Equities Sector Coverage: Stocks Continue to Break Lower

Sector Recap |

wall streetCPI 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 199.39 -10.61 -5.05 6,593,035 Trade
XEL Xcel Energy Inc. 46.70 -0.20 -0.43 1,249,338 Trade
PG Procter & Gamble Company (The) 89.14 0.96 1.09 6,766,682 Trade
GE General Electric Co 25.44 0.01 0.04 46,181,545 Trade
CVX Chevron Corporation 104.39 1.19 1.15 7,093,841 Trade
SO Southern Company (The) 46.78 -0.47 -0.99 4,010,359 Trade
PCG Pacific Gas & Electric Co. 67.51 -0.39 -0.57 2,413,504 Trade
CLX Clorox Company (The) 132.87 1.55 1.18 688,894 Trade
FB Facebook Inc. 165.28 -0.72 -0.43 15,383,241 Trade
JNJ Johnson & Johnson 131.88 -1.13 -0.85 6,262,907 Trade
WMT Wal-Mart Stores Inc. 78.52 1.63 2.12 11,503,953 Trade
AA Alcoa Inc. 37.30 0.61 1.66 3,425,542 Trade
INTC Intel Corporation 34.67 0.17 0.49 18,096,682 Trade
IBM International Business Machines Corp 146.19 0.20 0.14 4,208,895 Trade
D Dominion Resources Inc. 76.79 0.02 0.03 1,783,060 Trade
TRV The Travelers Companies Inc. 127.46 1.08 0.85 1,578,172 Trade
CIO City Office REIT Inc. 12.52 -0.06 -0.48 169,377 Trade
AAPL Apple Inc. 152.74 0.65 0.43 18,853,932 Trade
EIX Edison International 78.39 -0.09 -0.11 1,723,038 Trade
PLAB Photronics Inc. 10.20 0.00 0.00 300,175 Trade
RENN Renren Inc. American Depositary Shares each repres 6.69 0.29 4.53 286,215 Trade
NSM Nationstar Mortgage Holdings Inc. 18.37 0.23 1.27 285,394 Trade
JPM JP Morgan Chase 92.80 1.52 1.67 16,447,678 Trade
AXP American Express Company 85.41 0.41 0.48 3,255,176 Trade
VAL Valspar Corporation (The) n/a n/a n/a 0 Trade
UTX United Technologies Corporation 120.42 -2.71 -2.20 4,801,441 Trade
NVDA NVIDIA Corporation 165.35 -0.80 -0.48 12,413,896 Trade
AVP Avon Products Inc. 3.75 0.10 2.74 4,397,214 Trade
TJX TJX Companies Inc. (The) 68.70 1.80 2.69 5,865,339 Trade
CSCO Cisco Systems Inc. 32.12 0.26 0.82 14,989,974 Trade
DIS Walt Disney Company (The) 106.42 -0.58 -0.54 5,394,699 Trade
VZ Verizon Communications Inc. 43.98 0.27 0.62 9,818,802 Trade
BAC Bank of America Corporation 24.48 0.57 2.38 86,154,719 Trade
SUMR Summer Infant Inc. 1.68 -0.05 -2.89 48,130 Trade
MCD McDonald\'s Corporation 159.07 7.22 4.75 9,511,383 Trade
CTL CenturyLink Inc. 22.96 0.20 0.88 6,960,395 Trade
DD E.I. du Pont de Nemours and Co. 85.49 1.14 1.35 2,212,436 Trade
BMY Bristol-Myers Squibb Company 55.95 0.35 0.63 7,312,939 Trade
GPS Gap Inc. (The) 23.97 0.80 3.45 4,857,988 Trade
ZGNX Zogenix Inc. 13.00 -0.40 -2.99 179,121 Trade
HD Home Depot Inc. (The) 146.97 2.39 1.65 5,002,381 Trade
XOM Exxon Mobil Corporation 80.27 0.40 0.50 11,465,272 Trade
PFE Pfizer Inc. 33.10 -0.22 -0.66 19,787,519 Trade
PSTI Pluristem Therapeutics Inc. 1.18 -0.02 -1.67 114,864 Trade
DKS Dick\'s Sporting Goods Inc 35.80 0.68 1.94 2,923,859 Trade
HPQ HP Inc. 19.41 0.17 0.88 9,266,648 Trade
AZN Astrazeneca PLC 33.78 -0.07 -0.21 3,173,897 Trade
BA Boeing Company (The) 212.46 0.28 0.13 2,889,035 Trade
MRK Merck & Company Inc. (new) 62.36 -0.21 -0.34 5,955,856 Trade
GRPN Groupon Inc. 3.69 0.04 1.10 3,940,503 Trade
SNY Sanofi American Depositary Shares (Each repstg one 48.07 0.36 0.75 914,480 Trade
FE FirstEnergy Corporation 30.87 -0.38 -1.22 4,536,059 Trade
SLW Silver Wheaton Corp (Canada) n/a n/a n/a n/a
KO Coca-Cola Company (The) 45.24 0.40 0.89 14,096,307 Trade
SNE Sony Corporation 40.18 -0.43 -1.06 830,555 Trade
T AT&T Inc. 36.22 -0.01 -0.03 29,446,967 Trade
CAT Caterpillar Inc. 114.54 6.36 5.88 14,264,596 Trade
MSFT Microsoft Corporation 74.19 0.59 0.80 22,018,681 Trade

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