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 190.43 -1.08 -0.56 1,984,622 Trade
TM Toyota Motor Corporation 111.73 0.37 0.33 211,671 Trade
PG Procter & Gamble Company (The) 90.49 -0.08 -0.09 10,071,996 Trade
GE General Electric Co 29.44 -0.28 -0.94 28,986,703 Trade
CVX Chevron Corporation 106.28 -1.71 -1.58 6,479,407 Trade
SO Southern Company (The) 50.30 -0.12 -0.24 3,680,789 Trade
PCG Pacific Gas & Electric Co. 67.19 -0.67 -0.99 3,474,676 Trade
DISH DISH Network Corporation 62.17 0.18 0.29 1,775,511 Trade
SON Sonoco Products Company 53.19 -0.13 -0.24 293,825 Trade
TWC Time Warner Cable Inc n/a n/a n/a 0 Trade
AFFX Affymetrix Inc. n/a n/a n/a 0 Trade
FB Facebook Inc. 140.32 -0.02 -0.01 12,800,643 Trade
PKG Packaging Corporation of America 89.21 -1.20 -1.33 1,121,764 Trade
JNJ Johnson & Johnson 125.80 0.32 0.26 5,004,285 Trade
WMT Wal-Mart Stores Inc. 69.66 0.05 0.07 5,792,586 Trade
AA Alcoa Inc. 32.47 -0.09 -0.28 3,654,475 Trade
INTC Intel Corporation 35.39 0.23 0.65 16,994,243 Trade
IBM International Business Machines Corp 173.77 -0.06 -0.03 3,259,057 Trade
KND Kindred Healthcare Inc. 8.60 0.15 1.78 2,349,170 Trade
D Dominion Resources Inc. 77.92 -0.34 -0.43 2,548,696 Trade
TRV The Travelers Companies Inc. 121.01 0.24 0.20 1,087,729 Trade
KEY KeyCorp 17.18 -0.06 -0.35 10,813,311 Trade
HMC Honda Motor Company Ltd. 30.81 0.03 0.10 470,097 Trade
MQA.UN:CA Macquarie Emerging Markets Infrastructure Income F 9.67 0.00 0.00 0
EIX Edison International 80.50 -0.21 -0.26 1,334,370 Trade
GILD Gilead Sciences Inc. 67.50 -0.01 -0.01 5,455,294 Trade
JPM JP Morgan Chase 87.24 -0.05 -0.06 16,689,317 Trade
AXP American Express Company 77.60 -0.60 -0.77 3,835,309 Trade
UTX United Technologies Corporation 111.83 0.03 0.03 2,490,820 Trade
TXN Texas Instruments Incorporated 80.53 -0.06 -0.07 3,260,892 Trade
TROW T. Rowe Price Group Inc. 67.63 -0.20 -0.29 1,211,386 Trade
PRGS Progress Software Corporation 28.19 0.16 0.57 294,513 Trade
CSCO Cisco Systems Inc. 33.99 -0.09 -0.26 17,740,653 Trade
SFY Swift Energy Co. n/a n/a n/a n/a
DIS Walt Disney Company (The) 112.38 0.24 0.21 4,469,820 Trade
CHRW C.H. Robinson Worldwide Inc. 77.02 -0.45 -0.58 993,673 Trade
PNRA Panera Bread Company 253.26 3.78 1.52 842,688 Trade
VZ Verizon Communications Inc. 49.14 -0.54 -1.09 13,270,862 Trade
CERS Cerus Corporation 4.22 0.12 2.93 631,206 Trade
GDOT Green Dot 32.93 0.15 0.46 263,025 Trade
GM General Motors Company 34.71 0.15 0.43 12,941,317 Trade
BAC Bank of America Corporation 23.03 -0.09 -0.39 119,516,283 Trade
BHP BHP Billiton Limited 35.83 -0.68 -1.86 3,285,293 Trade
EMN Eastman Chemical Company 77.93 0.75 0.97 954,456 Trade
WES Western Gas Partners LP Limited Partner Interests 58.77 -0.68 -1.14 233,445 Trade
MCD McDonald\'s Corporation 129.49 0.15 0.12 2,540,421 Trade
TMO Thermo Fisher Scientific Inc 154.59 0.55 0.36 1,418,568 Trade
ASH Ashland Inc. (NEW) 122.61 0.76 0.62 310,437 Trade
DD E.I. du Pont de Nemours and Co. 80.58 0.98 1.23 3,570,040 Trade
AEG AEGON N.V. 5.23 -0.05 -0.95 2,093,530 Trade
RNST Renasant Corporation 38.91 -0.15 -0.38 143,268 Trade
MXIM Maxim Integrated Products Inc. 45.09 -0.14 -0.31 1,393,356 Trade
HD Home Depot Inc. (The) 146.87 -0.84 -0.57 2,943,006 Trade
XOM Exxon Mobil Corporation 81.25 0.02 0.02 8,481,162 Trade
PFE Pfizer Inc. 34.18 0.18 0.53 17,886,194 Trade
HPQ HP Inc. 17.20 -0.03 -0.17 5,698,091 Trade
NFLX Netflix Inc. 144.06 2.04 1.44 4,771,760 Trade
BA Boeing Company (The) 176.10 0.28 0.16 2,750,697 Trade
YHOO Yahoo! Inc. 46.40 0.00 0.00 6,016,624 Trade
MRK Merck & Company Inc. (new) 63.19 0.01 0.02 8,015,894 Trade
ANF Abercrombie & Fitch Company 11.57 0.26 2.30 2,956,310 Trade
PH Parker-Hannifin Corporation 155.65 -1.04 -0.66 976,323 Trade
FE FirstEnergy Corporation 31.39 0.05 0.16 2,457,592 Trade
KO Coca-Cola Company (The) 42.32 0.20 0.47 12,387,394 Trade
T AT&T Inc. 41.49 -0.19 -0.46 13,185,156 Trade
CAT Caterpillar Inc. 91.51 -0.64 -0.69 3,425,760 Trade
MSFT Microsoft Corporation 65.10 0.12 0.18 18,614,665 Trade
CMCSA Comcast Corporation Class A Common Stock 37.11 -0.27 -0.72 13,473,664 Trade

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