Equities Sector Coverage: Optimism for Easing Continues to Push Markets Higher

Sector Recap  |

Optimism for Easing Continues to Push Markets HigherThe US Trade Deficit widened to a less than expected $42.0 billion in July from $41.9 billion in June. The Dow Jones Industrial Average traded up to a day’s high at 13,354.34. The NASDAQ traded up to 3117.86 on Tuesday morning then faded slightly into the red going into the final half hour of trading.

Asian stocks were mixed on Tuesday. The Nikkei 225 ended the day at 8,807 – down 0.70%. The Hang Seng ended the day at 19,858 – up 0.15%. European exchanges opened lower on Tuesday, but rebounded to mixed closes with eyes on the FOMC for additional quantitative easing. The FTSE 100 ended the day at 5,790 – down 0.05%. The DAX ended the day at 7,311 – up 1.35%. The CAC 40 ended the day at 3,537 – up 0.89%. The yield on the 10-Year US Treasury rose from 1.646% to 1.704% staying above its 50-day simple moving average at 1.594% with the 200-day at 1.835%.

Comex gold traded up from $1728.0 the Troy ounce to $1740.5 well above the 50-day and 200-day simple moving averages at $1626.4 and $1646.4. Nymex crude oil rebounded from $96.08 per barrel to $97.31 versus the 200-day simple moving average at $96.61. The euro versus the dollar traded down to 1.2758 then up to 1.2869 above the 200-day simple moving average at 1.2833.

Energy

Spectra Energy (SE) is teaming up with BG Group (BRGXF) to build a new 525-mile natural gas pipeline in British Columbia to take as much as 4.2B cubic feet a day of gas from the province's shale fields to a proposed LNG-export facility. Clean Energy Fuels (CLNE) is a Hold at Jefferies.

Dow components – Chevron (CVX) up 0.35%, Exxon Mobil (XOM) up 0.21%.

Energy Select Sector SPDR (XLE) was trading at $73.92 at 3:30 PM on Tuesday, up 1.08% on the day – up 6.93% year-to-date.

Materials

Ball Corp. (BLL) is begun with a Buy at Citigroup. Crown Holdings (CCK) is assumed with a Buy at Citigroup. Eastman Chemical (EMN) is a Hold at Jefferies. AngloGold (AU) is initiated with an Outperform at Credit Suisse, which has a new Neutral on Gold Fields (GFI) and an Underperform on Harmony Gold (HMY). Intrepid Potash (IPI) is initiated with a Buy at Wunderlich. Sealed Air (SEE) is a new Neutral at Citigroup. Louisiana-Pacific (LPX) is lowered to Underperform from Outperform at Crédit Agricole. Owens-Illinois (OI) is slashed to Neutral from Buy at Citigroup. Quaker Chemical (KWR) is moved to Neutral from Buy at Janney Montgomery Scott.

Dow Components – Alcoa (AA) up 2.87%, DuPont (DD) up 0.89%.

The Materials Select Sector SPDR (XLB) was trading at $37.00 at 3:30 PM on Tuesday, up 0.30% on the day – up 10.45% year-to-date.

Industrials

Philips Electronics (PHG) has increased its cost-savings goal to €1.1B from €800M as it looks to address inefficiency at its healthcare and lighting divisions. The Pentagon has refrained from authorizing a plan for operational testing of Lockheed Martin's (LMT) F-35 Joint Strike Fighter program, with officials expressing frustration at the pace of development in a "very painful" review on Friday.

Big Movers – A123 Systems (AONE) up 21.67%.
Dow components – Boeing Co (BA) up 0.35%, Caterpillar (CAT) up 1.63%, General Electric (GE) up 0.65%, 3M Company (MMM) up 0.74%, United Technologies (UTX) up 0.11%.

The Industrial Select Sector SPDR (XLI) was trading at $36.96 at 3:30 PM on Tuesday, up 0.54% on the day – up 9.51% year-to-date.

Consumer Discretionary

Digital Domain (DDMG) has filed for bankruptcy protection after last week defaulting on debt repayments of $35M in senior notes, and the resignation of Chairman and CEO John Textor. R.G. Barry (DFZ) beat estimates by 5 cents and revenue by $3M. Five Below (FIVE) beat estimates by 2 cents and revenue by $4M. Shuffle Master (SHFL) missed estimates by 2 cents and revenue by $4.6M. Comcast (CMCSA) is initiated with a Buy at Janney Capital. Burberry (BURBY) is lowered to Neutral from Buy at Nomura. Coach (COH) is downgraded to Hold from Buy at Brean Murray.

Big Movers – K12 Inc. (LRN) down 13.90%.
Dow Components – Disney (DIS) up 0.17%, Home Depot (HD) down 1.02%, McDonalds (MCD) up 0.10%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.67 at 3:30 PM on Tuesday, down 0.09% on the day – up 19.61% year-to-date.

Consumer Staples

United Natural Foods (UNFI) reported FQ4 EPS of $0.51 (in-line) on revenue of $1.34B (in-line). Casey's General Stores (CASY) beat estimates by 6 cents, while missing revenue by $60M. Dow components – Kraft (KFT) down 1.23%, Coca Cola (KO) up 0.32%, Procter & Gamble (PG) down 0.17%, Wal-Mart (WMT) up 0.85%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $35.63 at 3:30 PM on Tuesday, down 0.25% on the day – up 9.66% year-to-date.

Health Care

Walgreens (WAG), Merck (MRK) and Oneok (OKE) led 14 companies in selling nearly $19B worth of debt yesterday, making it the biggest day for investment-grade bond issuance since September 8, 2010, and the third busiest on record. Bristol-Myers Squibb (BMY) and Johnson & Johnson are both a new Neutrals at Credit Suisse. IntelliPharmaCeutics (IPCI) is begun with a Buy at Brean Murray. Life Technologies (LIFE) is launched with a Buy at WallachBeth. Bristol-Myers Squibb (BMY) is boosted to Conviction Buy from Buy at Goldman Sachs. Catamaran Corp (CTRX) is upgraded to Conviction Buy from Buy at Goldman Sachs. AmerisourceBergen (ABC) is now Neutral from Conviction Buy at Goldman Sachs. Navidea Biopharmaceuticals (NAVB) is now Hold from Buy at ThinkEquity. Watson Pharmaceuticals (WPI) is downgraded to Buy from Conviction Buy at Goldman Sachs.

Big Movers – Sunesis Pharmaceuticals (SNSS) up 32.20%, Complete Genomics (GNOM) down 10.86%.
Dow Components – Johnson & Johnson (JNJ) up 0.23%, Merck (MRK) up 0.34%, Pfizer (PFE) up 0.25%.

The Health Care Select Sector SPDR (XLV) was trading at $39.40 at 3:30 PM on Tuesday, up 0.03% on the day – up 13.58% year-to-date.

Financial

The government and the Fed have made a minimum profit of $12.4B on the $182.3B bailout of AIG (AIG) after the Treasury raised $18B by selling 554M shares at $32.50 each, with the insurer purchasing about $5B. Deutsche Bank's (DB) co-CEOs have unveiled their plans to deliver return to shareholders in a lousy macro environment for investment banking, promising €4.5B in annual savings by 2015 - greater than the €3B floated two months ago. Morgan Stanley (MS) has scored a victory after consultant Perella Weinberg valued Morgan Stanley Smith Barney at below $15B. Barclays (BCS) could significantly shrink its controversial tax structuring unit, which at its peak earned up to 75% of the profits at the company's investment banking operations, as the firm looks to restore its reputation. Moody's has kept its negative outlook on U.K. banks, due to the travails of the British and eurozone economies. The agency said the likes of RBS (RBS), Lloyds (LYG) and Barclays (BCS) could also be hit by high regulatory costs following various scandals and write-downs on their exposure to foreign real estate. Investors Real Estate Trust (IRET) missed estimates by 6 cents. iStar Financial (SFI) is initiated with a Buy at BTIG Research. Corporate Office Properties (OFC) is now Neutral from Underweight at JPMorgan. Equity Residential (EQR) is raised to Buy from Hold at ISI Group. PacWest Bancorp (PACW) is upgraded to Outperform from Neutral at Macquarie. ING Groep (ING) gets downgraded to Neutral from Outperform at Macquarie. Unicredit (UNCFY) gets reduced to Hold from Buy at Société Générale.

Dow Components – American Express (AXP) down 0.30%, Bank of America (BAC) up 4.31%, JP Morgan Chase (JPM) up 1.96%, Travelers (TRV) up 2.27%.

The Financial Select Sector SPDR (XLF) was trading at $15.655 at 3:30 PM on Tuesday, up 0.68% on the day – up 20.42% year-to-date.

Information Technology

Less than 24 hours after news broke that its infrastructure CTO had left, Zynga (ZNGA) yesterday announced that chief marketing and revenue officer Jeff Karp has become the latest in a long line of executives to leave. Mark Zuckerberg is due to speak at a TechCrunch conference in San Francisco today in a rare public appearance since Facebook's (FB) bungled IPO in May, following which shares have plummeted and communication has been scarce. Ancestry.com (ACOM) is still talking with three P-E firms about a buyout, but bidders continue to balk at the company's demand for an acquisition price above $35 a share ($1.5B). Hanwha SolarOne (HSOL) missed estimates by 19 cents and revenue by $5M. Palo Alto Networks (PANW) beat estimates by 3 cents and revenue by $10M. The company guides on its FQ4 call for FQ1 revenue of $80M-$84M and EPS of $0.03; the former is mostly above an $80.1M consensus, but the latter is only in-line. Majesco Entertainment (COOL) missed estimates by 5 cents and revenue by $4M. The company now expects FQ4 results to be "in the lower end" of a revenue guidance range of $130M-$140M and EPS range of $0.20-$0.30. Street estimates stand at $139M and $0.27. Intuit (INTU) is begun with an Equal Weight at Evercore. Yelp Inc. (YELP) is picked up with a Neutral at Piper Jaffray. Synacor (SYNC) is now Neutral from Sell at Citigroup. Majesco Entertainment (COOL) is cut to Hold from Buy at Needham. TIBCO Software (TIBX) is taken to Hold from Buy at ThinkEquity.

Dow Components – Cisco Systems (CSCO) down 0.16%, Hewlett-Packard (HPQ) up 2.67%, IBM (IBM) up 0.98%, Intel Corp (INTC) up 0.82%, Microsoft (MSFT) up 0.42%.

The Technology Select Sector SPDR (XLK) was trading at $30.81 at 3:30 PM on Tuesday, up 0.16% on the day – up 21.06% year-to-date.

Telecommunication Services

Dow Components – AT&T (T) up 0.75%, Verizon (VZ) up 0.49%. The NASDAQ Telecommunications Index (IXTC) was trading at $197.16 at 3:30 PM on Tuesday, up 0.11% on the day – up 0.12% year-to-date.

Utilities

The Big Names – Dominion Resources (D) down 0.54%, Edison International (EIX) up 0.14%, First Energy (FE) down 0.29%, PG&E Corp (PCG) down 0.08%, Southern Company (SO) down 0.38%. The Utilities Select Sector SPDR (XLU) was trading at $36.50 at 3:30 PM on Tuesday, down 0.22% on the day – up 1.45% 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, BP, PXP, RIG, EOG, NBL, DK, VQ, REPYY, SDRL, PXP, MT, BMS, PDH, HCLP, SEE, CRS, MUSA, MLM, CLF, IP, PKG, RKT, JAG, TTN, DOV, GOL, CFX, GOL, HUB-B, PHG, TYC, AONE, JW.A, AEO, KFT, GMCR, SSH, AMGN, ARIA, SNY, SNTS, SNN, AZN, BIIB, CELG, GERN, ZLCS, AIG, RBS, TWO, FULT, MCO, RF, AINV, WFC, FITB, BK, STT, APKT, FNSR, AAPL, DELL, AMD, DOX, ERIC, IFNNY, STX, GTAT, S, NEE, NRG, EXC

 

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Companies

Symbol Name Price Change % Volume
MMM 3M Company 216.33 1.06 0.49 5,563,733 Trade
PG Procter & Gamble Company (The) 85.82 0.46 0.54 17,402,589 Trade
GE General Electric Company 12.17 -0.29 -2.33 95,419,064 Trade
CVX Chevron Corporation 121.13 1.71 1.43 13,703,596 Trade
SO Southern Company (The) 44.01 0.72 1.66 13,119,077 Trade
PCG Pacific Gas & Electric Co. 46.79 -0.13 -0.28 8,661,732 Trade
RIG Transocean Ltd (Switzerland) 13.54 0.91 7.21 35,510,161 Trade
DOX Amdocs Limited 66.31 0.16 0.24 550,623 Trade
PKG Packaging Corporation of America 116.69 -1.47 -1.24 1,072,282 Trade
IP International Paper Company 54.12 -0.46 -0.84 4,923,476 Trade
JNJ Johnson & Johnson 142.88 0.90 0.63 13,283,427 Trade
WMT Walmart Inc. 95.90 0.15 0.16 9,530,133 Trade
AA Alcoa Corporation 43.79 0.86 2.00 4,939,859 Trade
INTC Intel Corporation 46.66 -0.54 -1.14 52,650,601 Trade
IBM International Business Machines Corporation 151.35 0.20 0.13 19,947,878 Trade
D Dominion Energy Inc. 70.85 0.53 0.75 5,587,162 Trade
TRV The Travelers Companies Inc. 134.44 0.29 0.22 2,738,460 Trade
ARIA ARIAD Pharmaceuticals Inc. n/a n/a n/a 0 Trade
AAPL Apple Inc. 217.66 -2.37 -1.08 96,246,748 Trade
SNRW Home Capital Group Inc. n/a n/a n/a 0 Trade
S Sprint Corporation 6.39 -0.05 -0.78 12,029,077 Trade
FITB Fifth Third Bancorp 29.50 -0.29 -0.97 9,683,402 Trade
CRS Carpenter Technology Corporation 59.18 -0.29 -0.49 683,625 Trade
EIX Edison International 68.36 0.54 0.80 4,222,840 Trade
NRG NRG Energy Inc. 36.16 0.33 0.92 5,110,298 Trade
JPM JP Morgan Chase & Co. 117.85 -0.78 -0.66 24,788,247 Trade
STX Seagate Technology PLC 49.28 0.26 0.53 8,344,370 Trade
AXP American Express Company 110.90 -0.21 -0.19 5,662,932 Trade
FNSR Finisar Corporation 18.47 -0.69 -3.60 2,766,592 Trade
UTX United Technologies Corporation 142.08 0.23 0.16 7,330,895 Trade
AMD Advanced Micro Devices Inc. 31.02 -0.16 -0.51 129,792,949 Trade
MLM Martin Marietta Materials Inc. 192.18 -3.31 -1.69 1,046,601 Trade
CSCO Cisco Systems Inc. 48.56 0.83 1.74 59,664,599 Trade
ERIC Ericsson 8.80 0.06 0.69 2,498,251 Trade
DIS The Walt Disney Company 110.40 -1.22 -1.09 25,753,718 Trade
VZ Verizon Communications Inc. 54.42 0.47 0.87 48,954,080 Trade
PHG Koninklijke Philips N.V. NY Registry Shares 45.85 -0.39 -0.84 452,739 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
HCLP Hi-Crush Partners LP representing limited partner interests 12.55 0.40 3.29 2,426,807 Trade
GERN Geron Corporation 5.46 -0.04 -0.73 13,469,992 Trade
BAC Bank of America Corporation 31.03 -0.16 -0.51 85,992,133 Trade
DK Delek US Holdings Inc. 43.94 -0.27 -0.61 2,094,132 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 6.97 -0.15 -2.11 2,559,201 Trade
MCD McDonald's Corporation 165.30 4.51 2.80 8,805,474 Trade
BMS Bemis Company Inc. 48.38 0.08 0.17 1,688,246 Trade
BK Bank of New York Mellon Corporation (The) 53.39 0.06 0.11 21,768,659 Trade
SNN Smith & Nephew SNATS Inc. 36.88 -0.20 -0.54 494,984 Trade
RF Regions Financial Corporation 19.44 -0.05 -0.26 14,424,443 Trade
EOG EOG Resources Inc. 119.46 0.25 0.21 4,784,611 Trade
AMGN Amgen Inc. 205.10 0.00 0.00 7,313,970 Trade
NEE NextEra Energy Inc. 170.76 1.49 0.88 4,230,832 Trade
AINV Apollo Investment Corporation 5.50 -0.11 -1.96 889,019 Trade
GOL Gol Linhas Aereas Inteligentes S.A. Sponsored ADR representing 2 Pfd Shares 5.66 0.22 4.04 1,209,250 Trade
TYC Tyco International plc (Ireland) n/a n/a n/a 0
HD Home Depot Inc. (The) 212.39 1.33 0.63 9,749,205 Trade
XOM Exxon Mobil Corporation 85.17 0.35 0.41 26,639,437 Trade
TWO Two Harbors Investment Corp 15.24 0.07 0.46 8,979,292 Trade
PFE Pfizer Inc. 44.06 0.31 0.71 35,192,233 Trade
BIIB Biogen Inc. 345.41 4.17 1.22 3,874,482 Trade
WFC Wells Fargo & Company 54.99 -0.56 -1.01 36,158,566 Trade
AIG American International Group Inc. 54.67 0.35 0.64 6,440,426 Trade
MT Arcelor Mittal NY Registry Shares NEW 32.05 -0.33 -1.02 4,005,471 Trade
HPQ HP Inc. 25.83 0.14 0.54 21,915,838 Trade
AZN Astrazeneca PLC 37.68 -0.04 -0.11 1,705,160 Trade
BA The Boeing Company 372.23 4.77 1.30 7,144,087 Trade
CELG Celgene Corporation 87.72 -0.58 -0.66 6,625,151 Trade
MRK Merck & Company Inc. (new) 71.10 0.32 0.45 17,033,118 Trade
NBL Noble Energy Inc. 30.47 0.20 0.66 5,768,810 Trade
MUSA Murphy USA Inc. 85.91 0.03 0.03 732,147 Trade
SEE Sealed Air Corporation 41.74 -0.37 -0.88 1,871,445 Trade
SNY Sanofi American Depositary Shares (Each repstg one-half of one) 43.55 -0.60 -1.36 1,588,447 Trade
CFX Colfax Corporation 36.47 -0.02 -0.05 928,095 Trade
MCO Moody's Corporation 174.59 -4.16 -2.33 2,384,506 Trade
CLF Cleveland-Cliffs Inc. 12.16 -0.06 -0.49 10,598,960 Trade
BP BP p.l.c. 44.67 0.10 0.22 8,699,775 Trade
FE FirstEnergy Corp. 36.90 0.04 0.11 11,661,930 Trade
KO Coca-Cola Company (The) 46.58 -0.06 -0.13 19,240,577 Trade
EXC Exelon Corporation 43.65 0.26 0.60 9,479,805 Trade
T AT&T Inc. 33.78 0.34 1.02 130,157,081 Trade
CAT Caterpillar Inc. 156.38 0.38 0.24 5,932,137 Trade
AEO American Eagle Outfitters Inc. 23.81 0.01 0.04 4,496,474 Trade
DOV Dover Corporation 89.30 -0.06 -0.07 2,867,087 Trade
FULT Fulton Financial Corporation 17.55 -0.15 -0.85 2,718,918 Trade
SSH CHFS Sunshine Heart Inc 390.80 0.00 0.00 0
MSFT Microsoft Corporation 114.26 0.69 0.61 71,229,698 Trade

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