Equities Sector Coverage: Optimists Take Hold of Market

Sector Recap |

NYSE There were no economic data points and the bond markets were closed on Columbus Day. The Dow Jones Industrial Average surged to 11,394.81 on Monday on the European pledge to help banks. The NASDAQ traded climbed from 2519.78 to 2559.02 on Monday. Asian stocks moved higher on Monday with the Nikkei 225 closed at 8,606 and the Hang Seng higher by just 0.02% to 17,711. European stocks traded higher on Monday as Germany and France reach agreement on Europe’s banks. The FTSE 100 gained 1.80% to 5,399 with the DAX up surging 3.02% to 5,847 and the CAC 40 higher by 2.07% to 3,161. The US Treasury market was closed for Columbus Day. The 10-Year US Treasury yield ended last week at 2.076 well above its September 23rd all time low at 1.671 percent. Gold rose from $1639.9 the Troy ounce to $1676.7 on Monday. Crude oil traded up from $82.75 to $86.09 above its 200-week simple moving average at $83.57. The euro versus the dollar rose from 1.3381 to 1.3697 on Monday.

Energy

Oil-field services company Superior Energy (SPN) has agreed to buy Complete Production (CPX) for $2.7B in cash and stock ($32.90 per share – a 61% premium). The transaction will provide stronger competition to the Big Four service companies: Schlumberger (SLB), Halliburton (HAL), Baker Hughes (BHI) and Weatherford (WFT). Stone Energy (SGY) is upgraded to Overweight from Equal Weight at Barclays. Pioneer Natural Resources (PXD) is reduced to Equal Weight from Overweight at Barclays. Talisman Energy (TLM) is taken to Equal Weight from Overweight at Barclays. In afternoon trading: Shares of General Maritime (GMR) are up about 44%. Shares of Complete Production Services are up about 40%, while shares of Superior Energy are down about 13.5%.

Energy Select Sector SPDR (XLE) was trading at $63.65 at 4:00 PM on Monday, up 4.52% on the day – down 6.74% year-to-date.

Materials

Dow Chemical (DOW) and Saudi Aramco signed a deal over the weekend that advances their plans to build one of the world's biggest chemical plants in Saudi Arabia. Potash (POT) is lifted to Buy from Neutral at Ticonderoga with a new price objective of $62. In afternoon trading: Shares of Stillwater Mining (SWC) are up about 11.25%. Shares of Mechel OAO (MTL) are up about 10.25%. Shares of Cliffs Natural Resources (CLF) are up about 7.5%. Shares of ArcelorMittal (MT) are up about 7%. Shares of Harmony Gold (HMY) are up about 6.5%.

The Materials Select Sector SPDR (XLB) was trading at $32.40 at 4:00 PM on Monday, up 4.11% on the day – down 15.65% year-to-date.

Industrials

ABB Ltd (ABB) is upgraded to Buy from Hold at boutique brokerage Berenberg. Southwest Airlines (LUV) gets lowered to Hold from Buy at Deutsche Bank. Emerson (EMR) and MSC Industrial (MSM) are each lowered to Neutral from Buy by Bank of America-Merrill Lynch. In afternoon trading: Shares of SmartHeat (HEAT) are down about 12.25%. Shares of A-Power Energy (APWR) are down about 11.5%. Shares of Excel Maritime Carriers (EXM) are up about 10.5%. Shares of Manitowoc (MTW) are up about 9.75%. Shares of Tata Motors (TTM) are up about 9.5%.

The Industrial Select Sector SPDR (XLI) was trading at $31.37 at 4:00 PM on Monday, up 3.39% on the day – down 10.04% year-to-date.

Consumer Discretionary

Sidetracked by its own potential sale, Yahoo has withdrawn from the auction to buy online video Web site Hulu. The list of those still in the running following the latest bidding deadline last week comprises Dish (DISH), Amazon (AMZN) and Google (GOOG), with the latter prepared to offer over $2B. Chrysler (FIATY) and the UAW are due to discuss the final details of a new labor contract today, with a vote of union members possibly occuring by the end of the week. Meanwhile, Ford (F) workers started voting on their tentative agreement at the weekend. Dangdang (DANG) is begun with an Underweight by Barclays. Netflix (NFLX) is now Neutral from Sell at Janney Scott. CTC Media (CTCM) is lifted to Buy from Hold at Deutsche Bank. Bally Technologies (BYI) is now Buy from Neutral at Janney Scott. In afternoon trading: Shares of Central European Media Enterprises (CETV) are up about 16%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.59 at 4:00 PM on Monday, up 3.41% on the day – up 0.48% year-to-date.

Consumer Staples

Diamond Foods (DMND) is upgraded to Buy from Hold at Jefferies. TreeHouse Foods (THS) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. In afternoon trading: Shares of Coffee Holding (JVA) are up about 13.5%. Shares of Medifast (MED) are up about 5.3%. Shares of Extra Space Storage (EXR) are up about 5%. Shares of AgFeed (FEED) are down about 5.3%. Actives: Shares of Wal-Mart (WMT) are up about 1.7%. Shares of Altria Group (MO) are up about 0.3%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.51 at 4:00 PM on Monday, up 1.46% on the day – up 4.09% year-to-date.

Healthcare

Aegerion Pharmaceuticals (AEGR) is initiated with Buy at Jefferies. St. Jude Medical (STJ) is lifted to Equal Weight from Underweight at Morgan Stanley. Illumina (ILMN) is downgraded to Hold from Buy at Deutsche Bank. ICON plc (ICLR) is downgraded to Neutral at JP Morgan. In afternoon trading: Shares of eResearch Technology (ERT) are up about 10.25%. Shares of Complete Genetics (GNOM) are up about 10%. Shares of Merge Healthcare (MRGE) are up about 9.5%. Shares of Anadys Pharmaceuticals (ANDS) are up about 9.4%. Shares of Achillion Pharmaceuticals (ACHN) are up about 9.1%. Shares of Vertex Pharmaceuticals (VRTX) are down about 9.2%.

The Health Care Select Sector SPDR (XLV) was trading at $32.64 at 4:00 PM on Monday, up 2.32% on the day – up 3.62% year-to-date.

Financials

The Merkel-Sarkozy talks were given extra urgency by the woes of Dexia (DXBGF), whose rescue was agreed to by France, Luxembourg and Belgium last night. Sabra Healthcare REIT (SBRA) is resumed as a Buy at Citigroup. Robert Baird reduces ratings to Neutral from Outperform on Bank of Kentucky Financial (BKYF), Cardinal Financial (CFNL), First Financial Bancorp (FFBC), First Midwest Bancorp (FMBI), IberiaBank (IBKC), MB Financial (MBFI), Wintrust Financial (WTFC), and Bank of Hawaii (BOH). In afternoon trading: Shares of MGIC Investment (MTG) are up about 13.25%. Shares of Radian Group (RDN) are up about 10.5%.

The Financial Select Sector SPDR (XLF) was trading at $12.44 at 4:00 PM on Monday, up 5.16% on the day – down 22.01% year-to-date.

Information Technology

Alibaba is interested in buying Yahoo's (YHOO) 40% stake in the Chinese company, and has held talks with Singaporean investment company Temasek about providing the financing. Sidetracked by its own potential sale, Yahoo has withdrawn from the auction to buy online video Web site Hulu. The list of those still in the running following the latest bidding deadline last week comprises Dish (DISH), Amazon (AMZN) and Google (GOOG), with the latter prepared to offer over $2B. Initial sales of Apple's (AAPL) iPhone 4S are likely to beat those for the previous version of the device, with AT&T (T) and Sprint (S) reporting strong preorders after the product became available on Friday. Barclays has Overweights on Baidu (BIDU), Sohu.com (SOHU), and Sina Corp (SINA). Micron (MU) gets increased to Buy from Hold at Citigroup. Accenture (ACN) gets downgraded to Neutral from Outperform at Robert W. Baird with a new lower target price of $62. Logitech Intl SA (LOGI) is moved to Underperform from Neutral at Bank of America-Merrill Lynch. In afternoon trading: Shares of Youku.com (YOKU) are up about 13.5%. Shares of Intralinks Holdings (IL) are up about 11.25%.

The Technology Select Sector SPDR (XLK) was trading at $25.05 at 4:00 PM on Monday, up 3.09% on the day – down 0.56% year-to-date.

Telecommunications Services

Initial sales of Apple's (AAPL) iPhone 4S are likely to beat those for the previous version of the device, with AT&T (T) and Sprint (S) reporting strong preorders after the product became available on Friday. Sprint Nextel (S) is downgraded by Deutsche Bank to Hold from Buy, Kaufman Brothers to Hold from Buy, and brokers Collins Stewart to Neutral from Buy, with a new lower target price of $3. In afternoon trading: Shares of Sprint Nextel are down about 10.5%. Shares of Clearwire (CLWR) are down about 10%. Shares of Radcom (RDCM) are up about 15%. Shares of Iridium Communications (IRDM) are up about 8.9%. Shares of MetroPCS (PCS) are up about 8%.

The NASDAQ Telecommunications Index (IXTC) was trading at $192.19 at 4:00 PM on Monday, up 3.05% on the day – down 14.72% year-to-date.

Utilities

In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about 2%. Shares of AES Corp (AES) are up about 3.2%. Shares of Exelon (EXC) are up about 1.4%. Shares of TECO Energy (TE) are up about 2.2%. Shares of Genon Energy (GEN) are up about 2%. Shares of Southern (SO) are up about 1.1%. Shares of Constellation Energy Group (CEG) are up about 1%. Shares of PG&E (PCG) are up about 0.3%.

The Utilities Select Sector SPDR (XLU) was trading at $34.05 at 4:00 PM on Monday, up 1.95% on the day – up 8.65% year-to-date.

STOCKS: SPN, CPX, SLB, HAL, BHI, WFT, SGY, PXD, TLM, GMR, DOW, POT, SWC, MTL, CLF, MT, HMY, ABB, LUV, EMR, MSM, HEAT, APWR, EXM, MTW, TTM, DISH, AMZN, GOOG, FIATY, F, DANG, NFLX, CTCM, BYI, CETV, DMDN, THS, JVA, MED, EXR, FEED, WMT, MO, AEGR, STJ, ILMN, ICLR, ERT, GNOM, MRGE, ANDS, ACHN, VRTX, DXBGF, SBRA, BKYF, CFNL, FFBC, FMBI, IBKC, MBFI, WTFC, BOH, MTG, RDN, YHOO, AAPL, T, S, BIDU, SOHU, SINA, MU, ACN, LOGI, YOKU, IL, CLWR, RDCM, IRDM, PCS, DUK, AES, EXC, TE, GEN, SO, CEG, PCG

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
AAPL Apple Inc. 113.05 0.87 0.78 36,379,106
ABB ABB Ltd 22.51 0.13 0.58 2,473,389
ACHN Achillion Pharmaceuticals Inc. 8.10 0.17 2.14 1,095,631
ACN Accenture plc Class A (Ireland) 122.17 0.53 0.44 4,815,794
AEGR Aegerion Pharmaceuticals Inc. 2.97 -0.09 -2.94 994,318
AES The AES Corporation 12.85 -0.05 -0.39 5,867,949
AMZN Amazon.com Inc. 837.31 8.26 1.00 4,430,566
BHI Baker Hughes Incorporated 50.47 0.26 0.52 4,441,008
BIDU Baidu Inc. 182.07 -0.16 -0.09 2,183,724
BOH Bank of Hawaii Corporation 72.62 1.24 1.74 260,552
CETV Central European Media Enterprises Ltd. 2.31 0.01 0.43 104,773
CFNL Cardinal Financial Corporation 26.09 0.43 1.68 199,344
CLF Cliffs Natural Resources Inc 5.85 -0.01 -0.17 10,544,894
CTCM CTC Media Inc n/a n/a n/a 0
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0
DISH DISH Network Corporation 54.78 -0.26 -0.47 2,249,484
DUK Duke Energy Corporation (Holding Company) 80.04 -0.27 -0.34 3,883,040
EMR Emerson Electric Company 54.51 1.49 2.81 7,460,094
EXC Exelon Corporation 33.29 0.00 0.00 5,529,887
EXR Extra Space Storage Inc 79.41 -1.51 -1.87 1,629,139
F Ford Motor Company 12.07 0.10 0.84 34,903,811
FFBC First Financial Bancorp. 21.84 0.33 1.53 220,584
FMBI First Midwest Bancorp Inc. 19.36 0.35 1.84 429,463
GEN Genesis Healthcare Inc. 2.67 0.05 1.91 172,362
GOOG Alphabet Inc. 777.29 2.28 0.29 1,585,333
HAL Halliburton Company 44.88 0.70 1.58 9,195,272
HMY Harmony Gold Mining Company Limited 3.49 -0.07 -1.97 2,575,941
IBKC IBERIABANK Corporation 67.12 1.33 2.02 340,027
ICLR ICON plc 77.37 1.25 1.64 402,480
IL IntraLinks Holdings Inc. $0.001 par value 10.06 0.33 3.39 326,757
ILMN Illumina Inc. 181.66 5.10 2.89 1,283,304
IRDM Iridium Communications Inc 8.11 0.15 1.88 1,154,304
JVA Coffee Holding Co. Inc. 5.56 0.13 2.39 31,438
LOGI Logitech International S.A. 22.46 0.11 0.49 271,781
LUV Southwest Airlines Company 38.89 0.74 1.94 9,364,392
MBFI MB Financial Inc. 38.04 0.59 1.58 991,581
MED MEDIFAST INC 37.79 0.70 1.89 118,018
MO Altria Group Inc. 63.23 0.41 0.65 6,599,878
MSM MSC Industrial Direct Company Inc. 73.41 1.05 1.45 367,566
MT ArcelorMittal 6.04 0.00 0.00 13,829,653
MTG MGIC Investment Corporation 8.00 0.08 1.01 2,783,969
MTL Mechel PAO American Depositary Shares (Each rep. 1 2.86 -0.01 -0.35 207,006
MTW Manitowoc Company Inc. (The) 4.79 0.19 4.13 1,491,646
MU Micron Technology Inc. 17.78 0.24 1.37 21,363,073
NFLX Netflix Inc. 98.55 1.88 1.94 9,807,925
PCG Pacific Gas & Electric Co. 61.17 -0.59 -0.96 3,494,971
POT Potash Corporation of Saskatchewan Inc. 16.32 0.10 0.62 5,602,974
PXD Pioneer Natural Resources Company 185.65 0.29 0.16 1,896,157
RDCM Radcom Ltd. 20.42 0.88 4.50 241,440
RDN Radian Group Inc. 13.55 0.02 0.15 1,612,654
S Sprint Corporation 6.63 -0.03 -0.45 14,655,332
SBRA Sabra Healthcare REIT Inc. 25.18 -0.05 -0.20 889,659
SGY Stone Energy Corporation 11.88 0.14 1.19 843,820
SINA Sina Corporation 73.83 -2.15 -2.83 1,904,994
SLB Schlumberger N.V. 78.64 1.27 1.64 6,485,671
SO Southern Company (The) 51.30 -0.75 -1.44 7,048,679
SOHU Sohu.com Inc. 44.25 -0.96 -2.12 155,971
SPN Superior Energy Services Inc. 17.90 0.91 5.36 6,344,282
STJ St. Jude Medical Inc. 79.76 0.80 1.01 2,650,776
SWC Stillwater Mining Company ($0.01 Par Value) 13.36 0.46 3.57 2,040,537
T AT&T Inc. 40.61 -0.12 -0.29 19,381,624
TE TECO Energy Inc. n/a n/a n/a 0
THS Treehouse Foods Inc. 87.19 0.69 0.80 758,137
TTM Tata Motors Ltd Limited 39.98 0.66 1.68 1,196,741
VRTX Vertex Pharmaceuticals Incorporated 87.21 2.21 2.60 2,545,736
WFT Weatherford International plc (Ireland) 5.62 -0.06 -1.06 23,253,286
WMT Wal-Mart Stores Inc. 72.12 1.39 1.97 9,982,598
WTFC Wintrust Financial Corporation 55.57 1.18 2.17 194,260
YHOO Yahoo! Inc. 43.10 0.53 1.25 10,374,757
YOKU Youku Tudou Inc ADR (Sponsored) n/a n/a n/a 0

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