Equities Sector Coverage: Market Curbs Enthusiasm as Gains Lose Steam

Sector Recap |

European Union ParliamentThe 20-City Composite of the S&P/Case-Shiller Housing Market Index shows that home prices rose 0.9% in July from June, but that prices are down 4.1% year over year. Consumer Confidence came in at 45.4, well below the 90 to 120 neutral range for this data. The “Jobs Hard to Get” component rose to the highest level since May 1983. Tomorrow we get Durable Goods Orders. The final reading of Q2 GDP comes on Thursday, and Personal Income & Spending and Chicago PMI are released on Friday. The Dow Jones Industrial Average traded significantly higher to 11,369.30 on Tuesday then faded below 11,250 into the final half hour of trading. The NASDAQ traded higher from 2550.24 to 2590.94 then faded below its 50-day simple moving average at 2571 into the final half hour of trading.

Asian stocks surged on Tuesday on renewed hope with regard to the European debt crisis. The Nikkei 225 jumped 2.82% to 8,610 and the Hang Seng climbed by 4.15% to 18,131. European stocks followed Asia significantly higher. The FTSE 100 climbed by 4.02% to 5,294 with the DAX surging 5.29% to 5,628 and the CAC 40 popping 5.74% to 3,023. The yield on the 10-Year US Treasury continues to rise following Friday’s all time low of 1.671. On Tuesday this yield rose to 2.016 percent. Gold which traded as low as $1535.0 the Troy ounce on Monday, traded as high as $1679.2 on Tuesday. Crude oil continued to rebound on Tuesday from $80.92 per barrel to $84.77 above its 200-week simple moving average at $83.66. The euro versus the US dollar traded up from 1.3483 to 1.3667.

Energy

Callon Petroleum (CPE) is a new Neutral and $5 target at brokers Robert W. Baird. Tesco ADR (TESO) is upgraded to Neutral from Underweight at HSBC Securities. In afternoon trading: Shares of General Maritime (GMR) are up about 33%. Shares of Uranium Resources (URRE) are up about 12%. Shares of Basic Energy Services (BAS) are up about 11.5%. Shares of ION Geophysical (IO) are up about 11.2%. Shares of GMX Resources (GMXR) are up about 11%. Shares of Penn Virginia (PVA) are up about 10%. Shares of Magnum Hunter Resources (MHR) are up about 10%. Shares of InterOil (IOC) are DOWN about 14.5%.

Energy Select Sector SPDR (XLE) was trading at $61.73 at 4:00 PM on Tuesday, up 1.46% on the day – down 9.55% year-to-date.

Materials

Potash (POT) is upgraded to Overweight from Neutral at Atlantic Equities. Atlantic Equities cuts CF Industries (CF) to Underweight and Agrium (AGU) to Neutral. In afternoon trading: Shares of Ivanhoe Mines (IVN) are up about 22%. Shares of Stillwater Mining (SWC) are up about 15.2%. Shares of Kraton Performance Polymers (KRA) are up about 11.5%. Shares of Molycorp (MCP) are up about 11.2%. Shares of Suncoke Energy (SXC) are up about 9.9%. Shares of China Shen Zhou Mining (SHZ) are up about 9.9%. Shares of Allegheny Technologies (ATI) are up about 9.5%.

The Materials Select Sector SPDR (XLB) was trading at $31.86 at 4:00 PM on Tuesday, up 2.08% on the day – down 17.05% year-to-date.

Industrials

Deutsche Lufthansa AG (DLAKY) and Ryanair Holdings PLC (RYAAY) are each reduced to Neutral from Buy at Goldman Sachs. In afternoon trading: Shares of Excel Maritime Carriers (EXM) are up about 12.9%. Shares of Manitowoc (MTW) are up about 12%. Shares of Eagle Bulk Shipping (EGLE) are up about 11.3%. Shares of General Cable (BGC) are up about 11.1%. Shares of Swisher Hygiene (SWSH) are up about 9.1%. Shares of The Babcock & Wilcox (BWC) are up about 9%. Shares of YRC Worldwide (YRCW) are up about 9%.

The Industrial Select Sector SPDR (XLI) was trading at $30.58 at 4:00 PM on Tuesday, up 1.76% on the day – down 12.30% year-to-date.

Consumer Discretionary

Shares of Eastman Kodak (EK) fell 27% yesterday to $1.74, a 38-year low, after the firm disclosed it had borrowed $160M against its credit line for "general corporate purposes." Barnes & Noble (BKS) won court approval yesterday to buy intellectual property, including a customer database, from bankrupt Borders Group. Vera Bradley Inc (VRA) is begun with a Buy and $50 target at Jefferies. FBR Capital assigns Outpeforms on American Public Education (APEI) and Grand Canyon Education (LOPE) with respective price objectives are $45 and $19. Lazard launches Buy rated coverage on Panera Bread (PNRA) with a $137 target. It has new Neutrals on Einstein Noah (BAGL) and Chipotle Mexican Grill (CMG). Daimler AG (DDAIF) is now Outperform from Neutral at Credit Suisse. WMS Industries (WMS) is cut to Neutral from Buy at Sterne Agee with a target of $22. In afternoon trading: Shares of Blockbuster (BLOAQ) are up about 36%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $36.82 at 4:00 PM on Tuesday, up 0.68% on the day – down 1.58% year-to-date.

Consumer Staples

Boston Beer Co (SAM) is begun with a Hold rating and $79 price objective at Auriga. It begins a more bullish Buy and $25 target price on Constellation Brands (STZ). Bunge (BG) is upgraded to Buy from Hold at Citigroup. Sanderson Farms (SAFM) is added to the Conviction Buy List at Goldman. Clorox (CLX) is increased to Average from Below Average at Caris & Company after Carl Icahn withdrew his offer. Koninklijke Ahold (AHONY) is downgraded to Underweight from Neutral at HSBC Securities. In afternoon trading: Shares of Coffee Holding (JVA) are down about 14.3%. Shares of Walgreens (WAG) are down about 6.7%. Shares of Origin Agritech (SEED) are up about 13.7%. Shares of Pilgrim’s Pride (PPC) are up about 6.7%. Shares of Bunge are up about 6.5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.25 at 4:00 PM on Tuesday, up 0.60% on the day – up 3.21% year-to-date.

Healthcare

Alexion Pharmaceuticals (ALXN) is a new Outperform and $74 price target at Oppenheimer. Affymax (AFFY) is boosted to Strong Buy from Buy at WBB Securities. Baxter (BAX) is boosted to Overweight from Neutral at JP Morgan, which moves Boston Scientific (BSX) to Neutral from Underweight and Stryker (SYK) to Overweight from Neutral. Abbott Labs (ABT) and Zimmer (ZMH) are both now Neutral from Overweight at JP Morgan. In afternoon trading: Shares of Biodel (BIOD) are dowm about 29.5%. Shares of Gentiva Health Services (GTIV) are up about 9.3%. Shares of Achillion Pharmaceuticals (ACHN) are up about 9.1%.

The Health Care Select Sector SPDR (XLV) was trading at $32.49 at 4:00 PM on Tuesday, up 1.53% on the day – up 3.14% year-to-date.

Financials

After promising $1.2B in cost cuts over the summer, Goldman Sachs (GS) is preparing to expand its cost-cutting initiative by "hundreds of millions of dollars" - a move that would likely lead to more job losses. Berkshire Hathaway (BRK.A) announced a share repurchase program yesterday morning, planning to reduce its cash holdings to no less than $20B. Kimco Realty (KIM) is now Neutral from Underperform at Robert W. Baird with a target of $18. Equity One (EQY) gets upgraded to Hold from Sell at Citigroup. In afternoon trading: Shares of ZipRealty (ZIPR) are down about 19.3%. Shares of The PMI Group (PMI) are up about 15.5%. Shares of FelCor Lodging Trust (FCH) are up about 13.5%. Shares of Radian Group (RDN) are up about 11%. Shares of MGIC Investment (MTG) are up about 10.2%.

The Financial Select Sector SPDR (XLF) was trading at $12.26 at 4:00 PM on Tuesday, up 0.49% on the day – down 23.13% year-to-date.

Information Technology

The first scheduled court hearing of Samsung's (SSNLF) intellectual-property suits against Apple (AAPL) was held yesterday in the Netherlands, with Samsung arguing that Apple is "consciously, structurally infringing the 3G patents." InterDigital (IDCC) fell more than 20% yesterday, before recovering somewhat to close -14% at $49.54, after a media report claimed buyout offers for the 3G/4G patent holder, which put itself on sale in July, have been in the $1B-2B range. Motorola Solutions (MSI), the part of the old Motorola (MMI) not being acquired by Google (GOOG), is reportedly under investigation by the Justice Department and SEC over whether it paid bribes to win business in Europe in violation of the Foreign Corrupt Practices Act. Aruba Networks (ARUN) and F5 Networks (FFIV) are each Holds at Jefferies. Gartner (IT) is initiated with a Neutral at Goldman Sachs. Booz Allen Hamilton (BAH) is a new Negative at Susquehanna. In afternoon trading: Shares of Powerwave Tech (PWAV) are up about 10.4%. Shares of Quantum (QTM) are up about 9.5%.

The Technology Select Sector SPDR (XLK) was trading at $24.61 at 4:00 PM on Tuesday, up 1.28% on the day – down 2.30% year-to-date.

Telecommunications Services

SK Telecom (SKM) is now Neutral from Overweight at HSBC Securities. In afternoon trading: Shares of TerreStar (TSTRQ) are up about 8.3%. Shares of Neutral Tandem (TNDM) are up about 7.7%. Shares of SureWest Communications (SURW) are up about 7.1%. Shares of Mobile Telesystems (MBT) are up about 5.6%. Shares of Millicom International Cellular (MIICF) are up about 5.2%. Shares of Global Crossing (GLBC) are up about 5.1%. Shares of Level 3 Communications (LVLT) are up about 5%.

The NASDAQ Telecommunications Index (IXTC) was trading at $187.66 at 4:00 PM on Tuesday, up 1.62% on the day – down 16.73% year-to-date.

Utilities

In afternoon trading: Shares of Duke Energy (DUK) are relatively unchanged. Shares of Genon Energy (GEN) are up about 0.7%. Shares of AES Corp (AES) are up about 1.9%. Shares of Southern (SO) are down slightly. Shares of CMS Energy (CMS) are up about 1.4%. Shares of Exelon (EXC) are up about 1.3%. Shares of CenterPoint Energy (CNP) are up about 0.4%. Shares of NiSource (NI) are up about 1.6%.

The Utilities Select Sector SPDR (XLU) was trading at $33.80 at 4:00 PM on Tuesday, up 0.36% on the day – up 7.85% year-to-date.

STOCKS: CPE, TESO, GMR, URRE, BAS, IO, GMXR, PVA, MHR, IOC, POT, CF, AGU, IVN, SWC, KRA, MCP, SXC, SHZ, ATI, DLAKY, RYAAY, EXM, MTW, EGLE, BGC, SWSH, BWC, YRCW, EK, BKS, VRA, APEI, LOPE, PNRA, BAGL, CMG, DDAIF, WMS, BLOAQ, SAM, STZ, BG, SAFM, CLX, AHONY, JVA, WAG, SEED, PPC, ALXN, AFFY, BAX, BSX, SYK, ABT, ZMH, BIOD, GTIV, ACHN, GS, BRK.A, KIM, EQY, ZIPR, PMI, FCH, RDN, MTG, SSNLF, AAPL, IDCC, MSI, MMI, GOOG, ARUN, FFIV, IT, BAH, PWAV, QTM, SKM, TSTRQ, TNDM, SURW, MBT, MIICF, GLBC, LVLT, DUK, GEN, AES, SO, CMS, EXC, CNP, NI

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
KRA Kraton Performance Polymers Inc 31.08 -0.02 -0.06 238,211
CMG Chipotle Mexican Grill Inc. 400.03 -2.35 -0.58 839,346
SAM Boston Beer Co. Cl A 173.00 2.30 1.35 113,916
GEN Genesis Healthcare Inc. 3.56 0.00 0.00 76,462
CF CF Industries Holdings Inc. 28.38 -0.34 -1.18 5,097,318
FCH FelCor Lodging Trust Incorporated 7.46 0.05 0.67 2,526,786
MTW Manitowoc Company Inc. (The) 5.98 -0.04 -0.66 1,863,983
PVA Penn Virginia Corp. n/a n/a n/a 0
IO Ion Geophysical Corporation 7.30 -0.65 -8.18 56,629
NI NiSource Inc 21.69 -0.02 -0.09 4,973,194
ABT Abbott Laboratories 37.90 0.30 0.80 7,252,818
SO Southern Company (The) 46.76 0.17 0.36 4,386,169
KEQU Kewaunee Scientific Corporation 24.75 0.40 1.64 3,902
AGU Agrium Inc. 100.15 -0.62 -0.62 269,543
CLX Clorox Company (The) 114.02 0.44 0.39 835,188
ALXN Alexion Pharmaceuticals Inc. 122.96 0.95 0.78 1,251,394
BGC General Cable Corporation 19.15 -0.05 -0.26 432,963
BAX Baxter International Inc. 44.01 0.38 0.87 5,933,939
SWC Stillwater Mining Company ($0.01 Par Value) 15.17 0.15 1.00 1,390,229
RYAAY Ryanair Holdings plc American Depositary Shares ea 80.67 0.41 0.51 207,317
CNP CenterPoint Energy Inc (Holding Co) 24.10 0.30 1.26 4,181,472
CMS CMS Energy Corporation 39.94 0.25 0.63 1,676,853
BIOD Biodel Inc. n/a n/a n/a n/a
URRE Uranium Resources Inc. 1.36 -0.08 -5.56 590,941
CPE Callon Petroleum Company 17.24 -0.20 -1.15 3,139,299
SKM SK Telecom Co. Ltd. 21.50 0.20 0.94 1,136,272
IOC InterOil Corporation 48.80 0.37 0.76 213,186
LOPE Grand Canyon Education Inc. 57.04 -0.61 -1.06 315,585
KIM Kimco Realty Corporation 25.20 0.05 0.20 3,065,478
AAPL Apple Inc. 109.90 0.41 0.37 26,527,997
POT Potash Corporation of Saskatchewan Inc. 18.07 -0.13 -0.71 4,040,665
SAFM Sanderson Farms Inc. 81.96 0.87 1.07 508,971
RDN Radian Group Inc. 14.89 0.00 0.00 2,257,787
WMS Advanced Drainage Systems Inc. 21.00 0.00 0.00 594,481
IDCC InterDigital Inc. 78.60 1.05 1.35 243,944
BKS Barnes & Noble Inc. 12.20 -0.20 -1.61 451,640
EGLE Eagle Bulk Shipping Inc. 6.28 -0.08 -1.26 101,734
IVN Ivanhoe Mines Ltd n/a n/a n/a 0
VRA Vera Bradley Inc. 14.07 -0.01 -0.07 199,358
LVLT Level 3 Communications Inc. 55.82 0.63 1.14 1,860,229
AES The AES Corporation 11.18 0.15 1.36 5,521,035
GS The Goldman Sachs Group Inc. 223.36 -3.27 -1.44 5,297,420
BSX Boston Scientific Corporation 20.35 0.26 1.29 10,982,710
PNRA Panera Bread Company 213.67 -0.02 -0.01 270,228
TESO Tesco Corporation 8.15 0.25 3.16 104,977
QTM Quantum Corporation 0.91 -0.01 -0.60 584,639
YRCW YRC Worldwide Inc. 13.51 0.36 2.74 920,968
GOOG Alphabet Inc. 750.50 2.58 0.34 1,452,484
SXC SunCoke Energy Inc. 12.15 0.47 4.02 907,845
PPC Pilgrim\'s Pride Corporation 17.69 0.31 1.78 1,862,462
JVA Coffee Holding Co. Inc. 4.91 -0.02 -0.41 16,535
ACHN Achillion Pharmaceuticals Inc. 4.06 0.09 2.27 948,503
BAH Booz Allen Hamilton Holding Corporation 37.54 0.69 1.87 2,225,206
APEI American Public Education Inc. 23.20 0.00 0.00 70,974
MBT Mobile TeleSystems PJSC 8.55 0.29 3.51 4,775,608
EXC Exelon Corporation 33.01 0.84 2.61 7,811,789
EQY Equity One Inc. 29.35 0.01 0.03 1,006,035
ATI Allegheny Technologies Incorporated 16.93 -0.83 -4.67 5,474,752
BG Bunge Limited 69.12 -0.88 -1.26 1,150,239
MHR Magnum Hunter Resources Corp n/a n/a n/a 0
DUK Duke Energy Corporation (Holding Company) 73.42 0.67 0.92 3,754,148
SEED Origin Agritech Limited 2.40 -0.07 -2.84 160,287
SYK Stryker Corporation 112.08 0.33 0.30 1,211,110
BAS Basic Energy Services Inc. 0.48 -0.06 -11.09 4,954,347
MMI Marcus & Millichap Inc. 27.29 0.15 0.55 91,061
MTG MGIC Investment Corporation 9.26 0.02 0.22 4,239,585
FFIV F5 Networks Inc. 138.99 -0.37 -0.27 595,363
SWSH Swisher Hygiene Inc n/a n/a n/a 0
IT Gartner Inc. 100.08 -0.89 -0.88 336,814

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