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

Sector Recap |

nyse, wall street, economy, stock marketThe 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
AA Alcoa Inc. 9.83 0.07 0.72 3,243,877
AAPL Apple Inc. 113.01 0.30 0.27 13,897,144
ADSK Autodesk Inc. 71.44 -0.23 -0.32 448,659
AFG American Financial Group Inc. 74.10 -0.30 -0.40 85,561
AGN Allergan plc 240.19 -3.75 -1.54 724,092
AIG American International Group Inc. New 58.34 -0.39 -0.66 1,396,182
AXP American Express Company 63.34 -0.51 -0.80 1,194,905
BA Boeing Company (The) 131.42 -0.37 -0.28 498,228
BAC Bank of America Corporation 15.39 -0.13 -0.84 25,967,342
BCEI Bonanza Creek Energy Inc. 0.89 -0.07 -7.41 1,022,750
BMRN BioMarin Pharmaceutical Inc. 96.98 -0.42 -0.43 260,600
BRCM Broadcom Corp. n/a n/a n/a 0
CAT Caterpillar Inc. 82.42 -0.02 -0.02 1,063,840
CSCO Cisco Systems Inc. 31.11 -0.24 -0.75 7,492,569
CVX Chevron Corporation 99.92 0.70 0.71 1,785,287
D Dominion Resources Inc. 76.48 -0.53 -0.69 521,030
DD E.I. du Pont de Nemours and Co. 66.12 -0.66 -0.98 643,613
DIS Walt Disney Company (The) 92.30 -0.97 -1.04 2,344,780
EIX Edison International 75.37 -0.26 -0.34 329,852
ELLI Ellie Mae Inc. 98.95 -0.71 -0.71 57,666
F Ford Motor Company 12.03 -0.14 -1.15 9,879,477
FDS FactSet Research Systems Inc. 175.50 -3.07 -1.72 140,369
FE FirstEnergy Corporation 34.60 0.11 0.32 635,474
GE General Electric Co 29.73 -0.17 -0.55 6,954,292
GM General Motors Company 31.99 -0.13 -0.42 4,239,243
GMED Globus Medical Inc. Class A 22.35 -0.23 -1.02 50,969
HCBK Hudson City Bancorp Inc n/a n/a n/a 0
HD Home Depot Inc. (The) 125.74 -2.05 -1.60 1,409,201
HPQ HP Inc. 15.10 0.01 0.07 1,726,260
HTZ Hertz Global Holdings Inc 46.54 0.04 0.09 359,847
IBM International Business Machines Corp 153.75 -1.24 -0.80 621,647
INTC Intel Corporation 36.71 -0.48 -1.29 8,187,986
IRG Ignite Restaurant Group Inc. 0.82 -0.00 -0.01 12,277
JAZZ Jazz Pharmaceuticals plc 124.19 -3.00 -2.36 183,672
JNJ Johnson & Johnson 117.62 -1.19 -1.00 1,533,241
JPM JP Morgan Chase 66.46 -0.79 -1.17 4,822,808
KEG Key Energy Services Inc. n/a n/a n/a n/a
KO Coca-Cola Company (The) 42.47 -0.27 -0.63 2,530,735
LYB LyondellBasell Industries NV Class A (Netherlands) 76.92 -0.47 -0.61 551,672
MCD McDonald\'s Corporation 116.48 -0.69 -0.59 939,612
MET MetLife Inc. 43.92 -0.60 -1.35 1,719,124
MMM 3M Company 176.22 -1.17 -0.66 410,242
MOS Mosaic Company (The) 24.67 -0.15 -0.60 1,801,687
MRK Merck & Company Inc. (new) 62.04 -0.92 -1.46 2,010,311
MRTN Marten Transport Ltd. 21.48 0.02 0.09 6,354
MSFT Microsoft Corporation 56.90 -0.54 -0.93 6,293,598
NOK Nokia Corporation Sponsored American Depositary Sh 5.64 -0.02 -0.35 3,804,346
NYMT New York Mortgage Trust Inc. 6.06 0.02 0.33 272,110
PCG Pacific Gas & Electric Co. 63.87 -0.33 -0.51 420,821
PEG Public Service Enterprise Group 43.50 -0.30 -0.68 579,593
PFE Pfizer Inc. 33.75 -0.52 -1.50 8,157,441
PG Procter & Gamble Company (The) 87.68 -0.08 -0.09 10,216,496
PPHM Peregrine Pharmaceuticals Inc. 0.42 0.01 1.34 666,481
RWWD:CA First Asset MSCI World Low Risk Weighted ETF Com U n/a n/a n/a 0
SO Southern Company (The) 53.32 -0.21 -0.39 1,289,152
SRPT Sarepta Therapeutics Inc. 59.88 2.05 3.54 3,535,356
T AT&T Inc. 41.23 -0.05 -0.12 5,368,995
THS Treehouse Foods Inc. 85.76 -0.71 -0.82 163,730
TIF Tiffany & Co. 71.53 -1.16 -1.60 275,668
TRV The Travelers Companies Inc. 114.17 -1.15 -0.99 312,524
TSM Taiwan Semiconductor Manufacturing Company Ltd. 29.99 -0.13 -0.43 1,380,657
UTX United Technologies Corporation 102.53 -0.03 -0.03 998,827
VZ Verizon Communications Inc. 52.10 -0.46 -0.88 3,033,522
WFC Wells Fargo & Company 45.33 -0.42 -0.91 8,066,884
WLK Westlake Chemical Corporation 50.08 -0.22 -0.44 225,840
WMT Wal-Mart Stores Inc. 71.89 -0.46 -0.64 1,658,491
WY Weyerhaeuser Company 31.86 -0.33 -1.01 600,095
XOM Exxon Mobil Corporation 83.64 0.19 0.22 2,429,930

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