Equities Sector Coverage: Stocks End Week With Mixed Trading

Sector Recap |

Caterpillar CATNext week we focus on weak Consumer Confidence, stabilizing but depressed New Home Sales, weak Durable Goods Orders and Advanced GDP for the second quarter expected at a weak +1.8%. The U.S. Treasury market must absorb $35 billion in 2-Year notes on Tuesday, $35 billion 5-Year notes on Wednesday and $29 billion in 7-Year notes on Thursday. The Dow Jones Industrial Average traded lower on Friday to 12,644.19 primarily on weakness from Caterpillar (CAT) following an earnings miss. The Dow is trying to return to its May 2nd high at 12,876.00. The NASDAQ traded down to 2830.58 then rebounded to 2862.72 versus its May 2nd high at 2887.75.

Asian stocks surged on Friday with the Nikkei 225 up 1.2% to 10,132. The Hang Seng gained a robust 2.1% to 22,444. European stocks continued their Greek relieve rally. The FTSE 100 gained 0.5% to 5,927. The DAX tacked on 0.4% to 7,320. The CAC 40 added 0.7% to 3,843. The yield on the 10-Year US Treasury note declined from 3.015 percent to 2.955 on Friday consolidating Thursday’s yield rise. Gold rebounded from $1583.2 the Troy ounce to $1607.7 on Friday versus the all time high of $1610.7 set on Tuesday. Crude oil traded below $100 per barrel on Friday morning moving down from $99.83 per barrel to $98.43. Oil then rebounded in afternoon trading to $100.19. The euro versus the US dollar traded down from 1.4437 to 1.4328 on Friday. There were no economic data points on Friday.

Energy

Schlumberger (SLB) beat estimates by 2 cents on revenue of $9.62B. Complete Production Services, Inc. (CPX) beat estimates by 5 cents on revenue of $552M. Air Products and Chemicals (APD) beat estimates by a penny on revenue of $2.6B. Amyris (AMRS) is a new Outperform at brokers Robert W. Baird with a $36 target price. Robert W. Baird starts Solazyme (SZYM) with an Outperform and $34 target. Marathon Petroleum (MPC) is a new Buy at Citigroup. EV Energy (EVEP) is upgraded to Buy from Hold with Wunderlich with a $71 price target. Lazard lowers Sunpower (SPWRA) and ReneSola (SOL) to Neutral from Buy. In afternoon trading: Shares of Denison Mines (DNN) are up about 8.2%. Shares of ION Geophysical (IO) are up about 7.25%. Shares of Uranium Resources (URRE) are up about 6.7%. Shares of Complete Production Services (CPX) are up about 6.6%. Shares of LDK Solar (LDK) are up about 6.4%. Shares of Yingli Green Energy (YGE) are up about 5.9%. Shares of Sandridge Energy (SD) are up about 5.9%.

Energy Select Sector SPDR (XLE) was trading at $79.73 at 4:00 PM on Friday, up 0.50% on the day – up 16.82% year-to-date.

Materials

CRH Plc. (CRH) is now Buy from Neutral at Nomura. LaFarge (LFRGY) is now Neutral from Reduce at Nomura. In afternoon trading: Shares of Horsehead Holding (ZINC) are up about 6%. Shares of China Shen Zhou Mining (SHZ) are up about 5.8%. Shares of Walter Energy (WLT) are up about 4.9%. Shares of Olin Corp (OLN) are down about 5.9%. Over 3x average daily volume: Shares of Ecolab (ECL) are down about a quarter of a percent. Shares of Freeport-McMoran (FCX) are up about 0.8%. Over 2x average daily volume: Shares of Cemex (CX) are up about 3.9%. Shares of Nalco Holding (NLC) are up slightly.

The Materials Select Sector SPDR (XLB) traded at $39.95 at 4:00 PM on Friday, down 0.47% on the day – up 4.01% year-to-date.

Industrials

Rockwell Collins (COL) missed estimates by 2 cents on revenue of $1.19B, and sees FY'11 EPS at $4.00-4.10. Caterpillar (CAT) missed estimates by 6 cents on revenue of $14.23B. Honeywell (HON) beat estimates by 2 cents on revenue of $9.1B, and sees FY'11 EPS at $3.85-4.00. Xerox (XRX) beat estimates by 3 cents on revenue of $5.6B, and sees FY'11 EPS at $1.07-1.12.  Xerox's Q2 results: New signings $3.5B (+15% Q/Q), equipment sales -1%, and operating margin 10.4%. Dover (DOV) beat estimates by 5 cents on revenue of $2.2B and raised FY'11 guidance. The company now sees EPS of $4.50-4.60 vs. $4.44 consensus, and revenue of $8.4B-8.5B vs. $8.3B consensus. GE (GE) beat estimates by 2 cents on revenue of $35.6B. Chicago Bridge & Iron (CBI) beat estimates by 3 cents on revenue of $1.09B. Chicago Bridge & Iron’s Q2 results and guidance: New awards $1.2B +32% Y/Y, backlogs $7.3B +8% Y/Y, and sees FY11 new awards $6.8B-$7.2B, revenue $4.3B-$4.7B, and EPS $2.35-$2.45. RSC Holdings (RRR) beat estimates by 4 cents on revenue of $367.1M. Kansas City Southern (KSU) beat estimates by 2 cents on revenue of $535M. Diana Containerships (DCIX) is initiated as a Buy and $9 objective at Dahlman Rose. DigitalGlobe (DGI) is upgraded to Buy from Hold at The Benchmark Company. Diana Shipping (DSX) is cut to Underperform from Market Perform with Wells Fargo, which assigns identical ratings reductions on Eagle Bulk Shipping (EGLE) and Genco Shipping (GNK). In afternoon trading: Shares of RSC Holdings are up about 14%. Shares of SmartHeat (HEAT) are down about 16%.

The Industrial Select Sector SPDR (XLI) traded at $36.83 at 4:00 PM on Friday, down 1.05% on the day – up 5.62% year-to-date.

Consumer Discretionary

McDonald's (MCD) posts 2Q EPS of $1.35 (topping estimates) on Revenue of $6.91 Billion. Volvo Group AB (VOLVY) reported Q2 EPS of SEK 2.52 on revenue of SEK 78.96B. Rent-A-Center (RCII) is resumed as a Hold at KeyBanc Capital. Aaron’s (AAN) is picked up as a Buy and $34 price objective at KeyBanc Capital. Gaylord Entertainment (GET) gets picked up at a Neutral by Nomura. Adidas (ADDYY) is boosted to Buy from Hold at Deutsche Bank. Urban Outfitters (URBN) is upgraded to Buy from Sell at Wall Street Strategies with a new target of $36. Coach (COH) is cut to Neutral from Outperform at Cowen & Company. Ruby Tuesday (RT) is reduced to Underperform from Neutral at Bank of America-Merrill Lynch. In afternoon trading: Shares of China Education Alliance (CEU) are up about 37% on over 3x average daily volume.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $41.09 at 4:00 PM on Friday, up 0.39% on the day – up 9.84% year-to-date.

Consumer Staples

Reynolds American (RAI) missed estimates by 4 cents on revenue of $2.27B, and sees FY'11 EPS at $2.62-2.70. In afternoon trading: Shares of Zhongpin (HOGS) are up about 9.9%. Shares of American Oriental Bioengineering (AOB) are up about 9.2%. Shares of Yuhe International (YUII) are up about 8.3%. Shares of Reynolds American are down about 6.6%. Shares of SUPERVALU (SVU) are down about 6.2%. Most Active: Shares of Pepsico (PEP) are down about 0.8%. Shares of Altria Group (MO) are down about 1.1%.

The Consumer Staples Select Sector SPDR (XLP) traded at $31.74 at 4:00 PM on Friday, down 0.19% on the day – up 8.29% year-to-date.

Healthcare

LifePoint Hospitals (LPNT) is launched with a Hold at Auriga. Robert W. Baird has a Neutral and $10 target on Codexis (CDXS) - $10 target. Alexion Pharmaceuticals (ALXA) is taken to Hold from Buy at S&P Equity Research. In afternoon trading: Shares of athenahealth (ATHN) are up about 16.5% on over 3x average daily volume in reaction to a strong Q2 report. Shares of Healthways (HWAY) are down about 14% on over 3x average daily volume after being downgraded to Market Underperform by JMP Securities. Shares of CR Bard (BCR) are down about 11% on over 3x average daily volume in reaction to reporting a Q2 loss.

The Health Care Select Sector SPDR (XLV) traded at $35.59 at 4:00 PM on Friday, down 0.17% on the day – up 12.98% year-to-date.

Financials

A judge dismissed a lawsuit of over $1B against Goldman Sachs (GS) from Australia's Basis Yield for fraudulently selling it securities in a 2007 CDO. U.S. prosecutors have further upped the ante against Credit Suisse (CS) by charging four senior executives for helping American citizens avoid paying taxes, adding to existing charges against four other bankers. SunTrust Banks (STI) beat estimates by 2 cents on revenue of $2.2B. People's Bank (PBCT) beat estimates by 2 cents. Chubb (CB) beat estimates by 41 cents on revenue of $3.0B. Marsh & McLennan (MMC) is a new Neutral at Goldman Sachs, which begins ACE Limited (ACE) at Buy, and adds Aon Corp. (AON) to its Conviction Buy List. Blackstone (BX) is added to the Top Picks Live List at Citigroup. Royal Bank of Scotland (RBS) is raised to Neutral from Sell at WestLB. Chubb (CB) gets downgraded to Neutral from Buy at Goldman. In afternoon trading: Shares of StanCorp Financial Group (SFG) are down about 13.8% on over 3x average daily volume.

The Financial Select Sector SPDR (XLF) traded at $15.32 at 4:00 PM on Friday, down 0.26% on the day – down 3.95% year-to-date.

Information Technology

Microsoft's (MSFT) Q4 results top forecasts, as net profit increased 35% to $0.69 a share and revenue rose 8% to $17.37B, with a surprisingly low 7% tax rate also helping to offset another expected but disappointing slowdown at the Windows division. With investors wondering what it is going to do with a cash pile of $76.2B, Apple (AAPL) is reportedly considering bids for Hulu and InterDigital (IDCC). Others interested in Hulu include Google (GOOG), Yahoo (YHOO) and AT&T (T). A judge has warned Google (GOOG) it could suffer drastic penalties if it is proved the company willfully infringed Oracle's (ORCL) patents in a dispute over Android. More happily for Google, Google+ has already attracted 20M unique visitors, including 5M in the U.S., after only three weeks and despite being invitation-only. FLIR Systems (FLIR) missed estimates by 18 cents on revenue of $390M. Cymer (CYMI) beat estimates by 18 cents on revenue of $158.2M, and guides Q3 sales lower. NCR (NCR) beat estimates by 4 cents on revenue of $1.31B. Flextronics International (FLEX) missed estimates by a penny on revenue of $7.54B. Skyworks (SWKS) beat estimates by 3 cents on revenue of $356.1M, and guides for FQ4 revenue of $400M and non-GAAP EPS of $0.53, ahead of $369.2M and $0.50 consensus. Western Digital (WDC) reported FQ4 EPS of $0.81 (versus. consensus of $0.66) on revenue of $2.4B. Advanced Micro Devices (AMD) beat estimates by a penny on revenue of $1.57B. Informatica (INFA) beat estimates by 2 cents on revenue of $192.7M. Compuware (CPWR) beat estimates by a penny on revenue of $230M. Advanced Micro Devices (AMD) is increased by both Wells Fargo (Market Perform from Underperform) and Canaccord Genuity (Buy from Hold). LM Ericsson (ERIC) is lifted to Neutral from Sell at WestLB. Autodesk (ADSK) is upgraded to Buy from Hold at Jefferies with a new target of $44. Kulicke & Soffa (KLIC) is hoisted to Buy from Hold at Jefferies. Microsoft (MSFT) is moved to Market Perform from Outperform by brokerage William Blair. Travelzoo (TZOO) is taken to Hold from Buy at The Benchmark Company. Texas Instruments (TXN) is cut to Underperform from Market Perform By BNP Paribas. STMicroelectronics (STM) is now Neutral from Outperform at BNP Paribas. Lazard lowers Sunpower (SPWRA) and ReneSola (SOL) to Neutral from Buy. In afternoon trading: Shares of Avid Technology (AVID) are down about 24.5% after reporting non-GAAP EPS of -$0.10 versus consensus of +$0.09. Shares of Advanced Micro Devices are up about 19%. Shares of Skyworks Solutions are up about 17.5%.

The Technology Select Sector SPDR (XLK) traded at $26.72 at 4:00 PM on Friday, up 0.87% on the day – up 6.07% year-to-date.

Telecommunications Services

Vodafone's (VOD) Q1 group revenue rose 3.5% to £11.66B ($19.04B), but growth slowed as tough conditions in southern Europe, and Spain in particular, offset faster expansion in markets such as India and Turkey. Verizon (VZ) beat estimates by 2 cents on revenue of $27.5B. Verizon's Q2 results: Wireless service revenue +6.6% Y/Y, wire-line service revenue +17.8% Y/Y, and retail postpaid churn lowest in three years. In afternoon trading: Actives: Shares of Verizon (VZ) are down about 2.7%, while shares of Sprint Nextel (S) are down about a half of a percent and shares of AT&T (T) are relatively unchanged.

The NASDAQ Telecommunications Index (IXTC) traded at $212.71 at 4:00 PM on Friday, up 1.19% on the day – down 5.62% year-to-date.

Utilities

In afternoon trading: Shares of Tokyo Electric Power (TKECF) are down about 7.4%. Actives: Shares of Genon Energy (GEN) are down about a half of a percent. Shares of Duke Energy (DUK) are down about 0.9%. Shares of Exelon (EXC) are down about 0.4%. Shares of Southern (SO) are down about 0.4%. Shares of Edison International (EIX) are up slightly. Shares of PPL Corp (PPL) are relatively unchanged.

The Utilities Select Sector SPDR (XLU) traded at $33.82 at 4:00 PM on Friday, down 0.62% on the day – up 7.91% year-to-date.

STOCKS: SLB, CPX, APD, AMRS, SZYM, MPC, EVEP, SPWRA, SOL, DNN, IO, URRE, CPX, LDK, YGE, SD, CRH, LFRGY, ZINC, SHZ, WLT, OLN, ECL, FCX, CX, NLC, COL, CAT, HON, XRX, DOV, GE, CBI, RRR, KSU, DCIX, DGI, DSX, EGLE, GNK, HEAT, MCD, VOLVY, RCII, AAN, GET, ADDYY, URBN, COH, RT, CEU, RAI, HOGS, AOB, YUII, SVU, PEP, MO, LPNT, CDXS, ALXA, ATHN, HWAY, BCR, GS, CS, STI, PBCT, CB, MMC, ACE, AON, BX, RBS, SFG, MSFT, AAPL, IDCC, GOOG, YHOO, T, ORCL, FLIR, CYMI, NCR, FLEX, SWKS, WDC, AMD, INFA, CPWR, ERIC, ADSK, KLIC, TZOO, TXN, STM, AVID, VOD, VZ, S, T, TKECF, GEN, DUK, EXC, SO, EIX, PPL

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
AAN Aaron\'s Inc. 25.42 0.73 2.96 743,682
AAPL Apple Inc. 113.05 0.87 0.78 36,379,106
ACE ACE Ltd. n/a n/a n/a 0
ADSK Autodesk Inc. 72.33 0.74 1.03 1,513,358
ALXA Alexza Pharmaceuticals Inc n/a n/a n/a 0
AMD Advanced Micro Devices Inc. 6.91 0.24 3.60 47,453,145
AMRS Amyris Inc. 0.58 0.08 14.99 9,250,024
AON Aon plc Class A (UK) 112.49 1.57 1.42 937,233
APD Air Products and Chemicals Inc. 150.34 -0.17 -0.11 2,169,307
ATHN athenahealth Inc. 126.12 2.05 1.65 341,932
AVID Avid Technology Inc. 7.94 0.34 4.47 482,139
BCR C.R. Bard Inc. 224.28 0.54 0.24 610,488
BLPH Bellerophon Therapeutics Inc. 1.40 -0.05 -3.45 68,306
BX The Blackstone Group L.P. Representing Limited Par 25.53 0.47 1.88 5,698,539
CAT Caterpillar Inc. 88.77 1.30 1.49 6,379,056
CB D/B/A Chubb Limited New 125.65 1.26 1.01 1,646,157
CBI Chicago Bridge & Iron Company N.V. 28.03 0.30 1.08 1,702,588
CDXS Codexis Inc. 4.44 0.17 3.98 104,244
COH Coach Inc. 36.56 0.35 0.97 4,743,277
COL Rockwell Collins Inc. 84.34 0.11 0.13 590,475
CRH CRH PLC American Depositary Shares 33.27 0.24 0.73 1,457,772
CX Cemex S.A.B. de C.V. Sponsored ADR 7.94 -0.25 -3.05 14,598,842
DCIX Diana Containerships Inc. 3.29 -0.13 -3.78 5,188
DGI DigitalGlobe Inc 27.50 0.24 0.88 281,543
DNN Denison Mines Corp (Canada) 0.47 0.01 1.86 98,223
DOV Dover Corporation 73.64 1.77 2.46 1,565,238
DSX Diana Shipping inc. 2.62 0.01 0.38 161,459
DUK Duke Energy Corporation (Holding Company) 80.04 -0.27 -0.34 3,883,040
ECL Ecolab Inc. 121.72 0.99 0.82 956,759
EGLE Eagle Bulk Shipping Inc. 7.07 -0.29 -3.94 84,438
EIX Edison International 72.25 -0.43 -0.59 1,734,361
ERIC Ericsson 7.21 0.11 1.55 4,098,596
EVEP EV Energy Partners L.P. 2.40 0.01 0.42 343,709
EXC Exelon Corporation 33.29 0.00 0.00 5,529,887
FCX Freeport-McMoRan Inc. 10.86 0.17 1.59 26,469,580
FLEX Flextronics International Ltd. 13.62 0.24 1.79 2,799,893
FLIR FLIR Systems Inc. 31.42 0.11 0.35 694,019
GE General Electric Co 29.62 0.09 0.30 36,120,040
GEN Genesis Healthcare Inc. 2.67 0.05 1.91 172,362
GNK Genco Shipping & Trading Limited New (Marshall Isl 4.58 0.08 1.78 84,887
GOOG Alphabet Inc. 777.29 2.28 0.29 1,585,333
GS The Goldman Sachs Group Inc. 161.27 2.32 1.46 4,497,189
HON Honeywell International Inc. 116.59 0.40 0.34 3,837,728
HWAY Healthways Inc. 26.46 0.02 0.08 930,583
IDCC InterDigital Inc. 79.20 0.44 0.56 406,209
IO Ion Geophysical Corporation 6.85 0.34 5.22 85,237
KLIC Kulicke and Soffa Industries Inc. 12.93 0.13 1.02 296,982
KSU Kansas City Southern 93.32 0.66 0.71 1,128,594
LPNT LifePoint Health Inc. 59.23 1.03 1.77 342,844
MCD McDonald\'s Corporation 115.36 0.57 0.50 4,188,694
MMC Marsh & McLennan Companies Inc. 67.25 0.85 1.28 2,597,202
MO Altria Group Inc. 63.23 0.41 0.65 6,599,878
MPC Marathon Petroleum Corporation 40.59 0.85 2.14 7,756,305
MSFT Microsoft Corporation 57.60 0.20 0.35 29,910,788
NCR NCR Corporation 32.19 0.54 1.71 696,245
OLN Olin Corporation 20.52 0.50 2.50 2,656,317
ORCL Oracle Corporation 39.28 0.16 0.41 12,861,882
PBCT People\'s United Financial Inc. 15.82 0.20 1.28 3,707,505
PEP Pepsico Inc. 108.77 1.01 0.94 7,173,287
PPL PPL Corp 34.57 -0.25 -0.72 4,998,489
RAI Reynolds American Inc 47.15 0.02 0.04 4,706,760
RBS Royal Bank of Scotland Group Plc New (The) ADS 4.66 0.16 3.56 2,555,005
RCII Rent-A-Center Inc. 12.64 0.29 2.35 684,092
RT Ruby Tuesday Inc. 2.50 -0.05 -1.96 735,558
S Sprint Corporation 6.63 -0.03 -0.45 14,655,332
SD SandRidge Energy n/a n/a n/a 0
SFG StanCorp Financial Group Inc n/a n/a n/a 0
SLB Schlumberger N.V. 78.64 1.27 1.64 6,485,671
SO Southern Company (The) 51.30 -0.75 -1.44 7,048,679
SOL Renesola Ltd. of Beneficial Interest 1.01 -0.02 -1.94 348,643
STI SunTrust Banks Inc. 43.80 0.65 1.51 3,614,508
STM STMicroelectronics N.V. 8.15 0.25 3.16 2,341,459
SVU SuperValu Inc. 4.99 0.16 3.31 4,100,154
SWKS Skyworks Solutions Inc. 76.14 2.88 3.93 4,110,161
SZYM Solazyme Inc. n/a n/a n/a n/a
T AT&T Inc. 40.61 -0.12 -0.29 19,381,624
TXN Texas Instruments Incorporated 70.18 0.34 0.49 5,071,022
TZOO Travelzoo Inc. 12.83 0.09 0.71 26,015
URBN Urban Outfitters Inc. 34.52 0.09 0.26 2,784,576
URRE Uranium Resources Inc. 1.28 -0.03 -2.29 593,397
VOD Vodafone Group Plc 29.15 0.03 0.10 4,732,148
VZ Verizon Communications Inc. 51.98 -0.14 -0.27 13,077,552
WDC Western Digital Corporation 58.47 0.20 0.34 4,396,809
XRX Xerox Corporation 10.13 -0.05 -0.49 7,677,388
YGE Yingli Green Energy Holding Company Limited ADR 3.87 0.03 0.78 40,165
YHOO Yahoo! Inc. 43.10 0.53 1.25 10,374,757
ZINC Horsehead Hldg Corp n/a n/a n/a 0

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