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 41.88 0.00 0.00 1,474 Trade
MMM 3M Company 166.76 0.00 0.00 3,867 Trade
GLW Corning Incorporated 27.76 0.00 0.00 542 Trade
WBS Webster Financial Corporation 48.38 0.00 0.00 0 Trade
GSK GlaxoSmithKline PLC 41.63 0.00 0.00 77,151 Trade
ASML ASML Holding N.V. 245.79 0.00 0.00 5,030 Trade
SHW Sherwin-Williams Company (The) 550.54 0.00 0.00 65 Trade
TDW Tidewater Inc. 16.57 0.00 0.00 0 Trade
PG Procter & Gamble Company (The) 122.24 0.00 0.00 5,240 Trade
GE General Electric Company 9.37 0.00 0.00 156,185 Trade
ASNA Ascena Retail Group Inc. 0.29 0.00 0.00 2 Trade
CVX Chevron Corporation 124.32 0.00 0.00 7,193 Trade
SO Southern Company (The) 61.11 0.00 0.00 3,471 Trade
WM Waste Management Inc. 115.28 0.00 0.00 848 Trade
PCG Pacific Gas & Electric Co. 11.61 0.00 0.00 3,282 Trade
BAX Baxter International Inc. 87.40 0.00 0.00 1,904 Trade
AZO AutoZone Inc. 1,159.37 0.00 0.00 318 Trade
LYV Live Nation Entertainment Inc. 67.39 0.00 0.00 0 Trade
JNJ Johnson & Johnson 131.65 0.00 0.00 5,218 Trade
PPG PPG Industries Inc. 119.26 0.00 0.00 351 Trade
AA Alcoa Corporation 21.70 0.00 0.00 14,127 Trade
CSX CSX Corporation 68.62 0.00 0.00 651 Trade
INTC Intel Corporation 50.72 0.00 0.00 26,310 Trade
D Dominion Energy Inc. 80.84 0.00 0.00 669 Trade
TRV The Travelers Companies Inc. 146.28 0.00 0.00 10,513 Trade
BONT Bankers Petroleum Ltd. n/a n/a n/a n/a
MPC Marathon Petroleum Corporation 55.10 0.00 0.00 1,747 Trade
PSMT PriceSmart Inc. 60.34 0.00 0.00 3,009 Trade
ASBPRC Associated Banc n/a n/a n/a 0 Trade
CSL Carlisle Companies Incorporated 145.23 0.00 0.00 0 Trade
EIX Edison International 72.74 0.00 0.00 224 Trade
AXP American Express Company 116.80 0.00 0.00 766 Trade
FDP Fresh Del Monte Produce Inc. 30.73 0.00 0.00 0 Trade
LRCX Lam Research Corporation 235.31 0.00 0.00 1,626 Trade
UTX United Technologies Corporation 135.57 0.00 0.00 4,822 Trade
MRO Marathon Oil Corporation 13.18 0.00 0.00 4,762 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. 9.76 0.00 0.00 0 Trade
CSCO Cisco Systems Inc. 49.60 0.00 0.00 12,682 Trade
LYB LyondellBasell Industries NV Class A (Netherlands) 88.29 0.00 0.00 600 Trade
AGN Allergan plc 166.47 0.00 0.00 1,112 Trade
GS Goldman Sachs Group Inc. (The) 213.74 0.00 0.00 6,612 Trade
VZ Verizon Communications Inc. 60.29 0.00 0.00 3,373 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
MAT Mattel Inc. 11.35 0.00 0.00 2 Trade
BBT BB&T Corporation 52.42 0.00 0.00 862 Trade
BAC Bank of America Corporation 29.59 0.00 0.00 150,793 Trade
EMN Eastman Chemical Company 72.33 0.00 0.00 208 Trade
ILMN Illumina Inc. 309.57 0.00 0.00 1,798 Trade
MCD McDonald's Corporation 209.39 0.00 0.00 2,834 Trade
KSS Kohl's Corporation 49.02 0.00 0.00 250 Trade
SBUX Starbucks Corporation 90.07 0.00 0.00 1,985 Trade
BBBY Bed Bath & Beyond Inc. 9.82 0.00 0.00 431 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
ACHN Achillion Pharmaceuticals Inc. 3.74 0.00 0.00 1 Trade
GIS General Mills Inc. 54.33 0.00 0.00 2,904 Trade
PFE Pfizer Inc. 36.69 0.00 0.00 2,926 Trade
KSU Kansas City Southern 132.04 0.00 0.00 8 Trade
GMLP Golar LNG Partners LP 10.03 0.00 0.00 1 Trade
MT Arcelor Mittal NY Registry Shares NEW 15.03 0.00 0.00 125,921 Trade
HPQ HP Inc. 18.47 0.00 0.00 3,780 Trade
AZN Astrazeneca PLC 45.18 0.00 0.00 83,492 Trade
MRK Merck & Company Inc. (new) 85.16 0.00 0.00 12,652 Trade
NTRS Northern Trust Corporation 94.27 0.00 0.00 66 Trade
BP BP p.l.c. 38.99 0.00 0.00 39,713 Trade
FE FirstEnergy Corp. 47.39 0.00 0.00 88 Trade
BRCM Broadcom Corp. n/a n/a n/a 0 Trade
HAS Hasbro Inc. 117.63 0.00 0.00 133 Trade
PGR Progressive Corporation (The) 76.01 0.00 0.00 356 Trade
CBRL Cracker Barrel Old Country Store Inc. 166.12 0.00 0.00 15 Trade
KO Coca-Cola Company (The) 53.91 0.00 0.00 12,961 Trade
T AT&T Inc. 37.91 0.00 0.00 101,275 Trade
CAT Caterpillar Inc. 128.16 0.00 0.00 7,700 Trade
SCHW Charles Schwab Corporation (The) 42.78 0.00 0.00 506 Trade
DOV Dover Corporation 98.91 0.00 0.00 12 Trade
UNP Union Pacific Corporation 166.38 0.00 0.00 121 Trade
MSFT Microsoft Corporation 139.44 0.00 0.00 64,780 Trade
CLNE Clean Energy Fuels Corp. 2.11 0.00 0.00 1,100 Trade
NWS News Corporation 14.32 0.00 0.00 9 Trade
RGLD Royal Gold Inc. 127.47 0.00 0.00 1,185 Trade
WMT Walmart Inc. 116.98 0.00 0.00 7,734 Trade
IBM International Business Machines Corporation 141.88 0.00 0.00 1,379 Trade
AAPL Apple Inc. 217.73 0.00 0.00 165,985 Trade
JPM JP Morgan Chase & Co. 118.90 0.00 0.00 15,984 Trade
AMZN Amazon.com Inc. 1,794.16 0.00 0.00 33,222 Trade
DIS The Walt Disney Company 132.27 0.00 0.00 15,380 Trade
HD Home Depot Inc. (The) 224.67 0.00 0.00 5,152 Trade
XOM Exxon Mobil Corporation 72.08 0.00 0.00 8,259 Trade
BA The Boeing Company 379.39 0.00 0.00 11,863 Trade

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     

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