Equities Sector Coverage: Stocks Edge Lower to Start Final Week of Summer

Sector Recap  |

The Dow Jones Industrial Average opened higher, traded down to 13,121.65 then up to 13,176.17. The NASDAQ opened higher, traded down to 3069.05 then up to 3085.81. Asian stocks were mixed on Monday. The Nikkei 225 ended the day at 9,085 – up 0.16%. The Hang Seng ended the day at 19,799 – down 0.41%. European exchanges were higher on Monday. The FTSE 100 was closed at 5,777. The DAX ended the day at 7,047 – up 1.10%. The CAC 40 ended the day at 3,463 – up 0.86%.

The yield on the 10-Year US Treasury note traded down from 1.688% to 1.640% versus the five-week modified moving average at 1.649%. Gold traded up to $1679.3 the Troy ounce then fell to $1666.2, above the 200-day simple moving average at $1648.1. Crude oil traded up to $97.72 per barrel then faded to $94.41 with the 200-day simple moving average at $96.75. The euro versus the dollar rebounded from 1.2493 to 1.2534 above its 50-day simple moving average at 1.2371.

Energy

Bonanza Creek Energy (BCEI) is begun with a Sector Perform at RBC Capital. Key Energy (KEG) is taken to Buy from Neutral with at SunTrust. Dow components – Chevron (CVX) down 0.06%, Exxon Mobil (XOM) down 0.12%. Energy Select Sector SPDR (XLE) was trading at $71.96 at 3:30 PM on Monday, down 0.03% on the day – up 4.09% year-to-date.

Materials

Mosaic (MOS) is a fresh Hold at Topeka. Citing expectations for higher ethane prices, UBS lowers LyondellBasell (LYB) to Neutral from Buy and Westlake Chemical (WLK) to Sell from Neutral. Dow Components – Alcoa (AA) down 1.39%, DuPont (DD) down 0.70%. The Materials Select Sector SPDR (XLB) was trading at $35.60 at 3:30 PM on Monday, down 0.67% on the day – up 6.27% year-to-date.

Industrials

After two years of trying, Hertz (HTZ) is set to acquire Dollar Thrifty (DTG) in a deal worth $2.3B ($87.50 per share – a premium of 8%, more than double the $41 that Hertz offered in 2010). To help get regulatory approval, Hertz has agreed to sell its Advantage Rent-A-Car unit to Franchise Services of North America and Macquarie Capital. Marten Transport (MRTN) is moved to Buy from Hold at Wunderlich. Dow components – Boeing Co (BA) up 0.58%, Caterpillar (CAT) down 0.55%, General Electric (GE) up 0.62%, 3M Company (MMM) down 0.22%, United Technologies (UTX) up 0.82%. The Industrial Select Sector SPDR (XLI) was trading at $36.64 at 3:30 PM on Monday, down 0.19% on the day – up 8.56% year-to-date.

Consumer Discretionary

Tiffany's (TIF) Q2 earnings were in line with its own expectations but came in just below those of analysts. Net profit rose 2% to $92M, or $0.72 a share, while revenue increased by the same amount to $887M. The jeweler lowered its FY EPS guidance to $3.70-$3.80 from a prior outlook of $3.95-$4.04. GM's (GM) European unit Opel has denied a report in Germany's Bild newspaper that it intends to slash a third of jobs in the country. The cuts would be part of a phased strategy that also includes reducing working hours, a move that Opel announced last week. Ford (F) has broken ground on a factory in Chongqing in southwest China, where it plans to start making its 2-liter EcoBoost turbocharged engine. rue21 (RUE) is raised to Buy from Hold at Jefferies. Ignite Restaurant Group (IRG) is downgraded to Hold from Buy at KeyBanc. Dow Components – Disney (DIS) up 0.54%, Home Depot (HD) down 0.25%, McDonalds (MCD) up 0.85%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.32 at 3:30 PM on Monday, down 0.13% on the day – up 16.12% year-to-date.

Consumer Staples

Annie’s Inc. (BNNY) is a new Outperform at Credit Suisse. TreeHouse Foods (THS) is now Buy from Neutral at Citigroup. Dow components – Kraft (KFT) down 0.38%, Coca Cola (KO) down 0.55%, Procter & Gamble (PG) up 0.40%, Wal-Mart (WMT) up 0.85%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.645 at 3:30 PM on Monday, up 0.13% on the day – up 9.71% year-to-date.

Health Care

Allergan (AGN) is begun with an Outperform at William Blair. Globus Medical (GMED) is a new Outperform at William Blair. Jazz Pharmaceuticals (JAZZ) is initiated with a Buy at brokerage boutique WallachBeth. Sarepta Therapeutics (SRPT) is begun with a Buy at ThinkEquity. BioMarin Pharmaceutical (BMRN) is downgraded to Hold from Buy at Deutsche Bank. Big Movers – Sarepta Therapeutics (SRPT) up 13.18%, Zalicus (ZLCS) up 10.32%, Peregrine Pharmaceuticals (PPHM) down 12.27%. Dow Components – Johnson & Johnson (JNJ) up 0.22%, Merck (MRK) down 0.09%, Pfizer (PFE) down 0.29%. The Health Care Select Sector SPDR (XLV) was trading at $38.78 at 3:30 PM on Monday, up 0.10% on the day – up 11.79% year-to-date.

Financial

The drought will probably cause insurers their biggest agricultural loss ever, with gross indemnities of $30B and an underwriting loss of $18B. However, the government will pay for $14B through reinsurance programs and private firms $4B-$5B. Companies with exposure include QBE (QBEIF), American Financial (AFG) and Wells Fargo's (WFC) Rural Community. State regulators are looking at changes that would force insurers such as AIG (AIG) and MetLife (MET) to increase by billions of dollars the amount that they would have to hold against the riskier mortgage bonds they've been acquiring lately. New York Mortgage Trust (NYMT) is a new Buy at Ladenburg. Weyerhaeuser (WY) is upgraded to Market Perform from Underperform by BMO Capital. Big Movers – Hudson City Bancorp (HCBK) up 15.68%. Dow Components – American Express (AXP) up 0.03%, Bank of America (BAC) down 0.92%, JP Morgan Chase (JPM) up 0.43%, Travelers (TRV) down 0.24%. The Financial Select Sector SPDR (XLF) was trading at $15.13 at 3:30 PM on Monday, unchanged on the day – up 16.42% year-to-date.

Information Technology

Samsung's (SSNLF) shares tumbled 7.45% in Seoul today following its $1.05B patent defeat to Apple (AAPL) on Friday, with the latter climbing 2.35% premarket, Nokia (NOK) jumping 11.4% and Microsoft (MSFT) edging up 0.8%. Apple has until today to outline which Samsung devices it wants to ban from being sold in the U.S. Read market currents for a summary of the latest reaction and analysis. Samsung (SSNLF) has followed Intel (INTC) and Taiwan Semiconductor (TSM) in investing in ASML, with the South Korean company agreeing to provide the Dutch chip-equipment maker with €276M for R&D. ASML has now raised €1.38B from the three chipmakers for research. Samsung is also buying a 3% stake in ASML for €503M, bringing the total customer equity investment in the company to €3.85B. Eloqua (ELOQ) is initiated with Buys at both Needham Deutsche Bank, Overweight at JPMorgan and an Outperform at JMP Securities. FactSet Research Systems (FDS) is a fresh Market Perform at William Blair. Autodesk (ADSK) is downgraded to Hold from Buy at Argus. Broadcom (BRCM) is now Neutral from Buy at Nomura. Ellie Mae Inc. (ELLI) gets cut to Equal Weight from Overweight at Stephens. Dow Components – Cisco Systems (CSCO) up 0.44%, Hewlett-Packard (HPQ) down 1.08%, IBM (IBM) down 0.86%, Intel Corp (INTC) down 0.16%, Microsoft (MSFT) up 0.69%. The Technology Select Sector SPDR (XLK) was trading at $30.56 at 3:30 PM on Monday, unchanged on the day – up 20.16% year-to-date.

Telecommunication Services

Dow Components – AT&T (T) down 0.15%, Verizon (VZ) down 1.38%. The NASDAQ Telecommunications Index (IXTC) was trading at $197.08 at 3:30 PM on Monday, up 0.37% on the day – up 0.07% year-to-date.

Utilities

Public Service Enterprise Group (PEG) is downgraded to Underperform from Perform at FBR Capital. Dominion Resources (D) up 0.45%, Edison International (EIX) up 1.32%, First Energy (FE) up 0.24%, PG&E Corp (PCG) up 0.27%, Southern Company (SO) down 0.38%. The Utilities Select Sector SPDR (XLU) was trading at $36.67 at 3:30 PM on Monday, up 0.14% on the day – up 1.95% year-to-date.

STOCKS: BCEI, KEG, CVX, XOM, MOS, LYB, WLK, AA, DD, HTZ, DTG, MRTN, BA, CAT, GE, MMM, UTX, TIF, GM, F, RUE, IRG, DIS, HD, MCD, BNNY, THS, KFT, KO, PG, WMT, AGN, GMED, JAZZ, SRPT, BMRN, ZLCS, PPHM, JNJ, MRK, PFE, QBEIF, AFG, WFC, AIG, MET, NYMT, WY, HCBK, AXP, BAC, JPM, TRV, SSNLF, AAPL, NOK, MSFT, INTC, TSM, ELOQ, FDS, ADSK, BRCM, ELLI, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, PEG, 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 169.67 -1.77 -1.03 2,459,306 Trade
WLK Westlake Chemical Corporation 69.11 3.21 4.87 948,216 Trade
FDS FactSet Research Systems Inc. 277.41 -0.05 -0.02 235,009 Trade
PG Procter & Gamble Company (The) 119.75 -2.37 -1.94 9,626,736 Trade
GE General Electric Company 9.38 0.04 0.43 45,748,351 Trade
MRTN Marten Transport Ltd. 21.87 -0.19 -0.86 148,687 Trade
CVX Chevron Corporation 124.12 2.62 2.16 10,683,891 Trade
SO Southern Company (The) 59.86 -0.27 -0.45 4,658,642 Trade
MOS Mosaic Company (The) 22.97 0.32 1.41 4,481,239 Trade
PCG Pacific Gas & Electric Co. 11.01 -0.17 -1.52 5,830,156 Trade
GMED Globus Medical Inc. Class A 51.03 -0.09 -0.18 326,470 Trade
ADSK Autodesk Inc. 153.87 0.39 0.25 1,505,075 Trade
JNJ Johnson & Johnson 129.54 -1.24 -0.95 5,101,689 Trade
AA Alcoa Corporation 22.56 -0.33 -1.44 2,866,088 Trade
INTC Intel Corporation 52.20 -0.34 -0.65 13,354,588 Trade
D Dominion Energy Inc. 78.49 -0.03 -0.04 2,517,611 Trade
TRV The Travelers Companies Inc. 146.34 0.03 0.02 1,160,950 Trade
TIF Tiffany & Co. 96.40 -1.88 -1.91 1,526,614 Trade
RWWD:CA First Asset MSCI World Low Risk Weighted ETF Com Unit Unhedged Adv Cl n/a n/a n/a 0
EIX Edison International 71.48 -0.45 -0.63 975,879 Trade
JAZZ Jazz Pharmaceuticals plc 134.01 2.60 1.98 370,345 Trade
MET MetLife Inc. 47.55 -0.82 -1.70 7,593,764 Trade
AXP American Express Company 117.64 -1.56 -1.31 4,280,612 Trade
UTX United Technologies Corporation 138.08 0.02 0.01 2,112,032 Trade
HTZ Hertz Global Holdings Inc 14.82 -0.18 -1.20 1,949,090 Trade
SRPT Sarepta Therapeutics Inc. 87.02 1.02 1.19 928,822 Trade
CSCO Cisco Systems Inc. 49.96 -0.07 -0.14 13,025,571 Trade
WY Weyerhaeuser Company 27.59 0.18 0.66 3,182,793 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 89.67 3.40 3.94 4,971,124 Trade
AGN Allergan plc 165.56 -0.58 -0.35 2,226,700 Trade
VZ Verizon Communications Inc. 59.50 -0.46 -0.77 10,950,528 Trade
HCBK Hudson City Bancorp Inc n/a n/a n/a 0 Trade
GM General Motors Company 37.21 -1.65 -4.25 15,650,269 Trade
BAC Bank of America Corporation 30.13 -0.04 -0.13 43,391,344 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 5.12 -0.06 -1.16 13,017,597 Trade
MCD McDonald's Corporation 207.40 -2.41 -1.15 3,437,739 Trade
BCEI Bonanza Creek Energy Inc. 26.00 2.45 10.40 438,990 Trade
IRG Ignite Restaurant Group Inc. n/a n/a n/a 0
PPHM CDMO Peregrine Pharmaceuticals Inc. n/a n/a n/a n/a
F Ford Motor Company 9.30 -0.15 -1.59 50,052,608 Trade
PFE Pfizer Inc. 36.83 -0.08 -0.22 18,858,707 Trade
KEG Key Energy Services Inc. 1.76 0.28 18.92 579,563 Trade
WFC Wells Fargo & Company 48.98 0.06 0.12 17,759,682 Trade
AIG American International Group Inc. 56.32 -0.65 -1.14 2,793,573 Trade
HPQ HP Inc. 18.87 -0.21 -1.10 7,849,496 Trade
THS Treehouse Foods Inc. 58.62 0.26 0.45 230,943 Trade
AFG American Financial Group Inc. 108.08 1.52 1.43 523,393 Trade
MRK Merck & Company Inc. (new) 82.03 -0.58 -0.70 5,907,730 Trade
FE FirstEnergy Corp. 47.56 0.19 0.40 2,130,642 Trade
BRCM Broadcom Corp. n/a n/a n/a 0 Trade
BMRN BioMarin Pharmaceutical Inc. 74.21 1.56 2.15 1,025,311 Trade
KO Coca-Cola Company (The) 53.96 -0.30 -0.55 11,172,001 Trade
T AT&T Inc. 37.31 -0.60 -1.58 49,189,889 Trade
TSM Taiwan Semiconductor Manufacturing Company Ltd. 44.60 -0.14 -0.31 3,716,348 Trade
CAT Caterpillar Inc. 133.15 -0.63 -0.47 2,876,495 Trade
NYMT New York Mortgage Trust Inc. 6.13 -0.05 -0.81 4,990,405 Trade
MSFT Microsoft Corporation 136.33 -0.99 -0.72 16,731,440 Trade
PEG Public Service Enterprise Group Incorporated 60.80 0.00 0.00 1,245,549 Trade
WMT Walmart Inc. 115.57 -1.86 -1.58 6,090,303 Trade
IBM International Business Machines Corporation 142.48 -1.19 -0.83 1,928,500 Trade
AAPL Apple Inc. 219.90 1.15 0.53 21,158,141 Trade
JPM JP Morgan Chase & Co. 119.16 -1.07 -0.89 11,993,932 Trade
DIS The Walt Disney Company 135.80 -2.22 -1.61 6,329,260 Trade
HD Home Depot Inc. (The) 230.99 -2.99 -1.28 3,120,219 Trade
XOM Exxon Mobil Corporation 73.73 1.09 1.50 19,830,182 Trade
BA The Boeing Company 378.85 -0.91 -0.24 3,055,451 Trade

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     

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