Equities Sector Coverage: Stocks Inch Higher on Housing Boost

Sector Recap |

Stock Market Trading FloorHousing 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

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.65 -0.03 -0.31 11,470,339
AAPL Apple Inc. 113.09 0.21 0.19 24,607,412
ACHN Achillion Pharmaceuticals Inc. 8.25 -0.09 -1.08 1,584,960
AGN Allergan plc 239.36 0.68 0.28 2,899,540
AMZN Amazon.com Inc. 816.11 16.95 2.12 3,819,600
ASBPRC Associated Banc n/a n/a n/a 0
ASML ASML Holding N.V. 109.62 0.85 0.78 591,635
ASNA Ascena Retail Group Inc. 5.61 -0.13 -2.26 3,409,495
AXP American Express Company 64.28 0.86 1.36 3,916,263
AZN Astrazeneca PLC 33.61 0.06 0.18 3,677,853
AZO AutoZone Inc. 779.61 20.73 2.73 794,553
BA Boeing Company (The) 131.32 0.75 0.57 1,939,020
BAC Bank of America Corporation 15.29 0.20 1.33 81,992,627
BAX Baxter International Inc. 47.33 0.13 0.28 3,376,963
BBBY Bed Bath & Beyond Inc. 42.16 -0.05 -0.12 2,105,077
BBT BB&T Corporation 37.40 0.37 1.00 4,250,939
BIN Progressive Waste Solutions Ltd. n/a n/a n/a 0
BONT The Bon-Ton Stores Inc. 1.64 -0.02 -1.20 25,873
BP BP p.l.c. 33.61 -0.07 -0.21 4,171,938
BRCM Broadcom Corp. n/a n/a n/a 0
BX The Blackstone Group L.P. Representing Limited Par 25.00 -0.46 -1.81 5,416,835
CAT Caterpillar Inc. 82.88 0.51 0.62 4,295,596
CBI Chicago Bridge & Iron Company N.V. 26.83 -0.32 -1.18 1,203,243
CBRL Cracker Barrel Old Country Store Inc. 135.66 -0.63 -0.46 436,296
CBS CBS Corporation Class B 52.05 0.92 1.80 4,383,770
CLNE Clean Energy Fuels Corp. 4.35 -0.05 -1.14 1,398,859
CSCO Cisco Systems Inc. 31.48 0.41 1.32 18,045,376
CSL Carlisle Companies Incorporated 101.95 0.55 0.54 183,034
CSX CSX Corporation 29.62 -0.09 -0.30 5,256,563
CVX Chevron Corporation 98.98 0.20 0.20 6,476,099
D Dominion Resources Inc. 75.78 -0.82 -1.07 2,936,914
DD E.I. du Pont de Nemours and Co. 67.26 0.74 1.11 1,765,930
DIS Walt Disney Company (The) 91.72 -0.24 -0.26 9,167,391
DOV Dover Corporation 69.45 0.57 0.83 1,628,731
EIX Edison International 74.24 -1.31 -1.73 1,769,825
EMN Eastman Chemical Company 65.50 0.42 0.65 1,807,540
FDP Fresh Del Monte Produce Inc. 59.82 0.19 0.32 177,610
FE FirstEnergy Corporation 33.67 -0.91 -2.63 5,301,436
GE General Electric Co 29.88 0.34 1.15 25,491,940
GIS General Mills Inc. 63.92 0.02 0.03 2,693,107
GLW Corning Incorporated 23.33 0.33 1.43 10,186,997
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GMLP Golar LNG Partners LP 19.23 0.04 0.21 206,712
GS The Goldman Sachs Group Inc. 162.89 1.41 0.87 2,602,686
GSK GlaxoSmithKline PLC 43.32 0.36 0.84 2,084,804
HAS Hasbro Inc. 79.87 0.50 0.63 1,030,723
HD Home Depot Inc. (The) 126.82 1.37 1.09 4,433,646
HPQ HP Inc. 15.34 0.32 2.13 9,061,256
IBM International Business Machines Corp 156.77 2.79 1.81 2,987,195
ILMN Illumina Inc. 180.35 1.88 1.05 793,983
INTC Intel Corporation 37.18 0.53 1.45 22,391,576
JNJ Johnson & Johnson 119.22 1.44 1.22 5,349,466
JPM JP Morgan Chase 66.36 0.58 0.88 13,711,386
KO Coca-Cola Company (The) 42.59 0.54 1.28 11,920,432
KSS Kohl\'s Corporation 42.70 0.02 0.05 1,887,411
KSU Kansas City Southern 91.60 1.50 1.66 1,984,665
LMCA Liberty Media Corporation 28.50 0.31 1.10 300,007
LRCX Lam Research Corporation 92.51 1.10 1.20 1,680,242
LYB LyondellBasell Industries NV Class A (Netherlands) 77.78 1.29 1.69 3,777,659
LYV Live Nation Entertainment Inc. 27.48 0.04 0.15 872,906
MAT Mattel Inc. 31.36 0.08 0.26 2,921,335
MCD McDonald\'s Corporation 116.88 0.35 0.30 3,745,396
MMM 3M Company 176.30 0.35 0.20 2,433,570
MON Monsanto Company 102.25 0.12 0.12 3,109,860
MPC Marathon Petroleum Corporation 41.85 0.37 0.89 4,728,435
MRK Merck & Company Inc. (new) 62.57 0.42 0.68 7,340,756
MRO Marathon Oil Corporation 14.06 -0.35 -2.43 16,028,688
MSFT Microsoft Corporation 57.95 1.05 1.85 28,065,071
MT ArcelorMittal 6.03 -0.03 -0.50 10,660,917
NTRS Northern Trust Corporation 67.55 0.09 0.13 1,004,126
NWS News Corporation 14.32 0.13 0.92 547,376
PCG Pacific Gas & Electric Co. 62.85 -1.05 -1.64 2,941,282
PFE Pfizer Inc. 33.83 0.19 0.56 15,610,585
PG Procter & Gamble Company (The) 88.36 0.51 0.58 65,150,794
PGR Progressive Corporation (The) 31.43 0.21 0.67 3,574,569
PPG PPG Industries Inc. 102.45 0.31 0.30 1,290,438
PSMT PriceSmart Inc. 82.34 1.25 1.54 113,695
RGLD Royal Gold Inc. 78.10 -1.97 -2.46 616,798
SBUX Starbucks Corporation 54.19 0.15 0.28 6,463,747
SCHW Charles Schwab Corporation (The) 30.73 0.27 0.89 6,376,692
SHW Sherwin-Williams Company (The) 282.38 2.07 0.74 430,213
SO Southern Company (The) 52.84 -0.47 -0.88 5,774,119
STJ St. Jude Medical Inc. 79.91 0.85 1.08 2,345,013
T AT&T Inc. 41.46 0.32 0.78 18,440,158
TDW Tidewater Inc. 2.43 0.01 0.41 1,723,859
TRV The Travelers Companies Inc. 114.41 0.47 0.41 1,758,557
UNP Union Pacific Corporation 94.85 0.67 0.71 3,167,357
UTX United Technologies Corporation 102.35 0.12 0.12 4,299,266
VAL Valspar Corporation (The) 106.30 0.03 0.03 187,321
VRA Vera Bradley Inc. 15.71 0.11 0.71 170,536
VZ Verizon Communications Inc. 52.49 0.34 0.65 8,259,032
WBS Webster Financial Corporation 37.65 0.14 0.37 575,820
WM Waste Management Inc. 63.89 0.39 0.61 2,660,580
WMT Wal-Mart Stores Inc. 72.33 0.71 0.99 6,344,407
XOM Exxon Mobil Corporation 83.24 0.18 0.22 9,595,020

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