Equities Sector Coverage: Stocks Close Lower to End Streak of Gains

Sector Recap |

Equities Sector Coverage: Stocks Close Lower to End Streak of GainsRetail Sales rose 0.3% in November, unchanged excluding autos and up 0.7% excluding autos and gasoline. Initial Jobless fell to 343,000 in the latest week, but is this a trend below the 350,000 recessionary threshold? PPI fell 0.8% in November, up 0.1% excluding food & energy.  The Dow Jones Industrial Average traded up to 13,264.41 then down to 13,147.19 staying above its 50-day and 200-day simple moving average at 13,127.93 and 13,003.41. The Nasdaq traded up to 3026.51 then down to 2982.63 versus the 50-day and 200-day simple moving averages at 2997.75 and 2989.00.

Asian stocks were mixed on Thursday. The Nikkei 225 closed at 9743 – up 1.68%. The Hang Seng closed at 22,446 – down 0.26%. European exchanges were lower on Thursday. The FTSE 100 ended the day at 5,930 – down 0.27%. The DAX ended the day at 7,582 – down 0.43%. The CAC 40 ended the day at 3,643 – down 0.10%. The yield on the 10-Year US Treasury increased from 1.683% to 1.744% between the 50-day and 200-day simple moving averages at 1.680% and 1.746%.

Comex gold declined from $1712.8 the Troy ounce to $1690.7 staying between the 200-day simple moving average at $1663.3 and the 50-day SMA at $1726.7. Nymex crude oil rallied to $86.97 per barrel then fell to $85.81 staying below the 50-day and 200-day simple moving averages at $87.82 and $92.91. The euro versus the dollar declined from 1.3098 to 1.3044 staying above its 50-day and 200-day simple moving averages at 1.2922 and 1.2781.

Energy

Southcross Energy Partners (SXE) reported Q3 EPS of -$10.09 (may not be comparable to consensus of $0.21), while missing revenue by $63M. Dresser-Rand (DRC) is now Positive from Neutral at Susquehanna. Tesoro (TSO) is taken to Outperform from Neutral at Credit Suisse. Nabors Industries (NBR) is now Underperform from Hold at Jefferies. Big Mover – Basic Energy Services (BAS) is down about 8.5%. Dow components – Chevron (CVX) is down about 0.3%. Exxon Mobil (XOM) is down about 1.1%. Energy Select Sector SPDR (XLE) was trading at $71.45 at 3:00 PM on Thursday, down 0.98% on the day – up 3.36% year-to-date.

Materials

Arcelor-Mittal (MT) CEO Lakshmi Mittal has confirmed that the company could be interested in acquiring ThyssenKrupp's (TYEKF) steel plant in Alabama. Molycorp (MCP) is a new Neutral at Robert W. Baird. Titanium Metals (TIE) is taken to Neutral from Overweight at JPMorgan. Graphic Packaging Holding (GPK) is down about 2.6% on over 3x average daily volume. Dow Components – Alcoa (AA) is down about 0.6%. DuPont (DD) is down about 1%. The Materials Select Sector SPDR (XLB) was trading at $36.26 at 3:00 PM on Thursday, down 0.60% on the day – up 8.24% year-to-date.

Industrials

Canada is reconsidering plans to buy 65 of the Lockheed Martin (LMT) fighter jets after an audit found it would cost $45.8B to acquire and operate the planes over their expected lifespan of 42 years (way about forecasts). It will now look at purchasing alternative aircraft such as Boeing's (BA) Super Hornet. SkyWest (SKYW) has finalized an agreement to acquire 100 Mitsubishi Regional Jets in a deal worth $4.2B at list prices and has taken an option for another 100. Mitsubishi Aircraft expects to start delivering the 70-90 seat planes, which will be fitted with Pratt & Whitney (UTX) engines, in 2017. Hexcel (HXL) now guides FY13 earnings of EPS of $1.66 - $1.78 on revenue of around $1.64B - $1.74B (versus consensus for an EPS of $1.58 on revenue of $1.58B. FY13). Aircastle (AYR) is begun with Buy at Deutsche Bank. BE Aerospace (BEAV) is initiated with an Overweight at JPMorgan. JetBlue (JBLU) is begun with a Buy at Buckingham. Big Mover – AMR Corp. (AAMRQ) is up about 15%. Dow components – Boeing Co (BA) is down about 1.25%. Caterpillar (CAT) is up about 0.4%. General Electric (GE) is down about 0.6%. 3M Company (MMM) is down about 0.8%. United Technologies (UTX) is down about 0.6%. The Industrial Select Sector SPDR (XLI) was trading at $37.625 at 3:00 PM on Thursday, down 0.52% on the day – up 11.48% year-to-date.

Consumer Discretionary

ZAGG Inc (ZAGG) announced that its board of directors has authorized a share repurchase program under which the company may repurchase up to $10 million of its outstanding common stock from time to time on the open market. Best Buy (BBY) founder Richard Schulze may be set to finally make a takeover offer for the struggling electronics retailer. Dish Network (DISH) has won approval with U.S. regulators to offer a smartphone service. It will be interesting to watch if there will be a reaction from DirecTV (DTV). Amazon (AMZN) has chalked up another victory in the global book wars after the EU accepted an offer from Apple (AAPL) and four publishers to ease price-cutting restrictions in exchange for ending an antitrust investigation. The publishers include CBS's (CBS) Simon & Schuster and News Corp. (NWS) unit HarperCollins. Japan's Universal Entertainment has filed a criminal complaint against Wynn Resorts (WYNN) CEO Stephen Wynn in the Philippines as the bitter dispute between Wynn and former shareholder Kazuo Okada - who is Universal's majority owner - keeps ratcheting higher. Pier 1 Imports (PIR) beat estimates by a penny and revenue by $6M. Brinker (EAT) and Burger King (BKW) are both Buys at Citigroup, which has a new Neutral on Buffalo Wild Wings (BWLD). Five Below (FIVE) is a fresh Hold at BB&T Capital. Vera Bradley (VRA) is upgraded to Buy from Hold at Jefferies. Yum Brands (YUM) is upgraded to Buy from Neutral at Goldman. Darden Restaurants (DRI) gets downgraded to Neutral from Buy at Goldman. Big Movers – Dex One Corp. (DEXO) is up about 20.5%. Best Buy (BBY) is up about 15%. Zagg Inc. (ZAGG) is up about 12.5%. Dow Components – Disney (DIS) is down about 1%. Home Depot (HD) is down about 0.4%. McDonalds (MCD) is down slightly. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.02 at 3:00 PM on Thursday, down 0.72% on the day – up 20.50% year-to-date.

Consumer Staples

Harbinger Group Inc. (HRG) announced its registered secondary public offering of 20,000,000 shares of HGI common stock has been priced at $7.50 per share. Wal-Mart (WMT) is reportedly in talks to acquire an 80% stake in leading Turkish retailer Migros from U.K. private-equity firm BC Partners in a deal that would value Migros at over $4B including debt. Wal-Mart could possibly face competition from France's Carrefour (CRRFY) and Britain's Tesco (TSCDF). Boston Beer (SAM) raises its FY12 EPS to $4.30 to $4.60 per share (up from its prior view of $3.80 - $4.20 and versus consensus of $4.18). Janney Montgomery Scott starts Annie’s Inc. (BNNY) at a Sell, begins Inventure Foods (SNAK) with a Buy, and has new Neutrals on Flowers Foods (FLO) Green Mountain Coffee Roasters (GMCR) and Hain Celestial (HAIN). B&G Foods (BGS) is taken to Outperform from Sector Perform at RBC Capital. Big Movers – Harbinger Group (HRG) is down about 26.5%. Boston Beer (SAM) is up about 15.25%. Dow components – Coca Cola (KO) is down slightly. Procter & Gamble (PG) is down about 1.1%. Wal-Mart (WMT) is up about 0.5%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.00 at 3:00 PM on Thursday, down 0.22% on the day – up 10.80% year-to-date.

Health Care

Telik (TELK) publishes a clinical trial abstract on ICN treatment, which reports the preliminary results of a clinical trial with ezatiostat to study the treatment of patients with idiopathic chronic neutropenia, ICN. Oncolytics Biotech Inc. (ONCY) announced positive top line data for the first endpoint in a randomized Phase III study of its Reolysin drug for head and neck cancers. AstraZeneca (AZN) and its partner Rigel Pharmaceuticals Inc. (RIGL) reported that their experimental rheumatoid arthritis drug failed to show superiority to Abbott's Humira in a midstage study. Nordion (NDZ) postpones the release of its Q4 and FY12 financial results and conference call scheduled for December 18 and 19, respectively, saying it's initiated discussions to amend the terms of the company’s credit facility. AdCare Health Systems (ADK) is an In-line at Imperial Capital. Biogen Idec (BIIB) is added to the Conviction Buy List at Goldman. Charles River (CRL) is upgraded to Outperform from Market Perform at Wells Fargo. Eli Lilly (LLY) is lifted to Neutral from Underperform at Cowen. United Therapeutics (UTHR) is slashed to Sell from Neutral at Goldman. Big Movers – Oncolytics Biotech (ONCY) is up about 44%. Telik Inc. (TELK) is up about 22%. Rigel Pharmaceuticals (RIGL) is down about 36%. Dow Components – Johnson & Johnson (JNJ) is down about 0.4%. Merck (MRK) is down about 2.5%. Pfizer (PFE) is down about 0.4%. United Health Group (UNH) is down about 1%. The Health Care Select Sector SPDR (XLV) was trading at $40.69 at 3:00 PM on Thursday, down 0.80% on the day – up 17.30% year-to-date.

Financials

CorEnergy Infrastructure (CORR) has agreed to sell 13,000,000 shares of its common stock at a purchase price of $6.00 per share. Barclays (BCS) is reportedly planning to cut up to 2,000 out of 23,000 positions at its investment bank as part of a company-wide overhaul that could see the firm reduce jobs at other divisions as well. Axis Capital (AXS) is initiated with a Buy at Goldman Sachs. HSBC Holdings (HBC) is upgraded to Buy from Hold at Deutsche Bank. Boston Private Financial (BPFH) gets downgraded to Perform from Outperform at Keefe Bruyette. Big Mover – Investable Correlation Index (CORR) is down about 11.25%. Dow Components – American Express (AXP) is relatively unchanged. Bank of America (BAC) is down about 0.75%. JP Morgan Chase (JPM) is relatively unchanged. The Travelers Companies (TRV) is up slightly. The Financial Select Sector SPDR (XLF) was trading at $16.05 at 3:00 PM on Thursday, down 0.56% on the day – up 23.46% year-to-date.

Information Technology

SolarCity Corp (SCTY) makes a huge move during their market debut on Thursday, after the company slashed its IPO price. Amazon (AMZN) has chalked up another victory in the global book wars after the EU accepted an offer from Apple (AAPL) and four publishers to ease price-cutting restrictions in exchange for ending an antitrust investigation. The publishers include CBS's (CBS) Simon & Schuster and News Corp. (NWS) unit HarperCollins. Nearly three months after Tim Cook apologized for the fiasco that is Apple's (AAPL) iOS 6 Maps, Google (GOOG) has released its new Maps app for the iPhone, with an iPad version due later. Ciena (CIEN) missed estimates by a penny and revenue by $3M. Western Union (WU) is a new Neutral at Guggenheim. Avago Technologies (AVGO) is upgraded to Buy from Neutral at Goldman. Microchip (MCHP) is moved to Neutral from Sell at Goldman. RF Micro Devices (RFMD) is raised to Overweight from Equal-Weight at Barclays. Analog Devices (ADI) is now Neutral from Buy at Citigroup. Lexmark (LXK) is lowered to Sell from Hold at Deutsche Bank. Linear Technology (LLTC) is now Sell from Neutral at Citigroup. Allot Communications is downgraded to Hold from Buy at Wunderlich. Big Mover – Allot Communications (ALLT) is down about 11.5%. Dow Components – Cisco Systems (CSCO) is down about 0.3%. Hewlett-Packard (HPQ) is down about 0.3%. IBM (IBM) is down about 0.5%. Intel Corp (INTC) is down about 0.6%. Microsoft (MSFT) is down about 0.9%. The Technology Select Sector SPDR (XLK) was trading at $28.93 at 3:00 PM on Thursday, down 0.86% the day – up 13.67% year-to-date.

Telecommunication Services

Sprint (S) has offered to buy the 48.3% of Clearwire (CLWR) it doesn't already own for $4.23B ($2.90 a share – a 5.45% premium). Big Movers – Clearwire (CLWR) is up about 15.5%. NII Holdings (NIHD) is up about 11%. Dow Components – AT&T (T) is down about 0.4%. Verizon (VZ) is down about 0.4%. The NASDAQ Telecommunications Index (IXTC) was trading at $200.43 at 3:00 PM on Thursday, down 0.27% on the day – up 1.78% year-to-date.

Utilities

E.ON AG (EONGY) is downgraded to Reduce from Neutral at Nomura. Connecticut Water Service (CTWS) is down about 1.6% on over 3x average daily volume. The Big Names – Dominion Resources (D) is down about 0.6%. Edison International (EIX) is down about 0.8%. First Energy (FE) is down about 1.5%. PG&E Corp (PCG) is down about 0.5%. Southern Company (SO) is down about 0.75%. The Utilities Select Sector SPDR (XLU) was trading at $35.285 at 3:00 PM on Thursday, down 0.58% on the day – down 1.93% 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, SXE, DRC, TSO, NBR, BAS, MT, TYEKF, MCP, TIE, GPK, LMT, BA, SKYW, UTX, HXL, AYR, BEAV, JBLU, AAMRQ, ZAGG, BBY, DISH, DTV, AMZN, AAPL, CBS, NWS, WYNN, PIR, EAT, BKW, BWLD, FIVE, VRA, YUM, DRI, DEXO, HRG, WMT, CRRFY, TSCDF, SAM, BNNY, SNAK, FLO, GMCR, HAIN, BGS, TELK, ONCY, AZN, RIGL, NDZ, ADK, BIIB, CRL, LLY, UTHR, CORR, BCS, AXS, HBC, BPFH, SCTY, GOOG, CIEN, WU, AVGO, MCHP, RFMD, ADI, LXK, LLTC, ALLT, S, CLWR, NIHD, EONGY, CTWS

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. 9.76 -0.02 -0.20 12,146,577
AAPL Apple Inc. 112.71 -1.91 -1.67 52,481,151
ABDC Alcentra Capital Corp. 13.13 -0.06 -0.45 53,330
ADI Analog Devices Inc. 63.23 -0.45 -0.71 3,185,537
ADK Adcare Health Systems Inc (GA) 2.08 -0.02 -0.91 33,526
ALLT Allot Communications Ltd. 5.15 -0.04 -0.77 25,851
AMZN Amazon.com Inc. 805.75 1.05 0.13 2,353,511
AVGO Broadcom Limited 166.65 -2.19 -1.30 2,687,474
AXP American Express Company 63.85 -0.78 -1.21 5,083,894
AXS Axis Capital Holdings Limited 54.89 -0.95 -1.70 386,951
AYR Aircastle Limited 19.74 -0.09 -0.45 196,046
AZN Astrazeneca PLC 33.97 -0.31 -0.90 3,795,020
BA Boeing Company (The) 131.78 -0.09 -0.07 2,330,720
BAC Bank of America Corporation 15.52 -0.08 -0.51 51,604,424
BAS Basic Energy Services Inc. 0.51 -0.04 -7.14 1,311,064
BBY Best Buy Co. Inc. 37.99 -0.48 -1.25 3,930,193
BCS Barclays PLC 8.83 -0.20 -2.21 4,993,335
BEAV B/E Aerospace Inc. 49.99 0.72 1.46 776,581
BGS B&G Foods Inc. 50.33 -0.14 -0.28 687,551
BIIB Biogen Inc. 312.58 -2.23 -0.71 881,641
BPFH Boston Private Financial Holdings Inc. 12.80 -0.01 -0.08 352,162
BWLD Buffalo Wild Wings Inc. 155.38 0.28 0.18 310,829
CAT Caterpillar Inc. 82.44 -1.06 -1.27 3,031,533
CBS CBS Corporation Class B 50.91 0.84 1.68 4,052,153
CIEN Ciena Corporation 22.16 -0.10 -0.45 2,048,664
CORR CorEnergy Infrastructure Trust Inc. 30.34 -0.06 -0.20 110,407
CRL Charles River Laboratories International Inc. 82.76 -0.20 -0.24 277,427
CSCO Cisco Systems Inc. 31.34 -0.32 -1.01 20,442,199
CTWS Connecticut Water Service Inc. 52.00 -0.30 -0.57 29,545
CVX Chevron Corporation 99.22 -0.76 -0.76 7,396,784
D Dominion Resources Inc. 77.01 -0.03 -0.04 2,050,553
DD E.I. du Pont de Nemours and Co. 66.77 -0.08 -0.12 2,661,570
DIS Walt Disney Company (The) 93.27 -0.14 -0.15 4,407,725
DISH DISH Network Corporation 53.91 0.05 0.09 1,912,152
DRI Darden Restaurants Inc. 63.05 1.06 1.71 1,704,297
EIX Edison International 75.62 0.11 0.15 1,399,240
FE FirstEnergy Corporation 34.49 -0.35 -1.00 4,010,237
FIVE Five Below Inc. 41.82 -0.29 -0.69 1,040,151
FLO Flowers Foods Inc. 15.54 -0.13 -0.83 1,569,850
GE General Electric Co 29.89 -0.15 -0.50 22,821,677
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GOOG Alphabet Inc. 786.90 -0.31 -0.04 1,411,937
GPK Graphic Packaging Holding Company 14.14 0.04 0.28 2,109,922
HAIN The Hain Celestial Group Inc. 34.98 -0.18 -0.51 1,379,956
HD Home Depot Inc. (The) 127.79 -0.96 -0.75 4,464,702
HPQ HP Inc. 15.09 -0.03 -0.20 8,102,240
HRG HRG Group Inc. 15.49 -0.03 -0.19 569,014
HXL Hexcel Corporation 43.51 -0.17 -0.39 267,925
IBM International Business Machines Corp 154.98 -1.13 -0.72 2,702,153
INTC Intel Corporation 37.19 -0.36 -0.96 18,062,474
JBLU JetBlue Airways Corporation 17.27 -0.03 -0.17 5,090,056
JNJ Johnson & Johnson 118.81 -0.65 -0.54 4,772,980
JPM JP Morgan Chase 67.25 -0.14 -0.21 13,967,357
KO Coca-Cola Company (The) 42.74 -0.22 -0.51 8,852,719
LLTC Linear Technology Corporation 58.87 -0.16 -0.27 2,612,006
LLY Eli Lilly and Company 81.16 -0.13 -0.16 2,197,653
LMT Lockheed Martin Corporation 245.84 -0.78 -0.32 858,776
LXK Lexmark International Inc. 35.99 0.00 0.00 537,465
MCD McDonald\'s Corporation 117.17 -0.19 -0.16 2,775,956
MCHP Microchip Technology Incorporated 60.64 -0.54 -0.88 985,163
MMM 3M Company 177.39 -2.46 -1.37 1,910,978
MRK Merck & Company Inc. (new) 62.96 -0.06 -0.10 7,679,801
MSFT Microsoft Corporation 57.43 -0.39 -0.67 19,955,336
MT ArcelorMittal 6.06 0.11 1.85 16,724,071
NBR Nabors Industries Ltd. 10.00 -0.44 -4.21 6,412,540
NIHD NII Holdings Inc. 3.32 0.01 0.30 517,104
NWS News Corporation 14.47 -0.06 -0.41 388,219
ONCY Oncolytics Biotech Inc. n/a n/a n/a 0
PCG Pacific Gas & Electric Co. 64.20 0.18 0.28 2,120,841
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
PG Procter & Gamble Company (The) 87.76 -1.23 -1.38 48,281,375
PIR Pier 1 Imports Inc. 4.36 0.10 2.35 1,000,422
RIGL Rigel Pharmaceuticals Inc. 3.44 -0.01 -0.29 598,726
S Sprint Corporation 6.64 0.02 0.30 8,699,931
SAM Boston Beer Co. Cl A 152.30 0.98 0.65 183,688
SCTY SolarCity Corporation 19.24 0.53 2.83 3,399,102
SKYW SkyWest Inc. 26.38 0.16 0.61 287,376
SNAK Inventure Foods Inc. 9.49 -0.13 -1.35 88,122
SO Southern Company (The) 53.53 0.05 0.09 4,282,665
SXE Southcross Energy Partners L.P. representing limit 1.52 -0.04 -2.56 112,689
T AT&T Inc. 41.28 0.17 0.41 18,867,573
TRV The Travelers Companies Inc. 115.31 -1.42 -1.22 1,141,120
TSO Tesoro Corporation 83.61 0.66 0.80 2,227,209
UNH UnitedHealth Group Incorporated (DE) 140.51 -0.53 -0.38 2,801,957
UTHR United Therapeutics Corporation 127.21 0.20 0.16 489,809
UTX United Technologies Corporation 102.56 -0.44 -0.43 2,646,428
VRA Vera Bradley Inc. 16.03 -0.05 -0.31 137,395
VZ Verizon Communications Inc. 52.56 0.21 0.40 13,014,796
WMT Wal-Mart Stores Inc. 72.35 0.08 0.11 7,696,449
WU Western Union Company (The) 20.30 -0.02 -0.10 3,147,513
XOM Exxon Mobil Corporation 83.45 -0.09 -0.11 12,667,106
YUM Yum! Brands Inc. 90.64 0.17 0.19 2,180,788
ZAGG ZAGG Inc 7.93 0.02 0.25 319,030

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