Equities Sector Coverage: Stocks Advance After Battling Through Choppy Trading

Sector Recap |

Jet EngineDurable Goods Orders rose by a larger than expected 4.0% and up 0.7% excluding transportation. Mortgage applications for home purchases fell 5.7% to the lowest level since December 1996. The Dow Jones Industrial Average opened lower trading as low as 11,113.04 in morning trading, and rebounded solidly into the green into the last hour of trading to 11,321.47. The NASDAQ traded on both sides of the flat line on Wednesday with a low of 2420.48 and a high of 2470.22.

Asian stocks slumped on Wednesday as Moody’s downgrades Japan’s credit rating. The Nikkei 225 lost 1.07% to 8,640 with the Hang Seng plunging 2.06% to 19,467. European stocks continued an upside correction with the FTSE 100 up 1.49% to 5,206; the DAX popping 2.69% to 5,681 and the CAC 40 up 1.79% to 3,140. The yield on the 10-Year US Treasury note rose from 2.113 percent to 2.232 on Wednesday as the flight to quality eases. The US Treasury auctioned of $35 billion in 5-Year notes at 1.029% with a weaker than normal 2.71 bid to cover, and a strong 42.1% indirect bids which includes foreign central banks. The yield on the 10-Year note rose to 2.294 after the auction. Tomorrow the US Treasury auctions $29 billion 7-Year notes will be up for the bidding.

After a new all time high at $1917.9 the Troy ounce, Gold ended Tuesday with a key reversal day. From the record high to Wednesday’s low at $1751.6 gold plunged by $166.3 the Troy ounce. Crude oil declined to $84.55 per barrel then rebounded to $86.59, again staying above its 200-week simple moving average at $83.90. The euro versus the US dollar traded between 1.4384 and 1.4479.


BHP Billiton's (BHP) FH2 net profit excluding items jumped 62% to a record $10.98B (missing estimates by $720M), boosted mostly by soaring prices for iron ore. BHP raised its dividend by 22% but won't buy back shares, as speculated, because its $12.1B acquisition of Petrohawk Energy (HK) will absorb any extra cash. CNOOC (CEO) reported H1 net profit of 39.34B yuan (beats by 2.9B) on revenue of 125B yuan. Tesoro (TSO) gets lifted 180 degrees to Buy from Sell at The Benchmark Company with a target price of $25. In afternoon trading: Shares of ATP Oil & Gas (ATPG) are up about 12.25%. Shares of Magnum Hunter Resources (MHR) are up about 10.25%. Shares of Tesoro are up about 8%.

Energy Select Sector SPDR (XLE) was trading at $65.95 at 4:00 PM on Wednesday, up 0.59% on the day – down 3.37% year-to-date.


BHP Billiton's (BHP) FH2 net profit excluding items jumped 62% to a record $10.98B (missing estimates by $720M), boosted mostly by soaring prices for iron ore. BHP raised its dividend by 22% but won't buy back shares, as speculated, because its $12.1B acquisition of Petrohawk Energy (HK) will absorb any extra cash. Newmont Mining (NEM) is upgraded to Sector Perform from Underperform at RBC Capital. Nucor (NUE) is now Overweight from Equal Weight at Morgan Stanley. US Steel (X) and Steel Dynamics (STLD) are both cut by Morgan Stanley to Equal Weight from Overweight. In afternoon trading: Shares of Temple-Inland (TIN) are up about 9%. Shares of Jaguar Mining (JAG) are down about 6.5%.

The Materials Select Sector SPDR (XLB) was trading at $33.60 at 4:00 PM on Wednesday, up 1.42% on the day – down 12.52% year-to-date.


Dycom (DY) beat estimates by 14 cents and revenue by $5M. In afternoon trading: Shares of Swift Transportation (SWFT) are up about 16.75%. Shares of Trinity Industries (TRN) are up about 12.75%. Shares of Greenbrier Companies (GBX) are up about 12.5%. Shares of Dycom are up about 11.75%. Shares of SatCon Technologies (SATC) are up about 11.75%. Shares of Capstone Turbine (CPST) are up about 10.75%.

The Industrial Select Sector SPDR (XLI) was trading at $30.88 at 4:00 PM on Wednesday, up 2.02% on the day – down 11.44% year-to-date.

Consumer Discretionary

American Eagle Outfitters (AEO) missed estimates by a penny, but beat revenue by $25M, and sees FY11 EPS of $0.85-0.95. Toll Brothers (TOL) beat estimates by 22 cents, but missed revenue by $10M. WPP (WPPGY) reported H1 net profit of £230.7M on revenue of £4.71B, and trimmed its full-year growth outlook to 5.9% from a previous 6%+. Pacific Sunwear of California (PSUN) beat estimates by 6 cents and revenue by $3M, and sees FQ3 EPS in the range of -$0.16 to -$0.29 (versus consensus of -$0.05). Saks (SKS) is lifted to Neutral from Underperform with an $8 objective at Credit Suisse. Summit Hotel (INN) is upgraded to Buy from Hold at Keybanc. Strayer Education (STRA) is now Neutral from Sell at Sterne Agee. Pacific Sunwear (PSUN) is downgraded to Perform from Outperform at Oppenheimer. In afternoon trading: Shares of E-Commerce China Dangdang (DANG) are up about 12%. Shares of MGM Resorts International (MGM) are up about 11.75%. Shares of American Eagle are down about 9.25%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $36.10 at 4:00 PM on Wednesday, up 1.78% on the day – down 3.50% year-to-date.

Consumer Staples

Heineken’s (HINKY) adjusted profits rose 5.7% to €694M, but the brewer warned full-year profit will be flat amid poor weather and low consumer confidence in Europe and the U.S. In afternoon trading: Shares of AgFeed Industries (FEED) are up about 6.75%. Shares of Chiquita Brands International (CQB) are up about 6.75%. Shares of Dole Food Company (DOLE) are up about 5.25%. Shares of CVS Caremark (CVS) are up about 4.75%. Shares of Heineken are down about 7.5%. Shares of Fomento Economico Mexican (FMX) are down about 5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.38 at 4:00 PM on Wednesday, up 0.43% on the day – up 3.65% year-to-date.


Universal Health (UHS) is a fresh Buy at Auriga with a target of $45. Edwards Lifesciences (EW) is initiated with a Buy at Wunderlich with a target of $75. Elan (ELN) is raised to Outperform from Neutral at Credit Suisse. AtriCure (ATRC) is moved to Outperform from Market Perform at Morgan Keegan. United Therapeutics (UTHR) is downgraded to Hold from Buy at Deutsche Bank.  In afternoon trading: Shares of United Therapeutics are down about 17.75%. Shares of Adolor Corporation (ADLR) are down about 9.5%. Shares of Cadence Pharmaceuticals (CADX) are down about 7.25%. Shares of Depomed (DEPO) are up about 8.5%. Shares of Affymetrix (AFFY) are up about 8%. Shares of Amylin Pharmaceuticals (AMLN) are up about 7.75%.

The Health Care Select Sector SPDR (XLV) was trading at $32.39 at 4:00 PM on Wednesday, up 1.16% on the day – up 2.83% year-to-date.


A federal judge has turned down the FDIC's attempt to dismiss a $10B lawsuit filed by a unit of Deutsche Bank (DB) over bad mortgages that were securitized by Washington Mutual before it was seized by regulators and sold to JPMorgan (JPM). NY AG dropped from foreclosure panel. New York AG Eric Schneiderman has been removed from a committee of state AGs negotiating a deal with major banks over inappropriate foreclosure practices. The institutions involved are Bank of America (BAC), JPMorgan (JPM), Wells Fargo (WFC), Citigroup (C) and Ally Financial. Fears about legal liabilities and write-offs again played havoc with Bank of America (BAC) yesterday as five-year CDS spreads hit levels higher than during the peak of the financial crisis. LPL Investment (LPLA) is started with a Sell at Ticonderoga with a target of $22. The Hanover Insurance Group (THG) is a new Buy at Sterne Agee. Nasdaq OMX (NDAQ) is now Buy from Neutral at UBS. U-Store-It (YSI) is upgraded to Outperform from Market Perform at BMO Capital. Public Storage (PSA) gets lowered to Underperform from Market Perform at BMO Capital. In afternoon trading: Shares of MGIC Investment (MTG) are up about 33%. Shares of Radian Group (RDN) are up about 22%. Shares of The PMI Group (PMI) are up about 15.5%. Shares of Bank of America are up about 14%.

The Financial Select Sector SPDR (XLF) was trading at $12.70 at 4:00 PM on Wednesday, up 2.68% on the day – down 20.38% year-to-date.

Information Technology

Two Internet users are suing comScore (SCOR) for secretly installing illegal data-mining software on their computers. AU Optronics (AUO) is being sued by HP (HPQ), one of its largest clients, for allegedly conspiring to fix prices of thin-film transistor LCD panels. Avago Technologies (AVGO) posted FQ3 results that beat Street forecasts by 2 cents and revenue by $8M, and is guiding for FQ4 revenue growth of 2%-5%; the midpoint of that range is above consensus. Perfect World (PWRD) reported Q2 revenue of $120.6M and EPS of $1.01 (beating consensus by $12.8M and $0.44), and expects 15-22% revenue growth in Q3 (above a 14.5% consensus). Google (GOOG) is initiated with a Outperform at Robert W. Baird with a price objective of $650. ValueClick (VCLK) is a new Neutral at Robert W. Baird with a $17 price target. Multi-Fineline (MFLX) is a new Outperform at Rodman & Renshaw. International Rectifier (IRF) is begun with a Buy at The Benchmark Company. Harmonic (HLIT) has a new Hold rating established at ThinkEquity. Perfect World (PWRD) is upgraded to Outperform from Neutral at Credit Suisse. Benchmark Electronics (BHE) is cut to Sector Perform from Outperform, while Sanmina-SCI (SANM) is downgraded to Underperform from Sector Perform at RBC Capital. Fidelity National Information Services (FIS) is moved to Underweight from Neutral at JP Morgan. In afternoon trading: Shares of RealNetworks (RNWK) are down about 28.5%. Shares of Avago Technologies (AVGO) are up about 13.25%.

The Technology Select Sector SPDR (XLK) was trading at $23.68 at 4:00 PM on Wednesday, up 0.89% on the day – down 5.99% year-to-date.

Telecommunications Services

China Unicom (CHU) reported H1 net profit of 2.65B yuan (more than double consensus of 1.28B) on revenue of 101B (beats by 2B). In afternoon trading: Shares of China Unicom are up about 7.25%. Actives: Shares of Sprint Nextel (S) are up about 2.6%. Shares of AT&T (T) are up about 2.1%. Shares of Level 3 Communications (LVLT) are up about 5%. Shares of Verizon (VZ) are up about 2.1%. Shares of Vodafone (VOD) are up about 0.7%.

The NASDAQ Telecommunications Index (IXTC) was trading at $184.79 at 4:00 PM on Wednesday, up 0.35% on the day – down 18.01% year-to-date.


In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about 2%. Shares of Southern Co (SO) are up about 1.4%. Shares of CenterPoint Energy (CNP) are up about 2.2%. Shares of Genon Energy (GEN) are down about 0.7%. Shares of Exelon (EXC) are up about 1.9%. Shares of Calpone (CPN) are up about 5.9%.

The Utilities Select Sector SPDR (XLU) was trading at $33.60 at 4:00 PM on Wednesday, up 2.16% on the day – up 7.21% year-to-date.


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Symbol Name Price Change % Volume
INN Summit Hotel Properties Inc. 14.88 -0.30 -1.98 1,199,436 Trade
CEO CNOOC Limited 110.34 0.66 0.60 151,194 Trade
BHE Benchmark Electronics Inc. 31.30 -0.85 -2.64 325,018 Trade
GEN Genesis Healthcare Inc. 1.07 -0.02 -1.83 989,006 Trade
FMX Fomento Economico Mexicano S.A.B. de C.V. 100.34 -0.62 -0.61 289,440 Trade
NOW ServiceNow Inc. 106.86 -2.64 -2.41 1,245,227 Trade
SO Southern Company (The) 47.92 -0.49 -1.01 3,346,385 Trade
EW Edwards Lifesciences Corporation 113.57 -2.00 -1.73 981,506 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.77 -0.18 -0.62 2,514,593 Trade
DY Dycom Industries Inc. 80.54 -1.80 -2.19 379,252 Trade
AUO AU Optronics Corp American Depositary Shares 3.83 0.02 0.52 2,454,101 Trade
THG Hanover Insurance Group Inc 98.57 -1.06 -1.06 146,171 Trade
RNWK RealNetworks Inc. 4.10 -0.08 -1.91 60,470 Trade
C Citigroup Inc. 66.60 -1.11 -1.64 14,487,868 Trade
TSO Tesoro Corporation n/a n/a n/a n/a
S Sprint Corporation 8.09 -0.21 -2.53 7,471,795 Trade
RDN Radian Group Inc. 16.90 -0.37 -2.13 714,843 Trade
JPM JP Morgan Chase 90.65 -1.44 -1.56 13,837,463 Trade
HK Halcon Resources Corporation 6.12 0.03 0.49 1,993,449 Trade
VOD Vodafone Group Plc 28.56 -0.45 -1.55 3,513,043 Trade
TOL Toll Brothers Inc. 38.63 -1.07 -2.70 1,175,815 Trade
AVGO Broadcom Limited 246.95 -6.47 -2.55 2,279,288 Trade
SWFT Swift Transportation Company Class A 26.55 -0.26 -0.97 1,430,448 Trade
SANM Sanmina Corporation 35.20 -1.55 -4.22 574,549 Trade
DB Deutsche Bank AG 16.44 -0.60 -3.52 7,895,527 Trade
LVLT Level 3 Communications Inc. 52.99 -2.19 -3.97 3,551,623 Trade
VZ Verizon Communications Inc. 47.89 -0.52 -1.07 10,638,043 Trade
GBX Greenbrier Companies Inc (The) 44.35 -1.30 -2.85 285,909 Trade
BAC Bank of America Corporation 23.64 -0.55 -2.27 78,969,326 Trade
BHP BHP Billiton Limited 40.46 -0.71 -1.72 1,807,404 Trade
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0 Trade
LPLA LPL Financial Holdings Inc. 46.13 -1.17 -2.47 1,061,265 Trade
PSA Public Storage 197.73 -1.28 -0.64 728,662 Trade
CPN Calpine Corporation 13.50 -0.42 -3.02 2,829,453 Trade
GOOG Alphabet Inc. 910.98 -15.98 -1.72 1,277,238 Trade
WPPGY WPP plc American Depositary Shares each representi 102.11 -0.84 -0.82 118,836 Trade
MGM MGM Resorts International 30.51 -0.79 -2.52 6,566,407 Trade
STRA Strayer Education Inc. 77.86 -1.80 -2.26 46,937 Trade
MFLX Multi-Fineline Electronix Inc. n/a n/a n/a 0 Trade
CPST Capstone Turbine Corporation 0.63 -0.02 -3.08 117,041 Trade
X United States Steel Corp. 23.75 -0.88 -3.57 12,421,893 Trade
NDAQ Nasdaq Inc. 76.28 -0.84 -1.09 560,085 Trade
WFC Wells Fargo & Company 51.80 -0.89 -1.69 16,814,287 Trade
ELN Elan Corp. PLC ADS n/a n/a n/a 0 Trade
DEPO Depomed Inc. 6.30 0.17 2.77 2,090,527 Trade
UHS Universal Health Services Inc. 107.18 -1.50 -1.38 1,159,692 Trade
HPQ HP Inc. 18.64 -0.33 -1.74 9,282,794 Trade
HLIT Harmonic Inc. 3.40 -0.10 -2.86 486,480 Trade
CVS CVS Health Corporation 78.89 -0.36 -0.45 4,470,494 Trade
UTHR United Therapeutics Corporation 131.06 -0.98 -0.74 618,908 Trade
EXC Exelon Corporation 37.60 -0.53 -1.39 3,654,219 Trade
T AT&T Inc. 37.60 -0.63 -1.65 21,993,973 Trade
AEO American Eagle Outfitters Inc. 11.26 -0.19 -1.66 2,592,721 Trade
MHR Magnum Hunter Resources Corp n/a n/a n/a 0
NEM Newmont Mining Corporation 36.05 -0.08 -0.22 5,008,518 Trade
DUK Duke Energy Corporation (Holding Company) 85.87 -0.44 -0.51 2,055,010 Trade
TRN Trinity Industries Inc. 28.23 -0.30 -1.05 1,010,623 Trade
PSUN Pacific Sunwear of California Inc. n/a n/a n/a n/a
NUE Nucor Corporation 54.35 -2.38 -4.20 2,840,517 Trade
CHU China Unicom (Hong Kong) Ltd 14.86 -0.81 -5.17 1,538,343 Trade
MTG MGIC Investment Corporation 11.45 -0.27 -2.30 3,458,256 Trade
SCOR comScore Inc. 28.80 0.10 0.35 19,821
FIS Fidelity National Information Services Inc. 89.57 -1.88 -2.06 1,183,399 Trade
ATRC AtriCure Inc. 22.18 -0.50 -2.20 179,183 Trade
STLD Steel Dynamics Inc. 34.55 -1.57 -4.35 2,390,989 Trade


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