Equities Sector Coverage: Market Retakes Positive Territory For 2011

Sector Recap  |

Wall Street Bull StocksMortgage Applications tumbled 9.6% last week with for purchases near a fifteen year low. The demand for refinancings slumped 12.2%. According to ADP, the private sector added just 91,000 workers in August. The Chicago PMI came in at 56.5 in August down from 58.8 in July. The Dow Jones Industrial Average surged higher Thursday morning up more than 100 points to a morning high at 11,712.60 versus the 50-day and 200-day simple moving averages at 11,916 and 11,993. There was afternoon weakness into the red with a day’s low at 11,528.08. The NASDAQ jumped to 2611.58 in morning trading versus its 50-day and 200-day simple moving averages at 2656 and 2704. The NASDAQ weakened in afternoon trading to a day’s low in the red at 2557.74.

Asian stocks traded higher on Wednesday again following the gains on Wall Street. The Nikkei 225 lagged with a fractional gain to 8,955. The Hang Seng gained 1.64% to 20,535. In Europe, the markets shrugged off weak consumer confidence trading significantly higher. The FTSE 100 climbed by 2.39% to 5,395. The DAX surged by 2.50% to 5,785. The CAC 40 powered up by 3.07% to 3,257. The yield on the 10-Year US Treasury traded down from 2.192 percent to 2.137 then rose to 2.234 in the final hour of trading, still within the post-FOMC range of 2.360 to 1.973. Gold declined to $1813.6 the Troy ounce then rebounded to $1842.7 then consolidated the day’s range. Crude oil traded down from $89.18 per barrel to $87.67 then up to $89.54. The euro versus the US dollar traded down from 1.4466 to 1.4362.

Energy

Exxon Mobil (XOM) has gained access to major oil and gas reserves with the signing of an Arctic exploration deal with Rosneft. Exxon and the Russian company will invest $3.2B to develop blocks in the Kara Sea that contain an estimated 110B barrels of oil equivalent, and an area in the Black Sea with 9B barrels of oil. Bailiffs today raided BP’s (BP) Moscow offices in relation to a lawsuit filed by minority shareholders of TNK-BP over BP's aborted pact with Rosneft. Tesoro (TSO) is raised to Outperform from Sector Perform at RBC Capital. Berry Petroleum (BRY) is cut to Neutral from Positive at Susquehanna. In afternoon trading: Shares of North American Energy Partners (NOA) are up about 6.4%. Shares of CGG Veritas (CGV) are up about 5.6%. Shares of ATP Oil & Gas (ATPG) are down about 5.8%.

Energy Select Sector SPDR (XLE) was trading at $68.64 at 4:00 PM on Wednesday, up 0.75% on the day – up 0.57% year-to-date.

Materials

DuPont (DD) is a new Equal Weight at Barclays. Barclays launches LyondellBasell (LYB), Air Products (APD), and Celanese (CE) with Overweights. Century Aluminum (CENX) is now Neutral from Sell at Goldman, which gives Reliance Steel (RS) a raise to Buy from Neutral. DRDGOLD (DROOY) is moved to Equal Weight from Underweight at Morgan Stanley. Steel Dynamics (STLD) is now Neutral from Buy at Goldman. Worthington Industries (WOR) gets downgraded to Sell from Neutral at Goldman. In afternoon trading: Shares of ADA-ES (ADES) are up about 10.1%. Shares of Omnova Solutions (OMN) are down about 7.6%.

The Materials Select Sector SPDR (XLB) was trading at $35.34 at 4:00 PM on Wednesday, up 0.26% on the day – down 7.99% year-to-date.

Industrials

Joy Global (JOYG) beat estimates by 7 cents, but missed revenue by $70M, and sees FY12 revenue at $4.3-4.5B and EPS of $5.70-6.00. DryShips (DRYS) missed estimates by 13 cents and revenue by $40M. In afternoon trading: Shares of NF Energy Saving Corp of America (NFEC) are up about 12.6%. Shares of YRC Worldwide (YRCW) are up about 10.6%. Shares of Energy Recovery (ERII) are down about 9.1%. Shares of Dryships are down about 6.8%. Shares of Altra Holdings (AIMC) are down about 6.3%. Shares of American Semiconductor (AMSC) are down about 6.2%. Shares of Mueller Water Products (MWA) are down about 6.1%.

The Industrial Select Sector SPDR (XLI) was trading at $32.40 at 4:00 PM on Wednesday, up 0.68% on the day – down 7.08% year-to-date.

Consumer Discretionary

Sony (SNE), Toshiba (TOSBF) and Hitachi (HIT) intend to merge their small and medium sized display operations. State-owned Japanese company Innovation Network will then invest ¥200B ($2.6B) in the new entity and receive a 70% stake, leaving the three firms with 10% each. The merged entity will replace Sharp (SHCAY), which is due to receive a $1B investment from Apple (AAPL), as the largest maker of small panels used in smartphones and tablet PCs. Yesterday, Carl Icahn fired another shot in his battle with Clorox (CLX), saying his board nominees would try to sell the company if elected. He also agreed to walk away from a two-year attempt to take over Lions Gate (LGF). Vera Bradley (VRA) beat estimates by 5 cents and revenue by $7M, sees FQ3 revenue of $107M-$110M (versus consensus of $107.33M) and EPS of $0.26-$0.28 (versus consensus of $0.29), and expects FY12 revenue of $438M-$443M (versus consensus of $436M) and EPS of $1.32-$1.35. Phillips-Van Heusen (PVH) beat estimates by 12 cents with revenue in-line with estimates. Intercontinental Hotels Group (IHG) is begun with a Buy at Jefferies. Columbia Sportswear (COLM) is resumed with a Market Perform and $61 price objective at FBR Capital. Francesca’s (FRAN) is a new Neutral at Goldman Sachs, and is begun with a Buy ($32 price target) at Jefferies. Cedar Fair (FUN) gets a Buy-from-Hold hoist at Keybanc Capital. UBS lifts DR Horton (DHI) and Lennar (LEN) to Buy from Neutral. Credit Suisse cuts Toyota Motor (TM) and Honda Motor (HMC) to Neutral from Outperform. In afternoon trading: Shares of Francesca’s are down about 10.4%. Shares of Lion’s Gate are down about 7.1%. Shares of Pier 1 Imports (PIR) are down about 7%. Shares of Melco Crown Entertainment (MPEL) are down about 7%. Shares of Vera Bradley are up about 8.4%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.57 at 4:00 PM on Wednesday, up 0.62% on the day – up 0.43% year-to-date.

Consumer Staples

Yesterday, Carl Icahn fired another shot in his battle with Clorox (CLX), saying his board nominees would try to sell the company if elected. He also agreed to walk away from a two-year attempt to take over Lions Gate (LGF). Brown-Forman Corporation (BF.B) missed estimates by 2 cents, but beat revenue by $96M, and sees FY12 EPS of $3.45-3.85. In afternoon trading: Shares of The Fresh Market (TFM) are up about 9.5%. Shares of Star Scientific (CIGX) are down about 7%. Shares of Hansen Natural (HANS) are down about 5.6%. Actives: Shares of Altria Group (MO) are up about 0.4%. Shares of Coca Cola (KO) are up about 0.6%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.89 at 4:00 PM on Wednesday, up 0.32% on the day – up 5.39% year-to-date.

Healthcare

Onyx Pharmaceuticals (ONXX) is assumed with a Hold at Brean Murray. NuPathe (PATH) is lowered to Neutral from Buy at Lazard. In afternoon trading: Shares of Pacira Pharmaceuticals (PCRX) are down about 9.2%. Shares of Complete Genetics (GNOM) are down about 5.7%. Shares of Avanir Pharmaceuticals (AVNR) are down about 5.7%. Shares of Optimer Pharmaceuticals (OPTR) are up about 6.4%. Shares of Keryx Biopharmaceuticals (KERX) are up about 6.1%. Shares of NuVasive (NUVA) are up about 5.5%.

The Health Care Select Sector SPDR (XLV) was trading at $33.40 at 4:00 PM on Wednesday, up 0.69% on the day – up 6.03% year-to-date.

Financials

Bank of America (BAC) was reportedly warned by AIG (AIG) in January about a potential lawsuit over problematic mortgages and knew by March that the latter would probably seek over $10B, but BofA made no mention of the threat until AIG filed suit this month. As it looks to streamline its operations and strengthen its finances in the face of its massive legal liabilities, Bank of America (BAC) reportedly plans to sell its correspondent mortgage business. Apollo Residential Mortgage (AMTG) is a new Neutral at JP Morgan. Allianz SE (AZSEY) gets a Buy-from-Neutral boost at Goldman. Midsouth Bancorp (MSL) is moved to Strong Buy from Market Perform at Raymond James. Jefferies Group (JEF) is now Neutral from Buy at Rochdale Securities. In afternoon trading: Shares of FelCor Lodging Trust (FCH) are up about 8.5%. Shares of ETrade (ETFC) are up about 6.2%. Shares of MGIC Investment (MTG) are down about 6.1%. Shares of The PMI Group (PMI) are down about 5.7%.

The Financial Select Sector SPDR (XLF) was trading at $13.38 at 4:00 PM on Wednesday, up 1.29% on the day – down 16.11% year-to-date.

Information Technology

The FBI, Justice Department and SEC are reportedly investigating Oracle (ORCL) for possible bribery in its foreign dealings, including in software sales to governments in Western and Central Africa. Sony (SNE), Toshiba (TOSBF) and Hitachi (HIT) intend to merge their small and medium sized display operations. State-owned Japanese company Innovation Network will then invest ¥200B ($2.6B) in the new entity and receive a 70% stake, leaving the three firms with 10% each. The merged entity will replace Sharp (SHCAY), which is due to receive a $1B investment from Apple (AAPL), as the largest maker of small panels used in smartphones and tablet PCs. BMC Software (BMC), Citrix Systems (CTXS), and Red Hat (RHT) are all initiated at Outperform with Wells Fargo. Wunderlich assigns Buys on Concur (CNQR), Constant Contact (CTCT), IntraLinks (IL), Lionbridge Technologies (LIOX), LivePerson (LPSN), LogMeIn (LOGM), RealPage (RP), RightNow (RNOW), Salesforce.com (CRM), Ultimate (ULTI), and Vocus (VOCS), and it has a new Hold on NetSuite (N). Pacific Crest assigns Outperforms on Altera (ALTR) - $50 price objective and Lattice Semiconductor (LSCC) - $9 price objective, and it has a Market Perform on Xilinx (XLNX). Cognex (CGNX) is cut to Neutral from Overweight at Piper Jaffray. TriQuint Semi (TQNT) is taken to Equal Weight from Overweight by Barclays. In afternoon trading: Shares of Openwave Systems (OPWV) are up about 22.5% after the company took legal action against Apple (AAPL) and RIM (RIMM) to protect its intellectual property for mobile internet access.

The Technology Select Sector SPDR (XLK) was trading at $24.44 at 4:00 PM on Wednesday, down 0.24% on the day – down 2.98% year-to-date.

Telecommunications Services

Telefonica S.A. (TEF) is moved to Market Perform from Underperform by Sandord Bernstein. The Obama administration fired a legal broadside to block AT&T's (T) $39 billion acquisition of T-Mobile, launching its biggest challenge yet to a takeover and dealing the carrier a potentially costly blow. In afternoon trading: Shares of Deutsche Telkom (DTEGY) are down about 7.3%. Shares of Towerstream (TWER) are up about 6.3%. Shares of Sprint Nextel (S) are up about 6.2%. Shares of Clearwire (CLWR) are up about 5.9%. Shares of SBA Communications (SBAC) are up about 5.1%.

The NASDAQ Telecommunications Index (IXTC) was trading at $193.40 at 4:00 PM on Wednesday, up 0.22% on the day – down 14.19% year-to-date.

Utilities

In afternoon trading: Shares of Dynegy (DYN) are up about 10.8%. Actives: Shares of Duke Energy (DUK) are up about 0.7%. Shares of Southern (SO) are up about a quarter of a percent. Shares of Genon Energy (GEN) are up about 3%. Shares of AES Corp (AES) are up about 1.8%. Shares of Exelon (EXC) are up about 0.6%. Shares of CenterPoint Energy (CNP) are up about a half of a percent. Shares of PPL Corp (PPL) are up about 1.6%. Shares of Calpine (CPN) are up about 3.5%.

The Utilities Select Sector SPDR (XLU) was trading at $33.89 at 4:00 PM on Wednesday, up 0.65% on the day – up 8.14% year-to-date.

STOCKS: XOM, BP, TSO, BRY, NOA, CGV, ATPG, DD, LYB, APD, CE, CENX, RS, DROOY, STLD, WOR, ADES, OMN, JOYG, DRYS, NFEC, YRCW, ERII, AIMC, AMSC, MWA, SNE, TOSBF, HIT, SHCAY, AAPL, CLX, LGF, VRA, PVH, IHG, COLM, FRAN, FUN, DHI, LEN, TM, HMC, PIR, MPEL, BF.B, TFM, CIGX, HANS, MO, KO, ONXX, PATH, PCRX, GNOM, AVNR, OPTR, KERX, NUVA, BAC, AIG, AMTG, AZSEY, MSL, JEF, FCH, ETFC, MTG, PMI, ORCL, BMC, CTXS, RHT, CNQR, CTCT, IL, LIOX, LPSN, LOGM, RP, RNOW, CRM, ULTI, VOCS, N, ALTR, LSCC, XLNX, CGNX, TQNT, OPWV, RIMM, TEF, T, DTEGY, TWER, S, CLWR, SBAC, DYN, DUK, SO, GEN, AES, EXC, CNP, PPL, CPN

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
FUN Cedar Fair L.P. 53.37 -0.25 -0.47 215,594 Trade
RHT Red Hat Inc. 140.79 1.66 1.19 1,363,253 Trade
ORCL Oracle Corporation 48.10 0.26 0.54 11,874,326 Trade
APD Air Products and Chemicals Inc. 164.72 0.51 0.31 1,169,230 Trade
GEN Genesis Healthcare Inc. 1.55 0.05 3.33 225,905 Trade
IL IntraLinks Holdings Inc. $0.001 par value n/a n/a n/a 0 Trade
LSCC Lattice Semiconductor Corporation 7.68 0.04 0.52 527,574 Trade
TM Toyota Motor Corporation 122.76 0.91 0.75 132,916 Trade
RIO Rio Tinto Plc 47.56 0.13 0.27 2,363,188 Trade
CRM Salesforce.com Inc 145.73 0.69 0.48 3,703,974 Trade
SO Southern Company (The) 47.50 0.35 0.74 6,024,386 Trade
AMSC American Superconductor Corporation 6.03 -0.17 -2.74 183,597 Trade
ETFC E*TRADE Financial Corporation 61.29 0.96 1.59 1,497,521 Trade
CLX Clorox Company (The) 146.77 1.80 1.24 773,494 Trade
TEF Telefonica SA 8.47 0.07 0.83 1,217,124 Trade
KERX Keryx Biopharmaceuticals Inc. 3.02 -0.02 -0.66 825,512 Trade
DRYS DryShips Inc. 4.42 0.13 3.03 499,195 Trade
LGF Lions Gate Entertainment Corporation n/a n/a n/a 0 Trade
CTCT Constant Contact Inc n/a n/a n/a 0 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.29 0.34 1.22 4,620,585 Trade
AMTG Apollo Residential Mortgage Inc. n/a n/a n/a 0 Trade
LIOX Lionbridge Technologies Inc. n/a n/a n/a 0 Trade
RP RealPage Inc. 58.45 -0.35 -0.60 226,957 Trade
MO Altria Group Inc. 60.83 0.65 1.08 7,166,735 Trade
AAPL Apple Inc. 213.32 3.08 1.47 28,500,367 Trade
HMC Honda Motor Company Ltd. 29.79 0.36 1.22 313,996 Trade
LOGM LogMein Inc. 79.30 -0.35 -0.44 710,420 Trade
XLNX Xilinx Inc. 70.61 0.00 0.00 1,594,542 Trade
TSO ANDV Tesoro Corporation n/a n/a n/a 0
S Sprint Corporation 6.12 0.11 1.83 6,005,011 Trade
PPL PPL Corporation 29.56 0.36 1.23 4,927,993 Trade
COLM Columbia Sportswear Company 89.54 -2.01 -2.20 255,689 Trade
PVH PVH Corp. 148.25 -0.29 -0.20 610,792 Trade
CGNX Cognex Corporation 52.61 0.31 0.59 1,038,257 Trade
ERII Energy Recovery Inc. 8.92 -0.35 -3.78 437,009 Trade
CTXS Citrix Systems Inc. 111.32 -0.08 -0.07 1,353,600 Trade
ULTI The Ultimate Software Group Inc. 289.14 1.67 0.58 116,943 Trade
CENX Century Aluminum Company 12.10 1.01 9.11 1,833,615 Trade
MPEL Melco Crown Entertainment Limited n/a n/a n/a n/a
VRA Vera Bradley Inc. 13.94 -0.21 -1.48 168,967 Trade
AES The AES Corporation 13.87 0.38 2.82 7,318,143 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 111.95 1.19 1.07 1,642,281 Trade
LPSN LivePerson Inc. 24.50 0.75 3.16 634,943 Trade
RS Reliance Steel & Aluminum Co. (DE) 87.39 1.96 2.29 516,364 Trade
YRCW YRC Worldwide Inc. 8.98 0.19 2.16 600,174 Trade
BAC Bank of America Corporation 30.72 0.36 1.19 44,015,361 Trade
DHI D.R. Horton Inc. 44.32 0.49 1.12 2,583,979 Trade
NFEC NF Energy Saving Corporation 5.03 0.51 11.28 335,856 Trade
AIMC Altra Industrial Motion Corp. 40.85 0.70 1.74 205,254 Trade
WOR Worthington Industries Inc. 44.82 0.54 1.22 226,382 Trade
N Netsuite Inc n/a n/a n/a 0 Trade
LEN Lennar Corporation Class A 50.48 0.25 0.50 2,409,149 Trade
FRAN Francesca's Holdings Corporation 7.32 -0.17 -2.27 685,355 Trade
NOA North American Construction Group Ltd. (no par) 7.25 -0.05 -0.68 37,250 Trade
XOM Exxon Mobil Corporation 78.00 1.06 1.38 11,519,944 Trade
ALTR Altair Engineering Inc. 39.82 0.56 1.43 403,464 Trade
TFM Fresh Market Inc (The) n/a n/a n/a 0 Trade
AIG American International Group Inc. 52.46 0.36 0.69 5,029,299 Trade
MSL MidSouth Bancorp 14.75 0.85 6.12 246,139 Trade
PIR Pier 1 Imports Inc. 1.80 0.02 1.12 2,217,148 Trade
BP BP p.l.c. 41.72 0.19 0.46 7,633,918 Trade
IHG Intercontinental Hotels Group American Depositary Shares (Each representing one) 60.60 0.53 0.88 622,839 Trade
OMN OMNOVA Solutions Inc. 8.80 0.00 0.00 46,675 Trade
SBAC SBA Communications Corporation 155.70 0.65 0.42 941,119 Trade
KO Coca-Cola Company (The) 46.22 0.14 0.30 10,600,733 Trade
EXC Exelon Corporation 44.33 0.70 1.60 8,266,499 Trade
SNE Sony Corporation 53.84 0.13 0.24 1,480,792 Trade
T AT&T Inc. 33.09 0.62 1.91 37,384,750 Trade
MWA MUELLER WATER PRODUCTS 11.65 0.06 0.52 431,142 Trade
DUK Duke Energy Corporation (Holding Company) 81.79 0.86 1.06 3,104,928 Trade
NUVA NuVasive Inc. 68.65 1.36 2.02 937,087 Trade
MTG MGIC Investment Corporation 12.56 0.18 1.45 2,576,018 Trade
TWER Towerstream Corp 3.30 0.05 1.54 194
STLD Steel Dynamics Inc. 43.39 0.85 2.00 1,229,287 Trade
PCRX Pacira Pharmaceuticals Inc. 46.20 -1.75 -3.65 999,858 Trade

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