Equities Sector Coverage: Markets Get a Boost from Bernanke

Sector Recap |

will markets keep rising, is economy recovering, will dow keep risingInitial 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. 1.71 0.00 0.00 704,234
MMM 3M Company 211.03 0.30 0.14 1,186,373 Trade
RHT Red Hat Inc. 110.07 4.31 4.08 6,168,088 Trade
TNP Tsakos Energy Navigation Ltd 4.47 0.00 0.00 186,265 Trade
UPS United Parcel Service Inc. 118.92 0.70 0.59 2,545,653 Trade
CGA China Green Agriculture Inc. 1.23 0.00 0.00 81,737 Trade
STNG Scorpio Tankers Inc. 3.41 -0.12 -3.40 3,588,191 Trade
PG Procter & Gamble Company (The) 92.65 -0.07 -0.08 4,804,305 Trade
GE General Electric Co 24.93 -0.18 -0.72 38,459,494 Trade
ASNA Ascena Retail Group Inc. 2.30 0.13 5.99 12,685,414 Trade
CVX Chevron Corporation 117.52 -0.47 -0.40 4,412,321 Trade
SO Southern Company (The) 48.79 -0.24 -0.49 3,934,773 Trade
PCG Pacific Gas & Electric Co. 69.04 -0.25 -0.36 2,321,341 Trade
CORT Corcept Therapeutics Incorporated 18.73 -0.40 -2.09 2,036,678 Trade
AMED Amedisys Inc 53.13 0.33 0.63 180,750 Trade
HAE Haemonetics Corporation 42.92 -0.08 -0.19 352,160 Trade
JNJ Johnson & Johnson 130.94 -0.23 -0.18 3,683,117 Trade
WMT Wal-Mart Stores Inc. 79.39 0.24 0.30 5,803,434 Trade
AA Alcoa Inc. 44.74 -0.55 -1.21 4,538,717 Trade
INTC Intel Corporation 37.47 0.31 0.83 29,457,491 Trade
IBM International Business Machines Corp 146.56 0.69 0.47 4,106,509 Trade
D Dominion Resources Inc. 78.21 0.19 0.24 2,120,704 Trade
TRV The Travelers Companies Inc. 122.57 -0.10 -0.08 1,297,106 Trade
JIVE Jive Software Inc. n/a n/a n/a 0 Trade
TIF Tiffany & Co. 89.66 1.63 1.85 1,148,171 Trade
AAPL Apple Inc. 153.14 2.59 1.72 35,684,956 Trade
NAT Nordic American Tankers Limited 5.28 -0.04 -0.75 540,504 Trade
TCB.P.C TCF Financial Corporation Perp Pfd Ser B n/a n/a n/a n/a
EIX Edison International 79.15 -0.12 -0.15 1,203,439 Trade
JPM JP Morgan Chase 93.70 -0.42 -0.45 9,308,871 Trade
AXP American Express Company 88.69 0.48 0.54 2,166,499 Trade
UTX United Technologies Corporation 114.72 0.43 0.38 3,631,330 Trade
TROW T. Rowe Price Group Inc. 86.56 -0.76 -0.87 1,298,934 Trade
AMD Advanced Micro Devices Inc. 12.45 -0.16 -1.27 67,575,474 Trade
TJX TJX Companies Inc. (The) 73.78 -0.05 -0.07 2,710,740 Trade
PDS Precision Drilling Corporation 3.17 0.08 2.59 2,758,077 Trade
SIG Signet Jewelers Limited 65.45 -0.24 -0.37 1,345,772 Trade
CSCO Cisco Systems Inc. 33.76 0.04 0.12 25,937,922 Trade
DIS Walt Disney Company (The) 98.63 -0.94 -0.94 5,899,185 Trade
COH Coach Inc. 39.68 0.53 1.35 3,291,689 Trade
VZ Verizon Communications Inc. 49.51 -0.39 -0.78 10,644,969 Trade
NOC Northrop Grumman Corporation 284.74 3.37 1.20 921,234 Trade
NKE Nike Inc. 53.70 0.47 0.88 14,191,278 Trade
GM General Motors Company 40.26 -0.04 -0.10 13,104,827 Trade
BAC Bank of America Corporation 24.81 0.05 0.20 48,364,321 Trade
ROST Ross Stores Inc. 63.79 0.93 1.48 3,613,917 Trade
MRVL Marvell Technology Group Ltd. 17.65 0.04 0.23 3,061,224 Trade
MCD McDonald\'s Corporation 153.35 -2.91 -1.86 6,184,129 Trade
O Realty Income Corporation 58.34 0.41 0.71 1,304,355 Trade
WPPGY WPP plc American Depositary Shares each representi 93.68 -2.20 -2.29 123,199 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
GPS Gap Inc. (The) 29.31 0.19 0.65 3,669,711 Trade
SFL Ship Finance International Limited 14.40 0.10 0.70 397,350 Trade
PEIX Pacific Ethanol Inc. 5.90 0.20 3.51 398,177 Trade
JVA Coffee Holding Co. Inc. 4.41 0.05 1.15 17,015 Trade
TYC Tyco International plc (Ireland) n/a n/a n/a 0
HD Home Depot Inc. (The) 161.26 0.16 0.10 3,064,373 Trade
F Ford Motor Company 11.93 -0.01 -0.08 30,508,193 Trade
XOM Exxon Mobil Corporation 80.89 -0.09 -0.11 7,491,542 Trade
PFE Pfizer Inc. 35.30 -0.21 -0.59 16,879,303 Trade
PSTI Pluristem Therapeutics Inc. 1.54 0.00 0.00 592,298 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
NVS Novartis AG 85.24 -0.99 -1.15 1,773,176 Trade
HPQ HP Inc. 19.88 0.03 0.15 16,559,199 Trade
BA Boeing Company (The) 253.70 -0.62 -0.24 2,171,652 Trade
AFAM Almost Family Inc 48.75 0.45 0.93 85,818 Trade
ACI Arch Coal Inc. n/a n/a n/a 0 Trade
MRK Merck & Company Inc. (new) 64.76 -0.42 -0.64 5,792,674 Trade
ANF Abercrombie & Fitch Company 14.40 0.10 0.70 1,911,440 Trade
DRI Darden Restaurants Inc. 77.71 -5.43 -6.53 6,146,809 Trade
PIR Pier 1 Imports Inc. 4.36 0.08 1.87 2,861,260 Trade
SNY Sanofi American Depositary Shares (Each repstg one 49.55 -0.42 -0.84 607,992 Trade
CLF Cliffs Natural Resources Inc 6.95 0.09 1.31 6,156,322 Trade
FE FirstEnergy Corporation 30.83 -0.28 -0.90 4,357,940 Trade
KORS Michael Kors Holdings Limited 47.03 1.16 2.53 2,114,457 Trade
KO Coca-Cola Company (The) 45.57 -0.12 -0.26 6,406,055 Trade
T AT&T Inc. 38.72 -0.40 -1.02 22,491,538 Trade
CAT Caterpillar Inc. 124.51 0.19 0.15 2,301,912 Trade
AEO American Eagle Outfitters Inc. 14.26 0.20 1.42 2,813,696 Trade
DOV Dover Corporation 91.87 -0.37 -0.40 576,646 Trade
LRN K12 Inc 17.75 0.36 2.07 115,225 Trade
MSFT Microsoft Corporation 73.26 0.00 0.00 17,201,110 Trade
ZUMZ Zumiez Inc. 16.70 -0.25 -1.47 367,204 Trade
NNA Navios Maritime Acquisition Corporation 1.23 0.01 0.82 556,918 Trade

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