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

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.71 0.06 0.62 5,998,884
AAPL Apple Inc. 113.62 0.53 0.47 18,237,765
ACI Arch Coal Inc. n/a n/a n/a 0
AEO American Eagle Outfitters Inc. 17.66 -0.45 -2.48 1,508,926
AFAM Almost Family Inc 36.80 0.41 1.13 25,547
AMD Advanced Micro Devices Inc. 6.56 0.02 0.23 17,154,973
AMED Amedisys Inc 48.22 0.37 0.77 115,575
ANF Abercrombie & Fitch Company 15.89 -0.36 -2.19 1,547,643
ASNA Ascena Retail Group Inc. 5.49 -0.12 -2.14 1,325,318
AXP American Express Company 63.87 -0.41 -0.64 1,512,530
BA Boeing Company (The) 131.01 -0.31 -0.24 676,271
BAC Bank of America Corporation 15.21 -0.08 -0.52 29,670,539
CAT Caterpillar Inc. 84.61 1.73 2.09 3,721,987
CGA China Green Agriculture Inc. 1.42 0.01 0.71 65,609
CLF Cliffs Natural Resources Inc 6.04 -0.02 -0.33 3,972,393
COH Coach Inc. 35.57 -0.08 -0.21 736,654
CORT Corcept Therapeutics Incorporated 6.52 -0.04 -0.53 147,365
CSCO Cisco Systems Inc. 31.41 -0.07 -0.22 6,906,920
CVX Chevron Corporation 99.67 0.69 0.70 2,117,611
D Dominion Resources Inc. 75.59 -0.19 -0.25 866,975
DD E.I. du Pont de Nemours and Co. 66.57 -0.69 -1.03 771,177
DIS Walt Disney Company (The) 91.86 0.14 0.15 3,834,945
DOV Dover Corporation 69.91 0.46 0.66 333,421
DRI Darden Restaurants Inc. 60.74 -0.78 -1.26 1,081,530
EIX Edison International 73.61 -0.15 -0.20 610,482
F Ford Motor Company 12.02 0.04 0.29 15,715,924
FE FirstEnergy Corporation 33.57 -0.10 -0.30 1,697,596
GE General Electric Co 29.64 -0.24 -0.80 10,095,196
GM General Motors Company 31.71 0.11 0.35 4,057,454
GPS Gap Inc. (The) 21.93 -0.36 -1.62 2,358,114
HAE Haemonetics Corporation 36.61 -0.13 -0.35 62,720
HD Home Depot Inc. (The) 127.76 0.94 0.74 3,011,289
HPQ HP Inc. 15.34 -0.01 -0.03 4,308,875
IBM International Business Machines Corp 157.05 0.28 0.18 1,219,177
INTC Intel Corporation 37.28 0.10 0.27 7,021,880
JIVE Jive Software Inc. 4.24 -0.01 -0.24 18,267
JNJ Johnson & Johnson 119.09 -0.13 -0.11 1,830,085
JPM JP Morgan Chase 66.24 -0.12 -0.18 5,167,278
JVA Coffee Holding Co. Inc. 5.47 -0.01 -0.18 7,737
KO Coca-Cola Company (The) 42.08 -0.51 -1.20 7,080,050
KORS Michael Kors Holdings Limited 47.87 -0.30 -0.62 641,239
LRN K12 Inc 13.66 -0.03 -0.18 36,585
MCD McDonald\'s Corporation 115.11 -1.77 -1.52 2,904,348
MMM 3M Company 177.03 0.73 0.41 629,103
MRK Merck & Company Inc. (new) 62.92 0.35 0.56 5,325,732
MRVL Marvell Technology Group Ltd. 13.13 0.04 0.31 5,086,801
MSFT Microsoft Corporation 57.87 -0.08 -0.14 8,148,565
NAT Nordic American Tankers Limited 10.09 0.11 1.10 1,218,828
NKE Nike Inc. 53.42 -1.92 -3.47 19,560,804
NOC Northrop Grumman Corporation 217.30 -0.75 -0.34 289,997
NVS Novartis AG 80.92 0.04 0.04 1,031,957
O Realty Income Corporation 68.43 0.25 0.37 373,537
PCG Pacific Gas & Electric Co. 62.32 -0.04 -0.06 789,137
PDS Precision Drilling Corporation 3.78 0.15 4.14 1,091,493
PEIX Pacific Ethanol Inc. 6.61 0.09 1.38 142,981
PFE Pfizer Inc. 33.77 -0.06 -0.18 5,570,383
PG Procter & Gamble Company (The) 88.74 0.38 0.43 42,446,027
PIR Pier 1 Imports Inc. 4.28 0.10 2.27 1,987,289
PSTI Pluristem Therapeutics Inc. 1.60 -0.02 -1.11 42,567
RHT Red Hat Inc. 79.93 0.82 1.03 829,428
ROST Ross Stores Inc. 63.55 -0.84 -1.30 765,528
SFL Ship Finance International Limited 14.38 0.25 1.77 309,985
SIG Signet Jewelers Limited 74.32 -0.38 -0.50 616,545
SKUL Skullcandy Inc. 6.34 0.00 0.00 49,445
SNY Sanofi American Depositary Shares (Each repstg one 38.49 0.34 0.89 3,659,606
SO Southern Company (The) 52.83 -0.01 -0.02 2,431,670
STNG Scorpio Tankers Inc. 4.75 0.05 1.06 969,553
T AT&T Inc. 40.67 -0.79 -1.91 11,624,576
TCB.P.C TCF Financial Corporation Perp Pfd Ser B 25.90 -0.10 -0.38 281
TGB Taseko Mines Ltd. 0.47 -0.00 -0.64 12,137
TIF Tiffany & Co. 70.78 -0.87 -1.21 310,562
TJX TJX Companies Inc. (The) 74.26 -0.98 -1.30 895,787
TNP Tsakos Energy Navigation Ltd 4.80 0.03 0.52 118,617
TROW T. Rowe Price Group Inc. 65.88 0.32 0.49 697,052
TRV The Travelers Companies Inc. 114.51 0.10 0.09 307,889
TYC Tyco International plc (Ireland) n/a n/a n/a 0
UPS United Parcel Service Inc. 108.85 -1.16 -1.05 1,193,915
UTX United Technologies Corporation 101.78 -0.57 -0.56 2,037,966
VZ Verizon Communications Inc. 51.98 -0.51 -0.98 4,165,769
WMT Wal-Mart Stores Inc. 71.64 -0.70 -0.96 2,681,547
WPPGY WPP plc American Depositary Shares each representi 118.29 1.92 1.65 76,950
XOM Exxon Mobil Corporation 84.26 1.02 1.22 5,585,798
ZUMZ Zumiez Inc. 17.35 -0.27 -1.53 84,671

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