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
AA Alcoa Inc. 9.88 0.23 2.38 17,748,052
AAPL Apple Inc. 113.95 0.86 0.76 29,641,085
ANGI Angie\'s List Inc. 10.37 0.11 1.07 160,555
ARCPP ARCPP n/a n/a n/a 0
ATW Atwood Oceanics Inc. 8.21 1.01 14.03 7,602,858
AXP American Express Company 64.22 -0.06 -0.09 3,580,082
BA Boeing Company (The) 132.23 0.91 0.69 1,772,965
BAC Bank of America Corporation 15.38 0.09 0.59 66,076,402
BMO Bank Of Montreal 65.81 0.88 1.36 573,966
BNS Bank of Nova Scotia 53.99 0.90 1.70 690,725
CAT Caterpillar Inc. 86.59 3.71 4.48 9,497,066
CSCO Cisco Systems Inc. 31.50 0.02 0.06 15,840,958
CVX Chevron Corporation 102.15 3.17 3.20 10,190,924
CYBX Cyberonics Inc. n/a n/a n/a 0
D Dominion Resources Inc. 75.84 0.06 0.08 2,037,478
DD E.I. du Pont de Nemours and Co. 67.19 -0.07 -0.10 2,702,556
DE Deere & Company 84.09 1.64 1.99 3,389,522
DIS Walt Disney Company (The) 92.20 0.48 0.52 8,272,345
DO Diamond Offshore Drilling Inc. 17.18 1.17 7.31 6,452,523
DY Dycom Industries Inc. 83.73 1.56 1.90 491,970
EIX Edison International 73.70 -0.06 -0.08 1,289,632
ESV Ensco plc Class A 8.15 0.89 12.26 17,220,778
ETE Energy Transfer Equity L.P. representing Limited P 16.70 0.29 1.77 6,671,632
ETN Eaton Corporation PLC 64.57 1.16 1.83 1,916,683
FE FirstEnergy Corporation 33.54 -0.13 -0.39 3,954,414
FRO Frontline Ltd 7.25 0.20 2.84 2,203,238
GCO Genesco Inc. 54.04 0.48 0.90 304,871
GE General Electric Co 29.90 0.02 0.07 26,750,633
GM General Motors Company 31.90 0.30 0.95 10,713,565
HD Home Depot Inc. (The) 128.27 1.45 1.14 5,751,066
HPQ HP Inc. 15.49 0.15 0.98 9,742,233
IBM International Business Machines Corp 158.29 1.52 0.97 3,310,008
INTC Intel Corporation 37.44 0.26 0.70 19,020,799
JASO JA Solar Holdings Co. Ltd. 6.13 0.07 1.16 323,239
JNJ Johnson & Johnson 119.39 0.17 0.14 5,076,091
JOY Joy Global Inc. 27.76 0.15 0.54 1,330,646
JPM JP Morgan Chase 66.71 0.35 0.53 11,278,036
KO Coca-Cola Company (The) 42.15 -0.44 -1.03 15,523,783
LINC Lincoln Educational Services Corporation 2.16 -0.09 -4.00 18,549
MCD McDonald\'s Corporation 115.18 -1.70 -1.45 5,638,874
MMM 3M Company 177.59 1.29 0.73 1,693,951
MOV Movado Group Inc. 21.57 0.13 0.61 170,395
MRK Merck & Company Inc. (new) 63.30 0.73 1.17 11,794,978
MSFT Microsoft Corporation 58.03 0.08 0.14 20,536,400
MTD Mettler-Toledo International Inc. 414.38 0.33 0.08 238,081
NE Noble Corporation (UK) 6.21 0.72 13.11 22,419,038
OKS ONEOK Partners L.P. 39.27 1.05 2.75 471,735
ORIG Ocean Rig UDW Inc. 0.77 -0.01 -1.42 2,419,260
PAA Plains All American Pipeline L.P. 30.92 1.49 5.06 4,391,609
PCG Pacific Gas & Electric Co. 62.38 0.02 0.03 2,050,062
PEG Public Service Enterprise Group 42.75 -0.05 -0.12 1,598,767
PFE Pfizer Inc. 33.99 0.16 0.47 14,307,758
PG Procter & Gamble Company (The) 89.46 1.10 1.24 89,805,967
PRGS Progress Software Corporation 28.40 0.45 1.61 470,876
QCOM QUALCOMM Incorporated 63.45 0.14 0.22 5,251,926
RDC Rowan Companies plc Class A 14.60 1.25 9.36 8,347,269
RFP Resolute Forest Products Inc. 4.67 0.04 0.86 103,588
RIG Transocean Ltd (Switzerland) 10.02 0.60 6.37 42,938,544
RUK RUK n/a n/a n/a 0
SCHN Schnitzer Steel Industries Inc. 20.78 1.15 5.86 410,399
SDRL Seadrill Limited (Bermuda) 2.31 0.38 19.69 18,630,076
SO Southern Company (The) 52.70 -0.14 -0.26 5,819,741
SXL Sunoco Logistics Partners LP representing limited 28.04 0.52 1.89 3,942,972
T AT&T Inc. 40.85 -0.61 -1.47 26,340,209
TEAR TearLab Corporation 0.66 -0.03 -4.35 50,395
TFM The Fresh Market Inc. n/a n/a n/a 0
TRV The Travelers Companies Inc. 115.01 0.60 0.52 862,025
TSM Taiwan Semiconductor Manufacturing Company Ltd. 30.33 -0.07 -0.23 4,125,090
UTX United Technologies Corporation 102.35 0.00 0.00 5,010,726
VIAB Viacom Inc. 36.56 1.09 3.07 10,654,744
VZ Verizon Communications Inc. 52.06 -0.43 -0.82 13,279,093
WIT Wipro Limited 9.78 -0.05 -0.51 629,932
WMT Wal-Mart Stores Inc. 71.79 -0.54 -0.75 6,184,932
XOM Exxon Mobil Corporation 86.90 3.66 4.40 28,117,871
YGE Yingli Green Energy Holding Company Limited ADR 3.81 -0.02 -0.52 32,745

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