Nonmanufacturing ISM came in at 53.4 in March with prices paid elevated at 61.0. Construction Spending fell 1.1% in February the largest decline since July 2011. The Dow Jones Industrial Average declined to 13,153.69 then rebounded to a new 52-week high at 13,297.11 going into the final half hour of trading. The NASDAQ’s traded down to 3079.78 then rebounded to 3123.03 shy of its 52-week high at 3134.17 set on March 27th going into the final half hour of trading.
Asian stocks were mixed on Monday. The Nikkei 225 ended their session at 10,110 – up 0.26% on the day. The Hang Seng ended their session at 20,522 – down 0.16% on the day. European stocks were higher despite EU recession fears. The FTSE 100 ended their session at 5,875 – up 2.31% on the day. The DAX ended their session at 7,057 – up 1.58% on the day. The CAC 40 ended their session at 3,463 – up 1.14% on the day. The yield on the 10-Year US Treasury declined from 2.254 percent to 2.162 versus its 200-day simple moving average at 2.178.
Gold rebounded from $1664.4 the Troy ounce to $1685.4 staying below its 200-day simple moving average at $1686.2. Crude oil declined from $103.58 per barrel to $102.06 then rose to $105.49 back above its 50-day simple moving average at $103.56. The euro versus the dollar declined from 1.3378 to 1.3282 staying above the 50-day simple moving average at 1.3211.
Energy
Concho Resources (CXO) traded higher on Monday following an upgrade to Buy from Hold by Deutsche Bank. Cenovus Energy (CVE) traded higher on the session despite a downgrade to Equal Weight from Overweight by Barclays. Willbros Group (WG) rose by 25% Monday Morning. Chevron (CVX) and Exxon Mobil (XOM) were up about 1.0% each on Monday. Halliburton (HAL) was downgraded to Market Perform from Market Outperform at Howard Weil, who set a $43 price target. Dresser-Rand (DRC) was upgraded to Market Outperform from Market Perform by Howard Weil with a $60 price target.
Energy Select Sector SPDR (XLE) was trading at $72.66 at 3:30 PM on Monday, up 1.27% on the day – up 5.11% year-to-date.
Materials
Noranda Aluminum (NOR) traded higher by 7.4% Monday morning following an upgrade to Buy from Neutral at Bank of America-Merrill Lynch. Rio Tinto (RIO) was hiked to Overweight from Equal Weight by Barclays. The day’s early winners were; Alcoa (AA), Barrick Gold (ABX), and Newmont Mines (NEM). Cytec Industries (CYT) was downgraded to Neutral from Buy at Citigroup.
The Materials Select Sector SPDR (XLB) was trading at $37.56 at 3:30 PM on Monday, up 1.60% on the day – up 12.12% year-to-date.
Industrials
Sector winners on Monday were; Boeing Co (BA) and CSX Corp (CSX). Notable losers early on were; Caterpillar (CAT), General Electric (GE), 3M Company (MMM), United Technologies (UTX). These names recovered as the day progressed. Alliant Techsystems (ATK) was upgraded to Overweight from Neutral at JPMorgan with a $62 price target. Worthington Industries (WOR) was upgraded to Neutral from Sell at Goldman.
The Industrial Select Sector SPDR (XLI) was trading at $37.75 at 3:30 PM on Monday, up 0.91% on the day – up 11.85% year-to-date.
Consumer Discretionary
Abercrombie & Fitch (ANF) was upgraded to Buy from Hold at Brean Murray. General Motors (GM) was resumed with an Overweight at Morgan Stanley. Kohl’s Corp (KSS) was upgraded to Neutral from Underweight at JP Morgan. PVH Corp (PVH) was upgraded to Outperform from Neutral at Credit Suisse on improved visibility for growth in its domestic and international Tommy Hilfiger business. The price target was raised to $105 from $72.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.31 at 3:30 PM on Monday, up 0.49% on the day – up 16.12% year-to-date.
Consumer Staples
PetMed Express (PETS) has been upgraded to Neutral from Underweight at Piper Jaffray. Sherwin-Williams (SHW) was downgraded to Neutral from Buy at Bank of America-Merrill Lynch. Lumber Liquidators (LL) was downgraded to Hold from Buy at Stifel Nicolaus due to valuation. Groupon (GRPN) was downgraded to Neutral from Buy by Bank of America-Merrill Lynch following Friday’s announcement of a fourth-quarter loss wider than initially disclosed. Casual dining stocks Buffalo Wild Wings (BWLD), Darden Restaurants (DRI) DineEquity (DIN), and Panera Bread (PNRA) were all downgraded at Raymond James.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.37 at 3:30 PM on Monday, up 0.85% on the day – up 5.79% year-to-date.
Health Care
Regeneron Pharmaceuticals (REGN) was resumed at Goldman Sachs with a Buy recommendation. Threshold Pharmaceuticals (THLD) were initiated with a Buy at Mizuho with a $15 price target price. Allergan (AGN) was downgraded to Neutral from Buy at Lazard. eHealth (EHTH) was downgraded to Neutral from Buy at Bank of America-Merrill. Roche (RHHBY.PK) may drop its $6.7 billion bid for Illumina (ILMN) on the view that Illumina is “nice-to-have” but not a “must-have.”
The Health Care Select Sector SPDR (XLV) was trading at $37.77 at 3:30 PM on Monday, up 0.43% on the day – up 8.88% year-to-date.
Financials
Goldman Sachs (GS) is said to be looking to launch a $3 billion property debt fund to take advantage of a growing shortage of real estate financings in Europe. Redwood Trust (RWT) has been upgraded to Neutral from Underperform at Bank of America-Merrill Lynch. SL Green Realty (SLG) REIT was downgraded to Neutral from Buy at UBS.
The Financial Select Sector SPDR (XLF) was trading at $15.93 at 3:30 PM on Monday, up 0.82% on the day – up 22.54% year-to-date (the strongest performing sector).
Information Technology
Apple Inc (AAPL) was initiated with a Buy rating by Topeka with a price target at $1,001. Amazon.com (AMZN) was downgraded to Neutral from Buy at Bank of America-Merrill Lynch. Semiconductor stocks Texas Instruments (TXN) and Linear Technology (LLTC) were downgraded to Neutral from Buy at UBS. VMware (VMW) was downgraded to Equal Weight from Overweight at Evercore.
The Technology Select Sector SPDR (XLK) was trading at $30.49 at 3:30 PM on Monday, up 1.09% on the day – up 19.80% year-to-date.
Telecommunication Services
Telefonica (TEF) has reduced its debt by 1.3 billion euros to as they attempt to merge its Colombian fixed-line and wireless units. DirecTV (DTV) has subscribers in 19 markets, which includes New York and Chicago, has lost satellite access to Tribune (TRBCQ.PK) TV stations over the weekend after the firms did not renew a content deal. Affected programs include “American Idol” and Major League Baseball. Frontier Communications (FRT) was upgraded to Buy from Neutral at Nomura.
The NASDAQ Telecommunications Index (IXTC) was trading at $222.82 at 3:30 PM on Monday, up 0.71% on the day – up 13.15% year-to-date.
Utilities
Heavily Traded stocks include (DUK) +0.7%, (GEN) flat, (CNP) +3.8%, (EXC) +0.2%, (AES) flat, (AEP) +0.8%, (PPL) +0.3%.
The Utilities Select Sector SPDR (XLU) was trading at $35.20 at 3:30 PM on Monday, up 0.43% on the day – down 2.17% year-to-date (the weakest performing sector/the only negative sector).
STOCKS: CXO, CVE, WG, CVX, XOM, HAL, DRC, NOR, RIO, AA, ABX, NEM, CYT, BA, CSX, CAT, GE, MMM, UTX, ATK, WOR, ANF, GM, KSS, PVH, PETS, SHW, LL, GRPN, BWLD, DRI, DIN, PNRA, REGN, THLD, AGN, EHTHY, RHHBY.PK, ILMN, GS, RWT, SLG, AAPL, AMZN, TXN, LLTC, VMW, TEF, DTV, TRBCQ.PK, FRT, DUK, GEN, CNP, EXC, AES, AEP, PPL
