The Dow Jones Industrial Average stayed above its 200-day simple moving average at 11,975 trading above 12,170 into the final half hour of trading. The NASDAQ stayed above its 200-day at 2690 at the open with a trading range between 2709.34 and 2723.01. The NASDAQ dipped below its 200-day to a day’s low at 2680.93 before an afternoon rebound to a day’s high above 2725.
Asian stocks were mixed on Tuesday with the Nikkei 225 down 1.27% to 8,656 and the Hang Seng unchanged at 19,678. European stocks rebounded on Tuesday despite record 10-Year borrowing rates for Italy. The FTSE 100 gained 1.03% to 5,567 with the DAX rebounding 0.55% to 5,961 and the CAC 40 up 1.28% to 3,143. The US Treasury 10-Year yield traded down to 1.997 percent then rose to 2.075 above the 50-day simple moving average remains a magnet at 2.045. The US Treasury auctioned $32 billion in 3-Year notes at 0.379 with a strong bid to cover of 3.41 times.
On Wednesday the US Treasury auctions $24 billion 10-Year notes then on Thursday suctions $16 billion 30-Year bonds. Gold traded above $1800 the Troy ounce for the first time since September 21st, but did not stay above that milestone. Crude oil broke out above its 200-day simple moving average at $94.95 Monday afternoon and traded as high as $96.99 on Tuesday. The euro versus the dollar traded between 1.3728 and 1.3846.
Energy
The State Department’s inspector general is opening a probe into the authorization process of TransCanada’s (TRP) planned $7B Keystone XL pipeline, which will carry 500,000 barrels of oil a day from Canada to Texas. HollyFrontier Corp (HFC) beat estimates by 16 cents and revenue by $610M. Fossil (FOSL) beat estimates by 6 cents with revenue in-line with estimates. Southern Union Company (SUG) missed estimates by a penny on revenue of $617.2M. Carrizo Oil & Gas (CRZO) missed estimates by 3 cents and revenue by $16M. Solazyme (SZYM) announced that United Airlines (UAL) flew the world’s first commercial flight that uses the company’s algae-based jet fuel, and that it has agreed to supply up to 20M gallons/year to United starting in 2014. Hornbeck Offshore (HOS) announced a $720M plan to build 16 new offshore supply vessels, with an option to build an additional 16 should future demand justify it. YPF Sociedad Anonima (YPF) is lifted to Buy from Neutral boost at Bank of America-Merrill Lynch. Pioneer Natural Resources (PXD) is now Neutral from Positive at Susquehanna. In afternoon trading: Shares of YPF Sociedad Anonima (YPF) are up about 13.5%. Shares of Basic Energy Services (BAS) are up about 11.5%.
Energy Select Sector SPDR (XLE) was trading at $72.82 at 4:00 PM on Tuesday, up 1.63% on the day – up 6.70% year-to-date.
Materials
DuPont (DD) is initiated with an Overweight at Piper Jaffray, which has a new Neutral on Deere (DE). In afternoon trading: Shares of Headwaters (HW) are up about 15.5%. Shares of Avalon Rare Metals (AVL) are up about 14.5%. Shares of US Energy (USEG) are up about 13.75%. Shares of China GengSheng (CHGS) are up about 12%. Shares of China Shen Zhou (SHZ) are up about 11.25%. Shares of International Flavors (IFF) are down about 9.5%.
The Materials Select Sector SPDR (XLB) was trading at $35.70 at 4:00 PM on Tuesday, up 1.19% on the day – down 7.06% year-to-date.
Industrials
Rockwell Automation (ROK) beat estimates by 18 cents and revenue by $100M. Solazyme (SZYM) announced that United Airlines (UAL) flew the world’s first commercial flight that uses the company’s algae-based jet fuel, and that it has agreed to supply up to 20M gallons/year to United starting in 2014. Emerson (EMR) and Honeywell (HON) are each upgraded to Buy from Neutral at Citigroup. American Science & Engineering (ASEI) is downgraded to Sell from Hold with a $58 price target by The Benchmark Company. Illinois Tool Works (ITW) and Cooper Industries (CBE) are both now Neutral from Buy at Citigroup. Alliant Techsystems (ATK) is downgraded by both Suntrust (Neutral from Buy) and RBC Capital (Sector Perform from Outperform). DuPont (DD) is initiated with an Overweight at Piper Jaffray, which has a new Neutral on Deere (DE). In afternoon trading: Shares of Republic Airways (RJET) are up about 60% on news that the company is looking to shed Frontier Airlines – after cutting costs and reducing flying. Shares of Fuel Tech (FTEK) are up about 27%. Shares of EnerNOC (ENOC) are up about 25%.
The Industrial Select Sector SPDR (XLI) was trading at $34.06 at 4:00 PM on Tuesday, up 1.13% on the day – down 2.32% year-to-date.
Consumer Discretionary
Toyota’s (TM) FQ2 net profit dropped 19% to ¥80.4B ($1B) and missed expectations as revenue slipped 4.8% to ¥4.575T, with the car maker struggling to cope with the strong yen and the lingering effects of the March earthquake. Toyota (TM) reported FQ2 net profit -19% to ¥80.4B ($1B) versus forecasts of ¥103.5B, and joins Honda (HMC) in scrapping FY guidance due to Thai floods. Expedia (EXPE) is moved to Underweight from Equal Weight at Morgan Stanley. Buckle (BKE) is cut to Neutral from Positive at Susquehanna. Red Lion Hotels (RLH) is moved to Market Perform from Outperform at JMP Securities. In afternoon trading: Shares of McCormick & Schmicks (MSSR) are up about 35%. Shares of Exide Technologies (XIDE) are down about 30%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $39.55 at 4:00 PM on Tuesday, up 0.97% on the day – up 5.72% year-to-date.
Consumer Staples
A judge has granted a temporary injunction against a federal requirement that would have made tobacco companies put graphic images on cigarette packages from next year. In afternoon trading: Shares of Yuhe International (YUII) are up about 15%. Shares of Farmer Brothers (FARM) are up about 9%. Shares of Winn-Dixie (WINN) are up about 7.75%. Shares of L’Oreal (LRLCF) are up about 7.5%. Shares of Susser Holdings (SUSS) are up about 7%. Shares of Seneca Farms (SENEA) are up about 7%. Shares of Inter Parfums (IPAR) are up about 7%. Shares of American Oriental Bioengineering (AOB) are down about 8.5%. Shares of Coffee Holding (JVA) are down about 6.5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $31.56 at 4:00 PM on Tuesday, up 0.99% on the day – up 7.68% year-to-date.
Healthcare
Olympus’ (OCPNY) future is in doubt after it admitted hiding massive losses on investments with $1B it initially claimed was related to mergers and advisory fees. Hologic (HOLX) reported FQ4 that beat street estimates – on the strength of recent acquisitions plus solid sales growth in all its business units. Roche Holding (RHHBY) gets a Buy-from-Neutral boost by brokers Collins Stewart. St. Jude Medical (STJ) is now Outperform from Neutral at Credit Suisse. Sanofi-Aventis (SNY) is cut to Sell from Hold at Collins Stewart, the broker also lowering Swiss rival Novartis AG (NVS) to Hold from Buy. Vertex Pharmaceuticals (VRTX) is now Neutral from Outperform at Robert W. Baird. In afternoon trading: Shares of Olympus are down about 34%.
The Health Care Select Sector SPDR (XLV) was trading at $33.99 at 4:00 PM on Tuesday, up 1.22% on the day – up 7.90% year-to-date.
Financials
Citigroup (C), JPMorgan (JPM), BNP Paribas (BNPQY), RBS (RBS) and HSBC (HBC) may be forced to boost their reserves by the maximum 2.5 percentage points under plans by regulators to better safeguard the financial system, Bloomberg reports, citing a provisional list. Credit Suisse (CS) has confirmed that it will release to the IRS the names and account details of American clients with offshore accounts, after U.S. authorities worked legal channels in Switzerland. A federal judge has approved a $410M settlement in a lawsuit against Bank of America (BAC) that claimed it had charged excessive overdraft fees. Ares Capital (ARCC) beat estimates by 6 cents. Societe Generale (SCGLY) reported Q3 net profit -31% to €622M ($855M) versus forecasts of €858M and revenue +4% to €6.5B. Lloyds (LYG) reported Q3 pretax profit -21% Q/Q to £644M ($1.03B) versus forecasts of £754M and revenue £5.07B versus forecasts of £5.21B. Morgan Stanley starts AllianceBernstein (AB) and Federated Investors (FII) at Underweight, Kohlberg Kravis Roberts & Co. (KKR) at Equal Weight, and Franklin Resources (BEN) and Invesco (IVZ) at Overweight. UBS begins Buys on City National (CNY), Comerica (CMA), Fifth Third (FITB), and KeyCorp (KEY). Chesapeake Lodging Trust (CHSP) is raised to Buy from Hold at Deutsche Bank. Hospitality Properties Trust (HPT) is reduced to Neutral from Buy at Janney Montgomery Scott. In afternoon trading: Shares of MF Global (MFGLQ) are down about 31%. Shares of MGIC Investment (MTG) are up about 23%. Shares of Radian Group (RDN) are up about 20%.
The Financial Select Sector SPDR (XLF) was trading at $13.61 at 4:00 PM on Tuesday, up 1.87% on the day – down 14.67% year-to-date.
Information Technology
Hewlett-Packard (HPQ) is looking to sell the webOS mobile platform it obtained when it bought Palm last year for $1.2B, Reuters reports. Those who may be interested include Amazon (AMZN), Research In Motion (RIMM) and Intel (INTC). Cornerstone OnDemand (CSOD) reported Q3 EPS of -$0.06 (in-line), while beating revenue by $1.48M. Demand Media (DMD) reported Q3 revenue of $81.5M and EPS of $0.06 (beating consensus by $3.3M and $0.02). GT Advanced Technologies (GTAT) beat estimates by 5 cents and revenue by $13M. Trimble Navigation (TRMB) is a new Buy at Janney Montgomery Scott. Alcatel-Lucent (ALU) is upgraded to Market Perform from Underperform by Sanford Bernstein, while being moved to Neutral from Buy at Bank of America-Merrill Lynch. Rackspace (RAX) is boosted to Buy from Hold at Kaufman Brothers. Research In Motion (RIMM) is reduced to Equal Weight from Overweight at Barclays. OmniVision (OVTI) is cut to Perform from Outperform at Oppenheimer. In afternoon trading: Shares of Energy Conversion Devices (ENER) are up about 20%. Shares of DealerTrack Holdings (TRAK) are up about 18.25%.
The Technology Select Sector SPDR (XLK) was trading at $26.51 at 4:00 PM on Tuesday, up 1.14% on the day – up 5.24% year-to-date.
Telecommunications Services
Vodafone (VOD) reported FH1 EBITDA +2.3% to £7.53B ($12.09B) versus forecasts of £7.42B and revenue +4.1% to £23.5B. In afternoon trading: Shares of Iridium Communications (IRDM) are up about 15%. Actives: Shares of Sprint Nextel (S) are up about 1.2%. Shares of AT&T (T) are up about 0.7%. Shares of Frontier Communications (FTR) are up about 1.1%. Shares of Vodafone are up about 2.3%. Shares of Verizon (VZ) are up about 1.1%.
The NASDAQ Telecommunications Index (IXTC) was trading at $205.37 at 4:00 PM on Tuesday, up 0.97% on the day – down 8.87% year-to-date.
Utilities
Houston power generator Dynegy Inc. (DYN) yesterday put its holding company, Dynegy Holdings, and other Dynegy Holdings units into Chapter 11 bankruptcy protection in a move that will cause losses for bondholders but protect shareholders of the parent company, which didn’t file for bankruptcy. UGI (UGI) missed by 6 cents with revenue in-line with estimates. In afternoon trading: Shares of Dynegy are up about 17%. Shares of Huaneng Power International (HNP) are up about 10%. Actives: Shares of Duke Energy (DUK) are up about 0.3%. Shares of Genon Energy (GEN) are up about 4.6%. Shares of Exelon (EXC) are up about 1.6%.
The Utilities Select Sector SPDR (XLU) was trading at $35.40 at 4:00 PM on Tuesday, up 0.65% on the day – up 12.95% year-to-date.
STOCKS: TRP, HFC, FOSL, SUG, CRZO, SZYM, UAL, HOS, YPF, PXD, YPF, BAS, DD, DE, HW, AVL, USEG, CHGS, SHZ, IFF, ROK, EMR, HON, ASEI, ITW, CBE, ATK, RJET, FTEK, ENOC, TM, HMC, EXPE, BKE, RLH, MSSR, XIDE, YUII, FARM, WINN, LRLCF, SUSS, SENEA, IPAR, AOB, JVA, OCPNY, HOLX, RHHBY, STJ, SNY, NVS, VRTX, C, JPM, BNPQY, RBS, HBC, CS, BAC, ARCC, SCGLY, LYG, AB, FII, KKR, BEN, IVZ, CNY, CMA, FITB, KEY, CHSP, HPT, MFGLQ, MTG, RDN, HPQ, AMZN, RIMM, INTC, CSOD, DMD, GTAT, TRMB, ALU, RAX, OVTI, ENER, TRAK, VOD, IRDM, S, T, FTR, VZ, DYN, UGI, HNP, DUK, GEN, EXC
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