Equities Sector Coverage: Stocks Continue to Break Lower

Sector Recap  |

CPI was flat in April, up 0.2% excluding food and energy. Retail Sales rose just 0.1% in April with and without autos. After a Dip in April, the NAHB Home Builder Index jumped 5 points to 29 in May. The Dow Jones Industrial Average traded down to 12,672.80 on Tuesday then up to 12,758.43 then plunged to 12,608.16 into the final half hour of trading. The NASDAQ traded down to 2902.30 Tuesday then up to 2930.68 then declined to 2889.39 into the final half hour of trading.

Asian stocks were mixed on Tuesday. The Nikkei 225 ended their session at 8,900 – down 0.81% on the day. The Hang Seng ended their session at 19,894 – up 0.81% on the day. European exchanges opened higher on Tuesday but slipped into the red at the closes. The FTSE 100 ended their session at 5,438 – down 0.51% on the day. The DAX ended their session at 6,401 – down 0.79% on the day. The CAC 40 ended their session at 3,039 – down 0.61% on the day. The yield on the 10-Year US Treasury rose from 1.760 percent to 1.810 then back down to 1.760 a new year-to-date low and well below its 50-day and 200-day simple moving averages at 2.054 and 2.030.

Gold traded down to a new year to date low of $1546.8 the Troy ounce then rebounded to $1564.4 then declined to $1542.8 well below the “Death Cross” 50-day and 200-day simple moving averages at $1649.3 and $1697.9. Crude oil traded up from $93.91 per barrel to $95.48 then declined to $93.06 below its 200-day simple moving average at $96.26. The euro versus the dollar traded up to 1.2868 then down to 1.2725 below its 50-day simple moving average at 1.3147.

Energy

Kodiak Oil & Gas (KOG) increased the size of its private offering of senior notes due in 2019 from $100 million to $150 million aggregate principal amount. Patriot Coal (PCX) was down 3.7% premarket after revising its metallurgical coal to 3.9 million tons at $142 per ton for the of the year from 4.9 million tons at $138 per ton and 0.2 million tons at an average $122 per ton for 2013. Dow components – Chevron (CVX) – down 0.16%, Exxon Mobil (XOM) up 0.12%.

Energy Select Sector SPDR (XLE) was trading at $64.94 at 3:30 PM on Tuesday, down 1.93% on the day – down 6.06% year-to-date.

Materials

Valspar (VAL) beat FQ2 EPS estimates by three cent with in-line revenue. Silver Wheaton (SLW) have been upgraded to Outperform from Neutral at Macquarie. Dow components – Alcoa (AA) down 1.12%, DuPont (DD) down 0.43%.

The Materials Select Sector SPDR (XLB) was trading at $33.98 at 3:30 PM on Tuesday, down 1.56% on the day – up 1.43% year-to-date.

Industrials

General Motors (GM) wants to buy Ally Financial's global businesses, which is a move that could help the bailed-out auto maker repay a portion of the $12 billion it owes US taxpayers. Ford (F) launched a new advertising campaign omitting the well-known blue oval logo from TV spots and doesn't mention the company by name, to focus on new models. Dow components – Boeing Co (BA) up 0.21%, Caterpillar (CAT) up 0.42%, General Electric (GE) down 0.32%, 3M Company (MMM) up 0.41%, United Technologies (UTX) up 1.07%.

The Industrial Select Sector SPDR (XLI) was trading at $34.98 at 3:30 PM on Tuesday, down 0.74% on the day – up 3.67% year-to-date.

Consumer Discretionary

Summer Infant (SUMR) missed Q1 EPS estimates by a nickel with a miss on the revenue line, and shares plunged 27.4% in after hours trading. Home Depot (HD) fell 4.3% premarket this morning after reporting in-line Q1 EPS, but missed consensus on the revenue line. Saks (SKS) reported in-line Q1 EPS, but missed on the revenue line and shares traded down 10.5% premarket. Dick's Sporting Goods (DKS) beat Q1 EPS estimates by seven cents with better than expected revenue and shares rose by 4.3% premarket. Gap (GPS) plans to open a store in New York City for its Piperlime online marketplace. Dow Components – Disney (DIS) up 0.84%, Home Depot down 1.12%, McDonalds (MCD) up 0.78%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.47 at 3:30 PM on Tuesday, down 0.32% on the day – up 11.40% year-to-date.

Consumer Staples

Groupon (GRPN) beat Q1 EPS estimates by a penny with better than expected revenue and shares rose by 11.4% in after hours trading. Clorox (CLX) raised its quarterly dividend 6.7% to 64 cents per share from 60 cents. Coty withdraws its $10.7 billion takeover bid for Avon (AVP), after the cosmetics direct seller missed its deadline to start talks. TJX Companies (TJX) beat Q1 EPS estimates by a penny with in-line revenue. Dow components – Kraft (KFT) down 0.29, Coca Cola (KO) flat, Procter & Gamble (PG) up 0.71%, Wal-Mart (WMT) up 0.76%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.80 at 3:30 PM on Tuesday, down 0.27% on the day – up 4.03% year-to-date.

Health Care

Zogenix (ZGNX) reported mixed Q1 earnings, a beat on revenue but short on a per share basis. Revenue doubled year over year on a jump in total prescriptions and higher contract revenue. DynaVox (DVOX) missed FQ3 EPS estimates by two cents with a miss on the revenue. Shares rallied 6.8% non-the-less. Amylin (AMLN) has become a takeover target from Pfizer (PFE), AstraZeneca (AZN), Bristol-Myers (BMY) and Sanofi (SNY), and each have signed confidentiality agreements on the drugmaker's sale process. Pluristem Therapeutics (PSTI) traded up 5.3% premarket after announcing cardiac function in pre-clinical diabetic diastolic heart failure subjects was improved by the use of the company's PLX cells. Dow Components – Johnson & Johnson (JNJ) down 0.25%, Merck (MRK) down 0.79%, Pfizer (PFE) down 0.95%.

The Health Care Select Sector SPDR (XLV) was trading at $36.58 at 3:30 PM on Tuesday, down 0.84% on the day – up 5.454% year-to-date.

Financials

JPMorgan (JPM) will consider clawing back bonuses following its $2.3 billion trading loss, and following news that Ina Drew could potentially receive $14.65 million of accelerated equity awards. Nationstar Mortgage (NSM), in its first earnings report since going public, reported Q1 EPS of 67 cents up from 21 cents in Q4. Dow Components – American Express (AXP) flat, Bank of America (BAC) up 1.36%, JP Morgan Chase (JPM) up 2.96%, Travelers (TRV) flat.

The Financial Select Sector SPDR (XLF) was trading at $14.42 at 3:30 PM on Tuesday, down 0.62% on the day – up 10.92% year-to-date.

Information Technology

Opnet Technologies (OPNT) beat FQ4 expectations on both the top line and bottom line as higher product sales helped offset the effect of temporary customer order delays. The stock rose by 6.5% in after hour trading. Panasonic (PC) and Sony (SNE) are in talks to form a joint venture to produce OLED TVs, with the goal of commercializing sets by 2015. It appears that Apple's (AAPL) upcoming MacBook Pros will use Nvidia (NVDA) graphics processors to go with retina displays. Photronics (PLAB) beat FQ2 estimates despite an 11% year over year dip in overall revenue for the quarter. Facebook (FB) has increased its IPO price to between $34 and $38 a share in response to heavy demand for the shares. The previous price range was $28 to $35 a share. Dow Components – Cisco Systems (CSCO) down 0.54%, Hewlett-Packard (HPQ) down 1.15%, IBM (IBM) up 0.68%, Intel Corp (INTC) up 0.70%, Microsoft (MSFT) down 0.10%.

The Technology Select Sector SPDR (XLK) was trading at $28.33 at 3:30 PM on Tuesday, down 0.39% on the day – up 11.32% year-to-date.

Telecommunication Services

Renren (RENN) reported Q1 EPS loss of a penny beating estimates by a penny. The company sees Q2 revenue coming in below estimates at around $41 to $43 million. Rural telco CenturyLink (CTL) remains a value play according to SA's Saibus Research, noting that the company demonstrated a further narrowing of its revenue losses, and continued growth for its broadband, TV, and data center operations. Dow components – AT&T (T) flat, Verizon (VZ) up 1.05%.

The NASDAQ Telecommunications Index (IXTC) was trading at $184.33 at 3:30 PM on Tuesday, down 0.85% on the day – down 6.40% year-to-date.

Utilities

Dominion Resources (D) has been upgraded to Buy from Hold at Jefferies, citing valuation. Southern Company (SO) has been upgraded by Jefferies to Buy from Hold. Xcel Energy (XEL) has been downgraded to Hold from Buy at Jefferies. Dominion Resources (D) flat, Edison International (EIX) down 0.27%, First Energy (FE) down 0.38%, PG&E Corp (PCG) down 0.40%, Southern Company (SO) up 0.06%.

The Utilities Select Sector SPDR (XLU) was trading at $35.58 at 3:30 PM on Tuesday, down 0.86% on the day – down 1.11% year-to-date.

STOCKS: CVX, XOM, KOG, PCX, AA, DD, VAL, SLW, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, SUMR, SKS, DKS, GPS, KFT, KO, PG, WMT, GRPN, CLX, AVP, TJX, JNJ, MRK, PFE, ZGNX, DVOX, AMLN, AZN, BMY, SNY, PSTI, AXP, BAC, JPM, TRV, NSM, CSCO, HPQ, IBM, INTC, MSFT, OPNT, PC, SNE, AAPL, NVDA, PLAB, FB, T, VZ, RENN, CTL, D, EIX, FE, PCG, SO, XEL

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 198.24 -4.44 -2.19 2,254,486 Trade
PG Procter & Gamble Company (The) 92.45 -1.10 -1.18 7,996,809 Trade
GE General Electric Company 7.01 -0.34 -4.63 114,480,098 Trade
CVX Chevron Corporation 115.49 -0.42 -0.36 9,114,442 Trade
SO Southern Company (The) 46.98 0.46 0.99 5,787,141 Trade
PCG Pacific Gas & Electric Co. 25.79 -0.24 -0.92 6,837,428 Trade
CLX Clorox Company (The) 162.47 -1.29 -0.79 808,829 Trade
FB Facebook Inc. 137.42 -2.21 -1.58 21,195,460 Trade
JNJ Johnson & Johnson 145.43 -0.48 -0.33 9,444,459 Trade
WMT Walmart Inc. 93.19 -1.58 -1.67 8,496,467 Trade
AA Alcoa Corporation 28.82 -0.83 -2.80 3,383,928 Trade
INTC Intel Corporation 46.24 -2.13 -4.40 34,016,375 Trade
IBM International Business Machines Corporation 119.34 -4.57 -3.69 7,019,616 Trade
D Dominion Energy Inc. 75.61 0.83 1.11 5,232,884 Trade
TRV The Travelers Companies Inc. 123.56 -1.08 -0.87 1,679,622 Trade
CIO City Office REIT Inc. 10.97 -0.34 -3.01 631,033 Trade
AAPL Apple Inc. 168.49 -6.23 -3.57 42,281,631 Trade
EIX Edison International 58.51 0.97 1.69 1,910,086 Trade
PLAB Photronics Inc. 9.06 -0.47 -4.93 440,361 Trade
RENN Renren Inc. American Depositary Shares each representing fifteen Class A 1.68 0.07 4.35 100,177 Trade
JPM JP Morgan Chase & Co. 103.29 -1.90 -1.81 19,248,595 Trade
AXP American Express Company 106.68 -1.57 -1.45 4,419,413 Trade
UTX United Technologies Corporation 119.45 -2.00 -1.65 7,503,568 Trade
NVDA NVIDIA Corporation 147.61 -10.68 -6.75 17,041,949 Trade
AVP Avon Products Inc. 1.99 0.01 0.51 4,381,805 Trade
TJX TJX Companies Inc. (The) 45.29 -1.17 -2.52 9,689,245 Trade
CSCO Cisco Systems Inc. 46.44 -1.95 -4.03 38,297,966 Trade
DIS The Walt Disney Company 111.98 -1.47 -1.30 8,305,465 Trade
VZ Verizon Communications Inc. 57.68 -0.40 -0.69 16,948,126 Trade
BAC Bank of America Corporation 25.43 -0.85 -3.23 107,477,614 Trade
SUMR Summer Infant Inc. 0.97 0.00 0.41 13,469 Trade
MCD McDonald's Corporation 182.96 -2.49 -1.34 3,087,954 Trade
CTL CenturyLink Inc. 17.47 -0.01 -0.06 12,155,398 Trade
BMY Bristol-Myers Squibb Company 53.08 -0.17 -0.32 10,462,854 Trade
GPS Gap Inc. (The) 26.99 -0.62 -2.25 4,816,247 Trade
ZGNX Zogenix Inc. 42.55 -1.06 -2.43 553,234 Trade
HD Home Depot Inc. (The) 172.79 -3.17 -1.80 6,226,078 Trade
XOM Exxon Mobil Corporation 77.64 -0.75 -0.96 16,224,694 Trade
PFE Pfizer Inc. 43.92 -1.06 -2.36 26,531,218 Trade
PSTI Pluristem Therapeutics Inc. 1.04 0.01 0.97 114,393 Trade
DKS Dick's Sporting Goods Inc 36.34 0.63 1.76 4,728,809 Trade
HPQ HP Inc. 22.93 -1.09 -4.54 17,395,261 Trade
AZN Astrazeneca PLC 38.18 -0.69 -1.78 3,825,914 Trade
BA The Boeing Company 323.22 -8.68 -2.62 4,526,264 Trade
MRK Merck & Company Inc. (new) 76.72 -1.65 -2.11 12,622,990 Trade
GRPN Groupon Inc. 3.10 0.02 0.65 8,839,207 Trade
SNY Sanofi American Depositary Shares (Each repstg one-half of one) 43.48 -0.23 -0.53 826,951 Trade
FE FirstEnergy Corp. 39.23 0.15 0.38 3,541,480 Trade
SLW WPM Silver Wheaton Corp (Canada) n/a n/a n/a n/a
KO Coca-Cola Company (The) 49.09 -0.29 -0.59 15,565,697 Trade
SNE Sony Corporation 51.13 -0.73 -1.41 635,018 Trade
T AT&T Inc. 30.14 -0.39 -1.28 37,474,553 Trade
CAT Caterpillar Inc. 123.55 -4.82 -3.75 6,413,735 Trade
MSFT Microsoft Corporation 104.82 -4.37 -4.00 45,044,937 Trade

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