Equities Sector Coverage: Stocks Fade in Late Trading to End Lower

Sector Recap |

Stocks Fade in Late Trading to End LowerThe S&P/Case-Shiller 20-city composite index of home prices showed a decline of 0.8% in January, a slightly bigger decline than expected. Home prices were down 3.8% year over year. The Conference Board’s reading of Consumer Confidence feel to 70.2 in March and was below expectations. Remember that 90 to 120 is the neutral zone for this data. The Dow Jones Industrial Average traded up to a day’s high at 13,264.98 again staying below its 52-week high at 12,289.08 set on March 16th. The Dow was trading below 13,220 going into the final half hour of trading. The NASDAQ’s traded up to a day’s high at 3134.17 setting another new 52-week high, but was below 3130 going into the final half hour of trading.

Asian stocks surged on Tuesday playing catch-up with gains in the US on Monday. The Nikkei 225 ended their session at 10,255 – up 2.36% on the day. The Hang Seng ended their session at 21,047 – up 1.83% on the day. European stocks opened higher, but closed lower on the day. The FTSE 100 ended their session at 5,870 – down 0.56% on the day. The DAX ended their session at 7,079 – flat on the day. The CAC 40 ended their session at 3,470 – down 0.92% on the day. The yield on the 10-Year US Treasury declined from 2.264 percent to 2.180 just below its 200-day simple moving average at 2.195.

Gold rallied from $1683.8 the Troy ounce to $1696.9 then fell to $1678.6 going into the final half hour of trading and back below its 200-day simple moving average at $1683.4. Crude oil rallied from $106.67 per barrel to $107.73 then fell to $106.52. The euro versus the dollar traded between 1.3323 and 1.3384 then declined to 1.3321.

Energy

Enbridge (ENB) and Enterprise Products Partners (EPD) are planning to build new pipelines that will transport up to 850K barrels of crude oil a day from Canada to refineries along the Gulf Coast by mid-2014. The pipelines will compete with TransCanada's (TRP) troubled Keystone project, if it ever gets approved. Delek US Holdings (DK) is increased to Overweight from Equal Weight by Barclays. Williams Companies (WMB) is raised to Buy from Neutral at UBS.
Energy Select Sector SPDR (XLE) was trading at $72.07 at 4:00 PM on Tuesday, down 1.00% on the day – up 4.25% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.
Big Movers: (DHT) -9.5%.
Heavily Traded: (TOT) -6.75%, (HAL) -2.1%, (SLB) -2.5%, (WFT) -4.1%.

Materials

Rio Tinto (RIO) is considering selling its diamond assets because the mines may no longer fit its strategy. The unit could be worth nearly $2.6B. Southern Copper (SCCO) is upgraded to Overweight from Equal Weight at Morgan Stanley, which similarly lifts Brazil’s Vale S.A. (VALE).
The Materials Select Sector SPDR (XLB) was trading at $37.31 at 4:00 PM on Tuesday, down 0.21% on the day – up 11.37% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.
Big Movers: (CAGC) +14.5%, (SHZ) +13.75%, (MCP) +9.25%.
Heavily Traded: (AA) -0.4%, (VALE) +1%, (FCX) +0.7%.

Industrials

The European Commission has opened an in-depth investigation into United Technologies' (UTX) $16.5B acquisition of Goodrich (GR) amid worries that the purchase could hurt competition for engine controls and AC power generators. Deutsche Lufthansa (DLAKY) is upgraded the air carrier to Overweight from Neutral at JP Morgan. Sterling Construction (STRL) is boosted to Outperform from Market Perform by BMO Capital.
The Industrial Select Sector SPDR (XLI) was trading at $37.59 at 4:00 PM on Tuesday, down 0.32% on the day – up 11.38% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Movers: (KDN) -26%, (HEAT) -12%
Heavily Traded: (GE) +0.4%, (GLW) -0.6%.



Consumer Discretionary

Michaels Stores, the largest arts-and-crafts retailer in North America, is reportedly intending to carry out an IPO. The listing would come six years after Michaels was taken private for over $6B by a consortium of P-E firms that included Blackstone Group (BX) and Bain. News Corp. (NWS) might have another hacking scandal on its hands: a BBC program alleges that set-top software firm NDS, which is 49%-owned by News Corp. and is due to be acquired by Cisco (CSCO), cracked the smart card codes of ONdigital, a one-time rival to News Corp.-affiliated BSkyB (BSYBY). Incoming Sony (SNE) CEO Kazuo Hirai is to maintain direct charge of the company's ailing TV division, indicating the priority he's placing on turning it around. Lennar (LEN) beat estimates by 3 cents and revenue by $25M. Apollo Group (APOL) beat estimates by 20 cents and revenue by $38M. Overall revenue dipped 7.5% Y/Y, primarily due to lower enrollment at the University of Phoenix, which was partially offset by selective tuition pricing and other fee changes. For the quarter, University of Phoenix degreed enrollment dropped 12.2% to 355,800. Regal Entertainment (RGC) is a new Neutral at Nomura, which begins a Buy on Cinemark (CNK). Steven Madden Ltd (SHOO) is a new Neutral with Wedbush, which starts Skechers USA (SKX) at an Underperform and covers Crocs Inc (CROX) with Outperform. American Eagle Outfitters (AEO) is lifted to Buy from Neutral at Lazard. Dangdang (DANG) gets upgraded to Outperform from Perform with a $9.50 objective at Oppenheimer. Rent-A-Center (RCII) is raised to Buy from Hold with a $48 target at Stifel Nicolaus. Apollo Group (APOL) is now Neutral from Outperform at Credit Suisse. Buffalo Wild Wings (BWLD) gets downgraded to Hold from Buy at Deutsche Bank.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.29 at 4:00 PM on Tuesday, down 0.15% on the day – up 16.07% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.
Big Movers: (DANG) +10.5%, (APOL) -9%, (SKX) -7%.

Consumer Staples

Walgreen (WAG) beat estimates by a penny with revenue in-line with estimates. McCormick & Company (MKC) beat estimates by 2 cents and revenue by $37M. Imperial Tobacco (ITYBY) gets upgraded to Buy from Hold at Société Générale. Schiff Nutrition (WNI) is now Outperform from In-Line at Imperial Capital.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.97 at 4:00 PM on Tuesday, down slightly on the day – up 4.56% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.
Big Movers: (HOGS) +26%.
Heavily Traded: (WAG) +1.2%, (RAD) +0.6%, (KFT) -0.4%, (MO) flat, (SWY) +0.4%.

Health Care

OncoGenex Pharmaceuticals (OGXI) is initiated with an Outperform and target of $19 at Leerink Swann. Greenway Medical (GWAY) gets picked up with a Neutral at Sterne Agee.
The Health Care Select Sector SPDR (XLV) was trading at $37.33 at 4:00 PM on Tuesday, up 0.19% on the day – up 7.61% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (BSPM) -18.25%, (NBIX) -12.5%, (XOMA) +16%.
Heavily Traded: (ARNA) +5.8%, (PFE) +1.6%, (HTS) -2.4%.

Financials

Michaels Stores, the largest arts-and-crafts retailer in North America, is reportedly intending to carry out an IPO. The listing would come six years after Michaels was taken private for over $6B by a consortium of P-E firms that included Blackstone Group (BX) and Bain. The British government is in negotiations to sell up to a third of its 82% stake in RBS (RBS) to Abu Dhabi, the BBC reports. Based on RBS's market cap of $49.8B, the deal could be worth around $13.5B. The taxpayer could end up making a profit of $5B-$10B once AIG (AIG) repays the estimated $45B it still owes the government for its bailout, CEO Bob Benmosche told Jim Cramer yesterday. First Republic Bank (FRC) is a fresh Outperform at BMO Capital. ProLogis (PLD) is picked up with an Underperform at Imperial Capital. Hatteras Financial (HTS) is moved to Buy from Neutral at Sterne Agee. Bank of America (BAC) is now Neutral from Outperform with a $10 target at Robert W. Baird. First Commonwealth Financial (FCF) is now Neutral from Buy at Sterne Agee. U.S. Bancorp (USB) is downgraded to Hold from Buy at ISI Group.
The Financial Select Sector SPDR (XLF) was trading at $15.83 at 4:00 PM on Tuesday, down 0.92% on the day – up 21.77% 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.

Information Technology

News Corp. (NWS) might have another hacking scandal on its hands: a BBC program alleges that set-top software firm NDS, which is 49%-owned by News Corp. and is due to be acquired by Cisco (CSCO), cracked the smart card codes of ONdigital, a one-time rival to News Corp.-affiliated BSkyB (BSYBY). Symantec (SYMC) is expected to complete the dissolution of its joint venture with Huawei Technologies in the next two weeks. Australia's consumer watchdog says Apple (AAPL) made misleading claims about 4G capability when promoting its new iPad in the country. Activision Blizzard (ATVI) is begun with a Buy recommendation and $16 price objective at Stifel Nicolaus. Electronic Arts (EA) is also resumed with a Buy rating and $21 target, also at Stifel. Micron (MU) is begun initiated with a Buy at Jefferies, which starts SanDisk (SNDK) at a Hold. Comverge (COMV) is cut to Hold from Buy at Needham. STMicroelectronics (STM) is moved to Hold from Buy at Société Générale.
The Technology Select Sector SPDR (XLK) was trading at $30.42 at 4:00 PM on Tuesday, down slightly on the day – up 19.53% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.
Big Movers: (FFN) +12.5%, (OCLR) -8.5%.

Telecommunication Services

Multiband (MBND) reported Q4 EPS of $0.06 (in-line), while beating revenue. Profit rose to a record $300M, up 13% Y/Y. The company also raises guidance for 2012, now expecting revenue of about $320M, ahead of the Street view of $295M.
The NASDAQ Telecommunications Index (IXTC) was trading at $220.49 at 4:00 PM on Tuesday, up slightly on the day – up 11.96% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.
Big Movers: (TSTRQ) +25.5%.
Heavily Traded: (S) -1.75%, (T) -0.4%, (FTR) -2.4%, (VZ) 1.25%.

Utilities

The EPA will propose, possibly today, the first ever standards for limiting CO2 emissions from new electricity plants, Reuters reports. The rules are likely to be politically divisive, and could hurt companies that generate most of their power from coal, such as Southern Co (SO) and American Electric Power (AEP). International Power (IPRPY) is downgraded it to Hold from Buy at Deutsche Bank.
The Utilities Select Sector SPDR (XLU) was trading at $35.005 at 4:00 PM on Tuesday, up 0.47% on the day – down 2.71% year-to-date (the weakest performing sector / the only negative sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
Heavily Traded: (DUK) +0.4%, (GEN) +0.2%, (PPL) +1.8%, (EXC) +0.3%.

STOCKS: ENB, EPD, TRP, DK, WMB, DHT, TOT, HAL, SLB, WFT, RIO, SCCO, VALE, CAGC, SHZ, MCP, AA, FCX, UTX, GR, DLAKY, STRL, KDN, HEAT, GE, GLW, BX, NWS, CSCO, BSYBY, SNE, LEN, APOL, RGC, CNK, SHOO, SKX, CROX, AEO, DANG, RCII, BWLD, WAG, MKC, ITYBY, WNI, HOGS, RAD, KFT, MO, SWY, OGXI, GWAY, BSPM, NBIX, XOMA, ARNA, PFE, HTS, RBS, AIG, FRC, PLD, HTS, BAC, FCF, USB, SYMC, AAPL, ATVI, EA, MU, SNDK, COMV, STM, FFN, OCLR, MBND, TSTRQ, S, T, FTR, VZ, SO, AEP, IPRPY, DUK, GEN, PPL, EXC

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
BX The Blackstone Group L.P. Representing Limited Par 29.58 0.27 0.92 3,715,882
STM STMicroelectronics N.V. 11.61 0.02 0.17 2,370,076
GLW Corning Incorporated 24.79 0.37 1.52 6,958,789
GEN Genesis Healthcare Inc. 4.24 0.05 1.19 107,383
FTR Frontier Communications Corporation 3.49 0.01 0.29 18,466,670
GE General Electric Co 30.53 -0.68 -2.18 83,277,281
RIO Rio Tinto Plc 42.93 -0.08 -0.19 2,422,714
SO Southern Company (The) 49.06 0.01 0.02 3,598,528
APOL Apollo Education Group Inc. 9.99 0.04 0.40 920,492
VALE VALE S.A. American Depositary Shares Each Represen 10.03 0.23 2.35 27,984,359
STRL Sterling Construction Company Inc 8.57 -0.14 -1.61 117,504
AA Alcoa Inc. 35.66 0.24 0.68 5,330,864
RGC Regal Entertainment Group Class A 22.32 0.37 1.69 1,174,434
SHOO Steven Madden Ltd. 35.40 0.20 0.57 326,501
EA Electronic Arts Inc. 80.12 -0.26 -0.32 2,642,945
RAD Rite Aid Corporation 7.46 -1.14 -13.26 99,167,361
NXC:CA NexC Partners Corp. Class A Shares 12.67 0.00 0.00 0
MO Altria Group Inc. 70.01 0.46 0.66 9,182,524
AAPL Apple Inc. 120.00 0.22 0.18 30,502,622
S Sprint Corporation 8.93 -0.04 -0.45 26,024,581
PPL PPL Corp 34.40 0.17 0.50 2,596,527
OCLR Oclaro Inc. 9.37 -0.11 -1.16 6,953,435
TOT Total S.A. 51.16 0.50 0.99 2,064,719
UTX United Technologies Corporation 110.79 0.06 0.05 3,134,293
HTS Hatteras Financial Corp n/a n/a n/a 0
ARNA Arena Pharmaceuticals Inc. 1.37 0.01 0.74 1,868,378
SNDK SanDisk Corp. n/a n/a n/a 0
BWLD Buffalo Wild Wings Inc. 151.10 4.95 3.39 462,672
SCCO Southern Copper Corp 36.01 0.16 0.45 913,616
SYMC Symantec Corporation 26.65 0.09 0.34 5,620,118
CSCO Cisco Systems Inc. 30.10 0.12 0.40 22,754,266
SKX Skechers U.S.A. Inc. 24.97 0.42 1.71 1,419,662
WMB Williams Companies Inc. (The) 28.21 -0.24 -0.84 11,521,660
VZ Verizon Communications Inc. 52.72 0.36 0.69 15,468,317
ENB Enbridge Inc 42.91 0.30 0.70 1,607,152
RCII Rent-A-Center Inc. 8.40 0.09 1.08 5,211,054
BAC Bank of America Corporation 22.64 0.11 0.49 102,560,544
DK Delek US Holdings Inc. 23.21 0.00 0.00 774,754
RBS Royal Bank of Scotland Group Plc New (The) ADS 5.48 0.04 0.74 961,469
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0
MKC McCormick & Company Incorporated 93.31 0.30 0.32 586,534
USB U.S. Bancorp 51.20 0.47 0.93 8,853,350
WFT Weatherford International plc (Ireland) 5.42 0.05 0.93 15,569,425
FCX Freeport-McMoRan Inc. 15.51 0.25 1.64 17,978,515
BSPM Biostar Pharmaceuticals Inc. 2.82 -0.09 -3.09 35,591
NBIX Neurocrine Biosciences Inc. 41.27 -0.35 -0.84 768,940
OGXI OncoGenex Pharmaceuticals Inc. 0.55 -0.02 -3.21 198,483
ATVI Activision Blizzard Inc 38.97 0.11 0.28 6,106,829
LEN Lennar Corporation Class A 43.85 0.12 0.27 2,351,001
PFE Pfizer Inc. 31.77 0.07 0.22 30,159,695
AIG American International Group Inc. New 66.54 0.25 0.38 9,070,940
FRC FIRST REPUBLIC BANK 92.56 0.45 0.49 1,207,273
TRP TransCanada Corporation 46.90 0.40 0.86 832,320
FCF First Commonwealth Financial Corporation 13.64 0.13 0.96 170,408
DHT DHT Holdings Inc. 4.40 0.12 2.80 2,772,747
CNK Cinemark Holdings Inc Inc. 40.26 0.49 1.23 440,208
EPD Enterprise Products Partners L.P. 27.85 0.18 0.65 3,413,454
PLD ProLogis Inc. 52.57 -0.19 -0.36 2,725,686
MU Micron Technology Inc. 21.96 0.25 1.15 19,977,469
EXC Exelon Corporation 35.80 0.06 0.17 5,318,136
SNE Sony Corporation 30.50 0.10 0.33 796,987
T AT&T Inc. 41.45 0.45 1.10 25,164,892
HAL Halliburton Company 56.45 1.11 2.01 14,788,627
AEO American Eagle Outfitters Inc. 14.96 0.08 0.54 2,474,202
DUK Duke Energy Corporation (Holding Company) 77.33 0.21 0.27 2,662,840
CROX Crocs Inc. 7.16 0.18 2.58 603,525
SLB Schlumberger N.V. 86.49 -0.71 -0.81 10,367,599
AEP American Electric Power Company 62.91 0.21 0.33 2,014,966
NWS News Corporation 12.35 -0.10 -0.80 644,177
XOMA XOMA Corporation 4.59 -0.16 -3.37 51,855

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