Equities Sector Coverage: Stocks Close Lower on No Progress for Fiscal Cliff

Sector Recap  |

The S&P Case/Shiller 20-City Home Price Index rose 0.3% month over month in September, the sixth consecutive monthly rise, and rose 3.0% year over year. The index is up 9.0% from its March 2012 low, but is still down 29.0% since the housing bubble popped in June/July 2006. The Conference Board’s reading on Consumer Confidence rose to 73.7 in November the highest reading since February 2008, but keep in mind that this is well below the 90 to 110 neutral zone for this measure.  The Dow Jones Industrial Average traded up to 12,980.19 then down to 12,877.79 still below its 200-day simple moving average at 12,993.48. The Nasdaq traded between 2965.13 and 2985.32 staying below its 200-day SMA at to 2985.88.

Asian stocks were mixed on Tuesday. The Nikkei 225 closed at 9423 – up 0.37%. The Hang Seng closed at 21,844 – down 0.08%. European exchanges traded slightly higher on Tuesday. The FTSE 100 ended the day at 5,798 – up 0.19%. The DAX ended the day at 7,332 – up 0.55%. The CAC 40 ended the day at 3,502 – up 0.03%. The yield on the 10-Year US Treasury rose from 1.645% to 1.680% then declined to 1.635% staying below the 50-day and 200-day simple moving averages at 1.691% and 1.767%. Durable Goods Orders came in unchanged in October and up 1.5% ex-Transportation.

Comex gold declined from $1751.9 the Troy ounce to $1741.2 holding the 50-day simple moving average at $1742.0. Nymex crude oil declined from $88.25 per barrel to $86.83 still below its 50-day and 200-day simple moving averages at $88.97 and $94.03. The euro versus the dollar declined from 1.3006 to 1.2918 above its 50-day and 200-day simple moving averages at 1.2905 and 1.2798.

Energy

Barclays initiated Overweight ratings on Delek Logistics Partners (DKL) and Southcross Energy Partners (SXE). McMoRan Exploration (MMR) has been downgraded to Perform from Outperform at RBC Capital. National Oilwell Varco (NOV) has been downgraded to Equal-Weight from Overweight at Morgan Stanley. Dow components – Chevron (CVX) is down about 0.7%. Exxon Mobil (XOM) is down about 0.8%. Energy Select Sector SPDR (XLE) was trading at $70.47 at 3:30 PM on Tuesday, down 0.62% on the day – up 1.94% year-to-date.

Materials

Demand for gold in India, one of the world's largest markets for the precious metal will rise to 800 metric tons in 2012, well above a prior prediction of 650-750 tons. The increase in the outlook results from a pick-up in purchases during the festive season and comes despite government efforts to restrict gold sales. ConAgra Foods (CAG) will acquire Ralcorp Holdings (RAH) in a deal worth $6.8 billion, including debt. The offer price of $90 a share is a 28.2% premium to Ralcorp's closing price on Monday. The transaction will create the largest packaged-food company in North America. Eastman Chemical (EMN) has been initiated with a Buy rating at KeyBanc Capital. Barclays initiates Norilsk Nickel (NILSY) with an Overweight rating and initiates Mechel Steel (MTL) with an Underweight rating. Dow Components – Alcoa (AA) is up about 0.8%. DuPont (DD) is up about 1.2%. The Materials Select Sector SPDR (XLB) was trading at $36.40 at 3:30 PM on Tuesday, down 0.08% on the day – up 8.66% year-to-date.

Industrials

Dollar General (DG) will be added to the S&P 500 on Friday to replace Cooper Industries (CBE), which is being acquired by Eaton Corp. (ETN). Pall Corp. (PLL) - BB&T Capital downgraded the stock to Hold from Buy. Dow components – Boeing Co (BA) is about flat. Caterpillar (CAT) is up about 0.25%. General Electric (GE) is up about 0.2%. 3M Company (MMM) is up about 0.8%. United Technologies (UTX) is up about 0.3. The Industrial Select Sector SPDR (XLI) was trading at $36.78 at 3:30 PM on Tuesday, up 0.05% on the day – up 8.98% year-to-date.

Consumer Discretionary

Online retail sales jumped 26% on Cyber Monday versus a year ago according to IBM. Purchases from mobile devices, including tablets, rose 10.2%. The rise follows a strong increase in Internet shopping over the Thanksgiving weekend. Dish's (DISH) request to build a cellular network on spectrum it owns without power restrictions would interfere with nearby frequencies that the FCC plans to auction for potentially billions of dollars. The Dish network would lower the value of the FCC assets. The company denied the claims, but FCC will likely note approve the request. Athletic Apparel: Foot Locker (FL) has been initiated with a Buy rating at Goldman Sachs with Finish Line (FINL) initiated with a Neutral rating. Crédit Agricole initiated Buy ratings on both Hyatt (H) ($50 price target) and Starwood Hotels (HOT) ($64 price target), and initiated Marriott (MAR) with an Underperform and $38 price target. Goldman Sachs initiated Crocs Inc.(CROX) with a Buy rating and $17 price target, initiates a Sell rating on Steven Madden, Ltd. (SHOO) with a $35 price target, and initiates Neutral ratings on Deckers Outdoor (DECK) with a $33 price target, and Wolverine World Wide (WWW) and a $43 price target. Dow Components – Disney (DIS) is about flat. Home Depot (HD) is up about 0.4%. McDonalds (MCD) is up about 0.2%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.87 at 3:30 PM on Tuesday, down 0.15% on the day – up 20.12% year-to-date.

Consumer Staples

Amazon (AMZN) is taking advantage of low interest rates by raising $3 billion in a bond offering that comprised notes maturing in three, five and 10 years. The company will use the money to help buy its new Seattle headquarters in a $1.16 billion deal, and for general corporate purposes. Dollar General (DG) will be added to the S&P 500 on Friday to replace Cooper Industries (CBE), which is being acquired by Eaton Corp. (ETN). Ralcorp (RAH) beat Q4 estimates by a nickel with in-line revenue. Dow components – Coca Cola (KO) is up about 1.1%. Procter & Gamble (PG) is about flat. Wal-Mart (WMT) is up about 0.2%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.43 at 3:30 PM on Tuesday, up 0.06% on the day – up 9.05% year-to-date.

Health Care

Alkermes (ALKS) - Morgan Stanley initiates the stock with an Equal-Weight rating. Amarin (AMRN) - Citigroup initiates the stock at a Buy rating. Jazz Pharmaceuticals (JAZZ) has been initiated with a Buy rating at Citigroup. Trius Therapeutics (TSRX) Leerink Swann initiated the stock with an Outperform rating and $10 price target. Baxter International (BAX) has been downgraded to Neutral from Buy with a $72 price objective at Mizuho. Boston Scientific (BSX) has been downgraded to Perform from Outperform by Sanford Bernstein amid ongoing market share losses in major cardiology business. Pfizer (PFE) has been downgraded to Neutral from Buy at MKM Partners. Dow Components – Johnson & Johnson (JNJ) is about flat. Merck (MRK) is down about 0.15%. Pfizer (PFE) is down about 0.4%. United Health Group (UNH) is down above 0.5%. The Health Care Select Sector SPDR (XLV) was trading at $39.71 at 3:30 PM on Tuesday, down 0.33% on the day – up 14.47% year-to-date.

Financials

AvalonBay (AVB) and Equity Residential (EQR) will jointly acquire apartment owner Archstone Enterprise from Lehman Brothers (LEHMQ) for $6.5 billion, plus $9.5 billion in debt. AvalonBay will get about 40% of the assets and liabilities, and Equity Residential gets the rest. Both companies are commencing stock offerings to fund the deal. Lazard (LAZ) has been initiated with an Outperform rating and $34 price target at Raymond James. Eaton Vance (EV) has been upgraded to Outperform from Sector Perform at RBC Capital citing recent acquisitions and management’s shift in strategy. The price target was increased by $6 to $36. Royal Bank of Scotland (RBS) has been upgraded to Buy from Neutral at UBS, which notes its restructuring efforts are progressing nicely. Dow Components – American Express (AXP) is down about 0.7%. Bank of America (BAC) is up about 0.8%. JP Morgan Chase (JPM) is up about 0.6%. The Travelers Companies (TRV) is up about 0.4%. The Financial Select Sector SPDR (XLF) was trading at $15.69 at 3:30 PM on Tuesday, down 0.57% on the day – up 20.69% year-to-date.

Information Technology

Hewlett-Packard (HPQ) received its first lawsuit over its purchase of Autonomy, with a shareholder accusing H-P of making misleading statements and hiding the fact that it bought the UK firm based on unreliable financial statements. Allot Communications (ALLT) has been initiated with a Buy rating at Needham with a $27.50 price target as the company is expected to generate substantial growth even in an environment of tight spending and economic uncertainty. Angie’s List (ANGI) has been initiated with an Outperform rating at Northland Securities with a $15 price target. NCR Corp. (NCR) has been initiated with a Positive rating at Susquehanna. Yelp Inc. (YELP) has been upgraded to Buy from Hold at Cantor Fitzgerald, which says a recent sell-off ignores a still-strong brand and local ad business. Ancestry.com (ACOM) has been downgraded to Hold from Buy at The Benchmark Company after an offer to acquire the genealogy website was announced on in October. Dow Components – Cisco Systems (CSCO) is up about 0.6%. Hewlett-Packard (HPQ) is down about 0.9%. IBM (IBM) is about flat%. Intel Corp (INTC) is up about 1.1%. Microsoft (MSFT) is down about 0.35%. The Technology Select Sector SPDR (XLK) was trading at $28.91 at 3:30 PM on Tuesday, down 0.21% the day – up 13.60% year-to-date.

Telecommunication Services

The latest trial in the global patent wars gets underway today in San Diego, where Alcatel-Lucent (ALU) is suing Apple (AAPL) and LG Electronics for allegedly infringing IP to video-compression technology. Alcatel-Lucent is seeking a "reasonable royalty" based on what it would have received had Apple and LG agreed to a licensing deal before supposedly breaching the patents. Dow Components – AT&T (T) is down about 0.25%. Verizon (VZ) is down about 0.15%. The NASDAQ Telecommunications Index (IXTC) was trading at $192.87 at 3:30 PM on Tuesday, down 0.38% on the day – down 2.06% year-to-date.

Utilities

Exelon (EXC) The nuclear power play has been upgraded to Buy from Neutral at ISI Group. The Big Names – Dominion Resources (D) is down about 0.5%. Edison International (EIX) is up about 0.9%. First Energy (FE) is up about 0.35%. PG&E Corp (PCG) is up about 1.45%. Southern Company (SO) is up about 0.3%. The Utilities Select Sector SPDR (XLU) was trading at $34.69 at 3:30 PM on Tuesday, up 0.49% on the day – down 3.59% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KO, PG, WMT, JNJ, MRK, PFE, UNH, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, DKL, SXE, NOV, MMR, CAG, RAH, NILSY, MTL, EMN, DG, CBE, ETN, PLL, FL, FINL, H, HOTMAR, CROX, SHOO, DECK, WWW, AMZN, ALKS, AMRN, JAZZ, TSRX, BAX, BSX, AVB, EQR, LEHMQ, LAZ, EV, RBS, ALLT, ANGI, NCR, YELP, ACOM, ALU, AAPL, EXC

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
MMM 3M Company 189.48 0.54 0.29 2,492,126 Trade
UNH UnitedHealth Group Incorporated (DE) 261.46 4.59 1.79 6,069,471 Trade
EV Eaton Vance Corporation 38.27 0.76 2.03 1,228,304 Trade
LAZ Lazard LTD. LTD. Class A 38.87 1.25 3.32 1,089,420 Trade
DECK Deckers Outdoor Corporation 114.86 0.99 0.87 518,293 Trade
PG Procter & Gamble Company (The) 91.37 -0.64 -0.70 7,964,516 Trade
GE General Electric Company 8.98 0.25 2.86 84,265,676 Trade
CVX Chevron Corporation 111.40 -0.72 -0.64 5,624,092 Trade
SO Southern Company (The) 46.87 0.08 0.17 5,475,262 Trade
PCG Pacific Gas & Electric Co. 7.03 0.12 1.74 78,485,910 Trade
YELP Yelp Inc. 35.75 0.78 2.23 2,999,527 Trade
BAX Baxter International Inc. 68.26 0.72 1.07 4,253,085 Trade
JNJ Johnson & Johnson 128.04 -1.32 -1.02 6,264,150 Trade
H Hyatt Hotels Corporation Class A 67.21 -0.65 -0.96 614,597 Trade
AA Alcoa Corporation 28.98 0.08 0.28 9,242,882 Trade
WWW Wolverine World Wide Inc. 32.50 0.15 0.46 631,800 Trade
INTC Intel Corporation 48.13 -0.47 -0.97 19,057,707 Trade
SHOO Steven Madden Ltd. 31.19 0.07 0.22 293,566 Trade
D Dominion Energy Inc. 68.97 0.09 0.13 5,574,973 Trade
NOV National Oilwell Varco Inc. 29.36 0.05 0.17 3,520,212 Trade
TRV The Travelers Companies Inc. 122.30 0.48 0.39 1,349,813 Trade
ALKS Alkermes plc 33.58 0.54 1.63 833,084 Trade
FL Foot Locker Inc. 56.41 -0.61 -1.07 2,798,274 Trade
EIX Edison International 54.18 -0.87 -1.58 4,778,289 Trade
JAZZ Jazz Pharmaceuticals plc 128.17 0.17 0.13 1,044,973 Trade
XXMD:CA First Asset Morningstar US Value Index ETF Unhedged Unit Adv Cl n/a n/a n/a 0
NCR NCR Corporation 25.98 -0.20 -0.76 923,198 Trade
SXE Southcross Energy Partners L.P. 0.37 0.01 3.46 51,283 Trade
AMRN Amarin Corporation plc 16.61 0.25 1.53 5,387,295 Trade
ALLT Allot Ltd. 6.32 -0.03 -0.47 143,785 Trade
AXP American Express Company 99.41 1.42 1.45 4,701,930 Trade
DKL Delek Logistics Partners L.P. representing Limited Partner Interests 29.50 0.22 0.75 25,197 Trade
UTX United Technologies Corporation 110.87 -0.19 -0.17 3,887,461 Trade
MTL Mechel PAO American Depositary Shares (Each rep. 1) 2.43 0.08 3.40 146,539 Trade
CSCO Cisco Systems Inc. 43.96 -0.06 -0.14 17,262,525 Trade
EQR Equity Residential of Beneficial Interest 69.08 0.62 0.91 1,910,972 Trade
BSX Boston Scientific Corporation 36.62 -0.10 -0.27 5,535,844 Trade
VZ Verizon Communications Inc. 57.08 -1.02 -1.76 13,411,691 Trade
BAC Bank of America Corporation 28.45 1.90 7.16 163,131,700 Trade
DG Dollar General Corporation 112.21 0.04 0.04 3,296,419 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 6.11 0.08 1.33 821,008 Trade
ETN Eaton Corporation PLC 70.10 0.22 0.31 1,791,899 Trade
EMN Eastman Chemical Company 76.78 1.06 1.40 1,141,275 Trade
MCD McDonald's Corporation 179.35 -1.67 -0.92 3,376,029 Trade
AVB AvalonBay Communities Inc. 182.16 2.37 1.32 633,708 Trade
PFE Pfizer Inc. 42.11 -0.62 -1.45 28,623,739 Trade
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0 Trade
HPQ HP Inc. 21.05 0.04 0.19 8,633,235 Trade
MRK Merck & Company Inc. (new) 74.61 0.11 0.15 14,573,342 Trade
FE FirstEnergy Corp. 38.48 0.36 0.94 4,644,565 Trade
KO Coca-Cola Company (The) 46.92 -0.65 -1.37 16,907,780 Trade
EXC Exelon Corporation 45.80 0.01 0.02 5,571,621 Trade
T AT&T Inc. 30.56 -0.04 -0.13 24,494,417 Trade
CAT Caterpillar Inc. 131.66 0.97 0.74 3,636,946 Trade
CAG ConAgra Brands Inc. 21.17 0.05 0.24 5,288,328 Trade
CROX Crocs Inc. 30.53 0.48 1.60 1,083,044 Trade
MSFT Microsoft Corporation 105.38 0.37 0.35 29,853,865 Trade
ANGI ANGI Homeservices Inc. 15.92 -0.11 -0.69 623,531 Trade
WMT Walmart Inc. 96.35 0.10 0.10 5,409,950 Trade
IBM International Business Machines Corporation 121.62 -0.11 -0.09 3,841,100 Trade
AAPL Apple Inc. 154.94 1.87 1.22 30,569,706 Trade
JPM JP Morgan Chase & Co. 102.50 0.82 0.81 18,532,952 Trade
AMZN Amazon.com Inc. 1,683.78 9.22 0.55 6,366,864 Trade
DIS The Walt Disney Company 110.91 -0.85 -0.76 5,899,937 Trade
HD Home Depot Inc. (The) 177.04 0.57 0.32 4,075,410 Trade
XOM Exxon Mobil Corporation 71.64 -0.03 -0.04 12,595,640 Trade
BA The Boeing Company 352.06 -0.18 -0.05 2,731,082 Trade

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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