Personal Income rose just 0.1% in September while spending increased by 0.6% as the personal savings rate fell to 3.6% the lowest since December 2007. The Dow Jones Industrial Average traded between 12,164.24 and 12,237.84 on Friday. The NASDAQ traded between 2723.03 and 2740.33 on Friday.
Asian stocks followed U.S. markets higher on Friday. The Nikkei 225 rallied 1.39% to 9,050 with the Hang Seng up 1.68% to 20,019. European stocks consolidated Thursday’s huge gains with mixed performances. The FTSE 100 lost 0.35% to 5,694 with the DAX ticking up 0.13% to 6,346 and the CAC 40 down 0.59% to 3,349. The U.S. Treasury 10-Year yield declined from 2.420 to 2.299 on Friday. Gold declined from $1754.0 the Troy ounce to $1733.0 versus its 50-day simple moving average at $1736.0. Crude oil declined from $93.93 per barrel to $92.01 staying below its 200-day simple moving average at $94.79. The euro versus the dollar is traded above its 50-day and 200-day simple moving averages at 1.3846 and 1.4101.
Energy
Chevron (CVX) beat estimates by 50 cents, while missing revenue by $3.3B. Arch Coal (ACI) missed estimates by 5 cents with revenue in-line with estimates. Occidental Petroleum (OXY) is increased to Outperform from Neutral at Credit Suisse. Clayton Williams (CWEI) gets hoisted to Buy from Hold with Wunderlich. McDermott International (MDR) and Dresser-Rand (DRC) are each moved to Equal Weight from Overweight at Morgan Stanley. FMC Technologies, Inc. (FTI) is taken to Underweight from Equal Weight at Morgan Stanley. In afternoon trading: Shares of Arch Coal are up about 9.75%.
Energy Select Sector SPDR (XLE) was trading at $73.04 at 4:00 PM on Friday, up 0.68% on the day – up 7.02% year-to-date.
Materials
Commercial Metals (CMC) reported FQ4 EPS of $1.04 (versus consensus of $0.19) with revenue in-line with estimates. Stillwater Mining (SWC) beat estimates by 4 cents and revenue by $49M. In afternoon trading: Shares of Stillwater Mining are up about 21%. Shares of United States Steel (X) are up about 10%. Shares of Rare Element (REE) are up about 9%. Shares of Jaguar Mining (JAG) are up about 7.25%. Shares of Avalon Rare Metals (AVL) are up about 7%. Shares of Olin Corp. (OLN) are down about 8%.
The Materials Select Sector SPDR (XLB) was trading at $35.99 at 4:00 PM on Friday, up 0.70% on the day – down 6.30% year-to-date.
Industrials
Rockwell Collins (COL) reported Q3 EPS of $1.13 (in-line), while missing revenue of $50M. Goodrich (GR) gets lowered to Market Perform from Outperform at Wells Fargo. Iron Mountain (IRM) is downgraded to Hold from Buy at Stifel Nicolaus. In afternoon trading: Shares of Zipcar (ZIP) are up about 7.5%. Shares of Tata Motors (TTM) are up about 7.25%. Shares of Colfax (CFX) are up about 6.75%. Shares of Titan International (TWI) are up about 6%.
The Industrial Select Sector SPDR (XLI) was trading at $34.26 at 4:00 PM on Friday, unchanged on the day – down 1.75% year-to-date.
Consumer Discretionary
Moody’s has increased the credit ratings of Ford (F) and General Motors (GM) one level each to Ba1, the highest non-investment grade, with a positive outlook on both. Interpublic Group of Companies (IPG) beat estimates by 6 cents and revenue by $70M. BorgWarner (BWA) beat estimates by 11 cents with revenue in-line with estimates. Goodyear Tire & Rubber (GT) beat estimates by 33 cents, while missing revenue by $150M. Lear (LEA) missed estimates by 27 cents, while beating revenue by $260M. Bed Bath & Beyond (BBBY) is begun with an Outperform rating and $77 price objective at brokerage Williams Capital, while Morgan Stanley begins the company at an Underweight. Lowe’s (LOW) is launched as an Underweight at Morgan Stanley. RadioShack (RSH) is resumed at an Overweight with Morgan Stanley. Macy’s (M) is established with a Buy at Nomura, which has new Neutrals on J.C. Penney (JCP), Nordstrom (JWN) and Kohl’s (KSS). Fossil (FOSL) is begun with a Buy at Bank of America-Merrill Lynch, while The Benchmark Company cuts Fossil to Hold from Buy. Panasonic (PC) is upgraded to Outperform from Neutral at Credit Suisse. Time Warner Cable (TWC) is taken to Market Perform from Outperform with Wells Fargo. Virgin Media (VMED) is removed from Goldman Sachs’ Pan Europe Conviction Buy List. Peugot SA (PEUGY) is reduces to Hold from Buy at the Royal Bank of Scotland. In afternoon trading: Shares of Dangdang (DANG) are up about 18%. Shares of SodaStream (SODA) are up about 12%. Shares of Interpublic Group of Companies are up about 11%. Shares of Visteon (VC) are up about 11%. Shares of Newell Rubbermaid (NWL) are up about 11%. Shares of Deckers Outdoor (DECK) are up about 10%. Shares of Whirlpool (WHR) are down about 13.75%. Shares of Cablevision (CVC) are down about 13.25%. Shares of Standard Pacific (SPF) are down about 12.5%. Shares of Tenneco (TEN) are down about 10.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $39.63 at 4:00 PM on Friday, down 0.78% on the day – up 5.93% year-to-date.
Consumer Staples
Coca-Cola (KO) is begun with a Buy at Deutsche Bank, which assigns an identical rating on arch rival PepsiCo (PEP) and has a Hold on Dr. Pepper Snapple (DPS). Whole Foods (WFM) gets lifted to Neutral from Underperform at Credit Suisse. In afternoon trading: Shares of Central European Distribution (CEDC) are down about 10.5%. Shares of AgFeed (FEED) are down about 7.5%. Shares of SuperValu (SVU) are down about 4.5%. Shares of Green Mountain Coffee Roasters (GMCR) are up about 7.5%. Shares of Coffee Holding (JVA) are up about 6.25%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $31.51 at 4:00 PM on Friday, down 0.25% on the day – up 7.51% year-to-date.
Healthcare
Merck (MRK) beat estimates by 3 cents and revenue by $400M, and sees full-year revenue to grow in mid-single digit off of $46B base and raises lower end of EPS range to $3.72-$3.76. Biogen Idec (BIIB) beat estimates by 9 cents with revenue in-line with estimates. Coventry Health Care (CVH) beat estimates by 3 cents, while missing revenue by $50M. Eli Lilly (LLY) is upgraded to Outperform from Market Perform at First Global. Bristol-Myers (BMY) is downgraded by 180 degrees, to Underperform from Outperform at Credit Suisse. Community Health (CYH) is moved to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of Align Technology (ALGN) are up about 31.5%. Shares of Zalicus (ZLCS) are up about 26.5%. Shares of MedAssets (MDAS) are up about 15%. Shares of VCA Antech (WOOF) are up about 13.5%. Shares of Computer Programs and Systems (CPSI) are down about 28.15%. Shares of NuVasive (NUVA) are down about 16.25%.
The Health Care Select Sector SPDR (XLV) was trading at $34.21 at 4:00 PM on Friday, up slightly on the day – up 8.60% year-to-date.
Financials
MF Global (MF) has drawn down and exhausted all its revolving credit lines over the past few days after stating that it still had around $1.3B remaining. After failing in a lawsuit in July, Australian fund Basis Yield Alpha Fund is now suing Goldman Sachs (GS) for $1B in damages for selling it CDOs despite the bank expecting the value of the securities to tumble. Where Bank of America (BAC) boldly goes, JPMorgan (JPM) declines to follow, saying it won’t charge fees on debit cards to make up for revenue lost due to new restrictions on transaction charges, credit cards and overdrafts. JPMorgan joins US Bancorp (USB), Citigroup (C) and other large banks in deciding to avoid the wrath of consumers and Washington. Apartment Investment and Management Company (AIV) reported Q3 EPS of $0.41 (in-line). AON Corp. (AON) missed estimates by 3 cents, while beating revenues by $100M. Barclays PLC (BCS) gets an Overweight-from-Neutral boost at JPMorgan. In afternoon trading: Shares of China Real Estate Information Corp. (CRIC) are up about 16.5%. Shares of RAIT Financial (RAS) are up about 14%. Shares of Lehman Brothers (LEHMQ) are up about 13.5%. Shares of ZipRealty (ZIPR) are up about 10.5%. Shares of CBRE Group (CBG) are up about 10.5%.
The Financial Select Sector SPDR (XLF) was trading at $14.05 at 4:00 PM on Friday, up slightly on the day – down 11.91% year-to-date.
Information Technology
In a dramatic reversal, Hewlett-Packard (HPQ) has decided to keep its mammoth PC division, as it would have cost far more than expected to divest the tightly integrated unit: an initial $1.5B and then $1B a year. Brocade (BRCD), which has a market cap of $2.18B, may be looking for an acquirer two years after failing in a previous attempt. Samsung (SSNLF) grabbed 23.8% of the market for smartphones in Q3 2011, breezing past Apple (AAPL) (14.6%) to take the number one spot. Nokia (NOK) was in third place with 14.4%, but remained the overall leading provider of handsets. The speculation swirling round Yahoo (YHOO) shows no signs of abating, with The Wall Street Journal reporting that the Internet portal is examining a “cash-rich split-off” that could let it divest its 40%, $14B stake in Alibaba (ALBIY) without paying taxes on the profits. Digital River (DRIV) reported Q3 revenue of $95.4M and EPS of $0.23 (the former beat by $1.4M, but the latter missed by $0.01). The company is guiding for Q4 revenue of $103M-$105M and EPS of $0.32-$0.35 (below a consensus of $107.6M and $0.39). Genpact (G) is begun with a Buy and $19 price target at Kaufman Brothers. Syntel (SYNT) is a Hold and $52 target at Kaufman. Advanced Micro Devices (AMD) is raised to Outperform from Market Perform at Wells Fargo. Aixtron (AIXG) is increased to Reduce from Sell at WestLB. Intuit (INTU) is moved to Hold from Buy at Jefferies. Dassault Systems (DASTY) is now Neutral from Buy at UBS. PMC-Sierra (PMCS) is now Neutral from Overweight at JPMorgan. Nanometrics (NANO) is now Neutral from Overweight at Piper Jaffray. In afternoon trading: Shares of Digital River are down about 19.75%. Shares of Avid Technology (AVID) are down about 19%. Shares of Powerwave (PWAV) are down about 18.25%. Shares of Nanometrics are down about 11%. Shares of Sonus Networks (SONS) are up about 15.5%. Shares of Renren (RENN) are up about 14.5%. Shares of FEI Company (FEIC) are up about 14.5%. Shares of Quantum (QTM) are up about 12.75%. Shares of Emulex (ELX) are up about 12%. Shares of Youku.com (YOKU) are up about 12%. Shares of VistaPrint (VPRT) are up about 11.5%. Shares of Monster Worldwide (MWW) are up about 11%.
The Technology Select Sector SPDR (XLK) was trading at $26.48 at 4:00 PM on Friday, up 0.34% on the day – up 5.12% year-to-date.
Telecommunications Services
Sprint (S) is close to renewing an agreement to use Clearwire’s (CLWR) network for another three-to-five years when the current pact ends in 2012, although the price Sprint will pay will probably fall. Sprint Nextel (S) is moved to Outperform from Neutral at Macquarie. MetroPCS (PCS) is lowered 180 degrees, to Underperform from Buy at Bank of America-Merrill Lynch. In afternoon trading: Shares of MetroPCS are down about 7.5%. Actives: Shares of Sprint are up about 2.5%, while shares of AT&T (T) are up about 0.8% and shares of Verizon (VZ) are down about a quarter of a percent. Shares of NII Holdings (NIHD) are down about 3.5%.
The NASDAQ Telecommunications Index (IXTC) was trading at $202.77 at 4:00 PM on Friday, up slightly on the day – down 10.03% year-to-date.
Utilities
Dominion Resources (D) beat estimates by 2 cents. Constellation Energy (CEG) missed estimates by 12 cents and revenue by $1B. NiSource (NI) beat estimates by 2 cents with revenue in-line with estimates. Con Edison (ED) gets cut to Underperform from Hold at Jefferies. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 1%. Shares of Exelon (EXC) are up about 0.7%. Shares of NiSource are up about 1.1%. Shares of CSE&G (CEG) are up about 0.6%.
The Utilities Select Sector SPDR (XLU) was trading at $35.01 at 4:00 PM on Friday, down 0.82% on the day – up 11.71% year-to-date.
STOCKS: CVX, ACI, OXY, CWEI, MDR, DRC, FTI, CMC, SWC, X, REE, JAG, AVL, OLN, COL, GR, IRM, ZIP, TTM, CFX, TWI, F, GM, IPG, BWA, GT, LEA, BBBY, LOW, RSH, M, JCP, JWN, KSS, FOSL, PC, TWC, VMED, PEUGY, DANG, SODA, VC, NWL, DECK, WHR, CVS, SPF, TEN, KO, PEP, DPS, WFM, CEDC, FEED, SVU, GMCR, JVA, MRK, BIIB, CVH, LLY, BMY, CYH, ALGN, ZLCS, MDAS, WOOF, CPSI, NUVA, MF, GS, BAC, JPM, USB, C, AIV, AON, BCS, CRIC, RAS, LEHMQ, ZIPR, CBG, HPQ, BRCD, SSNLF, AAPL, NOK, YHOO, ALBIY, DRIV, G, SYNT, AMD, AIXG, INTU, DASTY, PMCS, NANO, AVID, PWAV, SONS, RENN, FEIC, QTM, ELX, YOKU, VPRT, MWW, S, CLWR, PCS, T, VZ, NIHD, D, CEG, NI, ED, DUK, EXC, CEG
