Equities Sector Coverage: Stocks Fail to Recoup Losses to End Streak of Gains

Sector Recap  |

Despite low mortgage rates, mortgage applications for re-financings and home purchases declined 4.5% last week. Existing Home Sales rose 4.3% in January to an annual rate of 4.57 million units. The inventory is down to 2.31 million, the lowest since March 2005. The price of a home continues to decline to $154,700 in January from $162,200 in December.

The Dow Jones Industrial Average traded around the flat line Wednesday morning between 12,939.81 and 12,977.91 then declined to 12,914.83 in afternoon trading. The NASDAQ opened lower then traded between 2937.74 and 2950.37 Wednesday morning then declined to 2929.68 in afternoon trading. The S&P 500, Dow Transports and Russell 2000 continue to lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.

Asian stocks rebounded on Wednesday with the Nikkei 225 ending their session 9,554 – up 0.96% on the day. The Hang Seng ended their session at 21,549 – up 0.33% on the day. European stocks slipped lower on Wednesday on skepticism about the Greek bailout. The FTSE 100 ended their session at 5,917 – down 0.20% on the day, the DAX ended their session at 6,844 down 0.93% on the day, and the CAC 40 ended their session at 3,447 – down 0.52% on the day. The yield on the 10-Year US Treasury traded down from 2.080 percent to 1.997.

Gold continued to rally on Wednesday with strength reaching $1783.4 the Troy ounce. Crude oil traded up to $106.72 per barrel. The euro versus the dollar traded between 1.3214 and 1.3264.

Energy

Shell (RDS.A) offered to buy African explorer Cove Energy (CNVGF) for £994.4M ($1.6B) – (195 pence/share – a 26% premium) to expand its footprint in Mozambique and Kenya. Newfield Exploration (NFX) reported Q4 EPS of $0.95 and revenues of $677M (both well below analyst estimates). Range Resources (RRC) beat estimates by 2 cents and revenue by $34M. Chesapeake Energy (CHK) missed estimates by a penny and revenue by $275M. Nabors Industries (NBR): Q4 adjusted EPS from continued operations of $0.52 beats by $0.02. Revenue of $1.72B (+31% Y/Y) beats by $20M. Apache (APA), Anadarko Petroleum (APC), and Noble Energy (NBL) are all new Buys at Guggenheim. Newfield Exploration (NFX) is now Neutral from Buy at Citigroup and Hold from Buy at Deutsche Bank. Statoil ASA (STO) gets downgraded to Neutral from Overweight at HSBC Securities.

Energy Select Sector SPDR (XLE) was trading at $75.55 at 4:00 PM on Wednesday, up 0.23% on the day – up 9.29% year-to-date. The January change was +2.26%. The 2011 change was -1.29%

Big Movers: (NFX) -12.5%, (FST) -9.5%, (NBR) +9%, (CSIQ) +7.5%.

Materials

Ternium ADS (TX) missed estimates by 12 cents with revenue in-line with estimates. Mosaic (MOS) is moved to Buy from Hold at Canaccord Genuity. Dow Chemical (DOW) gets slashed to Sell from Hold at Gilford Securities. Akzo Nobel N.V. (AKZOY) is lowered to Hold from Buy at ING Groep. Kronos Worldwide (KRO) is cut to Hold from Buy at Deutsche Bank. Rockwood Holdings (ROC) is moved to Neutral from Overweight at JP Morgan.
The Materials Select Sector SPDR (XLB) was trading at $37.53 at 4:00 PM on Wednesday, down 0.16% on the day – up 12.03% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Heavily Active Stocks: (CX) -2.4%, (AA) +0.6%.

Industrials

Genco Shipping & Trading (GNK) beat estimates by 6 cents and revenue by $6M. Multi-Color Corp (LABL) is assigned a new Neutral at Robert W. Baird, which sets a $26 target price. Air Lease Corp (AL) is resumed with a Buy recommendation and $30 target at Dahlman Rose. URS Corp (URS) is upgraded to Outperform from Neutral at Robert W. Baird, which takes its target up to $55.
The Industrial Select Sector SPDR (XLI) was trading at $37.37 at 4:00 PM on Wednesday, down 0.11% on the day – up 10.73% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Heavily Traded Stocks: (GE) -0.4%, (GLW) -1.2%, (CSX) +0.8%, (XRS) +0.7%.

Consumer Discretionary

PSA Peugeot Citroen (PEUGY) is in advanced alliance talks with GM (GM), according to French online newspaper LaTribune.fr, with sources saying the two could join forces on development and production in Europe. Comcast (CMCSA) announced Streampix, a subscription-based VOD service aimed at Netflix (NFLX). Ford (F) is going to pump $3.8B into its global pension plan this year and invest the plan's assets more heavily in bonds as the automaker tries to minimize its pension risks in a shaky market. TJX Companies (TJX) reported Q4 EPS of $0.62 (in-line) on revenue of $6.71B (in-line). Lamar Advertising (LAMR) beat estimates by 6 cents and revenue by $4M. Dollar Tree Stores (DLTR) beat estimates by 2 cents with revenue in-line with estimates. Garmin (GRMN) beat estimates by 31 cents and revenue by $140M. Garmin's Q4: Posted revenue gains across all segments (automobile/mobile +4% Y/Y, outdoor +35%, and fitness +17%). Gross margin rose to 48%, from 45% a year ago. The company sets 2012 guidance for revenue of $2.7B-$2.8B and EPS to fall in a range of $2.45-$2.60. Zale (ZLC) beat estimates by a penny and revenue by $7M. Chico's FAS (CHS) beat estimates by 4 cents and revenue by $22.5M. Toll Brothers (TOL) missed estimates by 4 cents and revenue by $38.8M. The Cheesecake Factory (CAKE) beat estimates by a penny and revenue by $6M. The company guides on its Q4 earnings call (webcast) for revenue of $435M-$440M and EPS of $0.34-$0.36 (below a consensus of $443.8M and $0.40). Papa John's International (PZZA) beat estimates by 4 cents, while missing revenue by $5M. La-Z-Boy (LZB) beat estimates by a penny and revenue by $9M. Jefferies initiates Buys on TAL Education (XRS), New Oriental Education & Technology (EDU), and Ambow Education (AMBO). Tesla Motors (TLSA) is a new Buy at ThinkEquity Partners. Urban Outfitters (URBN) is raised to Outperform from Market Perform by BMO Capital. Hibbett Sportings (HIBB) is now Hold from Buy at Needham due to valuation.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.70 at 4:00 PM on Wednesday, down 0.26% on the day – up 9.43% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Big Movers: (CETV) -19.5%, (LL) -9.5%, (PZZA) -8.75%, (CHS) +17%, (GRMN) +8%.

Consumer Staples

Anheuser-Busch (BUD), on the lookout for assets in faster-growing markers, is eying up Czech brewer StarBev in a deal that could be valued as high as $3B. Others with interest: SABMiller (SBMRY), Heineken (HINKY), and Molson Coors (TAP). Winn-Dixie Stores (WINN) missed estimates by 11 cents with revenue in-line with estimates. Wal-Mart (WMT) gets downgraded to Market Perform from Strong Buy at Raymond James this morning. Philip Morris International (PM) is now Reduce from Neutral at Nomura. Tesco PLC (TSCDY) is moved to Underperform from Neutral by Bank of America-Merrill Lynch.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.78 at 4:00 PM on Wednesday, down 0.27% on the day – up 0.89% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Heavily Traded Stocks: (WMT) -2.3%, (KFT) -1.5%, (MO) +0.2%, (TJX) -0.2%, (WAG) +0.9%.

Health Care

Johnson & Johnson (JNJ) CEO Bill Weldon announced his retirement, following an embarrassing stretch of product recalls and speculation in winter 2010 that he would step down within the year. Medicines Company (MDCO) beat estimates by 28 cents and revenue by $7M. Biomarin Pharmaceuticals (BMRN) is begun with a Buy rating and $45 price objective at Citigroup, which also adds it to their Top Pick Live list. Dendreon (DNDN) is a new Neutral at Citigroup. Rigel Pharmaceuticals (RIGL) is raised to Buy from Neutral at Citigroup. Medtronic (MDT) is moved to Hold from Buy at Deutsche Bank and to Neutral from Outperform at Credit Suisse. Human Genome Sciences (HGSI) is reduced to Sector Perform from Outperform at RBC Capital. Gilead Sciences (GILD) is taken to Market Perform from Outperform by Sanford Bernstein. WebMD Health (WBMD) is slashed to Sell from Neutral at Goldman.
The Health Care Select Sector SPDR (XLV) was trading at $35.98 at 4:00 PM on Wednesday, unchanged on the day – up 3.72% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Big Movers: (CYH) +14.5%, (GNOM) +7%, (MOH) -7%, (HGSI) -6.5%.

Financials

With no end in sight to Fannie Mae (FNMA.OB) and Freddie Mac's (FMCC.OB) drain on taxpayers, the two mortgage giants need to rein in their rising legal costs. At present, Fannie and Freddie are spending tens of millions of dollars defending former execs facing private lawsuits and government investigations. Citigroup (C) is facing a potential multibillion-dollar write-down as it begins unwinding its minority investment in the Morgan Stanley Smith Barney brokerage. Accounting complications and a reduced valuation could leave Citi facing an after-tax hit of up to $1.8B, more than it earned in Q4. Wells Fargo (WFC) agreed to buy an energy loan portfolio with a face value of $11B from BNP Paribas (BNPQY). Eaton Vance (EV) beat estimates by 4 cents with revenue in-line with estimates. Interactive Brokers (IBKR) is a fresh Outperform with Wells Fargo. Apollo Global Management (APO) and Blackstone Group (BX) both get Buy-from-Neutral boosts at Goldman Sachs. DDR Corp (DDR) is lifted to Buy from Neutral at Bank of America-Merrill Lynch. Barclays PLC (BCS) is moved to Underperform from Neutral at Macquarie. BlackRock (BLK) is move to Neutral from Buy at Goldman.
The Financial Select Sector SPDR (XLF) was trading at $14.585 at 4:00 PM on Wednesday, down 1.29% on the day – up 12.19% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Heavily Traded Stocks: (BAC) -1.2%, (C) -2.7%, (TWO) -3.1%.

Information Technology

Dell (DELL) reported Q4 EPS yesterday afternoon of $0.51 (missing by a penny) and revenue of $16.03B (beating by $70M). The company expects FY13 EPS to exceed $2.13 (consensus is for $2.04) but it expects FQ1 revenue to fall 7% Q/Q (implied level of $14.9B, below $15.2B consensus). Alibaba (ALBCF) bid as much as HK$19.6B ($2.5B) to take Alibaba.com private, offering minority shareholders HK$13.50/share for the 27% of shares it doesn't already own. Anadigics (ANAD) missed estimates by 2 cents and revenue by $1M. Intuit (INTU) beat estimates by 6 cents with revenue in-line with estimates. The company sets FY12 revenue guidance of $4.185B-$4.285B and raises its FY12 EPS guidance to between $2.90 - $2.97 per share. Sonus Networks (SONS) beat estimates by a penny and revenue by $2M. Brocade Communications Systems (BRCD) beat estimates by 7 cents and revenue by $18M. Maxim Integrated (MXIM) is launched with a Buy at Capstone Investments. Dell Inc (DELL) is cut by both Citigroup (Neutral from Buy) and Needham (Hold from Buy). Yahoo (YHOO) is cut to Underperform from Buy at Crédit Agricole. WebMD Health (WBMD) is slashed to Sell from Neutral at Goldman.
The Technology Select Sector SPDR (XLK) was trading at $28.54 at 4:00 PM on Wednesday, down 0.35% on the day – up 12.14% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Big Movers: (FIRE) +25.25%, (MOTR) +9.5%, (ENER) -12%, (CELL) -11%, (TRAK) -9.5%.

Telecommunication Services

Cogent Communications Group (CCOI) beat estimates by 9 cents with revenue in-line with estimates.
The NASDAQ Telecommunications Index (IXTC) was trading at $216.86 at 4:00 PM on Wednesday, down 0.81% on the day – up 10.12% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Heavily Traded: (S) -2%, (FTR) -1.1%, (T) +0.1%, (CLWR) -3%, (WIN) -3.1%, (VOD) -1.5%, (VZ) -0.7%.

Utilities

El Paso Electric (EE) missed estimates by 6 cents and revenue by $56M. PG&E Corp (PCG) is moved to Neutral from Buy at Goldman.

The Utilities Select Sector SPDR (XLU) was trading at $34.96 at 4:00 PM on Wednesday, up 0.11% on the day – down 2.83% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: (GEN) +3.4%, (DUK) +0.3%, (EXC) +0.9%, (PPL) +1.3%, (NI) -0.6%.

STOCKS: RDS.A, CNVGF, NFX, RRC, CHK, NBR, APA, APC, NBL, NFX, STO, TX, MOS, DOW, AKZOY, KRO, ROC, GNK, LABL, AL, URS, GE, GLW, CSX, XRS, PEUGY, GM, CMCSA, NFLX, F, TJX, LAMR, DLTR, ZLC, CHS, TOL, CAKE, PZZA, LZB, EDU, AMBO, TLSA, URBN, HIBB, CETV, LL, BUD, SBMRY, HINKY, TAP, WINN, WMT, PM, TSCDY, KFT, MO, TJX, WAG, JNJ, MDCO, BMRN, DNDN, RIGL, MDT, HGSI, GILD, WBMD, CYH, GNOM, MOH, HGSI, FNMA.OB, FMCC.OB, C, WFC, BNPQY, EV, IBKR, APO, BX, DDR, BCS, BLK, BAC, C, TWO, DELL, ALBCF, ANAD, INTU, SONS, BRCD, MXIM, YHOO, FIRE, MOTR, ENER, CELL, TRAK, CCOI, S, FTR, T, CLWR, WIN, VOD, VZ, EE, PCG, GEN, DUK, EXC, PPL, NI

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 Partnership Interests 38.62 2.69 7.49 28,121,357 Trade
GLW Corning Incorporated 34.85 -0.06 -0.17 2,967,964 Trade
XRS TAL Education Group American Depositary Shares eac n/a n/a n/a 0
EV Eaton Vance Corporation 41.68 0.06 0.14 749,497 Trade
GEN Genesis Healthcare Inc. 1.32 0.05 3.94 113,325 Trade
NBR Nabors Industries Ltd. 3.80 -0.18 -4.52 10,423,125 Trade
FTR Frontier Communications Corporation 2.56 -0.03 -1.16 2,140,012 Trade
GE General Electric Company 9.35 0.23 2.52 51,509,079 Trade
NI NiSource Inc 27.56 -0.03 -0.11 1,878,833 Trade
MOS Mosaic Company (The) 27.07 0.17 0.63 3,989,172 Trade
PCG Pacific Gas & Electric Co. 21.00 -0.85 -3.89 5,209,478 Trade
JNJ Johnson & Johnson 137.52 -1.00 -0.72 10,485,289 Trade
CSX CSX Corporation 78.97 0.03 0.04 6,296,112 Trade
RIGL Rigel Pharmaceuticals Inc. 2.37 0.05 2.16 2,057,631 Trade
HGSH China HGS Real Estate Inc. 1.06 -0.04 -3.27 6,646 Trade
CHS Chico's FAS Inc. 3.69 -0.10 -2.64 2,062,144 Trade
MO Altria Group Inc. 54.37 -1.81 -3.22 18,001,189 Trade
BCS Barclays PLC 8.75 -0.11 -1.24 2,159,620 Trade
C Citigroup Inc. 69.67 -0.68 -0.97 13,513,780 Trade
AL Air Lease Corporation Class A 37.80 -0.20 -0.53 709,428 Trade
S Sprint Corporation 5.77 0.13 2.31 12,245,036 Trade
PPL PPL Corporation 30.97 -0.12 -0.39 4,119,473 Trade
DDR SITC DDR Corp. n/a n/a n/a 0
GILD Gilead Sciences Inc. 62.95 -0.30 -0.47 11,552,923 Trade
EDU New Oriental Education & Technology Group Inc. Sponsored ADR representing 1 (Cayman Islands) 89.99 0.26 0.29 1,273,445 Trade
CCOI Cogent Communications Holdings Inc. 56.44 -0.18 -0.32 186,869 Trade
VOD Vodafone Group Plc 18.52 -0.20 -1.04 2,492,351 Trade
TOL Toll Brothers Inc. 39.22 0.50 1.29 1,454,303 Trade
MDCO The Medicines Company 28.02 0.49 1.78 738,708 Trade
TJX TJX Companies Inc. (The) 55.12 0.06 0.11 3,577,233 Trade
VZ Verizon Communications Inc. 58.04 0.26 0.45 13,189,013 Trade
LAMR Lamar Advertising Company 80.28 -0.07 -0.09 226,012 Trade
GM General Motors Company 40.30 0.31 0.78 10,678,039 Trade
DLTR Dollar Tree Inc. 108.67 0.67 0.62 1,625,531 Trade
MDT Medtronic plc. 84.22 -0.51 -0.60 6,798,040 Trade
BAC Bank of America Corporation 30.03 0.00 0.00 61,796,624 Trade
GNK Genco Shipping & Trading Limited New (Marshall Islands) 8.67 -0.07 -0.80 108,774 Trade
SONS RBBN Metro Inc. n/a n/a n/a n/a
APO Apollo Global Management LLC Class A Representing Class A Limitied Liability Company Interests 31.65 1.70 5.68 2,867,030 Trade
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 89.96 1.63 1.85 1,409,166 Trade
ANAD ANADIGICS Inc n/a n/a n/a 0 Trade
APA Apache Corporation 35.87 -0.72 -1.97 3,965,389 Trade
LABL Multi-Color Corporation 49.86 -0.03 -0.06 100,317 Trade
INTU Intuit Inc. 257.77 1.50 0.59 1,370,908 Trade
CYH Community Health Systems Inc. 3.26 0.10 3.16 1,731,857 Trade
APC Anadarko Petroleum Corporation 64.18 0.15 0.23 10,900,494 Trade
KRO Kronos Worldwide Inc 14.63 -0.05 -0.34 124,306 Trade
URBN Urban Outfitters Inc. 30.93 0.30 0.98 2,548,355 Trade
RRC Range Resources Corporation 9.75 -0.40 -3.94 12,196,463 Trade
WIN WINMQ Windstream Holdings n/a n/a n/a 0
EE El Pasoectric Company 58.90 -0.59 -0.99 130,832 Trade
HIBB Hibbett Sports Inc. 20.51 0.01 0.05 488,048 Trade
MXIM Maxim Integrated Products Inc. 59.77 0.20 0.34 1,070,106 Trade
PM Philip Morris International Inc 84.49 -0.99 -1.16 7,765,417 Trade
F Ford Motor Company 9.55 0.05 0.53 29,843,042 Trade
TWO Two Harbors Investment Corp 13.70 0.00 0.00 1,896,957 Trade
TX Ternium S.A. American Depositary Shares (each representing ten shares USD1.00 par value) 26.81 -0.38 -1.40 326,528 Trade
WFC Wells Fargo & Company 47.58 0.03 0.06 22,416,772 Trade
CAKE The Cheesecake Factory Incorporated 47.03 0.86 1.86 764,912 Trade
NFLX Netflix Inc. 360.35 5.61 1.58 8,353,165 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
NBL Noble Energy Inc. 27.11 -0.10 -0.37 5,323,711 Trade
IBKR Interactive Brokers Group Inc. 54.88 0.72 1.33 467,113
CETV Central European Media Enterprises Ltd. 4.06 -0.01 -0.25 284,339 Trade
STO EQNR Statoil ASA n/a n/a n/a 0
BMRN BioMarin Pharmaceutical Inc. 83.16 0.81 0.98 2,067,788 Trade
EXC Exelon Corporation 49.40 0.51 1.04 8,692,654 Trade
T AT&T Inc. 32.03 0.08 0.25 23,317,482 Trade
PZZA Papa John's International Inc. 49.26 1.31 2.73 604,962 Trade
DUK Duke Energy Corporation (Holding Company) 89.14 0.08 0.09 2,822,523 Trade
LL Lumber Liquidators Holdings Inc 12.23 0.75 6.53 4,635,032 Trade
MOH Molina Healthcare Inc 120.68 4.01 3.44 1,989,084 Trade
CHK Chesapeake Energy Corporation 2.91 -0.15 -4.90 42,521,531 Trade
LZB La-Z-Boy Incorporated 33.92 -0.80 -2.30 244,645 Trade
CMCSA Comcast Corporation Class A Common Stock 42.43 -0.14 -0.33 13,959,321 Trade
TAP Molson Coors Brewing Company Class B 61.40 1.98 3.33 1,917,905 Trade
WMT Walmart Inc. 103.18 0.02 0.02 3,727,937 Trade

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Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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