Equities Sector Coverage: Markets Get a Boost from Bernanke

Sector Recap  |

Initial Jobless Claims rose more than expected to 382,000 well above the 350,000 recessionary threshold. The Producer Price Index rose to 1.7% in August boosted by energy costs. Core PPI was up 0.2% in August vs 0.4% in July. The FOMC announced that QE3 would be a program to buy $40 billion mortgage-backed securities each month in an open-ended program. Operation Twist will continue until year end. The proceeds from maturing agencies and MBS will continue to be re-invested. Combined Twist and MBS will total $85 billion a month until year end. Keeping the federal funds at zero to 0.25% will be extended into mid-2015. The Dow Jones Industrial Average traded down to 13,325.22 then up to 13,573.33 following the Fed Statement for a new year to date high. The NASDAQ traded popped to 3167.63 following the Fed Statement for a new year to date high.

Asian stocks were mixed on Thursday. The Nikkei 225 ended the day at 8,995 – up 0.39%. The Hang Seng ended the day at 20,048 – down 0.14%. European exchanges closed before the Fed Statement and were mixed on Thursday. The FTSE 100 ended the day at 5,820 – up 0.65%. The DAX ended the day at 7,310 – down 0.45%. The CAC 40 ended the day at 3,502 – down 1.18%. The yield on the 10-Year US Treasury declined from 1.756% to 1.713% before the Fed Statement then rose to 1.833% testing the 200-day simple moving average at 1.832%.

Comex gold traded down to $1720.0 the Troy ounce before the Fed Statement then popped to $1775.0. Nymex crude oil traded up to $98.58 per barrel on Middle-East tensions not on the Fed Statement with the 200-day simple moving average at $96.61. The euro versus the dollar traded up to 1.3000 after the Fed Statement.

Energy

QR Energy (QRE) is launched with a Buy at Wunderlich. Global Hunter has a reduce on Nordic American Tankers (NAT), assigns new Neutrals on Navios Acquisition (NNA) and Overseas Shipholding (OSG), has an Accumulate on Ship Finance International (SFL), and begins Buys on Scorpio Tankers (STNG) and Tsakos Energy (TNP). Precision Drilling (PDS) is upgraded to Outperform from Market Perform with Wells Fargo. Lukoil (LUKOY) is lowered to Neutral from Overweight at JPMorgan.

Big Movers – Uranerz Energy (URZ) are up about 15.5%, Pacific Ethanol (PEIX) are up about 15.2%, Alpha Natural Resources (ANR) are up about 13.1% and shares of Arch Coal (ACI) are up about 10%. Dow components – Chevron (CVX) up 1.69%, Exxon Mobil (XOM) up 1.61%. Energy Select Sector SPDR (XLE) was trading at $75.60 at 3:30 PM on Thursday, up 1.67% on the day – up 9.36% year-to-date.

Materials

China Green Agriculture (CGA) reported FQ4 EPS of $0.41 and revenue of $57.3M. Spartech (SEH) missed estimates by 4 cents and revenue by $15M. Taseko Mines (TGB) is initiated with an Underperform at Bank of America-Merrill. Cliffs Natural Resources (CLF) is upgraded to Buy from Neutral at Nomura. Dow Components – Alcoa (AA) up 2.41%, DuPont (DD) down 1.73%. The Materials Select Sector SPDR (XLB) was trading at $37.805 at 3:30 PM on Thursday, up 2.26% on the day – up 12.85% year-to-date.

Industrials

BAE Systems (BAESF) dropped 6.2% and EADS (EADSF) 8.65% in European trading following news yesterday that they're in advanced talks to merge in a deal that would create a company worth $48B and supersede Boeing (BA) as the world's largest aerospace and defense firm. Pall (PLL) missed estimates by 4 cents, while beating revenue by $65M. The company is forecasting for EPS to grow in a yearly range of 9%-16%, implying adjusted profit of $3.05-$3.25/share. For FY 2012, PLL generated pro-forma earnings from continuing operations of $2.80/share, up 16% Y/Y. Dover (DOV) is upgraded to Overweight from Equal Weight at Barclays. Foster Wheeler (FWLT) is upgraded at DA Davidson Buy from Neutral. BAE Systems (BAESY) is downgraded to Sell from Hold at Société Générale. European Aeronautic Defence & Space (EADSY) is cut to Hold from Buy at Deutsche Bank, which points to integration risk from the company’s potential merger with BAE Systems London (BA.LN). Northrop Grumman (NOC) is slashed to Sell from Neutral at UBS. United Parcel Service (UPS) is downgraded to Equal Weight from Overweight by Barclays.

Big Movers – Nexxus Lighting (NEXS) are up about 160%.
Dow components – Boeing Co (BA) up 0.93%, Caterpillar (CAT) up 1.66%, General Electric (GE) up 0.63%, 3M Company (MMM) up 1.34%, United Technologies (UTX) up 2.34%.

The Industrial Select Sector SPDR (XLI) was trading at $37.52 at 3:30 PM on Thursday, up 1.10% on the day – up 11.17% year-to-date.

Consumer Discretionary

As it looks to return to profitability in Europe, Ford (F) is preparing to restructure its operations in the region and close a factory, possibly a 4,000-staff facility in Genk in Belgium. Meanwhile, GM (GM) is in talks with labor unions to shut an aging plant in Bochum in Germany as it also struggles to turn around major losses. Pier 1 Imports (PIR) reported Q2 EPS of $0.19 (in-line) and revenue of $367.6M (in-line). The company raises full-year EPS outlook to $1.10-$1.16, from prior guidance of $1.08-$1.14. K12 (LRN) beat estimates by 8 cents and revenue by $5M. Coach (COH) is a new Neutral at Citigroup, along with Gap Inc. (GPS). Buys are American Eagle (AEO), Ascena Retail (ASNA), Michael Kors (KORS), Ross Stores (ROST), Signet Jewelers (SIG), Tiffany (TIF), and TJX Cos (TJX). Abercrombie & Fitch (ANF) is a Sell. WPP Plc (WPPGY) gets upgraded to Hold from Underperform at Jefferies. Zumiez (ZUMZ) gets a Buy-from-Neutral boost at DA Davidson. Darden Restaurants (DRI) is lowered to Neutral from Outperform at Robert W. Baird. Nike (NKE) is cut to Neutral from Buy at Citigroup.

Big Movers – Skullcandy (SKUL) are down about 11.1%.
Dow Components – Disney (DIS) up 1.47%, Home Depot (HD) up 1.97%, McDonalds (MCD) up 0.77%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.51 at 3:30 PM on Thursday, up 1.26% on the day – up 21.76% year-to-date.

Consumer Staples

Coffee (JVA) beat estimates by 18 cents and revenue by $8.4M. Nestlé (NSRGY) is now Neutral from Buy at HSBC Securities. Dow components – Kraft (KFT) up 1.41%, Coca Cola (KO) up 1.97%, Procter & Gamble (PG) up 1.09%, Wal-Mart (WMT) up 1.34%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.06 at 3:30 PM on Thursday, up 1.81% on the day – up 10.99% year-to-date.

Health Care

Sanofi (SNY) has won FDA approval for its Aubagio pill for multiple sclerosis, making it the second such oral therapy that will be available in the U.S. The drug will compete with Novartis' (NVS) Gilenya, which was authorized in 2010. Almost Family (AFAM) is a Hold at Jefferies. Amedisys (AMED) is assumed with a Hold at Jefferies. Haemonetics (HAE) is begun with a Buy at The Benchmark Company. Corcept Therapeutics (CORT) is cut to Neutral from Overweight at Piper Jaffray.

Big Movers – Pluristem Therapeutics (PSTI) are down about 14.2%.
Dow Components – Johnson & Johnson (JNJ) up 1.20%, Merck (MRK) up 0.02%, Pfizer (PFE) up 0.46%.

The Health Care Select Sector SPDR (XLV) was trading at $39.82 at 3:30 PM on Thursday, up 0.99% on the day – up 14.79% year-to-date.

Financial

Treasury Department lawyers have recommended a preliminary settlement between federal and state prosecutors and Standard Chartered Bank over its dealings with Iran. However, the fine the bank will face is far less than the $340M it has agreed to pay New York's Department of Financial Services. Freddie Mac (FMCC.OB) will get back an additional $2.2B-$3.4B from banks over soured mortgages after scrutinizing the way it had originally assessed loans that were candidates for repurchase requests. Freddie had reached a $1.35B settlement with Bank of America (BAC) in January 2011 over the issue, but undertook the review at the behest of the FHFA inspector general, who found Freddie's original methodology lacking. JPMorgan (JPM) is reorganizing its corporate and investment banking division for the second time in three months. Realty Income (O) is upgraded to Outperform from Neutral by Robert Baird. T. Rowe Price (TROW) is taken to Neutral from Outperform at Credit Suisse.

Dow Components – American Express (AXP) up 2.92%, Bank of America (BAC) down 4.58%, JP Morgan Chase (JPM) up 3.33%, Travelers (TRV) up 1.10%.

The Financial Select Sector SPDR (XLF) was trading at $16.115 at 3:30 PM on Thursday, up 2.38% on the day – up 23.96% year-to-date.

Information Technology

Apple (AAPL) will start taking pre-orders for the iPhone 5 after introducing the smartphone yesterday at a launch that contained few surprises and even lacked the "wow" factor. Jefferies begins Microsoft (MSFT) with a Hold and resumes Red Hat (RHT) at a Buy. Jive Software (JIVE) is upgraded to Buy from Neutral at UBS. Citigroup cuts Intel (INTC) to Neutral from Buy, along with Advanced Micro Devices (AMD) and Marvell (MRVL). Tyco International (TYC) is moved to Equal Weight from Overweight at Barclays. Big Movers – Oclaro (OCLR) are up about 10.6%. Dow Components – Cisco Systems (CSCO) up 1.68%, Hewlett-Packard (HPQ) up 1.45%, IBM (IBM) up 1.07%, Intel Corp (INTC) up 0.52%, Microsoft (MSFT) up 1.01%. The Technology Select Sector SPDR (XLK) was trading at $31.45 at 3:30 PM on Thursday, up 1.42% on the day – up 23.58% year-to-date.

Telecommunication Services

AT&T (T) is taken to Hold from Buy at Hudson Square Research. Dow Components – AT&T (T) up 0.80%, Verizon (VZ) up 1.02%. The NASDAQ Telecommunications Index (IXTC) was trading at $200.93 at 3:30 PM on Thursday, up 1.43% on the day – up 2.03% year-to-date.

Utilities

The Big Names – Dominion Resources (D) up 1.12%, Edison International (EIX) up 1.35%, First Energy (FE) up 1.85%, PG&E Corp (PCG) up 0.02%, Southern Company (SO) up 1.04%. The Utilities Select Sector SPDR (XLU) was trading at $36.75 at 3:30 PM on Thursday, up 1.30% on the day – up 2.14% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, QRE, NAT, NNA, OSG, SFL, STNG, TNP, PDS, LUKOY, URZ, PEIX, ANR, ACI, CGA, SEH, TGB, CLF, BAESF, EADSF, BA, PLL, DOV, FWLT, BAESY, EADSY, BA.LN, NOC, UPS, NEXS, F, GM, PIR, LRN, COH, GPS, AEO, ASNA, KORS, ROST, SIG, TIF, TJX, ANF, WPPGY, ZUMZ, DRI, NKE, SKUL, JVA, NSRGY, SNY, NVS, AFAM, AMED, HAE, CORT, PSTI, FMCC.OB, BAC, JPM, O, TROW, AAPL, MSFT, RHT, JIVE, INTC, AMD, MRVL, TYC, T

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
TGB Taseko Mines Ltd. 0.59 0.03 5.42 1,148,767
MMM 3M Company 208.46 -0.40 -0.19 1,206,354 Trade
RHT Red Hat Inc. 181.84 0.86 0.48 977,894 Trade
TNP Tsakos Energy Navigation Ltd 3.34 -0.06 -1.76 65,941 Trade
UPS United Parcel Service Inc. 110.76 -0.11 -0.10 2,265,298 Trade
CGA China Green Agriculture Inc. 0.54 -0.02 -3.75 218,287 Trade
STNG Scorpio Tankers Inc. 19.95 0.18 0.91 1,334,615 Trade
PG Procter & Gamble Company (The) 99.99 1.51 1.53 10,073,075 Trade
GE General Electric Company 10.13 0.04 0.40 63,096,351 Trade
ASNA Ascena Retail Group Inc. 2.31 0.06 2.67 2,198,299 Trade
CVX Chevron Corporation 119.31 -0.04 -0.03 3,974,455 Trade
SO Southern Company (The) 48.92 0.36 0.74 5,346,643 Trade
PCG Pacific Gas & Electric Co. 17.74 2.26 14.60 28,628,001 Trade
CORT Corcept Therapeutics Incorporated 11.47 -0.33 -2.80 1,211,302 Trade
AMED Amedisys Inc 132.70 -3.52 -2.58 574,621 Trade
HAE Haemonetics Corporation 87.86 -0.14 -0.16 547,095 Trade
JNJ Johnson & Johnson 135.69 -0.69 -0.51 5,740,394 Trade
AA Alcoa Corporation 28.20 -0.07 -0.25 2,635,333 Trade
INTC Intel Corporation 51.40 -0.26 -0.50 15,023,102 Trade
D Dominion Energy Inc. 73.56 0.30 0.41 4,827,481 Trade
TRV The Travelers Companies Inc. 129.12 0.38 0.30 1,012,833 Trade
TIF Tiffany & Co. 90.39 -0.44 -0.48 966,988 Trade
NAT Nordic American Tankers Limited 2.22 -0.05 -2.20 1,721,830 Trade
TCB.P.C TCF Financial Corporation Perp Pfd Ser B n/a n/a n/a n/a
EIX Edison International 61.65 1.15 1.90 1,689,522 Trade
AXP American Express Company 106.53 -0.85 -0.79 3,125,556 Trade
UTX United Technologies Corporation 128.67 0.91 0.71 5,076,355 Trade
TROW T. Rowe Price Group Inc. 97.40 -0.18 -0.18 1,280,006 Trade
AMD Advanced Micro Devices Inc. 23.95 0.27 1.14 56,709,849 Trade
TJX TJX Companies Inc. (The) 50.47 0.24 0.48 3,921,144 Trade
PDS Precision Drilling Corporation 2.63 0.18 7.35 1,478,770 Trade
SIG Signet Jewelers Limited 25.31 -0.58 -2.24 1,243,718 Trade
CSCO Cisco Systems Inc. 49.65 0.22 0.45 19,821,162 Trade
COH T.P Coach Inc. n/a n/a n/a 0
VZ Verizon Communications Inc. 55.44 0.28 0.51 11,808,073 Trade
NOC Northrop Grumman Corporation 287.36 0.38 0.13 533,834 Trade
NKE Nike Inc. 84.57 -0.81 -0.95 5,041,720 Trade
GM General Motors Company 39.53 0.44 1.13 8,983,995 Trade
BAC Bank of America Corporation 29.13 0.02 0.07 40,523,636 Trade
ROST Ross Stores Inc. 93.67 -0.34 -0.36 2,154,131 Trade
MRVL Marvell Technology Group Ltd. 19.31 0.48 2.55 11,786,656 Trade
MCD McDonald's Corporation 179.25 -0.72 -0.40 4,452,544 Trade
O Realty Income Corporation 69.93 -0.16 -0.23 1,641,897 Trade
WPPGY WPP WPP plc American Depositary Shares each representi n/a n/a n/a n/a
GPS Gap Inc. (The) 25.21 0.14 0.56 2,288,877 Trade
SFL Ship Finance International Limited 12.55 -0.03 -0.24 435,163 Trade
PEIX Pacific Ethanol Inc. 1.15 0.01 0.88 267,498 Trade
JVA Coffee Holding Co. Inc. 6.53 -0.30 -4.39 194,317 Trade
TYC Tyco International plc (Ireland) n/a n/a n/a 0
F Ford Motor Company 8.82 0.28 3.28 35,157,107 Trade
PFE Pfizer Inc. 42.60 0.20 0.47 16,889,356 Trade
PSTI Pluristem Therapeutics Inc. 1.01 -0.01 -0.98 100,869 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
NVS Novartis AG 89.96 0.08 0.09 2,077,267 Trade
HPQ HP Inc. 23.26 -0.02 -0.09 6,019,767 Trade
ACI Arch Coal Inc n/a n/a n/a 0 Trade
MRK Merck & Company Inc. (new) 79.24 -0.57 -0.71 8,967,722 Trade
ANF Abercrombie & Fitch Company 20.70 -0.22 -1.05 1,465,566 Trade
DRI Darden Restaurants Inc. 111.35 -0.77 -0.69 649,461 Trade
PIR Pier 1 Imports Inc. 0.87 -0.03 -3.65 1,108,243 Trade
CLF Cleveland-Cliffs Inc. 11.24 -0.05 -0.44 9,753,927 Trade
FE FirstEnergy Corp. 39.60 0.01 0.03 3,381,423 Trade
KORS C.P.I Michael Kors Holdings Limited n/a n/a n/a n/a
KO Coca-Cola Company (The) 44.83 -0.41 -0.91 25,379,471 Trade
T AT&T Inc. 30.63 0.16 0.53 24,296,584 Trade
CAT Caterpillar Inc. 135.80 -0.40 -0.29 3,765,661 Trade
AEO American Eagle Outfitters Inc. 19.85 -0.22 -1.10 3,391,410 Trade
DOV Dover Corporation 91.43 0.23 0.25 833,239 Trade
LRN K12 Inc 32.23 0.17 0.53 334,242 Trade
MSFT Microsoft Corporation 108.17 -0.05 -0.05 17,540,440 Trade
ZUMZ Zumiez Inc. 24.91 0.69 2.85 358,676 Trade
NNA Navios Maritime Acquisition Corporation 7.38 -0.10 -1.34 78,706 Trade
WMT Walmart Inc. 102.20 2.21 2.21 20,527,235 Trade
IBM International Business Machines Corporation 138.70 0.67 0.49 2,745,858 Trade
AAPL Apple Inc. 170.93 0.51 0.30 17,780,649 Trade
JPM JP Morgan Chase & Co. 105.18 -0.37 -0.35 12,430,419 Trade
DIS The Walt Disney Company 113.51 0.92 0.82 6,920,368 Trade
HD Home Depot Inc. (The) 192.38 -0.01 -0.01 3,387,392 Trade
XOM Exxon Mobil Corporation 78.23 0.52 0.67 12,928,788 Trade
BA The Boeing Company 416.26 -1.71 -0.41 3,000,177 Trade

Comments


Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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