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
AA Alcoa Inc. 9.88 0.23 2.38 17,748,052
AEG AEGON N.V. 3.91 0.07 1.82 1,135,125
AFFX Affymetrix Inc. n/a n/a n/a 0
ANF Abercrombie & Fitch Company 15.90 -0.34 -2.09 3,476,752
ASH Ashland Inc. (NEW) 117.58 0.09 0.08 1,145,814
AXP American Express Company 64.22 -0.06 -0.09 3,580,082
BA Boeing Company (The) 132.23 0.91 0.69 1,772,965
BAC Bank of America Corporation 15.38 0.09 0.59 66,076,402
BHP BHP Billiton Limited 34.10 1.48 4.54 4,191,818
CAT Caterpillar Inc. 86.59 3.71 4.48 9,497,066
CERS Cerus Corporation 6.53 0.14 2.19 1,147,787
CHRW C.H. Robinson Worldwide Inc. 70.25 0.13 0.19 1,040,023
CMCSA Comcast Corporation Class A Common Stock 66.68 0.51 0.77 7,806,127
CSCO Cisco Systems Inc. 31.50 0.02 0.06 15,840,958
CVX Chevron Corporation 102.15 3.17 3.20 10,190,924
D Dominion Resources Inc. 75.84 0.06 0.08 2,037,478
DD E.I. du Pont de Nemours and Co. 67.19 -0.07 -0.10 2,702,556
DIS Walt Disney Company (The) 92.20 0.48 0.52 8,272,345
DISH DISH Network Corporation 54.93 0.58 1.07 2,115,664
EIX Edison International 73.70 -0.06 -0.08 1,289,632
EMN Eastman Chemical Company 66.77 1.27 1.94 1,330,763
FB Facebook Inc. 129.23 0.54 0.42 12,047,636
FE FirstEnergy Corporation 33.54 -0.13 -0.39 3,954,414
GDOT Green Dot 23.03 0.13 0.57 122,346
GE General Electric Co 29.90 0.02 0.07 26,750,633
GILD Gilead Sciences Inc. 78.97 -0.28 -0.35 6,854,065
GM General Motors Company 31.90 0.30 0.95 10,713,565
HD Home Depot Inc. (The) 128.27 1.45 1.14 5,751,066
HMC Honda Motor Company Ltd. 29.17 0.12 0.41 309,248
HPQ HP Inc. 15.49 0.15 0.98 9,742,233
IBM International Business Machines Corp 158.29 1.52 0.97 3,310,008
INTC Intel Corporation 37.44 0.26 0.70 19,020,799
JNJ Johnson & Johnson 119.39 0.17 0.14 5,076,091
JPM JP Morgan Chase 66.71 0.35 0.53 11,278,036
KEY KeyCorp 12.24 0.09 0.74 11,451,505
KND Kindred Healthcare Inc. 10.38 -0.09 -0.86 1,382,813
KO Coca-Cola Company (The) 42.15 -0.44 -1.03 15,523,783
MCD McDonald\'s Corporation 115.18 -1.70 -1.45 5,638,874
MMM 3M Company 177.59 1.29 0.73 1,693,951
MRK Merck & Company Inc. (new) 63.30 0.73 1.17 11,794,978
MSFT Microsoft Corporation 58.03 0.08 0.14 20,536,400
MXIM Maxim Integrated Products Inc. 39.29 0.06 0.15 1,219,239
NFLX Netflix Inc. 97.48 0.41 0.42 7,235,109
PCG Pacific Gas & Electric Co. 62.38 0.02 0.03 2,050,062
PFE Pfizer Inc. 33.99 0.16 0.47 14,307,758
PG Procter & Gamble Company (The) 89.46 1.10 1.24 89,805,967
PH Parker-Hannifin Corporation 124.78 2.09 1.70 903,760
PKG Packaging Corporation of America 81.66 0.90 1.11 609,564
PNRA Panera Bread Company 192.18 -1.33 -0.69 801,138
PRGS Progress Software Corporation 28.40 0.45 1.61 470,876
RNST Renasant Corporation 33.38 0.19 0.57 214,307
SFY Swift Energy Co. n/a n/a n/a n/a
SO Southern Company (The) 52.70 -0.14 -0.26 5,819,741
SON Sonoco Products Company 53.28 0.47 0.89 304,640
T AT&T Inc. 40.85 -0.61 -1.47 26,340,209
TM Toyota Motor Corporation 117.63 -0.69 -0.58 188,063
TMO Thermo Fisher Scientific Inc 158.64 -0.24 -0.15 946,741
TROW T. Rowe Price Group Inc. 66.35 0.79 1.21 1,657,117
TRV The Travelers Companies Inc. 115.01 0.60 0.52 862,025
TWC Time Warner Cable Inc n/a n/a n/a 0
TXN Texas Instruments Incorporated 69.74 0.29 0.42 3,241,333
UTX United Technologies Corporation 102.35 0.00 0.00 5,010,726
VZ Verizon Communications Inc. 52.06 -0.43 -0.82 13,279,093
WES Western Gas Partners LP Limited Partner Interests 53.80 1.60 3.07 488,011
WMT Wal-Mart Stores Inc. 71.79 -0.54 -0.75 6,184,932
XOM Exxon Mobil Corporation 86.90 3.66 4.40 28,117,871
YHOO Yahoo! Inc. 43.69 0.32 0.74 7,418,984

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