Equities Sector Coverage: Stocks End Week Higher Despite Disappointing GDP Growth

Sector Recap |

Wall Street Bulls EyeThe Advanced reading of Real GDP for the first quarter of 2012 came in below expectations at just 2.2%. A drag was Business Investment which was down 2.1%, the first decline since Q4 2009. The University of Michigan reading on consumer sentiment for the month of April came in at 76.4, the highest level since February 2011. The Dow Jones Industrial Average rallied to a day’s high at 13,266.68 versus the March 16th high at 13,289.08. The NASDAQ’s rallied to a day’s high at 3076.44 versus the March 27th high at 3134.17.

Asian stocks were lower on Friday. The Nikkei 225 ended their session at 9,521 – down 0.43% on the day. The Hang Seng ended their session at 20,741 – down 0.33% on the day. European exchanges were mixed on Friday but closed higher. The FTSE 100 ended their session at 5,777 – up 0.49% on the day. The DAX ended their session at 6,801 – up 0.91% on the day. The CAC 40 ended their session at 3,266 – up 1.14% on the day. The yield on the 10-Year US Treasury declined from 1.931 percent to 1.881 overnight then rose to 1.956 below its 50-day and 200-day simple moving averages at 2.080 and 2.087.

Gold declined from $1659.0 the Troy ounce to $1651.1 then rebounded to $1668.4 still below the “death cross” defined by the 50-day simple moving average at $1679.2 being below the 200-day simple moving average at $1697.3. Crude oil rebounded from $103.74 per barrel to $105.00, staying below its 50-day simple moving average at $105.11. The euro versus the dollar traded up from 1.3161 and 1.3269 above its 50-day simple moving average at 1.3210.

Energy

Chevron (CVX) posted a first-quarter profit of $3.27 a share, beating estimates by a penny. Total revenue came in at $60.71 billion, short of expectations of $72.42 billion. Oil States International (OIS) beat Q1 EPS estimates by 41 cents with better than expected revenue. Newpark Resources (NR) missed Q1 EPS estimates by a nickel with lower than expected revenue. Superior Energy Services (SPN) beat Q1 EPS estimates by twelve cents with better than expected revenue. Dahlman Rose initiates with Buy ratings Marathon Petroleum (MPC), Tesoro (TSO), and Valero Energy (VLO). Dow components - Chevron (CVX) lost 0.3% in morning trading with Exxon Mobil (XOM) flat.
Energy Select Sector SPDR (XLE) was trading at $70.76 at 3:30 PM on Friday, down 0.10% on the day – up 2.36% year-to-date.

Materials

Weyerhaeuser (WY) beat Q1 EPS estimates by two cents with better than expected revenue. TPC Group (TPCG) reported Q1 EPS of $1.14 and a miss on the revenue line. Eastman Chemical (EMN) beat Q1 EPS estimates by nine cents, but there was a miss on the revenue line. Compass Minerals (CMP) missed Q1 EPS estimates by nine cents with a miss on the revenue line. Agnico-Eagle Mines (AEM) beat Q1 EPS estimates by 22 cents with a beat on the revenue line. Dow components - Alcoa (AA) slipped 0.9% still below the $10 threshold. DuPont (DD) gained 0.2%.
The Materials Select Sector SPDR (XLB) was trading at $36.94 at 3:30 PM on Friday, up 0.52% on the day – up 10.27% year-to-date.

Industrials

China Eastern Airlines will likely place a $6 billion order for up to 20 Boeing (BA) 777 jets. Goodyear Tire & Rubber (GT) reported Q1 EPS of 34 cents with a miss on the revenue line. ScanSource (SCSC) missed Q3 EPS by a penny with in-line revenue. Metabolix (CBLX) reported in-line Q1 EPS with in-line revenue. Dow components - Boeing Co (BA) was up just 0.1% in morning trading, with Caterpillar (CAT) up 0.5%, General Electric (GE) inched up 0.2%, 3M Company (MMM) was flat, and United Technologies (UTX) picked up 0.6%.
The Industrial Select Sector SPDR (XLI) was trading at $37.39 at 3:30 PM on Friday, up 0.70% on the day – up 10.79% year-to-date.

Consumer Discretionary

Ford (F) reported first-quarter earnings of 39 cents a share on revenue of $32.4 billion, topping expectations of 35 cents a share on $31.27 billion. Deckers (DECK) fell 16.1% in after hours trading on Thursday as the maker of UGG boots misses earnings expectations and cut their full year guidance. Deckers Outdoor has been downgraded to Hold from Buy at Jefferies. Columbia Sportswear (COLM) reported Q1 EPS of $0.11 with a miss on the revenue line. Choice Hotels International (CHH) beat Q1 EPS estimate by three cents with a beat on the revenue line. Callaway Golf (ELY) missed Q1 EPS estimates by four cents with a miss on the revenue line. Bally Technologies (BYI) beat Q1 EPS estimates by a penny with a modest beat on the revenue line. Fortune Brands Home & Security (FBHS) beat Q1 EPS estimates by five cents with a beat on the revenue line. Coinstar (CSTR) reported Q1 EPS of $1.39 with a beat on the revenue line. Zynga (ZNGA) has been upgraded to Overweight from Neutral at JP Morgan. Dow Components - Disney (DIS) was flat in morning trading with McDonalds (MCD) up 1.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.98 at 3:30 PM on Friday, up 1.48% on the day – up 17.84% year-to-date.

Consumer Staples

Amazon (AMZN) shares were 12.4% higher premarket as Q1 EPS beat consensus with revenue growth of 34% to $13.18 billion. The company plans to invest another $800 to $900 million on capex in Q2. Amazon.com (AMZN) has been upgraded upgraded to Buy from Neutral at Goldman Sachs, to Buy from Neutral at Bank of America-Merrill Lynch, and to Buy from Neutral at Nomura. Starbucks' (SBUX) shares were 5% lower premarket as Q2 earnings narrowly beat estimates. The company gave FY 2012 EPS guidance that was below consensus causing the lower share price. Procter & Gamble (PG) beat Q3 EPS estimates by a penny, but missed on the revenue line. Aaron's (AAN) beat Q1 EPS estimates by three cents with a beat on the revenue line. Expedia (EXPE) beat Q1 EPS estimates by a dime with better than expected revenue. Expedia has been upgraded to Neutral from Underweight at JPMorgan. Dow components - Home Depot (HD) gained 0.6% in morning trading with Kraft (KFT) up 1.1%, Coca Cola (KO) up 1.4%, Procter & Gamble (PG) down 3.4%, and Wal-Mart (WMT) flat.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.29 at 3:30 PM on Friday, down 0.09% on the day – up 5.54% year-to-date.



Health Care

Allscripts (MDRX) shares plunged 42% in after hours trading Thursday following a bleak Q1 earnings report that missed consensus and after the announcement of a major shakeup. Allscripts-Misys Healthcare has been downgraded to Hold from Buy at Jefferies. Merck (MRK) beat Q1 EPS estimates by a penny with in-line revenue. Coventry Health Care (CVH) reported Q1 EPS of 62 cents with a beat on the revenue line, and shares were 3.9% higher premarket. Covidien (COV) beat Q2 EPS by two cents with in-line revenue. The FDA rejected Amgen's (AMGN) application to expand the use of the drug Xgeva to delay the spread of tumors to bones in patients suffering from advanced prostate cancer. Sanofi (SNY) reiterated full-year guidance saying that profits to drop as much as 15% in 2012 because of competition from generics. McKesson (MCK) will pay $190 million to settle allegations that the drug distribution company improperly inflated drug prices that led to overbilling the Medicaid system. Jazz Pharmaceuticals (JAZZ) shares surged 11.2% after hours Thursday after acquiring privately-held EUSA Pharma for as much as $700 million in cash. EUSA's FDA-approved Erwinaze treatment blocks cell growth in patients with acute leukemia. InterMune (ITMN) missed Q1 EPS estimates by four cents with a miss on the revenue line. InterMune has been downgraded to Market Perform from Outperform at JMP Securities. Gilead Sciences (GILD) missed Q1 EPS estimates by three cents but beat on the revenue line. Cerner (CERN) beat Q1 EPS estimates by four cents with better than expected revenue. Dow Components - Johnson & Johnson (JNJ) gained 0.3%, Merck (MRK) was down 0.2%, and Pfizer (PFE) was flat.
The Health Care Select Sector SPDR (XLV) was trading at $37.57 at 3:30 PM on Friday, up 0.16% on the day – up 8.30% year-to-date.

Financials

Wall Street may have to reduce headcount by another 10%-12% in order to achieve higher profitability targets this year, according to a recent report by the Boston Consulting Group. Regulators are widening their probe into the possible involvement of employees of Goldman Sachs (GS) in the Galleon Group insider trading ring. At issue is whether or not a senior investment banker gave Galleon traders advance information about pending health-care deals. SVB Financial Group (SIVB) beat Q1 EPS estimates by three cents. Seacoast Banking of Florida (SBCF) missed Q1 EPS estimates by a penny but reported better than expected revenue. Hancock Holding (HBHC) missed Q1 EPS estimates by eight cents. Citizens Republic Bancorp (CRBC) beat Q1 EPS estimates by fifteen cents. Federated Investors (FII) beat Q1 EPS estimates by three cents with better than expected revenue. Principal Financial Group (PFG) missed Q1 EPS estimates by three cents with in-line revenue. MetLife (MET) beat Q1 operating EPS estimates by nine cents with better than expected revenue. Dow Components - American Express (AXP) gained 2.1%, Bank of America (BAC) fell 0.4%, JP Morgan (JPM) lost 1.0%, and Travelers (TRV) declined by 1.2%.
The Financial Select Sector SPDR (XLF) was trading at $15.51 at 3:30 PM on Friday, flat on the day – up 19.31% year-to-date.

Information Technology

Silicon Motion Technology (SIMO) shares fell 8.7% after the close Thursday despite a beat of eight cents on Q1 EPS with higher than expected revenue. PerkinElmer (PKI) beat Q1 EPS estimates by two cents with better than expected revenue. Cray (CRAY) beat Q1 EPS estimates by a dime with better than expected revenue. Ariba (ARBA) beat Q2 EPS estimates by three cents with better than expected revenue. Applied Micro Circuits (AMCC) beat Q4 EPS estimates by a penny with in-line revenue. Applied Micro Circuits has been downgraded to Hold from Buy at Wunderlich after what should be a weaker period for their business. Amkor Technologies (AMKR) beat Q1 EPS estimates by two cents with better than expected revenue. VeriSign (VRSN) missed Q1 EPS estimates by a penny with a miss on the revenue line. KLA-Tencor (KLAC) beat Q3 EPS estimates by twelve cents with a beat on the revenue line. Crédit Agricole downgraded KLAC to Outperform from Buy. Skyworks (SWKS) beat Q2 EPS estimates by two cents with better than expected revenue. Western Digital (WDC) beat Q1 EPS estimates by 97 cents with better than expected revenue. Maxim Integrated Products (MXIM) beat Q3 EPS estimates by a nickel with in-line revenue. Informatica (INFA) beat Q1 EPS estimates by two cents with better than expected revenue. Dow Components - Cisco Systems (CSCO) was up 1.1% in morning trading, Hewlett-Packard (HPQ) slipped 0.7%, IBM (IBM) rallied 0.8%, Intel Corp (INTC) was up 0.6%, and Microsoft (MSFT) fell 0.3%.
The Technology Select Sector SPDR (XLK) was trading at $30.06 at 3:30 PM on Friday, up 0.07% on the day – up 18.11% year-to-date.

Telecommunication Services

Samsung (SSNLF.PK) has overtaken Nokia (NOK) as the world’s largest provider of cell phones, ending the Finnish company's 14-year reign. Samsung also regained the lead over Apple (AAPL) in the shipments of smart phones. TeleCommunication Systems (TSYS) missed Q1 EPS estimates by a penny with a miss on the revenue line. Sonus Networks (SONS) reported in-line Q1 EPS with a beat on the revenue line. PC-Tel (PCTI) reported in-line Q1 EPS with a beat on the revenue line. Brightpoint (CELL) missed Q1 EPS estimates by four cents, but beat on the revenue line. Clearwire (CLWR) missed Q1 EPS estimates by a nickel, but they beat on the revenue line. MetroPCS (PCS) has been downgraded to Market Perform from Outperform at Wells Fargo. Dow components - AT&T (T) was up 0.6% in morning trading with Verizon (VZ) up 0.2%.
The NASDAQ Telecommunications Index (IXTC) was trading at $211.34 at 3:30 PM on Friday, up 0.99% on the day – up 7.32% year-to-date.

Utilities

Calpine (CPN) reported Q1 EPS loss of 14 cents with revenue that was lower by 13.3%. Dominion Resources (D) was flat in morning trading, Edison International (EIX) slipped 0.2%, First Energy (FE) was flat, PG&E Corp (PCG) was flat, and Southern Company (SO) slipped 0.3%.
The Utilities Select Sector SPDR (XLU) was trading at $35.63 at 3:30 PM on Friday, up 0.39% on the day – down 0.97% year-to-date.

STOCKS: CVX, XOM, OIS, NR, SPN, MPC, TSO, VLO, AA, DD, WY, TPCG, EMN, CMP, AEM, BA, CAT, GE, MMM, UTX, GT, SCSC, CBLX, DIS, MCD, F, DECK, COLM, CHH, ELY, BYI, FBHS, CSTR, ZNGA, HD, KFT, KO, PG, WMT, AMZN, SBUX, AAN, EXPE, JNJ, MRK, PFE, LLY, MDRX, CVH, COV, AMGN, SNY, MCK, JAZZ, ITMN, GILD, CERN, AXP, BAC, JPM, TRV, GS, SIVB, SBVF, HBHC, CRBC, FII, PFG, MET, CSCO, HPQ, IBM, INTC, MSFT, SIMO, PKI, CRAY, ARBA, AMCC, AMKR, VRSN, KLAC, SWKS, WDC, MXIM, INFA, T, VZ, SSNLF.PK, NOK, AAPL, TSYS, PCTI, CELL, CLWR, PCS, D, EIX, FE, PCG, SO, CPN

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
MMM 3M Company 177.39 -0.05 -0.03 1,265,593
MCK McKesson Corporation 147.18 2.50 1.73 1,272,852
FII Federated Investors Inc. 27.69 0.06 0.22 729,833
DECK Deckers Outdoor Corporation 58.43 0.66 1.14 705,311
PG Procter & Gamble Company (The) 84.01 0.17 0.20 6,762,797
GE General Electric Co 31.36 -0.03 -0.10 24,323,767
CVX Chevron Corporation 116.38 0.22 0.19 4,952,967
SO Southern Company (The) 48.80 -0.20 -0.41 3,590,684
PCG Pacific Gas & Electric Co. 60.58 -0.03 -0.05 1,684,275
SCSC ScanSource Inc. 40.60 0.30 0.74 84,424
GT The Goodyear Tire & Rubber Company 30.74 0.15 0.49 1,597,756
CHH Choice Hotels International Inc. 54.40 0.00 0.00 310,427
JNJ Johnson & Johnson 114.60 -0.02 -0.02 4,935,188
WMT Wal-Mart Stores Inc. 67.13 -0.84 -1.24 10,012,519
AA Alcoa Inc. 33.01 -0.03 -0.09 3,026,712
INTC Intel Corporation 36.79 0.08 0.22 15,072,235
IBM International Business Machines Corp 167.34 -0.61 -0.36 2,875,433
VLO Valero Energy Corporation 66.39 -0.13 -0.20 3,366,737
D Dominion Resources Inc. 75.21 -0.07 -0.09 1,992,744
TRV The Travelers Companies Inc. 117.05 0.30 0.26 1,543,846
MDRX Allscripts Healthcare Solutions Inc. 11.73 0.07 0.60 1,386,482
SMP Standard Motor Products Inc. 51.42 0.28 0.55 56,113
AAPL Apple Inc. 119.04 -0.21 -0.18 26,111,948
MPC Marathon Petroleum Corporation 48.38 -0.87 -1.77 5,758,470
EXPE Expedia Inc. 118.81 0.80 0.68 2,414,069
TSO Tesoro Corporation 79.61 -1.07 -1.33 2,448,180
COLM Columbia Sportswear Company 56.30 1.43 2.61 241,772
EIX Edison International 72.10 -0.28 -0.39 979,440
JAZZ Jazz Pharmaceuticals plc 117.30 -0.25 -0.21 620,137
MET MetLife Inc. 54.31 0.40 0.74 5,213,456
GILD Gilead Sciences Inc. 73.07 -0.29 -0.40 8,269,090
JPM JP Morgan Chase 86.70 0.46 0.53 28,295,985
AXP American Express Company 76.62 -0.26 -0.34 3,454,338
OIS Oil States International Inc. 38.85 -0.25 -0.64 424,762
SPN Superior Energy Services Inc. 18.03 -0.22 -1.21 3,407,512
FBHS Fortune Brands Home & Security Inc. 54.27 0.03 0.06 995,426
UTX United Technologies Corporation 110.22 -0.60 -0.54 2,880,618
CERN Cerner Corporation 51.35 0.04 0.08 2,396,406
AEM Agnico Eagle Mines Limited 46.05 0.41 0.90 1,384,344
AMZN Amazon.com Inc. 817.14 3.50 0.43 3,791,945
CMP Compass Minerals Intl Inc 81.45 0.55 0.68 229,191
CSCO Cisco Systems Inc. 30.07 0.03 0.10 17,136,585
WY Weyerhaeuser Company 30.64 0.07 0.23 3,611,037
DIS Walt Disney Company (The) 108.06 0.53 0.49 6,488,966
GS The Goldman Sachs Group Inc. 244.30 0.46 0.19 4,186,076
AMKR Amkor Technology Inc. 10.46 -0.03 -0.29 1,238,665
VZ Verizon Communications Inc. 52.55 -0.13 -0.25 9,458,660
VRSN VeriSign Inc. 80.80 -0.20 -0.25 467,156
BAC Bank of America Corporation 23.01 0.09 0.39 161,930,864
NOK Nokia Corporation Sponsored American Depositary Sh 4.75 0.05 1.06 17,246,229
EMN Eastman Chemical Company 77.89 -0.43 -0.55 857,871
CPN Calpine Corporation 12.23 0.10 0.82 2,467,795
SIVB SVB Financial Group 176.59 2.08 1.19 307,467
ELY Callaway Golf Company 11.56 0.38 3.40 933,881
MCD McDonald\'s Corporation 121.50 -0.60 -0.49 2,877,498
LLY Eli Lilly and Company 77.40 0.25 0.32 5,602,614
SIMO Silicon Motion Technology Corporation 43.31 1.39 3.32 470,563
AAN Aaron\'s Inc. 32.05 -0.36 -1.11 546,914
PCTI PC-Tel Inc. 5.20 -0.06 -1.14 26,304
DD E.I. du Pont de Nemours and Co. 73.60 -0.51 -0.69 1,942,343
SBUX Starbucks Corporation 57.85 -0.18 -0.31 4,745,840
AMCC Applied Micro Circuits Corporation 8.40 0.10 1.20 796,161
AMGN Amgen Inc. 156.12 0.76 0.49 2,637,514
HBHC Hancock Holding Company 44.25 0.85 1.96 714,121
MXIM Maxim Integrated Products Inc. 41.47 1.00 2.47 3,088,140
HD Home Depot Inc. (The) 135.04 -0.03 -0.02 3,117,703
F Ford Motor Company 12.63 0.04 0.32 29,197,105
XOM Exxon Mobil Corporation 86.35 0.01 0.01 8,415,603
PFE Pfizer Inc. 32.52 -0.08 -0.25 20,291,186
CRAY Cray Inc 18.60 0.00 0.00 362,129
ZNGA Zynga Inc. 2.64 -0.03 -1.12 10,329,720
PFG Principal Financial Group Inc 59.03 0.16 0.27 709,746
HPQ HP Inc. 14.77 -0.02 -0.14 9,336,199
KLAC KLA-Tencor Corporation 81.44 1.34 1.67 1,148,201
BA Boeing Company (The) 158.83 0.54 0.34 2,435,391
SWKS Skyworks Solutions Inc. 78.33 1.58 2.06 1,963,387
MRK Merck & Company Inc. (new) 62.34 0.13 0.21 9,969,105
NR Newpark Resources Inc. 7.90 -0.05 -0.63 642,373
SNY Sanofi American Depositary Shares (Each repstg one 41.47 0.85 2.09 2,553,962
FE FirstEnergy Corporation 30.61 -0.07 -0.23 3,889,258
WDC Western Digital Corporation 71.00 0.25 0.35 2,078,365
KO Coca-Cola Company (The) 40.88 -0.07 -0.17 8,123,494
T AT&T Inc. 40.96 -0.05 -0.12 13,932,163
CAT Caterpillar Inc. 94.48 0.49 0.52 2,609,480
PKI PerkinElmer Inc. 53.90 0.94 1.77 778,571
MSFT Microsoft Corporation 62.70 0.09 0.14 19,422,310
TSYS TeleCommunication Systems Inc. n/a n/a n/a 0

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