Equities Sector Coverage: Stocks Close Lower Despite Paring Losses

Sector Recap |

Stocks Close Lower Despite Paring LossesThe US trade deficit fell to $48.68 billion in May from an upwardly revised $50.6 billion in April. Minutes from the June FOMC meeting revealed that Fed officials expect the US economy to expand more slowly than expected, with the unemployment rate falling “only slowly.” The FOMC continued to discuss the need for further monetary stimulus. The Fed also sees the deterioration in Europe and slowing in China as major risk factors. The Dow Jones Industrial Average traded down to 12,534.33 on Wednesday staying below its 50-day simple moving average at 12,656. The NASDAQ traded down to 2866.53 below its 50-day at 2885.

Asian stocks were mixed on Wednesday. The Nikkei 225 ended the day at 8,851 – down 0.08%. The Hang Seng ended the day at 19,420 – up 0.12%. European exchanges were also mixed on Wednesday. The FTSE 100 ended the day at 5,664 – up 0.01%. The DAX ended the day at 6,454 – up 0.24%. The CAC 40 ended the day at 3,157 – down 0.57%. The yield on the 10-Year US Treasury note traded down from 1.523% to 1.452% as the “flight to quality” continues.

Gold traded between $1565.5 the Troy ounce and $1583.4 as the 50-day and 200-day simple moving averages decline to $1594.8 and $1660.7. Crude oil rebounded from $84.01 per barrel to $86.49 between its 200-week simple moving average at $80.35 and the 50-day at $88.25. The euro versus the dollar traded down from 1.2295 to a new multi-year low at 1.2217.

Energy

Rex Energy (REXX) has been is resumed with an Outperform rating at Wells Fargo. Dow components – Chevron (CVX) up 1.42%, Exxon Mobil (XOM) up 1.03%.

Energy Select Sector SPDR (XLE) was trading at $65.60 at 3:30 PM on Wednesday, up 0.99% on the day – down 5.11% year-to-date.

Materials

Goldcorp (GG) slumped by 4% in after hours trading on Tuesday after lowering its 2012 gold production guidance to 2.35 to 2.45 million ounces below prior guidance of 2.6 million. Alcoa (AA) has been downgraded to Underperform from Market Perform at BMO Capital. BHP Billiton (BHP) - The Anglo-Australian mining company has been downgraded to Neutral from Outperform at Credit Suisse. DuPont (DD) has been downgraded to Neutral from Outperform at Macquarie with a $54 price target on concerns regarding chemical segment performance. Sigma-Aldrich (SIAL) has been downgraded to Neutral from Overweight at JP Morgan. Dow components – Alcoa (AA) down 0.30%, DuPont (DD) down 1.91%.
The Materials Select Sector SPDR (XLB) was trading at $34.19 at 3:30 PM on Wednesday, down 0.64% on the day – up 2.06% year-to-date.

Industrials

Robert W. Baird gives Neutral from Outperform downgrades to Commercial Vehicle Group (CVGI), Modine Manufacturing (MOD), and Meritor (MOTR). Norsk Hydro (NHYDY) has been downgraded to Underperform from Market Perform by BMO Capital. Shaw Group (SHAW) has been downgraded to Underperform from Neutral at Macquarie. Dow components – Boeing Co (BA) down 1.75%, Caterpillar (CAT) down 0.17%, General Electric (GE) up 0.11%, 3M Company (MMM) down 0.76%, United Technologies (UTX) down 1.71%.
The Industrial Select Sector SPDR (XLI) was trading at $34.24 at 3:30 PM on Wednesday, down 1.10% on the day – up 1.45% year-to-date.

Consumer Discretionary

DirecTV's (DTV) with 20 million subscribers lost access to 17 Viacom (VIA) networks last night, including Nickelodeon, MTV and Comedy Central. The channels were dropped because the two companies could not agree on a new deal on carriage fees. There was a similar fight between Dish Network (DISH) and AMC Networks (AMCX) in June. The Amazon (AMZN) smartphone rumors heats up that the company is testing a device with a 4 to 5 inch screen with an Asian component suppliers with mass production beginning in late 2012. Amazon.com (AMZN) has been initiated with a Market Perform rating by BMO Capital with a $260 price target. Life Time Fitness (LTM) has been initiated with a Hold rating at Stifel Nicolaus. AMC Networks (AMCX) has been upgraded to Positive from Neutral at Susquehanna. Dow Components – Disney (DIS) down 0.25%, Home Depot down 1.01%, McDonalds (MCD) down 1.14%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.89 at 3:30 PM on Wednesday, down 0.88% on the day – up 9.92% year-to-date.

Consumer Staples

Best Buy (BBY) lost 4.5% in after hours on Tuesday after HHGregg (HGG) cut its guidance blaming weak video sales, which is worrisome to Best Buy investors hoping that TV sales would hold up versus e-commerce sales. The Amazon (AMZN) smartphone rumors heats up that the company is testing a device with a 4 to 5 inch screen with an Asian component suppliers with mass production beginning in late 2012. Wendy’s (WEN) has been upgraded to Outperform from Neutral at Wedbush. Staples (SPLS) has been downgraded to Market Perform from Outperform by Sanford Bernstein due to economic concerns with the price target lowered to $14 from $18. Office Depot (ODP) has also been downgraded to Market Perform from Outperform, with a lowered price target at $2.50. Dow components – Kraft (KFT) down 0.25%, Coca Cola (KO) down 0.56%, Procter & Gamble (PG) down 0.70%, Wal-Mart (WMT) down 0.32%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.82 at 3:30 PM on Wednesday, down 0.40% on the day – up 7.17% year-to-date.

Health Care

Shionogi-ViiV Healthcare, which is a joint venture involving GlaxoSmithKline (GSK), Pfizer (PFE) and Shionogi, announced that a Phase III trial of its dolutegravir HIV treatment might be more effective than Gilead's (GILD) and Bristol-Myers Squibb's (BMY) Atripla drug. A Chinese consumer watchdog apologized over a test that showed that Mead Johnson's (MJN) baby formulas contained banned additives. Mead's shares ended Tuesday down 4.3%diving yesterday before they recovered somewhat. ViroPharma (VPHM) has been initiated with a Market Perform rating at Wells. Amerigroup (AGP) has been downgraded to Hold from Buy at Jefferies. Dendreon (DNDN) has been downgraded to Underperform from Neutral at Bank of America-Merrill Lynch. Dow Components – Johnson & Johnson (JNJ) up 0.07%, Merck (MRK) down 0.21%, Pfizer (PFE) down 0.53%.
The Health Care Select Sector SPDR (XLV) was trading at $37.48 at 3:30 PM on Wednesday, down 0.45% on the day – up 8.04% year-to-date.

Financial

To take advantage of a recovering office property market, Blackstone (BX) is considering packaging its portfolio of office buildings, worth as much as $22 billion by listing the properties as a REIT. Priced at $20 billion would result in about an $8 billion profit. JP Morgan (JPM) will claw back millions of dollars in stock from individuals connected with the CIO derivatives trading loss. The claw backs could be announced as soon as Friday, when the bank reports earnings. Three of Barclays' (BCS) top ten investors want an outsider appointed as new chairman, which could undermine plans for deputy chairman Sir Michael Rake to succeed Marcus Agius. Comerica (CMA) has been initiated with a Neutral rating at Guggenheim. Dow Components – American Express (AXP) down 0.72%, Bank of America (BAC) up 2.07%, JP Morgan Chase (JPM) up 1.17%, Travelers (TRV) down 1.01%.
The Financial Select Sector SPDR (XLF) was trading at $14.39 at 3:30 PM on Wednesday, up 0.35% on the day – up 10.69% year-to-date.

Information Technology

The Amazon (AMZN) smartphone rumors heats up that the company is testing a device with a 4 to 5 inch screen with an Asian component suppliers with mass production beginning in late 2012. Baidu.com (BIDU) has been initiated with an Overweight rating $154 price target at HSBC Securities. SINA Corp (SINA) has been initiated with an Overweight rating and $62 price target at HSBC. HSBC also initiated Youku.com (YOKU) with a Neutral rating and $22 price target. Apple (AAPL) has been initiated with a Buy rating at UBS with a price target at $740. EMC Corp. (EMC) has also been initiated with a Buy rating, but International Business Machines (IBM) has been initiated with a Neutral rating and a $205 price target. SAP AG (SAP) - The German software firm has been upgraded to Buy from Hold at ThinkEquity. Dow Components – Cisco Systems (CSCO) up 0.09%, Hewlett-Packard (HPQ) up 2.80%, IBM (IBM) down 0.27%, Intel Corp (INTC) down 0.63%, Microsoft (MSFT) down 1.55%.
The Technology Select Sector SPDR (XLK) was trading at $28.04 at 3:30 PM on Wednesday, down 0.95% on the day – up 10.18% year-to-date.

Telecommunication Services

The Amazon (AMZN) smartphone rumors heats up that the company is testing a device with a 4 to 5 inch screen with an Asian component suppliers with mass production beginning in late 2012. Dow Components – AT&T Inc down 0.38%, Verizon (VZ) up 0.36%.
The NASDAQ Telecommunications Index (IXTC) was trading at $178.34 at 3:30 PM on Wednesday, down 0.42% on the day – down 9.44% year-to-date.

Utilities

Duke Energy (DUK) fired CEO Bill Johnson after its merger with Progress Energy partly because of his autocratic leadership style. CEO Jim Rogers told a hearing of the North Carolina Utilities Commission that there were also concerns about Progress' nuclear assets and poor performance since the deal was announced 18 months ago. Duke Energy (DUK) has been downgraded to Neutral from Buy at UBS. Dominion Resources (D) up 0.60%, Edison International (EIX) up 0.71%, First Energy (FE) up 0.53%, PG&E Corp (PCG) up 1.22%, Southern Company (SO) up 0.33%.
The Utilities Select Sector SPDR (XLU) was trading at $36.85 at 3:30 PM on Wednesday, up 0.22 on the day – up 2.42% year-to-date.

STOCKS: CVX, XOM, REXX, AA, DD, GG, BHP, SIAL, BA, CAT, GE, MMM, UTX, CVGI, MOD, MOTR, NHYDY, SHAW, DIS, HD, MCD, DTV, VIA, DISH, ANCX, AMZN, LTM, AMCX, KFT, KO, PG, WMT, BBY, HGG, WEN, SPLS, ODP, JNJ, MRK, PFE, GSK, GILD, BMY, MJN, VPHM, AGP, DNDN, AXP, BAC, JPM, TRV, BX, BCS, CMA, CSCO, HPQ, IBM, INTC, MSFT, BIDU, SINA, YOKU, AAPL, EMC, SAP, T, VZ, D, EIX, FE, PCG, SO, DUK

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.96 0.08 0.81 26,881,953
AAPL Apple Inc. 112.18 -1.77 -1.55 35,886,990
AMCX AMC Networks Inc. 51.32 -0.30 -0.58 1,034,856
AMZN Amazon.com Inc. 829.05 0.33 0.04 4,922,248
ANCX Access National Corporation 23.45 -0.06 -0.26 14,907
AXP American Express Company 63.37 -0.85 -1.32 4,132,452
BA Boeing Company (The) 131.03 -1.20 -0.91 2,199,395
BAC Bank of America Corporation 15.16 -0.22 -1.43 78,997,682
BBY Best Buy Co. Inc. 37.41 -0.27 -0.72 3,202,199
BCS Barclays PLC 8.39 -0.33 -3.78 9,428,653
BHP BHP Billiton Limited 34.40 0.30 0.88 4,499,087
BIDU Baidu Inc. 182.23 -5.51 -2.93 3,628,127
BMY Bristol-Myers Squibb Company 53.87 -1.22 -2.21 17,228,510
BX The Blackstone Group L.P. Representing Limited Par 25.06 -0.06 -0.24 4,169,847
CAT Caterpillar Inc. 87.47 0.88 1.02 10,616,376
CMA Comerica Incorporated 46.63 -1.05 -2.20 1,911,368
CSCO Cisco Systems Inc. 31.39 -0.11 -0.35 15,417,082
CVGI Commercial Vehicle Group Inc. 5.70 0.09 1.60 188,731
CVX Chevron Corporation 101.27 -0.88 -0.86 8,148,404
D Dominion Resources Inc. 74.75 -1.09 -1.44 2,446,539
DD E.I. du Pont de Nemours and Co. 66.37 -0.82 -1.22 1,884,993
DIS Walt Disney Company (The) 91.80 -0.40 -0.43 7,476,594
DISH DISH Network Corporation 55.04 0.11 0.20 2,943,058
DUK Duke Energy Corporation (Holding Company) 80.31 -0.79 -0.97 2,898,863
EIX Edison International 72.68 -1.02 -1.38 1,311,465
EMC EMC Corporation n/a n/a n/a 0
FE FirstEnergy Corporation 33.17 -0.37 -1.10 2,556,258
GE General Electric Co 29.53 -0.37 -1.24 38,873,664
GG Goldcorp Inc. 16.65 0.06 0.36 6,252,498
GILD Gilead Sciences Inc. 77.86 -1.11 -1.41 7,618,560
GSK GlaxoSmithKline PLC 42.90 -0.77 -1.76 3,449,131
HD Home Depot Inc. (The) 127.93 -0.34 -0.27 5,987,472
HGG HHGregg Inc. (IN) 1.81 -0.04 -2.16 74,689
HPQ HP Inc. 15.39 -0.10 -0.65 9,794,740
IBM International Business Machines Corp 158.11 -0.18 -0.11 3,374,838
INTC Intel Corporation 37.32 -0.12 -0.32 17,674,969
JNJ Johnson & Johnson 117.27 -2.12 -1.78 6,190,185
JPM JP Morgan Chase 65.65 -1.06 -1.59 18,727,192
KO Coca-Cola Company (The) 42.03 -0.12 -0.28 12,671,673
MCD McDonald\'s Corporation 114.79 -0.39 -0.34 4,924,448
MJN Mead Johnson Nutrition Company 78.24 -0.07 -0.09 1,272,901
MMM 3M Company 175.37 -2.22 -1.25 1,853,613
MOD Modine Manufacturing Company 11.48 -0.17 -1.46 89,484
MRK Merck & Company Inc. (new) 61.91 -1.39 -2.20 10,930,029
MSFT Microsoft Corporation 57.40 -0.63 -1.09 25,463,536
ODP Office Depot Inc. 3.52 -0.04 -1.12 7,991,593
PCG Pacific Gas & Electric Co. 61.76 -0.62 -0.99 2,439,995
PFE Pfizer Inc. 33.32 -0.67 -1.97 25,043,991
PG Procter & Gamble Company (The) 88.23 -1.23 -1.37 74,587,460
REXX Rex Energy Corporation 0.56 0.02 3.39 7,341,722
SAP SAP SE ADR (Sponsored) 89.54 -2.54 -2.76 952,836
SIAL Sigma-Aldrich Corp. n/a n/a n/a 0
SINA Sina Corporation 75.98 -1.41 -1.82 1,109,022
SO Southern Company (The) 52.05 -0.65 -1.23 5,877,940
SPLS Staples Inc. 8.34 -0.03 -0.36 3,919,802
T AT&T Inc. 40.73 -0.12 -0.29 17,046,784
TE TECO Energy Inc. n/a n/a n/a 0
TRV The Travelers Companies Inc. 113.87 -1.14 -0.99 1,212,640
UTX United Technologies Corporation 101.06 -1.29 -1.26 3,720,014
VIA Viacom Inc. 42.52 1.60 3.91 307,231
VZ Verizon Communications Inc. 52.12 0.06 0.12 10,804,738
WMT Wal-Mart Stores Inc. 70.73 -1.06 -1.48 7,996,767
XOM Exxon Mobil Corporation 86.46 -0.44 -0.51 19,082,873
YOKU Youku Tudou Inc ADR (Sponsored) n/a n/a n/a 0

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