Equities Sector Coverage: Stocks End Higher on Jobs Numbers

Sector Recap |

Stocks End Higher on Jobs NumbersADP reported that private sector jobs rose by 162,000 in September. Non-manufacturing ISM came in stronger than expected at 55.1 in September. The employment component fell to 51.1 from 53.8. The Dow Jones Industrial Average traded up to 13,501.17 at Wednesday’s open and then declined to a morning low at 13,439.12. The Dow traded as high as 13,536.27 in afternoon trading. The NASDAQ traded up to 3134.19 at the open then fell to a morning low at 3115.04 before rallying to a day’s high at 3142.36 in the afternoon.

In Asian, the Nikkei 225 ended the day at 8,747 – down 0.45%. The Hang Seng ended the day at 20,888 – up 23%. European exchanges traded back and forth around the flat line. The FTSE 100 ended the day at 5,826 – up 0.28%. The DAX ended the day at 7,322 – up 0.22%. The CAC 40 ended the day at 3,406 – down 0.24%. The yield on the 10-Year US Treasury rose from 1.597% to 1.640% still below its 50-day and 200-day simple moving averages at 1.664% and 1.814%.

Comex gold rallied from $1773.0 the Troy ounce to $1784.0 staying below Monday’s new 2012 high at $1794.4. Nymex crude oil declined from $91.82 per barrel to $87.70 staying below its 50-day and 200-day simple moving averages at $93.68 and $96.21. The euro versus the dollar traded between 1.2879 and 1.2935 staying above its 200-day simple moving average at 1.2821.

Energy

Petrobras (PBR) is in talks with three prospective buyers to sell them $4B-$6B worth of stakes in oil blocks in the Gulf of Mexico [Shell (RDS.A), Exxon (XOM), Chevron (CVX) and BP (BP) are likely to be the most interested]. The divestments are part of Petrobras' strategy of selling $14.5B worth of non-core assets. Big Movers – Gastar Exploration (GST) is down about 25%.

Dow components – Chevron (CVX) down 1.31%, Exxon Mobil (XOM) down 0.38%. Energy Select Sector SPDR (XLE) was trading at $73.00 at 3:30 PM on Wednesday, down 1.26% on the day – up 5.60% year-to-date.

Materials

Vale S.A. (VALE) is a Hold at BB&T Capital. Xstrata (XSRAY) is boosted to Buy from Neutral at UBS. Lazard lowers Mosaic (MOS) and Potash (POT) to Neutral from Buy. Dow Components – Alcoa (AA) down 0.90%, DuPont (DD) down 0.40%. The Materials Select Sector SPDR (XLB) was trading at $36.504 at 3:30 PM on Wednesday, down 0.59% on the day – up 8.97% year-to-date.

Industrials

AMR (AAMRQ) and its pilot union intend to restart negotiations over a new labor contract this week after the company abrogated the old agreement as part of its bankruptcy restructuring - and then started to experience a spike in flight disruptions. Meanwhile, American Airlines is inspecting 47 out of its 102 Boeing 757s after seats came loose during two flights. Top brass at Lockheed Martin (LMT) and the Pentagon have become involved in long-running talks over a fifth order of F-35s. Resources Connection (RECN) reported FQ1 EPS of $0.12 (in-line), while missing revenue by $1M. Precision Castparts (PCP) is initiated with a Hold at KeyBanc Capital. CSX Corp (CSX) and Norfolk Southern (NSC) are each moved to Market Perform from Underperform by Sanford Bernstein. Embraer (ERJ) is now Neutral from Outperform at Cowen. Dow components – Boeing Co (BA) up 0.25%, Caterpillar (CAT) down 0.62%, General Electric (GE) up 0.18%, 3M Company (MMM) relatively unchanged, United Technologies (UTX) relatively unchanged. The Industrial Select Sector SPDR (XLI) was trading at $36.785 at 3:30 PM on Wednesday, up 0.40% on the day – up 8.99% year-to-date.

Consumer Discretionary

News Corp's (NWS) Fox and Time Warner's (TWX) Turner networks have extended their contracts to televise Major League Baseball until 2021, with Bloomberg reporting that the broadcasters have agreed to pay a combined $6.8B. Family Dollar Stores (FDO) met analyst expectations as FQ4 adjusted EPS climbed 14% to $0.75 and revenues 10% to $2.36B. Family Dollar Stores expects FY13 EPS of $4.10-$4.40 (in-line). Best Buy (BBY) founder Richard Schulze and at least four P-E firms, including Apollo Global (APO), are studying the struggling retailer's books ahead of a possible buyout offer worth up to $10.9B. Pearson (PSO) CEO Marjorie Scardino will step down at the end of the year after 16 years in the job and be replaced by John Fallon, the head of the U.K. publisher's International Education division. McGraw-Hill (MHP) is initiated with a Buy at UBS. Michael Kors (KORS) is an Outperform at William Blair. O’Reilly Automotive (ORLY) is started with an Overweight at Stephens. American Axle (AXL) is upgraded to Outperform from Sector Perform at RBC Capital. DineEquity (DIN) is upgraded to Buy from Neutral at Janney Capital. Ann Inc (ANN) is now Neutral from Buy at SunTrust. Express Inc. (EXPR) is downgraded to Neutral from Buy at SunTrust. Big Movers – Hovnanian Enterprises (HOV) is up about 11%. Dow Components – Disney (DIS) up 1.68%, Home Depot (HD) up 2.04%, McDonalds (MCD) down 0.64%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.07 at 3:30 PM on Wednesday, up 0.86% on the day – up 20.63% year-to-date.

Consumer Staples

Billionaire Ronald Burkle and P-E firms KKR (KKR) and TPG are interested in Supervalu (SVU), but are only thinking of buying parts of the hard-luck grocery chain rather than the whole company, which is what Supervalu would prefer. Casey’s General Stores (CASY) is a new Equal Weight at Stephens. Kraft Foods Group (KRFT) is a new Buy at Crédit Agricole. Mondelez International (MDLZ) is initiated with an Outperform at Crédit Agricole. Lorillard (LO) is launched with a Buy at Crédit Agricole. Dow components – Coca Cola (KO) down 0.26%, Procter & Gamble (PG) up 0.61%, Wal-Mart (WMT) up 0.92%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.24 at 3:30 PM on Wednesday, up 0.42% on the day – up 11.54% year-to-date.

Health Care

Aegerion Pharmaceuticals (AEGR) is initiated with an Overweight at JPMorgan. Brookdale Senior Living (BKD) is begun with a Buy at Deutsche Bank. PerkinElmer (PKI) is picked up at an Overweight with JPMorgan. horatec (THOR) is boosted to Buy from Neutral at UBS. Amarin (AMRN) is now Neutral from Outperform with Wedbush. ArQule (ARQL) is downgraded to Sector Perform from Outperform at RBC Capital. Hill-Rom Holdings (HRC) is cut to Equal-Weight from Overweight at Morgan Stanley. Smith & Nephew (SNN) is moved to Equal-Weight from Overweight at Morgan Stanley. Big Movers – AEterna Zentaris (AEZS) is down about 18%.

Dow Components – Johnson & Johnson (JNJ) relatively unchanged, Merck (MRK) up 0.47%, Pfizer (PFE) up 0.53%, United Health Group (UNH) relatively unchanged 1.62%. The Health Care Select Sector SPDR (XLV) was trading at $40.86 at 3:30 PM on Wednesday, up 0.79% on the day – up 17.79% year-to-date.

Financials

Best Buy (BBY) founder Richard Schulze and at least four P-E firms, including Apollo Global (APO), are studying the struggling retailer's books ahead of a possible buyout offer worth up to $10.9B. Billionaire Ronald Burkle and P-E firms KKR (KKR) and TPG are interested in Supervalu (SVU), but are only thinking of buying parts of the hard-luck grocery chain rather than the whole company, which is what Supervalu would prefer. In an attempt to kick-start the housing market, Freddie Mac wants to provide loans to investors who are looking to acquire foreclosed homes so that they can rent them out. However, the mortgage giant faces opposition from banks and the FHFA, which is concerned about increasing the government's role in the real-estate market and crowding out private capital with cheap loans, the WSJ reports. Agree Realty (ADC) is begun with a Buy at Wunderlich. Health Care REIT (HCN) is a new Outperform at RBC Capital. Assurant (AIZ) is now Buy from Neutral at Goldman. Discover Financial Services (DFS) is cut to Hold from Buy at Argus. Nationstar Mortgage (NSM) is now Neutral from Buy at Sterne Agee. Big Movers – Ocwen Financial (OCN) is up about 14.5%. Dow Components – American Express (AXP) up 0.31%, Bank of America (BAC) up 1.34%, JP Morgan Chase (JPM) down 0.22%, Travelers (TRV) up 0.25%. The Financial Select Sector SPDR (XLF) was trading at $15.82 at 3:30 PM on Wednesday, up 0.83% on the day – up 21.69% year-to-date.

Information Technology

The WSJ has firmed up speculation about the mass production of the iPad Mini, reporting that Apple's (AAPL) Asian suppliers have begun manufacturing the tablet, which will have a 7.85" screen vs. 9.7" for the regular iPad and 7" for Google's Nexus. LG Display and AU Optronics (AUO) started production for the new screen last month. Xyratex (XRTX) missed estimates by 7 cents and revenue by $43M. FQ4 revenue is expected to be within a range of $235M-$285M and EPS of -$0.15 to -$0.43, well below an outdated consensus of $327.9M and $0.49. Semtech (SMTC) is lifted to Buy from Neutral at Lazard. Heartland Payment Systems (HPY) is slashed to Sell from Hold at Stifel Nicolaus. Texas Instruments (TXN) is taken to Sector Perform from Outperform at Pacific Crest. Big Movers – Hewlett-Packard (HPQ) is down about 11%. Dow Components – Cisco Systems (CSCO) up 0.42%, Hewlett-Packard (HPQ) down 10.97%, IBM (IBM) up 0.41%, Intel Corp (INTC) down 1.27%, Microsoft (MSFT) up 0.30%. The Technology Select Sector SPDR (XLK) was trading at $30.97 at 3:30 PM on Wednesday, up 0.55% on the day – up 21.69% year-to-date.

Telecommunication Services

SBA Communications (SBAC) is resumed with an Overweight at JPMorgan. Big Movers – TerreStar (TSTRQ) is down about 32.5%. Leap Wireless (LEAP) is down about 16%. Dow Components – AT&T (T) up 1.11%, Verizon (VZ) up 1.00%. The NASDAQ Telecommunications Index (IXTC) was trading at $198.56 at 3:30 PM on Wednesday, up 0.45% on the day – up 0.83% year-to-date.

Utilities

The Big Names – Dominion Resources (D) up 0.41%, Edison International (EIX) up 1.08%, First Energy (FE) up 0.52%, PG&E Corp (PCG) up 0.54%, Southern Company (SO) up 0.38%. The Utilities Select Sector SPDR (XLU) was trading at $36.58 at 3:30 PM on Wednesday, up 0.47% on the day – up 1.67% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, PBR, RDS.A, XOM, CVX, BP, GST, VALE, XSRAY, MOS, POT, AAMRQ, LMT, RECN, PCP, CSX, NSC, ERJ, NWS, TWX, FDO, BBY, APO, PSO, MHP, KORS, ORLY, AXL, DIN, ANN, EXPR, HOV, KKR, SVU, CASY, KRFT, MDLZ, LO, AEGR, BKD, PKI, THOR, AMRN, ARQL, HRC, SNN, AEZS, ADC, HCN, AIZ, DFS, NSM, OCN, AAPL, AUO, XRTX, SMTC, HPY, TXN, HPQ, SBAC, TSTRQ, LEAP

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. 9.96 0.08 0.81 26,881,953
AAPL Apple Inc. 112.18 -1.77 -1.55 35,886,990
ADC Agree Realty Corporation 49.67 -0.60 -1.19 266,485
AEGR Aegerion Pharmaceuticals Inc. 3.06 0.57 22.89 6,304,155
AEZS AEterna Zentaris Inc. 3.42 -0.03 -0.87 86,192
AIZ Assurant Inc. 91.47 -0.30 -0.33 357,754
AMRN Amarin Corporation plc 3.13 -0.11 -3.40 1,750,777
APO Apollo Global Management LLC Class A Representing 17.78 -0.05 -0.28 847,007
ARQL ArQule Inc. 1.77 -0.03 -1.67 120,691
AUO AU Optronics Corp American Depositary Shares 3.63 -0.07 -1.89 326,171
AXL American Axle & Manufacturing Holdings Inc. 16.46 -0.30 -1.79 931,688
AXP American Express Company 63.37 -0.85 -1.32 4,132,452
BA Boeing Company (The) 131.03 -1.20 -0.91 2,199,395
BAC Bank of America Corporation 15.16 -0.22 -1.43 78,997,682
BBY Best Buy Co. Inc. 37.41 -0.27 -0.72 3,202,199
BKD Brookdale Senior Living Inc. 17.24 -0.38 -2.16 2,016,380
BP BP p.l.c. 35.06 0.22 0.63 9,021,686
CASY Caseys General Stores Inc. 115.09 -1.06 -0.91 644,638
CAT Caterpillar Inc. 87.47 0.88 1.02 10,616,376
CSCO Cisco Systems Inc. 31.39 -0.11 -0.35 15,417,082
CSX CSX Corporation 29.99 -0.02 -0.07 7,146,863
CVX Chevron Corporation 101.27 -0.88 -0.86 8,148,404
D Dominion Resources Inc. 74.75 -1.09 -1.44 2,446,539
DD E.I. du Pont de Nemours and Co. 66.37 -0.82 -1.22 1,884,993
DFS Discover Financial Services 56.02 -1.03 -1.81 2,886,015
DIN DineEquity Inc 78.16 -1.38 -1.74 128,657
DIS Walt Disney Company (The) 91.80 -0.40 -0.43 7,476,594
EIX Edison International 72.68 -1.02 -1.38 1,311,465
ERJ Embraer S.A. 17.40 -0.79 -4.34 1,825,942
EXPR Express Inc. 11.65 -0.06 -0.51 1,067,245
FE FirstEnergy Corporation 33.17 -0.37 -1.10 2,556,258
GE General Electric Co 29.53 -0.37 -1.24 38,873,664
GST Gastar Exploration Inc 0.84 -0.06 -6.23 1,185,369
HCN Welltower Inc. 75.81 -0.64 -0.84 1,722,576
HD Home Depot Inc. (The) 127.93 -0.34 -0.27 5,987,472
HOV Hovnanian Enterprises Inc. Class A 1.64 -0.05 -2.96 1,347,205
HPQ HP Inc. 15.39 -0.10 -0.65 9,794,740
HPY Heartland Payment Systems Inc n/a n/a n/a 0
HRC Hill-Rom Holdings In. 60.96 -0.76 -1.23 432,092
IBM International Business Machines Corp 158.11 -0.18 -0.11 3,374,838
INTC Intel Corporation 37.32 -0.12 -0.32 17,674,969
JNJ Johnson & Johnson 117.27 -2.12 -1.78 6,190,185
JPM JP Morgan Chase 65.65 -1.06 -1.59 18,727,192
KKR KKR & Co. L.P. Representing Limited Partnership In 14.05 -0.09 -0.64 1,364,512
KO Coca-Cola Company (The) 42.03 -0.12 -0.28 12,671,673
KORS Michael Kors Holdings Limited 46.87 -1.37 -2.84 1,779,282
LMT Lockheed Martin Corporation 242.34 -3.41 -1.39 1,134,120
MCD McDonald\'s Corporation 114.79 -0.39 -0.34 4,924,448
MDLZ Mondelez International Inc. 43.14 -0.26 -0.60 8,816,378
MMM 3M Company 175.37 -2.22 -1.25 1,853,613
MOS Mosaic Company (The) 24.25 -0.21 -0.86 4,453,896
MRK Merck & Company Inc. (new) 61.91 -1.39 -2.20 10,930,029
MSFT Microsoft Corporation 57.40 -0.63 -1.09 25,463,536
NSM Nationstar Mortgage Holdings Inc. 14.33 -0.30 -2.05 483,420
NWS News Corporation 14.13 -0.14 -0.98 1,920,842
OBM:CA Oban Mining Corporation n/a n/a n/a n/a
OCN Ocwen Financial Corporation NEW 3.50 -0.12 -3.31 1,304,188
ORLY O Reilly Automotive Inc. 278.90 -3.07 -1.09 677,924
PBR PETROLEO BRASILEIIRO SA PETROBRAS 9.27 -0.23 -2.42 27,158,567
PCG Pacific Gas & Electric Co. 61.76 -0.62 -0.99 2,439,995
PCP Precision Castparts n/a n/a n/a 0
PFE Pfizer Inc. 33.32 -0.67 -1.97 25,043,991
PG Procter & Gamble Company (The) 88.23 -1.23 -1.37 74,587,460
PKI PerkinElmer Inc. 55.14 -1.02 -1.82 363,056
POT Potash Corporation of Saskatchewan Inc. 16.22 -0.10 -0.61 4,213,541
PSO Pearson Plc 9.67 -0.22 -2.22 551,725
RECN Resources Connection Inc. 14.47 -0.21 -1.43 46,462
SBAC SBA Communications Corporation 111.60 -1.54 -1.36 456,229
SMTC Semtech Corporation 27.72 0.00 0.00 224,526
SNN Smith & Nephew SNATS Inc. 32.37 -0.87 -2.62 1,468,269
SO Southern Company (The) 52.05 -0.65 -1.23 5,877,940
SVU SuperValu Inc. 4.83 0.27 5.92 9,574,266
T AT&T Inc. 40.73 -0.12 -0.29 17,046,784
TRV The Travelers Companies Inc. 113.87 -1.14 -0.99 1,212,640
TWX Time Warner Inc. New 78.61 0.05 0.06 3,919,669
TXN Texas Instruments Incorporated 69.84 0.10 0.14 4,337,901
UTX United Technologies Corporation 101.06 -1.29 -1.26 3,720,014
VALE VALE S.A. American Depositary Shares Each Represen 5.53 -0.12 -2.12 19,621,208
VZ Verizon Communications Inc. 52.12 0.06 0.12 10,804,738
WMT Wal-Mart Stores Inc. 70.73 -1.06 -1.48 7,996,767
XOM Exxon Mobil Corporation 86.46 -0.44 -0.51 19,082,873

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