Equities Sector Coverage: Stocks Back Off Highs, Closing Slightly Lower

Sector Recap |

NYSE Wall StreetHousing Starts fell 1.1% in February to an annual rate of 698,000. Permits rose 5.1% to an annual rate of 717,000. Single Family Starts fell 9.9% to an annual rate of 457,000 homes. The Dow Jones Industrial Average opened lower trading down to 13,123.38 in morning trading, then rebounded entering the final half hour of trading below 13,200. The NASDAQ’s traded down to 3050.82 in morning trading, then rebounded entering the final half hour of trading below 3080.

Asian stocks were mixed again on Tuesday as analysts cite concerns over the economy in China. The Nikkei 225 was on holiday - ended their Monday session at 10,142 – up 0.12% on the day. The Hang Seng ended their session at 20,888 – down 1.08% on the day. European stocks declined on Tuesday on renewed Greek concerns. The FTSE 100 ended their session at 5,891 – down 1.17% on the day. The DAX ended their session at 7,055 – down 1.39% on the day. The CAC 40 ended their session at 3,531 – down 1.32% on the day.

The yield on the 10-Year US Treasury declined from 2.366 percent to 2.327 then rose to 2.399 staying above its 200-day simple moving average at 2.214. Gold declined from $1664.9 the Troy ounce to $1641.2 staying below its 200-day simple moving averages at $1680.3 for four consecutive days. Crude oil declined from $107.91 per barrel to $105.35. The euro versus the dollar declined from 1.3243 to 1.3176 then rebounded to 1.3250.

Energy

Williams Partners (WPZ) has agreed to buy Caiman Energy’s wholly owned subsidiary, Caiman Eastern Midstream, for approximately $2.5B. CVR Energy (CVI) has rejected Carl Icahn's extended $30 a share tender offer, and asked shareholders not to participate. Diamond Offshore (DO) is now Neutral from Underperform at Macquarie. Frontline (FRO) is taken to Underperform from Market Perform with Wells. Kinder Morgan Inc (KMI) is moved to Neutral from Buy at Bank of America-Merrill Lynch.

Energy Select Sector SPDR (XLE) was trading at $74.01 at 4:00 PM on Tuesday, down 1.50% on the day – up 7.06% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.

Big Movers: (DHT) -27%, (OSG) -12%.

Materials

Morgan Stanley starts Airgas (AIR) at Overweight, assigns an Underweight on Air Products (APD), and picks up Praxair (PX) at Equal Weight. Agrium (AGU) is a new Neutral at Piper Jaffray, which picks up CF Industries (CF) at Overweight and assigns it a price objective of $230. IAMGOLD (IAG) is lifted to Outperform from Neutral at Macquarie.

The Materials Select Sector SPDR (XLB) was trading at $37.12 at 4:00 PM on Tuesday, down 0.56% on the day – up 10.81% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.

Heavily Traded: (AA) -1.8%, (FCX) -0.4%, (VALE) -2.5%, (POT) +3.8%, (X) -1.5%.

Industrials

Morgan Stanley starts Airgas (AIR) at Overweight, assigns an Underweight on Air Products (APD), and picks up Praxair (PX) at Equal Weight. Rockwell Collins (COL) is covered with a Hold at KeyBanc Capital. Deutsche Lufthansa AG (DLAKY) gets a Buy-from-Neutral boost at UBS. United Parcel Service (UPS) is cut to Hold from Buy at Stifel Nicolaus.

The Industrial Select Sector SPDR (XLI) was trading at $37.54 at 4:00 PM on Tuesday, down 1.16% on the day – up 11.23% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.

Heavily Traded: (GE) -0.5%, (GLW) -1.7%.

Consumer Discretionary

Michael Kors (KORS) insiders plan to sell over $1B worth of stock in a secondary offering, with founder Michael Kors due to offload 3M shares and CEO John Idol 1.7M. The company has also raised its FY 2012 EPS outlook to $0.79-$0.81 (above consensus of $0.67) and revenue at $1.27B-$1.28B (versus Street predictions of $1.28B). Time Warner Cable (TWC) and News Corp's (NWS) Fox sports unit are heading for a potential multi-billion dollar showdown over the rights to telecast the L.A. Dodgers' baseball games. Disney (DIS) will take a $200M write-down related to the mega-flop John Carter, worse than the $120M-$160M forecast by analysts. The loss will result in Disney's studio division reporting an operating loss of $80M-$120M in the March quarter compared with a $77M operating profit in the December quarter. Tiffany (TIF) missed estimates by 3 cents, while beating revenue by $10M. The company sees sales up by ~10% and EPS falling in a range of $3.95 to $4.05. Lions Gate Entertainment (LGF) is initiated with an Overweight at JPMorgan. Clear Channel Outdoor (CCO) and Lamar Advertising (LAMR) are each upgraded to Above Average from Average at Caris & Company. Harley-Davidson (HOG) is upgraded to Outperform from Market Perform by BMO Capital with a new target of $60. Domino’s Pizza (DPZ) gets downgraded to Underperform from Neutral by Bank of America-Merrill Lynch.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.655 at 4:00 PM on Tuesday, up 0.17% on the day – up 14.44% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.

Consumer Staples

Tesco (TSCDY) gets upgraded to Hold from Sell at ING Group. Dole Food (DOLE) is moved to Neutral from Overweight at JPMorgan.



The Consumer Staples Select Sector SPDR (XLP) was trading at $33.60 at 4:00 PM on Tuesday, down slightly on the day – up 3.42% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.

Big Movers: (FEED) -15.25%, (PATH) -11%, (CHBT) +11.25%.

Heavily Traded: (RAD) -1.3%.

Health Care

AtriCure (ATRC) is a new Outperform at Leerink Swann. Cardiome Pharmaceuticals (CRME) is lowered to Market Perform from Outperform at Leerink Swann.

The Health Care Select Sector SPDR (XLV) was trading at $36.65 at 4:00 PM on Tuesday, down 0.52% on the day – up 5.65% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.

Big Movers: (ECYT) +11.5%, (AMRN) +11.25%.

Heavily Traded: (AMRN) +11.25%, (PFE) down slightly.

Financials

Deutsche Bank (DB) is facing a number of civil suits in the U.S. over alleged Libor manipulation, and it has received subpoenas and information requests from the Justice Department, the SEC, the CFTC and the European Commission. Jefferies Group (JEF) beat estimates by 5 cents and revenue by $72M. FX Alliance (FX) is a new Neutral at Citigroup, Goldman Sachs, and JPMorgan. Kimco Realty (KIM) is an In-Line at Imperial Capital with a $20 target price. Comerica (CMA) gets moved to Market Perform from Outperform by Sanford Bernstein. Webster Financial (WBS) gets reduced to Sector Perform from Outperform at RBC Capital. Zions Bancorp (ZION) is moved to Market Perform from Outperform by Bernstein. Washington Mutual (WAMUQ) is down about 95% on completion of its Chapter 11 filing.

The Financial Select Sector SPDR (XLF) was trading at $15.875 at 4:00 PM on Tuesday, up 0.47% on the day – up 22.12% year-to-date (the strongest performing sector). The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

After announcing a goody bag of a buyback and dividends early yesterday, Apple (AAPL) later disclosed that it has sold 3M new iPads since the device was launched on Friday. Adobe's (ADBE) FQ1 net profit dropped 21% to $185.2M while revenue rose 1.7% to $1.05B, with the company's performance hurt by lower-than-expected sales from its legacy desktop software due to customers waiting for the launch of the company's Creative Suite 6 software and subscription services. Oracle (ORCL) is due to report its FQ3 results after the bell today, with analysts expecting that EPS rose to $0.56 from $0.54 a year ago and that revenue edged up just 2.5% to $9.02B. Microsoft (MSFT) continues to work on Windows 8, with Bloomberg reporting that the first PCs and tablets based on the OS will arrive in October. The initial hardware will include systems featuring ARM-based (ARMH) processors to go with x86 Intel (INTC) gear. JA Solar Holdings (JASO) missed estimates by 29 cents, while beating revenue by $66M. 4:09 PM Adobe Systems (ADBE) reported FQ1 EPS of $0.57 (in-line) and revenue of $1.05B (in-line). The company expects FQ2 revenue of $1.09B-$1.14B and EPS of $0.57-$0.61, (in-line), and expects FY12 revenue growth of 6%-8% and EPS of $2.38-$2.48 (consensus of 4.7% growth and $2.42). LDK Solar (LDK) lowers the top end of its Q4 revenue guidance, forecasting revenue of $440M-450M (versus $440M-520M prior guidance). Yingli Green Energy (YGE) and Trina Solar (TSL) are each begun with Equal Weights at Barclays. Adobe Systems (ADBE) is upgraded to Sector Perform from Underperform at RBC Capital, but is slashed to Sector Perform from Outperform at Pacific Crest. InterXion (INXN) is moved to Outperform from Market Perform with Wells Fargo. OmniVision (OVTI) is now Buy from Hold with a $24 target at Needham. ARM Holdings (ARMH) is lifted to Overweight to Equal Weight at Barclays. Digital River (DRIV) is reduced to Sector Perform from Outperform at RBC Capital. F5 Networks (FFIV) is reduced to Hold from Buy at McAdams Wright Ragen. CA Technologies (CA) is cut to Sector Perform from Outperform. Ixia (XXIA) is downgraded to Hold from Buy with a $15 objective at Wunderlich. Veeco Instruments (VECO) is reduced to Sell from Underperform at Crédit Agricole.

The Technology Select Sector SPDR (XLK) was trading at $30.07 at 4:00 PM on Tuesday, down 0.10% on the day – up 18.15% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.

Big Movers: (YGE) +16%, (STP) +12.5%, (TSL) +10.75%, (DRWI) +10.25%.

Telecommunication Services

Swisscom AG (SCMWY) is now Neutral from Buy at Nomura. Inteliquent (IQNT) shares are up more than 11% after the company said it was included in the International Business Times fastest growing companies list.

The NASDAQ Telecommunications Index (IXTC) was trading at $216.87 at 4:00 PM on Tuesday, up 0.71% on the day – up 10.13% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.

Big Mover: (IQNT) +11.5%.

Heavily Traded (S) -0.5%, (CLWR) +3.9%, (VOD) +2.7%, (T) +0.5%.

Utilities

GenOn Energy (GEN) is slashed to Sell from Hold at Deutsche Bank. International Power (IPRPY) is now Neutral from Buy at Nomura. Public Service Enterprise Group (PEG) is downgraded to Hold from Buy at Deutsche Bank.

The Utilities Select Sector SPDR (XLU) was trading at $34.58 at 4:00 PM on Tuesday, up 0.12% on the day – down 3.89% year-to-date (the weakest performing sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: (GEN) -2.7%, (DUK) -0.4%, (EXC) -0.4%, (SO) -0.1%, (NRG) -0.2%.

STOCKS: WPZ, CVI, DO, FRO, KMI, DHT, OSG, AIR, APD, PX, AGU, CF, IAG, AA, FCX, VALE, POT, X, COL, DLAKY, UPS, GE, GLW, KORS, TWC, NWS, DIS, TIF, LGF, CCO, LAMR, HOG, DPZ, TSCDY, DOLE, FEED, PATH, CHBT, RAD, ATRC, CRME, ECYT, AMRN, PFE, DB, JEF, FX, KIM, CMA, WBS, ZION, WAMUQ, AAPL, ADBE, ORCL, MSFT, ARMH, INTC, JASO, LDK, YGE, TSL, INXN, OVTI, ARMH, DRIV, FFIV, CA, XXIA, VECO, STP, DRWI,, SCMWY, IQNT, S, CLWR, VOD, T, GEN, IPRPY, PEG, DUK, EXC, SO, NRG

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
ORCL Oracle Corporation 39.26 0.06 0.15 9,455,308
UPS United Parcel Service Inc. 114.24 0.33 0.29 1,788,059
GLW Corning Incorporated 24.84 0.31 1.26 3,849,630
WBS Webster Financial Corporation 53.93 0.80 1.51 505,192
APD Air Products and Chemicals Inc. 145.35 -0.49 -0.34 996,479
GEN Genesis Healthcare Inc. 4.36 -0.04 -0.91 88,792
CF CF Industries Holdings Inc. 33.98 -0.53 -1.54 4,144,901
GE General Electric Co 31.36 -0.03 -0.10 24,323,767
HOG Harley-Davidson Inc. 58.73 0.41 0.70 1,505,141
SO Southern Company (The) 48.80 -0.20 -0.41 3,590,684
VALE VALE S.A. American Depositary Shares Each Represen 9.58 0.14 1.48 31,394,330
TWC Time Warner Cable Inc n/a n/a n/a 0
AGU Agrium Inc. 105.38 -0.12 -0.11 209,411
ARMH ARM Holdings plc n/a n/a n/a 0
LGF Lions Gate Entertainment Corporation n/a n/a n/a 0
AA Alcoa Inc. 33.01 -0.03 -0.09 3,026,712
INTC Intel Corporation 36.79 0.08 0.22 15,072,235
RAD Rite Aid Corporation 8.66 -0.04 -0.46 34,303,556
BAM.PFA:CA Brookfield Asset Management Inc Cum Cl A Pref Shs Ser 32 n/a n/a n/a 0
TIF Tiffany & Co. 81.92 1.37 1.70 2,879,236
KIM Kimco Realty Corporation 25.33 -0.02 -0.08 2,405,379
IAG Iamgold Corporation 4.44 -0.02 -0.45 7,905,608
AAPL Apple Inc. 119.04 -0.21 -0.18 26,111,948
S Sprint Corporation 8.61 0.15 1.77 11,828,108
POT Potash Corporation of Saskatchewan Inc. 18.91 -0.07 -0.37 3,708,659
ADBE Adobe Systems Incorporated 108.53 -0.06 -0.06 1,594,154
DPZ Domino\'s Pizza Inc 167.16 -1.20 -0.71 475,747
NRG NRG Energy Inc. 14.60 0.22 1.53 6,953,502
CCO Clear Channel Outdoor Holdings Inc. Class A 4.85 -0.05 -1.02 19,665
AMRN Amarin Corporation plc 3.02 0.03 1.00 1,948,430
VOD Vodafone Group Plc 26.53 -0.12 -0.45 5,874,089
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.12 0.27 2.74 1,059,016
DB Deutsche Bank AG 19.18 0.46 2.46 6,959,672
DIS Walt Disney Company (The) 108.06 0.53 0.49 6,488,966
PX Praxair Inc. 117.08 -0.17 -0.14 1,088,306
LAMR Lamar Advertising Company 72.35 0.48 0.67 690,506
AIR AAR Corp. 32.28 0.35 1.10 216,494
XXIA Ixia 17.00 0.15 0.89 426,542
KMI Kinder Morgan Inc. 22.42 0.23 1.04 16,135,560
OVTI OmniVision Technologies Inc. n/a n/a n/a 0
FCX Freeport-McMoRan Inc. 15.19 -0.08 -0.52 33,977,849
YGE Yingli Green Energy Holding Company Limited ADR 2.78 0.02 0.72 24,532
DRWI DragonWave Inc 2.30 -0.05 -2.13 221,263
ECYT Endocyte Inc. 2.57 -0.01 -0.39 114,034
CRME Cardiome Pharma Corporation 2.81 0.04 1.44 22,400
DO Diamond Offshore Drilling Inc. 18.66 -0.83 -4.26 2,011,099
CMA Comerica Incorporated 69.92 0.70 1.01 1,885,004
JASO JA Solar Holdings Co. Ltd. 4.90 0.04 0.82 148,441
VECO Veeco Instruments Inc. 27.40 0.40 1.48 929,771
WPZ Williams Partners L.P. Representing Limited Partne 40.48 0.19 0.47 1,410,206
X United States Steel Corp. 32.70 -0.12 -0.37 16,648,081
FRO Frontline Ltd 7.10 -0.10 -1.39 1,332,943
PFE Pfizer Inc. 32.52 -0.08 -0.25 20,291,186
COL Rockwell Collins Inc. 89.93 -0.47 -0.52 1,720,097
INXN InterXion Holding N.V. (0.01 nominal value) 37.54 0.19 0.51 554,593
DHT DHT Holdings Inc. 3.99 -0.02 -0.50 746,528
KORS Michael Kors Holdings Limited 42.39 -0.26 -0.61 1,359,360
CVI CVR Energy Inc. 22.75 -0.05 -0.22 467,254
EXC Exelon Corporation 35.44 0.00 0.00 5,052,922
T AT&T Inc. 40.96 -0.05 -0.12 13,932,163
DUK Duke Energy Corporation (Holding Company) 77.21 -0.33 -0.43 1,954,531
MSFT Microsoft Corporation 62.70 0.09 0.14 19,422,310
IQNT Inteliquent Inc. 22.97 0.05 0.22 278,558
PEG Public Service Enterprise Group 44.03 -0.04 -0.09 1,579,169
ZION Zions Bancorporation 43.85 0.88 2.05 2,732,528
ATRC AtriCure Inc. 16.14 -0.26 -1.59 338,448
FFIV F5 Networks Inc. 143.37 0.38 0.27 451,617
NWS News Corporation 12.45 0.00 0.00 381,690

Comments

Emerging Growth

Naked Brand Group Inc

Naked Brand Group Inc through its wholly-owned subsidiary is engaged in manufacturing and selling of direct and wholesale men's undergarments to consumers and retailers.

Private Markets

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…

GoCoin

Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…