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
ADK Adcare Health Systems Inc (GA) n/a n/a n/a 0
FLO Flowers Foods Inc. 19.13 -0.09 -0.47 931,147 Trade
CBS CBS Corporation Class B 60.00 1.10 1.87 7,368,913 Trade
MMM 3M Company 245.91 -2.20 -0.89 2,233,505 Trade
UNH UnitedHealth Group Incorporated (DE) 243.16 4.73 1.98 6,234,153 Trade
SAM Boston Beer Co. Cl A 188.85 -2.25 -1.18 114,942 Trade
NBR Nabors Industries Ltd. 7.99 -0.26 -3.15 11,081,805 Trade
BEAV B/E Aerospace Inc. n/a n/a n/a 0 Trade
LMT Lockheed Martin Corporation 333.00 -1.86 -0.56 973,659 Trade
CRL Charles River Laboratories International Inc. 106.67 -0.10 -0.09 243,552 Trade
PG Procter & Gamble Company (The) 90.18 -0.33 -0.37 7,699,760 Trade
GE General Electric Co 16.77 -0.58 -3.34 172,263,372 Trade
CVX Chevron Corporation 131.59 -0.77 -0.58 5,890,004 Trade
SO Southern Company (The) 44.90 -0.15 -0.33 9,885,110 Trade
PCG Pacific Gas & Electric Co. 44.50 0.30 0.68 7,085,652 Trade
AYR Aircastle Limited 23.93 -0.44 -1.81 174,914 Trade
DISH DISH Network Corporation 45.16 -0.29 -0.64 3,514,932 Trade
JNJ Johnson & Johnson 146.92 -0.06 -0.04 5,554,815 Trade
WMT Wal-Mart Stores Inc. 104.30 1.60 1.56 12,307,866 Trade
AA Alcoa Inc. 53.00 -3.99 -7.00 19,521,004 Trade
INTC Intel Corporation 44.48 0.09 0.20 26,826,529 Trade
IBM International Business Machines Corp 169.12 0.47 0.28 14,259,345 Trade
ONCY Oncolytics Biotech Inc. n/a n/a n/a n/a
D Dominion Resources Inc. 74.89 -0.61 -0.81 6,801,100 Trade
RIGL Rigel Pharmaceuticals Inc. 4.09 0.00 0.00 955,584 Trade
TRV The Travelers Companies Inc. 137.34 0.48 0.35 1,561,201 Trade
AAPL Apple Inc. 179.26 0.16 0.09 31,193,352 Trade
ADI Analog Devices Inc. 97.24 1.67 1.75 5,285,179 Trade
BCS Barclays PLC 11.07 0.02 0.18 1,750,043 Trade
TSO Tesoro Corporation n/a n/a n/a 0
S Sprint Corporation 5.34 -0.15 -2.73 27,041,915 Trade
EIX Edison International 61.92 0.21 0.34 3,358,988 Trade
ABDC Alcentra Capital Corp. 8.36 -0.15 -1.76 86,431 Trade
SXE Southcross Energy Partners L.P. representing limit 2.02 0.03 1.51 187,744 Trade
BGS B&G Foods Inc. 31.80 -0.90 -2.75 1,036,772 Trade
ALLT Allot Communications Ltd. 5.00 -0.15 -2.91 107,625 Trade
JPM JP Morgan Chase 113.26 0.27 0.24 14,572,911 Trade
AXP American Express Company 99.86 -0.90 -0.89 5,290,672 Trade
UTX United Technologies Corporation 134.61 0.19 0.14 3,208,588 Trade
AVGO Broadcom Limited 269.80 3.99 1.50 3,031,929 Trade
BPFH Boston Private Financial Holdings Inc. 15.65 -0.15 -0.95 472,527 Trade
BWLD Buffalo Wild Wings Inc. 156.75 0.05 0.03 312,767 Trade
AMZN Amazon.com Inc. 1,293.32 -1.68 -0.13 4,026,915 Trade
VRA Vera Bradley Inc. 10.28 -0.05 -0.48 185,087 Trade
CSCO Cisco Systems Inc. 41.30 0.10 0.24 19,610,169 Trade
DIS Walt Disney Company (The) 110.42 -1.55 -1.38 8,070,928 Trade
JBLU JetBlue Airways Corporation 22.48 0.03 0.13 2,422,062 Trade
MCHP Microchip Technology Incorporated 97.29 1.27 1.32 2,416,573 Trade
VZ Verizon Communications Inc. 51.55 -0.17 -0.33 29,442,552 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
BAC Bank of America Corporation 31.48 0.30 0.96 76,463,847 Trade
YUM Yum! Brands Inc. 83.10 0.01 0.01 1,015,220 Trade
GOOG Alphabet Inc. 1,129.79 -2.19 -0.19 1,198,234 Trade
LLTC Linear Technology Corporation n/a n/a n/a 0 Trade
MCD McDonald\'s Corporation 174.57 -0.41 -0.23 2,154,754 Trade
LLY Eli Lilly and Company 85.82 -0.39 -0.45 4,445,813 Trade
CIEN Ciena Corporation 22.04 -0.83 -3.63 4,272,553 Trade
GPK Graphic Packaging Holding Company 16.25 -0.14 -0.85 2,093,877 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
SCTY SolarCity Corporation n/a n/a n/a 0 Trade
SKYW SkyWest Inc. 53.85 -0.15 -0.28 282,337 Trade
FIVE Five Below Inc. 66.79 -0.01 -0.01 668,832 Trade
BBY Best Buy Co. Inc. 74.69 0.43 0.58 2,737,590 Trade
CTWS Connecticut Water Service Inc. 51.82 -0.96 -1.82 48,916 Trade
HD Home Depot Inc. (The) 198.33 -1.49 -0.75 4,474,606 Trade
XOM Exxon Mobil Corporation 87.43 -0.57 -0.65 9,223,679 Trade
PFE Pfizer Inc. 36.99 -0.19 -0.51 18,924,552 Trade
BIIB Biogen Inc. 344.44 -0.43 -0.12 1,302,491 Trade
CORR CorEnergy Infrastructure Trust Inc. 38.15 -0.83 -2.13 84,274 Trade
MT ArcelorMittal 36.65 -0.03 -0.08 2,861,737 Trade
SNAK Inventure Foods Inc. n/a n/a n/a 0 Trade
HPQ HP Inc. 23.29 -0.17 -0.72 12,277,345 Trade
AZN Astrazeneca PLC 35.07 -0.01 -0.03 3,102,454 Trade
BA Boeing Company (The) 340.16 -10.85 -3.09 9,458,634 Trade
MRK Merck & Company Inc. (new) 61.13 -0.90 -1.45 19,905,799 Trade
AXS Axis Capital Holdings Limited 48.44 -0.48 -0.98 949,674 Trade
DRI Darden Restaurants Inc. 97.36 -0.10 -0.10 913,844 Trade
PIR Pier 1 Imports Inc. 3.87 -0.14 -3.49 2,522,823 Trade
UTHR United Therapeutics Corporation 139.53 -0.79 -0.56 446,979 Trade
FE FirstEnergy Corporation 29.56 -0.36 -1.20 5,686,628 Trade
KO Coca-Cola Company (The) 46.88 0.06 0.13 11,952,931 Trade
T AT&T Inc. 37.15 0.30 0.81 27,661,060 Trade
CAT Caterpillar Inc. 168.83 0.33 0.20 4,668,825 Trade
HAIN The Hain Celestial Group Inc. 39.47 -0.54 -1.35 635,976 Trade
HRG HRG Group Inc. 18.47 -0.52 -2.74 1,317,574 Trade
BAS Basic Energy Services Inc. 23.41 -0.54 -2.25 643,320 Trade
WU Western Union Company (The) 20.19 -0.05 -0.25 6,504,181 Trade
MSFT Microsoft Corporation 90.10 -0.04 -0.04 24,159,683 Trade
LXK Lexmark International Inc. n/a n/a n/a 0 Trade
HXL Hexcel Corporation 64.68 -0.07 -0.11 868,987 Trade
NWS News Corporation 17.40 -0.15 -0.85 257,486 Trade
ZAGG ZAGG Inc 17.05 -0.15 -0.87 606,637 Trade
NIHD NII Holdings Inc. 0.68 -0.01 -0.88 923,654 Trade

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