Equities Sector Coverage: Stocks Pare Gains As Fed Defends QE Infinity

Sector Recap |

nyse, wall street, economy, stock marketConstruction Spending was down 0.6% in August the largest drop since July 2011. ISM Manufacturing index came in at 51.5 in September, which was better than expected. The Dow Jones Industrial Average traded up to 13,598.25 Monday morning on the stronger than expected ISM data then consolidated in the afternoon. The NASDAQ traded up to 3146.99 Monday morning then traded into the red in the afternoon with a day’s low at 3103.89 going into the final half hour of trading.

In Asian, the Nikkei 225 ended the day at 8,797 – down 0.83%. The Hang Seng was on holiday at 20,840. European exchanges traded higher on Monday. The FTSE 100 ended the day at 5,820 – up 1.37%. The DAX ended the day at 7,327 – up 1.53%. The CAC 40 ended the day at 3,435 – up 2.39%. The yield on the 10-Year US Treasury declined from 1.640% to 1.611% then rose to 1.651% still below its 50-day and 200-day simple moving averages at 1.656% and 1.818%.

Comex gold traded up from $1765.7 the Troy ounce to $1794.4 setting a new year-to-date high. Nymex crude oil rallied from $91.26 per barrel to $93.33 staying below its 50-day and 200-day simple moving averages at $93.57 and $96.23. The euro versus the dollar traded up from 1.2806 to 1.2937 holding its 200-day simple moving average at 1.2822.

Energy

Big Movers – Treaty Energy Corp. (TECO) is up about 10.5%. Dow components – Chevron (CVX) up 0.51%, Exxon Mobil (XOM) up 0.28%. Energy Select Sector SPDR (XLE) was trading at $73.80 at 3:30 PM on Monday, up 0.50% on the day – up 6.76% year-to-date.

Materials

Dow Components – Alcoa (AA) up 0.34%, DuPont (DD) up 0.08%. The Materials Select Sector SPDR (XLB) was trading at $36.88 at 3:30 PM on Monday, up 0.22% on the day – up 10.09% year-to-date.

Industrials

Boeing (BA) workers are expected to turn down today the company's current offer on a contract covering 23K members of the Society of Professional Engineering Employees in Aerospace (Speea), though a second vote would be required to authorize a strike. Healthcare Services Group (HCSG) is initiated with a Buy at UBS. C.H. Robinson (CHRW) is now Buy from Neutral at Sterne Agee. Alliant Techsystems (ATK) is now Hold from Buy at Jefferies. Canadian Pacific (CP) is cut to Neutral from Buy at Sterne Agee. Emerson Electric (EMR) is now Neutral from Outperform at Macquarie. Owens Corning (OC) is now Neutral from Buy at Longbow. Raytheon (RTN) is lowered to Underperform from Neutral at Bank of America-Merrill Lynch. Big Movers – A123 Systems (AONE) is up about 12.5%. Dow components – Boeing Co (BA) up 0.50%, Caterpillar (CAT) down 0.71%, General Electric (GE) up 0.35%, 3M Company (MMM) up 0.90%, United Technologies (UTX) up 0.08%. The Industrial Select Sector SPDR (XLI) was trading at $36.66 at 3:30 PM on Monday, up 0.36% on the day – up 8.62% year-to-date.

Consumer Discretionary

Big jumps from Toyota (TM) and Honda (HMC) are forecast to be the driving factors behind a healthy gain in U.S. auto sales due to be reported on Tuesday. The shareholders have yet to see benefit, but suppliers like Leggett & Platt (LEG) - hired to help refurbish J.C. Penney (JCP) stores - have no complaints. Next up is the lucrative contract to install radio-frequency identification (RFID) tags on every item in J.C. Penney's stores in which R.R. Donnelly & Sons (RRD) and one other manufacturer are battling it out. Jakks Pacific (JAKK) cut its FY12 guidance, saying it experienced "disappointing" domestic product sales and a slowdown in orders, as well as increased expenses. It now expects to earn between $0.68 to $0.74 per share on revenue of around $690M to $700M, down significantly from earlier estimates for a profit of $1.04 to $1.08 per share and revenue between $720M and $728M. Abercrombie & Fitch (ANF) is initiated with an Underperform at Credit Suisse. Carnival (CCL) is a new Equal Weight at Barclays. Conns (CONN) is begun with a Buy at Canaccord Genuity. ZAGG Inc (ZAGG) is initiated with an Overweight at JPMorgan. Callaway Golf (ELY) is upgraded to Strong Buy from Market Perform at Raymond James. Coldwater Creek (CWTR) is upgraded to Overweight from Neutral at Piper Jaffray. DreamWorks (DWA) is upgraded to Buy from Neutral at Janney Capital. Finish Line (FINL) is now Neutral from Underperform at Sterne Agee. JAKKS Pacific (JAKK) is taken to Hold from Buy at KeyBanc. PulteGroup (PHM) is now Neutral from Outperform at Credit Suisse. Wendy’s (WEN) is now Neutral from Buy at Janney Capital. Big Movers – Coldwater Creek Inc. (CWTR) is up about 13.25%. Dow Components – Disney (DIS) down 0.54%, Home Depot (HD) up 0.24%, McDonalds (MCD) up 0.27%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.75 at 3:30 PM on Monday, down 0.09% on the day – up 19.81% year-to-date.



Consumer Staples

Cal-Maine Foods (CALM) beat estimates by 4 cents and revenue by $14M. Kraft Foods Group (KRFTV) is a Neutral at JPMorgan. Mondelez (MDLZV) is an Overweight at JPMorgan. Boston Beer (SAM) is slashed to Sell from Neutral at UBS. Molson Coors Brewing (TAP) is taken to Underweight from Equal-Weight at Morgan Stanley. Dow components – Coca Cola (KO) up 1.17%, Procter & Gamble (PG) up 0.05%, Wal-Mart (WMT) up 0.31%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.035 at 3:30 PM on Monday, up 0.59% on the day – up 10.91% year-to-date.

Health Care

"The board's sale process was woefully inadequate," say lawyers for three pension funds seeking to stop the $5.6B takeover. The 20% premium for Coventry (CVH) pales to premiums as high as 43% in other recent deals for insurers, according to the lawyers, who contend CEO Allen Wise didn't shop around for the highest price, instead spending four months negotiating with Aetna (AET) CEO Mark Bertolini before notifying the board. Synergetics USA (SURG) reported FQ4 EPS of $0.08 (in-line) and revenue of $16.9M (in-line). Avanir Pharmaceuticals (AVNR) is an Outperform at Cowen. Myriad Genetics (MYGN) is begun with a Buy at WallachBeth. Allscripts-Misys Healthcare (MDRX) is upgraded to Buy at ISI Group. Gilead Sciences (GILD) gets upgraded to Outperform from Market Perform by Sanford Bernstein. Myriad Genetics (MYGN) is upgraded to Overweight from Neutral at Piper Jaffray. Big Movers – Peregrine Pharmaceuticals (PPHM) is down about 16%. Dow Components – Johnson & Johnson (JNJ) up 0.26%, Merck (MRK) up 0.24%, Pfizer (PFE) up 0.60%, United Health Group (UNH) up 1.62%. The Health Care Select Sector SPDR (XLV) was trading at $40.32 at 3:30 PM on Monday, up 0.50% on the day – up 16.23% year-to-date.

Financials

FASB is expected to formally propose by year's end the elimination from net income calculations the debt valuation adjustment (DVA) in which banks with worsening credit spreads are able to report a boost to income (conversely, improving spreads create a loss). The rule has been behind big quarterly swings in reported numbers at the big banks, and Bank of America (BAC) has warned of a $1.9B hit to Q3 earnings as a result of its narrowing spreads. Citigroup (C) is begun with a Buy at Guggenheim. Yelp Inc. (YELP) and Zillow (Z) are each initiated with Equal Weights at Barclays. Allstate (ALL) is downgraded to Perform from Outperform at FBR Capital. Citigroup (C) is now Neutral from Buy at Sterne Agee. Fifth Third Bancorp (FITB) is moved to Market Perform from Outperform at Keefe Bruyette. Plum Creek (PCL) is now Neutral from Buy at DA Davidson. Big Movers – MGIC Investments Corp. (MTG) is up about 16.5%. Dow Components – American Express (AXP) up 1.57%, Bank of America (BAC) up 1.59%, JP Morgan Chase (JPM) up 1.51%, Travelers (TRV) up 1.10%. The Financial Select Sector SPDR (XLF) was trading at $15.65 at 3:30 PM on Monday, up 0.38% on the day – up 20.38% year-to-date.

Information Technology

Oracle (ORCL) is expected to unveil the first new version of its flagship database program in five years at the OpenWorld conference today. The 12c database is designed to present an alternative to the no-hardware approach to cloud computing offered by competitors Salesforce.com (CRM) and Workday (WDAY). Yelp Inc. (YELP) and Zillow (Z) are each initiated with Equal Weights at Barclays. Ciena (CIEN) and JDS Uniphase (JDSU) are new Neutrals at Lazard Capital. Tibco Software (TIBX) is a new Neutral at Nomura. InterActiveCorp (IACI) gets moved to Buy from Hold at Needham. Rudolph Technologies (RTEC) is raised to Outperform from Neutral at Credit Suisse. Alcatel-Lucent (ALU) is now Sell from Neutral at UBS. Baidu (BIDU) is downgraded to Hold from Buy at Jefferies. Microsoft (MSFT) is moved to Sector Perform from Outperform at RBC Capital. Nokia (NOK) is now Underperform from Neutral at Credit Suisse. Texas Instruments (TXN) is taken to Neutral from Positive at Susquehanna. Dow Components – Cisco Systems (CSCO) down 0.68%, Hewlett-Packard (HPQ) up 0.79%, IBM (IBM) up 1.49%, Intel Corp (INTC) up 0.22%, Microsoft (MSFT) down 0.84%. The Technology Select Sector SPDR (XLK) was trading at $30.73 at 3:30 PM on Monday, down 0.31% on the day – up 20.75% year-to-date.

Telecommunication Services

Sprint (S) is downgraded to Market Perform from Outperform at Raymond James. Big Movers – TerreStar Corp. (TSTRQ) is up about 30.25%. Dow Components – AT&T (T) unchanged, Verizon (VZ) up 0.41%. The NASDAQ Telecommunications Index (IXTC) was trading at $197.81 at 3:30 PM on Monday, down 0.40% on the day – up 0.45% year-to-date.

Utilities

Ferrellgas Partners L.P. (FGP) missed estimates by 2 cents and revenue by $58M. Duke Energy (DUK) is upgraded to Buy from Hold at Argus. The Big Names – Dominion Resources (D) down 0.30%, Edison International (EIX) up 0.53%, First Energy (FE) down 0.22%, PG&E Corp (PCG) down 0.91%, Southern Company (SO) down 1.03%. The Utilities Select Sector SPDR (XLU) was trading at $36.255 at 3:30 PM on Monday, down 0.37% on the day – up 0.76% 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, BA, HCSG, CHRW, ATK, CP, EMR, OC, RTN, TM, HMC, LEG, JCP, RFID, RRD, JAKK, ANF, CCL, CONN, ZAGG, ELY, CWTR, DWA, FINL, PHM, WEN, CALM, KRFTV, MDLZV, SAM, TAP, CVH, AET, SURG, AVNR, MYGN, MDRX, GILD, MYGN, BAC, C, YELP, Z, ALL, FITB, PCL, ORCL, CRM, WDAY, CIEN, JDSU, TIBX, IACI, RTEC, ALU, BIDU, MSFT, NOK, TXN, S, FGP, DUK

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 201.13 -14.75 -6.83 11,671,410 Trade
ORCL Oracle Corporation 45.53 -0.27 -0.59 13,356,952 Trade
CCL Carnival Corporation 65.54 -0.73 -1.10 3,303,307 Trade
LEG Leggett & Platt Incorporated 42.35 -0.58 -1.35 1,127,846 Trade
SAM Boston Beer Co. Cl A 218.20 -2.60 -1.18 111,796 Trade
TM Toyota Motor Corporation 129.47 0.40 0.31 145,628 Trade
PG Procter & Gamble Company (The) 72.50 -0.50 -0.68 16,551,693 Trade
GE General Electric Co 14.68 0.16 1.10 74,261,708 Trade
CRM Salesforce.com Inc 117.88 -4.01 -3.29 5,379,304 Trade
CVX Chevron Corporation 122.54 -1.04 -0.84 7,980,491 Trade
SO Southern Company (The) 45.70 0.46 1.02 5,078,285 Trade
PCG Pacific Gas & Electric Co. 46.30 0.73 1.60 6,356,420 Trade
FINL The Finish Line Inc. 13.52 -0.03 -0.22 494,996 Trade
BIDU Baidu Inc. 231.41 -0.01 -0.00 2,220,257 Trade
YELP Yelp Inc. Class A 43.89 -0.32 -0.72 770,087 Trade
RTN Raytheon Company 218.80 -9.33 -4.09 2,746,715 Trade
JNJ Johnson & Johnson 126.19 -0.64 -0.50 6,577,490 Trade
OC Owens Corning Inc New 75.74 -2.34 -3.00 1,748,652 Trade
WMT Wal-Mart Stores Inc. 86.53 0.43 0.50 8,469,716 Trade
AA Alcoa Inc. 50.82 -1.08 -2.08 7,258,060 Trade
DWA Dreamworks Animation SKG Inc. n/a n/a n/a 0 Trade
INTC Intel Corporation 51.45 0.35 0.68 42,494,668 Trade
IBM International Business Machines Corp 145.56 -0.30 -0.21 4,916,476 Trade
D Dominion Resources Inc. 64.78 -0.11 -0.17 4,819,264 Trade
TRV The Travelers Companies Inc. 132.88 -4.35 -3.17 3,147,891 Trade
MDRX Allscripts Healthcare Solutions Inc. 12.20 -0.03 -0.25 1,729,041 Trade
HMC Honda Motor Company Ltd. 34.16 0.00 0.00 558,359 Trade
C Citigroup Inc. 69.12 -0.36 -0.52 16,233,651 Trade
S Sprint Corporation 5.91 0.03 0.51 7,370,397 Trade
ARE.DB.A:CA Aecon Group Inc. 6.25% Convertible Unsecured Subordinated Debentures n/a n/a n/a 0
FITB Fifth Third Bancorp 33.25 1.32 4.13 11,385,289 Trade
EIX Edison International 64.77 0.77 1.20 2,426,817 Trade
GILD Gilead Sciences Inc. 72.72 -1.29 -1.74 5,562,456 Trade
HCSG Healthcare Services Group Inc. 39.59 0.10 0.25 1,218,408 Trade
JPM JP Morgan Chase 110.41 -0.52 -0.47 16,453,112 Trade
AXP American Express Company 100.44 -0.17 -0.17 5,049,177 Trade
FGP Ferrellgas Partners L.P. 3.77 0.11 3.01 426,798 Trade
RTEC Rudolph Technologies Inc. 26.35 -0.45 -1.68 182,839 Trade
UTX United Technologies Corporation 122.10 -1.36 -1.10 8,151,481 Trade
TXN Texas Instruments Incorporated 98.42 0.33 0.34 8,420,271 Trade
JDSU Viavi Solutions Inc n/a n/a n/a 0 Trade
CSCO Cisco Systems Inc. 43.74 -0.51 -1.15 21,421,528 Trade
DIS Walt Disney Company (The) 99.46 -0.69 -0.69 6,567,697 Trade
CHRW C.H. Robinson Worldwide Inc. 92.36 -1.35 -1.44 1,267,365 Trade
VZ Verizon Communications Inc. 49.67 1.01 2.08 20,920,383 Trade
WDAY Workday Inc. 125.56 -4.27 -3.29 1,896,979 Trade
BAC Bank of America Corporation 30.19 -0.13 -0.43 81,486,781 Trade
AET Aetna Inc. 177.20 0.10 0.06 1,614,310 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 5.93 0.04 0.68 13,294,373 Trade
CONN Conn\'s Inc. 25.45 -0.90 -3.42 493,984 Trade
ELY Callaway Golf Company 16.74 -0.07 -0.42 1,068,536 Trade
MCD McDonald\'s Corporation 157.32 -1.67 -1.05 2,904,359 Trade
CIEN Ciena Corporation 26.85 0.56 2.13 4,583,827 Trade
EMR Emerson Electric Company 68.30 -1.60 -2.29 4,130,006 Trade
JAKK JAKKS Pacific Inc. 2.20 -0.10 -4.35 42,673 Trade
DD E.I. du Pont de Nemours and Co. n/a n/a n/a 0 Trade
CALM Cal-Maine Foods Inc. 49.75 -0.10 -0.20 235,976 Trade
WEN Wendys International Inc. 16.85 -0.37 -2.15 3,860,280 Trade
ALL Allstate Corporation (The) 97.39 -1.22 -1.24 1,952,680 Trade
HD Home Depot Inc. (The) 176.26 -1.40 -0.79 4,435,423 Trade
XOM Exxon Mobil Corporation 78.35 -1.22 -1.53 14,101,979 Trade
PFE Pfizer Inc. 37.06 0.26 0.71 25,717,648 Trade
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0 Trade
PHM PulteGroup Inc. 29.65 0.83 2.88 9,616,352 Trade
HPQ HP Inc. 21.20 -0.18 -0.84 7,331,641 Trade
BA Boeing Company (The) 329.06 -9.78 -2.89 7,051,820 Trade
MRK Merck & Company Inc. (new) 60.09 -0.16 -0.27 13,334,877 Trade
ANF Abercrombie & Fitch Company 27.02 0.26 0.97 4,394,414 Trade
Z Zillow Group Inc. 47.68 -0.26 -0.54 1,945,842 Trade
MYGN Myriad Genetics Inc. 28.58 -0.55 -1.89 420,458 Trade
FE FirstEnergy Corporation 34.29 -0.21 -0.61 8,441,939 Trade
IACI IAC/InterActiveCorp n/a n/a n/a 0 Trade
KO Coca-Cola Company (The) 43.07 -0.91 -2.07 18,523,876 Trade
CP Canadian Pacific Railway Limited 176.16 -0.97 -0.55 608,704 Trade
PCL Plum Creek Timber Co. Inc. REIT n/a n/a n/a 0 Trade
T AT&T Inc. 35.00 0.11 0.32 21,572,221 Trade
CAT Caterpillar Inc. 144.44 -9.55 -6.20 24,122,297 Trade
DUK Duke Energy Corporation (Holding Company) 78.22 0.23 0.29 4,273,016 Trade
RRD R.R. Donnelley & Sons Company 9.22 -0.03 -0.32 814,261 Trade
JCP J.C. Penney Company Inc. Holding Company 3.01 0.10 3.44 10,851,777 Trade
MSFT Microsoft Corporation 93.12 -2.23 -2.34 34,524,799 Trade
TAP Molson Coors Brewing Company Class B 71.69 -0.23 -0.32 1,506,390 Trade
ZAGG ZAGG Inc 11.45 -0.40 -3.38 188,658 Trade

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