Equities Sector Coverage: Stocks Close Best Week So Far in 2012

Sector Recap |

Wall Street Bulls EyeThe US Trade Deficit came in at $50.06 billion, as both exports and imports declined as the economy slows. The Dow Jones Industrial Average declined to 12,398.44 then rebounded to 12,544.13 versus Thursday’s high at 12,555.26. The NASDAQ declined to 2814.80 then rebounded to 2856.55 versus Thursday’s high at 2873.59.

Asian stocks were lower on Friday. The Nikkei 225 ended the day at 8,459 – down 2.09%. The Hang Seng ended the day at 18,502 – down 0.94%. European exchanges were also lower on Friday. The FTSE 100 ended the day at 5,435 – down 0.23% on Friday. The DAX ended the day at 6,131 – down 0.22%. The CAC 40 ended the day at 3,052 – down 0.63%. The yield on the 10-Year US Treasury declined from 1.639% to 1.556% then up to 1.642%.

Gold declined from $1593.6 the Troy ounce to $1556.4 then rebounded to $1596.0 still below the 50-day and 200-day simple moving averages at $1618.8 and $1682.9. Crude oil declined from $83.99 per barrel to $82.00 then up to $84.67. The euro versus the dollar declined from 1.2574 to 1.2440.

Energy

Shell (RDS.A) signed a preliminary agreement with truck-stop chain TravelCenters of America (TA) to supply liquefied natural gas for heavy-duty trucks at 100 fueling stations across the US beginning in 2013. Shell initiative should lower costs and should spark demand for the alternative fuel. Chesapeake Energy (CHK) confirmed its plan to sell its assets in Chesapeake Midstream Partners (CHKM) to Global Infrastructure Partners in three separate transactions for cash proceeds of more than $4 billion. SandRidge Energy (SD) has been initiated with an Outperform rating at RBD Capital. Chevron (CVX) has been upgraded to Buy from Hold with a $120 price target at Société Générale. Dow components – Chevron (CVX) down 0.46%, Exxon Mobil (XOM) down 1.07%.

Energy Select Sector SPDR (XLE) was trading at $64.41 at 3:30 PM on Friday, down 0.12% on the day – down 6.83% year-to-date.

Materials

KMG Chemicals (KMGB) beat FQ3 EPS estimates by a penny with better than expected revenue. Owens Corning (OC) has been upgraded to Buy from Neutral at Citigroup. Pall Corp (PLL): have been upgraded to Neutral from Underweight at JP Morgan. Praxair (PX) has been upgraded to Outperform from Neutral at Robert W. Baird. Air Products (APD) has been downgraded to Neutral from Outperform at Robert W. Baird. Dow components – Alcoa (AA) down 1.64%, DuPont (DD) up 0.27%.

The Materials Select Sector SPDR (XLB) was trading at $34.53 at 3:30 PM on Friday, up 0.52% on the day – up 3.07% year-to-date.

Industrials

United Continental (UAL) has reached a tentative labor agreement with the Association of Flight Attendants, which covers staff from the company's Continental subsidiary. Flight attendants are set to vote on the deal in the coming weeks. General Motors (GM) says it Opel unit plans to sell 30,000 cars in China. Even though this sales target is relatively low, it marks an important channel for the Europe-based automaker, who struggles to find buyers in Europe. Boeing (BA) and Airbus (EADSY.PK) are in competition over El Al Israel Airlines order for 15 and 20 wide-body jets over the next decade. Boeing is already providing the carrier with a $40 million loan contingent on a commitment to buy or lease new 787 Dreamliners by the end of the year. Airbus has countered by offering to repay the loan if El Al switches allegiance and buys it's planes from them for the first time. DR Horton (DHI) and PulteGroup (PHM) have been upgraded to Buy from Neutral at Citigroup. Beazer Homes (BZH) has been downgraded to Sell from Buy at Citigroup. Lennar (LEN) has been downgraded to Sell from Neutral at Citigroup. Dow components – Boeing Co (BA) down 0.47, Caterpillar (CAT) down 0.92%, General Electric (GE) up 0.72%, 3M Company (MMM) up 0.12%, United Technologies (UTX) down 0.52%.

The Industrial Select Sector SPDR (XLI) was trading at $34.77 at 3:30 PM on Friday, up 0.67% on the day – up 3.02% year-to-date.



Consumer Discretionary

Nevada becomes the first U.S. state to adopt statutes to allow online gaming, as International Game Technology (IGT) received a unanimous recommendation from the Nevada Gaming Control Board for providing an interactive online gaming service provider and manufacturer license. Dish Network (DISH) has been defending the company's controversial Auto Hop ad-skipping feature as a competitively necessary response to the explosion of cheap or free Internet video. McDonald's (MCD) reported that global comparable sales were up 3.3% in May. Sales rose 4.4% in the US on demand for new breakfast items and Europe saw a 2.9% gain, but Asia/Pacific, Middle East and Africa sales dropped 1.7% for the month, and this caused shares to slip 2.6% premarket. Dow Components – Disney (DIS) up 1.14%, Home Depot up 1.32%, McDonalds (MCD) up 0.16%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.33 at 3:30 PM on Friday, up 0.70% on the day – up 11.05% year-to-date.

Consumer Staples

Jefferies upgraded Jack in the Box (JACK) to Buy with a price target of $31, as analysts at Jefferies expect JACK to see earnings upside from strong same-store sales and continued margin expansion. Yum Brands (YUM) plans to double its presence in Thailand, with a goal to reach 1,000 restaurants by 2020. The strategy falls in line with the company's plans to stay aggressive in China and India.. Dow components – Kraft (KFT) up 0.29%, Coca Cola (KO) up 0.85%, Procter & Gamble (PG) down 0.10%, Wal-Mart (WMT) up 2.87%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.98 at 3:30 PM on Friday, up 0.53% on the day – up 4.59% year-to-date.

Health Care

Cooper Companies (COO) missed Q2 earnings across the board on higher depreciation expenses and despite a 6% rise in total revenue year over year. The company cut guidance for the full year EPS. Onyx Pharmaceuticals (ONXX) - Bank of America-Merrill Lynch has upgraded ONXX to Buy from Neutral. Dow Components – Johnson & Johnson (JNJ) down 0.08%, Merck (MRK) down 0.07%, Pfizer (PFE) up 0.36%.

The Health Care Select Sector SPDR (XLV) was trading at $36.55 at 3:30 PM on Friday, up 0.49% on the day – up 5.36% year-to-date.

Financial

America's 19 biggest banks are at least $50 billion short of meeting Basel III capital requirements under the new rules approved by the Federal Reserve on Thursday. The smaller banks are $10 billion short. The Fed surprised the banking industry by voting in favor of applying these complex regulations to all 7,307 FDIC-Insured financial institutions. The FHA is expected to announce a bulk sale program as the federal agency attempts to offload more troubled loans to investors. The move is expected to prevent or delay foreclosures for thousands of homeowners. The FHA has more than 700,000 loans in default, amounting to over 9% of the $1 trillion of debt that it insures. Citigroup has downgraded several regional banks - Wells Fargo (WFC), SunTrust (STI), KeyCorp (KEY), First Horizon (FHN), Zions’ (ZION), SVB Financial (SIVB), M&T (MTB), PNC Financial (PNC), and First Niagara (FNFG). Dow Components – American Express (AXP) up 0.54%, Bank of America (BAC) down 1.75%, JP Morgan Chase (JPM) up 1.11%, Travelers (TRV) down 0.06%.

The Financial Select Sector SPDR (XLF) was trading at $14.08 at 3:30 PM on Friday, up 0.79% on the day – up 8.31% year-to-date.

Information Technology

A judge has tentatively dismissed the IP litigation between Apple (AAPL) and Motorola Mobility (GOOG) and canceled the trial that would have began on Monday. Logitech (LOGI) will layoff off 450 employees, or 13% of its non-direct-labor workforce, as part of its previously-announced restructuring plan. Starting in FY14, this plan should save the company an annual $80 million in operating costs. RF Micro Devices (RFMD has been raised to Buy from Neutral at Davenport, saying that strong demand for the chip maker's products should allow the company to meet or exceed Wall Street expectations in coming months. Cisco Systems (CSCO) has been initiated with a Buy rating at Citigroup with a $19 price target. Yahoo (YHOO) has been upgraded to Outperform from Market Perform at Bernstein, which says the recent deal with Alibaba reduces risks related to its Asian assets. Dow Components – Cisco Systems (CSCO) up 0.39%, Hewlett-Packard (HPQ) up 0.45%, IBM (IBM) down 0.13%, Intel Corp (INTC) up 1.33%, Microsoft (MSFT) up 0.21%.

The Technology Select Sector SPDR (XLK) was trading at $28.26 at 3:30 PM on Friday, up 0.82% on the day – up 11.04% year-to-date.

Telecommunication Services

Comtech Telecommunications (CMTL) beat FQ3 EPS estimates by a nickel with better than expected revenue. Dow components – AT&T (T) up 1.14%, Verizon (VZ) up 1.27%.
The NASDAQ Telecommunications Index (IXTC) was trading at $181.65 at 3:30 PM on Friday, up 1.06% on the day – down 7.76% year-to-date.

Utilities

First Energy (FE) reported that the leaked radioactive coolant at its Davis-Besse nuclear reactor in Ohio was cleaned up and no radioactivity escaped. An inspection required to resume operations after a month-long reactor shutdown for refueling and maintenance had revealed the leak. Aqua America (WTR) has been downgraded to Neutral from Buy at Janney Montgomery Scott. Dominion Resources (D) up 0.82%, Edison International (EIX) up 0.33%, First Energy (FE) up 0.17%, PG&E Corp (PCG) up 0.76%, Southern Company (SO) down 0.10%.
The Utilities Select Sector SPDR (XLU) was trading at $36.83 at 3:30 PM on Friday, up 0.24% on the day – up 2.36% year-to-date.

STOCKS: CVX, XOM, RDS.A, TA, CHK, CHKM, SD, AA, DD, KMGB, OC, PLL, PX, APD, BA, CAT, GE, MMM, UTX, UAL, GM, EADSY.PK, DHI, PHM, BZH, LEN, DIS, HD, MCD, IGT, DISH, KFT, KO, PG, WMT, JACK, YUM, JNJ, MRK, PFE, COO, ONXX, AXP, BAC, JPM, TRV, WFC, STI, KEY, FHN, ZION, SIVB, MTB, PNC, FNFG, CSCO, HPQ, IBM, INTC, MSFT, AAPL, GOOG, LOGI, RFMD, YHOO, T, VZ, CMTL, D, EIX, FE, PCG, SO, WTR

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Companies

Symbol Name Price Change % Volume
MMM 3M Company 229.36 -0.06 -0.03 1,732,091 Trade
APD Air Products and Chemicals Inc. 161.58 0.40 0.25 909,963 Trade
FNFG First Niagara Financial Group Inc. n/a n/a n/a 0 Trade
UAL United Continental Holdings 58.20 -0.48 -0.82 4,256,927 Trade
PG Procter & Gamble Company (The) 88.43 -0.82 -0.92 5,919,864 Trade
GE General Electric Co 18.21 -0.04 -0.22 60,294,057 Trade
CVX Chevron Corporation 114.71 0.14 0.12 4,328,766 Trade
SO Southern Company (The) 50.97 -0.39 -0.76 5,386,309 Trade
PCG Pacific Gas & Electric Co. 54.00 -1.15 -2.09 7,648,879 Trade
DISH DISH Network Corporation 50.66 0.16 0.32 2,040,358 Trade
JNJ Johnson & Johnson 138.00 -0.87 -0.63 4,112,134 Trade
OC Owens Corning Inc New 85.63 1.84 2.20 1,875,670 Trade
WMT Wal-Mart Stores Inc. 97.47 -2.15 -2.16 23,507,101 Trade
AA Alcoa Inc. 43.40 1.10 2.60 3,569,042 Trade
INTC Intel Corporation 44.63 -1.02 -2.23 63,116,495 Trade
IBM International Business Machines Corp 148.97 -0.15 -0.10 4,865,373 Trade
D Dominion Resources Inc. 81.32 -0.64 -0.78 1,703,379 Trade
TRV The Travelers Companies Inc. 129.92 -0.89 -0.68 2,366,554 Trade
PNC PNC Financial Services Group Inc. (The) 132.85 0.36 0.27 1,066,390 Trade
KEY KeyCorp 18.31 0.18 0.99 9,498,546 Trade
AAPL Apple Inc. 170.15 -0.95 -0.56 21,805,211 Trade
ZYNE Zynerba Pharmaceuticals Inc. 13.88 0.72 5.47 408,621 Trade
EIX Edison International 80.89 -0.86 -1.05 1,395,112 Trade
BZH Beazer Homes USA Inc. 20.50 0.04 0.20 682,090 Trade
JPM JP Morgan Chase 98.14 -0.33 -0.34 8,987,195 Trade
AXP American Express Company 93.69 0.13 0.14 3,247,661 Trade
UTX United Technologies Corporation 116.53 -1.36 -1.15 2,540,725 Trade
CMTL Comtech Telecommunications Corp. 20.57 -0.11 -0.53 119,897 Trade
LOGI Logitech International S.A. 35.66 0.46 1.31 365,405 Trade
WTR Aqua America Inc. 36.37 -0.24 -0.66 398,662 Trade
JACK Jack In The Box Inc. 105.03 0.59 0.56 442,263 Trade
CSCO Cisco Systems Inc. 35.90 0.02 0.06 27,512,643 Trade
DIS Walt Disney Company (The) 103.44 -0.16 -0.15 7,435,925 Trade
PX Praxair Inc. 150.64 1.60 1.07 2,919,280 Trade
VZ Verizon Communications Inc. 45.42 0.65 1.45 18,732,128 Trade
TA TravelCenters of America LLC 4.83 0.08 1.58 172,582 Trade
GM General Motors Company 43.88 0.28 0.64 10,529,689 Trade
FHN First Horizon National Corporation 18.40 0.10 0.55 2,128,349 Trade
BAC Bank of America Corporation 26.62 -0.14 -0.52 48,263,648 Trade
YUM Yum! Brands Inc. 78.60 0.06 0.08 1,482,056 Trade
GOOG Alphabet Inc. 1,019.09 -13.41 -1.30 1,359,972 Trade
SIVB SVB Financial Group 215.22 0.99 0.46 261,074 Trade
MCD McDonald\'s Corporation 166.72 -1.37 -0.82 2,215,766 Trade
DHI D.R. Horton Inc. 48.13 0.61 1.28 3,002,898 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
LEN Lennar Corporation Class A 58.89 0.80 1.38 3,710,543 Trade
HD Home Depot Inc. (The) 167.74 0.24 0.14 4,508,384 Trade
XOM Exxon Mobil Corporation 80.24 -0.32 -0.40 9,210,020 Trade
PFE Pfizer Inc. 35.37 -0.19 -0.53 14,817,055 Trade
COO Cooper Companies Inc. (The) 238.65 -0.80 -0.33 216,132 Trade
WFC Wells Fargo & Company 54.15 -0.45 -0.82 14,937,412 Trade
PHM PulteGroup Inc. 32.25 0.35 1.10 6,152,152 Trade
HPQ HP Inc. 21.75 0.18 0.83 10,633,230 Trade
BA Boeing Company (The) 262.26 -1.44 -0.55 1,714,329 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
MRK Merck & Company Inc. (new) 55.20 0.03 0.05 9,869,660 Trade
IGT International Game Technology 28.54 -0.26 -0.90 2,087,725 Trade
SD SandRidge Energy 16.57 0.32 1.97 1,929,588 Trade
FE FirstEnergy Corporation 34.65 0.01 0.03 3,509,394 Trade
KO Coca-Cola Company (The) 45.71 -0.84 -1.80 19,690,811 Trade
T AT&T Inc. 34.51 -0.01 -0.03 36,882,419 Trade
CAT Caterpillar Inc. 136.13 -0.23 -0.17 2,307,366 Trade
MTB M&T Bank Corporation 160.57 0.70 0.44 371,381 Trade
MSFT Microsoft Corporation 82.40 -0.80 -0.96 21,867,193 Trade
CHK Chesapeake Energy Corporation 4.02 0.17 4.42 21,734,935 Trade
ZION Zions Bancorporation 46.30 0.19 0.41 1,290,488 Trade
STI SunTrust Banks Inc. 57.77 0.05 0.09 2,460,967 Trade

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