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

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Companies

Symbol Name Price Change % Volume
MMM 3M Company 219.24 0.97 0.44 1,369,000 Trade
PG Procter & Gamble Company (The) 91.59 -0.49 -0.53 8,584,972 Trade
GE General Electric Co 23.58 0.46 1.99 75,574,053 Trade
CVX Chevron Corporation 118.20 0.05 0.04 4,576,638 Trade
SO Southern Company (The) 52.00 0.73 1.42 4,804,567 Trade
PCG Pacific Gas & Electric Co. 57.00 0.56 0.99 10,741,821 Trade
TEF Telefonica SA 10.40 -0.12 -1.14 1,019,028 Trade
JNJ Johnson & Johnson 142.04 1.36 0.97 9,181,291 Trade
WMT Wal-Mart Stores Inc. 86.40 0.18 0.21 7,028,958 Trade
AA Alcoa Inc. 46.54 -1.21 -2.53 6,033,142 Trade
INTC Intel Corporation 40.09 -0.16 -0.40 19,222,705 Trade
IBM International Business Machines Corp 160.90 1.37 0.86 9,914,169 Trade
TRV The Travelers Companies Inc. 133.17 3.15 2.42 2,970,858 Trade
BKE Buckle Inc. (The) 16.10 0.05 0.31 212,716 Trade
IAG Iamgold Corporation 5.77 0.07 1.23 3,391,723 Trade
JWN Nordstrom Inc. 41.73 -0.28 -0.67 1,123,742 Trade
EIX Edison International 79.47 1.62 2.08 1,321,038 Trade
JPM JP Morgan Chase 98.11 0.12 0.12 9,133,863 Trade
AXP American Express Company 91.90 -0.18 -0.20 6,512,126 Trade
DAR Darling Ingredients Inc. 17.06 0.08 0.47 679,983 Trade
NVLS Nivalis Therapeutics Inc. n/a n/a n/a n/a
UTX United Technologies Corporation 119.49 0.31 0.26 1,631,657 Trade
NVDA NVIDIA Corporation 197.80 0.22 0.11 14,269,253 Trade
ARNA Arena Pharmaceuticals Inc. 27.31 -0.25 -0.91 740,230 Trade
HOV Hovnanian Enterprises Inc. Class A 2.31 0.02 0.87 1,249,687 Trade
ESRX Express Scripts Holding Company 58.75 0.98 1.70 3,797,088 Trade
DB Deutsche Bank AG 16.87 -0.02 -0.12 2,711,639 Trade
MYRG MYR Group Inc. 30.49 -0.43 -1.39 97,372 Trade
CSCO Cisco Systems Inc. 33.75 0.20 0.60 13,203,111 Trade
ERIC Ericsson 5.90 -0.08 -1.34 10,440,135 Trade
RTK Rentech Inc. n/a n/a n/a n/a
DIS Walt Disney Company (The) 99.01 0.76 0.77 5,634,272 Trade
MDR McDermott International Inc. 6.29 -0.10 -1.56 2,512,669 Trade
VZ Verizon Communications Inc. 49.21 0.56 1.15 29,173,869 Trade
RDY Dr. Reddy\'s Laboratories Ltd 36.31 -0.13 -0.36 114,025 Trade
BAC Bank of America Corporation 26.58 0.10 0.38 54,542,694 Trade
MCD McDonald\'s Corporation 166.50 0.73 0.44 2,478,221 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
GME Gamestop Corporation 20.05 0.00 0.00 1,271,642 Trade
BBBY Bed Bath & Beyond Inc. 21.20 0.07 0.33 4,099,867 Trade
DDS Dillard\'s Inc. 51.40 0.21 0.41 514,635 Trade
WIN Windstream Holdings Inc. 1.90 -0.11 -5.47 8,389,851 Trade
HD Home Depot Inc. (The) 163.24 -0.21 -0.13 2,676,062 Trade
XOM Exxon Mobil Corporation 82.74 -0.02 -0.02 7,945,461 Trade
PFE Pfizer Inc. 36.24 0.41 1.14 19,789,423 Trade
HPQ HP Inc. 21.96 0.24 1.11 10,247,749 Trade
BA Boeing Company (The) 259.04 -1.00 -0.38 2,589,203 Trade
HMIN Homeinns Hotel Group ADR (Sponsored) n/a n/a n/a 0 Trade
MRK Merck & Company Inc. (new) 63.75 0.24 0.38 10,071,235 Trade
FE FirstEnergy Corporation 32.30 0.31 0.97 3,206,729 Trade
NUAN Nuance Communications Inc. 15.32 -0.34 -2.17 2,740,341 Trade
KO Coca-Cola Company (The) 46.59 0.19 0.41 7,515,545 Trade
T AT&T Inc. 35.69 -0.02 -0.06 32,887,368 Trade
CAT Caterpillar Inc. 131.55 0.26 0.20 4,837,581 Trade
SOL Renesola Ltd. of Beneficial Interest 2.37 0.05 2.16 57,133 Trade
MSFT Microsoft Corporation 77.91 0.30 0.39 15,092,758 Trade
CHK Chesapeake Energy Corporation 3.84 0.07 1.86 23,884,525 Trade
ZUMZ Zumiez Inc. 17.50 0.10 0.57 183,328 Trade
RGLD Royal Gold Inc. 87.71 0.20 0.23 292,696 Trade

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