Equities Sector Coverage: Resting Bulls Unmoved By Stronger Economic Numbers

Sector Recap |

US DollarInitial Jobless Claims rose to 402,000 in the latest week, still well above the 350,000 recessionary threshold. The national manufacturing ISM came in at 52.7 in November with Construction Spending up 0.8% in October. Tomorrow we have the drum-roll for November’s Employment Data with the economy creating 125,000 jobs with a 9.0% unemployment rate. The Dow Jones Industrial Average traded between 11974.62 and 12062.64. The NASDAQ traded between 2611.48 and 2636.08.

Asian stocks followed the US markets higher on Thursday with the Nikkei 225 up 1.93% to 8,597 and the Hang Seng surging 5.63% to 19,002. European stocks consolidated Wednesday’s huge gains. The FTSE 100 ended the day at 5,489 – down 0.29%; the DAX ended the day at 6,036 – down 0.87%; and the CAC 40 ended the day at 3,130 – down 0.78%. The yield on the US Treasury 10-Year note stayed tested and held its 50-day simple moving average at 2.048 percent with a high yield at 2.142. Gold traded between $1737.2 the Troy ounce and $1758.0. Crude oil traded between $98.87 per barrel and $101.17. The euro versus the dollar traded between 1.3421 and 1.3519.

Energy

Sasol (SSL) could invest up to $4.5B to build a factory that would use low-cost natural gas to make ethylene and related chemicals in Louisiana. SeaDrill (SDRL) reported Q3 EPS of $0.07 (may not be comparable to consensus of $0.72) and revenue of $1.03B (beating by $20M). In afternoon trading: Shares of GMX Resources (GMXR) are up about 20%. Shares of Western Refining (WNR) are up about 7.5%.

Energy Select Sector SPDR (XLE) was trading at $70.48 at 4:00 PM on Thursday, down 0.55% on the day – up 3.27% year-to-date.

Materials

Schnitzer Steel (SCHN) is a new Hold at Auriga. In afternoon trading: Shares of China Agritech (CAGC) are up over 140%. Shares of Texas Industries (TXI) are up about 7.25%. Actives: Shares of Alcoa (AA) are down about 2.1%. Shares of Nalco Holding (NLC) are up about 0.6%. Shares of Vale SA (VALE) are down about 0.2%. Shares of Freeport McMoran (FCX) are down about 1.2%.

The Materials Select Sector SPDR (XLB) was trading at $34.30 at 4:00 PM on Thursday, down 0.64% on the day – down 10.70% year-to-date.

Industrials

US Airways (LCC) is lifted to Overweight from Equal Weight at Barclays. USG Corporation (USG) gets an Outperform-from-Sector Perform increase at RBC Capital. In afternoon trading: Shares of Kratos Defense & Security (KTOS) are up about 17%. Shares of AMR Corp. (AMR) are up about 16.5%. Shares of United Continental Holdings are up about 9%. Shares of UTi Worldwide (UTIW) are down about 11.25%. Shares of A123 Systems (AONE) are down about 9.25%.

The Industrial Select Sector SPDR (XLI) was trading at $33.78 at 4:00 PM on Thursday, down 0.32% on the day – down 3.13% year-to-date.

Consumer Discretionary

Gildan Activewear (GIL) reported FQ4 EPS of $0.42 (in-line), while missing revenue by $16M, and sees FY12 revenue of $1.9B and EPS of $1.30. Citing weak selling prices and "excess producer inventories," the company expects FQ1 revenue of just $300M and EPS of -$0.30 in FQ1 2012, well below a consensus of $451.1M and $0.29. Lululemon (LULU) beat estimates by 2 cents, while missing revenue by $5M, and sees Q4 revenue of $327-332M and EPS of $0.40-0.42. Pier 1's (PIR) raised its guidance for Q3, and sees EPS of $0.20-21 (versus $0.18 consensus, and revenue of $383M (versus $380M consensus). La-Z-Boy (LZB) FQ2 beat estimates by a penny, but missed revenue by $3M. Krispy Kreme Doughnuts (KKD) beat estimates by a penny, while missing revenue by $0.6M. The company issues preliminary FY13 EPS guidance of $0.35-$0.41 (largely above $0.35 consensus). Express (EXPR) reported FQ3 revenue of $486.8M and EPS of $0.37 (the latter beat by $0.02, but the former missed by $1.1M). The company expects FQ4 EPS of $0.66-$0.70 ($0.67 consensus). Guess? (GES) missed estimates by 2 cents and revenue by $12M. Aeropostale (ARO) beat estimates by 2 cents and revenue by $19M. Marriot Vacations (VAC) is begun at a Hold by Deutsche Bank. HomeAway (AWAY) is upgraded to Outperform from Sector Perform at Pacific Crest. Tupperware (TUP) and Spectrum Brands (SPB) are both now Hold from Buy at Suntrust. Fiat SpA (FIATY) is cut 180 degrees, to Underweight from Overweight at Morgan Stanley. In afternoon trading: Shares of GIldan Activewear are down about 30%. Shares of Barnes & Noble (BKS) are down about 17%. Shares of Talbots (TLB) are down about 15%. Shares of Bont Ton Stores (BONT) are up about 27.5%. Shares of La-Z-Boy are up about 16%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.77 at 4:00 PM on Thursday, up slightly on the day – up 3.64% year-to-date.



Consumer Staples

Fresh Del Monte (FDP) is a Hold at Auriga, which begins Buys on both Dole Food (DOLE) and Chiquita Brands (CQB). Tupperware (TUP) and Spectrum Brands (SPB) are both now Hold from Buy at Suntrust. In afternoon trading: Shares of Coffee Holding (JVA) are up about 17%. Shares of Imperial Sugar (IPSU) are up about 15.25%. Shares of Diamond Foods (DMND) are up about 7%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $31.85 at 4:00 PM on Thursday, down slightly on the day – up 8.67% year-to-date.

Healthcare

Watson Pharmaceuticals (WPI) is a Hold at Jefferies. Procter & Gamble (PG) is raised to Outperform from Sector Perform at RBC Capital. Allergan (AGN) is boosted to Buy from Hold with a $95 target at Argus. WebMD Health (WBMD) is cut to Neutral from Outperform at Cowen. In afternoon trading: Shares of Transcept Pharmaceuticals (TPST) are up about 17.5%. Shares of GTx Inc. (GTXI) are up about 10%. Shares of Geron Corp. (GERN) are up about 7.25%. Shares of Pacira Pharmaceuticals (PCRX) are up about 7%. Shares of Savient Pharmaceuticals (SVNT) are down about 7.25%.

The Health Care Select Sector SPDR (XLV) was trading at $33.93 at 4:00 PM on Thursday, up slightly on the day – up 7.71% year-to-date.

Financials

Blackstone (BX), Bain Capital, Softbank (SFTBF) and Alibaba (ALBCF) are in talks about making a bid for all of Yahoo (YHOO). Toronto Dominion Bank (TD) beat estimates by C$0.22 and revenue by C$250M. Dollar Financial (DLLR) is added FBR Capital’s Top Picks List. Teva Pharmaceuticals (TEVA) is taken to Neutral from Buy at Suntrust. Onyx Pharmaceuticals (ONXX) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. Bank of the Ozarks (OZRK) is cut to Hold from Buy with a $28 target at Wunderlich. National Penn Bancshares (NPBC) is pulled from FBR Capital’s list of Top Picks. Unum Group (UNM) is downgraded to Neutral from Buy at Suntrust. In afternoon trading: Shares of Assured Guaranty Municipal Holdings (AGO) are up about 14.5%.

The Financial Select Sector SPDR (XLF) was trading at $12.74 at 4:00 PM on Thursday, down 0.55% on the day – down 20.13% year-to-date.

Information Technology

Internet gaming company Zynga plans to raise $900M in its IPO by offering its shares at $8-$10 each, which would give it a market cap of up to $10B. Blackstone (BX), Bain Capital, Softbank (SFTBF) and Alibaba (ALBCF) are in talks about making a bid for all of Yahoo (YHOO). Semtech (SMTC) beat estimates by 6 cents and revenue by $0.9M. The company is guiding for FQ4 revenue of $102M-$108M and EPS of $0.27-$0.33 (well below Street estimates of $117.7M and $0.43). Synopsys (SNPS) reported FQ4 EPS of $0.45 (in-line) and revenue of $390M (in-line). Finisar (FNSR) beat estimates by a penny with revenue in-line with estimates. Moneygram (MGI) is started at Outperform by JMP Securities. Amphenol (APH) is a new Buy and $55 price objective at KeyBanc Capital. TE Connectivity (TEL) is launched with a Buy and $41 target price at KeyBanc. Hewlett-Packard (HPQ) is boosted to Sector Perform from Underperform at Pacific Crest. Seagate Technology (STX) is lifted to Buy from Hold at Argus this morning. WebMD Health (WBMD) is cut to Neutral from Outperform at Cowen. In afternoon trading: Shares of Magma Design (LAVA) are up about 25.5%. Shares of Zoom Tech (ZOOM) are up about 22.25%. Shares of Finisar Corp. (FNSR) are down about 12.75%.

The Technology Select Sector SPDR (XLK) was trading at $25.76 at 4:00 PM on Thursday, up 0.55% on the day – up 2.26% year-to-date.

Telecommunications Services

In a sign that AT&T (T) may be giving up hope on a fully-fledged merger occurring, The Wall Street Journal reports Ma Bell has held preliminary talks with T-Mobile parent Deutsche Telekom (DTEGY) about forming a JV to pool their network assets. Abovenet (ABVT) is a new Overweight at Piper Jaffray. In afternoon trading: Shares of Towerstream (TWER) are up about 18.5%. Shares of Clearwire (CLWR) are up about 15.25%. Actives: Shares of Sprint Nextel (S) are down about 0.6%, while shares of AT&T are down about 0.8% and shares of Verizon (VZ) are flat.

The NASDAQ Telecommunications Index (IXTC) was trading at $200.66 at 4:00 PM on Thursday, down 0.23% on the day – down 10.96% year-to-date.

Utilities

PNM Resources (PNM) is reduced to Neutral from Buy at Suntrust. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about a half of a percent. Shares of PPL Corp. (PPL) are down slightly. Shares of AES Corp. (AES) are up about 1.1%. Shares of Calpine (CPN) are down slightly. Shares of Southern Company (SO) are up about a half of a percent. Shares of Exelon (EXC) are down about 0.4%.

The Utilities Select Sector SPDR (XLU) was trading at $35.11 at 4:00 PM on Thursday, down 0.28% on the day – up 12.03% year-to-date.

STOCKS: SSL, SDRL, GMXR, WNR, SCHN, CAGC, TXI, AA, NLC, VALE, FCX, LCC, USG, KTOS, AMR, UTIW, AONE, GIL, LULU, PIR, LZB, KKD, EXPR, GES, ARO, VAC, AWAY, TUP, SPB, FIATY, BKS, TLB, BONT, FDP, DOLE, CQB, TUP, SPB, JVA, IPSU, DMND, WPI, PG, AGN, WBMD, TPST, GTXI, GERN, PCRX, SVNT, BX, SFTBF, ALBCF, YHOO, TD, DLLR, TEVA, ONXX, OZRK, NPBC, UNM, AGO, SMTC, SNPS, FNSR, MGI, APH, TEL, HPQ, STX, LAVA, ZOOM, FNSR, T, DTEGY, ABVT, TWER, CLWR, S, VZ, PNM, DUK, PPL, AES, CPN, SO, EXC

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
BX The Blackstone Group L.P. Representing Limited Par 34.42 0.14 0.41 3,050,906 Trade
KKD Krispy Kreme Doughnuts Inc. n/a n/a n/a 0 Trade
EXPR Express Inc. 6.15 -0.14 -2.23 1,669,392 Trade
KTOS Kratos Defense & Security Solutions Inc. 12.38 0.05 0.41 944,205 Trade
SDRL Seadrill Limited (Bermuda) 0.44 -0.02 -3.30 3,935,408 Trade
ARO Aeropostale Inc. n/a n/a n/a n/a
PG Procter & Gamble Company (The) 88.61 0.01 0.01 5,714,842 Trade
SO Southern Company (The) 47.88 0.56 1.18 4,117,193 Trade
TD Toronto-Dominion Bank 52.11 0.08 0.15 1,245,545 Trade
VALE VALE S.A. American Depositary Shares Each Represen 9.02 -0.11 -1.20 28,732,994 Trade
WPI Watson Pharmaceuticals Inc. n/a n/a n/a 0 Trade
UTIW UTi Worldwide Inc. n/a n/a n/a 0 Trade
AZUR Azure Midstream Partners LP Limited Partnership n/a n/a n/a n/a
AA Alcoa Inc. 36.62 -0.10 -0.27 2,527,539 Trade
SSL Sasol Ltd. American Depositary Shares 28.59 -0.54 -1.85 226,052 Trade
NPBC National Penn Bancshares Inc (Boyertown Penn.) n/a n/a n/a 0 Trade
BONT The Bon-Ton Stores Inc. 0.80 0.12 17.66 3,993,176 Trade
WBMD WebMD Health Corp 55.19 -0.06 -0.11 558,251 Trade
S Sprint Corporation 8.53 0.15 1.79 9,334,200 Trade
PPL PPL Corp 38.55 0.31 0.81 2,791,627 Trade
TUP Tupperware Brands Corporation 68.90 -0.05 -0.07 238,586 Trade
GES Guess? Inc. 12.61 -0.20 -1.56 1,019,542 Trade
STX Seagate Technology 39.58 0.16 0.41 3,256,610 Trade
FNSR Finisar Corporation 27.18 -0.18 -0.66 1,662,881 Trade
FDP Fresh Del Monte Produce Inc. 51.29 -0.03 -0.06 171,705 Trade
BKS Barnes & Noble Inc. 7.15 -0.30 -4.03 1,420,609 Trade
MGI Moneygram International Inc. 16.56 -0.28 -1.66 510,699 Trade
SMTC Semtech Corporation 39.75 0.05 0.13 547,799 Trade
AES The AES Corporation 11.42 0.05 0.44 3,197,342 Trade
AGN Allergan plc 250.97 1.90 0.76 2,509,879 Trade
VZ Verizon Communications Inc. 44.23 0.01 0.02 11,426,562 Trade
GERN Geron Corporation 2.80 -0.01 -0.36 804,971 Trade
VAC Marriot Vacations Worldwide Corporation 115.51 0.01 0.01 182,229 Trade
CPN Calpine Corporation 13.72 -0.19 -1.37 4,819,530 Trade
OZRK Bank of the Ozarks 46.78 -0.89 -1.87 594,656 Trade
GTXI GTx Inc. 5.60 -0.02 -0.36 14,860 Trade
FCX Freeport-McMoRan Inc. 13.01 -0.03 -0.23 11,718,713 Trade
PNM PNM Resources Inc. (Holding Co.) 39.20 0.70 1.82 413,109 Trade
AGO Assured Guaranty Ltd. 45.09 0.34 0.76 463,706 Trade
SPB Spectrum Brands Holdings Inc. 124.13 -1.01 -0.81 344,716 Trade
USG USG Corporation 29.07 -0.24 -0.82 1,317,059 Trade
SNPS Synopsys Inc. 75.91 0.09 0.12 453,358 Trade
AWAY HomeAway Inc. n/a n/a n/a 0 Trade
JVA Coffee Holding Co. Inc. 4.25 -0.06 -1.39 36,849 Trade
UNM Unum Group 47.80 0.06 0.13 977,731 Trade
LULU lululemon athletica inc. 61.94 0.83 1.36 2,193,098 Trade
APH Amphenol Corporation 75.57 -0.09 -0.12 826,332 Trade
TEVA Teva Pharmaceutical Industries Limited American De 32.64 0.21 0.65 3,251,371 Trade
GIL Gildan Activewear Inc. Class A Sub. Vot. 30.34 -0.01 -0.03 291,617 Trade
HPQ HP Inc. 19.15 0.21 1.11 9,235,767 Trade
WNR Western Refining Inc. Inc. n/a n/a n/a 0 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
PIR Pier 1 Imports Inc. 4.67 -0.11 -2.30 1,396,136 Trade
EXC Exelon Corporation 37.48 -0.12 -0.32 4,373,348 Trade
T AT&T Inc. 36.51 -0.01 -0.03 20,150,775 Trade
SCHN Schnitzer Steel Industries Inc. 26.20 -0.65 -2.42 438,959 Trade
DUK Duke Energy Corporation (Holding Company) 85.20 0.27 0.32 2,494,385 Trade
DMND Diamond Foods Inc. n/a n/a n/a 0 Trade
TEL TE Connectivity Ltd. New Switzerland Registered Sh 82.03 -0.56 -0.68 1,354,269 Trade
LZB La-Z-Boy Incorporated 32.35 -0.20 -0.61 296,900 Trade
TWER Towerstream Corporation 0.08 0.01 6.76 11,002
PCRX Pacira Pharmaceuticals Inc. 47.65 -1.50 -3.05 385,661 Trade

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