Equities Sector Coverage: Stocks Edge Lower Ahead of Earnings

Sector Recap  |

The Dow Jones Industrial Average traded down to 12,686.57 on Monday morning then rebounded in the afternoon. The NASDAQ traded down to 2919.04 on Monday morning then rebounded in the afternoon.

Asian stocks were lower on Monday. The Nikkei 225 ended the day at 8,897 – down 1.37%. The Hang Seng ended the day at 19,428 – down 1.88%. European exchanges traded lower on Monday. The FTSE 100 ended the day at 5,627 – down 0.62%. The DAX ended the day at 6,388 – down 0.35%. The CAC 40 ended the day at 3,157 – down 0.38%. The yield on the 10-Year US Treasury note traded down from 1.549% to 1.505% on Monday.

Gold rebounded from $1576.0 the Troy ounce to $1593.1 on Monday as the 50-day and 200-day simple moving averages decline to $1598.2 and $1661.1. Crude oil rebounded from $84.00 per barrel to $86.48 trading between its 200-week simple moving average at $80.35 and the 50-day at $89.04. The euro versus the dollar rebounded from 1.2259 to 1.2323.

Energy

Cabot Oil & Gas (COG) has been upgraded to Buy from Neutral at Goldman. Carrizo Oil & Gas (CRZO) has been downgraded to Market Perform from Outperform at BMO Capital. Ormat Tech (ORA) has been downgraded to Underweight from Equal Weight at Barclays. Dow components – Chevron (CVX) down 0.95%, Exxon Mobil (XOM) down 1.75%.
Energy Select Sector SPDR (XLE) was trading at $65.89 at 3:30 PM on Monday, down 0.60% on the day – down 4.69% year-to-date.

Materials

Alcoa (AA) kicks off the second quarter earnings results today, and analysts have sharply cut their EPS estimates to just $0.05 vs. $0.32 a year ago. Revenues are projected to slide 11.8% to $5.81 billion. Producing aluminum is being pressured by rising input costs and sinking finished-product prices. LyondellBasell (LYB) has been upgraded to Outperform from Neutral at Macquarie. Thompson Creek Metals (TC) has been upgraded to Buy from Hold at Deutsche Bank. Weyerhaeuser (WY) has been upgraded to Buy from Neutral at Citigroup. Smithfield Foods (SFD) and Archer Daniels (ADM) have been downgraded to Market Perform from Outperform at BMO Capital. Pan Am Silver (PAAS) has been downgraded to Hold from Buy at Deutsche Bank. Dow components – Alcoa (AA) down 1.73%, DuPont (DD) down 2.04%.
The Materials Select Sector SPDR (XLB) was trading at $34.90 at 3:30 PM on Monday, down 0.71% on the day – up 4.18% year-to-date.

Industrials

United Technologies (UTX) Sikorsky Aircraft division has signed a five-year $7.3 billion deal to supply the US armed forces with H-60 Black Hawk helicopters and additional versions of the aircraft. The agreement is the eighth multi-year procurement of the helicopters including options that could add $1 to $2 billion to the value of the contract. General Motors (GM) believes that faster growth in Russia will partially offset slowing sales in China. Mueller Water (MWA) has been upgraded to Buy from Hold at Brean Murray with a $5.10 price target. Catalysts include the recent positive housing data. Alaska Air (ALK) has been downgraded to Underweight from Equal Weight at Barclays. Dow components – Boeing Co (BA) up 0.75%, Caterpillar (CAT) down 1.43%, General Electric (GE) down 0.15%, 3M Company (MMM) down 0.38%, United Technologies (UTX) down 0.24%.
The Industrial Select Sector SPDR (XLI) was trading at $35.15 at 3:30 PM on Monday, down 0.17% on the day – up 4.15% year-to-date.

Consumer Discretionary

Coach (COH) has been upgraded to Overweight from Neutral at Atlantic Equities. Pearson Plc (PSO) has been downgraded to Neutral from Buy at Citigroup. PetSmart (PETM) has been downgraded to Hold from Buy at Needham amid valuation concerns. Dow Components – Disney (DIS) down 0.22%, Home Depot down 0.08%, McDonalds (MCD) down 0.36%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.50 at 3:30 PM on Monday, down 0.62% on the day – up 11.48% year-to-date.

Consumer Staples

DSW Inc (DSW) - The shoe company is initiated with a Hold rating at Canaccord Genuity Boston Beer (SAM) has been downgraded to Sell from Neutral at UBS. Dollar Tree (DLTR) has been downgraded to Underweight from Equal Weight at Morgan Stanley. Smithfield Foods (SFD) and Archer Daniels (ADM) have been downgraded to Market Perform from Outperform at BMO Capital. Tyson Foods (TSN) has been downgraded to Market Perform from Outperform at BMO Capital. Dow components – Kraft (KFT) down 0.10%, Coca Cola (KO) down 0.23%, Procter & Gamble (PG) up 0.55%, Wal-Mart (WMT) up 0.29%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.87 at 3:30 PM on Monday, down 0.26% on the day – up 7.33% year-to-date.

Health Care

WellPoint (WLP) will acquire Amerigroup (AGP) for $92 a share in a cash deal worth about $4.9 billion. The offer represents a 43% premium over Amerigroup's closing price on Friday, and AGP shares were up 40% in the premarket. Celgene (CELG) is one of two firms other than GSK (GSK) considering buying Human Genome Sciences (HGSI) and holding talks with the company. Human Genome will be holding an auction, and the deadline for bids is July 16. Nanosphere (NSPH) has been upgraded to Buy from Neutral at ROTH Capital. Sirona Dental Systems (SIRO) has been upgraded to Outperform from Perform at Robert W. Baird. Lincare (LNCR) has been downgraded to Hold from Buy at Jefferies. Dow Components – Johnson & Johnson (JNJ) up 0.37%, Merck (MRK) up 1.08%, Pfizer (PFE) up 0.10%.
The Health Care Select Sector SPDR (XLV) was trading at $37.82 at 3:30 PM on Monday, up 0.50% on the day – up 9.02% year-to-date.

Financial

According to Britain’s Sunday Times, Barclays (BCS) is considering spinning off its investment-banking unit following the Libor scandal. The division could be headquartered in New York while the UK-based retail and commercial bank businesses stay in London. Wells Fargo (WFC) has been initiated with a Buy rating at Jefferies. MasterCard (MA) and Visa (V) have been downgraded to Sell from Neutral at UBS, sending each lower before the open on Monday. State Street (STT) has been downgraded to Neutral from Buy at Goldman. TD Ameritrade (AMTD) has been downgraded to Sell from Neutral at Goldman. Dow Components – American Express (AXP) down 0.98%, Bank of America (BAC) down 0.52%, JP Morgan Chase (JPM) down 0.44%, Travelers (TRV) down 0.19%.

The Financial Select Sector SPDR (XLF) was trading at $14.42 at 3:30 PM on Monday, down 0.35% on the day – up 10.92% year-to-date.

Information Technology

Entropic Communications (ENTR) has been initiated with a Buy rating and $8 price target at Needham, which sees the company gaining market share in the set-top box arena. Youku.com (YOKU) has been initiated with an Overweight rating at JP Morgan. Lam Research (LRCX) has been downgraded to Outperform from Buy at Credit Agricole. SolarWinds (SWI) has been downgraded to Market Perform from Outperform at FBR Capital. Dow Components – Cisco Systems (CSCO) down 0.72%, Hewlett-Packard (HPQ) down 0.69%, IBM (IBM) down 1.13%, Intel Corp (INTC) down 0.99%, Microsoft (MSFT) down 0.66%.
The Technology Select Sector SPDR (XLK) was trading at $28.59 at 3:30 PM on Monday, down 0.35% on the day – up 12.34% year-to-date.

Telecommunication Services

Equinix (EQIX) has been initiated with a Buy rating at Deutsche Bank.Dow Components – AT&T Inc down 0.14%, Verizon (VZ) up 0.20%.
The NASDAQ Telecommunications Index (IXTC) was trading at $181.04 at 3:30 PM on Monday, down 0.74% on the day – down 8.07% year-to-date.

Utilities

Dominion Resources (D) down 0.37%, Edison International (EIX) up 0.22%, First Energy (FE) down 0.20%, PG&E Corp (PCG) down 0.16%, Southern Company (SO) up 0.43%.
The Utilities Select Sector SPDR (XLU) was trading at $36.70 at 3:30 PM on Monday, down 0.35% on the day – up 2.00% year-to-date.

STOCKS: CVX, XOM, COG, CRZO, ORA, AA, DD, LYB, TC, WY, SFD, ADM, PAAS, BA, CAT, GE, MMM, UTX, GM, MWA, ALK, DIS, HD, MCD, COH, PSO, PETM, KFT, KO, PG, WMT, DSW, SAM, DLTR, TSN, AVP, JNJ, MRK, PFE, WLP, AGP, CELG, GSK, HGSI, NSPH, SIRO, LNCR, AXP, BAC, JPM, TRV, BCS, WFC, MA, V, STT, AMTD, CSCO, HPQ, IBM, INTC, MSFT, ENTR, YOKU, LRCX, SWI, T, VZ, EQIX, D, EIX, FE, PCG, SO

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 198.37 1.33 0.67 2,168,809 Trade
COG Cabot Oil & Gas Corporation 26.49 1.10 4.33 14,013,574 Trade
GSK GlaxoSmithKline PLC 41.40 0.37 0.90 2,400,677 Trade
SAM Boston Beer Company Inc. (The) 308.75 0.47 0.15 128,602 Trade
TSN Tyson Foods Inc. 58.17 -3.44 -5.58 7,845,926 Trade
EQIX Equinix Inc. 383.53 -5.89 -1.51 490,677 Trade
PG Procter & Gamble Company (The) 93.47 0.77 0.83 13,438,750 Trade
GE General Electric Company 8.61 0.62 7.76 205,815,973 Trade
CVX Chevron Corporation 115.35 -2.04 -1.74 6,846,504 Trade
SO Southern Company (The) 47.27 0.38 0.81 5,165,719 Trade
PCG Pacific Gas & Electric Co. 32.72 -0.26 -0.79 17,907,547 Trade
CRZO Carrizo Oil & Gas Inc. 16.94 -1.63 -8.78 3,415,075 Trade
JNJ Johnson & Johnson 144.68 -0.94 -0.65 7,432,438 Trade
WMT Walmart Inc. 102.94 -0.93 -0.90 7,956,688 Trade
AA Alcoa Corporation 34.72 0.99 2.94 4,016,944 Trade
INTC Intel Corporation 47.39 0.74 1.59 29,315,924 Trade
IBM International Business Machines Corporation 120.84 -0.06 -0.05 4,084,385 Trade
D Dominion Energy Inc. 74.02 0.59 0.80 2,821,920 Trade
TRV The Travelers Companies Inc. 126.81 -0.23 -0.18 1,419,931 Trade
AGII ARGO Bankers Petroleum Ltd.
BCS Barclays PLC 9.15 0.42 4.81 6,876,137 Trade
EIX Edison International 55.54 1.98 3.70 5,180,623 Trade
ALK Alaska Air Group Inc. 67.58 1.82 2.77 1,337,424 Trade
JPM JP Morgan Chase & Co. 109.59 0.64 0.59 13,746,059 Trade
AXP American Express Company 107.86 1.37 1.29 3,021,822 Trade
AMTD TD Ameritrade Holding Corporation 51.77 0.16 0.31 1,042,366 Trade
LRCX Lam Research Corporation 143.95 1.04 0.73 2,885,641 Trade
UTX United Technologies Corporation 129.12 0.82 0.64 3,433,021 Trade
AVP Avon Products Inc. 2.00 -0.01 -0.50 3,669,580 Trade
V Visa Inc. 139.72 0.00 0.00 6,286,973 Trade
SIRO Sirona Dental Systems Inc n/a n/a n/a 0 Trade
CSCO Cisco Systems Inc. 45.12 -0.50 -1.10 26,196,749 Trade
WY Weyerhaeuser Company 26.65 -0.35 -1.30 4,151,586 Trade
DIS The Walt Disney Company 116.85 0.15 0.13 4,650,588 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 92.07 -3.17 -3.33 4,514,036 Trade
COH T.P Coach Inc. n/a n/a n/a 0
VZ Verizon Communications Inc. 58.66 -0.06 -0.10 13,047,907 Trade
NSPH Nanosphere Inc. n/a n/a n/a 0 Trade
GM General Motors Company 35.93 0.24 0.67 8,593,970 Trade
DLTR Dollar Tree Inc. 86.94 0.95 1.10 1,508,107 Trade
BAC Bank of America Corporation 27.76 0.01 0.04 57,423,447 Trade
ORA Ormat Technologies Inc. 51.21 -0.84 -1.61 235,712 Trade
MCD McDonald's Corporation 184.01 -0.36 -0.20 2,358,173 Trade
PSO Pearson Plc 11.72 -0.05 -0.42 300,922 Trade
PAAS Pan American Silver Corp. 14.13 -0.13 -0.91 1,241,697 Trade
ADM Archer-Daniels-Midland Company 48.02 0.08 0.17 4,056,999 Trade
TC TC n/a n/a n/a 0
DSW DSW Inc. 26.13 -0.77 -2.86 1,331,064 Trade
HD Home Depot Inc. (The) 179.00 -0.43 -0.24 14,274,029 Trade
XOM Exxon Mobil Corporation 78.00 -1.83 -2.29 15,530,229 Trade
PFE Pfizer Inc. 43.52 -0.59 -1.34 19,126,232 Trade
WFC Wells Fargo & Company 52.74 0.39 0.74 28,102,033 Trade
HPQ HP Inc. 23.95 -0.04 -0.17 7,820,566 Trade
BA The Boeing Company 349.51 -7.52 -2.11 4,959,999 Trade
CELG Celgene Corporation 70.24 -0.78 -1.10 6,351,161 Trade
MRK Merck & Company Inc. (new) 74.61 -0.08 -0.11 15,827,652 Trade
SWI SolarWinds Corporation 15.06 0.36 2.45 1,304,430 Trade
FE FirstEnergy Corp. 38.68 -0.11 -0.28 2,752,756 Trade
YOKU Youku Tudou Inc ADR (Sponsored) n/a n/a n/a 0 Trade
KO Coca-Cola Company (The) 49.86 -0.01 -0.02 13,873,127 Trade
T AT&T Inc. 30.33 -0.45 -1.46 25,640,955 Trade
MWA MUELLER WATER PRODUCTS 10.90 -0.03 -0.27 543,237 Trade
CAT Caterpillar Inc. 125.96 0.96 0.77 5,820,210 Trade
MSFT Microsoft Corporation 106.94 0.07 0.07 35,374,583 Trade

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