Equities Sector Coverage: Stocks Let Early Gains Slip to Close in the Red

Sector Recap |

JPMorgan, JPMThe Producer Price Index fell 0.2% in April, up 0.2% excluding food and energy. The preliminary reading for the University of Michigan consumer sentiment came in at 77.8 in May, slightly above estimates, but well below the 90/120 neutral reading. The Dow Jones Industrial Average traded down to 12,779.28 then traded up to 12,918.01, trading below 12,830 going into the final half hour. The NASDAQ traded down to 2918.74 then up to 2960.38 before consolidating into the closing half hour.

Asian stocks were lower on Friday. The Nikkei 225 ended their session at 8,953 – down 0.63% on the day. The Hang Seng ended their session at 19,965 – down 1.30% on the day. European exchanges traded back and forth around the flat line ending the day mixed. The FTSE 100 ended their session at 5,576 – up 0.57% on the day. The DAX ended their session at 6,580 – up 0.95% on the day. The CAC 40 ended their session at 3,130 – flat on the day. The yield on the 10-Year US Treasury declined from 1.869 percent to 1.836 with the yield below its 50-day and 200-day simple moving averages at 2.062 and 2.037.

Gold traded down from $1595.2 the Troy ounce to $1572.0 well below the “Death Cross” 50-day and 200-day simple moving averages at $1654.3 and $1698.6. Crude oil traded down from $96.61 per barrel to $95.61 then up to $97.20 before closing below its 200-day simple moving average at $96.28. The euro versus the dollar traded down from 1.2955 to 1.2909 below its 50-day simple moving average at 1.3161.

Energy

McDermott (MDR) missed Q1 estimates on revenue but beats on a per share basis. Net profit slid 11% year over year on lower fabrication man hours and weaker marine activity in Asia, but cost controls gave a boost to the overall bottom line, and shares rose 9.3% in after hours trading on Thursday. Chesapeake Energy (CHK) still has $1.4 billion of previously unreported liabilities due over the coming years from off-balance sheet deals according to the Wall Street Journal. ReneSola (SOL) beat Q1 EPS estimates by seven cents with a beat on the revenue line. Bio-fuel company Rentech (RTK) beat Q1 EPS estimates by a penny with revenue up 60.8% year over year. Dow components – Chevron (CVX) – up 0.25%, Exxon Mobil (XOM) up 1.0%.
Energy Select Sector SPDR (XLE) was trading at $67.62 at 3:30 PM on Friday, down 0.32% on the day – down 2.18% year-to-date.

Materials

Lam Research (LCRX) will be removed from the S&P 400 and added to the S&P 500, replacing Novellus (NVLS) after their deal to buy LRCX is completed. Royal Gold (RGLD) will be added to the S&P 400 in its place. Dow components – Alcoa (AA) up 0.7%, DuPont (DD) up 0.3%.
The Materials Select Sector SPDR (XLB) was trading at $35.09 at 3:30 PM on Friday, down 0.06% on the day – up 4.75% year-to-date.

Industrials

Darling International (DAR) missed Q1 EPS estimates by six cents with a miss on the revenue line and shares fell 11.5% in after hours trading on Thursday. Molycorp (MCP) beat Q1 EPS estimates by a penny with a miss on the revenue line. Hovnanian (HOV) - UBS upgraded the homebuilder to Buy from Neutral. Dow components – Boeing Co (BA) down 0.15%, Caterpillar (CAT) up 0.5%, General Electric (GE) up 0.5%, 3M Company (MMM) flat, United Technologies (UTX) up 0.6%.
The Industrial Select Sector SPDR (XLI) was trading at $35.79 at 3:30 PM on Friday, up 0.14% on the day – up 6.04% year-to-date.

Consumer Discretionary

Home Inns & Hotels Management (HMIN) missed Q1 EPS estimates by a nickel with a beat on the revenue line. Panasonic (PC) reported that their FQ4 loss increased by more than tenfold and shares dropped 8.0% pre-market. For the current year Panasonic expects to return to profitability. Buckle (BKE) has been initiated with an Underperform at Bank of America-Merrill Lynch, which also rates Zumiez (ZUMZ) a Buy with a $40 price target. Bed Bath & Beyond (BBBY) has been upgraded to Outperform from Neutral at Credit Suisse. Dow Components – Disney (DIS) up 0.6%, Home Depot flat, McDonalds (MCD) up 0.6%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.39 at 3:30 PM on Friday, up 0.14% on the day – up 13.76% year-to-date.

Consumer Staples

Dillards (DDS) beat Q1 estimates across the board on improved comp store sales and better control of expenses. Same store sales rose 5% year over year and the stock popped 3% in after hour trading on Thursday. GameStop (GME) pre-announced Q1 EPS of 54 cents, a penny better than expected, and re-affirmed its full-year EPS outlook. Nordstrom (JWN) missed EPS estimates despite higher revenue and a jump in same-store sales. The company reaffirmed its full-year guidance, but shares fell 5% in the after hours on Thursday. Dow components – Kraft (KFT) up 0.2%, Coca Cola (KO) up 0.25%, Procter & Gamble (PG) flat, Wal-Mart (WMT) up 0.5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.07 at 3:30 PM on Friday, down 0.15% on the day – up 4.86% year-to-date.

Health Care

Arena Pharmaceuticals (ARNA) surged 89% in after hours trading on Thursday after a panel of experts chosen by the FDA voted that their weight loss drug Lorcaserin should be approved. Express Scripts (ESRX) Q1 results were mixed beating on revenue but missing on a per share basis. Dr. Reddy's Laboratories (RDY) reported in-line FQ4 EPS and beat on the revenue line. Dow Components – Johnson & Johnson (JNJ) up 0.25%, Merck (MRK) down 0.5%, Pfizer (PFE) up 0.4%.
The Health Care Select Sector SPDR (XLV) was trading at $37.08 at 3:30 PM on Friday, up 0.08% on the day – up 6.89% year-to-date.

Financials

JPMorgan Chase (JPM) reported after the close that a hedging program against credit stress was not working and the initial mark-to-mark loss was in the $2 billion range. JPM shares fell 6.6% in after hours trading on Thursday. Deutsche Bank (DB) agreed to pay $202 million to settle a US based case charging the bank with recklessly lying about mortgage loan quality to keep access to federal financing. Dow Components – American Express (AXP) up 0.9%, Bank of America (BAC) up 0.2%, JP Morgan Chase (JPM) down 7.4%, Travelers (TRV) flat.
The Financial Select Sector SPDR (XLF) was trading at $14.83 at 3:30 PM on Friday, down 0.34% on the day – up 14.08% year-to-date.

Information Technology

Lam Research (LCRX) will be removed from the S&P 400 and added to the S&P 500, replacing Novellus (NVLS) after their deal to buy LRCX is completed. Royal Gold (RGLD) will be added to the S&P 400 in its place. Nuance (NUAN) beat FQ2 estimates across the board on a 24% year over year rise in total revenue. The company expects a balanced performance across all its markets to sustain growth for the remainder of 2012. Intel (INTC) gave a rosy outlook at its annual meeting, countering comments from Cisco Systems (CSCO) on their weak outlook Intel was also fairly upbeat about PC sales, especially to emerging markets. Nvidia (NVDA) beat Q1 EPS estimates by six cents with better than expected revenue. Dow Components – Cisco Systems (CSCO) down 0.3%, Hewlett-Packard (HPQ) down 0.4%, IBM (IBM) up 0.5%, Intel Corp (INTC) up 2.3%, Microsoft (MSFT) up 1.8%.
The Technology Select Sector SPDR (XLK) was trading at $28.80 at 3:30 PM on Friday, up 0.45% on the day – up 13.16% year-to-date.

Telecommunication Services

Telefonica's (TEF) reported that their Q1 net profit slumped 54%, well below the consensus, as weakness in Europe could not be offset by strong Latin American operations. AT&T (T) remains on the hunt to buy Leap Wireless (LEAP) in an attempt to buy growth through acquisitions in a mature market. Dow members AT&T Inc (T) and Verizon (VZ) have been upgraded to Outperform from Neutral at Credit Suisse. Ericsson (ERIC) has been upgraded to Buy from Neutral at UBS. Windstream (WIN) has been downgraded to Neutral from Buy at Citigroup. Dow components – AT&T (T) up 2.1%, Verizon (VZ) up 1.6%.
The NASDAQ Telecommunications Index (IXTC) was trading at $187.13 at 3:30 PM on Friday, down 0.61% on the day – down 4.98% year-to-date.

Utilities

MYR Group (MYRG) has been initiated with a Neutral rating at Bank of America-Merrill Lynch. Dominion Resources (D) up 0.4%, Edison International (EIX) up 0.5%, First Energy (FE) up 0.5%, PG&E Corp (PCG) up 0.2%, Southern Company (SO) up 0.2%.
The Utilities Select Sector SPDR (XLU) was trading at $35.96 at 3:30 PM on Friday, up 0.14% on the day – down 0.06% year-to-date.

STOCKS: CVX, XOM, MDR, CHK, SOL, RTK, AA, DD, RGLD, BA, CAT, GE, MMM, UTX, DAR, MCP, HOV, DIS, HD, MCD, HMIN, PC, BKE, ZUMZ, BBBY, KFT, KO, PG, WMT, DDS, GME, JWN, JNJ, MRK, PFE, ARNA, ESRX, RDY, AXP, BAC, JPM, TRV, DB, CSCO, HPQ, IBM, INTC, MSFT, LCRX, NVLS, NUAN, NVDA, T, VZ, TEF, LEAP, ERIC, WIN, EIX, FE, PCG, SO, MYRG

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
MMM 3M Company 172.43 -0.20 -0.12 1,871,524
PG Procter & Gamble Company (The) 82.40 0.54 0.66 9,079,412
GE General Electric Co 31.34 -0.05 -0.16 21,401,028
CVX Chevron Corporation 113.00 -0.29 -0.26 6,167,368
SO Southern Company (The) 46.76 0.17 0.36 4,386,169
PCG Pacific Gas & Electric Co. 58.28 0.24 0.41 2,343,089
TEF Telefonica SA 8.18 -0.05 -0.61 1,298,546
JNJ Johnson & Johnson 111.96 0.58 0.52 6,167,740
WMT Wal-Mart Stores Inc. 70.88 0.21 0.30 6,674,206
AA Alcoa Inc. 29.04 0.16 0.55 3,870,822
INTC Intel Corporation 34.16 0.40 1.18 21,492,534
IBM International Business Machines Corp 160.02 0.20 0.13 2,740,867
TRV The Travelers Companies Inc. 115.65 0.24 0.21 1,885,339
BKE Buckle Inc. (The) 24.25 -0.50 -2.02 374,269
IAG Iamgold Corporation 3.86 0.18 4.89 9,047,035
JWN Nordstrom Inc. 56.54 0.50 0.89 2,088,123
EIX Edison International 69.40 0.84 1.23 1,435,505
JPM JP Morgan Chase 81.60 -0.19 -0.23 16,931,504
AXP American Express Company 71.86 -0.67 -0.92 2,959,077
DAR Darling Ingredients Inc. 13.22 -0.07 -0.53 1,126,180
NVLS Nivalis Therapeutics Inc. 2.07 0.00 0.00 334,101
UTX United Technologies Corporation 108.22 0.74 0.69 3,124,427
NVDA NVIDIA Corporation 88.45 0.81 0.92 11,957,300
ARNA Arena Pharmaceuticals Inc. 1.41 0.01 0.71 2,936,708
HOV Hovnanian Enterprises Inc. Class A 2.17 0.17 8.50 3,924,592
ESRX Express Scripts Holding Company 75.66 -0.17 -0.22 2,718,891
DB Deutsche Bank AG 15.74 -0.32 -1.99 5,262,617
MYRG MYR Group Inc. 37.87 -0.45 -1.17 101,628
CSCO Cisco Systems Inc. 29.25 -0.20 -0.68 27,069,499
ERIC Ericsson 5.16 0.04 0.78 4,465,404
RTK Rentech Inc. 1.50 -0.06 -3.85 289,519
DIS Walt Disney Company (The) 98.50 -0.44 -0.44 7,737,193
MDR McDermott International Inc. 6.93 0.04 0.58 4,712,873
VZ Verizon Communications Inc. 49.81 -0.06 -0.12 10,650,716
RDY Dr. Reddy\'s Laboratories Ltd 46.26 0.21 0.46 210,864
BAC Bank of America Corporation 21.23 -0.27 -1.26 128,468,708
MCD McDonald\'s Corporation 118.24 -0.23 -0.19 3,348,723
DD E.I. du Pont de Nemours and Co. 73.13 -0.49 -0.67 3,233,772
GME Gamestop Corporation 24.27 -0.37 -1.50 1,572,836
BBBY Bed Bath & Beyond Inc. 44.77 -0.64 -1.41 1,740,903
DDS Dillard\'s Inc. 70.84 -0.74 -1.03 449,876
WIN Windstream Holdings Inc. 7.27 0.07 0.97 1,628,811
HD Home Depot Inc. (The) 129.87 0.40 0.31 3,738,338
XOM Exxon Mobil Corporation 87.04 -0.20 -0.23 9,706,646
PFE Pfizer Inc. 31.63 0.17 0.54 19,007,839
HPQ HP Inc. 15.12 0.06 0.40 8,377,096
BA Boeing Company (The) 152.25 -0.14 -0.09 2,105,577
HMIN Homeinns Hotel Group ADR (Sponsored) n/a n/a n/a 0
MRK Merck & Company Inc. (new) 61.13 0.37 0.61 7,993,092
FE FirstEnergy Corporation 30.57 -0.42 -1.36 5,280,823
NUAN Nuance Communications Inc. 15.97 0.13 0.82 2,759,152
KO Coca-Cola Company (The) 40.36 0.19 0.47 11,176,301
T AT&T Inc. 38.61 -0.27 -0.69 16,102,161
CAT Caterpillar Inc. 95.14 -1.10 -1.14 5,038,257
SOL Renesola Ltd. of Beneficial Interest 0.69 0.00 0.07 360,001
MSFT Microsoft Corporation 59.25 0.05 0.08 25,515,665
CHK Chesapeake Energy Corporation 7.23 0.18 2.55 51,162,112
ZUMZ Zumiez Inc. 24.70 0.15 0.61 1,315,556
RGLD Royal Gold Inc. 70.72 2.19 3.20 664,235

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