Import Prices for May came in higher than expected at +0.2% and up 12.5% year over year. The Dow Jones Industrial Average opened lower on Friday trading down to 11,937 with the NASDAQ down to 2642. The Dow Industrial Average closed up 75 points on Thursday in an oversold bounce to 12,124, up 4.7% year to date but down 5.8% from its May 2nd high. The NASDAQ gained 10 points to 2685 on Thursday up just 1.2% year to date and down 7.0% since its May 2nd high.
Asian stocks were mixed on Friday for the third consecutive day with the Nikkei 225 up 0.5% to 9,514 with the Hang Seng Index down 0.8%. European stocks traded lower on Friday with the FTSE 100 down 1.6%, the DAX down 1.3% and the CAC 40 down 1.9%. The yield on the 10-Year U.S. Treasury note traded back below 3% on Friday down to 2.933 percent, as a flight to quality continues. Comex gold traded lower on Friday trading down from $1546.5 the Troy ounce to $1526.7. Nymex crude oil traded lower on Friday down from $102.15 per barrel to $98.60. The euro traded down from 1.4550 to 1.4326 on Friday.
Energy
Noble Corp (NE) is upgraded to Outperform from Market Perform at Morgan Keegan with a price target of $48. The downside for energy stocks is highlighted by; Canadian Solar (CSIQ) declined by 5.9% in mid-afternoon trading. Dow components also took a hit on Friday with Chevron (CVX) down 2.0% with Exxon Mobil (XOM) down 1.6%. Chevron shows a double top just below $110 a share in April and May with the stock below $100 on Friday. Similarly Exxon Mobil had a double top just above $88 a share in February and May and is trading around $80 on Friday.
The Energy Select Sector SPDR (XLE) was trading at $73.26 at 4:00 PM on Friday, down 2.03% on the day – up 7.34% year-to-date.
Materials
Notable losers during Friday’s session include; Dow component Alcoa (AA) down 2.0% in mod-afternoon trading with second quarter earnings about a month away. Dow component DuPont (DD) was down about 1.5%. Gold stocks that were down 2% or more including; Barrick Gold (ABX), AngloGold Ashanti (AU), Yamana Gold (AUY), and Freeport McMoRan (FCX).
The Materials Select Sector SPDR (XLB) traded at $37.60 at 4:00 PM on Friday, down 1.23% on the day – down 2.11% year-to-date.
Industrials
Siemens (SI) has found evidence of corruption at its business in Kuwait and informed the authorities. Siemens has been the subject of corruption accusations in the past. In December 2008 for example, the conglomerate agreed to pay $800 million to settle a US investigation of allegations that it used bribes to win contracts. Siemens traded down by more than 3%. Nokia (NOK) and Siemens (SI) said they are in conversations with several parties about their Nokia-Siemens Networks joint venture. Rockwell Automation (ROK) has been downgraded to Neutral from Overweight at HSBC Securities. Dow component Caterpillar (CAT) which set an all time high of $116.55 on May 2nd is declining towards its 200-day simple moving average at $93.49. Other Dow components – Boeing (BA) declined 1.5%. General Electric (GE) slumped by 2.2%. United Technologies (UTX) was down about 1.5%.
The Industrial Select Sector SPDR (XLI) traded at $35.19 at 4:00 PM on Friday, down 1.65% on the day – up 0.92% year-to-date.
Consumer Discretionary
Toyota Motor Corp (TM) reported that their net profit for the year through March 2012 will drop 31% to $3.5 billion, well below analyst estimates. The Japan earthquake and strong yen are the catalysts for the worse than expected performance for the auto maker. The largest TV networks have received $8.7 billion in advertising commitments for the fall season that begins in September, an 8.1% rise from a year earlier. CBS (CBS) booked $2.65 billion up 13% to 15%, NBC (CMCSA), ABC (DIS) and Fox (NWSA) are up 9% to 11%. Under Armour (UA) has been upgraded to Buy from Hold with an $80 price target by Stifel Nicolaus, Zale (ZLC) has been downgraded to Neutral from Buy by Bank of America-Merrill Lynch and shares dropped by 15%. Cracker Barrel (CBRL) has been downgraded to Market Perform from Outperform at Morgan Keegan on the growing risk of slower same store sales or escalating commodity prices. Brunswick Corp (BC) declined by more than 4.5%. Goodyear Tire (GT) slumped nearly 7.0%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $37.87 at 4:00 PM on Friday, down 1.81% on the day – up 1.23% year-to-date.
Consumer Staples
Chiquita Brands (CQB) had their shares peeled by nearly 6.2% in mid-afternoon on Friday. High flyer Green Mountain Coffee (GMCR) declined by about 2.0%. Dow components – Kraft Foods (KFT) declined by about 1.0%. Coca Cola (KO) fell about 0.6%. Proctor & Gamble (PG) traded back and forth around the flat line.
The Consumer Staples Select Sector SPDR (XLP) traded at $30.90 at 4:00 PM on Friday, down 1.18% on the day – up 5.42% year-to-date.
Healthcare
Amarin Corp (AMRN) traded down by about 5.6% in mid-afternoon trading on Friday. Dow components – Johnson & Johnson (JNJ) traded lower by 0.6%. Merck (MRK) lost about 1.3%. Pfizer Inc (PFE) moved 2.8% lower.
The Health Care Select Sector SPDR (XLV) traded at $34.81 at 4:00 PM on Friday, down 1.83% on the day – up 10.61% year-to-date.
Financials
Switzerland is in talks with the U.S. about a multi-billion dollar deal in which Swiss and other European banks join a common settlement and avoid US prosecution involving helping Americans avoid taxes. Financial institutions caught up in the probe include Credit Suisse (CS) and HSBC (HBC). CME Group (CME) has been upgraded to Buy from Neutral at UBS. CME Group was also removed from the Focus List at JP Morgan. SunTrust Banks (STI) has been downgraded to Neutral from Outperform at Macquarie. Dow components – American Express (AXP) slipped by about 1.3%. Banks of America (BAC) lost about 0.5% as did JP Morgan (JPM).
The Financial Select Sector SPDR (XLF) traded at $14.83 at 4:00 PM on Friday, down 0.67% on the day – down 7.02% year-to-date.
Information Technology
Nokia (NOK) and Siemens (SI) said they are in conversations with several parties about their Nokia-Siemens Networks joint venture. The Supreme Court has upheld a record $290 million verdict against Microsoft (MSFT) for patent infringement of I4i, a small Canadian firm involving 2003 and 2007 versions of Word. National Semiconductor (NSM) reported their Q4 EPS at 26 cents a share missing estimates by a penny. Revenue was slightly higher than expected. Micron (MU) was upgraded to Outperform from Market Perform by Wells Fargo. Dow components – Cisco Systems (CSCO) lost about 1.3%. Hewlett-Packard (HPQ) was a fractionally lower. IBM (IBM) declined by 0.6%. Intel Corp (INTC) dropped 1.5%.
The Technology Select Sector SPDR (XLK) traded at $24.77 at 4:00 PM on Friday, down 1.39% on the day – down 1.67% year-to-date.
Telecommunications Services
There were steady declines within telecoms on Friday. MetroPCS (PCS) traded lower by 1.2% in mod-afternoon trading. Sprint Nextel (S) lost slightly more than 3%. Vodafone Group (VOD) was a 2.5% loser. Dow components – AT&T (T) traded higher by .7%. Verizon (VZ) declined by 1.1%.
The NASDAQ Telecommunications Index (IXTC) traded at $207.15 at 4:00 PM on Friday, down 1.91% on the day – down 8.08% year-to-date.
Utilities
There were steady declines in utilities on Friday. Duke Energy (DUK) was down a fractional 0.3% as was Progress Energy (PGN). AES Corp (AES) slumped by 1.1%. Dynegy Inc (DYN) was down 1.8%. Southern Company (SO) bucked the trend trading around the flat line.
The Utilities Select Sector SPDR (XLU) traded at $32.99 at 4:00 PM on Friday, down 0.60% on the day – up 5.26% year-to-date.
STOCKS: NE, CSIQ, CVX, XOM, AA, DD, ABX, AU, AUY, FCX, SI, ROK, CAT, BA, GE, UTX, TM, CBS, CMCSA, DIS, UA, ZLC, CBRL,BC, GT, CQB, CMCR, KFT, KO, PG, AMRN, JNJ, MRK, PFE, CS, HBC, CME, STI, AXP, BAC, JPM, NOK, MSFT NSM, MU, CSCO, HPQ, IBM, INTC, PCS, S, VOD, T, VZ, DUK, PGN, AES, DYN, SO
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