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.

Energy

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.

Materials

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.

Industrials

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.

Financials

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.

Utilities

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.

STOCKS: CVX, XOM, HFC, ATO, WPX, AA, DD, ABX, GG, IAG, NG, NGD, NEM, BA, CAT, GE, MMM, UTX, SSW, LUV, LXU, PCP, HSC, DIS, HD, MCD, RRGB, BYD, JACK, BKE, KFT, KO, PG, WMT, LTD, SPTN, CPWM, HOTT, DLTR, SHLD, JNJ, MRK, PFE, DNDN, ALKS, QSII, AXP, BAC, JPM, TRV, RY, CS, HBC, CSCO, HPQ, IBM, INTC, MSFT, CTRP, EGHT, GTAT, TSEM, T, VZ, VOD, D, EIX, FE, PCG, SO, DUK

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
NGD New Gold Inc. 3.15 -0.06 -1.87 5,850,080
NG Novagold Resources Inc. 4.28 -0.14 -3.17 2,655,317
WPX WPX Energy Inc. 12.00 -0.08 -0.66 6,138,838 Trade
MMM 3M Company 194.23 2.73 1.43 2,709,554 Trade
PG Procter & Gamble Company (The) 89.55 0.93 1.05 8,338,467 Trade
GE General Electric Co 29.55 0.00 0.00 48,585,162 Trade
CVX Chevron Corporation 105.93 1.04 0.99 4,538,203 Trade
SO Southern Company (The) 50.15 0.17 0.34 4,097,080 Trade
PCG Pacific Gas & Electric Co. 67.79 0.46 0.68 2,704,968 Trade
JNJ Johnson & Johnson 122.89 1.13 0.93 5,679,021 Trade
WMT Wal-Mart Stores Inc. 74.78 -0.16 -0.21 7,812,524 Trade
AA Alcoa Inc. 33.31 1.61 5.08 7,907,300 Trade
INTC Intel Corporation 36.75 0.43 1.18 26,305,762 Trade
IBM International Business Machines Corp 160.75 0.37 0.23 5,320,608 Trade
D Dominion Resources Inc. 78.07 0.53 0.68 2,543,271 Trade
TRV The Travelers Companies Inc. 120.57 1.47 1.23 1,957,578 Trade
ALKS Alkermes plc 56.73 0.16 0.28 864,520 Trade
LXU LSB Industries Inc. 7.35 0.18 2.51 729,583 Trade
BYD Boyd Gaming Corporation 22.53 0.36 1.62 893,970 Trade
BKE Buckle Inc. (The) 19.05 0.25 1.33 362,346 Trade
ATO Atmos Energy Corporation 80.01 0.18 0.23 375,552 Trade
IAG Iamgold Corporation 4.27 -0.07 -1.61 7,181,042 Trade
CSWC Capital Southwest Corporation 16.17 0.02 0.12 18,667 Trade
EIX Edison International 80.94 0.34 0.42 1,539,209 Trade
SSW Seaspan Corporation 6.21 -0.07 -1.11 771,410 Trade
GG Goldcorp Inc. 14.83 -0.32 -2.11 7,861,875 Trade
JPM JP Morgan Chase 87.50 2.98 3.53 25,468,285 Trade
AXP American Express Company 80.45 0.86 1.08 3,563,193 Trade
UTX United Technologies Corporation 116.32 1.33 1.16 3,155,205 Trade
VOD Vodafone Group Plc 26.34 0.51 1.97 3,810,205 Trade
RY Royal Bank of Canada 71.15 1.15 1.64 1,215,183 Trade
JACK Jack In The Box Inc. 101.58 0.50 0.49 577,751 Trade
CSCO Cisco Systems Inc. 33.28 0.46 1.40 15,400,452 Trade
EGHT 8x8 Inc 14.85 0.40 2.77 436,767 Trade
LUV Southwest Airlines Company 56.49 0.86 1.55 3,573,551 Trade
DIS Walt Disney Company (The) 113.70 -0.74 -0.65 7,294,620 Trade
HSC Harsco Corporation 12.65 0.35 2.85 376,621 Trade
QSII Quality Systems Inc. 13.92 -0.06 -0.43 264,852 Trade
VZ Verizon Communications Inc. 47.05 -0.20 -0.42 23,161,886 Trade
ABX Barrick Gold Corporation 19.04 -0.19 -0.99 14,307,763 Trade
SHLD Sears Holdings Corporation 12.45 -0.94 -7.02 1,405,224 Trade
DLTR Dollar Tree Inc. 79.79 0.98 1.24 2,245,067 Trade
BAC Bank of America Corporation 23.63 0.92 4.05 138,638,933 Trade
HFC HollyFrontier Corporation 28.82 0.94 3.37 3,641,100 Trade
MCD McDonald\'s Corporation 134.23 0.82 0.61 5,040,990 Trade
DD E.I. du Pont de Nemours and Co. 79.37 0.72 0.92 2,345,907 Trade
RRGB Red Robin Gourmet Burgers Inc. 59.50 0.25 0.42 166,021 Trade
HD Home Depot Inc. (The) 151.89 1.89 1.26 5,077,174 Trade
XOM Exxon Mobil Corporation 81.11 0.42 0.52 8,729,701 Trade
PFE Pfizer Inc. 33.74 0.10 0.30 21,288,924 Trade
HPQ HP Inc. 18.54 0.25 1.37 8,054,640 Trade
BA Boeing Company (The) 182.06 1.68 0.93 3,141,913 Trade
MRK Merck & Company Inc. (new) 62.14 0.25 0.40 8,846,263 Trade
SPTN SpartanNash Company 35.68 0.66 1.88 154,944 Trade
FE FirstEnergy Corporation 30.71 0.10 0.33 5,218,400 Trade
KO Coca-Cola Company (The) 43.28 0.21 0.49 16,703,800 Trade
T AT&T Inc. 40.02 0.09 0.23 24,033,786 Trade
CAT Caterpillar Inc. 96.81 2.49 2.64 6,739,398 Trade
NEM Newmont Mining Corporation 33.71 -0.42 -1.23 8,432,485 Trade
DUK Duke Energy Corporation (Holding Company) 82.58 0.37 0.45 2,641,318 Trade
PCP Precision Castparts n/a n/a n/a 0 Trade
CTRP Ctrip.com International Ltd. 47.55 0.39 0.83 4,004,949 Trade
MSFT Microsoft Corporation 67.53 1.13 1.70 29,769,976 Trade
TSEM Tower Semiconductor Ltd. 22.11 0.59 2.74 254,193 Trade

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