Equities Sector Coverage: Stocks Close Out Week in Green

Sector Recap |

Wall Street NYSEThe Dow Industrial Average traded down to 13,094.96 in early trading than traded up to 13,180.97 into the final half hour of trading. The NASDAQ traded down to 3003.38 in early trading then rebounded to 3016.70.

Asian stocks were lower on Friday. The Nikkei 225 ended the day at 8,891 – down 0.97%. The Hang Seng ended the day at 20,136 – down 0.66%. European exchanges were lower on Friday. The FTSE 100 ended the day at 5,847 – down 0.08%. The DAX ended the day at 6,945 – down 0.29%. The CAC 40 ended the day at 3,436 – down 0.61%.

The yield on the 10-Year US Treasury note declined from 1.681% to 1.628% versus the five-week modified moving average at 1.588%. Gold declined to $1604.4 the Troy ounce then rose to $1627.3. The 50-day simple moving average rose to $1599.1 with the 200-day simple moving average at $1654.7. Crude oil declined from $93.87 per barrel to $91.71. The euro versus the dollar declined from 1.2307 to 1.2244 then rose to 1.2315 versus the five-week modified moving average at 1.2422.

Energy

Chesapeake Energy (CHK) is under a US antitrust investigation over the purchase and lease of oil and gas rights. Chesapeake reportedly plotted with Encana (ECA) to suppress land prices in a promising oil and gas play in Michigan. Abraxas Petroleum (AXAS) has been downgraded to Hold from Buy with Wunderlich, which takes its target down by $4 to $3 from $7, as the hoped-form turnaround theme is not materializing. Dow components – Chevron (CVX) up 0.04%, Exxon Mobil (XOM) down 0.23%.

Energy Select Sector SPDR (XLE) was trading at $72.19 at 3:30 PM on Friday, down 0.07% on the day – up 4.43% year-to-date.

Materials

Mechel Steel (MTL) has been downgraded to Underperform from Neutral at Credit Suisse. Silver Wheaton (SLW) beat Q2 EPS estimates by a penny with better than expected revenue. Denison Mines (DNN) beat Q2 EPS estimates by two cents with revenue down 79.4% year over year. Dow Components – Alcoa (AA) up 0.90%, DuPont (DD) up 0.38%.

The Materials Select Sector SPDR (XLB) was trading at $36.00 at 3:30 PM on Friday, down 0.25% on the day – up 7.46% year-to-date.

Industrials

Circor (CIR) has been initiated with a Buy rating and $41 price target at Capstone Investments, which says it should benefit from secular trends across energy, power generation, and aerospace. CF Industries (CF) has been downgraded to Neutral from Overweight at Atlantic Equities. Dow components – Boeing Co (BA) down 0.16%, Caterpillar (CAT) down 0.38%, General Electric (GE) down 0.32%, 3M Company (MMM) up 0.15%, United Technologies (UTX) up 0.38%.

The Industrial Select Sector SPDR (XLI) was trading at $36.59 at 3:30 PM on Friday, up 0.22% on the day – up 8.41% year-to-date.

Consumer Discretionary

Lions Gate (LGF) unexpectedly swung to a FQ1 net loss of $44.2 million from a profit of $10.3 million year over year, due to a $90 million increase in film-marketing costs. Revenue however surged 81% and beat forecasts, helped by the success of "The Hunger Games" and the takeover of Summit Entertainment. There could be another investigation into Las Vegas Sands (LVS) concerning a breach of US anti-bribery laws in mainland China involving a real-estate payment, sponsorship of a basketball team, and a ferry deal. This probe adds to those of possible money laundering and one concerning LVS's Macau casinos. Glu Mobile (GLUU) has been initiated with an Overweight rating at Piper Jaffray. Cablevision (CVC) has been downgraded to Equal Weight from Overweight by Barclays. Ralph Lauren (RL) has been downgraded to Hold from Buy at Argus based on a weaker outlook and valuation. Dow Components – Disney (DIS) down 0.97%, Home Depot down 0.28%, McDonalds (MCD) up 0.91%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.53 at 3:30 PM on Friday, down 0.29% on the day – up 14.12% year-to-date.

Consumer Staples

JC Penney (JCP) slumped by 5% premarket after its Q2 earnings missed expectations, with the retailer reporting an adjusted EPS loss of $0.37 vs a profit of $0.19 a year ago. Revenue plunged 23% to $3.02 billion with Internet sales down 33%. JC Penney also lowered FY guidance. Aeropostale (ARO) - Lazard Capital initiated ARO with a Neutral rating. Tim Hortons (THI) has been upgraded to Outperform from Market Perform at BMO Capital. Advance Auto Parts (AAP) has been downgraded to Neutral from Outperform at Credit Suisse. Big Lots (BIG) has been downgraded to Underweight from Neutral at JP Morgan. Brinker International (EAT) has been downgraded to Market Perform from Outperform at Raymond James. Dow components – Kraft (KFT) down 0.71%, Coca Cola (KO) down 0.50%, Procter & Gamble (PG) down 0.03%, Wal-Mart (WMT) down 0.30%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $35.59 at 3:30 PM on Friday, down 0.14% on the day – up 9.54% year-to-date.

Health Care

OraSure (OSUR) has been initiated with a Buy rating at Jefferies. Sanofi (SNY) has been upgraded to Outperform from Neutral at Cowen. GlaxoSmithKline (GSK) - The giant pharmaceutical company has been downgraded to Neutral from Outperform at Cowen & Company amid concerns over it’s slower than expected earnings and margin recovery. Novo Nordisk (NVO) has been downgraded to Sell from Hold at Société Générale. Sagent Pharmaceuticals (SGNT) has been downgraded to Sector Perform from Outperform at RBC Capital. Dow Components – Johnson & Johnson (JNJ) up 0.25%, Merck (MRK) up 0.20%, Pfizer (PFE) down 0.13%.

The Health Care Select Sector SPDR (XLV) was trading at $38.67 at 3:30 PM on Friday, up 0.36% on the day – up 11.47% year-to-date.

Financial

New York's case against Standard Chartered (SCBFF) is more about whether the bank violated the "books and records" law by covering up dealings with Iran using falsified records rather than whether those dealings broke the law. Breaches of records law are easier to prove than violations of regulations that restrict dollar transactions with sanctioned countries. Barclays (BCS) has appointed former Bank of England Executive Director David Walker as Chairman replacing Marcus Agius, who is leaving in the wake of the Libor scandal. Walker's first job is to find a CEO to replace Bob Diamond, who resigned because of Libor. The Fed and the Office of the Comptroller of the Currency have directed five leading banks to formulate recovery plans for preventing their collapse if there’s another severe period of financial stress. The plans are different the wills, and requests were first sent two years ago to Citigroup (C), Morgan Stanley (MS), JPMorgan (JPM), BofA (BAC) and Goldman Sachs (GS). Dow Components – American Express (AXP) down 1.68%, Bank of America (BAC) flat, JP Morgan Chase (JPM) down 0.43%, Travelers (TRV) down 0.30%.

The Financial Select Sector SPDR (XLF) was trading at $14.90 at 3:30 PM on Friday, down 0.20% on the day – up 14.62% year-to-date.

Information Technology

Yahoo (YHOO) CEO Marissa Mayer is reviewing the company's capital allocation strategy, which may result in cancelling a $5.5 billion stock buyback program tied to Alibaba's $7.1 billion repurchase of half of Yahoo's 40% stake in the Chinese company. Cisco Systems (CSCO) has been initiated with a Hold at Needham, saying that sustaining the current margin structure is increasingly challenging. Ciena (CIEN) and Finisar (FNSR) have been initiated with Neutral ratings at Goldman, which begins Buy ratings on JDS Uniphase (JDSU) and Level 3 Communications (LVLT). Broadcom (BRCM) - Sanford Bernstein upgrades BRCM to Outperform from Market Perform. Jive Software (JIVE) has been upgraded to Buy from Hold, with a $20 price target, at Needham. VeriSign (VRSN) has been downgraded to Neutral from Outperform at Robert W. Baird. Yahoo (YHOO) has been downgraded to Neutral from Buy at Bank of America-Merrill.

Dow Components – Cisco Systems (CSCO) down 1.19%, Hewlett-Packard (HPQ) up 0.77%, IBM (IBM) down 0.39%, Intel Corp (INTC) up 0.42%, Microsoft (MSFT) down 0.56%.

The Technology Select Sector SPDR (XLK) was trading at $30.10 at 3:30 PM on Friday, up 0.13% on the day – up 18.27% year-to-date.

Telecommunication Services

IBM (IBM) has informally approached RIM (RIMM) about acquiring RIM’s network operations centers, which secure and compress content delivered to BlackBerries. RIM has considered turning these centers into a standalone business that service multiple platforms. Palo Alto Networks (PANW) has been initiated with a Buy rating at Stifel Nicolaus. Ciena (CIEN) and Finisar (FNSR) have been initiated with Neutral ratings at Goldman, which begins Buy ratings on JDS Uniphase (JDSU) and Level 3 Communications (LVLT). Ubiquiti Networks (UBNT) has been downgraded to Neutral from Buy at UBS. Dow Components – AT&T (T) up 0.42%, Verizon (VZ) down 0.14%.

The NASDAQ Telecommunications Index (IXTC) was trading at $189.21 at 3:30 PM on Friday, down 0.60% on the day – down 3.92% year-to-date.

Utilities

Dominion Resources (D) up 0.09%, Edison International (EIX) up 0.09%, First Energy (FE) down 0.33%, PG&E Corp (PCG) down 0.32%, Southern Company (SO) down 0.06%.

The Utilities Select Sector SPDR (XLU) was trading at $37.52 at 3:30 PM on Friday, up 0.24% on the day – up 4.28% year-to-date.

STOCKS: CVX, XOM, CHK, ECA, AXAS, AA, DD, MTL, SLW, DNN, BA, CAT, GE, MMM, UTX, CIR, CF, DIS, HD, MCD, LGF, LVS, GLUU, CVC, RL, KFT, KO, PG, WMT, JCP, ARO, THI, AAP, BIG, EAT, JNJ, MRK, PFE, OSUR, GSK, NVO, SGNT, AXP, BAC, JPM, TRV, SCBFF, BCS, C, MS, GS, CSCO, HPQ, IBM, INTC, MSFT, RIMM, YHOO, CIEN, FNSR, JDSU, LVLT, BRCM, JIVE, VRSN, T, VZ, UBNT, D, EIX, FE, PCG, SO

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.76 -0.02 -0.20 12,146,577
AAP Advance Auto Parts Inc W/I 149.24 0.09 0.06 1,375,943
ARO Aeropostale Inc. n/a n/a n/a n/a
AXAS Abraxas Petroleum Corporation 1.59 -0.07 -4.22 730,524
AXP American Express Company 63.85 -0.78 -1.21 5,083,894
BA Boeing Company (The) 131.78 -0.09 -0.07 2,330,720
BAC Bank of America Corporation 15.52 -0.08 -0.51 51,604,424
BCS Barclays PLC 8.83 -0.20 -2.21 4,993,335
BIG Big Lots Inc. 46.50 -1.32 -2.76 874,471
BRCM Broadcom Corp. n/a n/a n/a 0
C Citigroup Inc. 47.15 0.04 0.08 14,793,526
CAT Caterpillar Inc. 82.44 -1.06 -1.27 3,031,533
CF CF Industries Holdings Inc. 22.63 -0.60 -2.58 6,960,761
CHK Chesapeake Energy Corporation 6.63 -0.24 -3.49 30,559,871
CIEN Ciena Corporation 22.16 -0.10 -0.45 2,048,664
CIR CIRCOR International Inc. 58.38 -1.34 -2.24 32,882
CSCO Cisco Systems Inc. 31.34 -0.32 -1.01 20,442,199
CVC Cablevision Systems Corp. n/a n/a n/a 0
CVX Chevron Corporation 99.22 -0.76 -0.76 7,396,784
D Dominion Resources Inc. 77.01 -0.03 -0.04 2,050,553
DD E.I. du Pont de Nemours and Co. 66.77 -0.08 -0.12 2,661,570
DIS Walt Disney Company (The) 93.27 -0.14 -0.15 4,407,725
DNN Denison Mines Corp (Canada) 0.48 -0.00 -0.06 161,584
ECA Encana Corporation 9.10 -0.40 -4.21 22,616,316
EIX Edison International 75.62 0.11 0.15 1,399,240
FE FirstEnergy Corporation 34.49 -0.35 -1.00 4,010,237
FNSR Finisar Corporation 29.22 -0.11 -0.38 1,255,692
GE General Electric Co 29.89 -0.15 -0.50 22,821,677
GLUU Glu Mobile Inc. 2.22 0.01 0.45 664,799
GS The Goldman Sachs Group Inc. 165.13 -2.89 -1.72 3,421,183
GSK GlaxoSmithKline PLC 43.42 -0.16 -0.37 2,128,068
HD Home Depot Inc. (The) 127.79 -0.96 -0.75 4,464,702
HPQ HP Inc. 15.09 -0.03 -0.20 8,102,240
IBM International Business Machines Corp 154.98 -1.13 -0.72 2,702,153
INTC Intel Corporation 37.19 -0.36 -0.96 18,062,474
JCP J.C. Penney Company Inc. Holding Company 9.78 0.02 0.20 7,767,422
JDSU Viavi Solutions Inc n/a n/a n/a 0
JIVE Jive Software Inc. 4.29 -0.11 -2.50 213,940
JNJ Johnson & Johnson 118.81 -0.65 -0.54 4,772,980
JPM JP Morgan Chase 67.25 -0.14 -0.21 13,967,357
KO Coca-Cola Company (The) 42.74 -0.22 -0.51 8,852,719
LGF Lions Gate Entertainment Corporation 20.70 -0.29 -1.38 3,828,763
LVLT Level 3 Communications Inc. 47.55 0.15 0.32 3,135,539
LVS Las Vegas Sands Corp. 57.38 0.21 0.37 3,643,534
MCD McDonald\'s Corporation 117.17 -0.19 -0.16 2,775,956
MMM 3M Company 177.39 -2.46 -1.37 1,910,978
MRK Merck & Company Inc. (new) 62.96 -0.06 -0.10 7,679,801
MS Morgan Stanley 31.91 -0.33 -1.02 9,400,557
MSFT Microsoft Corporation 57.43 -0.39 -0.67 19,955,336
MTL Mechel PAO American Depositary Shares (Each rep. 1 2.86 -0.01 -0.35 688,237
NVO Novo Nordisk A/S 44.88 -0.69 -1.51 3,873,940
OSUR OraSure Technologies Inc. 8.31 -0.18 -2.12 689,699
PCG Pacific Gas & Electric Co. 64.20 0.18 0.28 2,120,841
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
PG Procter & Gamble Company (The) 87.76 -1.23 -1.38 48,281,375
RL Ralph Lauren Corporation 99.91 0.94 0.95 740,633
SGNT Sagent Pharmaceuticals Inc. n/a n/a n/a 0
SLW Silver Wheaton Corp (Canada) 27.82 -0.87 -3.03 3,748,886
SO Southern Company (The) 53.53 0.05 0.09 4,282,665
T AT&T Inc. 41.28 0.17 0.41 18,867,573
TRV The Travelers Companies Inc. 115.31 -1.42 -1.22 1,141,120
UBNT Ubiquiti Networks Inc. 53.20 -0.99 -1.83 598,292
UTX United Technologies Corporation 102.56 -0.44 -0.43 2,646,428
VRSN VeriSign Inc. 78.53 0.05 0.06 765,553
VZ Verizon Communications Inc. 52.56 0.21 0.40 13,014,796
WMT Wal-Mart Stores Inc. 72.35 0.08 0.11 7,696,449
XOM Exxon Mobil Corporation 83.45 -0.09 -0.11 12,667,106
YHOO Yahoo! Inc. 42.80 -1.35 -3.06 31,888,521

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