Equities Sector Coverage: Stocks Inch Higher on Housing Boost

Sector Recap  |

Housing Starts rose a less than expected 2.3% to 750,000 units annualized in August. Building Permits fell by 1.0%. Existing Home Sales rose 7.8% in August to an annual rate of 4.82 million, the highest level since May 2010. The Dow Jones Industrial Average traded up to 13,586.35, dipped to 13,556.74 then rallied to 13,626.48 in afternoon trading. The NASDAQ traded up to 3179.33, dipped to 3172.29 then rallied to 3189.35 in afternoon trading.

Asian stocks surged on Wednesday after the Bank of Japan increased their version of quantitative easing. The Nikkei 225 ended the day at 9,232 – up 1.19%. The Hang Seng ended the day at 20,842 – up 1.16%. European exchanges also traded higher on Wednesday. The FTSE 100 ended the day at 5,888 – up 0.35%. The DAX ended the day at 7,391 – up 0.59%. The CAC 40 ended the day at 3,532 – up 0.54%. The yield on the 10-Year US Treasury declined from 1.831% to 1.763% back below the 200-day simple moving average at 1.828%.

Comex gold traded up from $1767.4 the Troy ounce to $1781.8 then down to $1764.2. Nymex crude oil declined from $96.17 per barrel to $91.25, back below its 200-day simple moving average at $96.54. The euro versus the dollar declined from 1.3083 to 1.2996.

Energy

BP (BP) is in sustained negotiations to sell its Texas City refinery to Marathon Petroleum (MPC) for as much as $2.5B. Clean Energy Fuels (CLNE) is a new Hold at KeyBanc Capital. Tidewater (TDW) is an Outperform at Wells Fargo. Golar LNG Partners (GMLP) gets upgraded to Outperform from Market Perform with Wells Fargo. Marathon Oil (MRO) is moved to Outperform from Neutral at Credit Suisse. Dow components – Chevron (CVX) down 0.38%, Exxon Mobil (XOM) down 0.40%. Energy Select Sector SPDR (XLE) was trading at $74.765 at 3:30 PM on Wednesday, down 0.91% on the day – up 8.15% year-to-date.

Materials

ArcelorMittal (MT) is started with a Sell at BTIG. Dow Chemical (DOW), DuPont (DD), PPG Industries (PPG), and Eastman Chemical (EMN) are all Sector Performs at RBC Capital. Outperforms are assigned on LyondellBasell (LYB) and Valspar (VAL). Sherwin-Williams (SHW) is initiated with a Top Pick at RBC Capital. Monsanto (MON) is added to Goldman’s list of Conviction Buys. Royal Gold (RGLD) is now Neutral from Overweight at HSBC Securities. Dow Components – Alcoa (AA) down 0.11%, DuPont (DD) up 0.90%. The Materials Select Sector SPDR (XLB) was trading at $37.885 at 3:30 PM on Wednesday, up 0.60% on the day – up 13.09% year-to-date.

Industrials

AMR (AAMRQ) is sending notices to over 11,000 employees that their jobs might be at risk, although it expects to lay off only around 4,400. Carlisle Cos (CSL) is a new Neutral at Sun Trust. Dover (DOV) is begun with a Buy at Capstone Investments. Chicago Bridge & Iron (CBI) is moved to Neutral from Outperform at Macquarie. Progessive Waste (BIN) is downgraded to Neutral from Overweight at JP Morgan. Kansas City Southern (KSU) is cut to Sell from Neutral at UBS, which gives Neutral-from-Buy reductions to competitors CSX Corp. (CSX), Union Pacific (UNP), and Norfolk Southern (NSC). Waste Management (WM) is downgraded to Underweight from Neutral at JPMorgan.

Big Movers – Excel Maritime Carriers (EXM) is up about 32%. Dow components – Boeing Co (BA) down 0.54%, Caterpillar (CAT) up 0.86%, General Electric (GE) up 0.92%, 3M Company (MMM) up 0.44%, United Technologies (UTX) up 0.14%. The Industrial Select Sector SPDR (XLI) was trading at $37.69 at 3:30 PM on Wednesday, up 0.27% on the day – up 11.67% year-to-date.

Consumer Discretionary

U.S. conglomerate Anschutz said it intends to sell its AEG sports-and-entertainment unit, which could reportedly fetch several billion dollars. Potential buyers could include News Corp. (NWS) and Liberty Media (LMCA), the owner of a 21% stake in AEG ticket rival Live Nation (LYV). Despite Green Mountain's (GMCR) travails, CEO Larry Blanford has given an upbeat interview to the WSJ, pointing out that while sales growth is falling, it's still going to be 15%-20%, which few other companies in GMCR's sector achieve. Blanford's also not worried about Starbucks' (SBUX) single-serve brewing machines, as they're espresso products while GMCR's are for filtered coffee. Amazon (AMZN) is set for another win in the e-book wars after Apple (AAPL) and four major publishers offered to allow retailers to sell the books at discounts for two years in order to end an EU antitrust probe. The publishers include CBS's (CBS) Simon & Schuster and News Corp's (NWS) HarperCollins. Retailers appear to be optimistic about the Christmas holiday season despite the gloom in other sectors because of the global economy. Department store Kohl's (KSS) expects to add 10%. AutoZone (AZO) beat estimates by 6 cents on revenue of $2.8B. Ascena Retail (ASNA) beat estimates by 2 cents and revenue by $140M. Cracker Barrel (CBRL) missed estimates by 10 cents, while beating revenue by $15M. Vera Bradley (VRA) is upgraded to Overweight from Neutral at JPMorgan. Bed Bath & Beyond (BBBY) is cut to Market Perform from Outperform at Oppenheimer. Bon-Ton Stores (BONT) is moved to Underperform from Neutral at Credit Suisse. Hasbro (HAS) and Mattel (MAT) are each Hold from Buy at Needham.
Dow Components – Disney (DIS) up 1.46%, Home Depot (HD) up 1.33%, McDonalds (MCD) up 0.05%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.885 at 3:30 PM on Wednesday, up 1.24% on the day – up 22.72% year-to-date.

Consumer Staples

Despite Green Mountain's (GMCR) travails, CEO Larry Blanford has given an upbeat interview to the WSJ, pointing out that while sales growth is falling, it's still going to be 15%-20%, which few other companies in GMCR's sector achieve. Blanford's also not worried about Starbucks' (SBUX) single-serve brewing machines, as they're espresso products while GMCR's are for filtered coffee. General Mills (GIS) beat estimates by 3 cents with revenue in-line with estimates. Chiquita Brands (CQB) and Fresh Del Monte (FDP) are both hoisted to Buy from Hold at BB&T Capital. PriceSmart (PSMT) is downgraded to Neutral from Buy at Janney Capital. Dow components – Coca Cola (KO) unchanged, Procter & Gamble (PG) up 0.30%, Wal-Mart (WMT) up 0.80%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.23 at 3:30 PM on Wednesday, up 0.42% on the day – up 11.51% year-to-date.

Health Care

Illumina (ILMN) CEO Jay Flatley has told Bloomberg that while the fiscal cliff will affect a third of the gene-sequencing company's customers, "it's going to probably be pretty short-lived." Achillion Pharmaceuticals (ACHN) is begun with a Buy at Deutsche Bank. Allergan (AGN) is a Hold at Canaccord. Baxter International (BAX) is a new Outperform at BMO Capital Markets. Achillion Pharmaceuticals (ACHN) gets a Buy-from-Neutral boost at Bank of America-Merrill Lynch. AstraZeneca (AZN) is now Neutral from Underperform by BNP Paribas. St. Jude Medical (STJ) gets moved to Outperform from Market Perform with Wells Fargo. GlaxoSmithKline (GSK) gets downgraded to Underperform from Outperform by BNP Paribas. Idenix Pharmaceuticals (IDIX) is lowered to Neutral from Buy at Bank of America-Merrill Lynch.
Big Movers – Achillion Pharmaceuticals (ACHN) is up about 15%, Questcor Pharmaceuticals (QCOR) is down about 40%, Idenix Pharmaceuticals (IDIX) is down about 11%. Dow Components – Johnson & Johnson (JNJ) up 0.44%, Merck (MRK) up 1.27%, Pfizer (PFE) up 1.27%, United Health Group down 0.02%. The Health Care Select Sector SPDR (XLV) was trading at $40.15 at 3:30 PM on Wednesday, up 0.30% on the day – up 15.74% year-to-date.

Financial

Blackstone (BX) has agreed to acquire Vivint for $2B from initial investors Goldman Sachs (GS), Jupiter and Peterson, Vivint CEO Todd Pedersen has told Bloomberg, confirming earlier speculation. Goldman Sachs (GS) has named Harvey Schwartz, the global co-head of its securities arm, as its next CFO. Schwartz will replace David Viniar, who is retiring at the end of January after a 12-year stint. Progressive (PGR) is upgraded to Equal Weight from Underweight at Evercore. Webster Financial (WBS) is raised to Strong Buy from Outperform at Raymond James. BB&T Corp. (BBT) is cut to Market Perform from Outperform by Sanford Bernstein. Charles Schwab (SCHW) is cut to Neutral from Buy at Goldman. Northern Trust (NTRS) is now Underperform from Neutral at Credit Suisse. Dow Components – American Express (AXP) up 0.28%, Bank of America (BAC) up 0.81%, JP Morgan Chase (JPM) up 0.30%, Travelers (TRV) up 0.09%. The Financial Select Sector SPDR (XLF) was trading at $16.07 at 3:30 PM on Wednesday, up 0.12% on the day – up 23.62% year-to-date.

Information Technology

Amazon (AMZN) is set for another win in the e-book wars after Apple (AAPL) and four major publishers offered to allow retailers to sell the books at discounts for two years in order to end an EU antitrust probe. The publishers include CBS's (CBS) Simon & Schuster and News Corp's (NWS) HarperCollins. The first iPhone 5 (AAPL) reviews are out and they mostly gush with praise. ASML Holding (ASML) is initiated with an Overweight at JPMorgan. Corning (GLW) gets a Buy-from-Neutral boost at Goldman Sachs. Broadcom (BRCM) is moved to Market Perform from Outperform at Wells Fargo. Lam Research (LRCX) is now Neutral from Buy at Citigroup. Dow Components – Cisco Systems (CSCO) down 0.50%, Hewlett-Packard (HPQ) down 0.77%, IBM (IBM) down 0.09%, Intel Corp (INTC) down 0.09%, Microsoft (MSFT) down 0.11%. The Technology Select Sector SPDR (XLK) was trading at $31.715 at 3:30 PM on Wednesday, up 0.27% on the day – up 24.62% year-to-date.

Telecommunication Services

Dow Components – AT&T (T) up 0.41%, Verizon (VZ) up 0.67%. The NASDAQ Telecommunications Index (IXTC) was trading at $200.68 at 3:30 PM on Wednesday, up 0.32% on the day – up 1.90% year-to-date.

Utilities

The Big Names – Dominion Resources (D) down 0.04%, Edison International (EIX) up 0.09%, First Energy (FE) up 0.46%, PG&E Corp (PCG) up 0.20%, Southern Company (SO) up 0.21%. The Utilities Select Sector SPDR (XLU) was trading at $36.283 at 3:30 PM on Wednesday, up 0.23% on the day – up 0.84% 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, BP, MPC, CLNE, TDW, GMLP, MRO, MT, DOW, DD, PPG, EMN, LYB, VAL, SHW, MON, RGLD, AAMRQ, CSL, DOV, CBI, BIN, KSU, CSX, UNP, NSC, WM, EXM, NWS, LMCA, LYV, GMCR, SBUX, AMZN, AAPL, CBS, NWS, KSS, AZO, ASNA, CBRL, VRA, BBBY, BONT, HAS, MAT, GMCR, SBUX, GIS, CQB, FDP, PSMT, ILMN, ACHN, AGN, BAX, ACHN, AZN, STJ, GSK, IDIX, ACHN, QCOR, IDIX, BX, GS, GS, PGR, WBS, BBT, SCHW, NTRS, AMZN, AAPL, CBS, NWS, AAPL, ASML, GLW, BRCM, LRCX

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CBS CBS Corporation Class B 50.57 -0.07 -0.14 4,189,727 Trade
BX The Blackstone Group L.P. Representing Limited Partnership Interests 33.50 0.15 0.45 4,394,840 Trade
MMM 3M Company 208.41 -0.45 -0.22 1,534,445 Trade
GLW Corning Incorporated 34.20 -0.31 -0.90 3,378,303 Trade
WBS Webster Financial Corporation 56.55 0.66 1.18 398,160 Trade
GSK GlaxoSmithKline PLC 41.29 0.05 0.12 2,676,334 Trade
ASML ASML Holding N.V. 182.46 -1.91 -1.04 900,465 Trade
SHW Sherwin-Williams Company (The) 437.55 -1.63 -0.37 593,626 Trade
TDW Tidewater Inc. 23.48 0.43 1.87 227,490 Trade
PG Procter & Gamble Company (The) 99.99 1.51 1.53 10,098,235 Trade
GE General Electric Company 10.13 0.04 0.40 63,548,341 Trade
ASNA Ascena Retail Group Inc. 2.31 0.06 2.67 2,253,781 Trade
CVX Chevron Corporation 119.31 -0.04 -0.03 4,277,827 Trade
SO Southern Company (The) 48.92 0.36 0.74 6,268,945 Trade
WM Waste Management Inc. 99.08 0.02 0.02 2,185,058 Trade
PCG Pacific Gas & Electric Co. 17.74 2.26 14.60 29,410,611 Trade
BAX Baxter International Inc. 73.47 0.04 0.05 1,999,491 Trade
AZO AutoZone Inc. 916.68 -3.07 -0.33 293,170 Trade
LYV Live Nation Entertainment Inc. 55.69 -0.65 -1.15 1,151,559 Trade
JNJ Johnson & Johnson 135.69 -0.69 -0.51 5,935,495 Trade
PPG PPG Industries Inc. 108.73 -0.38 -0.35 977,748 Trade
AA Alcoa Corporation 28.21 -0.06 -0.21 3,029,469 Trade
CSX CSX Corporation 72.51 -0.03 -0.04 4,707,922 Trade
INTC Intel Corporation 51.40 -0.26 -0.50 15,600,433 Trade
D Dominion Energy Inc. 73.54 0.28 0.38 6,080,955 Trade
TRV The Travelers Companies Inc. 129.10 0.36 0.28 1,459,280 Trade
BONT Bankers Petroleum Ltd. n/a n/a n/a n/a
MPC Marathon Petroleum Corporation 65.01 0.39 0.60 3,836,479 Trade
PSMT PriceSmart Inc. 62.55 -0.09 -0.14 109,360 Trade
ASBPRC Associated Banc n/a n/a n/a 0 Trade
CSL Carlisle Companies Incorporated 121.80 0.78 0.64 312,631 Trade
EIX Edison International 61.65 1.15 1.90 2,141,628 Trade
AXP American Express Company 106.50 -0.88 -0.82 3,692,762 Trade
FDP Fresh Del Monte Produce Inc. 29.21 -6.01 -17.06 1,113,690 Trade
LRCX Lam Research Corporation 180.31 -0.78 -0.43 1,551,617 Trade
UTX United Technologies Corporation 128.64 0.88 0.69 6,092,515 Trade
MRO Marathon Oil Corporation 17.03 0.00 0.00 11,335,905 Trade
LMCA Liberty Media Corp (DE) n/a n/a n/a 0 Trade
BIN Liberty Media Corp (DE) n/a n/a n/a n/a
VRA Vera Bradley Inc. 9.37 0.12 1.30 140,373 Trade
CSCO Cisco Systems Inc. 49.65 0.22 0.45 20,204,504 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 87.48 -0.16 -0.18 2,320,991 Trade
AGN Allergan plc 137.96 -1.11 -0.80 1,849,203 Trade
GS Goldman Sachs Group Inc. (The) 198.67 0.17 0.09 2,550,764 Trade
VZ Verizon Communications Inc. 55.44 0.28 0.51 12,272,733 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
MAT Mattel Inc. 14.01 0.19 1.37 30,551,114 Trade
BBT BB&T Corporation 51.11 0.41 0.81 6,593,522 Trade
BAC Bank of America Corporation 29.13 0.02 0.07 40,836,410 Trade
EMN Eastman Chemical Company 82.87 0.16 0.19 1,108,653 Trade
ILMN Illumina Inc. 302.26 2.44 0.81 929,041 Trade
MCD McDonald's Corporation 179.25 -0.72 -0.40 4,764,874 Trade
KSS Kohl's Corporation 66.24 0.31 0.47 3,090,911 Trade
SBUX Starbucks Corporation 70.20 -0.51 -0.72 9,207,562 Trade
BBBY Bed Bath & Beyond Inc. 16.77 -0.15 -0.89 3,660,798 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
ACHN Achillion Pharmaceuticals Inc. 2.43 0.05 2.10 1,000,713 Trade
GIS General Mills Inc. 45.74 0.70 1.55 5,193,203 Trade
PFE Pfizer Inc. 42.60 0.20 0.47 23,181,238 Trade
KSU Kansas City Southern 109.55 2.01 1.87 1,462,264 Trade
GMLP Golar LNG Partners LP 13.94 -0.21 -1.48 277,723 Trade
MT Arcelor Mittal NY Registry Shares NEW 22.61 -0.47 -2.04 6,070,644 Trade
HPQ HP Inc. 23.25 -0.03 -0.13 7,177,139 Trade
AZN Astrazeneca PLC 40.46 -0.46 -1.12 8,070,897 Trade
MRK Merck & Company Inc. (new) 79.24 -0.57 -0.71 9,207,392 Trade
NTRS Northern Trust Corporation 93.00 -0.09 -0.10 864,116 Trade
BP BP p.l.c. 42.38 0.09 0.21 4,014,034 Trade
FE FirstEnergy Corp. 39.60 0.01 0.03 4,475,268 Trade
BRCM Broadcom Corp. n/a n/a n/a 0 Trade
HAS Hasbro Inc. 87.46 1.06 1.23 1,550,318 Trade
PGR Progressive Corporation (The) 71.81 0.55 0.77 3,478,273 Trade
CBRL Cracker Barrel Old Country Store Inc. 172.29 1.66 0.97 261,959 Trade
KO Coca-Cola Company (The) 44.83 -0.41 -0.91 25,496,096 Trade
T AT&T Inc. 30.63 0.16 0.53 24,616,569 Trade
CAT Caterpillar Inc. 135.80 -0.40 -0.29 3,880,271 Trade
SCHW Charles Schwab Corporation (The) 47.06 0.70 1.51 4,977,702 Trade
DOV Dover Corporation 91.42 0.22 0.24 1,022,307 Trade
UNP Union Pacific Corporation 171.33 1.09 0.64 3,889,680 Trade
MSFT Microsoft Corporation 108.17 -0.05 -0.05 18,027,025 Trade
CLNE Clean Energy Fuels Corp. 2.00 0.11 5.82 747,741 Trade
NWS News Corporation 13.02 0.09 0.70 574,322 Trade
RGLD Royal Gold Inc. 89.30 2.11 2.42 471,622 Trade
WMT Walmart Inc. 102.20 2.21 2.21 20,683,056 Trade
IBM International Business Machines Corporation 138.70 0.67 0.49 3,383,979 Trade
AAPL Apple Inc. 170.93 0.51 0.30 18,961,505 Trade
JPM JP Morgan Chase & Co. 105.18 -0.37 -0.35 12,763,462 Trade
AMZN Amazon.com Inc. 1,627.58 19.63 1.22 3,673,305 Trade
DIS The Walt Disney Company 113.51 0.92 0.82 8,167,553 Trade
HD Home Depot Inc. (The) 192.33 -0.06 -0.03 3,828,354 Trade
XOM Exxon Mobil Corporation 78.23 0.52 0.67 13,549,491 Trade
BA The Boeing Company 416.26 -1.71 -0.41 3,049,157 Trade

Comments


Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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