Equities Sector Coverage: Stocks Drop on Bernanke Comments But Close Flat

Sector Recap |

Ben Bernanke, Chairman of the Federal ReserveThe Dow Jones Industrial Average rebounded to 13,329.44 then consolidated during Fed Chief Bernanke’s press conference dipping into the red at 13,239.65 but staying above its 50-day and 200-day simple moving average at 13,133.65 and 13,002.30. The Nasdaq traded up to 3033.93 then down to 3019.22 then up to 3035.19 after the Fed Statement then down to 3013.00 during the Fed Chief’s press conference staying above its 50-day and 200-day simple moving averages at 2999.94 and 2988.91.

Asian stocks were higher on Wednesday. The Nikkei 225 closed at 9581 – up 0.59%. The Hang Seng closed at 22,503 – up 0.80%. European exchanges were higher on Tuesday. The FTSE 100 ended the day at 5,946 – up 0.35%. The DAX ended the day at 7,615 – up 0.33%. The CAC 40 ended the day at 3,647 – up 0.01%. The yield on the 10-Year US Treasury traded between 1.646% and 1.673% before the FOMC Statement then rose to 1.704% on the announcement of QE4, staying versus the 50-day and 200-day simple moving averages at 1.678% and 1.747%.

Comex gold rebounded from $1708.5 the Troy ounce to $1725.0 staying between the 200-day simple moving average at $1663.4 and the 50-day simple moving average at $1728.3. Nymex crude oil rebounded from $85.68 per barrel to $87.68 staying below the 50-day and 200-day simple moving averages at $87.86 and $93.02. The euro versus the dollar traded up from 1.2998 to 1.3095 staying above its 200-day simple moving average at 1.2782 and the 50-day at 1.2921.

Energy

As expected, OPEC has left its oil output ceiling at 30M BPD at its meeting in Vienna today, although it's unclear whether the cartel will do anything to address the fact that it's producing well above that figure. Chesapeake Energy (CHK) has agreed to sell a substantial majority of its midstream assets to Access Midstream Partners (ACMP) for $2.16B. Meanwhile, Williams Cos. (WMB) will acquire a 50% interest in Access GP and 25% of limited partner units of Access Midstream for $2.4B. Crédit Agricole cuts National Oilwell Varco (NOV) and Patterson-UTI Energy (PTEN) to Outperform from Buy. Big Movers – TOP Ships (TOPS) is up about 13%, while Cobalt International Energy (CIE) is down about 7%, both on over 3x average volume. Dow components – Chevron (CVX) is up about 0.7%. Exxon Mobil (XOM) is up about 1%. Energy Select Sector SPDR (XLE) was trading at $72.14 at 3:30 PM on Wednesday, up 0.33% on the day – up 4.35% year-to-date.

Materials

Molycorp (MCP) said that Mark Smith has left as CEO but didn't provide an explanation, although the WSJ reported that Smith was fired. Molycorp named Vice Chairman Constantine Karayannopoulos as Smith's interim replacement. Agrium (AGU) and Intrepid Potash (IPI) are new Neutrals at Goldman Sachs, which starts CF Industries (CF) at a Sell and picks up Mosaic (MOS) and Potash (POT) with Buys. Anglo American (AAUKY) received an Equal Weight-from-Underweight boost at Barclays. Big Mover – Greif Inc. (GEF) is up about 7.5% on over 3x average volume. Dow Components – Alcoa (AA) is down slightly. DuPont (DD) is up about 2%. The Materials Select Sector SPDR (XLB) was trading at $36.46 at 3:30 PM on Wednesday, down 0.30% on the day – up 8.84% year-to-date.

Industrials

Joy Global (JOY) beat estimates by 22 cents on revenue of $1.6B. The outlook for the company's mining equipment remains weak for now… The company expects FY2013 EPS at $5.90-$6.50 on revenue of $4.9B-$5.2B. ABM Industries (ABM) is upgraded to Buy from Hold at Keybanc. Towers Watson (TW) is taken to Outperform from Perform at Robert W. Baird. FedEx (FDX) is reduced to Outperform from Strong Buy at Raymond James. Knight Transportation (KNX) is now Neutral from Buy at Bank of America-Merrill Lynch. Big Mover – Swisher Hygiene (SWSH) is up about 8.5% on over 2x average volume. Dow components – Boeing Co (BA) is down slightly. Caterpillar (CAT) is up about 1.4%. General Electric (GE) is up about 1.7%. 3M Company (MMM) is down about 0.5%. United Technologies (UTX) is relatively unchanged. The Industrial Select Sector SPDR (XLI) was trading at $37.83 at 3:30 PM on Wednesday, up 0.19% on the day – up 12.09% year-to-date.

Consumer Discretionary

The WSJ has continued its focus on executive trading at Big Lots (BIG), finding that ten senior managers sold a total of over $23M in stock in March. The sales were made just before the firm reported slowing Q1 revenues, which sent shares plunging 24% in one day. Nike (NKE) is a new Neutral at JPMorgan, which has an Underweight on Under Armour (UA). Deckers Outdoor (DECK) is assigned a Buy at Janney Montgomery Scott. Mattress Firm Holding (MFRM) is initiated with a Buy at Citigroup. Expedia (EXPE) is a new Neutral at Janney, along with MakeMyTrip (MMYT) and priceline.com (PCLN). Orbitz (OWW) is initiated with a Buy. Coinstar (CSTR) is upgraded to Outperform from Market Perform at Northland. Royal Caribbean (RCL) is reduced to Neutral from Buy at Longbow. Big Mover – Eastman Kodak (EKDKQ) is down about 11%. Dow Components – Disney (DIS) is up about 0.9%. Home Depot (HD) is up about 0.25%. McDonalds (MCD) is relatively unchanged. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.41 at 3:30 PM on Wednesday, up 0.23% on the day – up 21.50% year-to-date.

Consumer Staples



Costco's (COST) FQ1 net profit jumped 30% to $416M as EPS of $0.95 (beating consensus by 2 cents), but a revenue increase of 9.5% to $23.2B missed expectations. Costco's performance was boosted by a 14.3% increase in fee revenue after it raised some membership fees last year. Avon (AVP) intends to cut about 1,500 jobs worldwide and to exit South Korea and Vietnam as part of its program to save $400M a year by the end of 2015, which it announced in November. Mondelez International (MDLZ) is moved to Hold from Buy at Argus. Big Mover – Lifeadvantage (LFVN) is down about 11.5%. Dow components – Coca Cola (KO) is down about 0.25%. Procter & Gamble (PG) is up about 0.4%. Wal-Mart (WMT) is down about 2.6%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.13 at 3:30 PM on Wednesday, down 0.08% on the day – up 11.20% year-to-date.

Health Care

HIV drug maker Gilead Sciences Inc. (GILD) said it will pay about $510 million ($2.95 / share – an 81% premium) to buy drug developer YM BioSciences Inc. (YMI). Acadia Pharmaceuticals (ACAD) announced today a private equity financing to sell 19 million shares of common stock at $4.43 per share, plus warrants to purchase 500,000 shares at $0.01. The company expects gross proceeds of $86.4M. Warburg Pincus is reportedly looking at selling Bausch & Lomb and is seeking at least $10B for the eyecare company. Warburg's banker, Goldman Sachs, has contacted Sanofi (SNY), GlaxoSmithKline (GSK) and Merck (MRK), and plans to reach out to Abbott Laboratories (ABT). Alnylam Pharmaceuticals (ALNY) is raised to Overweight from Neutral at Piper Jaffray. Novartis (NVS) is now Hold from Buy at Deutsche Bank. Teva Pharmaceutical (TEVA) is taken to Market Perform from Outperform at Leerink. Big Movers - YM Biosciences (YMI) is up about 77%. AspenBio (APPY) is up about 22%. Cardiome Pharma (CRME) is up about 20%. Acadia Pharmaceuticals (ACAD) is up about 16.5%. Peregrine Pharmaceuticals (PPHM) is up about 15%. Acura Pharmaceuticals (ACUR) is down about 13.5%. Dow Components – Johnson & Johnson (JNJ) is up slightly. Merck (MRK) is up about 0.4%. Pfizer (PFE) is relatively unchanged. United Health Group (UNH) is up about 1.5%. The Health Care Select Sector SPDR (XLV) was trading at $41.05 at 3:30 PM on Wednesday, down 0.07% on the day – up 18.33% year-to-date.

Financials

The Fed is reportedly discouraging top U.S. banks from making large acquisitions as it informally uses powers it received under the Dodd-Frank Law and attempts to limit the ability of banks to threaten the stability of the financial system should they fail. Those told not to make major purchases include Capital One Financial (COF) after its $9B acquisition of ING's (ING) U.S. online business. Carlyle (CG) is a new Neutral at Bank of America-Merrill Lynch. Prosperity Bancshares (PB) is upgraded to Outperform from Neutral at Robert W. Baird. Sterling Bancorp (STL) is upgraded to Market Perform from Underperform at BMO Capital. Boston Properties (BXP) is downgraded to Hold from Buy at Stifel Nicolaus. Stifel Financial (SF) is downgraded to Underperform from Market Perform with Wells Fargo. Big Mover – MGIC Investment (MTG) is up about 8.5% on over 2x average volume. Dow Components – American Express (AXP) is up about 1.7%. Bank of America (BAC) is up about 1%. JP Morgan Chase (JPM) is up about 1.1%. The Travelers Companies (TRV) is up about 0.25%. The Financial Select Sector SPDR (XLF) was trading at $16.145 at 3:30 PM on Wednesday, up 0.47% on the day – up 24.19% year-to-date.

Information Technology

DayStar Technologies, Inc. (DSTI) announced that former United States Secretary of Energy, former Governor of New Mexico and Nobel Prize nominee, Bill Richardson, has joined the Board of Directors. Solar stocks are soaring today following news that Chinese officials would spend at least $2.1 billion to support the struggling industry [LDK Solar Co. (LDK), JinkoSolar (JKS), Yingli Green Energy (YGE), JA Solar (JASO) and Trina Solar (TSL), Canadian Solar (CSIQ), Renesol (SOL), Suntech Power (STP)]. SolarCity (SCTY) slashed its expected IPO price to $8 from $13-$15 and delayed going public at least a day. Akamai Technologies (AKAM) is a new Neutral at Goldman Sachs. OpenTable (OPEN) is an Overweight at JPMorgan. Yelp Inc. (YELP) is an Outperform at Credit Suisse. Take-Two Interactive Software (TTWO) is now Overweight from Neutral at Piper Jaffray. 3D Systems (DDD) is now Neutral from Underweight at JPMorgan. Seagate Technology (STX) gets downgraded to Underweight from Neutral at JPMorgan. Big Movers – DayStar Technologies (DSTI) is up about 60%. JinkoSolar (JKS) is up about 20%. Yingli Green Energy (YGE) is up about 18.25%. LDK Solar (LDK) is up about 16.5%. JA Solar (JASO) is up about 16.5%. Renesola (SOL) is up about 16%. Canadian Solar (CSIQ) is up about 14.5%. Trina Solar (TSL) is up about 13.5%. Suntech Power (STP) is up about 12.25%. Dow Components – Cisco Systems (CSCO) is up about 0.25%. Hewlett-Packard (HPQ) is up about 2.3%. IBM (IBM) is down about 0.4%. Intel Corp (INTC) is up about 0.3%. Microsoft (MSFT) is down about 0.2%. The Technology Select Sector SPDR (XLK) was trading at $29.17 at 3:30 PM on Wednesday, down 0.21% the day – up 14.62% year-to-date.

Telecommunication Services

Big Mover – Neutral Tandem (IQNT) is up about 9%. Dow Components – AT&T (T) is up about 1.4%. Verizon (VZ) is up about 1.1%. The NASDAQ Telecommunications Index (IXTC) was trading at $201.10 at 3:30 PM on Wednesday, up 0.02% on the day – up 2.12% year-to-date.

Utilities

E.ON AG (EONGY) is cut to Underperform from Neutral at Credit Suisse. The Big Names – Dominion Resources (D) is up about 0.3%. Edison International (EIX) is up about 0.25%. First Energy (FE) is relatively unchanged. PG&E Corp (PCG) is up about 0.25%. Southern Company (SO) is down about 0.4%. The Utilities Select Sector SPDR (XLU) was trading at $35.545 at 3:30 PM on Wednesday, down 0.01% on the day – down 1.21% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KO, PG, WMT, JNJ, MRK, PFE, UNH, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, CHK, ACMP, WMB, NOV, PTEN, TOPS, CIE, MCP, AGU, IPI, CF, MOS, POT, AAUKY, GEF, JOY, ABM, TW, FDX, KNX, SWSH, BIG, NKE, UA, DECK, MFRM, EXPE, MMYT, PCLN, OWW, CSTR, RCL, EKDKQ, COST, AVP, MDLZ, LFVN, GILD, YMI, ACAD, SNY, GSK, MRK, ABT, ALNY, NVS, TEVA, APPY, CRME, PPHM, ACUR, COF, ING, CG, PB, STL, BXP, SF, MTG, DSTI, LDK, JKS, YGE, JASO, TSL, CSIQ, SOL, STP, SCTY, AKAM, OPEN, YELP, TTWO, DDD, TSX, IQNT, EONGY

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 199.72 -0.33 -0.16 1,488,022 Trade
UNH UnitedHealth Group Incorporated (DE) 191.15 2.22 1.18 1,925,049 Trade
GSK GlaxoSmithKline PLC 40.93 0.18 0.44 6,233,161 Trade
CF CF Industries Holdings Inc. 28.99 0.18 0.62 2,707,988 Trade
DECK Deckers Outdoor Corporation 65.44 1.03 1.60 851,493 Trade
PG Procter & Gamble Company (The) 90.21 -0.47 -0.52 6,137,534 Trade
GE General Electric Co 25.53 -0.26 -1.01 28,286,777 Trade
CVX Chevron Corporation 108.12 2.01 1.89 7,812,602 Trade
ABT Abbott Laboratories 49.61 -0.50 -1.00 5,688,266 Trade
SO Southern Company (The) 47.51 -0.31 -0.65 4,263,378 Trade
MOS Mosaic Company (The) 24.17 0.29 1.21 3,015,120 Trade
PCG Pacific Gas & Electric Co. 67.45 -0.10 -0.15 1,423,527 Trade
AGU Agrium Inc. 99.78 0.77 0.78 225,136 Trade
ABM ABM Industries Incorporated 44.74 -0.05 -0.11 190,190 Trade
YELP Yelp Inc. Class A 33.02 0.26 0.79 1,698,832 Trade
MMYT MakeMyTrip Limited 32.80 -0.20 -0.61 423,362 Trade
JNJ Johnson & Johnson 131.85 1.02 0.78 4,970,860 Trade
CG The Carlyle Group L.P. 20.75 -0.20 -0.95 310,857 Trade
IPI Intrepid Potash Inc 2.96 -0.06 -1.99 2,385,190 Trade
WMT Wal-Mart Stores Inc. 79.81 0.03 0.04 4,975,216 Trade
AA Alcoa Inc. 35.64 -0.72 -1.98 2,859,014 Trade
INTC Intel Corporation 35.31 0.34 0.97 36,291,484 Trade
IBM International Business Machines Corp 144.29 -0.78 -0.54 3,054,834 Trade
LFVN Lifevantage Corporation 3.84 -0.02 -0.52 50,928 Trade
D Dominion Resources Inc. 76.99 -0.13 -0.17 1,232,829 Trade
NOV National Oilwell Varco Inc. 33.11 -0.60 -1.78 4,686,302 Trade
TRV The Travelers Companies Inc. 127.21 1.33 1.06 1,277,677 Trade
APPY Venaxis Inc. n/a n/a n/a n/a
BIG Big Lots Inc. 50.43 0.17 0.34 698,515 Trade
ACAD ACADIA Pharmaceuticals Inc. 30.13 0.66 2.24 748,724 Trade
MDLZ Mondelez International Inc. 43.93 -0.31 -0.70 6,700,587 Trade
EXPE Expedia Inc. 159.50 5.25 3.40 4,398,933 Trade
ALNY Alnylam Pharmaceuticals Inc. 82.63 2.93 3.68 532,080 Trade
POT Potash Corporation of Saskatchewan Inc. 17.82 0.12 0.68 4,216,348 Trade
AKAM Akamai Technologies Inc. 46.89 0.88 1.91 2,993,447 Trade
ACUR Acura Pharmaceuticals Inc. 0.45 -0.05 -9.80 2,267
EIX Edison International 78.25 -0.97 -1.22 2,742,884 Trade
GILD Gilead Sciences Inc. 75.94 0.98 1.31 8,954,646 Trade
AXLL Axiall Corporation n/a n/a n/a 0 Trade
UA Under Armour Inc. Class A 17.36 -0.01 -0.06 2,997,254 Trade
PCLN The Priceline Group Inc. 2,024.06 -1.03 -0.05 505,472 Trade
JPM JP Morgan Chase 91.28 -0.27 -0.29 9,351,915 Trade
AXP American Express Company 84.80 0.95 1.13 3,321,176 Trade
UTX United Technologies Corporation 118.87 0.18 0.15 2,150,812 Trade
AVP Avon Products Inc. 3.60 -0.14 -3.74 3,583,155 Trade
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) n/a n/a n/a 0 Trade
CSCO Cisco Systems Inc. 31.52 -0.05 -0.16 15,770,955 Trade
DIS Walt Disney Company (The) 109.96 -0.04 -0.04 4,864,456 Trade
WMB Williams Companies Inc. (The) 31.99 0.01 0.03 3,464,894 Trade
COST Costco Wholesale Corporation 152.89 0.37 0.24 2,779,452 Trade
VZ Verizon Communications Inc. 47.94 0.13 0.27 25,296,508 Trade
NKE Nike Inc. 58.67 0.52 0.89 5,112,825 Trade
BAC Bank of America Corporation 24.03 -0.08 -0.33 50,143,443 Trade
COF Capital One Financial Corporation 84.97 0.17 0.20 3,164,154 Trade
TW Towers Watson & Co n/a n/a n/a 0 Trade
GEF Greif Inc 56.18 -0.29 -0.51 103,637 Trade
MCD McDonald\'s Corporation 155.85 -1.10 -0.70 3,964,456 Trade
YGE Yingli Green Energy Holding Company Limited ADR 2.34 0.01 0.43 18,734 Trade
BXP Boston Properties Inc. 122.33 1.12 0.92 701,270 Trade
DD E.I. du Pont de Nemours and Co. 83.98 -0.61 -0.72 2,356,861 Trade
SCTY SolarCity Corporation n/a n/a n/a 0 Trade
CRME Cardiome Pharma Corporation 4.32 -0.10 -2.26 41,056 Trade
JASO JA Solar Holdings Co. Ltd. 6.36 0.08 1.27 438,165 Trade
JOY Joy Global Inc. n/a n/a n/a 0 Trade
JKS JinkoSolar Holding Company Limited American Deposi 28.02 1.26 4.71 1,433,068 Trade
PPHM Peregrine Pharmaceuticals Inc. 4.28 -0.04 -0.93 198,580 Trade
HD Home Depot Inc. (The) 148.08 0.35 0.24 3,421,081 Trade
XOM Exxon Mobil Corporation 79.60 -1.23 -1.52 22,800,785 Trade
PFE Pfizer Inc. 33.15 0.15 0.45 16,239,229 Trade
TEVA Teva Pharmaceutical Industries Limited American De 32.34 -0.11 -0.34 4,046,745 Trade
KNX Knight Transportation Inc. 35.45 0.20 0.57 1,481,356 Trade
NVS Novartis AG 84.75 -0.22 -0.26 1,278,927 Trade
CSIQ Canadian Solar Inc. 16.78 0.44 2.69 1,008,115 Trade
FDX FedEx Corporation 208.04 0.50 0.24 1,076,359 Trade
HPQ HP Inc. 19.17 -0.04 -0.21 5,898,307 Trade
BA Boeing Company (The) 241.27 0.27 0.11 4,602,406 Trade
MRK Merck & Company Inc. (new) 64.11 0.42 0.66 13,342,135 Trade
STL Sterling Bancorp 22.70 0.00 0.00 902,776 Trade
ING ING Group N.V. 18.66 0.12 0.65 3,528,090 Trade
SNY Sanofi American Depositary Shares (Each repstg one 47.56 -0.53 -1.10 1,977,342 Trade
FE FirstEnergy Corporation 32.15 0.90 2.88 10,070,829 Trade
TTWO Take-Two Interactive Software Inc. 80.10 0.39 0.49 1,502,769 Trade
KO Coca-Cola Company (The) 46.01 -0.11 -0.24 11,945,270 Trade
SF Stifel Financial Corporation 50.35 0.83 1.68 1,158,465 Trade
T AT&T Inc. 39.00 -0.41 -1.04 36,012,922 Trade
CAT Caterpillar Inc. 114.10 -0.27 -0.24 4,704,478 Trade
DDD 3D Systems Corporation 16.90 -0.03 -0.18 1,263,277 Trade
SOL Renesola Ltd. of Beneficial Interest 2.85 0.11 4.01 27,013 Trade
TOPS TOP Ships Inc. 0.34 -0.02 -6.25 5,363,687 Trade
MTG MGIC Investment Corporation 11.45 -0.15 -1.29 1,812,315 Trade
MSFT Microsoft Corporation 73.04 -0.12 -0.16 18,306,680 Trade
CHK Chesapeake Energy Corporation 5.06 0.00 0.00 41,607,527 Trade
IQNT Inteliquent Inc. n/a n/a n/a 0 Trade
MFRM Mattress Firm Holding Corp. n/a n/a n/a 0 Trade
CIE Cobalt International Energy Inc. COBALT INTERNATIO 2.53 0.02 0.80 379,798 Trade
PTEN Patterson-UTI Energy Inc. 19.51 0.08 0.41 4,070,321 Trade
SWSH Swisher Hygiene Inc n/a n/a n/a 0

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