Equities Sector Coverage: Stocks Gain on Fed's Beige Book But Fade Into Close

Sector Recap |

Stocks Gain on Fed's Beige Book But Fade Into CloseThe US economy grew 1.7% in the second quarter according to the preliminary reading. The advanced reading out a month ago pegged GDP growth at 1.5% in the second quarter. The Dow Jones Industrial Average traded down to 13,081.27 then up to 13,144.81. The NASDAQ traded down to 3067.62 then up to 3087.24.

Asian stocks were mixed again on Wednesday. The Nikkei 225 ended the day at 9,070 – up 0.40%. The Hang Seng ended the day at 19,789 – down 0.12%. European exchanges opened lower on Wednesday and closed mixed. The FTSE 100 ended the day at 5,744 – down 0.56%. The DAX ended the day at 7,011 – up 0.11%. The CAC 40 ended the day at 3,414 – down 0.51%. The yield on the 10-Year US Treasury note rose 1.622% to 1.675% versus the five-week modified moving average at 1.649%.

Gold traded down from $1672.5 the Troy ounce to $1654.4 staying above the 200-day simple moving average at $1647.0. Crude oil traded down from $96.37 per barrel to $94.76 with the 200-day simple moving average at $96.72. The euro versus the dollar fell from 1.2572 to 1.2522 above its 50-day simple moving average at 1.2365.

Energy

Frontline (FRO) beat estimates by 2 cents on revenue of $219.4M. Credit Suisse covers Atwood Oceanics (ATW), Diamond Offshore Drilling (DO), Noble Corp. (NE), Ocean Rig UDW (ORIG), and Rowan Companies (RDC) at Outperform. It has new Neutrals on Ensco (ESV), Hercules Offshore (HERO), Seadrill (SDRL), and Transocean (RIG). Robert W. Baird has new Neutrals on Energy Transfer Partners (ETP) and ONEOK (OKS). Baird is establishing Outperforms on Energy Transfer Equity (ETE), Plains All American (PAA), and Sunoco Logistics (SXL).

Big Movers – Frontline (FRO) down 11.92%.
Dow components – Chevron (CVX) down 0.36%, Exxon Mobil (XOM) down 0.16%.

Energy Select Sector SPDR (XLE) was trading at $71.71 at 3:30 PM on Wednesday, down 0.50% on the day – up 3.72% year-to-date.

Materials

AkzoNobel (AKZOY) is upgraded to Outperform from Neutral at Credit Suisse. Molycorp (MCP) gets upgraded to Buy from Hold at Gabelli. Resolute Forest Products (RFP) is taken to Reduce from Hold at TD Securities. Schnitzer Steel (SCHN) is cut to Sell from Underperform at Crédit Agricole.

Big Movers – Molycorp (MCP) up 13.30%.
Dow Components – Alcoa (AA) up 0.71%, DuPont (DD) up 0.72%.

The Materials Select Sector SPDR (XLB) was trading at $35.72 at 3:30 PM on Wednesday, up 0.48% on the day – up 6.63% year-to-date.

Industrials

Despite the drought, the net income of U.S. farmers is set to hit a record $122.2B, the USDA has forecast. Farmers inside the "drought belt" are filing insurance claims to offset the damage to their corn and soybean crops, while those outside in the northern plains could earn 39% more due to record prices. Equipment makers such as Deere (DE) and Kubota (KUB) could also benefit. Joy Global (JOY) missed estimates by 6 cents with revenue in-line with estimates. The company cut FY 2012 revenue guidance by $100M to $5.45B-$5.55B (versus consensus of $5.56B) and sees adjusted EPS at $7.05-$7.20 (versus $7.26). Dycom Industries (DY) missed estimates by 2 cents and revenue by $5M. Excel Maritime Carriers (EXM) missed estimates by a penny, while beating revenue by $8M. Eaton Corp. (ETN) is now Neutral from Buy at MKM Partners.

Big Movers – Dycom Industries (DY) down 18.59%.
Dow components – Boeing Co (BA) up 0.29%, Caterpillar (CAT) up 0.10%, General Electric (GE) up 0.53%, 3M Company (MMM) up 0.31%, United Technologies (UTX) down 0.31%.

The Industrial Select Sector SPDR (XLI) was trading at $36.53 at 3:30 PM on Wednesday, up 0.19% on the day – up 8.24% year-to-date.

Consumer Discretionary

GM (GM) may be struggling in Europe, but it intends to invest $1B over the next five years in Russia, one of the world's fastest-growing markets. Genesco (GCO) beat estimates by 23 cents and revenue by $10M. Zale (ZLC) beat estimates by 23 cents with revenue in-line with estimates. Jos. A. Bank Clothiers (JOSB) beat estimates by 10 cents and revenue by $9M. Arbitron (ARB) is now Neutral at Macquarie. Reed Elsevier (RUK) is lifted to Overweight from Neutral at JPMorgan. Lincoln Educational (LINC) is lowered to Perform from Outperform at Oppenheimer. Movado (MOV) is moved to Neutral from Buy at Citigroup. Viacom (VIAB) is lower to Hold from Buy with Wunderlich.



Dow Components – Disney (DIS) up 0.97%, Home Depot (HD) up 0.72%, McDonalds (MCD) down 0.56%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.65 at 3:30 PM on Wednesday, up 0.59% on the day – up 17.02% year-to-date.

Consumer Staples

Heinz's (HNZ) reported FQ1 EPS of $0.87 (beating by $0.07, while revenue slipped 1.5% to $2.79B (missing by $50M). The company affirms guidance for FY 2013 EPS of $3.52-$3.62 (versus consensus of $3.51). Despite the drought, the net income of U.S. farmers is set to hit a record $122.2B, the USDA has forecast. Farmers inside the "drought belt" are filing insurance claims to offset the damage to their corn and soybean crops, while those outside in the northern plains could earn 39% more due to record prices. Brown-Forman (BF.B) best estimates by 7 cents, while missing revenue by $14M. The Fresh Market (TFM) beat estimates by a penny and revenue by $6M. L’Oréal (LRLCY) is lowered to Neutral from Buy at UBS.

Dow components – Kraft (KFT) down 0.41%, Coca Cola (KO) down 1.08%, Procter & Gamble (PG) up 0.04%, Wal-Mart (WMT) up 0.54%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $35.625 at 3:30 PM on Wednesday, down 0.10% on the day – up 9.68% year-to-date.

Health Care

WellPoint (WLP) Chairperson and CEO Angela Braly has stepped down, yielding to shareholder pressure following the health insurer's poor performance of late. EVP John Cannon will take over as interim CEO while WellPoint looks for a replacement, although he doesn't want the job permanently. Mettler-Toledo (MTD) is initiated with a Hold at WallachBeth. TearLab (TEAR) is begun with a Buy at Canaccord. Cyberonics (CYBX) is hoisted to Buy from Hold at Canaccord Genuity. WellPoint (WLP) is boosted by Sanford Bernstein to Market Perform from Outperform. Amerigroup (AGP) gets downgraded to Neutral from Buy at Monness Crespi.

Big Movers – Warner Chilcott (WCRX) down 20.41%.
Dow Components – Johnson & Johnson (JNJ) up 0.20%, Merck (MRK) up 0.74%, Pfizer (PFE) up 0.84%.

The Health Care Select Sector SPDR (XLV) was trading at $38.88 at 3:30 PM on Wednesday, up 0.41% on the day – up 12.09% year-to-date.

Financial

Bank of Montreal (BMO) is boosted to Buy from Hold at Canadian firm Desjardins. Bank of Nova Scotia (BNS) is now Neutral from Outperform at Credit Suisse.

Dow Components – American Express (AXP) down 0.03%, Bank of America (BAC) up 0.50%, JP Morgan Chase (JPM) up 0.59%, Travelers (TRV) down 0.02%.

The Financial Select Sector SPDR (XLF) was trading at $15.15 at 3:30 PM on Wednesday, up 0.36% on the day – up 16.58% year-to-date.

Information Technology

Apple (AAPL) and Qualcomm (QCOM) offered Taiwan Semiconductor (TSM) over $1B apiece to secure chip production capacity, only to have TSMC reject them in the name of maintaining flexibility. Apple has also been reportedly planning to shift production of its app processors from Samsung (SSNLF) to TSMC. Yingli Green Energy (YGE) missed estimates by 22 cents with revenue in-line with estimates. JA Solar (JASO) missed estimates by 23 cents and revenue by $8M. LTX-Credence (LTXC) beat estimates by a penny, while missing revenue by $0.6M. Progress Software (PRGS) is a new Neutral with Wedbush, which unveils Outperforms on Informatica (INFA) and TIBCO (TIBX). Angie’s List (ANGI) gets increased to Outperform from Perform at Oppenheimer. Wipro (WIT) is upgraded to Overweight from Neutral at HSBC Securities.

Dow Components – Cisco Systems (CSCO) up 0.21%, Hewlett-Packard (HPQ) up 0.53%, IBM (IBM) up 0.46%, Intel Corp (INTC) down 1.06%, Microsoft (MSFT) up 0.19%.

The Technology Select Sector SPDR (XLK) was trading at $30.64 at 3:30 PM on Wednesday, up 0.36% on the day – up 20.39% year-to-date.

Telecommunication Services

Dow Components – AT&T (T) up 0.87%, Verizon (VZ) up 1.36%. The NASDAQ Telecommunications Index (IXTC) was trading at $197.82 at 3:30 PM on Wednesday, up 0.32% on the day – up 0.45% year-to-date.

Utilities

Public Service Enterprise Group (PEG) gets slashed to Sell from Hold at ISI Group. Dominion Resources (D) down 1.54%, Edison International (EIX) up 0.87%, First Energy (FE) down 0.83%, PG&E Corp (PCG) down 0.30%, Southern Company (SO) down 0.31%.

The Utilities Select Sector SPDR (XLU) was trading at $36.59 at 3:30 PM on Wednesday, down 0.11% on the day – up 1.70% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, FRO, ATW, DO, NE, ORIG, RDC, ESV, HERO, SDRL, RIG, ETP, OKS, ETE, PAA, SXL, AKZOY, MCP, RFP, SCHN, DE, KUB, JOY, DY, EXM, ETN, GM, GCO, ZLC, JOSB, ARB, RUK, LINC, MOV, VIAB, HNZ, BF.B, TFM, LRLCY, WLP, MTD, TEAR, CYBX, WLP, AGP, WCRX, BMO, BNS, AAPL, QCOM, TSM, SSNLF, YGE, JASO, LTXC, PRGS, INFA, TIBX, ANGI, WIT, PEG

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Companies

Symbol Name Price Change % Volume
MMM 3M Company 198.07 -0.60 -0.30 695,650 Trade
RDC Rowan Companies plc Class A 15.77 -0.36 -2.23 851,996 Trade
DE Deere & Company 157.30 0.72 0.46 958,931 Trade
SDRL Seadrill Limited (Bermuda) 0.46 0.05 11.98 9,070,082 Trade
PG Procter & Gamble Company (The) 73.97 -0.21 -0.28 2,268,501 Trade
GE General Electric Company 14.62 0.44 3.10 56,767,217 Trade
CVX Chevron Corporation 126.06 -2.64 -2.05 2,200,110 Trade
RUK RUK n/a n/a n/a 0 Trade
SO Southern Company (The) 44.24 0.25 0.57 1,599,443 Trade
PCG Pacific Gas & Electric Co. 43.66 -0.19 -0.43 515,287 Trade
CYBX Cyberonics Inc. n/a n/a n/a 0 Trade
MOV Movado Group Inc. 40.43 0.93 2.35 82,289 Trade
RIG Transocean Ltd (Switzerland) 13.13 -0.25 -1.87 4,399,797 Trade
WIT Wipro Limited 4.59 -0.03 -0.65 207,353 Trade
ATW Atwood Oceanics Inc. n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 121.97 -1.48 -1.20 2,370,408 Trade
WMT Walmart Inc. 82.41 -0.60 -0.72 4,238,216 Trade
AA Alcoa Corporation 49.10 0.53 1.09 644,695 Trade
INTC Intel Corporation 54.45 -0.76 -1.38 8,072,231 Trade
IBM International Business Machines Corporation 143.57 -1.10 -0.76 1,172,630 Trade
DY Dycom Industries Inc. 90.50 -1.53 -1.66 559,302 Trade
D Dominion Energy Inc. 63.95 0.04 0.05 1,584,244 Trade
TRV The Travelers Companies Inc. 130.09 -0.81 -0.62 257,340 Trade
RFP Resolute Forest Products Inc. 10.55 -0.15 -1.40 126,015 Trade
AAPL Apple Inc. 187.25 -1.11 -0.59 8,912,064 Trade
ARCPP ARCPP n/a n/a n/a 0 Trade
BNS Bank Nova Scotia Halifax Pfd 3 61.80 -0.76 -1.21 208,240 Trade
EIX Edison International 62.58 0.23 0.37 357,849 Trade
BMO Bank Of Montreal 78.42 -0.85 -1.07 145,734 Trade
JPM JP Morgan Chase & Co. 110.77 -1.72 -1.53 6,246,889 Trade
AXP American Express Company 101.30 -0.63 -0.62 1,017,058 Trade
OKS ONEOK Partners L.P. n/a n/a n/a 0 Trade
PAA Plains All American Pipeline L.P. 23.45 -0.71 -2.94 1,383,050 Trade
UTX United Technologies Corporation 127.02 -0.56 -0.44 453,807 Trade
MTD Mettler-Toledo International Inc. 567.98 -1.82 -0.32 50,444 Trade
TEAR TearLab Corp - Ordinary Shares 0.25 0.00 0.00 200
PRGS Progress Software Corporation 37.61 0.11 0.29 46,979 Trade
CSCO Cisco Systems Inc. 43.29 -0.40 -0.90 8,361,404 Trade
DIS The Walt Disney Company 101.65 -1.24 -1.21 3,029,436 Trade
VZ Verizon Communications Inc. 48.76 0.17 0.35 3,983,302 Trade
GM General Motors Company 38.27 0.42 1.11 3,034,019 Trade
SXL Sunoco Logistics Partners LP representing limited n/a n/a n/a 0
VIAB Viacom Inc. 27.03 -0.16 -0.59 883,629 Trade
BAC Bank of America Corporation 30.15 -0.29 -0.95 33,285,236 Trade
ETN Eaton Corporation PLC 78.56 -0.44 -0.56 515,932 Trade
MCD McDonald's Corporation 161.43 -0.20 -0.12 1,134,311 Trade
YGE Yingli Green Energy Holding Company Limited ADR 1.74 -0.02 -1.14 4,236 Trade
NE Noble Corporation (UK) 5.72 -0.10 -1.72 2,341,223 Trade
DD E.I. du Pont de Nemours and Company n/a n/a n/a 0 Trade
DO Diamond Offshore Drilling Inc. 19.01 -0.22 -1.14 354,815 Trade
JASO JA Solar Holdings Co. Ltd. 7.22 0.04 0.49 43,577 Trade
JOY Joy Global Inc. n/a n/a n/a 0 Trade
FRO Frontline Ltd. 4.78 -0.04 -0.74 83,728 Trade
ESV Ensco plc Class A 6.70 -0.17 -2.47 6,948,499 Trade
HD Home Depot Inc. (The) 185.33 -1.34 -0.72 1,625,846 Trade
XOM Exxon Mobil Corporation 80.23 -1.92 -2.34 4,889,797 Trade
PFE Pfizer Inc. 35.85 -0.12 -0.33 6,309,247 Trade
TFM Fresh Market Inc (The) n/a n/a n/a 0 Trade
HPQ HP Inc. 21.55 -0.35 -1.60 2,959,241 Trade
BA The Boeing Company 355.51 -3.70 -1.03 1,590,155 Trade
MRK Merck & Company Inc. (new) 59.07 -0.11 -0.18 2,612,036 Trade
ORIG Ocean Rig UDW Inc. 26.29 -0.69 -2.56 38,908 Trade
ETE Energy Transfer Equity L.P. representing Limited Partnership interests 16.89 -0.30 -1.72 1,241,350 Trade
FE FirstEnergy Corporation 34.05 0.20 0.59 977,953 Trade
LINC Lincoln Educational Services Corporation 1.81 -0.05 -2.69 337 Trade
KO Coca-Cola Company (The) 42.26 -0.14 -0.34 2,320,449 Trade
T AT&T Inc. 32.57 0.24 0.74 10,404,128 Trade
TSM Taiwan Semiconductor Manufacturing Company Ltd. 39.15 -0.50 -1.26 3,330,571 Trade
CAT Caterpillar Inc. 157.25 -0.49 -0.31 1,235,678 Trade
SCHN Schnitzer Steel Industries Inc. 30.75 -0.15 -0.49 44,883 Trade
GCO Genesco Inc. 45.60 1.00 2.24 38,276 Trade
QCOM QUALCOMM Incorporated 58.76 -0.06 -0.10 5,683,298 Trade
MSFT Microsoft Corporation 97.52 -1.15 -1.16 9,059,591 Trade
PEG Public Service Enterprise Group Incorporated 51.89 0.54 1.04 820,029 Trade
ANGI ANGI Homeservices Inc. 15.24 0.02 0.13 136,426 Trade

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