Equities Sector Coverage: Stocks End Flat After Failing to Hold Early Gains

Sector Recap  |

Wall Street Stock MarketThe Dow Jones Industrial Average rallied to a new year-to-date high of 13,221.27 then declined to 13,168.79 in afternoon trading. The NASDAQ rallied to a new year-to-date high of 3051.23 then declined to 3024.73 in afternoon trading. The Federal Reserve released the results of its stress tests, showing that "despite large hypothetical declines, the post-stress test capital level ... of 15 of the 19 bank holding companies were estimated ... above all 4 of the regulatory minimum levels ... even after considering the proposed capital actions, such as dividend increases or share buybacks."

Asian stocks were mixed on Wednesday. The Nikkei 225 ended their session at 10,050 – up 1.53% on the day. The Hang Seng ended their session at 21,308 – down 0.15% on the day. European stocks were up on Wednesday on a positive reaction to the Federal Reserve Stress Tests on the 19 biggest US banks. The closes were mixed however. The FTSE 100 ended their session at 5,949 – down 0.12% on the day. The DAX ended their session at 7,078 – up 1.18% on the day. The CAC 40 ended their session at 3,565 – up 0.40% on the day. The yield on the 10-Year US Treasury rose from 2.119 percent to 2.290 above its 200-day simple moving average at 2.227. This rise in yields is important as 200-day SMAs tend to be tested during every calendar year. In addition rising bond yields are a drag on equity valuations.

Import Prices rose 0.4% in February versus unchanged in January, and was up 5.5% year over year. Q4 Current Account Deficit came in at $124.11 billion, larger than expected. Gold declined to a day’s low of $1635.1 the Troy ounce, below 50-day and 200-day simple moving averages at $1701.3 and $1677.9. Crude oil declined from $107.02 per barrel to $105.12. The euro versus the dollar declined from 1.3089 to 1.3014 staying below the 50- day simple moving average at 1.3094.

Financials

Now to the actual breakdown: The winners: JPMorgan (JPM) announced a 20% increase in its dividend payout to $0.30/share and a new $15B share repurchase program that includes $12B in buybacks that can be earmarked for 2012. U.S. Bancorp (USB) raised its annual dividend to $0.78 from $0.50 after getting the all-clear from the Fed and received board authorization to repurchase up to 100M shares of stock. BB&T (BBT) boosted its quarterly dividend 25% to $0.20. Morgan Stanley (MS) said it received no objection from the Fed to its 2012 capital plan, which includes the potential acquisition of another 14% of Smith Barney and the ongoing payment of current dividends. American Express (AXP) authorized a $4B stock repurchase program and raised its dividend payout by 11.1% to $0.20/share. Wells Fargo (WFC) hiked its dividend an additional $0.10/share, which together with the $0.12/share dividend declared in January, raises the total dividend 83% to $0.22. Other winners: State Street (STT), Bank of NY Mellon (BK), Fifth Third (FITB), Capital One (COF), PNC Financial (PNC), KeyCorp (KEY), Goldman Sachs (GS), Bank of America (BAC), Regions Financial (RF). A few losers: Citigroup (C), SunTrust (STI), MetLife (MET) and Ally Financial failed to get their capital plans approved in the Fed's stress tests, which mandated a minimum tier 1 capital ratio of 5%. Citi had a projected 4.9% ratio under the tests, SunTrust a 4.8% ratio, and Ally a mere 2.5% ratio. MetLife would have had a minimum tier 1 capital ratio of 5.1% through Q4 2013 and a minimum tier 1 leverage ratio of 3.4%, levels that lead the Fed to object to MetLife's capital distribution plan. MetLife has responded by saying it's "deeply disappointed" with the Fed's conclusions. Citi, also disappointed, will submit a revised capital plan later this year. FXCM (FXCM) beat estimates by 11 cents and revenue by $7M. Penson Worldwide (PNSN) reported Q4 EPS of -$0.93 (versus consensus of -$0.16), while missing revenue by $19M. American Tower (AMT) is moved to Overweight from Neutral at JP Morgan. TCF Financial (TCB) is raised to Buy from Neutral at Sterne Agee, whose target is $13.50, but is lowered to Underperform from Market Perform with a $10 target at FBR Capital. Citigroup (C) is now Neutral from Overweight at JPMorgan. Essex Property (ESS) is reduced to Hold from Buy at Stifel Nicolaus due to valuation concerns. Texas Capital (TCBI) is now Neutral from Buy at Suntrust.

The Select Sector SPDR (XLF) was trading at $15.44 at 4:00 PM on Wednesday, up 0.13% on the day – up 18.77% year-to-date (the strongest performing sector). The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.
Big Mover: (PNSN) -20.5%.

Energy

USEC (USU) reported Q4 EPS of -$4.09 (versus consensus of -$0.03), while missing revenue by $25M. GeoResources (GEOI) beat estimates by 3 cents and revenue by $4M. AAON (AAON) reported Q4 EPS of $0.09 (versus consensus of $0.21), while missing revenue by $12M. Anadarko Petroleum (APC) is upgraded to Buy from Hold with a $100 price objective at Stifel Nicolaus.
Energy Select Sector SPDR (XLE) was trading at $73.95 at 4:00 PM on Wednesday, down 0.96% on the day – up 6.97% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.

Heavily Traded: (PBR) flat, (HAL) -2.8%.

Materials

The Materials Select Sector SPDR (XLB) was trading at $36.897 at 4:00 PM on Wednesday, down 0.39% on the day – up 10.14% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.

Heavily Traded: (AA) -0.6%, (KGC) -6.5%, (ABX) -5.2%, (FCX) -2.9%, (VALE) -2.9%, (AKS) +3.1%, (CX) -1.9%, (X) +2.8%, (AUY) -5.5%, (NEM) -1.6%.
Industrials
Metalico (MEA) missed estimates by a penny with revenue in-line with estimates. EnergySolutions (ES) reported Q4 EPS of $1.08 (versus consensus of $0.11), while beating revenue by $43M. Federal Signal (FSS) missed estimates by a penny, while beating revenue by $21M. Sterling Construction (STRL) reported Q4 EPS of -$0.17 (versus consensus of $0.14), while missing revenue by $114M. IHS Inc (IHS) is moved to Equal Weight from Overweight at Morgan Stanley.
The Industrial Select Sector SPDR (XLI) was trading at $37.69 at 4:00 PM on Wednesday, down 0.24% on the day – up 11.67% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Movers: (FSS) +22.25%, (EGLE) +11%, (MEA) -12%, (BWEN) -10.5%.

Consumer Discretionary

Marcus (MCS) reported FQ3 EPS of $0.03 (versus consensus of $0.00), while beating revenue by $8M. Lin TV (TVL) reported Q4 EPS of $0.13 (versus consensus of $0.20) with revenue in-line with estimates. Global Sources (GSOL) beat estimates by 9 cents and revenue by $11M. Francesca's Holdings (FRAN) beat estimates by 3 cents and revenue by $4.5M. The company boosts its FY12 guidance, now seeing an EPS of $0.76 - $0.81 on revenue of $268M - $274M (versus estimates of $0.76 on $266M). VisionChina Media (VISN) reported Q4 EPS of $0.02 (versus consensus of $0.05), while beating revenue by $1.5M. Pacific Sunwear of California (PSUN) beat estimates by 3 cents, while missing revenue by $11M. Geeknet (GKNT) gets resumed with a Buy recommendation and $22 price target at The Benchmark Company. American Eagle Outfitters (AEO) is raised to Buy from Above Average at Caris. CBS Corp (CBS) is upgraded to Top Pick from Outperform at RBC Capital.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.48 at 4:00 PM on Wednesday, down slightly on the day – up 13.99% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.

Big Movers: (PSUN) -16.25%, (EKDKQ) -13.75%, (BANM) +12%, (CZR) +11.25%, (FRAN) +10%.

Consumer Staples

Medifast (MED) missed estimates by 13 cents and revenue by $2M.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.74 at 4:00 PM on Wednesday, down 0.30% on the day – up 3.85% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.

Big Movers: (HOGS) -19.25%, (JVA) -10%, (PATH) +15.25%.
Heavily Traded: (RAD) +4.8%.

Health Care

Roche (RHHBY) said it received a second request for information from the FTC regarding its proposed acquisition of Illumina (ILMN). SciClone Pharmaceuticals (SCLN) posted better-than-expected Q4 results, helped by a widened product portfolio boosted by its NovaMed acquisition and growth in sales of its key drug Zadaxin, and raised its 2012 forecast to EPS of $0.72-$0.78 on revenue of $165M-$170M (versus estimates of $0.43 on revenue of $168M). Sunesis Pharma (SNSS) reported Q4 EPS of -$0.19 (in-line). Anacor Pharmaceuticals (ANAC) missed estimates by 17 cents and revenue by $4M. Cempra (CEMP) is covered with an Outperform with at Cowen & Company. Omeros (OMER) is moved to Buy from Hold at Canaccord Genuity. Coventry Health Care (CVH) is moved to Market Perform from Outperform at BMO Capital.

The Health Care Select Sector SPDR (XLV) was trading at $36.98 at 4:00 PM on Wednesday, relatively unchanged on the day – up 6.60% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (ECYT) +62.5%, (AMRN) +11.25%.

Information Technology

Apple (AAPL) could be subpoenaed by the FTC over its deal to make archrival Google (GOOG) the default search provider for iOS devices (and thereby contribute to Google's mobile search dominance), sources said. IDC is hiking its 2012 tablet shipment forecast to 106.1M units from a prior 87.7M - a level that translates into 54% Y/Y growth. Gartner, it should be noted, is estimating 368M PCs will be shipped this year, which suggests the ratio of PC shipments to tablet shipments may be only a little over 3:1 in 2012. IDC also estimates Amazon (AMZN) sold 4.7M Kindle Fires in Q4, good for 16.8% of the tablet market. FalconStor Software (FALC) beat estimates by 5 cents and revenue by $3M. Guidewire Software (GWRE) beat estimates by 19 cents and revenue by $5M. STR Holdings (STRI) missed estimates by a penny with revenue in-line with estimates. First Solar (FSLR) is hoisted to Hold from Sell at DNB Markets. Alcatel-Lucent (ALU) is upgraded to Outperform from Market Perform by BMO Capital. Altera (ALTR) and NXP Semiconductors (NXPI) are each added to the Conviction Buy List at Goldman Sachs. Micron (MU) is moved to Outperform from Market Perform by Sanford Bernstein. Juniper Networks (JNPR) is moved to Market Perform from Outperform by BMO Capital. Kopin Corp (KOPN) is now Hold from Buy at Needham.
The Technology Select Sector SPDR (XLK) was trading at $29.91 at 4:00 PM on Wednesday, up 0.37% on the day – up 17.52% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.

Big Movers: (GWRE) +16.5%, (RBCN) +14.5%.

Telecommunication Services

Inteliquent (IQNT) missed estimates by 5 cents, while beating revenue by $1M. Vodafone (VOD) is taken to Underperform from Neutral by BNP Paribas. Crown Castle International (CCI) is downgraded by both JP Morgan (Neutral from Overweight) and Goldman (Neutral from Buy at Goldman and also off its list of Conviction Buys).

The NASDAQ Telecommunications Index (IXTC) was trading at $213.48 at 4:00 PM on Wednesday, down 0.93% on the day – up 8.40% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.

Heavily Traded: (S) -1.4%, (T) -0.4%, (VOD) -3%, (CLWR) +2.3%, (VZ) flat.

Utilities

Great Plains Energy (GXP) is begun with a Buy at Citigroup.

The Utilities Select Sector SPDR (XLU) was trading at $35.16 at 4:00 PM on Wednesday, down 1.49% on the day – down 2.28% year-to-date (the weakest performing sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: (DUK) -1.4%, (EXC) -1.2%, (AEP) -1.9%, (AES) -1.2%, (CNP) -1.5%

STOCKS: USU, GEOI, AAON, APC, PBR, HAL, AA, KGC, ABX, FCX, VALE, AKS, CX, X, AUY, NEM, MEA, ES, FSS, STRL, HIS, EGLE, BWEN, MCS, TVL, GSOL, FRAN, VISN, PSUN, GKNT, AEO, CBS, EKDKQ, BANM, CZR, MED, HOGS, JVA, PATH, RAD, RHHBY, ILMN, SCLN, SNSS, ANAC, CEMP, OMER, CVH, ECYT, AMRN, JPM, USB, BBT, MS, AXP, WFC, STT, BK, FITB, COF, PNC, KEY, GS, BAC, RF, C, STI, MET, FXCM, PNSN, AMT, TCB, ESS, TCBI, AAPL, GOOG, AMZN, FALC, GWRE, STRI, FSLR, ALU, ALTR, NXPI, MU, JNPR, KOPN, RBCN, IQNT, VOD, CCI, S, T, CLWR, VZ, GXP, DUK, EXC, AEP, AES, CNP

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
CBS CBS Corporation Class B 56.74 0.04 0.07 6,121,104 Trade
AKS AK Steel Holding Corporation 4.74 -0.11 -2.27 9,819,875 Trade
VALE VALE S.A. American Depositary Shares Each Representing one 15.06 0.54 3.72 27,725,706 Trade
PBR Petroleo Brasileiro S.A.- Petrobras 11.50 0.14 1.23 22,520,309 Trade
FXCM Ivanhoe Mines Ltd. n/a n/a n/a n/a
FALC FalconStor Software Inc. 0.07 -0.01 -9.46 13,658
STRL Sterling Construction Company Inc 14.18 0.15 1.07 178,605 Trade
AA Alcoa Corporation 43.79 0.86 2.00 4,939,859 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.03 0.03 0.11 5,666,053 Trade
PNC PNC Financial Services Group Inc. (The) 144.01 -0.45 -0.31 3,154,413 Trade
RAD Rite Aid Corporation 1.25 -0.07 -5.30 27,401,705 Trade
SMRT Stein Mart Inc. 2.16 0.08 3.85 235,944 Trade
KEY KeyCorp 20.78 0.03 0.14 16,440,002 Trade
AAPL Apple Inc. 217.66 -2.37 -1.08 96,246,748 Trade
C Citigroup Inc. 74.15 -0.64 -0.86 28,874,692 Trade
S Sprint Corporation 6.39 -0.05 -0.78 12,029,077 Trade
FITB Fifth Third Bancorp 29.50 -0.29 -0.97 9,683,402 Trade
MET MetLife Inc. 48.79 0.37 0.76 10,282,327 Trade
MS Morgan Stanley 49.41 -0.47 -0.94 21,450,371 Trade
AMRN Amarin Corporation plc 2.99 0.06 2.05 4,265,411 Trade
SNSS Sunesis Pharmaceuticals Inc. 2.11 0.10 4.98 153,683 Trade
JPM JP Morgan Chase & Co. 117.85 -0.78 -0.66 24,788,247 Trade
ESS Essex Property Trust Inc. 247.24 1.88 0.77 493,091 Trade
AXP American Express Company 110.90 -0.21 -0.19 5,662,932 Trade
ANAC Anacor Pharmaceuticals Inc. n/a n/a n/a 0 Trade
KGC Kinross Gold Corporation 2.95 -0.06 -1.99 23,375,668 Trade
VOD Vodafone Group Plc 22.81 0.19 0.84 6,747,928 Trade
FSS Federal Signal Corporation 26.76 -0.02 -0.07 465,784 Trade
EGLE Eagle Bulk Shipping Inc. 5.66 -0.12 -2.08 2,644,096 Trade
AMZN Amazon.com Inc. 1,915.01 -29.29 -1.51 6,855,898 Trade
AES The AES Corporation 13.96 0.15 1.09 8,521,685 Trade
MCS Barrick Gold Corporation 40.80 0.70 1.75 346,667 Trade
GS Goldman Sachs Group Inc. (The) 235.34 -2.06 -0.87 3,760,267 Trade
BWEN Broadwind Energy Inc. 2.29 0.08 3.62 16,336 Trade
VZ Verizon Communications Inc. 54.42 0.47 0.87 48,954,080 Trade
BBT BB&T Corporation 51.44 -0.13 -0.25 4,819,567 Trade
ABX Barrick Gold Corporation 10.47 -0.15 -1.41 24,759,666 Trade
AAON AAON Inc. 39.85 -0.40 -0.99 314,586 Trade
BAC Bank of America Corporation 31.03 -0.16 -0.51 85,992,133 Trade
COF Capital One Financial Corporation 99.01 -0.25 -0.25 4,900,615 Trade
USB U.S. Bancorp 55.14 -0.21 -0.38 12,672,889 Trade
OMER Omeros Corporation 25.04 0.73 3.00 939,524 Trade
GOOG Alphabet Inc. 1,166.09 -20.78 -1.75 4,405,584 Trade
ILMN Illumina Inc. 358.16 1.84 0.52 1,171,341 Trade
JNPR Juniper Networks Inc. 29.77 0.21 0.71 6,409,243 Trade
FCX Freeport-McMoRan Inc. 14.61 0.22 1.53 52,922,206 Trade
BK Bank of New York Mellon Corporation (The) 53.39 0.06 0.11 21,768,659 Trade
APC Anadarko Petroleum Corporation 64.64 0.78 1.22 5,139,520 Trade
AUY Yamana Gold Inc. (Canada) 2.49 -0.05 -1.97 23,710,850 Trade
NXPI NXP Semiconductors N.V. 93.73 -0.16 -0.17 9,068,350 Trade
RF Regions Financial Corporation 19.44 -0.05 -0.26 14,424,443 Trade
ECYT Endocyte Inc. 17.53 -0.10 -0.57 1,656,865 Trade
RBCN Rubicon Technology Inc. 8.65 -0.20 -2.31 7,951 Trade
JVA Coffee Holding Co. Inc. 4.68 0.05 1.08 24,015 Trade
CZR Caesars Entertainment Corporation 10.80 -0.15 -1.37 30,956,063 Trade
FRAN Francesca's Holdings Corporation 3.86 -0.11 -2.77 1,663,677 Trade
TCBI Texas Capital Bancshares Inc. 88.50 -0.15 -0.17 820,384 Trade
X United States Steel Corporation 29.13 -0.72 -2.41 10,670,060 Trade
GWRE Guidewire Software Inc. 98.70 -3.04 -2.99 2,314,159 Trade
ALTR Altair Engineering Inc. 40.90 0.94 2.35 1,063,590 Trade
FSLR First Solar Inc. 49.98 -0.31 -0.62 2,254,964 Trade
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0 Trade
WFC Wells Fargo & Company 54.99 -0.56 -1.01 36,158,566 Trade
ES Eversource Energy (D/B/A) 62.16 0.39 0.63 2,685,832 Trade
CEMP MLNT Cempra Inc. n/a n/a n/a n/a
TCB TCF Financial Corporation n/a n/a n/a 0
AMT American Tower Corporation (REIT) 148.49 -0.24 -0.16 2,793,344 Trade
MU Micron Technology Inc. 44.74 -1.32 -2.87 97,053,409 Trade
EXC Exelon Corporation 43.65 0.26 0.60 9,479,805 Trade
T AT&T Inc. 33.78 0.34 1.02 130,157,081 Trade
MED MEDIFAST INC 215.09 1.10 0.51 912,221 Trade
HAL Halliburton Company 40.71 0.32 0.79 12,451,310 Trade
AEO American Eagle Outfitters Inc. 23.81 0.01 0.04 4,496,474 Trade
NEM Newmont Mining Corporation 31.56 0.06 0.19 11,595,497 Trade
DUK Duke Energy Corporation (Holding Company) 79.82 -0.80 -0.99 15,566,321 Trade
KOPN Kopin Corporation 2.41 0.19 8.56 1,005,868 Trade
PSUN Pacific Sunwear of California Inc. n/a n/a n/a n/a
CCI Crown Castle International Corp. (REIT) 111.71 -0.69 -0.61 2,906,154 Trade
CX Cemex S.A.B. de C.V. Sponsored ADR 7.06 -0.10 -1.40 3,853,493 Trade
IQNT Inteliquent Inc. n/a n/a n/a 0 Trade
AEP American Electric Power Company Inc. 71.40 0.32 0.45 4,336,785 Trade
STI SunTrust Banks Inc. 70.86 -0.07 -0.10 3,915,086 Trade

Comments

Emerging Growth

Margaux Resources Ltd.

Margaux Resources Ltd is a Calgary based resource company. The Company is focused on its Jersey Emeral Tungsten-Zinc property located in the southeast portion of British Columbia.