The 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
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