Equities Sector Coverage: Positive Earnings from Early Reporters Awake Bulls

Sector Recap |

will markets keep rising, is economy recovering, will dow keep risingImport prices rose 1.3% in March, topping estimates for a 0.8% increase, while export prices rose 0.8%, coming in higher than the 0.4% increase expected. Both gains were the largest month-to-month increases since April 2011. The Dow Jones Industrial Average rebounded to 12,844.82 staying below its 50-day simple moving average at 12,985. The NASDAQ’s rebounded to 3030.51 after holding its 50-day simple moving average at 2993 on Tuesday.

Asian stocks were lower again on Wednesday. The Nikkei 225 ended their session at 9,459 – down 0.83% on the day. The Hang Seng ended their session at 20,141 – down 1.06% on the day. European stocks rebounded on Wednesday. The FTSE 100 ended their session at 5,625 – up 0.53% on the day. The DAX ended their session at 6,675 – up 1.03% on the day. The CAC 40 ended their session at 3,238 – up 0.62% on the day. The yield on the 10-Year US Treasury rose from 1.989 percent to 2.047 below its 50-day simple moving average at 2.069.

Gold traded between $1653.5 the Troy ounce and $1663.9 staying below its 50-day and 200-day simple moving averages at $1699.5 and $1690.3, which are converging towards a “death cross”. Crude oil traded between $100.84 per barrel and $103.13 staying below its 50-day simple moving average at $104.08. The euro versus the dollar traded between 1.3069 and 1.3155 staying below its 50-day simple moving average at 1.3212.

Energy

The energy sector dipped into the red (XLE) at Tuesday’s close and today’s rebound is being led by Baker Hughes (BHI) up 1.8%, Peabody Energy (BTU up 3.1%, Diamond Offshore (DO) up 2.3%, First Solar (FSLR) up 8.3% and Patriot Coal (PCX) up 7.5%. Dow components were mixed with Chevron (CVX) down 0.3% and Exxon Mobil (XOM) up 0.3%.

Energy Select Sector SPDR (XLE) was trading at $68.28 at 3:30 PM on Wednesday, up 0.06% on the day – down 1.23% year-to-date.

Materials

Alcoa (AA) surprised Wall Street with an EPS profit of 10 cents per share when a loss of 4 cents was expected. Shares were 6.5% higher pre-market even though new income was sharply lower than a year earlier quarter. Eldorado Gold (EGO) is upgraded to Buy from Hold at Canaccord Genuity. Dow components - Alcoa (AA) gained 8.0% in morning trading following their better than expected results. DuPont (DD) tacked on 0.9%.

The Materials Select Sector SPDR (XLB) was trading at $35.59 at 3:30 PM on Wednesday, up 1.08% on the day – up 6.24% year-to-date.

Industrials

Owens-Illinois (OI) shares were 7.8% higher pre-market following upward guidance to their first quarter EPS, caused by greater than planned production rates. OI gained 8.8% in morning trading. Sealed Air (SEE), the maker of bubble wrap is a new Hold at Keybanc Capital. Bemis (BMS) has been removed from Citigroup’s list of Top Picks Live. General Dynamics (GD) has been downgraded to Neutral from Buy at Lazard. Dow components - Boeing Co (BA) gained 2.3%, Caterpillar (CAT) rebounded 1.4%, General Electric (GE) tacked on 1.9%, 3M Company (MMM) was higher by 1.0%, and United Technologies (UTX) regained 1.3%.

The Industrial Select Sector SPDR (XLI) was trading at $36.03 at 3:30 PM on Wednesday, up 1.12% on the day – up 6.76% year-to-date.

Consumer Discretionary

An investigation into the personal misconduct of CEO Brian Dunn led his sudden departure from Best Buy (BBY) on Tuesday. Las Vegas Sands (LVS) CEO Sheldon Adelson plans to invest $35 billion to build a 12-resort casino complex in Spain. UBS begins Nordstrom (JWN) with a Buy and initiates new Neutrals on Macy’s (M), Kohl’s (KSS), JC Penney (JCP), and Saks (SKS). GameStop (GME) has been downgraded to Hold from Buy at Needham on expectations of slowing retail sales. Dow Components - Disney (DIS) was higher by 1.3%, and McDonalds (MCD) gained 0.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.06 at 3:30 PM on Wednesday, up 1.26% on the day – up 12.92% year-to-date.

Consumer Staples

Coty may resurrect a plan to issue an IPO as an alternative to its $10 billion bid to buy Avon (AVP). Calavo Growers (CVGW) the avocado grower is initiated with an Outperform at Wedbush. Dow components - Home Depot (HD) rebounded by 0.8%, Kraft (KFT) slipped by 0.25, Coca Cola (KO) was flat, Procter & Gamble (PG) gained 0.5% and Wal-Mart (WMT) was lower by 0.35% in morning trading.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.59 at 3:30 PM on Tuesday, up 0.45% on the day – up 3.39% year-to-date.

Health Care

AVI BioPharma (AVII) is initiated with an Outperform at JMP Securities. eResearchTechnology (ERT) has been cut to Hold from Buy with an $8 price target at The Benchmark Company after the company announced plans to be taken private. Dow Components - Johnson & Johnson (JNJ) lost 0.2%, Merck (MRK) was flat and Pfizer (PFE) was also flat.

The Health Care Select Sector SPDR (XLV) was trading at $36.76 at 3:30 PM on Wednesday, up 0.38% on the day – up 5.97% year-to-date.

Financials

According to the Federal Housing Financing Agency Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) could save $1.7 billion by forgiving principal on some underwater mortgage loans. This plan could cost taxpayers $2.1 billion by taping unused TARP funds. Old Line Bancshares (OLBK) is resumed by Robert W. Baird with an Outperform rating and a $13 price target. Goldman initiates coverage with Buy ratings on both BB&T Capital (BBT) and Fifth Third Bancorp (FITB). Goldman starts Comerica (CMA) and Zions Bancorporation (ZION) with Sell ratings. Sterling Financial (STSA) is initiated with a Market Perform at Keefe Bruyette. Bank of America (BAC) has been upgraded to Buy from Neutral at Guggenheim. Banco Bilbao Vizcaya Argentaria (BBVA) has been upgraded to Buy from Hold at Deutsche Bank. Barclays (BCS) has been upgraded to Buy from Hold at Investec Securities. MetLife (MET) has been upgraded to Outperform from Market Perform at Raymond James. Dow Components - American Express (AXP) was up 1.2%, Bank of America (BAC) rallied by 3.6%, JP Morgan (JPM) gained 1.9%, and Travelers (TRV) gained o.6%.

The Financial Select Sector SPDR (XLF) was trading at $15.19 at 3:30 PM on Wednesday, up 1.47% on the day – up 16.85% year-to-date.

Information Technology

NVIDIA (NVDA) has been initiated with an Outperform at RBC Capital. American Superconductor (AMSC), a small cap tech stock is initiated with a Buy rating and a $7 price target at Maxim Group. SAP AG (SAP) has been downgraded to Hold from Buy at ThinkEquity. NetApp (NTAP) has been downgraded to Sector Perform from Outperform at FBN Securities. Dow Components - Cisco Systems (CSCO) gained 2.1%, Hewlett-Packard (HPQ) was up 1.0%, IBM (IBM) gained 0.6%, Intel Corp (INTC) gained 1.9%, and Microsoft (MSFT) slumped 0.3%.

The Technology Select Sector SPDR (XLK) was trading at $29.66 at 3:30 PM on Wednesday, up 0.41% on the day – up 16.54% year-to-date.

Telecommunication Services

Nokia (NOK) found a software bug in the Lumia 900 from Microsoft (MSFT) that can cause the service to lose its data connection. Nokia expects to fix the glitch by next week, and will offer a $100 credit to the AT&T (T) bills of affected users. NOK shares were down 13.7%. Silicon Labs (SLAB) has been upgraded to Buy from Hold at Wunderlich, which takes its price target up to $50 from $44. Telefónica (TEF) has been upgraded to Neutral from Sell. Dow components - AT&T (T) picked up 0.5% while Verizon (VZ) gained 1.6%.

The NASDAQ Telecommunications Index (IXTC) was trading at $209.91 at 3:30 PM on Wednesday, up 1.40% on the day – up 6.59% year-to-date.

Utilities

Telefónica (TEF) has been upgraded to Neutral from Sell. BT Group (BT) has been downgraded to Neutral from Overweight at J.P. Morgan. Dominion Resources (D) was up 0.2%, Edison International (EIX) was down 0.3%, First Energy (FE) was up 0.3%, and PG&E Corp (PCG) was up 0.5%.

The Utilities Select Sector SPDR (XLU) was trading at $34.33 at 3:30 PM on Wednesday, up 0.20% on the day – down 4.59% year-to-date.

STOCKS: CVX, XOM, BHI, BTU, DO, FSLR, AA, DD, EGO, BA, CAT, GE, MMM, UTX, OI, SEE, BMS, GD, DIS, MCD, BBY, LVS, JWN, M, KSS, JCP, SKS, GME, HD, KFT, KO, PG, WMT, CVGW, AVP, JNJ, MRK, PFE, AVII, ERT, AXP, BAC, JPM, FNMA.OB, FMCC.OB, OLBK, BBT, FITB, CMA, ZION, STSA, CSCO, HPQ, IBM, INTC, MSFT, NOK, NVDA, AMSC, SAP, NTAP, T, VZ, TEF, D, EIX, FE, 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
AA Alcoa Inc. 9.84 0.08 0.77 3,241,108
AMSC American Superconductor Corporation 6.86 0.03 0.44 29,872
AVP Avon Products Inc. 5.69 -0.15 -2.57 543,709
AXP American Express Company 63.37 -0.49 -0.76 1,178,514
BA Boeing Company (The) 131.43 -0.35 -0.27 495,664
BAC Bank of America Corporation 15.39 -0.13 -0.84 25,946,516
BBT BB&T Corporation 37.53 -0.34 -0.90 1,541,468
BBY Best Buy Co. Inc. 37.59 -0.40 -1.06 1,414,216
BHI Baker Hughes Incorporated 49.61 0.37 0.75 993,002
BMS Bemis Company Inc. 51.26 -0.01 -0.02 118,171
BTU Peabody Energy Corp n/a n/a n/a 0
CAT Caterpillar Inc. 82.45 0.01 0.01 1,061,414
CMA Comerica Incorporated 46.23 -0.73 -1.55 362,010
CSCO Cisco Systems Inc. 31.12 -0.22 -0.70 7,466,020
CVGW Calavo Growers Inc. 67.12 -0.11 -0.16 23,422
CVX Chevron Corporation 99.94 0.72 0.73 1,777,232
D Dominion Resources Inc. 76.49 -0.52 -0.68 517,213
DD E.I. du Pont de Nemours and Co. 66.14 -0.63 -0.94 640,478
DIS Walt Disney Company (The) 92.32 -0.95 -1.02 2,340,827
DO Diamond Offshore Drilling Inc. 16.08 0.45 2.88 1,226,850
EGO Eldorado Gold Corporation 4.08 -0.06 -1.33 1,797,303
EIX Edison International 75.38 -0.24 -0.32 329,334
FE FirstEnergy Corporation 34.60 0.11 0.32 634,829
FITB Fifth Third Bancorp 20.64 -0.28 -1.34 2,145,219
FSLR First Solar Inc. 37.13 0.07 0.19 1,071,496
GD General Dynamics Corp. 154.44 0.63 0.41 277,877
GE General Electric Co 29.72 -0.17 -0.57 6,922,313
GME Gamestop Corporation 27.83 -0.36 -1.28 410,728
HD Home Depot Inc. (The) 125.74 -2.05 -1.60 1,404,789
HPQ HP Inc. 15.10 0.01 0.07 1,719,588
IBM International Business Machines Corp 153.76 -1.22 -0.79 618,208
INTC Intel Corporation 36.73 -0.46 -1.24 8,166,432
JCP J.C. Penney Company Inc. Holding Company 9.67 -0.11 -1.12 3,293,935
JNJ Johnson & Johnson 117.67 -1.14 -0.96 1,524,308
JPM JP Morgan Chase 66.49 -0.77 -1.14 4,812,660
JWN Nordstrom Inc. 51.54 -0.03 -0.06 1,147,433
KO Coca-Cola Company (The) 42.47 -0.27 -0.63 2,510,240
KSS Kohl\'s Corporation 42.64 -0.72 -1.66 968,585
LVS Las Vegas Sands Corp. 56.53 -0.85 -1.48 1,135,540
M Macys Inc. 36.61 -0.01 -0.03 2,638,943
MCD McDonald\'s Corporation 116.48 -0.69 -0.59 931,362
MMM 3M Company 176.21 -1.18 -0.66 406,952
MRK Merck & Company Inc. (new) 62.03 -0.93 -1.48 2,001,294
MSFT Microsoft Corporation 56.90 -0.53 -0.92 6,276,074
NOK Nokia Corporation Sponsored American Depositary Sh 5.64 -0.02 -0.35 3,753,046
NTAP NetApp Inc. 35.26 -0.40 -1.12 1,064,817
NVDA NVIDIA Corporation 64.45 -0.50 -0.77 2,602,274
OI Owens-Illinois Inc. 18.13 0.02 0.11 315,065
OLBK Old Line Bancshares Inc. 19.22 -0.39 -1.98 824
PCG Pacific Gas & Electric Co. 63.88 -0.32 -0.50 405,622
PFE Pfizer Inc. 33.75 -0.51 -1.49 8,122,054
PG Procter & Gamble Company (The) 87.69 -0.07 -0.08 10,182,400
SAP SAP SE ADR (Sponsored) 90.80 -0.74 -0.81 298,828
SEE Sealed Air Corporation 46.76 0.18 0.39 354,172
T AT&T Inc. 41.23 -0.05 -0.12 5,355,193
TEF Telefonica SA 10.49 -0.13 -1.22 457,351
UTX United Technologies Corporation 102.55 -0.01 -0.01 990,980
VZ Verizon Communications Inc. 52.05 -0.51 -0.97 3,017,386
WMT Wal-Mart Stores Inc. 71.88 -0.47 -0.65 1,653,026
XOM Exxon Mobil Corporation 83.64 0.19 0.23 2,415,723
ZION Zions Bancorporation 30.28 -0.33 -1.08 887,046

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