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 212.81 0.59 0.28 582,857 Trade
RDC Rowan Companies plc Class A 10.08 -0.21 -1.99 2,947,532 Trade
DE Deere & Company 124.12 0.26 0.21 1,732,378 Trade
SDRL Seadrill Limited (Bermuda) 0.41 -0.05 -10.71 7,146,097 Trade
PG Procter & Gamble Company (The) 89.65 0.62 0.70 1,975,502 Trade
GE General Electric Co 27.59 0.04 0.13 13,393,452 Trade
CVX Chevron Corporation 104.87 0.42 0.40 1,874,280 Trade
RUK RUK n/a n/a n/a 0 Trade
SO Southern Company (The) 50.03 -0.36 -0.70 1,872,360 Trade
PCG Pacific Gas & Electric Co. 68.49 -0.32 -0.47 834,633 Trade
CYBX Cyberonics Inc. n/a n/a n/a 0 Trade
MOV Movado Group Inc. 23.30 0.35 1.53 24,672 Trade
RIG Transocean Ltd (Switzerland) 7.97 0.10 1.21 6,865,703 Trade
WIT Wipro Limited 5.10 0.03 0.49 532,945 Trade
ATW Atwood Oceanics Inc. 8.12 0.12 1.50 5,085,348 Trade
JNJ Johnson & Johnson 135.77 -0.28 -0.21 2,477,547 Trade
WMT Wal-Mart Stores Inc. 74.95 -0.58 -0.76 4,098,436 Trade
AA Alcoa Inc. 31.04 1.24 4.16 2,027,629 Trade
INTC Intel Corporation 34.26 -0.11 -0.31 10,644,958 Trade
IBM International Business Machines Corp 154.18 -0.23 -0.15 1,000,376 Trade
DY Dycom Industries Inc. 90.75 0.16 0.18 289,812 Trade
D Dominion Resources Inc. 78.60 -0.33 -0.42 1,262,463 Trade
TRV The Travelers Companies Inc. 127.76 -0.56 -0.43 408,201 Trade
RFP Resolute Forest Products Inc. 4.55 -0.05 -1.09 101,196 Trade
AAPL Apple Inc. 146.65 1.02 0.70 9,813,850 Trade
ARCPP ARCPP n/a n/a n/a 0 Trade
BNS Bank of Nova Scotia 60.07 -0.13 -0.22 370,975 Trade
EIX Edison International 80.66 -0.23 -0.28 599,033 Trade
BMO Bank Of Montreal 71.05 0.38 0.53 294,485 Trade
JPM JP Morgan Chase 86.98 -0.04 -0.05 5,686,208 Trade
AXP American Express Company 82.41 0.16 0.19 1,056,544 Trade
OKS ONEOK Partners L.P. 47.79 0.85 1.81 486,396 Trade
PAA Plains All American Pipeline L.P. 24.27 0.37 1.54 1,547,980 Trade
UTX United Technologies Corporation 122.35 0.18 0.15 859,504 Trade
MTD Mettler-Toledo International Inc. 600.76 5.00 0.84 73,751 Trade
TEAR TearLab Corporation 1.67 -0.07 -4.02 19,777 Trade
PRGS Progress Software Corporation 30.30 0.51 1.71 78,267 Trade
CSCO Cisco Systems Inc. 32.24 0.39 1.22 8,423,105 Trade
DIS Walt Disney Company (The) 104.33 0.11 0.11 4,145,975 Trade
VZ Verizon Communications Inc. 45.37 -0.05 -0.11 3,472,312 Trade
GM General Motors Company 34.17 -0.02 -0.06 3,297,936 Trade
SXL Sunoco Logistics Partners LP representing limited n/a n/a n/a 0
VIAB Viacom Inc. 34.33 0.21 0.62 1,139,673 Trade
BAC Bank of America Corporation 22.80 -0.13 -0.57 34,639,049 Trade
ETN Eaton Corporation PLC 76.31 0.54 0.71 855,861 Trade
MCD McDonald\'s Corporation 154.92 0.12 0.08 800,113 Trade
YGE Yingli Green Energy Holding Company Limited ADR 2.20 0.02 0.92 127,190 Trade
NE Noble Corporation (UK) 3.80 0.16 4.40 5,451,636 Trade
DD E.I. du Pont de Nemours and Co. 81.33 -0.01 -0.01 520,798 Trade
DO Diamond Offshore Drilling Inc. 10.12 -0.14 -1.36 1,922,200 Trade
JASO JA Solar Holdings Co. Ltd. 6.59 0.14 2.17 625,270 Trade
JOY Joy Global Inc. n/a n/a n/a 0 Trade
FRO Frontline Ltd 5.55 0.04 0.73 235,250 Trade
ESV Ensco plc Class A 5.17 0.08 1.47 13,084,207 Trade
HD Home Depot Inc. (The) 151.96 -3.52 -2.26 3,869,428 Trade
XOM Exxon Mobil Corporation 81.37 0.29 0.35 3,399,539 Trade
PFE Pfizer Inc. 34.08 0.02 0.06 7,803,263 Trade
TFM The Fresh Market Inc. n/a n/a n/a 0 Trade
HPQ HP Inc. 17.79 0.08 0.42 4,207,899 Trade
BA Boeing Company (The) 201.32 1.88 0.94 1,365,057 Trade
MRK Merck & Company Inc. (new) 66.21 0.19 0.29 3,449,313 Trade
ORIG Ocean Rig UDW Inc. 0.17 -0.01 -4.07 543,833 Trade
ETE Energy Transfer Equity L.P. representing Limited P 15.55 0.32 2.10 1,878,488 Trade
FE FirstEnergy Corporation 28.90 -0.28 -0.96 1,273,480 Trade
LINC Lincoln Educational Services Corporation 3.20 0.11 3.56 3,158 Trade
KO Coca-Cola Company (The) 45.33 0.26 0.57 3,051,508 Trade
T AT&T Inc. 37.95 -0.15 -0.39 7,096,135 Trade
TSM Taiwan Semiconductor Manufacturing Company Ltd. 36.68 -0.03 -0.08 2,481,837 Trade
CAT Caterpillar Inc. 103.89 0.05 0.05 2,172,734 Trade
SCHN Schnitzer Steel Industries Inc. 21.20 1.00 4.95 316,608 Trade
GCO Genesco Inc. 32.20 -0.15 -0.46 87,648 Trade
QCOM QUALCOMM Incorporated 57.20 0.73 1.28 2,098,529 Trade
MSFT Microsoft Corporation 70.77 0.51 0.72 7,978,361 Trade
PEG Public Service Enterprise Group 43.82 0.15 0.34 592,767 Trade
ANGI Angie\'s List Inc. 12.49 -0.01 -0.08 105,354 Trade

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