Nonfarm Payrolls rose by 80,000 in October with the Unemployment Rate down a notch to 9.0%. The Dow Jones Industrial Average opened below 12,000 to a day’s low at 11,850.31 versus its 200-day simple moving average at 11,974. The NASDAQ traded down from 2684.76 to 2655.12 then rebounded to 2693.67 in the afternoon versus its 200-day at 2690.
Asian stocks rebounded on Friday with the Nikkei 225 up 1.86% to 8,801 and the Hang Seng jumping by 3.12% to 19,843. European stocks slipped on Friday ahead of a confidence vote in Greece. The FTSE 100 lost 0.53% to 5,516 with the DAX slipping 2.84% to 5,959 and the CAC 40 down by 2.11% to 3,128. The US Treasury 10-Year yield rose to 2.141 percent then declined to 2.022 versus its 50-day simple moving average at 2.054. Gold traded down from $1766.5 the Troy ounce to $1749.8 staying above its 50-day simple moving average at $1727.4.
Crude oil traded down from $94.93 versus its 200-day simple moving average at $94.86 to $92.87 then consolidated. The euro versus the dollar traded down from 1.3865 to 1.3716 versus its 50-day and 200-day simple moving averages at 1.3783 and 1.4104.
Energy
Ultra Petroleum (UPL) beat estimates by 6 cents on revenue of $293.1M. Plains Exploration & Production (PXP) beat estimates by 4 cents and revenue by $10M. Weatherford International (WFT) is a new Neutral and $17 price objective at Global Hunter Securities. The broker is more bullish on rival Schlumberger (SLB), assigning an Accumulate rating and setting it an $86 target price. QEP Resources (QEP) is new a Buy at Deutsche Bank. First Solar (FSLR) is upgraded to Buy from Neutral at Lazard with a $75 target, but gets downgraded to Sell from Hold at ThinkEquity. Plains All American (PAA) is boosted to Buy from Hold at Wunderlich with a new price objective of $71.
Energy Select Sector SPDR (XLE) was trading at $71.26 at 4:00 PM on Friday, down slightly on the day – up 4.41% year-to-date.
Materials
Anglo American (AAUKF) / (AAUKY) has agreed to buy the Oppenheimer family’s 40% stake in De Beers for $5.1B, thereby increasing its stake to 85% in the diamond miner. Kronos Worldwide (KRO) is downgraded to Market Perform from Outperform with Wells Fargo.
The Materials Select Sector SPDR (XLB) was trading at $34.98 at 4:00 PM on Friday, down 0.23% on the day – down 8.93% year-to-date.
Industrials
A123 Systems (AONE) warned that 2011 revenue will be in a range of $165M-$180M (well below prior guidance of $210M-$220M). ITT Industries (ITT) gets a Neutral-from-Underperform lift at Bank of America-Merrill Lynch. Spirit Aerosystems (SPR) is boosted to Buy from Neutral at Bank of America-Merrill Lynch. KAR Auction Services (KAR) is cut to Market Perform from Outperform by Barrington Research. Mistras Group (MG) gets moved to Underperform from Neutral by Bank of America-Merrill Lynch.
The Industrial Select Sector SPDR (XLI) was trading at $33.60 at 4:00 PM on Friday, down 0.77% on the day – down 3.64% year-to-date.
Consumer Discretionary
Delphi Automotive plans to raise $550M in its IPO, although this is down from an initial goal of over $1B. Starbucks (SBUX) again brushed off the weak economy and higher costs in FQ4 as EPS rose to $0.37 from $0.32 while sales climbed 7% to $3B, with both metrics topping analyst forecasts. Skullcandy (SKUL) reported Q3 revenue of $60.6M and EPS of $0.17 (beating consensus by $10M and $0.03). Cinemark (CNK) missed estimates by a penny, while beating revenue by $23M. Sanford Bernstein starts Outperforms on Amazon.com (AMZN) and Google (GOOG). It has new Market Performs on Netflix (NFLX), Yahoo (YHOO), and eBay (EBAY). Charter Communications (CHTR) is a new Buy at Citigroup. Build-A-Bear Workshop (BBW) is boosted to Outperform from Market Perform at BMO Capital. Orbitz (OWW) is now Neutral from Underweight at Piper Jaffray. Kirklands (KIRK) is raised to Overweight from Neutral at Piper Jaffray. Tiffany (TIF), Nordstrom (JWN), and Coach (COH) are all taken to Equal Weight from Overweight at Morgan Stanley. Dollar Tree (DLTR) is downgraded to Equal Weight from Overweight at Morgan Stanley. Chico’s FAS (CHS) is reduced to Neutral from Buy by both Citigroup and Suntrust.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.92 at 4:00 PM on Friday, down 0.38% on the day – up 4.04% year-to-date.
Consumer Staples
Church & Dwight Company (CHD) beat estimates by a penny on revenue of $701M. Kellogg (K) gets a Hold-from-Underperform upgrade at Jefferies this morning. CVS Caremark (CVS) is moved to Overweight from Equal Weight at Morgan Stanley.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.99 at 4:00 PM on Friday, down 0.58% on the day – up 5.73% year-to-date.
Healthcare
Warner Chilcott (WCRX) missed estimates by a penny with revenue in-line with estimates. Seattle Genetics (SGEN) is now Neutral from Overweight at Piper Jaffray. Medifast (MED) is now Neutral from Buy at Janney Montgomery Scott.
The Health Care Select Sector SPDR (XLV) was trading at $33.19 at 4:00 PM on Friday, down 0.93% on the day – up 5.37% year-to-date.
Financials
The SEC is reviewing trades in MF Global’s (MFGLQ) convertible bonds to determine whether some investors sold the debt based on insider information before the firm collapsed. Despite asserting for months that it wouldn’t need to issue new shares, Bank of America (BAC) yesterday said it may swap preferred securities for a total of $6B in common stock and debt. Declining equity markets and interest rates helped AIG’s (AIG) Q3 net loss to increase more than expected to $4.1B from $2.52B a year earlier. KKR & Co (KKR) beat estimates by 5 cents and revenue by $15M. Brookfield Properties (BPO) beat estimates by 3 cents on revenue of $492M. Royal Bank of Scotland (RBS) reported Q3 operating profit, excluding accounting gains from debt valuation adjustments, £267M ($428M) vs. £726M a year earlier and forecasts of £343M. Sun Life (SLF) is downgraded to Underweight from Equal Weight by Barclays. First Bancorp (FBP) is to Sell from Hold at Cantor Fitzgerald.
The Financial Select Sector SPDR (XLF) was trading at $13.29 at 4:00 PM on Friday, down 1.37% on the day – down 16.71% year-to-date.
Information Technology
The frenzy for Internet IPOs will compete with the frenzy surrounding Greece in market trading today as Groupon (GRPN) makes its Nasdaq debut after selling shares for $20 each, a steep 10%-20% mark-up from a range of $16-$18 earlier this week. NetSuite (N) reported Q3 revenue of $61M and EPS of $0.05 (beating consensus by $0.9M and $0.01). Alcatel-Lucent (ALU) reported Net profit €194M vs. €25M a year earlier and forecasts of €57.2M. Sanford Bernstein starts Outperforms on Amazon.com (AMZN) and Google (GOOG). It has new Market Performs on Netflix (NFLX), Yahoo (YHOO), and eBay (EBAY). Microchip (MCHP) is moved to Buy from Neutral at UBS. Multi-Fineline (MFLX) is moved to Hold from Buy at Needham.
The Technology Select Sector SPDR (XLK) was trading at $26.05 at 4:00 PM on Friday, down 0.61% on the day – up 3.41% year-to-date.
Telecommunications Services
Windstream (WIN) missed estimates by 2 cents with revenue in-line with estimates. Turkcell (TKC) is taken to Equal Weight from Underweight at Barclays. Cogent Communications (CCOI) is upgraded to Market Perform from Underperform at FBR Capital with a new price target of $13. Frontier Communications (FTR) is lowered to Neutral from Overweight at JPMorgan.
The NASDAQ Telecommunications Index (IXTC) was trading at $202.90 at 4:00 PM on Friday, down 0.29% on the day – down 9.97% year-to-date.
Utilities
TEPCO (TKECF) has received a ¥1T ($12.8B) financial assistance package from Japan’s government aimed at preventing a cash crunch at the beleaguered company. NextEra Energy (NEE) misses estimates by 10 cents and revenue by $60M. DTE Energy Company (DTE) beat estimates by 9 cents and revenue by $130M. Pepco Holdings (POM) missed estimates by 7 cents. AES (AES) missed estimates by a penny on revenue of $4.38B.
The Utilities Select Sector SPDR (XLU) was trading at $34.98 at 4:00 PM on Friday, down 0.46% on the day – up 11.61% year-to-date.
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