Equities Sector Coverage: Stocks Pare Gains In Late Fade

Sector Recap |

NYSEJobless Claims fell more than expected, down 30,000 to 339,000, but one large State did not file. Import Prices rose 1.1% in September. Trade Deficit widened to $44.22B in August versus $42.47 Billion in July. The Dow Jones Industrial Average opened higher trading up to 13,428.49 then dipped into the red with an afternoon low at 13,334.01 staying above its 50-day simple moving average at 13,310.83. The NASDAQ opened higher trading up to 3078.08 then dipped into the red with a day’s low at 3047.14 staying below its 50-day simple moving average at 3087.69.

In Asia, the Nikkei 225 closed at 8,547 – down 0.58%. The Hang Seng closed at 20,999 – up 0.38%. European exchanges ended higher on Thursday. The FTSE 100 ended the day at 5,830 – up 0.92%. The DAX ended the day at 7,282 – up 1.06%. The CAC 40 ended the day at 3,414 – up 1.42%. The yield on the 10-Year US Treasury rose from 1.668% to 1.731% then consolidated versus the 50-day and 200-day simple moving averages at 1.690% and 1.808%.

Comex gold rebounded from $1760.2 the Troy ounce to $1776.6 well below the 2012 high at $1798.1 on Friday, October 5. Nymex crude oil rebounded from $91.09 per barrel to $92.94 staying below its 50-day and 200-day simple moving averages at $93.85 and $95.97. The euro versus the dollar rebounded from 1.2829 to 1.2951 staying above its 200-day simple moving average at 1.2821.

Energy

The oil industry has filed a lawsuit to overturn an SEC rule forcing companies to disclose payments to foreign governments, arguing the information hurts their competitiveness. BP (BP) and the Justice Department are close to a deal to resolve the company's civil and criminal liabilities arising from 2010's Deepwater Horizon spill. However, the sides are still about $6B apart on a final figure. Exxon Mobil (XOM) [Buy] and Chevron (CVX) [Hold] are resumed at Dahlman Rose. Big Movers – GMX Resources (GMXR) is down about 21%. Alpha Natural Resources (ANR) is up about 13.5%. Arch Coal (ARI) is up about 12.5%. James River Coal (JRCC) is up about 11%. Dow components – Chevron (CVX) is up about 0.7%. Exxon Mobil (XOM) is up about 0.3%. Energy Select Sector SPDR (XLE) was trading at $73.13 at 3:30 PM on Thursday, up 0.98% on the day – up 5.79% year-to-date.

Materials

Big Mover – Stillwater Mining (SWC) is down about 10.5%. Dow Components – Alcoa (AA) is up about 0.9%. DuPont (DD) is down about 0.5%. The Materials Select Sector SPDR (XLB) was trading at $36.59 at 3:30 PM on Thursday, up 0.58% on the day – up 9.22% year-to-date.

Industrials

Alaska Air (ALK) is ordering 50 Boeing (BA) 737 jets, with the airline set to announce the deal today. There's no word on price, but the deal is likely to be worth billions of dollars. American Airlines parent company AMR (AAMRQ) has asked a bankruptcy court in a court filing for permission to borrow up to $1.5B in order to refinance current debt. BAE Systems (BAESY) is boosted to Neutral from Underperform by BNP Paribas. European Aeronautic Defence & Space Co. (EADSY) is lifted to Buy from Hold at Deutsche Bank. FedEx (FDX) is boosted to Buy from Hold this morning at Standpoint Research. Caterpillar (CAT) is cut to Sector Perform from Outperform at RBC Capital. Siemens (SI) is cut to Hold from Buy at Deutsche Bank. Big Mover – Oshkosh (OSK) is up about 11.5%. Dow components – Boeing Co (BA) is up about 0.7%. Caterpillar (CAT) is down about 0.6%. General Electric (GE) is up about 0.4%. 3M Company (MMM) is down about 0.5%. United Technologies (UTX) is up about 0.3%.

The Industrial Select Sector SPDR (XLI) was trading at $36.51 at 3:30 PM on Thursday, up 0.58% on the day – up 8.18% year-to-date.



Consumer Discretionary

McGraw-Hill's (MHP) education unit is expected to draw final bids later this month from P-E firms Bain Capital and Apollo Global (APO), as well as rival college textbook publisher Cengage Learning, in a deal that could fetch $3B. General Motors (GM) plans to introduce 13 new models for its Chevrolet brand in 2013, including refreshed versions of the Silverado pickup, Tahoe SUV, and Spark electric vehicle. Eastman Kodak (EKDKQ) has reached a deal to resolve the bankrupt company's retiree health care and survivor benefits liabilities, which surpass $1.2B and cost Kodak $10M a month. Kodak will provide the retirees committee with a $7.5M cash payment, a $635M unsecured claim, and a $15M administrative claim to make payments to the former employees. Winnebago Industries (WGO) beat estimates by 7 cents with revenue in-line with estimates. Emmis Communications (EMMS) missed estimates by 3 cents on revenue of $55M. Ruby Tuesday (RT) missed estimates by a penny with revenue in-line with estimates. VOXX International (VOXX) missed estimates by 3 cents and revenue by $13M. Life Time Fitness (LTM) is launched at Outperform at Wedbush. Marriott International (MAR) gets moved to Neutral from Buy at Goldman Sachs. Dow Components – Disney (DIS) is down about 1.5%. Home Depot (HD) is down about 0.8%. McDonalds (MCD) is up about 0.3%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.38 at 3:30 PM on Thursday, down 0.19% on the day – up 18.86% year-to-date.

Consumer Staples

Brown-Forman (BFB) is assigned a Neutral at SunTrust. Rite Aid (RAD) is begun with a Buy at BTIG. Dow components – Coca Cola (KO) is up about 0.2%. Procter & Gamble (PG) is up about 0.2%. Wal-Mart (WMT) is down about 0.2%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.92 at 3:30 PM on Thursday, up 0.06% on the day – up 10.56% year-to-date.

Health Care

St. Jude Medical (STJ) only sent a warning to doctors in December 2010 about insulation problems with the wires used with its Riata defibrillators, at least five years after the company first encountered the flaws and two years after an internal audit had specifically identified the issue. Genomic Health (GHDX) is picked up with a Neutral rating at Goldman Sachs. Celgene (CELG) is now Neutral from Overweight at Piper Jaffray. Fresenius Medical (FMS) is now Neutral from Overweight at HSBC Securities. Qiagen (QGEN) is cut to Underweight from Neutral at HSBC Securities. Dow Components – Johnson & Johnson (JNJ) is down about 0.5%. Merck (MRK) is down about 0.5%. Pfizer (PFE) is down about 0.6%. United Health Group (UNH) is up about 1%. The Health Care Select Sector SPDR (XLV) was trading at $40.45 at 3:30 PM on Thursday, up 0.27% on the day – up 16.60% year-to-date.

Financials

McGraw-Hill's (MHP) education unit is expected to draw final bids later this month from P-E firms Bain Capital and Apollo Global (APO), as well as rival college textbook publisher Cengage Learning, in a deal that could fetch $3B. Expect continued substantial headcount reductions at Bank of America (BAC), CEO Brian Moynihan has reiterated to Bloomberg, saying, "It's really based on demand." Noting the bank's flat revenues amidst the flat yield curve and flat economy, he said, "When I talk to our clients...they don't expect to hire a lot more people." Mission West Properties (MSW) beat estimates by 7 cents and revenue by $4M. Privatebancorp (PVTB) beat estimates by 5 cents and revenue by $1M. American Tower (AMT) is a new Neutral at Nomura. First Financial Holdings (FFCH) is assigned a Market Perform at Raymond James. Popular Inc. (BPOP) is an Outperform at RBC Capital. American Campus Communities (ACC) is raised to Buy from Neutral at Janney Capital. Banner Corp. (BANR) is boosted to Outperform from Market Perform at Keefe Bruyette. Big Mover – MF Global (MFGLQ) is up about 64%. Dow Components – American Express (AXP) is up about 0.5%. Bank of America (BAC) is up about 1.2%. JP Morgan Chase (JPM) is up about 0.3%. Travelers (TRV) is down about 0.4%. The Financial Select Sector SPDR (XLF) was trading at $16.045 at 3:30 PM on Thursday, up 0.27% on the day – up 23.42% year-to-date.

Information Technology

PC shipments fell a stunning 8.3% on year in Q3 vs. just -0.1% in Q2, Gartner estimates, as weak back-to-school sales and cautious retailer orders add to the damage wreaked by tablet sales. Gartner also says that Lenovo (LNVGY) has passed H-P (HPQ) to become the world's top PC OEM. DragonWave (DRWI) beat estimates by 26 cents and revenue by $3.2M. DragonWave expects FQ3 revenue of $43M-$50M (in-line with a $48.7M consensus). Richardson Electronics (RELL) missed estimates by 6 cents and revenue by $6M. Sycamore Networks (SCMR) beat estimates by 10 cents and revenue by $4M. Heartland Payment Systems (HPY) is hoisted to Outperform from Market Perform at Raymond James. Check Point Software (CHKP) is now Hold from Buy at Needham. Texas Instruments (TXN) is cut to Neutral from Outperform at Credit Suisse. Big Movers – Dragonwave (DRWI) is up about 15%. KIT Digital (KITD) is down about 12.5%. Dow Components – Cisco Systems (CSCO) is down about 0.5%. Hewlett-Packard (HPQ) is up about 0.9%. IBM (IBM) is up about 0.1%. Intel Corp (INTC) is down about 0.4%. Microsoft (MSFT) is down about 0.3%. The Technology Select Sector SPDR (XLK) was trading at $30.06 at 3:30 PM on Thursday, unchanged on the day – up 18.11% year-to-date.

Telecommunication Services

Sprint (S) soared 23% premarket following a report that Japan's Softbank is mulling taking more than a two-thirds stake in the company for about $13B. Big Movers – Clearwire (CLWR) is up about 52%. Sprint Nextel (S) is up about 13%. TerreStar (TSTRQ) is down about 38%. Dow Components – AT&T (T) is down about 1.7%. Verizon (VZ) is down about 1.1%. The NASDAQ Telecommunications Index (IXTC) was trading at $194.05 at 3:30 PM on Thursday, up 0.36% on the day – down 1.46% year-to-date.

Utilities

The Big Names – Dominion Resources (D) is down about 0.3%. Edison International (EIX) is relatively unchanged. First Energy (FE) is up about 1.3%. PG&E Corp (PCG) is relatively unchanged. Southern Company (SO) is down about 0.5%. The Utilities Select Sector SPDR (XLU) was trading at $36.75 at 3:30 PM on Thursday, up 0.22% on the day – up 2.14% 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, BP, XOM, CVX, GMXR, ANR, ARI, JRCC, SWC, ALK, BA, AAMRQ, BAESY, EADSY, FDX, CAT, SI, OSK, MHP, APO, GM, EKDKQ, WGO, EMMS, RT, VOXX, LTM, MAR, BFB, RAD, STJ, GHDX, CELG, FMS, QGEN, MHP, APO, BAC, MSW, PVTB, AMT, FFCH, BPOP, ACC, BANR, MFGLQ, LNVGY, HPQ, DRWI, RELL, SCMR, HPY, CHKP, TXN, KITD, S, CLWR, TSTRQ

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 238.08 -1.03 -0.43 1,984,720 Trade
FMS Fresenius Medical Care AG 51.52 -0.68 -1.30 101,044 Trade
ARI Apollo Commercial Real Estate Finance Inc 18.62 -0.08 -0.43 739,817 Trade
PG Procter & Gamble Company (The) 91.00 0.12 0.13 5,853,526 Trade
GE General Electric Co 17.64 -0.12 -0.68 48,569,396 Trade
CVX Chevron Corporation 119.53 -0.40 -0.33 3,736,920 Trade
SO Southern Company (The) 51.52 -0.16 -0.31 4,534,821 Trade
ACC American Campus Communities Inc 42.96 -0.10 -0.23 398,582 Trade
PCG Pacific Gas & Electric Co. 52.72 -0.37 -0.70 2,451,572 Trade
SWC Stillwater Mining Company ($0.01 Par Value) n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 141.65 -1.24 -0.87 5,337,934 Trade
WMT Wal-Mart Stores Inc. 97.13 -0.63 -0.64 9,385,769 Trade
AA Alcoa Inc. 42.35 0.49 1.17 3,684,688 Trade
INTC Intel Corporation 43.26 -0.08 -0.18 19,645,370 Trade
IBM International Business Machines Corp 154.00 0.09 0.06 4,637,441 Trade
D Dominion Resources Inc. 84.38 0.27 0.32 2,202,729 Trade
TRV The Travelers Companies Inc. 132.58 -0.98 -0.73 1,278,685 Trade
RAD Rite Aid Corporation 1.81 -0.02 -1.09 14,106,342 Trade
BPOP Popular Inc. 34.73 -0.39 -1.11 1,351,182 Trade
S Sprint Corporation 5.63 -0.06 -1.05 14,090,068 Trade
AUDC AudioCodes Ltd. 7.13 0.13 1.86 69,011 Trade
GHDX Genomic Health Inc. 33.28 5.28 18.86 1,243,964 Trade
EIX Edison International 69.29 -0.51 -0.73 4,087,576 Trade
HPY Heartland Payment Systems Inc n/a n/a n/a 0 Trade
ALK Alaska Air Group Inc. 69.39 0.37 0.54 1,148,065 Trade
JPM JP Morgan Chase 104.66 -0.85 -0.81 13,034,332 Trade
AXP American Express Company 97.15 -0.63 -0.64 3,464,840 Trade
UTX United Technologies Corporation 123.76 -0.54 -0.43 3,033,688 Trade
TXN Texas Instruments Incorporated 100.25 1.39 1.41 7,106,663 Trade
CSCO Cisco Systems Inc. 37.90 -0.25 -0.66 16,738,542 Trade
DIS Walt Disney Company (The) 110.57 2.96 2.75 27,578,007 Trade
MAR Marriott International 127.72 -0.75 -0.58 2,564,256 Trade
VZ Verizon Communications Inc. 52.34 -0.55 -1.04 18,775,430 Trade
GM General Motors Company 40.81 -0.59 -1.43 9,277,001 Trade
BAC Bank of America Corporation 28.73 -0.11 -0.38 60,629,853 Trade
APO Apollo Global Management LLC Class A Representing 32.09 -0.08 -0.25 643,753 Trade
PVTB PrivateBancorp Inc. n/a n/a n/a 0 Trade
VOXX VOXX International Corporation 5.65 0.05 0.89 130,084 Trade
MCD McDonald\'s Corporation 173.14 -0.41 -0.24 2,667,521 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
DRWI DragonWave Inc n/a n/a n/a n/a
RT Ruby Tuesday Inc. 2.39 -0.02 -0.83 433,827 Trade
WGO Winnebago Industries Inc. 54.90 -1.75 -3.09 517,842 Trade
STJ St. Jude Medical Inc. n/a n/a n/a 0 Trade
RELL Richardson Electronics Ltd. 6.47 0.12 1.89 5,649 Trade
EMMS Emmis Communications Corporation 3.46 -0.08 -2.26 9,143 Trade
OSK Oshkosh Corporation (Holding Company)Common Stock 87.72 -1.38 -1.55 619,414 Trade
HD Home Depot Inc. (The) 182.13 -0.90 -0.49 3,542,922 Trade
XOM Exxon Mobil Corporation 82.90 -0.22 -0.26 9,492,394 Trade
BANR Banner Corporation 54.16 -1.36 -2.45 223,414 Trade
PFE Pfizer Inc. 36.46 -0.18 -0.49 14,788,307 Trade
FDX FedEx Corporation 238.50 -3.52 -1.45 1,537,532 Trade
HPQ HP Inc. 20.74 -0.11 -0.53 8,161,130 Trade
BA Boeing Company (The) 293.88 2.04 0.70 3,913,767 Trade
CELG Celgene Corporation 108.24 0.04 0.04 5,353,821 Trade
MRK Merck & Company Inc. (new) 56.01 -0.42 -0.74 10,137,284 Trade
QGEN Qiagen N.V. 31.61 -0.44 -1.37 922,760 Trade
AMT American Tower Corporation (REIT) 143.64 -0.09 -0.06 2,114,776 Trade
BP BP p.l.c. 40.63 -0.02 -0.05 2,886,218 Trade
FE FirstEnergy Corporation 32.12 -0.15 -0.46 4,042,839 Trade
CHKP Check Point Software Technologies Ltd. 106.30 -0.13 -0.12 1,153,517 Trade
KO Coca-Cola Company (The) 46.03 0.13 0.28 9,028,981 Trade
T AT&T Inc. 37.74 -0.30 -0.79 34,286,616 Trade
CAT Caterpillar Inc. 146.28 -2.29 -1.54 4,617,061 Trade
MSFT Microsoft Corporation 84.69 -0.66 -0.77 19,305,983 Trade

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