Equities Sector Coverage: Stocks Edge Lower as Q3 Earnings Set to Begin

Sector Recap |

Stock Price 52 Week Range High LowThe Dow Jones Industrial Average declined to 13,552.09 in morning trading then consolidated after a new 2012 high was set on Friday at 13,661.87. The NASDAQ declined to 3107.57 on Monday with the September 21 QE3 reaction high at 3196.93.

In Asian, the Nikkei 225 did not trade at 8,863. The Hang Seng ended the day at 20,825 – down 0.89%. European exchanges were mixed on Monday. The FTSE 100 ended the day at 5,842 – up 0.24%. The DAX ended the day at 7,291 – down 1.44%. The CAC 40 ended the day at 3,407 – down 1.46%.

The US Treasury market was closed on Columbus Day. Comex gold traded down from $1782.5 the Troy ounce to $1768.2 after setting a new 2012 high at $1798.1 on Friday. Nymex crude oil declined from $89.88 per barrel to $88.21 then rebounded to $89.89 staying below its 50-day and 200-day simple moving averages at $93.66 and $96.10. The euro versus the dollar declined from 1.3023 to 1.2941 staying above its 200-day simple moving average at 1.2822.

Energy

Sonoco Products (SON) is now Neutral from Buy at DA Davidson. Swift Energy (SFY) is now Neutral from Buy at SunTrust due to valuation. Western Gas Partners (WES) is now Neutral from Buy at UBS. Dow components – Chevron (CVX) down slightly, Exxon Mobil (XOM) relatively unchanged.

Materials

BHP Billiton (BHP) suspends one of its Nickel West mines in Western Australia after evacuating 79 workers due to a rock fall. Eastman Chemical (EMN) is a new Equal Weight at Morgan Stanley. Ashland (ASH) is now Neutral from Overweight at JPMorgan based on valuation. Packaging Corp. (PKG) is downgraded to Neutral from Buy at DA Davidson. Big Movers – TPC Group (TPCG) is up about 12%. Dow Components – Alcoa (AA) relatively unchanged, DuPont (DD) down 0.20%.

Industrials

The labor contract between the Speea union and Boeing (BA) ran out over the weekend, but no work stoppages are expected as more talks are set to take place this week. Meanwhile, Boeing delivered to Air India the first 787 jet built at its nonunion South Carolina factory. C.H. Robinson Worldwide (CHRW) is now Neutral from Underweight at JPMorgan. easyJet (ESYJY) is upgraded to Buy from Hold at Deutsche Bank. Parker-Hannifin (PH) gets lowered to Underperform from Neutral at Longbow. Dow components – Boeing Co (BA) down 0.26%, Caterpillar (CAT) down slightly, General Electric (GE) down 0.90%, 3M Company (MMM) up 0.24%, United Technologies (UTX) down 0.23%.

Consumer Discretionary

Wal-Mart Stores (WMT) and American Express (AXP) have teamed up to provide financial services to customers who often do not have traditional bank accounts by offering a prepaid debit card called Bluebird. The Bluebird will allow for deposits by smartphone and mobile bill paying, with no minimum balance or monthly, annual or overdraft fees. Toyota (TM), Honda (HMC), and Nissan (NSANF) plan to cut production in China by about half amidst plunging sales in the wake of protests over the disputed Senkaku/Diaoyu islands. General Motors (GM) says its auto sales in China were up 1.7% in September, to 244,266 vehicles. Pacific Crest picks up Sector Performs on Comcast (CMCSA), DIRECTV (DTV), Dish Network (DISH), and Time Warner Cable (TWC). Netflix (NFLX) is upgraded to Overweight from Equal-Weight at Morgan Stanley. Abercrombie & Fitch (ANF) is cut to Outperform from Buy at Crédit Agricole. Panera Bread (PNRA) is downgraded to Market Perform from Outperform by BMO Capital. Walt Disney (DIS) is downgraded to Average from Above Average at Caris. Big Movers – Netflix (NFLX) is up about 10%. Dow Components – Disney (DIS) down 1.25%, Home Depot (HD) down 1.74%, McDonalds (MCD) up 0.51%.

Consumer Staples

Constellation Brands (STZ) gets hoisted to Neutral from Underweight at HSBC Securities. Imperial Tobacco (ITYBY) is downgraded to Reduce from Neutral at Nomura. Dow components – Coca Cola (KO) up slightly, Procter & Gamble (PG) down 0.56%, Wal-Mart (WMT) up 0.15%.

Health Care

Auxilium Pharmaceuticals (AUXL) is initiated with a Buy at WallachBeth. Cerus (CERS) is initiated with an Outperform at Cowen. Kindred Healthcare (KND) is a new Neutral at Citigroup. Thermo Fisher Scientific (TMO) is a Neutral at JPMorgan. Gilead Sciences (GILD) gets upgraded to Buy from Neutral at Lazard Capital. Big Movers – Affymetrix (AFFX) is down about 16%. Dow Components – Johnson & Johnson (JNJ) down 0.20%, Merck (MRK) up 0.30%, Pfizer (PFE) down 0.35%, United Health Group (UNH) up 1.02%.

Financials

Wal-Mart Stores (WMT) and American Express (AXP) have teamed up to provide financial services to customers who often do not have traditional bank accounts by offering a prepaid debit card called Bluebird. The Bluebird will allow for deposits by smartphone and mobile bill paying, with no minimum balance or monthly, annual or overdraft fees. BlackRock (BLK) gets upgraded to Buy from Neutral at Citigroup. T. Rowe Price (TROW) is taken to Neutral from Sell at Citigroup. Aegon (AEG) gets downgraded to Neutral from Buy at Nomura. KeyCorp (KEY) is cut to Hold from Buy at Deutsche Bank. Renasant (RNST) is downgraded to Hold from Buy with Wunderlich. Big Movers – Green Dot (GDOT) is down about 19.5%. Dow Components – American Express (AXP) up 0.31%, Bank of America (BAC) down 0.43%, JP Morgan Chase (JPM) down 0.38%, Travelers (TRV) relatively unchanged.

Information Technology

China's top telecom equipment makers - Huawei and ZTE (ZTCOY) - pose a security threat and should be shut out of the U.S. market, according to a House Intelligence Committee report to be released today. Rather than pay a dividend, some are urging Yahoo (YHOO) to repurchase shares with the $3B raised from selling a stake in Alibaba. Maxim Integrated Products (MXIM) is moved to Neutral from Underweight at JPMorgan, which credits its high Samsung (SSNLF) exposure. Facebook (FB) is cut by BTIG Research to Sell from Neutral. RDA Microelectronics (RDA) is reduced to Equal-Weight from Overweight at Morgan Stanley. Texas Instruments (TXN) is taken to Hold from Buy at ISI Group. Big Movers – Progress Software (PRGS) is down about 13.5%. Dow Components – Cisco Systems (CSCO) up 0.42%, Hewlett-Packard (HPQ) down 1.36%, IBM (IBM) down 0.33%, Intel Corp (INTC) down 1.06%, Microsoft (MSFT) down 0.35%.

Telecommunication Services

China's top telecom equipment makers - Huawei and ZTE (ZTCOY) - pose a security threat and should be shut out of the U.S. market, according to a House Intelligence Committee report to be released today. MetroPCS (PCS) is upgraded to Outperform from Market Perform by Sanford Bernstein. Vivendi (VIVHY) is downgraded to Neutral from Buy at Citigroup. Big Movers – TerreStar (TSTRQ) is down about 17.25%. Dow Components – AT&T (T) down 0.45%, Verizon (VZ) down 0.90%.

Utilities

The Big Names – Dominion Resources (D) down 0.24%, Edison International (EIX) down 0.44%, First Energy (FE) down 0.28%, PG&E Corp (PCG) up 2.39%, Southern Company (SO) up 0.28%.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, SON, SFY, WES, BHP, EMN, ASH, PKG, TPCG, BA, CHRW, ESYJY, PH, WMT, AXP, TM, HMC, NSANF, GM, CMCSA, DTV, DISH, TWC, NFLX, ANF, PNRA, DIS, STZ, ITYBY, AUXL, CERS, KND, TMO, GILD, AFFX, BLK, TROW, AEG, KEY, RNST, GDOT, ZTCOY, YHOO, MXIM, SSNLF, FB, RDA, TXN, PRGS, PCS, VIVHY, TSTRQ

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 178.49 2.61 1.48 2,650,644
TM Toyota Motor Corporation 122.98 0.17 0.14 292,173
PG Procter & Gamble Company (The) 84.37 0.87 1.04 8,004,453
GE General Electric Co 31.78 0.25 0.79 31,227,376
CVX Chevron Corporation 115.81 0.64 0.56 5,771,551
SO Southern Company (The) 47.94 0.53 1.12 5,025,251
PCG Pacific Gas & Electric Co. 59.33 0.14 0.24 3,849,639
DISH DISH Network Corporation 59.00 -0.93 -1.55 1,792,006
SON Sonoco Products Company 54.01 -0.76 -1.39 485,293
TWC Time Warner Cable Inc n/a n/a n/a 0
AFFX Affymetrix Inc. n/a n/a n/a 0
FB Facebook Inc. 119.68 0.77 0.65 17,464,736
PKG Packaging Corporation of America 87.38 0.05 0.06 711,985
JNJ Johnson & Johnson 112.26 1.27 1.14 7,672,088
WMT Wal-Mart Stores Inc. 70.08 -0.26 -0.37 10,756,653
AA Alcoa Inc. 32.05 0.74 2.36 4,344,295
INTC Intel Corporation 35.76 0.06 0.17 16,326,925
IBM International Business Machines Corp 166.52 1.16 0.70 3,146,930
KND Kindred Healthcare Inc. 7.75 0.30 4.03 1,557,722
D Dominion Resources Inc. 74.53 1.03 1.40 2,224,948
TRV The Travelers Companies Inc. 119.19 0.81 0.68 2,138,835
KEY KeyCorp 18.46 0.09 0.49 11,221,681
HMC Honda Motor Company Ltd. 30.63 0.31 1.02 762,236
MQA.UN:CA Macquarie Emerging Markets Infrastructure Income F 8.60 0.00 0.00 500
EIX Edison International 69.97 0.53 0.76 3,307,626
GILD Gilead Sciences Inc. 72.70 0.68 0.94 9,936,284
JPM JP Morgan Chase 85.49 0.37 0.43 14,567,202
AXP American Express Company 74.77 -0.14 -0.19 2,566,883
UTX United Technologies Corporation 109.79 1.36 1.25 3,429,005
TXN Texas Instruments Incorporated 71.99 -0.14 -0.19 6,101,234
TROW T. Rowe Price Group Inc. 76.60 -2.01 -2.56 2,921,611
PRGS Progress Software Corporation 31.57 0.28 0.89 200,966
CSCO Cisco Systems Inc. 30.06 0.11 0.37 21,361,984
SFY Swift Energy Co. n/a n/a n/a n/a
DIS Walt Disney Company (The) 104.86 1.48 1.43 12,173,909
CHRW C.H. Robinson Worldwide Inc. 77.04 -0.43 -0.56 1,417,589
PNRA Panera Bread Company 213.58 -1.96 -0.91 264,318
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,101,462
CERS Cerus Corporation 5.16 0.01 0.19 599,164
GDOT Green Dot 25.32 0.13 0.52 163,862
GM General Motors Company 37.66 1.24 3.40 26,434,231
BAC Bank of America Corporation 23.09 0.14 0.61 130,590,406
BHP BHP Billiton Limited 38.48 -0.42 -1.08 2,059,742
EMN Eastman Chemical Company 77.20 -0.57 -0.73 1,449,148
WES Western Gas Partners LP Limited Partner Interests 53.77 0.06 0.11 268,664
MCD McDonald\'s Corporation 121.26 0.81 0.67 2,623,713
TMO Thermo Fisher Scientific Inc 145.41 2.34 1.64 1,620,683
ASH Ashland Inc. (NEW) 116.78 1.75 1.52 649,177
DD E.I. du Pont de Nemours and Co. 74.85 0.17 0.23 2,358,921
AEG AEGON N.V. 5.57 -0.11 -1.94 2,557,640
RNST Renasant Corporation 44.62 0.44 1.00 201,543
MXIM Maxim Integrated Products Inc. 39.15 -0.29 -0.74 1,479,714
HD Home Depot Inc. (The) 133.39 0.86 0.65 5,174,577
XOM Exxon Mobil Corporation 89.00 0.68 0.77 8,021,683
PFE Pfizer Inc. 31.70 0.76 2.46 29,350,843
HPQ HP Inc. 15.78 -0.38 -2.35 9,865,108
NFLX Netflix Inc. 122.88 -0.36 -0.29 4,700,783
BA Boeing Company (The) 156.49 1.10 0.71 2,707,872
YHOO Yahoo! Inc. 41.76 0.35 0.85 6,836,112
MRK Merck & Company Inc. (new) 61.23 1.11 1.85 10,516,352
ANF Abercrombie & Fitch Company 15.79 -0.45 -2.77 2,345,594
PH Parker-Hannifin Corporation 142.51 0.62 0.44 901,223
FE FirstEnergy Corporation 30.73 0.20 0.66 3,913,199
KO Coca-Cola Company (The) 42.00 1.02 2.49 28,125,775
T AT&T Inc. 40.38 -0.03 -0.07 17,105,180
CAT Caterpillar Inc. 95.53 -0.74 -0.77 6,550,220
MSFT Microsoft Corporation 61.97 0.96 1.57 27,349,356
CMCSA Comcast Corporation Class A Common Stock 69.45 0.22 0.32 8,580,877

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