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

Sector Recap |

Stocks Close Lower on No Progress for Fiscal CliffThe 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.


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.


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.


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.


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.


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.


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Symbol Name Price Change % Volume
AA Alcoa Inc. 28.48 0.26 0.92 3,927,842
AAPL Apple Inc. 115.13 0.65 0.56 12,330,680
ALKS Alkermes plc 50.92 -0.80 -1.55 584,925
ALLT Allot Communications Ltd. 5.18 0.00 0.00 67,070
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0
AMRN Amarin Corporation plc 3.15 -0.26 -7.62 4,346,358
AMZN Amazon.com Inc. 785.01 -33.35 -4.08 6,896,745
ANGI Angie\'s List Inc. 7.78 0.18 2.37 72,796
AVB AvalonBay Communities Inc. 168.82 3.12 1.88 310,619
AXP American Express Company 67.01 0.08 0.12 1,694,515
BA Boeing Company (The) 143.23 -0.08 -0.06 2,072,363
BAC Bank of America Corporation 16.78 -0.13 -0.77 50,003,840
BAX Baxter International Inc. 47.55 0.73 1.56 1,732,440
BSX Boston Scientific Corporation 22.34 0.85 3.93 9,512,725
CAG ConAgra Foods Inc. 48.24 0.78 1.64 578,832
CAT Caterpillar Inc. 83.75 0.74 0.89 1,508,647
CROX Crocs Inc. 7.92 0.24 3.13 284,253
CSCO Cisco Systems Inc. 30.70 0.32 1.04 6,049,391
CVX Chevron Corporation 104.51 4.59 4.59 8,173,810
D Dominion Resources Inc. 73.61 0.31 0.42 488,641
DD E.I. du Pont de Nemours and Co. 69.98 0.14 0.20 845,272
DECK Deckers Outdoor Corporation 54.28 3.52 6.93 1,171,245
DG Dollar General Corporation 68.46 1.01 1.50 680,175
DIS Walt Disney Company (The) 94.05 0.03 0.03 2,865,835
DKL Delek Logistics Partners L.P. representing Limited 25.50 0.20 0.79 21,607
EIX Edison International 71.96 0.55 0.77 244,283
EMN Eastman Chemical Company 72.59 5.32 7.90 2,034,606
EQR Equity Residential of Beneficial Interest 60.47 0.62 1.04 540,027
ETN Eaton Corporation PLC 63.23 0.94 1.51 581,369
EV Eaton Vance Corporation 35.71 -0.02 -0.06 329,792
EXC Exelon Corporation 33.39 0.12 0.36 2,410,130
FE FirstEnergy Corporation 34.21 0.31 0.91 1,541,720
FINL The Finish Line Inc. 19.89 0.01 0.05 953,149
FL Foot Locker Inc. 67.57 0.81 1.21 728,244
GE General Electric Co 29.37 0.74 2.57 23,249,907
H Hyatt Hotels Corporation Class A 49.66 0.83 1.70 149,526
HD Home Depot Inc. (The) 123.99 1.73 1.42 1,666,673
HPQ HP Inc. 14.17 0.18 1.25 3,379,219
IBM International Business Machines Corp 153.78 0.43 0.28 991,611
INTC Intel Corporation 35.10 0.29 0.82 5,817,379
JAZZ Jazz Pharmaceuticals plc 115.21 -3.92 -3.29 440,269
JNJ Johnson & Johnson 115.00 -0.70 -0.61 3,342,443
JPM JP Morgan Chase 69.14 -0.09 -0.13 4,456,066
KO Coca-Cola Company (The) 42.44 0.32 0.75 3,764,670
LAZ Lazard LTD. LTD. Class A 37.41 0.20 0.54 179,223
MCD McDonald\'s Corporation 112.33 0.25 0.22 1,144,017
MMM 3M Company 167.02 1.26 0.76 574,374
MRK Merck & Company Inc. (new) 59.28 -2.01 -3.28 7,401,604
MSFT Microsoft Corporation 60.36 0.26 0.43 10,656,776
MTL Mechel PAO American Depositary Shares (Each rep. 1 4.87 -0.02 -0.41 308,443
NCR NCR Corporation 35.47 0.13 0.37 616,446
NOV National Oilwell Varco Inc. 33.11 -0.60 -1.77 2,199,090
PCG Pacific Gas & Electric Co. 61.17 0.47 0.77 696,836
PFE Pfizer Inc. 32.13 -0.36 -1.09 10,146,131
PG Procter & Gamble Company (The) 87.11 0.53 0.61 1,955,490
RBS Royal Bank of Scotland Group Plc New (The) ADS 4.74 -0.09 -1.86 1,129,735
SHOO Steven Madden Ltd. 33.82 1.25 3.84 201,148
SO Southern Company (The) 50.97 0.21 0.41 1,070,431
SXE Southcross Energy Partners L.P. representing limit 1.47 -0.03 -2.00 76,428
T AT&T Inc. 36.74 0.22 0.60 7,631,553
TRV The Travelers Companies Inc. 108.65 0.63 0.58 745,141
UNH UnitedHealth Group Incorporated (DE) 141.19 -0.75 -0.53 1,670,712
UTX United Technologies Corporation 101.88 1.81 1.81 1,738,615
VZ Verizon Communications Inc. 48.48 -0.06 -0.12 3,633,987
WMT Wal-Mart Stores Inc. 70.13 0.30 0.43 2,259,586
WWW Wolverine World Wide Inc. 21.13 0.36 1.73 323,639
XOM Exxon Mobil Corporation 85.77 -1.15 -1.32 8,315,570
XXMD:CA First Asset Morningstar US Value Index ETF Unhedge n/a n/a n/a 0
YELP Yelp Inc. Class A 32.79 0.05 0.15 506,463


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