Equities Sector Coverage: Stocks Pare Gains But Still Closer Higher

Sector Recap |

Energy

Chevron (CVX) expects Q3 results to beat analyst forecasts and come in at the same level as Q2, when it reported EPS of $3.85. Energy Transfer Partners (ETP) is increased to Outperform from Perform with a $47.75 target at Morgan Keegan. Boardwalk Pipeline Partners (BWP) is also upgraded to Outperform from Perform at Morgan Keegan. Patriot Coal (PCX) gets cut to Sell from Neutral at Goldman. First Solar (FSLR) is taken to Sell from Neutral at Ticonderoga. In afternoon trading: Shares of General Maritime (GMR) are up about 51.5%. Shares of Frontline (FRO) are up about 17.25%. Shares of Cal Dive International (DVR) are up about 13.5%. Shares of W&T Offshore (WTI) are up about 12.25%.

Energy Select Sector SPDR (XLE) was trading at $64.13 at 4:00 PM on Wednesday, up 0.53% on the day – down 6.04% year-to-date.

Materials

Alcoa (AA) got the Q3 earnings season off to a poor start after reporting that EPS more than doubled to $0.15 but came in way below reduced expectations of $0.23. Revenue jumped 21% to $6.4B and beat forecasts. In afternoon trading: Shares of Cemex (CX) are up about 18%. Shares of Aluminum of China (ACH) are up about 12%. Shares of Rare Element (REE) are up about 8.25%. Shares of Mechel (MTL) are up about 7.5%. Shares of Louisiana-Pacific (LPX) are up about 7.25%.

The Materials Select Sector SPDR (XLB) was trading at $32.79 at 4:00 PM on Wednesday, up 0.99% on the day – down 14.63% year-to-date.

Industrials

Acuity Brands (AYI) is a new Hold and $38 target price at Jefferies. Norfolk Southern (NSC) and C.H. Robinson (CHRW) are now Hold from Buy at Deutsche Bank. In afternoon trading: Shares of A123 Systems (AONE) are up about 21.75%. Shares of Excel Maritime (EXM) are up about 17%. Shares of Paragon Shipping (PRGN) are up about 16.25%. Shares of WABCO (WBC) are up about 7.5%. Shares of DryShips (DRYS) are up about 7.5%. Shares of US Airways (LCC) are up about 7.5%.

The Industrial Select Sector SPDR (XLI) was trading at $31.89 at 4:00 PM on Wednesday, up 1.27% on the day – down 8.55% year-to-date.

Consumer Discretionary

AMC Networks (AMCX) is a new Underweight at Morgan Stanley. Cheesecake Factory (CAKE) is started with a Sell at Goldman Sachs, which has new Neutrals on DineEquity (DIN), Brinker International (EAT), and PF Chang’s (PFCB). Priceline.com (PCLN) is begun with a Buy and $580 price objective at Jefferies. In afternoon trading: Shares of Liz Claiborne (LIZ) is up about 32.5% after the company agreed to sell its Liz Claiborne, Monet and Kensie fashion brands for $328 million in cash, allowing the cash-strapped apparel maker to reduce its debt. Shares of Hovnanian (HOV) are up about 10%. Shares of Beazer Homes (BZH) are up about 9.5%. Shares of Eastman Kodak (EK) are down about 9%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.08 at 4:00 PM on Wednesday, up 0.90% on the day – up 1.79% year-to-date.

Consumer Staples

Bank of America-Merrill Lynch launches Buys on Altria (MO) and Philip Morris (PM) and assigns new Neutrals on Reynolds American (RAI) and Lorillard (LO). Carrefour SA (CRRFY) is cut Neutral from Buy at JP Morgan. In afternoon trading: Shares of AgFeed (FEED) are up about 17.75%. Shares of Zhongpin (HOGS) are up about 14.5%. Shares of Farmer Brothers (FARM) are up about 7.75%. Shares of Imperial Sugar (IPSU) are up about 7.25%. Shares of Coffee Holding (JVA) are down about 8%. Shares of Diamond Foods (DMND) are down about 6.5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.72 at 4:00 PM on Wednesday, down 0.79% on the day – up 4.81% year-to-date.

Healthcare

TE Connectivity (TEL) will replace Cephalon (CEPH) in the S&P 500 index after the close of trading on Friday. Cephalon is being acquired by Teva (TEVA) in a deal expected to be completed within the next few days. Align Technology (ALGN) is a new Neutral at Credit Suisse. Humana (HUM) and HealthSpring (HS) are each upgraded to Outperform from Perform at Oppenheimer, with respective increased price objectives of $87 and $45. WebMD Health (WBMD) is downgraded to Neutral from Buy at Goldman. In afternoon trading: Shares of Pacific Biosciences (PACB) are up about 28.25%. Shares of Gentiva Health Services (GTIV) are up about 16.25%. Shares of Metabolix (MBLX) are up about 13%.

The Health Care Select Sector SPDR (XLV) was trading at $32.60 at 4:00 PM on Wednesday, up slightly on the day – up 3.49% year-to-date.

Financials

Private-equity firm Bain Capital is in final negotiations to buy Japanese restaurant chain Skylark from Nomura (NMR) for up to ¥260B ($3.4B), including debt. Bank of America-Merrill Lynch has new Neutrals on SunTrust Banks (STI) and BB&T Corp (BBT). It begins Buys on U.S. Bancorp (USB), PNC Financial Services (PNC), and Wells Fargo (WFC). First Republic Bank (FRC) is initiated with a Buy at Cantor Fitzgerald. BNP Paribas (BNPQY) is upgraded to Buy from Hold at Societe Generale. Lloyds Banking (LYG) is lowered to Hold from Buy at Canaccord Genuity. Commerzbank AG (CRZBY) and Credit Agricole SA (CRARY) are both now Hold from Buy at Societe Generale, which cuts Natixis (NTXFF) by 180 degrees, to Sell from Buy. Waddell & Reed (WDR) is downgraded to Hold from Buy at Jefferies. Cullen/Frost Bankers (CFR) is cut to Underperform from Neutral at Sterne Agee.

The Financial Select Sector SPDR (XLF) was trading at $12.75 at 4:00 PM on Wednesday, up 2.53% on the day – down 20.09% year-to-date.

Information Technology

Hewlett Packard (HPQ) is reconsidering its plan to spin off or sell its PC arm, as new analyses show that the costs could outweigh the benefits. Matters continue to deteriorate for RIM (RIMM) as disruptions to its Blackberry service extend into a third day and spread further into Asia, having mainly affected Europe and Latin America until now. UPDATE: "BlackBerry subscribers in the Americas may be experiencing intermittent service delays this morning," RIM said in a statement. Samsung (SSNLF) says it will soon release amended versions of three Galaxy smartphones to bypass temporary sales bans in some European nations on handsets that violated an Apple (AAPL) patent. TE Connectivity (TEL) will replace Cephalon (CEPH) in the S&P 500 index after the close of trading on Friday. Cephalon is being acquired by Teva (TEVA) in a deal expected to be completed within the next few days. RBC Capital resumes Outperforms on Dow member Intel (INTC), along with Analog Devices (ADI), Cypress Semiconductor (CY), Marvell Technology (MRVL), and Texas Instruments (TXN). It starts Sector Perfoms on Altera (ALTR), Broadcom (BRCM), and Freescale (FSL), and names Sandisk (SNDK) a Top Pick. GT Advanced Technologies (GTAT) gets picked up at an Underperform at Jefferies. IAC/InterActiveCorp (IACI) is upgraded to Buy from Neutral at Goldman Sachs. Nokia (NOK) is moved to Neutral from Reduce at Nomura, but is now Sell from Neutral at WestLB. Xerox (XRX), Lexmark (LXK), and Brocade (BRCD) are each downgraded to Underweight from Neutral at JP Morgan, which takes Seagate Technology (STX) to Neutral from Overweight. Rackspace (RAX) is reduced to Hold from Buy at The Benchmark Company with a new target of $42. WebMD Health (WBMD) is downgraded to Neutral from Buy at Goldman. In afternoon trading: Shares of Broadsoft (BSFT) are up about 12%. Shares of Giant Interactive Group (GA) are up about 12%.

The Technology Select Sector SPDR (XLK) was trading at $25.27 at 4:00 PM on Wednesday, up 0.44% on the day – up 0.32% year-to-date.

Telecommunications Services

In afternoon trading: Actives: Shares of Sprint Nextel (S) are up about 8%. Shares of TerreStar (TSTRQ) are up about 7.5%. Shares of Clearwire (CLWR) are up about 7%. Shares of Telecom Italia (TI) are up about 5.8%. Shares of Premiere Global Services (PGI) are up about 5.4%. Shares of Turkcell (TKC) are up about 5.2%. Shares of NII Holdings (NIHD) are up about 5.1%. Shares of magicJack VocalTec (CALL) are down about 5.75%.

The NASDAQ Telecommunications Index (IXTC) was trading at $193.47 at 4:00 PM on Wednesday, up 0.83% on the day – down 14.15% year-to-date.

Utilities

Calpine (CPN) is initiated with a Buy at ISI Group, which has a Hold on rival Dynegy (DYN). In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about a quarter of a percent. Shares of CenterPoint Energy (CNP) are down about 0.4%. Shares of Exelon (EXC) are up about 1.5%. Shares of PPL Corp (PPL) are up about 0.4%. Shares of Genon Energy (GEN) are up about 0.7%. Shares of AES Corp (AES) are up about 2.6%. Shares of NV Energy (NVE) are up about 1.1%.

The Utilities Select Sector SPDR (XLU) was trading at $33.66 at 4:00 PM on Wednesday, down 0.24% on the day – up 7.40% year-to-date.

STOCKS: CVX, ETP, BWP, PCX, FSLR, GMR, FRO, DVR, WTI, AA, CX, ACH, REE, MTL, LPX, AYI, NSC, CHRW, AONE, EXM, PRGN, WBC, DRYS, LCC, AMCX, CAKE, DIN, EAT, PFCB, PCLN, LIZ, HOV, BZH, EK, MO, PM, RAI, LO, CRRFY, FEED, HOGS, FARM, IPSU, JVA, DMND, TEL, CEPH, TEVA, ALGN, HUM, HS, WBMD, PACB, GTIV, MBLX, NMR, STI, BBT, USB, PNC, WFC, FRC, BNPQY, LYG, CRZBY, CRARY, NTXFF, WDR, CFR, HPQ, RIMM, SSNLF, AAPL, INTC, ADI, CY, MRVL, TXN, ALTR, BRCM, FSL, SNDK, GTAT, IACI, NOK, XRX, LXK, BRCD, STX, RAX, BSFT, GA, S, TSTRQ, CLWR, TI, PGI, TKC, NIHD, CALL, CPN, DYN, DUK, CNP, EXC, PPL, GEN, AES, NVE

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
REE Rare Element Resources n/a n/a n/a n/a
AYI Acuity Brands Inc (Holding Company) 248.83 2.06 0.83 500,685
WDR Waddell & Reed Financial Inc. 21.54 -0.44 -2.00 1,339,742
RAI Reynolds American Inc 55.16 0.33 0.60 5,432,471
GEN Genesis Healthcare Inc. 4.14 0.13 3.24 304,082
FARM Farmer Brothers Company 35.95 0.70 1.99 64,968
BRCD Brocade Communications Systems Inc. 12.38 -0.01 -0.08 7,242,744
ACH Aluminum Corporation of China Limited American Dep 11.31 -0.26 -2.25 36,332
CVX Chevron Corporation 115.81 0.64 0.56 5,771,551
BWP Boardwalk Pipeline Partners LP 16.99 0.06 0.35 526,120
TI Telecom Italia S.P.A. New 8.15 -0.03 -0.37 394,805
VNDKD VendTek Systems Inc n/a n/a n/a 0
DRYS DryShips Inc. 4.05 -0.23 -5.37 7,731,748
BSFT BroadSoft Inc. 41.10 -2.00 -4.64 268,007
AA Alcoa Inc. 32.05 0.74 2.36 4,344,295
MBLX Metabolix Inc. 0.37 -0.14 -27.35 629,868
INTC Intel Corporation 35.76 0.06 0.17 16,326,925
CNP CenterPoint Energy Inc (Holding Co) 24.43 0.38 1.58 4,378,881
PNC PNC Financial Services Group Inc. (The) 115.02 0.20 0.17 2,565,802
CFR Cullen/Frost Bankers Inc. 87.88 -0.50 -0.57 520,309
MO Altria Group Inc. 66.27 0.91 1.39 7,464,496
AAPL Apple Inc. 113.95 1.83 1.63 34,402,627
ADI Analog Devices Inc. 73.14 -0.74 -1.00 2,106,681
WBMD WebMD Health Corp 53.02 0.00 0.00 576,209
S Sprint Corporation 8.48 -0.26 -2.97 19,560,796
PPL PPL Corp 33.51 0.40 1.21 4,871,078
BZH Beazer Homes USA Inc. 15.09 -0.38 -2.46 1,487,163
TKC Turkcell Iletisim Hizmetleri AS 6.64 -0.06 -0.90 409,417
PCLN The Priceline Group Inc. 1,557.98 9.31 0.60 333,919
STX Seagate Technology 39.38 0.15 0.38 4,125,494
TXN Texas Instruments Incorporated 71.99 -0.14 -0.19 6,101,234
SNDK SanDisk Corp. n/a n/a n/a 0
HUM Humana Inc. 203.29 -3.41 -1.65 1,097,541
HOV Hovnanian Enterprises Inc. Class A 2.50 0.13 5.49 3,081,997
MTL Mechel PAO American Depositary Shares (Each rep. 1 5.14 -0.10 -1.91 521,210
PRGN Paragon Shipping Inc n/a n/a n/a 0
AES The AES Corporation 11.92 0.08 0.68 4,492,687
CHRW C.H. Robinson Worldwide Inc. 77.04 -0.43 -0.56 1,417,589
BBT BB&T Corporation 47.25 0.27 0.57 5,052,103
MRVL Marvell Technology Group Ltd. 14.35 0.10 0.70 6,258,799
USB U.S. Bancorp 52.04 0.14 0.27 8,612,883
NOK Nokia Corporation Sponsored American Depositary Sh 4.62 0.04 0.87 12,020,369
CPN Calpine Corporation 11.66 0.38 3.37 9,061,382
LYG Lloyds Banking Group Plc American Depositary Share 3.14 -0.05 -1.57 4,423,285
JVA Coffee Holding Co. Inc. 4.90 0.09 1.87 11,750
LIZ Liz Claiborne Inc. n/a n/a n/a 0
XRX Xerox Corporation 9.46 -0.06 -0.63 10,839,298
FSL Freescale Semiconductor n/a n/a n/a 0
FRO Frontline Ltd 7.51 -0.20 -2.59 2,571,939
PM Philip Morris International Inc 90.24 0.85 0.95 4,298,030
ALTR Altera Corp. n/a n/a n/a 0
FSLR First Solar Inc. 33.54 0.37 1.12 2,052,860
TEVA Teva Pharmaceutical Industries Limited American De 36.30 0.39 1.09 7,696,056
PGI Premiere Global Services n/a n/a n/a 0
ALGN Align Technology Inc. 98.62 -0.68 -0.68 1,192,024
DIN DineEquity Inc 87.11 0.28 0.32 194,355
WFC Wells Fargo & Company 57.14 -0.15 -0.26 20,331,186
CAKE The Cheesecake Factory Incorporated 63.31 -0.61 -0.95 685,778
FRC FIRST REPUBLIC BANK 89.04 -1.57 -1.73 967,943
HPQ HP Inc. 15.78 -0.38 -2.35 9,865,108
WTI W&T Offshore Inc. 1.97 0.03 1.55 2,374,771
PACB Pacific Biosciences of California Inc. 6.95 -0.07 -1.00 759,367
AMCX AMC Networks Inc. 52.40 0.13 0.25 1,080,441
BRCM Broadcom Corp. n/a n/a n/a 0
LPX Louisiana-Pacific Corporation 20.83 -0.03 -0.14 1,603,083
CY Cypress Semiconductor Corporation 11.43 -0.07 -0.61 5,028,665
IACI IAC/InterActiveCorp n/a n/a n/a 0
CALL magicJack VocalTec Ltd 7.50 0.25 3.45 85,887
EXC Exelon Corporation 34.90 0.70 2.05 10,118,837
WBC Wabco Holdings Inc. 111.06 -0.50 -0.45 267,100
DUK Duke Energy Corporation (Holding Company) 75.82 1.09 1.46 3,196,119
DMND Diamond Foods Inc. n/a n/a n/a 0
TEL TE Connectivity Ltd. New Switzerland Registered Sh 70.75 0.15 0.21 819,379
CX Cemex S.A.B. de C.V. Sponsored ADR 8.77 -0.16 -1.79 11,913,975
NMR Nomura Holdings Inc ADR American Depositary Shares 6.73 0.25 3.86 297,835
RAX Rackspace Hosting Inc n/a n/a n/a 0
LXK Lexmark International Inc. n/a n/a n/a 0
NIHD NII Holdings Inc. 2.35 0.25 11.90 1,107,343
STI SunTrust Banks Inc. 54.84 0.05 0.09 4,207,317

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