Equities Sector Coverage: Stocks End Critical Week Surprisingly Flat

Sector Recap |

Wall Street Bulls EyeNonfarm payrolls rose by 200,000 in December with the Unemployment Rate down a notch to 8.5%. The labor force participation rate remained low at 64.0%. The Dow Jones Industrial Average opened lower traded down from 12,415.24 to 12,332.41 then consolidated. The NASDAQ traded down to 2658.83 then up to 2682.12 holding its 200-day simple moving average at 2660.

Asian stocks were lower on Friday with the Nikkei 225 ending their session at 8,390 – down 1.16% on the day, and the Hang Seng ending their session at 18,593 – down 1.17% on the day. European stocks were mixed on Friday. The FTSE 100 ended their session at 5,650 – up 0.45% on the day; the DAX ended their session at 6,058 – down 0.62% on the day; and the CAC 40 ended their session at 3,137 – down 1.24% on the day. The yield on the 10-Year US Treasury note rose to 2.046 percent then declined to 1.944 versus its 50-day simple moving average at 1.991.

Gold traded above its 200-day simple moving average at $1626.9 the Troy ounce with a day’s high at $1632.3 then faded to $1609.0. The close was below the 200-day. Crude oil stayed above its 50-day and 200-day simple moving averages at $97.81 and $95.72 in a day’s range down from $102.80 per barrel to $100.88. The euro versus the dollar traded down from 1.2811 to 1.2702, which is another new 52-week low.

Energy

Copano Energy (CPNO) and Plains All American Pipeline (PAA) are each moved to Overweight from Equal Weight at Morgan Stanley. In afternoon trading: Heavily Traded Stocks: Shares of Sandridge Energy (SD) are down slightly. Shares of El Paso (EP) are down about 0.3%. Shares of Exxon Mobile (XOM) are down about 0.4%. Shares of Halliburton (HAL) are up about 0.75%. Shares of Chesapeake Energy (CNK) are up about 1.7%. Shares of Kodiak Oil & Gas (KOG) are down about 3.2%.

Energy Select Sector SPDR (XLE) was trading at $70.44 at 4:00 PM on Friday, down 0.59% on the day – up 1.89% year-to-date. The 2011 change was +1.29%.

Materials

Just days before it is due to kick off earnings season, Alcoa (AA) yesterday said it will take restructuring charges of $0.15-0.16 in Q4 as it cuts global smelting capacity by 12% (531K metric tons) in response to a drop in aluminum prices. In afternoon trading: Shares of China GengSheng Minerals (CHGS) are up about 22.5%. Shares of Rare Elements (REE) are up about 18.75%. Shares of Avalon Rare Metals (AVL) are up about 8%.

The Materials Select Sector SPDR (XLB) was trading at $34.77 at 4:00 PM on Friday, down 0.14% on the day – up 3.79% year-to-date. The 2011 change was -12.78%.

Industrials

Wells Fargo has a fresh Outperform on FedEx (FDX) and a less bullish Market Perform on rival United Parcel Service (UPS). Corning (GLW) is initiated with a Hold at KeyBanc Capital. Vestas Wind Systems (VWDRY) is now Neutral from Sell at Citigroup. In afternoon trading: Shares of Pinnacle Airlines (PNCL) are up about 19.25%. Shares of SmartHeat (HEAT) are up about 10.75%. Shares of EnerNOC (ENOC) are down about 9%.

The Industrial Select Sector SPDR (XLI) was trading at $34.59 at 4:00 PM on Friday, down 0.20% on the day – up 2.49% year-to-date. The 2011 change was -3.21%.

Consumer Discretionary

J. C. Penney (JCP) is lifted to Outperform from Neutral at Macquarie. Children’s Place (PLCE) is lowered to Neutral from Buy at Goldman. Coinstar (CSTR) is cut to Perform from Outperform with a new lower objective of $42 at Morgan Keegan. In afternoon trading: Shares of ITT Educational Services (ESI) are up about 12%. Shares of Exide Technologies (XIDE) are up about 11.5%. Shares of Krispy Kreme Doughnuts (KKD) are up about 10.5%. Shares of American Apparel (APP) are up about 10.5%. Shares of Hovnanian (HOV) are up about 10%. Shares of Eastman Kodak (EK) are down about 13.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $40.05 at 4:00 PM on Friday, up 0.15% on the day – up 2.64% year-to-date. The 2011 change was +4.30%.

Consumer Staples

Bunge (BG) is a new Neutral at Piper Jaffray. Zhongpin (HOGS) is an Outperform and $12 target at Oppenheimer. Anheuser-Busch InBev (BUD) is taken to Hold from Buy at ING Group. Unilever NV (UN) is downgraded to Hold from Buy at ING Group. Philip Morris International (PM) and Altria (MO) are each downgraded to Neutral from Buy at Davenport. In afternoon trading: Shares of PriceSmart (PSMT) are down about 13.25%. Shares of Imperial Sugar (IPSU) are down about 10.5%. Shares of Zhongpin are up about 12%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.16 at 4:00 PM on Friday, down 0.65% on the day – down 1.02% year-to-date. The 2011 change was +10.85%.

Healthcare

Johnson & Johnson (JNJ) has halted a clinical trial of its antibiotic Doribax after more pneumonia patients who took the product died and fewer were cured. Doribax is still considered safe and effective for treating urinary and abdominal infections. Regeneron Pharmaceuticals (REGN) is raised to Buy from Hold at Jefferies. In afternoon trading: Shares of Integra LifeSciences (IART) are down about 20.25%. Shares of Tengion (TNGN) are up about 16.5%. Shares of Dendreon (DNDN) are up about 15.5%.

The Health Care Select Sector SPDR (XLV) was trading at $35.13 at 4:00 PM on Friday, up 0.17% on the day – up 1.27% year-to-date. The 2011 change was +10.32%.

Financials

The CFTC has widened its probe of MF Global's (MFGLQ) collapse to include whether CME Group's (CME) efforts to verify the safety of customer funds were sufficient. As if it doesn't have enough risk coping with, Bank of America (BAC), along with Mediobanca (MDIBF), has reportedly agreed to buy 10% of UniCredit's closely watched €7.5B share issue should it fail completely. After months of rumors and exclusive talks, Citigroup's (C) efforts to sell consumer-lending unit OneMain Financial have apparently ended without a deal in place, Blackstone (BX) and Carlyle are in separate discussions to acquire a substantial stake in the tower unit of Indian mobile carrier Reliance Communications, which values the subsidiary at around $4B. Travelers (TRV) is upgraded to Outperform from Market Perform with Wells Fargo. TD Ameritrade (AMTD) gets a Buy-from-Hold hoist at Deutsche Bank. Goldman Sachs (GS) gets downgraded to Market Perform from Outperform with Wells Fargo.

The Financial Select Sector SPDR (XLF) was trading at $13.40 at 4:00 PM on Friday, down 0.63% on the day – up 3.04% year-to-date. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

A hacker group called Lords of Dharmaraja has posted on the Internet a file explaining how Symantec’s (SYMC) flagship Norton Antivirus program is designed to work and threatened to release the source code. Samsung (SSNLF) expects its Q4 operating profit to have risen an annualized 73% to 5.2T won ($4.5B), largely due to strong sales of its smartphones and despite slower economic growth in key markets over the past year. Samsung also estimates a 12% revenue increase to 47T won. F5 Networks (FFIV) is a fresh Outperform and $126 price objective at Morgan Keegan. Marvell (MRVL) is begun with a Buy and $17 price objective at Mizuho. Ubiquiti Networks (UBNT) is a Buy at Wunderlich, with a $25 target. Zynga (ZNGA) is assigned a Neutral at Macquarie. SanDisk (SNDK) is now Buy from Neutral ($57 target) at Sterne Agee. Intel (INTC) is moved to Neutral from Buy with a $26 target at Sterne Agee. Ancestry.com (ACOM) is moved to Market Perform from Outperform at Morgan Keegan, with a new target of $27. In afternoon trading: Shares of Spreadtrum Communications (SPRD) are down about 22%. Shares of RF Micro Devices (RFMD) are down about 19.5%. Shares of Motricity (MOTR) are down about 12%. Shares of Energy Conversion Devices (ENER) are down about 11.5%.

The Technology Select Sector SPDR (XLK) was trading at $25.97 at 4:00 PM on Friday, up slightly on the day – up 2.04% year-to-date. The 2011 change was +1.03%.

Telecommunications Services

Vodafone PLC (VOD) get a Buy-from-Neutral boost at Goldman Sachs. In afternoon trading: Shares of TerreStar (TSTRQ) are down about 8.1%. Shares of Clearwire (CLWR) are up about 6.2%. Heavily Traded Stocks: Shares of Sprint Nextel (S) are down about 2.2%, while shares of AT&T (T) are down about 2.5% and shares of Verizon (VZ) are down about 1.5%. Shares of Frontier Communications (FTR) are up about 2.2%.

The NASDAQ Telecommunications Index (IXTC) was trading at $201.31 at 4:00 PM on Friday, up 0.29% on the day – up 2.22% year-to-date. The 2011 change was -12.62%.

Utilities

In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are down about 3.9%> Shares of Duke Energy (DUK) are relatively unchanged. Shares of AES Corp (AES) are down about 0.7%. Shares of Exelon (EXC) are down about 0.4%. Shares of Southern Company (SO) are down about 1.1%. Shares of PPL Corp (PPL) are down about 0.9%.

The Utilities Select Sector SPDR (XLU) was trading at $35.02 at 4:00 PM on Friday, down 0.54% on the day – down 2.67% year-to-date. The 2011 change was +14.81%; the strongest performing sector for the year.

STOCKS: CPNO, PAA, SD, EP, XOM, HAL, CNK, KOG, AA, CHGS, REE, AVL, FDX, UPS, GLW, VWDRY, PNCL, HEAT, ENOC, JCP, PLCE, CSTR, ESI, XIDE, KKD, APP, HOV, EK, BG, HOGS, BUD, UN, PM, MO, PSMT, IPSU, JNJ, REGN, IART, TNGN, DNDN, MFGLQ, CME, BAC, MDIBF, C, BX, TRV, AMTD, GS, SYMC, SSNLF, FFIV, MRVL, UBNT, ZNGA, SNDK, INTC, ACOM, SPRD, RFMD, MOTR, ENER, VOD, TSTRQ, CLWR, S, T, VZ, FTR, GEN, DUK, AES, EXC, SO, PPL

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
REE Rare Element Resources n/a n/a n/a n/a
BX The Blackstone Group L.P. Representing Limited Par 25.86 -0.29 -1.11 3,432,519
KKD Krispy Kreme Doughnuts Inc. n/a n/a n/a 0
UPS United Parcel Service Inc. 116.35 -0.08 -0.07 2,088,702
GLW Corning Incorporated 23.55 0.02 0.08 5,690,894
GEN Genesis Healthcare Inc. 3.56 0.00 0.00 76,462
FTR Frontier Communications Corporation 3.48 -0.03 -0.85 14,273,991
SO Southern Company (The) 46.76 0.17 0.36 4,386,169
ENOC EnerNOC Inc. 5.65 -0.40 -6.61 136,612
JNJ Johnson & Johnson 111.96 0.58 0.52 6,167,740
OC Owens Corning Inc New 51.91 0.01 0.02 892,821
AA Alcoa Inc. 29.04 0.16 0.55 3,870,822
INTC Intel Corporation 34.16 0.40 1.18 21,492,534
TRV The Travelers Companies Inc. 115.65 0.24 0.21 1,885,339
MO Altria Group Inc. 63.99 1.10 1.75 7,634,987
PSMT PriceSmart Inc. 90.85 0.70 0.78 95,699
C Citigroup Inc. 56.02 -1.25 -2.18 25,110,311
S Sprint Corporation 7.98 0.04 0.50 8,775,180
PPL PPL Corp 33.34 0.24 0.73 3,488,736
AMTD TD Ameritrade Holding Corporation 41.48 -0.40 -0.96 2,199,099
PAA Plains All American Pipeline L.P. 32.03 -0.29 -0.90 2,070,791
VOD Vodafone Group Plc 24.44 0.14 0.58 7,637,625
SNDK SanDisk Corp. n/a n/a n/a 0
HOV Hovnanian Enterprises Inc. Class A 2.17 0.17 8.50 3,924,592
SYMC Symantec Corporation 23.51 -0.25 -1.05 9,204,996
AES The AES Corporation 11.18 0.15 1.36 5,521,035
GS The Goldman Sachs Group Inc. 223.36 -3.27 -1.44 5,297,420
UN Unilever NV 39.47 0.35 0.89 4,745,716
VZ Verizon Communications Inc. 49.81 -0.06 -0.12 10,650,716
BAC Bank of America Corporation 21.23 -0.27 -1.26 128,468,708
MRVL Marvell Technology Group Ltd. 14.02 0.10 0.72 4,081,617
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 101.39 1.48 1.48 2,559,242
PM Philip Morris International Inc 88.08 0.31 0.35 4,818,431
XOM Exxon Mobil Corporation 87.04 -0.20 -0.23 9,706,646
ZNGA Zynga Inc. 2.86 -0.01 -0.35 5,178,557
PLCE Children\'s Place Inc. (The) 104.20 0.30 0.29 553,688
FDX FedEx Corporation 192.80 0.61 0.32 1,542,866
ESI ITT Educational Services Inc. n/a n/a n/a n/a
IART Integra LifeSciences Holdings Corporation 75.78 -1.07 -1.39 608,917
CNK Cinemark Holdings Inc Inc. 37.93 -1.37 -3.49 1,056,151
SD SandRidge Energy 23.29 -0.71 -2.96 174,606
REGN Regeneron Pharmaceuticals Inc. 372.71 -2.85 -0.76 723,571
EXC Exelon Corporation 33.01 0.84 2.61 7,811,789
CME CME Group Inc. 115.64 0.72 0.63 1,643,586
T AT&T Inc. 38.61 -0.27 -0.69 16,102,161
HAL Halliburton Company 54.17 0.93 1.75 7,174,924
BG Bunge Limited 69.12 -0.88 -1.26 1,150,239
DUK Duke Energy Corporation (Holding Company) 73.42 0.67 0.92 3,754,148
JCP J.C. Penney Company Inc. Holding Company 9.81 0.28 2.94 20,255,533
FFIV F5 Networks Inc. 138.99 -0.37 -0.27 595,363
UBNT Ubiquiti Networks Inc. 53.34 0.47 0.89 415,140

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