07 0.80 7,787,546
ARIA ARIAD Pharmaceuticals Inc. 12.98 0.22 1.72 3,570,897
BWA BorgWarner Inc. 41.68 0.08 0.19 2,056,907
MDAS MedAssets Inc. n/a n/a n/a 0
P Pandora Media Inc. 13.88 0.03 0.22 5,122,842
BCS Barclays PLC 12.01 0.11 0.88 7,041,284
S Sprint Corporation 8.75 -0.16 -1.74 23,851,469
DPZ Domino\'s Pizza Inc 164.91 -2.81 -1.68 573,452
SPAR Spartan Motors Inc. 9.05 0.20 2.26 97,743
SE Spectra Energy Corp 41.02 -0.05 -0.12 2,385,879
VOD Vodafone Group Plc 25.04 0.07 0.28 4,710,232
AVP Avon Products Inc. 5.55 0.16 2.97 2,784,719
WSM Williams-Sonoma Inc. (DE) 56.79 0.50 0.89 740,973
MUR Murphy Oil Corporation 33.14 0.33 1.01 1,620,685
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 9.81 0.00 0.00 972,150
EGLE Eagle Bulk Shipping Inc. 6.34 -0.18 -2.76 156,266
TRIP TripAdvisor Inc. 48.05 0.45 0.95 1,323,950
CPB Campbell Soup Company 58.25 -0.42 -0.72 1,046,371
PRGN Paragon Shipping Inc n/a n/a n/a 0
AES The AES Corporation 11.85 0.23 1.97 3,395,758
CBOE CBOE Holdings Inc. 75.23 0.39 0.52 564,255
LPSN LivePerson Inc. 8.43 0.38 4.66 172,326
VZ Verizon Communications Inc. 51.11 -0.28 -0.54 7,847,249
MMC Marsh & McLennan Companies Inc. 69.32 -0.11 -0.16 1,954,447
ENB Enbridge Inc 42.16 0.01 0.02 1,691,582
SRI Stoneridge Inc. 18.11 0.50 2.84 165,009
HST Host Hotels & Resorts Inc. 19.02 0.10 0.53 10,554,371
BAC Bank of America Corporation 23.00 0.43 1.92 161,951,769
COF Capital One Financial Corporation 90.70 1.12 1.25 2,617,272
CPN Calpine Corporation 11.30 0.24 2.17 5,949,975
HFC HollyFrontier Corporation 34.06 1.04 3.15 4,956,165
GOOG Alphabet Inc. 775.88 4.69 0.61 1,216,244
LLY Eli Lilly and Company 67.21 -0.17 -0.25 4,022,576
FCX Freeport-McMoRan Inc. 15.63 0.20 1.30 23,832,804
YGE Yingli Green Energy Holding Company Limited ADR 3.13 -0.10 -3.10 186,708
HSY The Hershey Company 98.44 -0.72 -0.73 557,395
UCTT Ultra Clean Holdings Inc. 10.34 0.05 0.49 310,563
BBBY Bed Bath & Beyond Inc. 47.85 0.17 0.36 1,742,852
CZR Caesars Entertainment Corporation 8.00 -0.20 -2.44 1,202,771
X United States Steel Corp. 37.41 -0.09 -0.23 25,576,318
MAS Masco Corporation 32.56 0.43 1.34 1,905,888
GIS General Mills Inc. 62.61 -0.38 -0.60 2,016,780
BIIB Biogen Inc. 288.88 3.58 1.25 4,147,737
K Kellogg Company 72.11 -0.54 -0.74 838,948
ACI Arch Coal Inc. n/a n/a n/a 0
ING ING Group N.V. 14.62 -0.02 -0.14 5,131,092
MJN Mead Johnson Nutrition Company 72.44 -0.29 -0.40 883,201
IHG Intercontinental Hotels Group American Depositary 42.30 -0.44 -1.03 134,004
KORS Michael Kors Holdings Limited 50.71 1.80 3.68 2,662,245
EXC Exelon Corporation 34.20 0.67 1.98 5,036,098
T AT&T Inc. 40.39 -0.06 -0.15 18,444,952
DUK Duke Energy Corporation (Holding Company) 74.76 0.09 0.11 2,143,434
LL Lumber Liquidators Holdings Inc 18.19 0.22 1.22 1,159,354
CX Cemex S.A.B. de C.V. Sponsored ADR 8.90 0.38 4.46 13,239,790
MYL Mylan N.V. 35.98 1.48 4.28 7,159,388
MMI Marcus & Millichap Inc. 28.98 0.25 0.87 160,416
RAX Rackspace Hosting Inc n/a n/a n/a 0
FIS Fidelity National Information Services Inc. 75.03 -0.59 -0.78 1,303,121
STI SunTrust Banks Inc. 54.75 0.29 0.53 3,351,196

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