Existing home sales rose 7.7% in August to a 5.03 million unit rate, topping the 1.4% gain economists had expected. The FOMC says that economic growth remains slow with continued weakness likely in overall labor market conditions, which means that the Unemployment Rate will remain elevated. The Dow Jones Industrial Average traded up to 11,447.86 then dipped to 11,334.03 as traders and investors awaited the Fed Statement. After the statement the Dow traded into the green, but then slumped to 11,117.28 in the final half hour of trading. The NASDAQ traded between 2583.42 and 2613.29 around its 50-day simple moving average at 2594 while waiting for the FOMC. After the Fed Statement the NASDAQ traded as low as 2537.46 in the final half hour of trading.
Asian stocks were mixed on Tuesday. The Nikkei 225 tacked on a modest 0.23% to 8,741. The Hang Seng lost 1.00% to 18,824. European stocks declined as global markets wait and see with regard to the FOMC Statement and status on Greek debt. The FTSE 100 lost 1.40% to 5,288 with the DAX losing 2.47% to 5,434 and the CAC 40 slipping by 1.62% to 2,936. The yield on the 10-Year US Treasury traded down from 1.970 to a new record low of 1.854 percent after the FOMC announced “Operation Twist”, which is a program where the Fed sells short maturity Treasuries to buy longer term notes and bonds. Gold traded down from $1816.7 the Troy ounce to $1786.0 then up to $1819.4, and then back down to $1781.0, as the double-top continues to form on the daily chart. Crude oil traded up from $85.80 per barrel to $87.99 then down to $85.08 continuing to trade between its 200-week simple moving average at $83.71 and its 50- day at $89.77. The euro versus the US dollar traded up from 1.3633 to 1.3789 then down to 1.3607.
Energy
BP (BP) fired back at Halliburton (HAL) over the latter’s lawsuit against it, denying claims it withheld information about a potentially dangerous condition in its Macondo oil well. BP is also facing a legal action from Anadarko Petroleum (APC), and from hundreds of other parties claiming economic loss and/or personal injury. Total SA (TOT) gets a Neutral-from-Underperform upgrade at Credit Suisse. In afternoon trading: Shares of Alpha Natural Resources (ANR) are down about 15.6%. Shares of James River Coal (JRCC) are down about 13.3%. Shares of Uranium Resources (URRE) are down about 11.9%. Shares of Basic Energy Services (BAS) are down about 11.5%. Shares of Arch Coal (ACI) are down about 10%. Shares of Patriot Coal (PCX) are down about 10%.
Energy Select Sector SPDR (XLE) was trading at $62.89 at 4:00 PM on Wednesday, down 4.16% on the day – down 7.85% year-to-date.
Materials
In afternoon trading: Shares of Cliffs Natural Resources (CLF) are down about 12.4%. Shares of Walter Energy (WLT) are down about 11.6%. Shares of Ferro (FOE) are down about 11.6%. Shares of Ivanhoe (IVN) are down about 10.1%. Shares of Celanese (CE) are down about 8.7%. Shares of LyondellBasell (LYB) are down about 7.6%. Shares of Rare Element (REE) are down about 6.9%. Shares of Freeport McMoran (FCX) are down about 6.7%.
The Materials Select Sector SPDR (XLB) was trading at $32.09 at 4:00 PM on Wednesday, down 4.52% on the day – down 16.45% year-to-date.
Industrials
Chatter continues to grow that United Technologies (UTX) is in final negotiations for a blockbuster acquisition of aerospace firm Goodrich (GR). Credit Suisse assigns Outperforms on Heico Corp (HEI) – $69 target, Triumph Group (TGI) – $64 target, and Esterline Technologies (ESL) – $79 target. It has new Neutrals on Moog Inc (MOG.A) – $41 target and AAR Corp (AIR) – $23 target. Expeditors International (EXPD) is a new Buy at Lazard. Goodrich (GR) gets reduced to Market Perform from Outperform by Sanford Bernstein. In afternoon trading: Shares of WABCO (WBC) are down about 10.1%. Shares of Meritor (MTOR) are down about 9.4%. Shares of General Cable (BGC) are down about 9.2%.
The Industrial Select Sector SPDR (XLI) was trading at $30.14 at 4:00 PM on Wednesday, down 4.13% on the day – down 13.56% year-to-date.
Consumer Discretionary
Deutsche Bank has new Buys on Penn National Gaming (PENN) – $52 price objective, Las Vegas Sands (LVS) – $61 price objective, Wynn Resorts (WYNN) – $198 price objective, MGM Resorts (MGM) – $17 price objective, Scientific Games (SGMS) – $14 price objective, and WMS Industries (WMS) -$23 price objective. It has Holds on Boyd Gaming (BYD) -$7 price objective, Ameristar Casinos (ASCA) – $20 price objective, International Game Technology (IGT) – $16 price objective, and Pinnacle Entertainment (PNK) – $14 price objective. Deutsche Bank begins Buys on Hyatt Hotels (H), Orient-Express (OEH), Wyndham Worldwide (WYN), and Starwood Hotels (HOT). Dollar General (DG) gets picked up with a Hold at Deutsche Bank. Carnival Corp (CCL) is now Buy from Neutral at Natixis. Cabela’s (CAB) is cut to Underweight from Neutral at JP Morgan. Regal Entertainment (RGC) is reduced to above Average from Buy at Caris & Company.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $36.29 at 4:00 PM on Wednesday, down 3.23% on the day – down 2.99% year-to-date.
Consumer Staples
SABMiller (SBMRF) is buying Australian brewer Foster’s (FBRWF) for A$5.10, or A$9.9B ($10.2B), giving SABMiller a leading position in the “stable and profitable” Australian beer industry. Unilever NV (UN) gets a Buy-from-Hold boost at Jefferies. L’Oreal (LRLCY) is lifted to Neutral from Underweight at HSBC Securities. Danone (DANOY) gets downgraded to Hold from Buy at Jefferies. In afternoon trading: Shares of China-Biotics (CHBT) are down about 12.5%. Shares of Farmer Brothers (FARM) are up about 7%. Shares of Foster’s are up about 6.1%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.01 at 4:00 PM on Wednesday, down 2.06% on the day – up 2.39% year-to-date.
Healthcare
Optimer Pharmaceuticals (OPTR) is a new Buy and $20 price target at Brokerage Brean Murray. Pacific Biosciences (PACB) is moved to Underweight from Neutral at JP Morgan. In afternoon trading: Shares of Orexigen Therapeutics (OREX) are up about 50% on news that the FDA reversed their position to give new life to the company’s obesity drug Contrave. Shares of Human Genome Sciences (HGSI) are up about 13%. Shares of Regeneron Pharmaceuticals (REGN) are up about 10%. Shares of Pacific Biosciences are down about 22%. Shares of NuVasive (NUVA) are down about 12%.
The Health Care Select Sector SPDR (XLV) was trading at $32.12 at 4:00 PM on Wednesday, down 2.70% on the day – up 1.97% year-to-date.
Financials
American Equity Investment Life (AEL) is initiated with an Overweight at JP Morgan. Plum Creek (PCL) is begun with a Buy at Citigroup, which has a Hold on Weyerhaeuser (WY). Jefferies Group (JEF) is taken to Neutral from Buy at Ticonderoga. Banco Santander Brasil (BSBR) is reduced to Neutral from Buy at Goldman Sachs. In afternoon trading: Shares of Credit Agricole (CRARF) are down about 17%. Shares of Alpha Bank (ALBKY) are down about 11.5%. Shares of Leucadia National (LUK) are down about 8%. Shares of MPG Office Trust (MPG) are down about 8%.
The Financial Select Sector SPDR (XLF) was trading at $11.90 at 4:00 PM on Wednesday, down 4.95% on the day – down 25.39% year-to-date.
Information Technology
Oracle (ORCL) narrowly beat earnings expectations, reporting FQ1 EPS of $0.48 (versus the $0.47 consensus) and in-line revenue of $8.4B. Looking ahead, the company expects FQ2 revenue of $8.99B-9.34B and EPS of $0.56-0.58 (versus consensus of $9.36B and $0.56). NXP Semiconductors NV (NXPI) is a new Buy and $29 target at Sterne Agee. Autodesk (ADSK) is upgraded to Overweight from Neutral at JP Morgan. Rovi Corp (ROVI) is raised to Overweight from Neutral at JP Morgan. Amdocs (DOX) and VeriSign (VRSN) are each now Neutral from Overweight at JP Morgan. LG Display (LPL) is lowered to Neutral from Buy at Nomura. In afternoon trading: Shares of Energy Conversion Devices (ENER) are up about 19%. Shares of JA Solar (JASO) are up about 14%. Shares of AOL (AOL) are down about 15%.
The Technology Select Sector SPDR (XLK) was trading at $24.49 at 4:00 PM on Wednesday, down 1.49% on the day – down 2.78% year-to-date.
Telecommunications Services
Swisscom AG (SCMWY) is lifted to Buy from Hold at Citigroup. In afternoon trading: Shares of MetroPCS (PCS) are down about 7.2%. Shares of Clearwire (CLWR) are down about 6.1%. Shares of NII Holdings (NIHD) are down about 5.7%. Shares of Frontier Communications (FTR) are down about 5.7%. Actives: Shares of Sprint Nextel (S) are down about 1.5%. Shares of AT&T (T) are down about 1.7%. Shares of Verizon (VZ) are down about 1.2%. Shares of Level 3 Communications (LVLT) are down about 2%. Shares of Vodafone (VOD) are down about 2.5%.
The NASDAQ Telecommunications Index (IXTC) was trading at $185.86 at 4:00 PM on Wednesday, down 3.33% on the day – down 17.53% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Duke Energy (DUK) are relatively unchanged. Shares of Genon Energy (GEN) are down about 4%. Shares of AES Corp (AES) are down about 2.9%. Shares of Southern (SO) are down about a half of a percent. Shares of Exelon (EXC) are down about 1.1%. Shares of TECO Energy (TE) are down about 4.7%. Shares of NRG Energy (NRG) are down about 2.8%. Shares of PPL Corp (PPL) are down about 0.9%. Shares of American Electric Power (AEP) are down about 2.1%.
The Utilities Select Sector SPDR (XLU) was trading at $33.65 at 4:00 PM on Wednesday, down 1.84% on the day – up 7.37% year-to-date.
STOCKS: BP, HAL, APC, TOT, ANR, JRCC, URRE, BAS, ACI, PCX, CLF, WLT, FOE, IVN, CE, LYB, REE, FCX, UTX, GR, HEI, TGI, ESL, MOG.A, AIR, EXPD, WBC, MTOR, BGC, PENN, LVS, WYNN, MGM, SGMS, WMS, BYD, ASCA, IGT, PNK, H, OEH, WYN, HOT, DG, CCL, CAB, RGC, SBMRF, FBRWF, UN, LRLCY, DANOY, CHBT, FARM, OPTR, PACB, OREX, HGSI, REGN, NUVA, AEL, PCL, WY, JEF, BSBR, CRARF, ALBKY, LUK, MPG, ORCL, NXPI, ADSK, ROVI, DOX, VRSN, LPL, ENER, JASO, AOL, SCMWY, PCS, CLWR, NIHD, FTR, S, T, VZ, LVLT, VOD, DUK, GEN, AES, SO, EXC, TE, NRG, PPL, AEP
