The National Association of Home Builders (NAHB) Housing Market Index rose by a couple of points to 15 in July, but that reading continues the housing depression as a neutral reading is 50. The Dow Jones Industrial Average opened lower on Monday trading down to 12,296 on Monday, below the 50-day simple moving average at 12,345. The NASDAQ declined from 2783 to 2744, below the 50-day at 2556.
Asian stocks were quiet on Monday with the Nikkei 225 closed at 9,974. The Hang Seng was down 0.3% to 21,805. European stocks were lower on Monday on concerns about the latest round of Stress Tests for major banks in Europe. The FTSE 100 declined 1.6% to 5,753. The DAX also declined by 1.6% to 7,108. The CAC 40 slumped 2.0% to 3,651. The yield on the 10-Year US Treasury note rose from 2.868 percent to 2.931 on Monday. Gold traded to another new all time high on Monday at $1607.9 the Troy ounce.
Crude oil traded down from $97.69 per barrel versus the 50-day simple moving average at $97.52 to $94.69 approaching the 200-day simple moving average at $94.18. The euro versus the US dollar traded between 1.4017 and 1.4133 on Monday.
Energy
Gregory Jaczko, the Chairman of the Nuclear Regulatory Commission, wants his agency to decide within three months how to proceed with major safety changes recommended for the industry by a report released last week. Halliburton (HAL) beat estimates by 9 cents on revenue of $5.3B. NGL Energy (NGL) is a new Outperform at brokers Robert W. Baird. Rosetta Resources (ROSE) is a new Buy at Dahlman Rose. Canaccord Genuity covers Oasis Petroleum (OAS), Pioneer Natural Resources (PXD), and Swift Energy (SFY) with Buys on each. Arch Coal (ACI) is upgraded to Buy from Hold at Citigroup. EOG Resources (EOG) is increased to Outperform from Market Perform with a $130 target price at FBR Capital. Alliance Resources (ARLP) is raised to Buy from Hold, while Natural Resource Partners (NRP) is now Hold from Sell at Citigroup. SunPower Corp (SPWRA) is now Sell from Neutral at Collins Stewart. Petrohawk Energy (HK) is removed from Credit Suisse’s US Focus List.
Energy Select Sector SPDR (XLE) was trading at $76.60 at 4:00 PM on Monday, down 0.34% on the day – up 12.23% year-to-date.
Basic Materials
Walter Energy (WLT) is begun with a Buy rating and $144 price objective at Citigroup. In afternoon trading: Shares of Walter Energy are up about 7%. Shares of Northgate Minerals (NXG) are up about 5%. Shares of China Shen Zhou Mining (SHZ) are down about 6.2%. Shares of Sappi (SPP) are down about 5.3%. Shares of Headwaters (HW) are down about 5.3%. Actives: Shares of Alcoa (AA) are down about 2.1%. Shares of Freeport-McMoran (FCX) are down about 0.7%.
The Materials Select Sector SPDR (XLB) traded at $39.10 at 4:00 PM on Monday, down 1.19% on the day – up 1.80% year-to-date.
Industrials
Philips (PHG) swung to a surprise net loss of €1.34B ($1.9B) in Q2 from a net profit of €259M a year ago after major writedowns at its healthcare and lighting divisions. Revenue slipped to €5.21B from €5.35B due to weak consumer sentiment and the “disentanglement” of Philips’ TV division. DigitalGlobe (DGI) is moved to Buy from Neutral at Merriman. US Airways Group (LCC) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. Armstrong World Industries (AWI) is downgraded to Hold from Buy at BB&T Capital. In afternoon trading: Shares of SkyWest (SKYW) are down about 17% after warning investors that its second-quarter earnings will probably be “lower than it previously anticipated.”
The Industrial Select Sector SPDR (XLI) traded at $36.13 at 4:00 PM on Monday, down 1.12% on the day – up 3.61% year-to-date.
Consumer Discretionary
Borders (BGPIQ) is in talks with Alabama-based retailer Books-A-Million (BAMM) and other potential buyers as it looks to survive after a bidding deadline passed yesterday without any offers that would save the company. British Sky Broadcasting (BSYBY) is boosted to Buy from Neutral at UBS. Netflix (NFLX) is cut to Sector Perform from Outperform at Pacific Crest. Dollar Tree (DLTR) gets downgraded to Neutral from Buy at Goldman Sachs. Scripps Networks (SNI) is reduced to Equalweight from Overweight at Morgan Stanley. In afternoon trading: Shares of E-Commerce China Dangdang (DANG) are down about 6.5%. Shares of MakeMyTrip (MMYT) are down about 6.1%, while shares of Orbitz Worldwide (OWW) are down about 6%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $39.90 at 4:00 PM on Monday, down 0.97% on the day – up 6.66% year-to-date.
Consumer Staples
Coca-Cola Enterprises (CCE) is a new Neutral at Nomura. Imperial Tobacco Group is raised to Buy from Hold at Citigroup. Clorox (CLX) is upgraded to Market Perform from Underperform at Sanford Bernstein, but is cut to Perform from Outperform at Oppenheimer. In afternoon trading: Shares of China-Biotics (CHBT) are down about 15%. Shares of Zhongpin (HOGS) are down about 13.5%. Shares of Central European Distribution (CEDC) are down about 6.5%. Shares of American Oriental Bioengineering (AOB) are down about 6.1%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.16 at 4:00 PM on Monday, down 0.64% on the day – up 6.31% year-to-date.
Healthcare
Pharmaceutical Product Development (PPDI), a provider of outsourced clinical research services, is exploring a sale. The company has a market cap of $3.15B and could attract bids from private-equity and larger clinical-research providers. Shire plc (SHPGY) is hoisted to Hold from Sell at the Royal Bank of Scotland. Medtronic (MDT) is cut to Equalweight from Overweight by Barclays Capital, which also reduces its recommendation on rival Boston Scientific (BSX) to Underweight from Equalweight. AmerisourceBergen (ABC) is pulled from Goldman’s Conviction Buy List. In afternoon trading: Shares of Nabi Biopharmaceuticals (NABI) are down nearly 70% after the company reported disappointing results from a key Phase III clinical trial for its smoking-cessation treatment NicVAX. Shares of Pharmaceutical Product Development are up about 11.5%.
The Health Care Select Sector SPDR (XLV) traded at $34.93 at 4:00 PM on Monday, down 0.74% on the day – up 10.89% year-to-date.
Financials
Richard Branson’s Virgin Money was among three concrete bidders by last week’s deadline for 632 U.K. branches being sold by Lloyds (LYG), with the offers believed to be above £2B ($3.2B). Sierra Income, which invests in private companies, has filed to raise up to $1.5B in an IPO by selling 150M shares at $10 each. WisdomTree Investments (WSDT) is picked up as a Buy and $10 price target at Citigroup. In afternoon trading: Shares of MGIC Investment (MTG) are down nearly 25% after reporting a nearly $152 million second-quarter loss on increased mortgage default claims and lower revenues. In fact, the entire mortgage-insurance sector is in complete disarray, as shares of Radian Group (RDN) are down about 15% and shares of The PMI Group (PMI) are down about 13%.
The Financial Select Sector SPDR (XLF) traded at $14.65 at 4:00 PM on Monday, down 1.35% on the day – down 8.15% year-to-date.
Information Technology
Check Point Software (CHKP) beat estimates by 2 cents on revenue of $300.6M. eBay Inc. (EBAY) is begun with a Buy at Argus. Ericsson (ERIC) is lifted to Outperform from Neutral at Credit Suisse. LinkedIn (LNKD) is lowered to Neutral from Overweight at JPMorgan. JA Solar (JASO) is now Hold from Buy at ThinkEquity. In afternoon trading: Shares of WebMD Health (WBMD) are down nearly 30% after reducing its 2011 forecast for profit and sales, citing an anticipated decline in advertising revenue. Shares of Evergreen Solar (ESLR) are down about 18%. Shares of Entropic Communications (ENTR) are down about 12.5%.
The Technology Select Sector SPDR (XLK) traded at $25.83 at 4:00 PM on Monday, down 0.35% on the day – up 2.54% year-to-date.
Telecommunications Services
In afternoon trading: Shares of TerreStar (TSTRQ) are down about 15%. Actives: Shares of Sprint Nextel (S) are down about 3.4%. Shares of Level 3 (LVLT) are down about 4.5%. Shares of AT&T (T) are down about 1.2%. Shares of Verizon (VZ) are down about 0.75%. Shares of Centurylink (CTL) are down about 1.5%. Shares of Frontier (FTR) are down about 1.2%.
The NASDAQ Telecommunications Index (IXTC) traded at $205.06 at 4:00 PM on Monday, down 0.97% on the day – down 9.01% year-to-date.
Utilities
Exelon (EXC) is taken to Buy from Neutral with a $49 target price at Ticonderoga. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 1%. Shares of AES Corp (AES) are down about 2.5%. Shares of Genon Energy (GEN) are down about 3%. Shares of Exelon are down about 0.9%. Shares of Southern (SO) are down about 0.4%. Shares of CenterPoint (CNP) are down slightly.
The Utilities Select Sector SPDR (XLU) traded at $33.04 at 4:00 PM on Monday, down 0.96% on the day – up 5.42% year-to-date.
STOCKS: HAL, NGL, ROSE, OAS, PXD, SFY, ACI, EOG, ARLP, NRP, SPWRA, HK, WLT, NXG, SHZ, SPP, HW, AA, FCX, PHG, DGI, LCC, AWI, SKYW, BGPIQ, BAMM, BSYBY, NFLX, DLTR, SNI, DANG, MMYT, OWW, CCE, CLX, CHBT, HOGS, CEDC, AOB, PPDI, SHPGY, MDT, BSX, ABC, NABI, LYG, WSDT, MTG, RDN, PMI, CHKP, EBAY, ERIC, LNKD, JASO, WBMD, ESLR, ENTR, TSTRQ, S, LVLT, T, VZ, CTL, FTR, EXC, DUK, AES, GEN, SO, CNP
