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) 1.62 0.02 1.24 50,741
FLO Flowers Foods Inc. 19.90 0.06 0.30 1,662,476
CBS CBS Corporation Class B 62.98 -0.28 -0.44 3,951,454
MMM 3M Company 175.97 -2.54 -1.42 3,473,183
UNH UnitedHealth Group Incorporated (DE) 160.43 1.36 0.85 3,514,096
SAM Boston Beer Co. Cl A 156.95 1.05 0.67 78,890
NBR Nabors Industries Ltd. 17.14 0.13 0.76 6,116,703
BEAV B/E Aerospace Inc. 61.50 0.34 0.56 837,739
LMT Lockheed Martin Corporation 252.91 -4.57 -1.77 2,984,999
CRL Charles River Laboratories International Inc. 79.28 -0.14 -0.18 219,025
PG Procter & Gamble Company (The) 87.86 0.90 1.04 8,704,722
GE General Electric Co 30.00 0.25 0.84 33,686,501
CVX Chevron Corporation 116.37 0.98 0.85 5,024,409
SO Southern Company (The) 48.57 -0.26 -0.53 5,507,298
PCG Pacific Gas & Electric Co. 60.89 -0.10 -0.16 1,775,842
AYR Aircastle Limited 22.33 0.42 1.92 292,739
DISH DISH Network Corporation 62.43 0.97 1.58 2,300,646
JNJ Johnson & Johnson 111.76 -2.15 -1.89 12,450,307
WMT Wal-Mart Stores Inc. 67.40 0.75 1.13 10,710,616
AA Alcoa Inc. 37.50 1.21 3.33 11,911,148
INTC Intel Corporation 37.62 0.85 2.31 35,140,871
IBM International Business Machines Corp 175.90 4.87 2.85 6,952,369
ONCY Oncolytics Biotech Inc. n/a n/a n/a n/a
D Dominion Resources Inc. 75.47 -0.11 -0.15 1,898,206
RIGL Rigel Pharmaceuticals Inc. 2.03 -0.07 -3.33 666,550
TRV The Travelers Companies Inc. 116.84 -1.20 -1.02 3,038,258
AAPL Apple Inc. 119.97 -0.11 -0.09 23,211,038
ADI Analog Devices Inc. 73.51 0.73 1.00 3,312,910
BCS Barclays PLC 11.46 0.21 1.87 2,567,332
TSO Tesoro Corporation 81.98 1.55 1.93 2,117,843
S Sprint Corporation 9.19 0.01 0.11 17,439,359
EIX Edison International 72.00 0.18 0.25 1,522,548
ABDC Alcentra Capital Corp. 12.23 -0.04 -0.33 41,996
SXE Southcross Energy Partners L.P. representing limit 2.16 0.04 1.89 83,733
BGS B&G Foods Inc. 44.90 0.90 2.05 353,009
ALLT Allot Communications Ltd. 4.87 -0.04 -0.81 427,584
JPM JP Morgan Chase 84.72 1.01 1.21 15,175,319
AXP American Express Company 77.43 1.46 1.92 4,024,267
UTX United Technologies Corporation 111.61 1.27 1.15 3,240,027
AVGO Broadcom Limited 197.75 6.75 3.53 6,200,772
BPFH Boston Private Financial Holdings Inc. 16.85 0.25 1.51 407,896
BWLD Buffalo Wild Wings Inc. 154.75 2.75 1.81 316,888
AMZN Amazon.com Inc. 822.44 4.56 0.56 2,971,740
VRA Vera Bradley Inc. 12.02 0.26 2.21 208,643
CSCO Cisco Systems Inc. 30.60 0.33 1.09 24,934,210
DIS Walt Disney Company (The) 107.90 0.78 0.73 5,456,146
JBLU JetBlue Airways Corporation 21.42 0.38 1.81 6,190,513
MCHP Microchip Technology Incorporated 67.90 0.87 1.30 1,752,435
VZ Verizon Communications Inc. 50.12 -2.29 -4.37 43,484,680
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
BAC Bank of America Corporation 22.95 0.39 1.73 98,508,678
YUM Yum! Brands Inc. 65.33 0.92 1.43 1,931,526
GOOG Alphabet Inc. 823.87 4.56 0.56 1,474,010
LLTC Linear Technology Corporation 62.66 0.29 0.46 1,056,745
MCD McDonald\'s Corporation 121.05 -0.33 -0.27 3,495,211
LLY Eli Lilly and Company 74.85 -1.47 -1.93 6,594,265
CIEN Ciena Corporation 24.65 0.71 2.97 2,349,169
GPK Graphic Packaging Holding Company 12.63 0.24 1.94 5,780,632
DD E.I. du Pont de Nemours and Co. 76.05 3.27 4.49 5,715,708
SCTY SolarCity Corporation n/a n/a n/a 0
SKYW SkyWest Inc. 36.55 0.40 1.11 201,453
FIVE Five Below Inc. 39.40 0.42 1.08 726,678
BBY Best Buy Co. Inc. 44.17 0.63 1.45 2,333,415
CTWS Connecticut Water Service Inc. 54.78 0.77 1.43 16,393
HD Home Depot Inc. (The) 138.06 -0.01 -0.01 4,055,080
XOM Exxon Mobil Corporation 85.09 0.12 0.14 11,858,111
PFE Pfizer Inc. 31.15 -0.31 -0.99 29,625,416
BIIB Biogen Inc. 273.82 -2.20 -0.80 1,975,246
CORR CorEnergy Infrastructure Trust Inc. 35.99 -0.16 -0.44 117,007
MT ArcelorMittal 8.30 0.07 0.85 27,622,452
SNAK Inventure Foods Inc. 6.07 -0.08 -1.30 407,922
HPQ HP Inc. 15.17 0.50 3.41 12,369,680
AZN Astrazeneca PLC 26.99 -0.11 -0.41 9,280,786
BA Boeing Company (The) 160.55 2.71 1.72 3,927,536
MRK Merck & Company Inc. (new) 61.21 -0.60 -0.97 10,487,452
AXS Axis Capital Holdings Limited 64.64 0.09 0.14 349,477
DRI Darden Restaurants Inc. 73.67 0.67 0.92 1,137,923
PIR Pier 1 Imports Inc. 7.52 0.01 0.13 2,527,179
UTHR United Therapeutics Corporation 156.62 3.62 2.37 548,739
FE FirstEnergy Corporation 29.58 -0.03 -0.10 3,838,089
KO Coca-Cola Company (The) 41.90 0.47 1.13 17,040,102
T AT&T Inc. 41.36 -0.64 -1.52 28,700,959
CAT Caterpillar Inc. 96.24 1.78 1.88 5,768,201
HAIN The Hain Celestial Group Inc. 40.99 0.54 1.34 877,513
HRG HRG Group Inc. 15.90 0.22 1.40 1,058,510
BAS Basic Energy Services Inc. 40.61 0.28 0.69 536,548
WU Western Union Company (The) 20.42 -0.30 -1.45 9,922,869
MSFT Microsoft Corporation 63.52 0.56 0.89 24,672,940
LXK Lexmark International Inc. n/a n/a n/a 0
HXL Hexcel Corporation 50.99 0.49 0.97 454,835
NWS News Corporation 12.60 0.20 1.61 359,058
ZAGG ZAGG Inc 7.00 0.20 2.94 175,709
NIHD NII Holdings Inc. 2.85 0.05 1.79 312,851

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