Equities Sector Coverage: Stocks Edge Slightly Higher As Bulls Rest

Sector Recap |

Wall StreetThe Case-Shiller Home Price Index shows that the 20-City Composite fell 0.6% in September and was down 3.6% year over year. Consumer Confidence surged to 56.0 from 40.9 in November, but keep in mind that 90 to 120 is the neutral range for this data. On Wednesday Chicago PMI should improve to 60.0. On Thursday national manufacturing ISM should be 52.0 in November with Construction Spending up 0.1% in October. Then we have the drum-roll for November’s Employment Data with the economy creating 125,000 jobs with a 9.0% unemployment rate. The Dow Jones Industrial Average popped to a day’s high at 11,624.01 on the better than expected Consumer Confidence data and closed above its 50-day simple moving average at 11,541. The NASDAQ traded between 2520.05 and 2542.46 in the morning, but drifted to 2508.27 in the afternoon before stabilizing.

Asian stocks advanced again on Tuesday. The Nikkei 225 gained 2.30% to 8,478 with the Hang Seng up 1.21% to 18,256. European stocks advanced slightly on Tuesday. The FTSE 100 was up 0.46% to 5,337, the DAX tacked on 0.95% to 5,800 and the CAC 40 gained 0.46% to 3,027. The yield on the US Treasury 10-Year note traded between 1.969 percent and 2.049 versus its 50-day simple moving average at 2.037. Gold stayed above its 50-day simple moving average at $1701.1 and traded as high as $1718.1 the Troy ounce. Crude oil traded up from $97.23 per barrel to $100.15. The euro versus the dollar traded between 1.3289 and 1.3441.

Energy

Jefferies has several ratings changes in Oil Service Stocks; Jefferies initiates Buy ratings on Baker Hughes (BHI), Halliburton (HAL) and Schlumberger (SLB). Nabors Industries (NBR), Patterson-UTI (PTEN), Pioneer Drilling (PDC), and Union Drilling (UDRL) were downgraded to Hold from Buy at Jefferies. Notable morning movers include; Quicksilver Resources (KWK) was up 6.9%, Transocean (RIG) slumped 7.5%, and Schlumberger (SLB) gained 2.0%.

Energy Select Sector SPDR (XLE) was trading at $67.64 into the final half hour of trading on Tuesday, up 2.14% on the day – down 0.89% year-to-date.

Materials

DuPont (DD) is initiated as a Neutral at UBS. Ternium S.A. (TX) is downgraded to Neutral from Buy at Bank of America. Notable morning movers include; Cemex (CX) gained 6.1%, Randgold Resources was up 5.7%, International Paper (IP) tacked on 2.1%, New Gold Inc (NGD) rallied 5.0%, and Vulcan Materials gained 2.2%.

The Materials Select Sector SPDR (XLB) was trading at $32.78 into the final half hour of trading on Tuesday, up 0.58% on the day – down 14.66% year-to-date.

Industrials

AMR Corp (AMR) has filed for Chapter 11 bankruptcy protection as the airline seeks to better manage under a new cost and debt structure. AMR shares plunged by 80%. Industrial packaging products maker Greif (GEF) lowered EPS guidance citing weak expected results in Europe and shares declined 3.7%. Boeing (BA) was initiated with a Buy at Sterne Agee with an $82 price target. United Technologies (UTX) is resumed with a Buy rating at Sterne Agee. Sterne Agee also has a Buy recommendation and $69 price target on Honeywell (HON) and resumes coverage on Rockwell Collins (COL) with a Neutral rating. Notable morning movers include; Corning Inc (GLW) slumped 11.5%, JetBlue Airways (JBLU) rebounded 5.8%, and US Airways (LCC) gained 7.6%.

The Industrial Select Sector SPDR (XLI) was trading at $32.38 into the final half hour of trading on Tuesday, up 0.47% on the day – down 7.20% year-to-date.

Consumer Discretionary

Early estimates show that Cyber Monday sales rose 18% year over year and the question is whether retailers can maintain this momentum throughout the holiday season. Tiffany (TIF) beat the street by ten cents a share with better than expected revenue. The luxury retailer issued cautious guidance and shares tumbled 11% at the open but paired that loss following the market rebound. Vera Bradley Inc (VRA) is initiated as a Neutral at JP Morgan. Dillard’s (DDS) has been downgraded to Neutral from Buy at Sterne Agee and shares traded down 7.3%. Notable morning movers include; Apollo Group gained 3.7%, Best Buy (BBY) was up 3.6%, Cheesecake Factory (CAKE) rebounded 3.5%, Lowe’s Companies (LOW) gained 3.0%, Netflix (NFLX) lost 4.9%, and Saks Inc (SKS) declined 3.9%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.70 into the final half hour of trading on Tuesday, up 0.69% on the day – up 0.78% year-to-date.

Consumer Staples

Early estimates show that Cyber Monday sales rose 18% year over year and the question is whether retailers can maintain this momentum throughout the holiday season. Hillenbrand (HI) beat EPS estimates by twelve cents on better than expected revenue. This report came out after the close on Monday and shares rallied 6.4% in after hours trading. United Natural Foods (UNFI) is upgraded to Buy from Hold at Jefferies. Notable morning movers include; Dole Food Company (DOLE) declined 3.1%, Diamond Foods (DMND) declined 3.8%, and Pilgrim’s Pride (PPC) gained 7.6%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $31.23 into the final half hour of trading on Tuesday, up 1.23% on the day – up 6.55% year-to-date.

Healthcare

Sagent Pharmaceuticals (SGNT) is initiated with a Buy rating and $25 price target at Collins Stewart. The recommendation cites positive product launches and improved gross margins. Idenix Pharmaceuticals (IDIX) was upgraded to Outperform from Market Perform by William Blair and shares popped by 5.5%. Notable morning movers include; Johnson & Johnson (JNJ) gained 0.9%, Merck & Co (MRK) was up 1.7% and Pfizer (PFE) gained 1.8%.

The Health Care Select Sector SPDR (XLV) was trading at $32.79 into the final half hour of trading on Tuesday, up 0.71% on the day – up 4.10% year-to-date.

Financials

The Italian bond market received another jolt in the latest Italian bond auction the yield on a 3-Year note rose to a euro-era record of 7.89% from 4.93% a month ago. The yield on the Italian 10-year bond rose to 7.56% from 6.06%. Fitch revised its outlook for the US to Negative, but affirmed the country's AAA-rating. The concern is that Congress will fail to agree on timely measures to reduce debt. Susquehanna Bank (SUSQ) has been upgraded to Buy from Neutral at Sterne Agee. Zions Bancorp (ZION) is downgraded to Neutral from Outperform by Macquarie. Notable morning movers include; Bank of America (BAC) lost 1.5%, but stayed above $5.00 a share, Citigroup (C) gained 1.8%, First Horizon National (FHN) gained 3.5%, KeyCorp (KEY) was up 2.6%, JP Morgan declined 1.3%, and Regions Financial (RF) lost 6.0%.

The Financial Select Sector SPDR (XLF) was trading at $12.13 into the final half hour of trading on Tuesday, unchanged on the day – down 23.95% year-to-date.

Information Technology

Facebook will likely file for an IPO by the end of the year and go public in the second quarter of 2012. This deal is projected to raise $10 billion, placing the market cap of $100 billion. Analysts say that the social network is likely to debut revenue above $4 billion, which is larger than Yahoo (YHOO). Yahoo remains in the rumor mill as a take-over target, one with Microsoft (MSFT) owns a portion of the company. Seagate Technology (STX) raised their guidance for the next two quarters, and shares rose by 5.4% pre-market on Tuesday. Deutsche Bank has made some rating changes to the Tech Sector; Applied Materials (AMAT) is a Hold with a $10 price target, KLA-Tencor (KLAC) is a Hold with a $38 price target, Novellus Systems (NVLS) is a Hold with a $33 price target. Amkor Technology (AMKR) is a Hold with a $4 price target, Lam Research (LRCX) is a Buy with a $45 price target, and Teradyne (TER) is a Buy with a $17 price target. Hewlett-Packard (HPQ) has been upgraded to Outperform from Sector Perform at RBC Capital. Ariba (ARBA) is upgraded to Outperform from Perform at Oppenheimer with a $36 price target. Notable morning movers include; Apple Inc (AAPL) was sliced by 1.1%, Cisco Systems (CSCO) lost 1.0%, Dell Inc (DELL) gained 0.7%, Hewlett-Packard (HPQ) was up 3.2%, and Intel Corp (INTC) was up 1.4%.

The Technology Select Sector SPDR (XLK) was trading at $24.82 into the final half hour of trading on Tuesday, up 0.08% on the day – down 1.47% year-to-date.

Telecommunications Services

AT&T (T) is still attempting to its $39 billion acquisition of T-Mobile, and is now in talks to sell some of T-Mobile's customer accounts and a portion of its cellular spectrum to Leap Wireless (LEAP). Qualcomm (QCOM) is initiated as an Outperform by Scotia. Research In Motion (RIMM) has been upgraded to Market Perform from Underperform by Sanford Bernstein. Notable morning movers include; Leap Wireless (LEAP) was up by 2.0%, Metro PCS (PCS) gained 0.9%, and Novatel Wireless (NVTL) picked up 6.9%.

The NASDAQ Telecommunications Index (IXTC) was trading at $194.00 into the final half hour of trading on Tuesday, down 0.31% on the day – down 13.92% year-to-date.

Utilities

Devon Energy (DVN) resumed by Robert W. Baird as an Outperform with an $83 price target. Notable morning movers include; AES Corp (AES) rallied by 2.6%, Consolidated Water (CWCO) gained 2.2%, Duke Energy (DUK) gained 1.5%, PG&E Corp (PCG) rebounded 2.1%, PPL Corp (PPL) rebounded 0.5%, and Sempra Energy (SRE) was up 0.3%.

The Utilities Select Sector SPDR (XLU) was trading at $34.28 into the final half hour of trading on Tuesday, up 1.27% on the day – up 9.38% year-to-date.

STOCKS: BHI, PTEN, PDC, UDRL, KWK, SLB, DD, TX, CX, IP, NGD, AMR, GEF, BA, UTX, HON, COL, GLW, JBLU, LCC, TIF, VRA, DDS, BBY, CAKE, LOW, NFLX, HI, UNFI, DOLE, DMND, PPC, SGNT, IDIX, JNJ, MRK, PFE, SUSQ, BAC, C, FHN, KEY, JPM, RF, YHOO, MSFT, AMAT, KLAC, NVLS, AMKR, LRCX, TER, HPQ, ARBA, AAPL, CSCO, DELL, HPQ, INTC, T, LEAP, QCOM, RIMM, PCS, NVTL, DVN, AES, CWCO, DUK, PCG, PPL, SRE

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
NGD New Gold Inc. 3.80 -0.11 -2.81 4,982,692
GLW Corning Incorporated 24.56 -0.32 -1.29 11,681,853
TER Teradyne Inc. 25.84 -0.41 -1.56 2,266,717
SRE Sempra Energy 100.71 1.13 1.13 1,115,904
PCG Pacific Gas & Electric Co. 59.33 0.14 0.24 3,849,639
MIF.UN:CA Marquest Canadian Equity Income Fund 5.65 0.00 0.00 0
IP International Paper Company 53.83 0.17 0.32 2,826,688
JNJ Johnson & Johnson 112.26 1.27 1.14 7,672,069
INTC Intel Corporation 35.76 0.06 0.17 16,326,725
KEY KeyCorp 18.46 0.09 0.49 11,221,511
TIF Tiffany & Co. 85.02 -0.04 -0.05 1,343,013
AAPL Apple Inc. 113.95 1.83 1.63 34,391,061
C Citigroup Inc. 60.04 -0.11 -0.18 22,796,471
PPL PPL Corp 33.51 0.40 1.21 4,871,078
JPM JP Morgan Chase 85.49 0.37 0.43 14,564,796
HON Honeywell International Inc. 116.23 0.58 0.50 2,915,337
LRCX Lam Research Corporation 104.09 -3.06 -2.86 2,227,565
NVLS Nivalis Therapeutics Inc. 2.14 0.03 1.42 532,235
UTX United Technologies Corporation 109.79 1.36 1.25 3,428,390
LOW Lowe\'s Companies Inc. 74.69 -0.55 -0.73 5,553,802
HI Hillenbrand Inc 37.40 0.05 0.13 381,091
VRA Vera Bradley Inc. 12.95 0.13 1.01 352,032
CSCO Cisco Systems Inc. 30.06 0.11 0.37 21,358,288
AES The AES Corporation 11.92 0.08 0.68 4,492,687
JBLU JetBlue Airways Corporation 21.90 0.07 0.32 8,950,019
AMKR Amkor Technology Inc. 10.86 -0.51 -4.49 2,027,970
UNFI United Natural Foods Inc. 46.28 -0.01 -0.02 954,305
FHN First Horizon National Corporation 20.49 -0.12 -0.58 3,889,269
BAC Bank of America Corporation 23.09 0.14 0.61 130,487,217
GEF Greif Inc 55.35 0.63 1.15 366,008
CWCO Consolidated Water Co. Ltd. 11.25 0.25 2.27 55,192
RF Regions Financial Corporation 14.60 0.05 0.34 22,542,914
DD E.I. du Pont de Nemours and Co. 74.85 0.17 0.23 2,358,921
DDS Dillard\'s Inc. 72.21 -0.85 -1.16 413,433
PPC Pilgrim\'s Pride Corporation 19.15 0.85 4.64 3,351,545
BHI Baker Hughes Incorporated 66.32 0.51 0.77 2,219,982
AMAT Applied Materials Inc. 32.35 -0.36 -1.10 10,774,275
BBY Best Buy Co. Inc. 49.00 -0.31 -0.63 4,294,387
PFE Pfizer Inc. 31.70 0.76 2.46 29,347,073
TX Ternium S.A. American Depositary Shares (each repr 25.94 -0.55 -2.08 207,246
COL Rockwell Collins Inc. 94.37 -0.31 -0.33 877,532
CAKE The Cheesecake Factory Incorporated 63.31 -0.61 -0.95 685,778
HPQ HP Inc. 15.78 -0.38 -2.35 9,865,104
KLAC KLA-Tencor Corporation 77.21 -1.64 -2.08 1,538,781
NFLX Netflix Inc. 122.88 -0.36 -0.29 4,699,255
BA Boeing Company (The) 156.49 1.10 0.71 2,707,872
YHOO Yahoo! Inc. 41.76 0.35 0.85 6,836,112
MRK Merck & Company Inc. (new) 61.23 1.11 1.85 10,516,352
DVN Devon Energy Corporation 48.07 0.33 0.69 3,675,213
T AT&T Inc. 40.38 -0.03 -0.07 17,104,630
DUK Duke Energy Corporation (Holding Company) 75.82 1.09 1.46 3,196,119
DMND Diamond Foods Inc. n/a n/a n/a 0
SLB Schlumberger N.V. 84.78 0.31 0.37 4,828,959
CX Cemex S.A.B. de C.V. Sponsored ADR 8.77 -0.16 -1.79 11,913,975
QCOM QUALCOMM Incorporated 68.52 -0.03 -0.04 5,549,133
MSFT Microsoft Corporation 61.97 0.96 1.57 27,348,038
SGNT Sagent Pharmaceuticals Inc. n/a n/a n/a 0
PTEN Patterson-UTI Energy Inc. 28.17 -0.66 -2.27 2,210,809

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