Equities Sector Coverage: Stocks Close Out Summer on High Note

Sector Recap  |

The Chicago PMI declined slightly to 53.0 in August, below expectations. The University of Michigan Consumer Sentiment reading for August was finalized at 74.3 slightly high than July’s reading, but well below the 90 to 120 neutral zone. Factory Orders rose 2.8% in July, the best gain since July 2011. Fed Chief Ben Bernanke in his Jackson Hole speech indicated that the Fed will provide additional accommodation as needed as it is important to make additional progress on economic growth and job creation. Bernanke stated that QE1 & QE2 raised GDP growth by about 3.0% and lifted employment by two million jobs.

The Dow Industrial Average traded up to 13,122.62 then fell to 13,002.64 before rallying to 13,151.87. The NASDAQ traded up to 3075.64 then fell to 3040.59 before rallying to 3078.52.

Asian stocks were lower on Friday. The Nikkei 225 ended the day at 8,940 – down 1.60%. The Hang Seng ended the day at 19,483 – down 0.36%. European exchanges traded slightly lower in London, but higher in Europe in anticipation of monetary stimulus from the Fed and ECB. The FTSE 100 ended the day at 5,711 – down 0.14%. The DAX ended the day at 6,971 – up 1.09%. The CAC 40 ended the day at 3,413 – up 1.00%. The yield on the 10-Year US Treasury note rose 1.657% then declined to 1.553% after the transcript of Fed Chief Bernanke’s speech was released at 10:00 AM.

Gold rebounded to $1666.0 the Troy ounce pre-Bernanke then fell to $1647.1 and then popped to $1692.0. The low held the 200-day simple moving average at $1645.8. Crude oil rebounded from $94.51 per barrel pre-Bernanke to $96.92 then consolidated, as the day’s close was below the 200-day simple moving average at $96.68. The euro versus the dollar rebounded from 1.2496 to 1.2635 staying above its 50-day simple moving average at 1.2364.

Energy

Energy markets aren't expecting "lasting disruptions" from Hurricane Isaac, Tudor Pickering analysts have said, but they are "looking for confirmation of this" from oil and gas companies. Phillips 66 (PSX) found some flooding at its refinery in Belle Chasse but the markets are mostly reassured: Valero (VLO) and Anadarko (APC) are among firms reporting no damage to their facilities. Spectra Energy (SE) is reduced to Equal Weight from Overweight by Barclays.

Dow components – Chevron (CVX) up 1.11%, Exxon Mobil (XOM) up 0.17%. Energy Select Sector SPDR (XLE) was trading at $71.41 at 3:30 PM on Friday, up 0.83% on the day – up 3.30% year-to-date.

Materials

Thompson Creek Metals (TC): TC is taken to Buy from Hold with a $4 objective at Dahlman Rose. Dow Components – Alcoa (AA) up 0.59%, DuPont (DD) down 0.07%. The Materials Select Sector SPDR (XLB) was trading at $35.625 at 3:30 PM on Friday, up 0.89% on the day – up 6.34% year-to-date.

Industrials

Esterline Technologies (ESL) missed estimates by a penny and revenue by $2M. The company boosts current quarter estimates to between $1.60 and $1.70 a share (estimates are projected at $1.59 a share). Air France-KLM (AFLYY) is cut to Underperform from Neutral at Credit Suisse. Belden (BDC) is downgraded to Hold from Buy at Stifel Nicolaus. Layne Christensen (LAYN) is downgraded to Sell from Neutral at UBS. Dow components – Boeing Co (BA) up 0.66%, Caterpillar (CAT) up 0.82%, General Electric (GE) up 0.05%, 3M Company (MMM) up 0.75%, United Technologies (UTX) up 0.77%.

The Industrial Select Sector SPDR (XLI) was trading at $36.32 at 3:30 PM on Friday, up 0.50% on the day – up 7.61% year-to-date.

Consumer Discretionary

SAIC (SAI) intends to separate into two independent, publicly traded companies, with one focused on government technical services and enterprise IT, and the other on science and technology services. Sharp (SHCAF) hasn't yet started the mass production of screens for Apple's (AAPL) next iPhone. Sharp had hoped to have begun deliveries by now and it is unclear when it will be able to start, although the iPhone's two other screen suppliers, LG Display and Japan Display, have commenced shipments. Zumiez (ZUMZ) missed estimates by 6 cents with revenue in-line with estimates. The company also gave a gloomy Q3 forecast, saying it expects to earn between $0.42 and $0.45 per share, on sales in a range of $181M to $185M (estimates are for the company to earn $0.56 a share on $182.8M in revenue). Gordmans Stores (GMAN) reported Q2 EPS of $0.18 (in-line), while missing revenue by $3M. Garmin (GRMN) is initiated with an Outperform at Wells Fargo, which has a Market Perform on rival Trimble Navigation (TRMB).

Big Movers – Zumiez (ZUMZ) down 10%. Dow Components – Disney (DIS) up 0.04%, Home Depot (HD) down 0.05%, McDonalds (MCD) up 0.87%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.50 at 3:30 PM on Friday, up 0.31% on the day – up 16.61% year-to-date.

Consumer Staples

Dow components – Kraft (KFT) up 0.36%, Coca Cola (KO) up 1.02%, Procter & Gamble (PG) up 0.44%, Wal-Mart (WMT) up 0.57%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.59 at 3:30 PM on Friday, up 0.39% on the day – up 9.54% year-to-date.

Health Care

Fresenius Medical (FMS) is a new Buy at Société Générale and a new Overweight at HSBC Securities. Merrimack Pharmaceuticals (MACK) is a new Buy at Bank of America-Merrill Lynch. BG Medicine (BGMD) and Fluidigm (FLDM) are each begun with Buys at Mizuho. Big Movers – Sarepta (SRPT) up 10.5%. Dow Components – Johnson & Johnson (JNJ) up 0.22%, Merck (MRK) down 0.27%, Pfizer (PFE) down 0.14%. The Health Care Select Sector SPDR (XLV) was trading at $38.77 at 3:30 PM on Friday, up 0.13% on the day – up 11.76% year-to-date.

Financial

New Barclays (BCS) CEO Antony Jenkins has told the FT that he's cutting the bank's return-on-equity goal to 11%-11.5% from the 13%-15% targeted by predecessor Bob Diamond. Canadian Imperial Bank of Commerce (CM) is upgraded to Outperform at BMO Capital. Credit Suisse (CS): The bank is hoisted to Hold from Sell by fellow European financial firm ING Groep. Royal Bank of Canada (RY) is raised to Outperform from Neutral at Credit Suisse. Toronto-Dominion Bank (TD) is now Neutral from Outperform at Credit Suisse. Dow Components – American Express (AXP) up 1.70%, Bank of America (BAC) up 0.51%, JP Morgan Chase (JPM) up 0.49%, Travelers (TRV) up 0.33%. The Financial Select Sector SPDR (XLF) was trading at $15.118 at 3:30 PM on Friday, up 0.45% on the day – up 16.29% year-to-date.

Information Technology

SAIC (SAI) intends to separate into two independent, publicly traded companies, with one focused on government technical services and enterprise IT, and the other on science and technology services. Sharp (SHCAF) hasn't yet started the mass production of screens for Apple's (AAPL) next iPhone. Sharp had hoped to have begun deliveries by now and it is unclear when it will be able to start, although the iPhone's two other screen suppliers, LG Display and Japan Display, have commenced shipments. Studios VP Bill Mooney and marketing VP Brian Birtwistle have left Zynga (ZNGA). Zynga has also lost its COO, chief creative officer, and a few other important figures over the last month, as a crashing stock price triggers an exodus from a company whose business culture has been frequently criticized. The IFA international conference for consumer electronics and home appliances has officially started in Berlin today, although the unveiling of some major products already took place earlier in the week. There's been a deluge of Windows 8/RT (MSFT) tablets, including from Dell (DELL) and H-P (HPQ), not to mention Samsung (SSNLF) beating Nokia (NOK) to the punch with a Windows 8 smartphone. OmniVision Technologies (OVTI) missed estimates by a penny, while beating revenue by $15M. FQ2 guidance is for revenue of $355M-$390M and EPS of $0.21-$0.37 (versus consensus of $268.6M and $0.33). Splunk (SPLK) beat estimates by 3 cents and revenue by $5M. The company expects FQ3 revenue of $45M-$47M and FY13 (ends Jan. '13) revenue of $183M-$186M (above estimates of $44.7M and $178.3M). Corning (GLW) is upgraded to Outperform from Perform at Oppenheimer. TeleComm Systems (TSYS) is moved to Overweight from Neutral at JPMorgan.
Dow Components – Cisco Systems (CSCO) up 0.87%, Hewlett-Packard (HPQ) up 0.12%, IBM (IBM) up 0.60%, Intel Corp (INTC) up 2.22%, Microsoft (MSFT) up 1.62%. The Technology Select Sector SPDR (XLK) was trading at $30.42 at 3:30 PM on Friday, up 0.56% on the day – up 19.53% year-to-date.

Telecommunication Services

Chunghwa Telecom (CHT) is moved to Underweight from Neutral at HSBC Securities. Dow Components – AT&T (T) up 0.07%, Verizon (VZ) up 0.35%. The NASDAQ Telecommunications Index (IXTC) was trading at $195.17 at 3:30 PM on Friday, up 0.38% on the day – down 0.89% year-to-date.

Utilities

Dominion Resources (D) down 0.19%, Edison International (EIX) down 0.08%, First Energy (FE) down 0.05%, PG&E Corp (PCG) down 0.62%, Southern Company (SO) down 0.31%. The Utilities Select Sector SPDR (XLU) was trading at $36.31 at 3:30 PM on Friday, down 0.22% on the day – up 0.92% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, PSX, VLO, APC, SE, TC, ESL, AFLYY, BDC, LAYN, SAI, SHCAF, AAPL, ZUMZ, GMAN, GRMN, TRMB, FMS, MACK, BGMD, FLDM, SRPT, BCS, CM, CS, RY, TD, ZNGA, MSFT, DELL, HPQ, SSNLF, NOK, OVTI, SPLK, GLW, TSYS, CHT

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
MMM 3M Company 207.77 -0.76 -0.36 1,737,687 Trade
GLW Corning Incorporated 34.50 -0.16 -0.46 2,762,029 Trade
FMS Fresenius Medical Care AG 39.85 -0.08 -0.20 202,290 Trade
BDC Belden Inc 60.34 -3.43 -5.38 866,084 Trade
PG Procter & Gamble Company (The) 99.78 0.50 0.50 7,445,027 Trade
GE General Electric Company 10.03 -0.07 -0.69 49,533,882 Trade
CVX Chevron Corporation 119.14 -1.14 -0.95 5,139,421 Trade
SO Southern Company (The) 50.22 0.48 0.97 8,403,065 Trade
TD Toronto Dominion Bank (The) 57.78 -0.11 -0.19 948,237 Trade
PCG Pacific Gas & Electric Co. 19.40 1.19 6.53 22,164,178 Trade
JNJ Johnson & Johnson 135.42 -0.93 -0.68 6,665,481 Trade
AA Alcoa Corporation 29.58 0.34 1.16 3,983,927 Trade
INTC Intel Corporation 51.41 0.02 0.04 16,177,075 Trade
VLO Valero Energy Corporation 84.48 -0.95 -1.11 3,207,947 Trade
D Dominion Energy Inc. 74.34 0.80 1.09 3,966,551 Trade
TRV The Travelers Companies Inc. 129.82 0.08 0.06 1,227,829 Trade
SPLK Splunk Inc. 132.42 -0.70 -0.53 1,698,992 Trade
ESL Esterline Technologies Corporation 122.09 0.00 0.00 236,255 Trade
GRMN Garmin Ltd. 82.42 -0.64 -0.77 3,144,160 Trade
BCS Barclays PLC 8.37 -0.02 -0.24 2,743,163 Trade
BNS Bank Nova Scotia Halifax Pfd 3 57.10 -0.31 -0.54 631,723 Trade
EIX Edison International 61.26 -1.42 -2.27 5,360,957 Trade
SE Sea Limited American Depositary Shares each representing one Class A 15.71 -0.13 -0.82 1,955,687 Trade
MACK Merrimack Pharmaceuticals Inc. 5.99 0.11 1.87 15,158 Trade
AXP American Express Company 106.61 -0.17 -0.16 2,566,460 Trade
UTX United Technologies Corporation 126.32 -2.11 -1.64 3,259,831 Trade
FLDM Fluidigm Corporation 10.73 -0.05 -0.46 1,085,028 Trade
RY Royal Bank of Canada 77.30 -0.72 -0.92 1,008,367 Trade
PSX Phillips 66 96.81 -0.64 -0.66 2,054,025 Trade
SRPT Sarepta Therapeutics Inc. 136.54 -4.03 -2.87 965,196 Trade
CSCO Cisco Systems Inc. 49.41 -0.22 -0.44 17,120,913 Trade
TRMB Trimble Inc. 39.92 -0.06 -0.15 615,286 Trade
VZ Verizon Communications Inc. 56.15 0.39 0.70 14,680,547 Trade
CM Canadian Imperial Bank of Commerce 86.22 -0.46 -0.53 393,878 Trade
BAC Bank of America Corporation 29.29 -0.12 -0.41 42,755,148 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 6.15 0.05 0.82 25,860,964 Trade
MCD McDonald's Corporation 182.81 2.32 1.29 4,391,032 Trade
OVTI OmniVision Technologies Inc n/a n/a n/a 0 Trade
APC Anadarko Petroleum Corporation 43.84 -1.32 -2.92 7,141,851 Trade
GMAN Gordmans Stores Inc. n/a n/a n/a 0
TC TuanChe Limited 6.35 0.05 0.79 52,873 Trade
PFE Pfizer Inc. 42.14 -0.06 -0.14 18,607,063 Trade
ZNGA Zynga Inc. 4.96 -0.08 -1.59 14,636,343 Trade
HPQ HP Inc. 23.39 0.01 0.04 9,610,857 Trade
MRK Merck & Company Inc. (new) 79.83 0.40 0.50 7,386,114 Trade
FE FirstEnergy Corp. 40.05 0.46 1.16 4,820,067 Trade
KO Coca-Cola Company (The) 45.86 0.76 1.69 23,123,114 Trade
T AT&T Inc. 30.83 -0.02 -0.06 26,581,130 Trade
CHT Chunghwa Telecom Co. Ltd. 34.40 -0.12 -0.35 66,421 Trade
CAT Caterpillar Inc. 138.88 -1.43 -1.02 4,051,165 Trade
MSFT Microsoft Corporation 109.41 2.26 2.11 29,070,801 Trade
ZUMZ Zumiez Inc. 25.09 -0.70 -2.71 646,651 Trade
TSYS TeleCommunication Systems Inc n/a n/a n/a 0 Trade
WMT Walmart Inc. 99.39 -0.49 -0.49 6,413,164 Trade
IBM International Business Machines Corporation 137.84 -0.16 -0.12 2,937,487 Trade
AAPL Apple Inc. 171.06 -0.97 -0.56 17,251,905 Trade
JPM JP Morgan Chase & Co. 105.47 -0.22 -0.21 8,400,075 Trade
DIS The Walt Disney Company 114.29 0.61 0.54 9,480,101 Trade
HD Home Depot Inc. (The) 191.82 -0.03 -0.02 3,094,240 Trade
XOM Exxon Mobil Corporation 77.82 -0.71 -0.90 10,266,012 Trade
BA The Boeing Company 417.58 -3.97 -0.94 2,880,494 Trade

Comments


Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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