Stocks continued trading down today because of poor economic news. The Dow Jones Industrial Average could not stay above 12,800 at the open trading down to 12,673.02 after we learned that the ISM non-manufacturing index declined to 52.8, well below expectations. The NASDAQ opened higher to 2848.16 then declined to 2808.79 as the market digested the disappointing economic data. An afternoon recovery pared losses in both indices. ADP Employer Services reported that private employers added 179,000 jobs in April, which is down from 207,000 in March.
Stocks were lower again in Asia with the Hang Seng Index in China down 1.3%. The European exchanges traded lower with the FTSE 100 down 1.6% on Wednesday. The yield on the 10-Year U.S. Treasury traded as low as 3.207 percent continuing the modest flight to quality. Comex gold traded up from $1530.9 the Troy ounce to $1543.5 on Wednesday then slipped significantly to $1505.5 as profit-taking continued. Nymex crude oil could not stay above $111.00 on Wednesday and traded as low as $108.48 on a larger than expected build in oil inventories. The euro traded below 1.48 for the third consecutive day and then traded above 1.49 without sustaining gains above 1.49.
Energy
Talisman Energy (TLM) reported Q1 EPS of $0.15 (vs. consensus of $0.25). Exco Resources (XCO) reported Q1 EPS of $0.13 (vs. consensus of $0.12), while missing revenue by $14M. First Solar (FSLR) beat estimates by 17 cents and revenue by $23M. Pioneer Natural Resources Company (PXD) reported Q1 EPS of $0.68 (vs. consensus of $0.51), while missing revenue by $6M. TECO Energy (TE) reported Q1 EPS of $0.24 (vs. consensus of $ 0.30), while missing revenue by $84M. Rowan Cos (RDC) is upgraded to Strong Buy from Sell at Duncan-Williams with a $54 target. First Solar (FSLR) is lowered to Hold from Buy at brokerage firm Collins Stewart. Chesapeake Energy (CHK) is cut to Accumulate from Buy at Global Hunter. In afternoon trading: Shares of Brigham Exploration Company (BEXP) are down about 9.25%, despite beating estimates by 4 cents as revenue came in at $40 million versus expectations of $76.5 million. Shares of World Fuel Services (INT) are down about 7%.
The Energy Select Sector SPDR (XLE) was trading at $76.05 at 4:00 PM on Wednesday, down 1.77% on the day – up 11.43% year-to-date.
Materials
Kinross Gold (KGC) beat estimates by 2 cents and revenue by $28M. Yamana Gold (AUY) missed estimates by a penny and revenue by $44M. Calgon Carbon (CCC) gets downgraded to Perform from Outperform at Oppenheimer. Scotts Miracle-Gro (SMG) gets cut to Sector Perform from Outperform at RBC Capital. In afternoon trading: Shares of Century Aluminum Company (CENX) are down nearly 16% after missing estimates by 4 cents and revenue by $9M. Shares of Kronos Worldwide (KRO) are down about 6.5%. Shares of IAMGOLD (IAG) are UP about 6%.
The Materials Select Sector SPDR (XLB) traded at $39.50 at 4:00 PM on Wednesday, down 1.77% on the day – up 2.84% year-to-date.
Industrials
General Electric (GE) is attempting to sell its railcar leasing business, which could be worth over $3B. R.R. Donnelley & Sons Company (RRD) missed estimates by 4 cents with revenue in-line with estimates. Avis Budget Group (CAR) beat estimates by 6 cents with revenue in-line with estimates. Genco Shipping & Trading Limited (GNK) missed estimates by a penny and revenue by $5M. KAR Auction Services (KAR) is now Neutral from Outperform at Robert W. Baird. Norfolk Southern (NSC) is now Hold from Buy at Jefferies. In afternoon trading: Shares of Quanta Services (PWR) are down about 11% after missing estimates by 12 cents. Shares of DigitalGlobe (DGI) are down about 10.75% after reporting their quarterly earnings. Shares of Republic Airways Holdings (RJET) are down about 10.25% after announcing that it lost $22.4 million during the first quarter on higher fuel and maintenance costs.
The Industrial Select Sector SPDR (XLI) traded at $37.92 at 4:00 PM on Wednesday, down 1.46% on the day – up 8.75% year-to-date.
Consumer Discretionary
Comcast (CMCSA) beat estimates by 2 cents, with net income rising 9% to $943M and revenue jumping 32% to $12.1B. Time Warner’s (TWX) Q1 2011 adjusted EPS slipped to $0.58 from $0.61 even as revenues rose 6% to $6.7B, reflecting growth at its Networks segment. Las Vegas Sands (LVS) missed estimates by 7 cents with revenue in-line with estimates. Peet’s Coffee & Tea (PEET) beat estimates by 7 cents with revenue in-line with estimates. Rue21 (RUE) is resumed with a Market Perform and $26 price target at FBR Capital. CBS Corp (CBS) is upgraded to Overweight from Neutral at Piper Jaffray. Dick’s Sporting Goods (DKS) is upgraded to Outperform from Perform with a $50 target at Oppenheimer. Lottomatica (LTTOY) is cut to Sell from Hold at Citigroup. In afternoon trading: Shares in CBS are up about 7.5% after beating estimates by 10 cents and announcing it will be doubling its dividend to $0.10 a share. Shares of Barnes & Noble (BKS) are up about 16.75% as the new system upgrade for the Nook Color e-reader from Barnes & Noble adds new features that you’d normally associate with a tablet. Shares of MGM Resorts (MGM) are up about 12.25% after reporting a loss of 16 cents per share versus estimates of a 19 cent loss. Shares of Lamar Advertising (LAMR) are down about 10%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.37 at 4:00 PM on Wednesday, down 0.22% on the day – up 7.91% year-to-date.
Consumer Staples
ConAgra Foods (CAG) has made a public $4.9B ($86 / share) offer for Ralcorp Holdings (RAH) after their initial bid was rejected in March. ConAgra will also assume $2.5B in debt. In afternoon trading: Shares in Green Mountain Coffee Roasters (GMCR) are up nearly 20% after the company, which makes brewing systems for hot drinks, beat estimates by 10 cents, beat revenue by $19M and increased its full-year outlook. Shares of Nu Skin Enterprises (NUS) are up about 10%. Shares of Hain Celestial Group (HAIN) are up about 5.25%. Shares of Ralcorp Holding are up about 4.75%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.60 at 4:00 PM on Wednesday, down slightly on the day – up 7.81% year-to-date.
Healthcare
American Medical Systems (AMMD) beat estimates by 3 cents and revenue by $4M. Cephalon (CEPH) beat estimates by 5 cents, but missed revenue by $15M. Charles River Laboratories International (CRL) beat estimates by 6 cents and revenue by $7M. Exelixis (EXEL) missed estimates by 5 cents and revenue by $1M. McKesson (MCK) beat estimates by 6 cents with revenue in-line with estimates. Myriad Genetics (MYGN) beat estimates by 6 cents and revenue by $4M. Thoratec (THOR) beat estimates by a penny with revenue in-line with estimates. Vertex Pharmaceuticals (VRTX) beat estimates by 18 cents and revenue by $49M. Sanofi-Aventis (SNY) is boosted to Buy from Neutral at Bank of America-Merrill Lynch. In afternoon trading: Shares of Zalicus (ZLCS) are down about 7.75%. Shares of Jazz Pharmaceuticals (JAZZ) are down 7.75% despite beating estimates by 2 cents with revenue in-line with estimates.
The Health Care Select Sector SPDR (XLV) traded at $35.48 at 4:00 PM on Wednesday, down slightly on the day – up 12.63% year-to-date.
Financials
The Justice Department is suing Deutsche Bank (DB) for over $1B, accusing the German bank of ‘recklessly’ lying about the quality of loans made by its MortgageIT unit and guaranteed by the government. Meanwhile, U.S. prosecutors are reviewing the findings of a Senate report that heavily criticized Deutsche Bank and Goldman Sachs (GS) for their actions in the lead up to the financial crisis. Glencore has priced its long-awaited IPO at £4.80-£5.80 ($7.90-$9.55) a share, valuing the commodities trading house at $60B at the mid-point of the price range. American Capital Strategies (ACAS) beat estimates by a penny. Genworth Financial (GNW) missed estimates by a penny with revenue in-line with estimates. UnumProvident (UNM) beat estimates by a penny with revenue in-line with estimates. XL Group (XL) missed estimates by 7 cents. UBS has Buys on Citigroup (C), Goldman Sachs (GS), and JPMorgan (JPM) and Neutrals on Bank of America (BAC) and Morgan Stanley (MS). BlackRock (BLK) is now Buy from Neutral at Ticonderoga with a price objective of $225. Legg Mason (LM) is lowered to Market Perform from Outperform at Keefe Bruyette. Banco Santander Central (STD) gets taken to Reduce from Neutral at WestLB.
The Financial Select Sector SPDR (XLF) traded at $16.24 at 4:00 PM on Wednesday, down 0.85% on the day – up 1.82% year-to-date.
Information Technology
AOL (AOL) reported Q1 EPS of $0.04 (vs. consensus of $0.19), while beating revenue by $15M. Harris (HRS) beat estimates by a penny, but missed revenue by $1B. Jack Henry & Associates (JKHY) reported Q3 EPS of $0.38 (in-line), while missing revenue by $2M. Molex (MOLX) reported Q3 EPS of $0.22 (vs. consensus of $0.42), while beating revenue by $3M. Plantronics (PLT) beat estimates by a penny and revenue by $3M. THQ (THQI) beat estimates by 4 cents, but missed revenue by $6M. Apple (AAPL) is resumed with an Outperform rating and $450 price objective at Oppenheimer. Applied Materials (AMAT) agreed to acquire Varian Semiconductor Equipment Associates (VSEA) for $4.9B, or $63 a share (a 55% premium). In afternoon trading: Shares of Varian are up over 51%. Shares of Heartland Payment Systems (HPY) are up about 12.25%. Shares of ValueClick (VCLK) are up about 10% after beating estimates by 3 cents and revenue by $2M. Shares of BTU International (BTUI) are down nearly 20% after reporting earnings and warning that solar inventories continue to grow. Shares of Sonus Networks (SONS) are down about 18.5% after missing estimates by 4 cents. Shares of Open Table (OPEN) are down about 14.5% despite beating estimates by 5 cents with revenue in-line with estimates as their CEO is stepping down; handing things over to the CFO. Shares of Motricity (MOTR) are down about 13.5% despite beating estimates by a penny, due to lower than exptected revenue. Shares of Quest Software (QSFT) are down about 10.5% after missing estimates by 9 cents and revenue by $10M.
The Technology Select Sector SPDR (XLK) traded at $26.57 at 4:00 PM on Wednesday, down 0.30% on the day – up 5.48% year-to-date.
Telecommunications Services
In afternoon trading: Shares of Alaska Communications Systems (ALSK) are down about 6.5% on over 3x average daily volume after announcing that it intends to offer $100 million aggregate principal amount of its Convertible Notes due 2018 in a private placement. Shares of SureWest (SURW) are down about 5.25%. Actives: Shares of Sprint Nextel (S) are up about 3%. Shares of AT&T (T) are down about a quarter of a percent. Shares of Frontier Communications (FTR) are down about 1.4%. Shares of Level 3 Communications (LVLT) are down about 1.5%. Shares of Verizon (VZ) are down about 0.4%.
The NASDAQ Telecommunications Index (IXTC) traded at $223.98 at 4:00 PM on Wednesday, down 0.46% on the day – down 0.62% year-to-date.
Utilities
Great Plains Energy (GXP) missed estimates by a penny and revenue by $21M. In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about 0.4%. Shares of E ON AG (EONGY) are down about 0.6%. Shares of Southern (SO) are up about 0.6%. Shares of PG&E (PCG) are down about 1.3%. Shares of Exelon (EXC) are down about 1.2%.
The Utilities Select Sector SPDR (XLU) traded at $33.34 at 4:00 PM on Wednesday, down slightly on the day – up 6.38% year-to-date.
STOCKS: TLM, XCO, FSLR, PXD, TE, RDC, CHK, BEXP, INT, KGC, AUY, CCC, SMG, CENX, KRO, IAG, GE, RRD, CAR, GNK, KAR, NSC, PWR, DGI, RJET, CMCSA, TWX, LVS, PEET, RUE, CBS, DKS, LTTOY, BKS, MGM, LAMR, CAG, RAH, GMCR, NUS, HAIN, AMMD, CEPH, CRL, EXEL, MCK, MYGN, THOR, VRTX, SNY, ZLCS, JAZZ, DB, GS, ACAS, GNW, UNM, XL, C, GS, BAC, MS, BLK, LM, STD, AOL, HRS, JKHY, MOLX, PLT, THQI, AAPL, AMAT, VSEA, HPY, VCLK, BTUI, SONS, OPEN, MOTR, QSFT, ALSK, SURW, S, T, FTR, LVLT, VZ, GXP, DUK, EONGY, SO, PCG, EXC
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