Equities Sector Coverage: Stocks Close Out Strong First Quarter

Sector Recap  |

Personal Income rose by just 0.2% in February with Spending up 0.8%. This brings the Savings Rate down to 3.7%, the lowest since August 2009. The year over year PCE Price Index was up 2.3%, above the Federal Reserve target for inflation. Chicago PMI came in slightly below expectations at 62.2 in March with an elevated prices paid index at 70.1. The Employment Component fell to 56.3 from 64.2 in February. The final reading of the Reuters/University of Michigan's consumer sentiment index hit 76.2 for March from a preliminary reading of 74.3. The Dow Jones Industrial Average traded up to 13,224.49 on Friday afternoon still shy of its 52-week high set at 13,289.08 on March 16th. The NASDAQ’s traded up to 3111.56 then fell to 3079.05 before consolidating. The NASDAQ stayed below its 52-week high at 3134.17 set on Tuesday.

Asian stocks declined again on Friday. The Nikkei 225 ended their session at 10,084 – down 0.31% on the day. The Hang Seng ended their session at 20,556 – down 0.26% on the day. European stocks rebounded on Friday. The FTSE 100 ended their session at 5,768 – up 0.46% on the day. The DAX ended their session at 6,947 – up 1.04% on the day. The CAC 40 ended their session at 3,424 – up 1.26% on the day. The yield on the 10-Year US Treasury declined from 2.177 percent to 2.139 then rose to 2.237 closing above its 200-day simple moving average at 2.183.

Gold rebounded from $1659.0 the Troy ounce to $1670.0 staying below its 200-day simple moving average at $1685.5. Crude oil rebounded from $102.95 per barrel to $103.69, fell to $102.82, then rose to $104.15 versus its 50-day simple moving average at $103.55. The euro versus the dollar rebounded from 1.3297 to 1.3375 staying above the 50-day simple moving average at 1.3206.

Energy

PetroChina (PTR), already the world's largest publicly-traded crude producer, plans to "buy assets on a large scale" to expand output. Lufkin Industries (LUFK) is launched with a Buy recommendation and $96 target at Dahlman Rose.

Energy Select Sector SPDR (XLE) was trading at $71.75 at 4:00 PM on Friday, up 0.81% on the day – up 3.79% year-to-date. The March 2012 change was -4.18%. The 2011 change was -1.29%.

Heavily Traded: (WMB) +1%, (VLO) -3.7%, (HAL) +1.7%.

Materials

BHP's (BHP) iron-ore chief, Ian Ashby, will unexpectedly step down on July 1. Pan American Silver (PAAS) is begun with a Buy and $31 target price at Deutsche Bank, which has a Hold on Hecla Mining (HL). AK Steel (AKS) is a new Neutral at Nomura, which begins Buys on rivals US Steel (X), and Steel Dynamics (STLD).

The Materials Select Sector SPDR (XLB) was trading at $36.97 at 4:00 PM on Friday, up 0.35% on the day – up 10.36% year-to-date. The March 2012 change was +0.00. The 2011 change was -12.78%.

Heavily Traded: (AA) +1.1%, (FCX) +0.6%.

Industrials

CPI Aerostructures (CVU) is upgraded to Buy from Hold at Capstone. Raytheon (RTN) is reduced to Sector Perform from Outperform at RBC Capital.

The Industrial Select Sector SPDR (XLI) was trading at $37.415 at 4:00 PM on Friday, up 0.44% on the day – up 10.86% year-to-date. The March 2012 change was +0.50%. The 2011 change was -3.21%.

Big Movers: (AWI) -14.5%.
Heavily Traded: (GE) +0.8%, (JBLU) -0.9%.

Consumer Discretionary

Lululemon Athletica (LULU) is begun with a Buy at UBS. Buffalo Wild Wings (BWLD) is a new Equal Weight at Morgan Stanley, which begins BJ Restaurants (BJRI) at Overweight. Walt Disney (DIS) is upgraded to Buy from Neutral at Lazard. Discovery Communications (DISCA) is lifted to Buy from Neutral at Lazard. Gap Inc (GPS) is boosted to Buy from Neutral at Janney Scott with a $33 target. Wyndham Worldwide (WYN) is upgraded to Buy from Neutral at Goldman Sachs.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.09 at 4:00 PM on Friday, up 0.45% on the day – up 15.56% year-to-date. The March 2012 change was +4.40%. The 2011 change was +4.30%.

Big Movers: (FINL) -14.5%, (LIZ) +13%.

Consumer Staples

Beam Inc (BEAM) is initiated with a Buy at Suntrust. United Natural Foods (UNFI) is started with a Sell and $33 target at Cantor Fitzgerald.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.08 at 4:00 PM on Friday, up 0.61% on the day – up 4.89% year-to-date. The March 2012 change was +2.56%. The 2011 change was +10.85%.

Big Movers: (FEED) -12%.
Heavily Traded: (RAD) -0.6%, (KO) down slightly, (MO) +1.1%, (SVU) -2.1%.

Health Care

Amerigroup (AGP), Molina Healthcare (MOH), and Centene (CNC) are all begun with Buys at Jefferies. Incyte (INCY) is initiated with a Buy at ThinkEquity. Vivus Inc (VVUS) is upgraded to Buy from Hold at Brean Murray. Accretive Health (AH) is now Neutral from Outperform with a new lower target of $21 at Robert W. Baird. Kindred Healthcare (KND) is cut to Market Perform from Outperform with Wells Fargo. Select Medical (SEM) is moved to Market Perform from Outperform with Wells.

The Health Care Select Sector SPDR (XLV) was trading at $37.61 at 4:00 PM on Friday, up 0.75% on the day – up 8.42% year-to-date. The March 2012 change was +3.95%. The 2011 change was +10.32%.

Big Movers: (SNSS) +19.5%, (STEM) +11%, (OREX) -9.5%.

Financials

Morgan Stanley (MS) is making preparations for a major downgrade from Moody's, which is due to decide in May whether to cut ratings for 17 global institutions. BATS (BATS) is thinking about suspending its efforts to recruit corporate listings after last Friday's trading glitch and IPO fiasco, The Wall Street Journal reports. The move would be a major defeat for the company, which has viewed such listings as critical in its efforts to compete with larger rivals NYSE Euronext (NYX) and Nasdaq (NDAQ). Peoples Bancorp (PEBO) is a new Outperform and $21 price objective at Keefe Bruyette. Kilroy Realty (KRC) is resumed with a Sell at Cantor Fitzgerald amid an uncompelling current valuation. By contrast, the broker begins Buy rated coverage on Boston Properties (BXP), Brandywine Realty (BDN), and SL Green Realty (SLG). U.S. Bancorp (USB) is downgraded to Market Perform from Outperform at BMO Capital.

The Financial Select Sector SPDR (XLF) was trading at $15.795 at 4:00 PM on Friday, up 0.54% on the day – up 21.50% year-to-date (the strongest performing sector). The March 2012 change was +7.01%. The 2011 change was -18.50%; the weakest performing sector for the year.

Big Movers: (XIN) +9.25%.

Information Technology

Research In Motion (RIMM) would consider selling itself if a strategic review found that this was its best option, CEO Thorsten Heins said yesterday after the BlackBerry maker once again missed earnings forecasts. RIM's FQ4 adjusted EPS almost halved on year to $0.80 as revenue slumped 25% to $4.19, while the company said it would discontinue "providing specific quantitative guidance." Apple (AAPL) and Foxconn have forged an agreement in which the latter will hire tens of thousands of workers, halt illegal overtime, improve safety and upgrade workers' housing. Websense (WBSN) is initiated with a Market Perform at JMP Securities. LinkedIn (LNKD) is lifted to Positive from Neutral at Susquehanna. InvenSense (INVN) is cut to Perform from Outperform with a $15 objective at Oppenheimer.

The Technology Select Sector SPDR (XLK) was trading at $30.15 at 4:00 PM on Friday, down 0.33% on the day – up 18.47% year-to-date. The March 2012 change was +4.16%. The 2011 change was +1.03%.

Big Movers: (FFN) -17%, (SIHI) -12.5%, (INVN) -10%.

Telecommunication Services

Vodafone (VOD) is urgently reviewing its options in India and overseas as the country moves toward a law that would retroactively apply a tax of over $2B on Vodafone's 2007 purchase of Hutchison Whampoa's Indian telecom venture. France Telecom (FTE) is taken to Sell from Neutral at Citigroup.

The NASDAQ Telecommunications Index (IXTC) was trading at $221.24 at 4:00 PM on Friday, up 0.43% on the day – up 12.34% year-to-date. The March 2012 change was +3.64%. The 2011 change was -12.62%.

Big Movers: (TWER) +14%, (TSTRQ) -9%.
Heavily Traded: (S) -2.2%, (T) up slightly, (FTR) +1.1%, (CLWR) -2.9%, (VZ) +0.2%.

Utilities

The Utilities Select Sector SPDR (XLU) was trading at $35.045 at 3:30 PM on Friday, up 0.55% on the day – down 2.60% year-to-date (the weakest performing sector / the only negative sector). The March 2012 change was +0.44%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: (DUK) +0.2%, (GEN) flat, (CNP) +1.5%, (EXC) -0.2%, (AES) +0.2%, (SO) flat, (AEP) +0.5%, (PPL) +0.6%.

STOCKS: PTR, LUFK, WMB, VLO, HAL, BHP, PAAS, HL, AKS, X, STLD, AA, FCX, CVU, RTN, AWI, GE, JBLU, LULU, BWLD, BJRI, DIS, DISCA, GPS, WYN, FINL, LIZ, BEAM, UNFI, FEED, RAD, KO, MO, SVU, AGP, CNC, INCY, VVUS, AH, KND, SEM, SNSS, STEM, OREX, MS, BATS, NYX, NDAQ, PEBO, KRC, BXP, BDN, SLG, USB, XIN, RIMM, AAPL, WBSN, LNKD, INVN, FFN, SIHI, VOD, FTE, TWER, TSTRQ, S, T, FTR, CLWR, VZ, DUK, GEN, CNP, EXC, AES, SO, AEP, PPL

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
CVU CPI Aerostructures Inc. 8.00 0.02 0.25 43,757
CNC Centene Corporation 46.39 -0.06 -0.13 6,167,750 Trade
GEN Genesis Healthcare Inc. 1.32 -0.03 -2.22 574,258 Trade
FTR Frontier Communications Corporation 1.01 0.00 0.00 7,819,998 Trade
GE General Electric Company 9.37 -0.05 -0.53 58,256,814 Trade
SO Southern Company (The) 61.11 0.05 0.08 7,526,745 Trade
AKS AK Steel Holding Corporation 2.43 -0.04 -1.62 12,857,297 Trade
WYN WYND Pembina Pipeline Corporation n/a n/a n/a 0
RTN Raytheon Company 194.93 -4.40 -2.21 2,259,349 Trade
AA Alcoa Corporation 21.70 -0.24 -1.09 5,091,900 Trade
VLO Valero Energy Corporation 82.85 -0.70 -0.84 3,827,588 Trade
CNP CenterPoint Energy Inc (Holding Co) 30.33 0.29 0.97 5,453,902 Trade
RAD Rite Aid Corporation 7.40 0.20 2.78 2,286,240 Trade
SIS:CA Savaria Corporation 11.93 0.09 0.76 79,288
MO Altria Group Inc. 40.81 0.69 1.72 31,277,616 Trade
S Sprint Corporation 6.58 -0.16 -2.37 12,567,431 Trade
PPL PPL Corporation 31.68 0.14 0.44 6,108,060 Trade
PEBO Peoples Bancorp Inc. 32.66 0.04 0.12 80,905 Trade
MS Morgan Stanley 43.67 -0.35 -0.80 22,497,623 Trade
SNSS Sunesis Pharmaceuticals Inc. 0.87 0.00 0.17 462,693 Trade
BDN Brandywine Realty Trust 14.89 -0.07 -0.47 1,496,619 Trade
VOD Vodafone Group Plc 19.85 -0.11 -0.55 4,265,799 Trade
AWI Armstrong World Industries Inc 97.53 -0.63 -0.64 585,053 Trade
INCY Incyte Corporation 81.21 3.09 3.96 2,206,030 Trade
AES The AES Corporation 16.09 0.14 0.88 7,457,811 Trade
SLG SL Green Realty Corp 81.37 -0.36 -0.44 1,466,390 Trade
JBLU JetBlue Airways Corporation 16.92 -0.19 -1.11 6,623,248 Trade
KRC Kilroy Realty Corporation 78.60 0.97 1.25 3,837,686 Trade
WMB Williams Companies Inc. (The) 24.71 -0.10 -0.40 11,306,938 Trade
XIN Xinyuan Real Estate Co Ltd American Depositary Shares 4.16 -0.07 -1.65 102,241 Trade
PTR PetroChina Company Limited 52.79 -0.16 -0.30 82,164 Trade
VZ Verizon Communications Inc. 60.29 0.31 0.52 21,409,603 Trade
SEM Select Medical Holdings Corporation 16.98 0.09 0.53 1,032,400 Trade
OREX Orexigen Therapeutics Inc. n/a n/a n/a n/a
BHP BHP Group Limited American Depositary Shares (Each representing two) 50.99 -0.36 -0.70 1,430,091 Trade
USB U.S. Bancorp 55.44 -0.36 -0.65 18,272,010 Trade
LNKD LinkedIn Corporation Class A n/a n/a n/a 0 Trade
FCX Freeport-McMoRan Inc. 10.47 0.02 0.19 23,552,483 Trade
HL Hecla Mining Company 1.98 0.10 5.32 9,584,034 Trade
PAAS Pan American Silver Corp. 16.80 0.07 0.39 4,268,893 Trade
BJRI BJ's Restaurants Inc. 35.77 -0.49 -1.35 721,592 Trade
BXP Boston Properties Inc. 130.11 0.08 0.06 3,677,136 Trade
GPS Gap Inc. (The) 17.19 -0.35 -2.00 8,858,315 Trade
VVUS VIVUS Inc. 4.10 -0.06 -1.44 73,252 Trade
LIZ Liz Claiborne Inc. n/a n/a n/a 0 Trade
LULU lululemon athletica inc. 189.30 -4.31 -2.23 2,454,597 Trade
X United States Steel Corporation 10.81 -0.25 -2.26 20,079,473 Trade
NDAQ Nasdaq Inc. 100.68 -1.00 -0.98 631,669 Trade
STEM StemCells Inc. n/a n/a n/a n/a
KO Coca-Cola Company (The) 53.91 -0.61 -1.12 19,349,483 Trade
EXC Exelon Corporation 48.45 0.65 1.36 10,381,007 Trade
T AT&T Inc. 37.91 0.76 2.05 79,104,102 Trade
HAL Halliburton Company 20.44 -0.48 -2.29 16,126,739 Trade
DUK Duke Energy Corporation (Holding Company) 95.27 0.78 0.83 5,117,756 Trade
TWER Towerstream Corp 0.70 0.00 0.00 1
AEP American Electric Power Company Inc. 93.18 0.00 0.00 3,175,741 Trade
STLD Steel Dynamics Inc. 30.35 -0.32 -1.04 3,722,633 Trade
AAPL Apple Inc. 217.73 -3.23 -1.46 57,977,094 Trade
DIS The Walt Disney Company 132.27 -1.03 -0.77 25,640,027 Trade

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