Durable Goods Orders unexpectedly declined 2.1% in June. The Fed’s Beige Book showed that the U.S. economy continued to grow but the pace has moderated and residential real estate activity was little changed and remains weak. Tomorrow the U.S. Treasury auctions $29 billion in 7-Year notes. The Dow Jones Industrial Average opened below its 21-day simple moving average at 12,517 on Thursday, which is a negative on its daily chart. The Dow traded below 12,300 in the final hour of trading. The NASDAQ also opened lower but was above its 21-day simple moving average at 2809. This was short-lived and the NASDAQ traded below 2765 into the final hour of trading.
Asian stocks drifted lower on Wednesday with the Nikkei 225 down 0.5% to 10,047. The Hang Seng Index lost 0.1% to 22,542. European stocks slumped on pressures on banks and the U.S. debt ceiling debate. The FTSE 100 lost 1.2% to 5,857. The DAX fell by 1.3% to 7,253. The CAC 40 eroded by 1.4% to 3,734. The yield on the 10-Year US Treasury note traded between 2.977 percent and 2.938 then rose to 3.010 just before today’s U.S. Treasury auction. The U.S. Treasury auctioned $35 billion 5-Year notes at 1.580% with a bid to cover at 2.62 times, below the 3.00 times threshold showing tepid demand. Gold traded to another all time high at $1628.8 on Wednesday morning then drifted lower to $1608.9. Crude oil traded down from $99.50 per barrel to $97.20, as inventories were higher than expected. The euro versus the US dollar declined from 1.4534 to 1.4344.
Hess (HES) missed estimates by 22 cents and revenue by $270M. RPC (RES) reported Q2 EPS of $0.50 (in-line), while beating revenue by $36.56M. Ensco (ESV) is moved to Overweight from Equalweight at Morgan Stanley. Range Resources (RRC) is raised to Hold from Sell at Citigroup. Rosetta Resources (ROSE) is reduced to Neutral from Positive at Susquehanna. Patriot Coal (PCX) is now Neutral from Buy at Goldman Sachs. In afternoon trading: Shares of RPC are down about 9%. Shares of Cobalt International (CIE) are down about 8.5%. Shares of QEP Resources (QEP) are down about 7%. Shares of LDK Solar (LDK) are down about 6%. Shares of Patriot Coal are down about 6%.
Energy Select Sector SPDR (XLE) was trading at $77.54 at 4:00 PM on Wednesday, down 1.89% on the day – up 13.60% year-to-date.
Dow Chemical's (DOW) Q2 EPS jumped 74% to $0.84 and beat expectations by 6 cents as revenues rose 18% to $16B, the second-highest quarter in the company's history, beating estimates by $1.31B. Meadwestvaco (MWV) reported Q2 EPS of $0.54 (in-line) and revenue of $1.56B (beating by $40M). Allegheny Technologies (ATI) missed estimates by 3 cents on revenue of $1.35B. Rockwood (ROC) beat estimates by 16 cents and revenue by $50M. ArcelorMittal (MT) beat estimates by 9 cents and revenue by $500M. ArcelorMittal's Q2 performance was "underpinned by higher steel selling prices…” AK Steel (AKS) gets increased to Buy from Fair Value at CRT Capital. In afternoon trading: Shares of Avalon Rare Metals (AVL) are down about 10%. Shares of Headwaters (HW) are down about 10%. Shares of Rare Element (REE) are down about 7.5%.
The Materials Select Sector SPDR (XLB) traded at $38.52 at 4:00 PM on Wednesday, down 2.28% on the day – up 0.29% year-to-date.
Boeing (BA) reported 2Q EPS of $1.25 (beating estimates by 27 cents and revenue by $70M), and raised FY'11 EPS guidance to $3.90-4.10. Delta Air Lines (DAL) missed estimates by 6 cents with revenue in-line with estimates. Corning (GLW) beat estimates by a penny and revenue by $50M. General Dynamics (GD) beat estimates by 7 cents, but missed revenue by $350M. Manitowoc (MTW) missed estimates by 3 cents, but beat revenue by $19M. C.H. Robinson Worldwide (CHRW) Q2 earnings +14% on increased load volumes, as all units posted higher revenue. But the company missed on earnings as higher fixed-expenses and fuel costs weighed heavier than anticipated on bottom-line margins. Hawaiian Holdings (HA) is lifted to Neutral from Underperform at Bank of America-Merrill Lynch. Ingersoll-Rand (IR) is reduced to Hold from Buy at Argus following earnings. In afternoon trading: Shares of TBS International (TBSI) are up about 20%. Shares of Trinity Industries (TRN) are down about 9.75%. Shares of Harbin Electric (HRBN) are down about 8.25%. Shares of CH Robinson are down about 8%.
The Industrial Select Sector SPDR (XLI) traded at $35.15 at 4:00 PM on Wednesday, down 2.71% on the day – up 0.80% year-to-date.
Dunkin' Brands (DNKN) is due to start trading today after it raised $422.75M in its IPO from selling 22.25M shares at $19 each, above a previously set range of $16-$18, which gave the company a $2.4B market cap. AutoNation (AN) beat estimates by 3 cents, but missed revenue by $100M. Wyndham (WYN) beat estimates by 8 cents and revenue of $50M. Tupperware (TUP) beat estimates by 8 cents and revenue by $22.3M. TAL Education Group (XRS) posted FQ1 2012 non-GAAP EPS of $0.09, ahead of the $0.04 consensus, while revenue rose 62.7% Y/Y to $33.2M. The company is guiding for FQ2 revenue growth of 42-47%, and FY2012 revenue growth of 40-45%. Starbucks (SBUX) gets a Buy-from-Neutral boost at Janney Montgomery Scott. Dollar Tree (DLTR) shares is upgraded to Overweight from Neutral at Piper Jaffray. PetSmart (PETM) is taken to Overweight from Neutral at Piper Jaffray. Office Depot (ODP) is now Neutral from Reduce at Nomura. Tractor Supply (TSCO) gets taken to Overweight from Neutral at Piper Jaffray. Buffalo Wild Wings (BWLD) is upgraded to Outperform from Market Perofrm at Raymond James. Wall Street may now be buying Amazon's strategy of investing prodigiously to fuel growth. In afternoon trading: Shares of Amazon (AMZN) are up about 3.25% despite the company's Q2 EPS sliding to $0.41 from $0.45 a year earlier, although it did beat forecasts. Revenue leapt 51% to $9.9B. In afternoon trading: Shares of The Jones Group (JNY) are up about 17%. Shares of Tempur-Pedic (TPX) are up about 10%. Shares of Tupperware are down about 14%. Shares of P.F. Chang’s (PFCB) are down about 10.5%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.04 at 4:00 PM on Wednesday, down 1.74% on the day – up 7.03% year-to-date.
Clorox (CLX) has again spurned Carl Icahn, rejecting his revised $80 share bid and saying the proposal is "inadequate and unlikely to be completed." Dr Pepper Snapple (DPN) reported Q2 EPS of $0.77 (in-line), while missing revenue by $10M, and issued guidance - FY'11 EPS of $2.70-2.78. Energizer (ENR) beat estimates by 12 cents and revenue by $50M, and issued guidance - FY'11 EPS of $3.90-4.10. In afternoon trading: Shares of China-Biotics (CHBT) are up about 14%. Shares of USANA Health Sciences (USNA) are down about 11.75%. Shares of B&G Foods (BGS) are down about 8.5%. Shares of Central European Distribution (CEDC) are down about 6.5%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.03 at 4:00 PM on Wednesday, down 1.08% on the day – up 5.87% year-to-date.
Swedish drugmaker Meda has denied it's received a takeover approach from Valeant (VRX) "of the kind that is described" in a WSJ report, which yesterday said any deal could be worth over $4B. Teva's (TEVA) Q2 EPS excluding items rose to $1.10 from $1.08 a share a year earlier and beat expectations as revenue increased 11% to $4.21B. Copaxone sales increased 24% to $957M. Hospira (HSP) beat estimates by 15 cents and revenue by $30M. Elan (ELN) missed estimates by 5 cents, but beat revenue by $19.4M. Zimmer (ZMH) beat estimates by 2 cents and revenue by $10M. WellPoint Health Networks (WLP) beat estimates by 3 cents and revenue by $210M. Thermo Fisher (TMO) beat estimates by a penny and revenue by $60M. Praxair (PX) beat estimates by a penny and revenue by $70M. Mylan Laboratories (MYL) beat estimates by 7 cents and revenue by $70M. Aetna (AET) beat estimates by 28 cents with revenue in-line with estimates. Merck (MKGAF) reported Q2 net EPS loss €0.40 ($0.58) vs profit €0.84 a year earlier, with revenue up +16% to €2.56B. Stryker (SYK) is hoisted to Buy from Hold with a $66 target price with Wunderlich. Salix Pharma (SLXP) is now Neutral from Reduce at Citadel. In afternoon trading: Shares of Questcor Pharmaceuticals (QCOR) are up about 24%. Shares of Illumina (ILMN) are down about 16.5%. Shares of Cardiome Pharma (CRME) are down about 9.5%.
The Health Care Select Sector SPDR (XLV) traded at $34.33 at 4:00 PM on Wednesday, down 1.73% on the day – up 8.98% year-to-date.
A settlement with major banks over inappropriate foreclosure practices is being delayed because the banks are arguing about how to divide the costs. Well Fargo (WFC) believes it should pay less than Bank of America (BAC) or JPMorgan (JPM), because it has fewer problematic mortgages, while Citigroup (C) thinks it should be rewarded for having stronger controls on foreclosure practices. The STOXX Europe 600 Banks index was -2% at midday in Europe after Goldman Sachs (GS) downgraded the EU bank sector to Neutral from Overweight, saying market doubts are beginning to creep back after the initial euphoria over Greece's second bailout. Banco Santander (STD) reported Q2 EPS of $0.23 after charges (missing by 11 cents) and net interest income of €7.74B. Moody's (MCO) beat estimates by 25 cents and revenue by $55.9M, and raised FY'11 EPS guidance to $2.22-2.32. Nasdaq (NDAQ) beat estimates by 2 cents and revenue by $3M. Investment Tech (ITG) is moved to Overweight from Neutral at JP Morgan. CapLease (LSE) is raised to Outperform from Market Perform with Wells Fargo. Ares Capital (ARCC) is upgraded to Outperform from Market Perform at Keefe Bruyette. Liberty Property Trust (LRY) is cut to Neutral from Buy at Janney. ECB Bancorp (ECBE) is cut to Market Perform from Outperform at Keefe Bruyette. In afternoon trading: Shares of Banco Santander are down about 7%. Shares of T Rowe Price (TROW) are down about 6%. Shares of ING (ING) are down about 6%.
The Financial Select Sector SPDR (XLF) traded at $14.83 at 4:00 PM on Wednesday, down 2.37% on the day – down 7.02% year-to-date.
HP (HPQ) Chairman Ray Lane believes his company will need more investment to turn itself around after serial cost-cutting under two previous CEOs. Intel (INTC) has appointed Chief Administrative Officer and former CFO Andy Bryant as Vice Chairman in preparation for him to replace Jane Shaw as Chair at the company's stockholders meeting in May next year. Arrow Electronics (ARW) beat estimates by a penny, but missed revenue by $200M. IAC/InterActiveCorp (IACI) beat estimates by 22 cents and revenue by $22M. Parametric Technology (PMTC) beat estimates by 2 cents and revenue by $12.5M, and posted FY'11 EPS of $0.63-0.67 and revenue of $1.15-1.16B. Electronic Arts' (ERTS) forecasts FQ2 revenue of $925M-$975M, above $902M consensus, slightly raises FQ2 non-GAAP EPS guidance range, raises FY2012 revenue guidance to $3.9B-$4.1B, from $3.8B-$4.025B, and forecasts FY2012 EPS of $0.70-$0.90, compared with $0.84 consensus. Linear Technology (LLTC) beat estimates by 13 cents, but missed revenue by $1M. Bankrate Inc. (RATE) is begun with a Buy at Stifel Nicolaus. LSI Logic (LSI) is launched as a Buy at Merriman. Electronic Arts (ERTS) is increased to Buy from Hold at Brean Murray with a price objective of $29. Juniper Networks (JNPR) is downgraded to Perform from Outperform at Oppenheimer. In afternoon trading: Shares of Juniper are down about 20.5%. Shares of Ciena (CIEN) are down about 10.25%. Shares of Finisar (FNSR) are down about 10%. Shares of Acxiom (ACXM) are up about 15.75%. Shares of IAC InterActive are up about 11.25%.
The Technology Select Sector SPDR (XLK) traded at $26.06 at 4:00 PM on Wednesday, down 2.65% on the day – up 3.45% year-to-date.
Vodafone Group (VOD) is moved to Outperform from Neutral at Macquarie. In afternoon trading: Most Actives: Shares of Level 3 Communications (LVLT) are down about a full percent. Shares of Sprint Nextel (S) are up about a quarter of a percent. Shares of AT&T (T) are up about a half of a percent. Shares of Verizon (VZ) are up about a quarter of a percent.
The NASDAQ Telecommunications Index (IXTC) traded at $202.20 at 4:00 PM on Wednesday, down 3.65% on the day – down 10.28% year-to-date.
Exelon (EXC) beat estimates by 9 cents and revenue by $160M. Southern Company (SO) beat estimates by 7 cents and revenue by $40M. NextEra Energy (NEE) beat estimates by 9 cents, but missed revenue by $920M. In afternoon trading: Shares of Tokyo Electric Power (TKECF) are down about 14.75%. Actives: Shares of Exelon are up about 1%. Shares of AES (AES) are down about 0.5%. Shares of Genon Energy (GEN) are down about 2.5%. Shares of Southern are up slightly. Shares of Duke Energy (DUK) are down about 0.3%.
The Utilities Select Sector SPDR (XLU) traded at $33.72 at 4:00 PM on Wednesday, down 0.30% on the day – up 7.59% year-to-date.
STOCKS: HES, RES, ESV, RRC, ROSE, PCX, CIE, QEP, LDK, DOW, MWV, ATI, ROC, MT, AKS, AVL, HW, REE, BA, DAL, GLW, GD, MTW, CHRW, HA, IR, TBSI, TRN, HRBN, DNKN, AN, WYN, TUP, XRS, SBUX, DLTR, PETM, ODP, TSCO, BWLD, AMZN, JNY, TPX, PFCB, CLX, DPN, ENR, CHBT, USNA, BGS, CEDC, VRX, TEVA, HSP, ELN, ZMH, WLP, TMO, PX, MYL, AET, MKGAF, SYK, SLXP, QCOR, ILMN, CRME, WFC, BAC, JPM, C, GS, STD, MCO, NDAQ, ITG, LSE, ARCC, LRY, ECBE, TROW, ING, HPQ, INTC, ARW, IACI, PMTC, ERTS, LLTC, RATE, LSI, JNPR, CIEN, FNSR, VOD, LVLT, S, T, VZ, EXC, SO, NEE, TKECF, AES, GEN, DUK
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