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

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
AA Alcoa Inc. 10.14 0.18 1.81 22,886,785
AAPL Apple Inc. 113.05 0.87 0.78 36,370,493
APD Air Products and Chemicals Inc. 150.34 -0.17 -0.11 2,169,307
AXP American Express Company 64.04 0.67 1.06 4,306,976
BA Boeing Company (The) 131.74 0.71 0.54 3,118,877
BAC Bank of America Corporation 15.65 0.49 3.23 119,410,772
BZH Beazer Homes USA Inc. 11.66 0.10 0.87 582,887
CAT Caterpillar Inc. 88.77 1.30 1.49 6,378,906
CHK Chesapeake Energy Corporation 6.27 0.15 2.45 72,776,374
CMTL Comtech Telecommunications Corp. 12.81 -0.32 -2.44 523,324
COO Cooper Companies Inc. (The) 179.26 3.22 1.83 936,797
CSCO Cisco Systems Inc. 31.72 0.33 1.05 30,380,552
CVX Chevron Corporation 102.92 1.65 1.63 9,431,324
D Dominion Resources Inc. 74.27 -0.48 -0.64 3,153,613
DD E.I. du Pont de Nemours and Co. 66.97 0.60 0.90 2,932,141
DHI D.R. Horton Inc. 30.20 0.06 0.20 4,380,073
DIS Walt Disney Company (The) 92.86 1.06 1.15 8,923,678
DISH DISH Network Corporation 54.78 -0.26 -0.47 2,249,484
EIX Edison International 72.25 -0.43 -0.59 1,734,361
FE FirstEnergy Corporation 33.08 -0.09 -0.27 3,504,010
FHN First Horizon National Corporation 15.23 0.30 2.01 1,704,856
FNFG First Niagara Financial Group Inc. n/a n/a n/a 0
GE General Electric Co 29.62 0.09 0.30 36,119,540
GM General Motors Company 31.77 0.29 0.92 9,330,018
GOOG Alphabet Inc. 777.29 2.28 0.29 1,585,278
HD Home Depot Inc. (The) 128.68 0.75 0.59 6,044,499
HPQ HP Inc. 15.53 0.14 0.91 11,457,298
IBM International Business Machines Corp 158.85 0.74 0.47 3,596,878
IGT International Game Technology 24.38 -0.45 -1.81 1,561,668
INTC Intel Corporation 37.75 0.43 1.15 24,278,249
JACK Jack In The Box Inc. 95.94 1.57 1.66 542,950
JNJ Johnson & Johnson 118.13 0.86 0.73 7,941,065
JPM JP Morgan Chase 66.59 0.94 1.43 21,680,093
KEY KeyCorp 12.17 0.12 1.00 22,705,265
KO Coca-Cola Company (The) 42.32 0.29 0.69 14,375,702
LEN Lennar Corporation Class A 42.34 0.15 0.36 1,888,429
LOGI Logitech International S.A. 22.46 0.11 0.49 271,781
MCD McDonald\'s Corporation 115.36 0.57 0.50 4,188,694
MMM 3M Company 176.23 0.86 0.49 2,419,430
MRK Merck & Company Inc. (new) 62.41 0.50 0.81 13,605,282
MSFT Microsoft Corporation 57.60 0.20 0.35 29,910,788
MTB M&T Bank Corporation 116.10 1.56 1.36 708,905
OC Owens Corning Inc New 53.39 0.41 0.77 855,912
PCG Pacific Gas & Electric Co. 61.17 -0.59 -0.96 3,494,971
PFE Pfizer Inc. 33.87 0.55 1.65 28,593,974
PG Procter & Gamble Company (The) 89.75 1.52 1.72 123,735,726
PHM PulteGroup Inc. 20.04 0.23 1.16 3,621,785
PNC PNC Financial Services Group Inc. (The) 90.09 1.10 1.24 3,380,090
PX Praxair Inc. 120.83 1.97 1.66 1,698,281
SD SandRidge Energy n/a n/a n/a 0
SIVB SVB Financial Group 110.54 3.23 3.01 410,807
SO Southern Company (The) 51.30 -0.75 -1.44 7,048,679
STI SunTrust Banks Inc. 43.80 0.65 1.51 3,614,508
T AT&T Inc. 40.61 -0.12 -0.29 19,379,944
TA TravelCenters of America LLC 7.16 0.34 4.99 276,773
TRV The Travelers Companies Inc. 114.55 0.68 0.60 1,361,208
UAL United Continental Holdings 52.47 1.33 2.60 5,366,308
UTX United Technologies Corporation 101.60 0.54 0.53 5,053,486
VZ Verizon Communications Inc. 51.98 -0.14 -0.27 13,077,552
WFC Wells Fargo & Company 44.28 -0.09 -0.20 54,114,483
WMT Wal-Mart Stores Inc. 72.12 1.39 1.97 9,982,498
WTR Aqua America Inc. 30.48 -0.41 -1.33 1,150,930
XOM Exxon Mobil Corporation 87.28 0.82 0.95 15,957,506
YHOO Yahoo! Inc. 43.10 0.53 1.25 10,374,757
YUM Yum! Brands Inc. 90.81 1.00 1.11 3,610,802
ZION Zions Bancorporation 31.02 0.50 1.64 2,910,065
ZYNE Zynerba Pharmaceuticals Inc. 13.05 0.20 1.56 257,221

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