Equities Sector Coverage: Stocks Lose Gains to Close Down

Sector Recap |

Bear MarketThe Dow Jones Industrial Average reached 12,179 with the NASDAQ at 2723. The NASDAQ is up just 1.9% year to date and is down 6.4% from its May 2nd high. Stocks opened higher on Tuesday after experiencing four consecutive losing days.

Asian stocks were mixed on Tuesday with the Nikkei 225 up 0.7% to 9,443 and the Hang Seng down 0.4%. European stocks ended modestly higher with the FTSE 100 up 0.3%, the DAX up 0.5% and the CAC 40 up 0.3%. The yield on the 10-Year US Treasury note traded up from 2.993 percent to 3.055 then stabilized as the US Treasury auctioned $32 billion 3-Year notes at 0.765% with a reasonably strong bid to cover of 3.28 times. The 10-Year yield moved back to 3% in afternoon trading. On Wednesday the US Treasury auctions $21 billion 10-Year notes, and on Thursday the US Treasury auctions $13 billion 30-Year bonds.

Comex gold traded up to $1551.4 the Troy ounce on Tuesday then faded back to $1537.0 before rebounding again. Nymex crude oil continued to drift lower down to $97.74 per barrel then rebounded back above $99. The euro stayed firm trading up from 1.4568 to nearly 1.47 in the final hour of trading. Stocks traded lower in the US on Monday with the Dow Industrial Average down 61 points to 12,090 and the NASDAQ lower by 30 points to 2703. The Dow ended Monday up 4.4% year to date and down 6.1% since May 2nd.

Energy

Top BP (BP) executives have notified TNK-BP's Russian oligarch shareholders that the British firm will soon send a letter formally announcing its plans to sell down its 50% stake in the JV, with BP planning to sell half the holding to Rosneft. BP shares were 0.8% higher mid-afternoon. Energy stocks with upward momentum of more than 4% on Tuesday include Holly Corp (HOC), Sunoco Inc (SUN) and Yanzhou Coal Mining Co (YZC).

The Energy Select Sector SPDR (XLE) was trading at $73.55 at 4:00 PM on Tuesday, flat on the day – up 7.77% year-to-date.

Materials

CRH Plc. (CRH) is upgraded to Outperform from Neutral at Credit Suisse and shares were 2.2% higher in afternoon trading. Southern Copper (SCCO) is downgraded to Hold from Buy at Citigroup, but shares were flat in afternoon trading. Shares in Temple-Inland (TIN) jumped about 41% after the provider of packaging and building materials received a $3.31B hostile offer from International Paper (IP), which rose by 1.4% in afternoon trading. Materials stocks gaining 4% or more Tuesday afternoon were Mechel OAO (MTL), MeadWestvaco (MWV), and Packaging Corp of America (PKG) which was up by more than 6%.

The Materials Select Sector SPDR (XLB) traded at $37.84 at 4:00 PM on Tuesday, up 0.37% on the day – down 1.48% year-to-date.

Industrials

BE Aerospace (BEAV) is added to the Conviction Buy List at Goldman and shares were up nearly 3% in afternoon trading. Stocks in this sector gaining more than 4% on Tuesday include MasTec (MTZ). A couple of big losers were 51job Inc (JOBS) was down 12% in afternoon trading and Navistar International (NAV) down about 5%.

The Industrial Select Sector SPDR (XLI) traded at $35.82 at 4:00 PM on Tuesday, down 0.06% on the day – up 2.72% year-to-date.

Consumer Discretionary

Ford (F) CEO Alan Mulally is expected to unveil a plan today to increase the company's worldwide sales to 8M by the middle of the decade from 5.3M. The stock was up 0.7% in mid-afternoon trading. Ford is putting a particular focus on Asia, where it lags behind Toyota (TM), General Motors (GM) and Volkswagen (VLKAY:US). McDonald’s (MCD) and Starbucks (SBUX) are begun with a Buy at Lazard Capital Markets, Buffalo Wild Wings (BWLD) is a new Neutral. Michelin (MGDDY) gets moved to Outperform from Market Perform by BNP Paribas. PF Chang’s (PFCB) is now Neutral from Underperform at Credit Suisse. The stocks rising by more than 4% on Tuesday include; Cablevision Systems (CVC) up 5.5%, Hermes Intl SA (HESAF) up by about 8% and Zumiez (ZUMZ) up by about 5%. Pep Boys Manny Moe & Jack (PBY) slumped by about 16%. An even bigger loser was Talbots (TLB) had its share price cut by about 40%.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $38.55 at 4:00 PM on Tuesday, up 0.1% on the day – up 3.05% year-to-date.

Consumer Staples

Energizer (ENR) is a new Buy at Standpoint Research, which has a $90 price target. Corn Products (CPO) was sharply higher before the bell after being boosted to Buy from Hold at Deutsche Bank. The stock was up 2.6% in afternoon trading. The stocks up by more than 4% include; Supervalu Inc (SVU) which was up about 5% in afternoon trading.

The Consumer Staples Select Sector SPDR (XLP) traded at $31.08 at 4:00 PM on Tuesday, down 0.22% on the day – up 6.04% year-to-date.

Healthcare

AEterna Zentaris (AEZS) is initiated with an Outperform at Oppenheimer. Stryker (SYK) and Zimmer (ZMH) are new Neutrals at Gleacher. Vail Resorts (MTN) is a new Market Perform at Rodman & Renshaw. VCA Antech (WOOF) is upgraded to Overweight from Equal Weight at First Analysis. United Therapeutics (UTHR) is now Neutral from Add at Citadel. The stocks up by more than 4% include; Ariad Pharmaceuticals (ARIA) was nearly 10% higher in afternoon trading. Elan Corp (ELN) rose by about 6%. Exelixis Inc (EXEL) was up about 12%. Phamasset (VRUS) gained about 5%.

The Health Care Select Sector SPDR (XLV) traded at $35.05 at 4:00 PM on Tuesday, up 0.20% on the day – up 11.27% year-to-date.

Financials

U.S. Internet bank GE (GE) and Capital One Financial (COF) have submitted bids for ING's (ING) U.S. online bank in a sale that may raise about $9B. Barclays (BCS) must give back $2B in margin collateral to the trustee liquidating the remains of Lehman Brothers Holdings’ brokerage and pay $270M in interest, a U.S. bankruptcy judge has ruled. Radian Group (RDN) is a new Neutral at Susquehanna, which has a Positive on MGIC Investment (MTG). Colonial Properties Trust (CLP) is added to the Top Picks list at FBR Capital. Credit Agricole (CRARY) is raised to Buy from Neutral at Nomura. Susquehanna Bank (SUSQ) is raised to Outperform at Macquarie. Essex Property Trust (ESS) is removed from the Top Picks list at FBR Capital. Nara Bancorp (NARA) was a big loser down nearly 12% in afternoon trading.

The Financial Select Sector SPDR (XLF) traded at $14.89 at 4:00 PM on Tuesday, down 0.27% on the day – down 6.65% year-to-date.

Information Technology

Apple (AAPL) shares fell 1.6% yesterday after Steve Jobs' unveiling of iCloud fell short of the usual hype. Many of the features, such as online music storage and iBooks, are available elsewhere, not that this has stopped Apple succeeding wildly before, as with the iPod and iPhone. Nintendo (NTDOY:US) is expected to unveil the next-generation Wii console when the E3 video games conference opens today in Los Angeles. At a pre-conference event last night, Sony (SNE) launched a new handheld device called the PlayStation Vita, a 24-inch 3D display and 3D glass. Microsoft (MSFT) introduced new Xbox 360 features and games, including the use of voice-activated search via Bing that can be used with Netflix, Hulu Plus, YouTube and other sites. The SEC is looking at how Microsoft (MSFT) uses foreign tax planning to reduce its U.S. taxes, forcing the company to reveal that $42B of its $50.2B cash mountain is held abroad. SanDisk (SNDK) gets started with a Buy at Goldman Sachs, which has a Neutral on STEC Inc (STEC) and a Sell on Micron (MU). RF Micro Device (RFMD) is initiated with a Buy at Cantor Fitzgerald, as is TriQuint Semiconductor (TQNT). Symantec (SYMC) is upgraded to Outperform from Neutral at Cowen. Xilinx (XLNX) gets lifted to Neutral from Sell at Goldman. Juniper Networks (JNPR) is now Overweight from Equal Weight at Evercore Partners. Citrix Systems (CTXS) is downgraded to Underweight from Neutral at JP Morgan. CA Tech (CA) is now Neutral from Outperform at Cowen.

The Technology Select Sector SPDR (XLK) traded at $25.27 at 4:00 PM on Tuesday, down 0.32% on the day – up 0.32% year-to-date.

Telecommunications Services

Sprint Nextel (S) is downgraded to Sell from Hold at Stifel Nicolaus and shares were down 2.2% in afternoon trading. Clearwire Corp (CLWR) gained about 3% on Tuesday. Actively traded AT&T (T) was up 0.5% with Verizon (VZ) up nearly 1%. Vodafone (VOD) was up about 1.7%.

The NASDAQ Telecommunications Index (IXTC) traded at $214.15 at 4:00 PM on Tuesday, down 0.66% on the day – down 4.98% year-to-date.

Utilities

This sector was stable on Tuesday with some modest gains. Duke Energy (DUK) gained about 0.5%. Dominion Resources (D) was 1.6% higher. Southern Co (SO) was up 0.4%. Progress Energy (PGN) was 0.5%.

The Utilities Select Sector SPDR (XLU) traded at $33.08 at 4:00 PM on Tuesday, up 0.12% on the day – up 5.55% year-to-date.

STOCKS: BP, HOC, SUN,YZC, CRH, SCCO, TIN, IP, MTL, MWC, PKG, BEAV, MTZ, JOBS, NAV, F, TM, GM, VLKAY.PK, MCD, SBUX, BWLD, MGDDY, PFCB, CVC, PBY, TLB, ZUMZ, ENR, CPO, SVU, AEZS, SYK, ZMH, MTN, WOOF, UTHR, ARIA, ELN, EXEL, VRUS, GE, COF, ING, BCS, RDN, MTG, CLP, CRARY, SUSQ, ESS, NARA, AAPL, NTDOY.PK, SNE, MSFT, SNDK, STEC, RFMD, TQNT, SYMC, XLNX, CTXS, CA, S, CLWR, T, VZ, VOD, DUK, D, SO, PGN

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Companies

Symbol Name Price Change % Volume
GLW Corning Incorporated 23.63 0.08 0.34 8,595,922

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