Equities Sector Coverage: Stocks Break Lower on Increased Fear and Disappointment

Sector Recap |

Stocks Break Lower on Increased Fear and DisappointmentInitial Jobless Claims came in at 370,000 still above the 350,000 recessionary threshold. The Philly Fed Index came in well below estimates at -5.8 in May when a +7.0 reading was expected. Leading Indicators came in at -0.1 in April, below estimates and the first decline in seven months. Freddie Mac reported that their 30-Year fixed rate mortgage is now at a record low of 3.79%. The Dow Jones Industrial Average rebounded to 12,611.42 then declined to 12,462.62 going into the final half hour of trading. The NASDAQ traded between up to 2879.22 then down to 2821.02 going into the final half hour of trading.

Asian stocks were lower on Thursday. The Nikkei 225 ended their session at 8,877 – up 0.86% on the day. The Hang Seng ended their session at 19,201 – down 0.31% on the day. European exchanges opened lower on Thursday and closed lower. The FTSE 100 ended their session at 5,338 – down 1.24% on the day. The DAX ended their session at 6,309 – down 1.18% on the day. The CAC 40 ended their session at 3,012 – down 1.20% on the day. The yield on the 10-Year US Treasury declined from 1.795 to a new year to date low at 1.692, well below its 50-day and 200-day simple moving averages at 2.045 and 2.023.

Gold traded up from $1538.4 the Troy ounce to $1579.8 well below the “Death Cross” 50-day and 200-day simple moving averages at $1643.1 and $1696.7. Crude oil traded up from $92.65 per barrel to $93.88 then down to $92.09 below its 200-day simple moving average at $96.24. The euro versus the dollar traded between 1.2670 and 1.2750 well below its 50-day simple moving average at 1.3124.


HollyFrontier (HFC) announced a special dividend of $0.50 per share and a 50% increase in its quarterly dividend to $0.15 from $0.10 per share. Atmos Energy (ATO) - Bank of America-Merrill Lynch upgraded the stock to Buy from Neutral with a price target at $37. WPX Energy (WPX) - Susquehanna downgraded the stock to Negative from Neutral. Dow components – Chevron (CVX) up 0.64%, Exxon Mobil (XOM) up 0.41%.
Energy Select Sector SPDR (XLE) was trading at $64.69 at 3:30 PM on Thursday, down 0.09% on the day – down 6.42% year-to-date.


Gold and gold shares have become extremely oversold and several gold minors had a strong rebound on Thursday. Barrick Gold (ABX) up 5.02%, Goldcorp (GG) up 5.96%, IAMGold (IAG) up 5.08%, NovaGold (NG) gained 7.05%, New Gold (NGD) up 5.91% and Newmont Mining (NEM) up 4.64%. Dow components – Alcoa (AA) up 0.77%, DuPont (DD) down 0.97%.
The Materials Select Sector SPDR (XLB) was trading at $33.13 at 3:30 PM on Thursday, down 1.52% on the day – down 1.10% year-to-date.


Seaspan (SSW) beat Q1 EPS estimates by 26 cents with in-line revenue. Southwest Airlines (LUV) is deferring deliveries of 30 Boeing (BA) 737-800 jets by four years, saving more than $1 billion as the carrier works to curb rising costs until it hits financial targets. LSB Industries (LXU) shares fell another 7.9% on Wednesday a day after an explosion at one of its facilities shut down the plant indefinitely. Precision Castparts (PCP) beat FQ4 EPS estimates by four cents with in-line revenue. Harsco (HSC) has been upgraded to Strong Buy from Market Perform at Raymond James. Dow components – Boeing Co (BA) down 2.03%, Caterpillar (CAT) down 3.44%, General Electric (GE) up 0.21%, 3M Company (MMM) down 0.56%, United Technologies (UTX) down 1.05%.
The Industrial Select Sector SPDR (XLI) was trading at $34.34 at 3:30 PM on Thursday, down 2.00% on the day – up 1.75% year-to-date.

Consumer Discretionary

Red Robin Gourmet Burgers (RRGB) reported mixed Q1 results beating on a per share basis but missing the revenue estimates. Revenues were weak on declining guest counts, but the bottom line was helped by a boost in the average guest check, better operating profit margins and tighter expense management. Boyd Gaming (BYD) will acquire Peninsula Gaming for $1.45 billion which will add five new casino properties in Iowa, Kansas, and Louisiana. Jack in the Box (JACK) missed FQ2 EPS estimates by four cents with a beat on the revenue line. Buckle (BKE) beat Q1 EPS estimates by three cents with in-line revenue. Dow Components – Disney (DIS) down 0.78%, Home Depot down 2.30%, McDonalds (MCD) down 1.02%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.56 at 3:30 PM on Thursday, down 2.12% on the day – up 9.07% year-to-date.

Consumer Staples

Limited Brands (LTD) reported in-line Q1 EPS estimates and in-line revenue, but shares dropped 3% in after hours trading Thursday. Spartan Stores (SPTN) beat FQ4 EPS estimates by a penny with a miss on the revenue line. Cost Plus (CPWM) beat Q1 EPS estimates by a nickel with a beat on the revenue line. Hot Topic (HOTT) beat Q1 EPS estimates by two cents with in-line revenue and shares slumped 5.7% after hours Wednesday. Wal-Mart's (WMT) beat Q1 EPS estimates by a nickel with a beat on the revenue line and shares were up 1.5% pre-market. Dollar Tree Stores (DLTR) beat Q1 EPS estimates by three cents with in-line revenue and shares traded lower by 4.8% in the premarket. Sears (SHLD) report a less than expected Q1 EPS loss and had better than expected revenue.Dow components – Kraft (KFT) down 0.24%, Coca Cola (KO) down 0.88%, Procter & Gamble (PG) down 0.28%, Wal-Mart (WMT) up 5.04%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.87 at 3:30 PM on Thursday, down 0.27% on the day – up 4.25% year-to-date.

Health Care

Dendreon (DNDN) confirmed that the SEC has opened an investigation connected to lawsuits accusing the company over misleading investors over Provenge. While Dendreon had been bullish about the prostate-cancer treatment, the company shocked the market in August 2011 when they cut its revenue forecast. Alkermes (ALKS) beat FQ4 EPS estimates by two cents with better than expected revenue. Quality Systems (QSII) missed FQ4 EPS estimates by two cents with a miss on the revenue line. Dow Components – Johnson & Johnson (JNJ) flat, Merck (MRK) flat, Pfizer (PFE) up 0.44%.
The Health Care Select Sector SPDR (XLV) was trading at $36.55 at 3:30 PM on Thursday, down 0.49% on the day – up 5.36% year-to-date.


JP Morgan (JPM) remains in focus as its massive trading losses grow, as sources say the loss has increased by $3 billion and counting. Meanwhile the White House intensified talks with the Treasury about ensuring a tough interpretation of the Volcker Rule. Royal Bank of Canada (RY) and Credit Suisse (CS) are suitors who made initial offers for Bank of America's (BAC) non-US wealth-management business. HSBC (HBC) said it's on track to meet its goal of slashing up to $3.5 billion in costs by the end of next year. According to Fitch, the world's 29 largest banks will have to raise $566 billion in additional capital by 2018 to meet tougher Basel III standards. The amount is a 23% increase on what banks held at the end of 2011. US banks will be hit particularly hard by the capital requirements for risky activities. Dow Components – American Express (AXP) down 1.62%, Bank of America (BAC) up 0.21%, JP Morgan Chase (JPM) down 2.66%, Travelers (TRV) down 1.04%.
The Financial Select Sector SPDR (XLF) was trading at $14.00 at 3:30 PM on Thursday, down 1.55% on the day – up 7.69% year-to-date.

Information Technology

Ctrip.com International (CTRP) reported in-line Q1 EPS with a beat on the revenue line. 8x8 Inc (EGHT) beat FQ4 earnings on a 33% year over year jump in total revenue, and the stock was up 7.5% in after hours trading. GT Advanced Technologies (GTAT) missed FQ4 EPS estimates by two cents and missed on the revenue line. Tower Semiconductor (TSEM) missed Q1 EPS estimates by three cents with a miss on the revenue line. Dow Components – Cisco Systems (CSCO) up 0.23%, Hewlett-Packard (HPQ) up 0.26%, IBM (IBM) down 0.17%, Intel Corp (INTC) down 0.10%, Microsoft (MSFT) up 0.45%.
The Technology Select Sector SPDR (XLK) was trading at $27.87 at 3:30 PM on Thursday, down 0.92% on the day – up 9.51% year-to-date.

Telecommunication Services

Verizon Wireless' (VZ, VOD) will be offering shared data plans min-summer that the company says will be very innovative something that hasn’t been tried before in the industry. Dow components – AT&T (T) up 0.51%, Verizon (VZ) up 0.97%.
The NASDAQ Telecommunications Index (IXTC) was trading at $181.88 at 3:30 PM on Thursday, down 0.96% on the day – down 7.64% year-to-date.


Duke Energy (DUK) has been upgraded to Outperform from Neutral at Macquarie. Dominion Resources (D) down 0.97%, Edison International (EIX) down 0.63%, First Energy (FE) down 0.23%, PG&E Corp (PCG) down 0.63%, Southern Company (SO) down 0.26%.
The Utilities Select Sector SPDR (XLU) was trading at $35.54 at 3:30 PM on Thursday, down 0.42% on the day – down 1.22% year-to-date.


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Symbol Name Price Change % Volume
AA Alcoa Inc. 26.86 -0.02 -0.07 5,692,311
ABX Barrick Gold Corporation 16.53 -0.39 -2.31 13,467,990
ALKS Alkermes plc 56.69 1.07 1.92 2,199,910
ATO Atmos Energy Corporation 71.85 0.13 0.18 229,033
AXP American Express Company 67.09 -0.27 -0.40 5,136,675
BA Boeing Company (The) 137.45 1.82 1.34 3,813,684
BAC Bank of America Corporation 16.77 0.10 0.60 66,303,610
BKE Buckle Inc. (The) 21.70 0.70 3.33 358,927
BYD Boyd Gaming Corporation 18.83 0.18 0.97 1,621,065
CAT Caterpillar Inc. 85.99 -0.34 -0.39 5,090,963
CSCO Cisco Systems Inc. 30.46 0.31 1.03 13,977,794
CSWC Capital Southwest Corporation 14.56 0.18 1.25 12,384
CTRP Ctrip.com International Ltd. 48.20 0.59 1.24 3,097,242
CVX Chevron Corporation 100.66 -0.64 -0.63 6,068,710
D Dominion Resources Inc. 73.12 0.28 0.38 2,433,031
DD E.I. du Pont de Nemours and Co. 70.14 0.44 0.63 2,545,271
DIS Walt Disney Company (The) 93.37 0.34 0.37 7,258,712
DLTR Dollar Tree Inc. 75.97 0.26 0.34 1,713,653
DUK Duke Energy Corporation (Holding Company) 78.40 0.38 0.49 2,868,061
EGHT 8x8 Inc 15.35 0.38 2.54 364,940
EIX Edison International 71.26 0.36 0.51 1,191,908
FE FirstEnergy Corporation 33.34 0.15 0.45 2,383,083
GE General Electric Co 28.92 -0.06 -0.21 29,964,196
GG Goldcorp Inc. 15.29 -0.22 -1.42 8,595,156
HD Home Depot Inc. (The) 127.78 1.18 0.93 3,820,083
HFC HollyFrontier Corporation 24.53 0.09 0.37 2,801,814
HPQ HP Inc. 13.97 0.17 1.23 9,762,137
HSC Harsco Corporation 9.85 0.00 0.00 251,795
IAG Iamgold Corporation 4.06 -0.04 -0.98 9,726,264
IBM International Business Machines Corp 150.57 0.94 0.63 2,657,180
INTC Intel Corporation 35.26 0.11 0.31 20,770,988
JACK Jack In The Box Inc. 97.06 -1.44 -1.46 498,449
JNJ Johnson & Johnson 113.61 0.17 0.15 6,125,772
JPM JP Morgan Chase 68.87 0.38 0.55 10,083,749
KO Coca-Cola Company (The) 42.56 0.43 1.02 13,392,465
LUV Southwest Airlines Company 42.33 -0.10 -0.24 4,848,720
LXU LSB Industries Inc. 6.36 -0.24 -3.64 650,547
MCD McDonald\'s Corporation 113.57 -0.36 -0.32 6,172,200
MMM 3M Company 171.27 1.77 1.04 2,666,699
MRK Merck & Company Inc. (new) 60.75 -0.45 -0.74 9,851,213
MSFT Microsoft Corporation 61.00 1.34 2.25 52,607,723
NEM Newmont Mining Corporation 35.84 -0.51 -1.40 5,188,031
NG Novagold Resources Inc. 4.62 -0.04 -0.86 2,033,781
NGD New Gold Inc. 4.02 -0.12 -2.90 4,465,602
PCG Pacific Gas & Electric Co. 60.51 0.20 0.33 1,394,232
PCP Precision Castparts n/a n/a n/a 0
PFE Pfizer Inc. 32.13 -0.05 -0.16 18,789,286
PG Procter & Gamble Company (The) 84.10 -0.23 -0.27 10,568,817
QSII Quality Systems Inc. 12.12 0.26 2.19 807,587
RRGB Red Robin Gourmet Burgers Inc. 46.25 0.65 1.43 262,519
RY Royal Bank of Canada 62.59 -0.18 -0.29 796,043
SHLD Sears Holdings Corporation 11.40 -0.20 -1.72 460,227
SO Southern Company (The) 50.85 0.32 0.63 3,334,507
SPTN SpartanNash Company 27.98 0.53 1.93 100,069
SSW Seaspan Corporation 12.74 0.03 0.24 381,872
T AT&T Inc. 36.86 -0.63 -1.68 100,545,998
TRV The Travelers Companies Inc. 109.07 0.72 0.66 2,522,596
TSEM Tower Semiconductor Ltd. 16.23 0.37 2.33 936,727
UTX United Technologies Corporation 99.52 0.85 0.86 4,294,644
VOD Vodafone Group Plc 27.67 -0.10 -0.36 4,044,101
VZ Verizon Communications Inc. 48.21 0.01 0.02 19,410,504
WMT Wal-Mart Stores Inc. 69.19 0.85 1.24 7,067,427
WPX WPX Energy Inc. 12.30 -0.38 -3.00 7,132,324
XOM Exxon Mobil Corporation 86.91 0.29 0.33 8,330,719


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