Equities Sector Coverage: Stocks Edge Lower on Fiscal Cliff Concerns

Sector Recap |

The Dow Jones Industrial Average traded down to 12,900.17 back below its 200-day simple moving average at 12,992.81. The Nasdaq traded down to 2951.73 then rebounded to 2973.07 staying below its 200-day SMA at to 2985.49.

Asian stocks were mixed on Monday. The Nikkei 225 closed at 9389 – up 0.24%. The Hang Seng closed at 21,862 – down 0.24%. European exchanges traded lower on Monday. The FTSE 100 ended the day at 5,787 – down 0.56%. The DAX ended the day at 7,292 – down 0.23%. The CAC 40 ended the day at 3,501 – down 0.79%.

The yield on the 10-Year US Treasury declined from 1.697% to 1.639% staying below the 50-day and 200-day simple moving averages at 1.694% and 1.769%. Comex gold rallied from $1746.0 the Troy ounce to $1752.3 above the 50-day simple moving average at $1742.4. Nymex crude oil declined from $88.29 per barrel to $87.27 still below its 50-day and 200-day simple moving averages at $89.14 and $94.09. The euro versus the dollar declined from 1.2982 to 1.2947 above its 50-day and 200-day simple moving averages at 1.2906 and 1.2800.

Energy

BP Plc. (BP) has been initiated with a Outperform rating at BNP Paribas. Imperial Oil (IMO) has been upgraded to Perform from Underperform at CIBC World Markets. James River Coal (JRCC) has been upgraded to Outperform from Perform at Raymond James. Dow components – Chevron (CVX) is down about 1.0%. Exxon Mobil (XOM) is down about 1.0%. Energy Select Sector SPDR (XLE) was trading at $70.87 at 3:30 PM on Monday, down 1.03% on the day – up 2.52% year-to-date.

Materials

Rio Tinto (RIO) projects that China's demand for minerals and metals will be substantial in upcoming years even, but not at the blistering pace of the last decade. Supporting demand will be the development of China's western regions and value-added manufacturing. AuRico Gold (AUQ) has been initiated with a Neutral rating and a $9.50 price target at UBS. AK Steel (AKS) has been upgraded to Neutral from Sell at UBS. Agrium (AGU) - The fertilizer firm has been downgraded to Neutral from Overweight at Atlantic Equities on concerns about valuation issues and lower nitrogen returns. The price target was lowered to $98 from $107. Dow Components – Alcoa (AA) is down about 1.0%. DuPont (DD) is down about 0.3%. The Materials Select Sector SPDR (XLB) was trading at $36.34 at 3:30 PM on Monday, down 0.16% on the day – up 8.48% year-to-date.

Industrials

Eaton Corp. (ETN) has been upgraded to Neutral from Underweight at Atlantic Equities, based on the pending Cooper Industries (CBE) acquisition. Lockheed Martin (LMT) has been upgraded to Outperform from Perform by Bernstein. Ball Corp. (BLL) - Deutsche Bank downgraded the stock to Hold from Buy but maintained its $46 price target. Wesco Aircraft (WAIR) has been downgraded to Underperform from Buy at Bank of America-Merrill Lynch. Dow components – Boeing Co (BA) is down about 0.25%. Caterpillar (CAT) is up about 0.1%. General Electric (GE) is down about 0.6%. 3M Company (MMM) is down about 0.4%. United Technologies (UTX) is down about 0.2%. The Industrial Select Sector SPDR (XLI) was trading at $36.73 at 3:30 PM on Monday, down 0.03% on the day – up 8.83% year-to-date.

Consumer Discretionary

Consumer spending over Thanksgiving weekend climbed 13% to $59.1 billion according to ComScore. This growth was slower than the 16% gain last year. Average spending per customer rose 6.3% to $423 with online sales on Black Friday jumped 26% topping $1 billion for the first time. ConScore projects that Internet sales will grow 17% this holiday season to a record $43.4 Billion. Sales of movie tickets reached a record $290 million for the five-day Thanksgiving period starting last Wednesday. Lions Gate's (LGF) "The Twilight Saga: Breaking Dawn, Part 2" led the way with $64 million, bringing the film's total domestic revenue to $227M, while Sony's (SNE) "Skyfall" generated $51 million, and Fox's (NWS) "Life of Pie" did $30.2M. Abercrombie & Fitch (ANF) - Janney Capital Markets adds the clothing company to its Best Ideas list, adding that channel checks indicate that the company is on the brink of a material turnaround. DSW Inc. (DSW) - Keybanc upgrades the shoe maker to Buy from Hold amid improving margin prospects with an $81 price target. Aéropostale (ARO) has been downgraded to Neutral from Buy with a $14 price target at Janney, and they removed American Eagle Outfitters (AEO) from its Best Ideas list. Chico’s FAS (CHS) - The clothing company has been downgraded to Market Perform from Outperform at FBR Capital, on macroeconomic concerns. DreamWorks Animation (DWA) has been downgraded to Below Average from Average at Caris. McDonald’s (MCD) - Lazard lowers the burger chain to Neutral from Buy. Dow Components – Disney (DIS) is down about 0.5%. Home Depot (HD) is down about 0.9%. McDonalds (MCD) is down about 1.2%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.73 at 3:30 PM on Monday, down 0.57% on the day – up 20.17% year-to-date.



Consumer Staples

Dunkin’ Brands (DNKN) has been initiated with a Buy rating at UBS with a $36 price target. Smart Balance (SMBL) - RBC Capital has upgraded the maker of buttery spreads to a Top Pick with a $16 price target. H.J. Heinz (HNZ) has been downgraded to Hold from Buy at Stifel Nicolaus due to valuation. Dow components – Coca Cola (KO) is down about 1.25%. Procter & Gamble (PG) is down about 0.5%. Wal-Mart (WMT) is down about 0.9%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.36 at 3:30 PM on Monday, down 0.87% on the day – up 8.33% year-to-date.

Health Care

Robert W. Baird downgraded three health care stocks to Neutral from Outperform; Vanguard Health Systems (VHS) has a $12 price target, Health Management (HMA) has a $9 price target, and Community Health (CYH) has a $31 price target. Illumina (ILMN) has been downgraded to Neutral from Outperform on emerging competition by Robert Baird setting a $54 price target. Dow Components – Johnson & Johnson (JNJ) is down about 0.75%. Merck (MRK) is down about 0.35%. Pfizer (PFE) is down about 0.6%. United Health Group (UNH) is down about 1.6%. The Health Care Select Sector SPDR (XLV) was trading at $39.79 at 3:30 PM on Monday, down 0.57% on the day – up 14.70% year-to-date.

Financials

UBS (UBS) will ask an appeals court today to dismiss a lawsuit from the Federal Housing Finance Agency over losses on $6.4 billion in mortgage bonds sold to Fannie Mae and Freddie Mac. UBS argues that the claims expired in 2010. JPMorgan (JPM), Barclays (BCS) and Goldman Sachs (GS) face similar charges. Barclays (BCS) - JPMorgan upgraded the British bank to Overweight from Neutral on expectations its balance sheet restructuring will unlock shareholder value. Knight Capital Group (KCG) has been upgraded to Market Perform from Underperform at Keefe Bruyette with a $2.60 price target. Dow Components – American Express (AXP) is down about 1.0%. Bank of America (BAC) is down about 1.1%. JP Morgan Chase (JPM) is down about 1.9%. The Travelers Companies (TRV) is down 0.75%. The Financial Select Sector SPDR (XLF) was trading at $15.73 at 3:30 PM on Monday, down 0.69% on the day – up 21.00% year-to-date.

Information Technology

Attempts by Facebook (FB) and Google (GOOG) and other Web sites to boost mobile revenues could be challenged by a new app for Android called AdBlock Plus. The app blocks pop-up and display ads on Web sites, and commercials that precede videos such as on YouTube. Apple Inc (AAPL) snapped an eight week losing streak last week and has been initiated with a Buy rating at Citigroup, who set a $675 price target. SanDisk (SNDK) has been initiated with an Outperform rating at Credit Suisse. Silicon Laboratories (SLAB) has been initiated with an Outperform rating by Pacific Crest with a $48 price target. Zillow (Z) - Morgan Stanley initiates the online real estate company with an Equal-Weight rating. Anadigics (ANAD) has been upgraded to Buy from Hold at Needham with a $2.50 price target. Broadcom (BRCM): has been upgraded to Buy from Hold hoist at Benchmark projecting 3% organic revenue growth. Facebook (FB) - Sanford Bernstein upgraded the stock to Outperform from Market Perform on the outlook that revenue growth estimates underestimate upcoming growth potential. They raised the price target up by $10, to $33. Research In Motion (RIMM) has been upgraded to Outperform from Perform at CIBC World Markets on the potential success of the upcoming BlackBerry 10 launch. RIMM’s price target was raised to $17 from $8. Yahoo (YHOO) has been upgraded to Conviction Buy from Buy at Goldman Sachs noting less pessimistic expectations for the company’s core search business. VeriSign (VRSN) has been downgraded to Equal Weight from Overweight at First Analysis. Dow Components – Cisco Systems (CSCO) is down about 0.9%. Hewlett-Packard (HPQ) is down about 0.2%. IBM (IBM) is down about 0.8%. Intel Corp (INTC) is up about 0.1%. Microsoft (MSFT) is down about 1.7%. The Technology Select Sector SPDR (XLK) was trading at $28.94 at 3:30 PM on Monday, up 0.31% the day – up 13.71% year-to-date.

Telecommunication Services

Research In Motion (RIMM) has been upgraded to Outperform from Perform at CIBC World Markets on the potential success of the upcoming BlackBerry 10 launch. RIMM’s price target was raised to $17 from $8. Dow Components – AT&T (T) is down about 1.3%. Verizon (VZ) is down about 1.2%. The NASDAQ Telecommunications Index (IXTC) was trading at $193.12 at 3:30 PM on Monday, up 0.44% on the day – down 1.93% year-to-date.

Utilities

Exelon (EXC) has been upgraded to Buy from Hold by Deutsche Bank on recent strengthening of gas prices with a $34 price target. The Big Names – Dominion Resources (D) is up about 1.1%. Edison International (EIX) is up about 1.9%. First Energy (FE) is up about 1.9%. PG&E Corp (PCG) is up above 1.4%. Southern Company (SO) is up about 1.2%. The Utilities Select Sector SPDR (XLU) was trading at $34.43 at 3:30 PM on Monday, up 1.00% on the day – down 4.31% 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, BP, IMO, JRCC, RIO, AUQ, AKS, AGU, ETN, CBE, LMT, BLL, WAIR, LGF, SNE, NWS, ANF, DSW, ARO, AEO, CHS, DWA, DNKN, SMBL, HNZ, VHS, HMA,, CYH, ILMN, UBS, BCS, KCG, FB, GOOG, AAPL, SNDK,, SLAB, Z, ANAD, BRCM, RIMM, YHOO, VRSN, EXC

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
IMO Imperial Oil Limited 26.96 -0.15 -0.55 406,550
MMM 3M Company 232.18 -2.89 -1.23 2,561,377 Trade
UNH UnitedHealth Group Incorporated (DE) 225.13 -1.53 -0.68 3,371,907 Trade
LMT Lockheed Martin Corporation 357.06 -1.63 -0.45 1,391,040 Trade
ARO Aeropostale Inc. n/a n/a n/a n/a
PG Procter & Gamble Company (The) 80.24 -1.10 -1.35 9,134,548 Trade
GE General Electric Co 14.49 -0.25 -1.70 98,111,484 Trade
RIO Rio Tinto Plc 55.97 -0.30 -0.53 2,268,040 Trade
CVX Chevron Corporation 109.06 -1.92 -1.73 6,892,254 Trade
SO Southern Company (The) 42.92 -0.55 -1.27 8,576,278 Trade
PCG Pacific Gas & Electric Co. 39.79 -0.22 -0.55 6,735,011 Trade
AKS AK Steel Holding Corporation 5.69 -0.12 -2.07 13,839,833 Trade
KCG KCG Holdings Inc. Class A n/a n/a n/a 0 Trade
AGU Agrium Inc. n/a n/a n/a 0 Trade
FB Facebook Inc. 177.91 1.90 1.08 23,200,804 Trade
LGF Lions Gate Entertainment Corporation n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 129.91 -0.96 -0.73 6,578,047 Trade
WMT Wal-Mart Stores Inc. 91.52 -2.59 -2.75 49,503,726 Trade
AA Alcoa Inc. 47.55 -0.52 -1.08 3,194,895 Trade
DWA Dreamworks Animation SKG Inc. n/a n/a n/a 0 Trade
INTC Intel Corporation 45.94 -0.38 -0.82 27,527,487 Trade
IBM International Business Machines Corp 153.96 -1.20 -0.77 3,728,571 Trade
D Dominion Resources Inc. 73.54 -1.21 -1.62 3,822,584 Trade
TRV The Travelers Companies Inc. 138.54 -0.53 -0.38 1,334,512 Trade
CHS Chico\'s FAS Inc. 9.28 0.07 0.76 2,589,604 Trade
AAPL Apple Inc. 171.07 -0.78 -0.45 37,471,623 Trade
BCS Barclays PLC 11.33 0.05 0.44 3,336,914 Trade
EIX Edison International 59.09 -1.22 -2.02 3,382,567 Trade
LAG:CA Industrial Alliance Insurance and Financial Services Inc. n/a n/a n/a n/a
JPM JP Morgan Chase 115.19 0.48 0.42 14,212,461 Trade
AXP American Express Company 97.50 0.31 0.32 4,431,517 Trade
UTX United Technologies Corporation 129.26 2.80 2.21 7,766,096 Trade
SNDK SanDisk Corp. n/a n/a n/a 0 Trade
CSCO Cisco Systems Inc. 43.31 -0.75 -1.70 28,499,215 Trade
DIS Walt Disney Company (The) 105.05 -0.93 -0.88 6,743,262 Trade
BLL Ball Corporation 39.14 -0.07 -0.18 3,466,159 Trade
VZ Verizon Communications Inc. 47.96 -0.96 -1.96 20,889,871 Trade
VRSN VeriSign Inc. 115.70 -0.64 -0.55 1,212,858 Trade
DNKN Dunkin\' Brands Group Inc. 60.70 -1.45 -2.33 1,691,297 Trade
BAC Bank of America Corporation 31.87 -0.06 -0.19 72,210,258 Trade
ETN Eaton Corporation PLC 81.56 -0.15 -0.18 2,219,257 Trade
GOOG Alphabet Inc. 1,111.34 8.88 0.81 1,512,910 Trade
ILMN Illumina Inc. 227.91 1.34 0.59 549,458 Trade
MCD McDonald\'s Corporation 158.64 1.48 0.94 7,833,396 Trade
ANAD ANADIGICS Inc. n/a n/a n/a 0 Trade
CYH Community Health Systems Inc. 5.98 0.11 1.87 1,515,523 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
UBS UBS Group AG Registered 19.24 0.06 0.31 2,184,129 Trade
DSW DSW Inc. 19.56 0.08 0.41 652,515 Trade
WAIR Wesco Aircraft Holdings Inc. 8.95 0.00 0.00 420,071 Trade
HD Home Depot Inc. (The) 183.06 -3.65 -1.95 7,527,186 Trade
XOM Exxon Mobil Corporation 74.89 -0.86 -1.14 11,714,985 Trade
PFE Pfizer Inc. 35.76 -0.25 -0.69 24,546,750 Trade
HPQ HP Inc. 21.17 -0.22 -1.03 7,528,242 Trade
BA Boeing Company (The) 352.37 -0.98 -0.28 5,258,555 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
MRK Merck & Company Inc. (new) 54.55 -0.43 -0.78 10,729,893 Trade
ANF Abercrombie & Fitch Company 21.39 -0.11 -0.51 1,013,355 Trade
Z Zillow Group Inc. 47.57 0.15 0.32 1,835,532 Trade
SLAB Silicon Laboratories Inc. 91.40 -1.75 -1.88 242,621 Trade
BP BP p.l.c. 38.84 -0.68 -1.72 6,914,123 Trade
FE FirstEnergy Corporation 32.76 -0.04 -0.12 12,353,141 Trade
BRCM Broadcom Corp. n/a n/a n/a 0 Trade
KO Coca-Cola Company (The) 43.34 -0.65 -1.48 12,792,902 Trade
EXC Exelon Corporation 37.06 -0.62 -1.65 14,813,750 Trade
SNE Sony Corporation 49.50 0.09 0.18 918,187 Trade
T AT&T Inc. 36.31 -0.46 -1.25 20,792,614 Trade
CAT Caterpillar Inc. 155.23 -0.33 -0.21 4,179,354 Trade
AEO American Eagle Outfitters Inc. 18.81 0.44 2.40 3,881,606 Trade
MSFT Microsoft Corporation 91.49 -1.23 -1.33 26,922,503 Trade
NWS News Corporation 16.15 0.05 0.31 561,863 Trade

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