Equities Sector Coverage: Stocks Pop on Earnings and Economic Positives

Sector Recap  |

The Consumer Price Index rose 0.6% in September and is up 2.0% year over year. Industrial Production rose by 0.4% in September with Capacity Utilization at 78.3%. The NAHB Housing Market Index rose a point to 41 in October, which is still below the 50 neutral reading.  The Dow Jones Industrial Average traded up to 13,556.37 on Tuesday versus the October 5 high at 13,661.87. The NASDAQ traded up to 3102.59 on Tuesday versus its 50-day simple moving average at 3093.56.

Asian stocks were higher on Tuesday. The Nikkei 225 closed at 8,701 – up 1.44%. The Hang Seng closed at 21,207 – up 0.28%. European exchanges were higher on Tuesday. The FTSE 100 ended the day at 5,871 – up 1.12%. The DAX ended the day at 7,376 – up 1.58%. The CAC 40 ended the day at 3,501 – up 2.36%. The yield on the 10-Year US Treasury rose from 1.660% to 1.726% versus the 50-day and 200-day simple moving averages at 1.695% and 1.803%.

Comex gold rebounded from $1736.1 the Troy ounce to $1748.9 above its 50-day simple moving average at $1713.1 and well below the 2012 high at $1798.1 on October 5. Nymex crude oil rebounded from $91.44 per barrel to $92.32 then declined to $91.30 staying below its 50-day and 200-day simple moving averages at $93.95 and $95.87. The euro versus the dollar rebounded from 1.2945 to 1.3059 staying above its 200-day simple moving average at 1.2825 with the September 17 high at 1.3170.


FMC Technologies (FTI) is a fresh Neutral at Credit Suisse. Baker Hughes (BHI), Schlumberger (SLB), and Weatherford International (WFT) are all new Neutrals at Credit Suisse, which covers Cameron (CAM) and Halliburton (HAL) at Outperform. Denbury Resources (DNR) is raised to Positive from Neutral at Susquehanna. Helmerich & Payne (HP) gets increased to Outperform from Sector Perform at RBC Capital. Big Mover – Overseas Shipholding Group (OSG) is down about 23%. Dow components – Chevron (CVX) is up about 15. Exxon Mobil (XOM) is up about 0.8%. Energy Select Sector SPDR (XLE) was trading at $73.93 at 3:30 PM on Tuesday, up 1.37% on the day – up 6.94% year-to-date.


Packaging of America (PKG) missed estimates by a penny, while beating revenue by $3M. Barclays begins Equal Weight coverage on Agnico-Eagle Mines (AEM), Barrick Gold (ABX), Eldorado Gold (EGO), IAMGOLD (IAG), and Kinross Gold (KCG). It establishes more upbeat Overweights on Newmont Mining (NEM), Goldcorp (GG), and Yamana Gold (AUY). Boise Inc. (BZ) is downgraded to Hold from Buy at TD Securities. Mechel Steel (MTL) is moved to Neutral from Overweight at HSBC Securities. Dow Components – Alcoa (AA) is up about 1.25%. DuPont (DD) is up about 1.25%. The Materials Select Sector SPDR (XLB) was trading at $37.489 at 3:30 PM on Tuesday, up 2.21% on the day – up 11.91% year-to-date.


A123 Systems (AONE) did not have sufficient cash to fund operations and filed for bankruptcy protection, this morning. The company, which received a $249M grant from the government, failed to meet interest payments on approximately $143M of its material debt agreements yesterday. Illinois Tool Works' (ITW) Chairman and CEO David Speer has taken a health-related leave of absence and will be replaced on an interim basis by Vice Chairman Scott Santi, who's also becoming President and COO. Mueller Water (MWA) is moved to Outperform from Sector Perform at RBC Capital. Aecom Technology (ACM) is cut to Hold from Buy at BB&T Capital. Robert Baird gives Neutral-from-Outperform ratings reductions to United Parcel Service (UPS) and Expeditors International (EXPD). Big Mover – A123 Systems (AONE) is down about 75%. Dow components – Boeing Co (BA) is up about 1.9%. Caterpillar (CAT) is up about 2.25%. General Electric (GE) is up about 0.2% 3M Company (MMM) is up 1.7%. United Technologies (UTX) is up about 1.9%. The Industrial Select Sector SPDR (XLI) was trading at $37.06 at 3:30 PM on Tuesday, up 0.98% on the day – up 9.81% year-to-date.

Consumer Discretionary

Bridgepoint Education (BPI) plummeted by as much as 13% in post-market trading after the for-profit education company said it was being investigated by the DOJ over compensation for its admissions staff. Japanese banks Sumitomo Mitsui (SMFG), Mitsubishi UFJ (MTU) and Resona (RSNHF) are providing Panasonic (PC) with $7.6B of loan commitments, allowing the electronics giant to avoid having to raise money in the markets. EU new-car registrations for September highlight the sector's troubles in the region, slumping 10.8% to 1.1M, the fastest drop in a year. Volkswagon (VLKAF), Ford (F), Opel (GM) and Renault all suffered sharp declines, although BMW's (BAMXF) sales climbed 11%. Domino's Pizza (DPZ) beat estimates by 2 cents and revenue by $4M. Mattel (MAT) beat estimates by 5 cents with revenue in-line with estimates. Wolverine World Wide (WWW) missed estimates by a penny and revenue by $9M. Joe's Jeans (JOEZ) beat estimates by 3 cents and revenue by $3M. Genuine Parts (GPC) is a new Equal-Weight at Morgan Stanley. Interval Leisure Group (IILG) is initiated with a Buy at SunTrust. Fossil Inc (FOSL) gets a Buy-from-Neutral boost at Citigroup. Dow Components – Disney (DIS) is up about 1%. Home Depot (HD) is down slightly. McDonalds (MCD) is up about 0.5%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.095 at 3:30 PM on Tuesday, up 0.82% on the day – up 20.69% year-to-date.

Consumer Staples

Russia, the world's second-largest cigarette market, has threatened to crack down even further on sales of the product, with Prime Minister Dmitry Medvedev accusing Philip Morris (PM) and British American Tobacco (BTI) of intentionally hooking women and children. Coca-Cola (KO) beat estimates by a penny, while missing revenue by $50M. WD-40 Company (WDFC) missed estimates by 14 cents and revenue by $9M. The company also cuts its outlook for FY13, now expecting net sales of $356M to $370M, or $2.31 to $2.40 per share, versus Street expectations of $2.56 per share. Kroger (KR) is lifted to Buy from Hold at Jefferies. Lorillard (LO) is upgraded to Outperform from Market Perform at Wells Fargo. Dow components – Coca Cola (KO) is down about 0.75%. Procter & Gamble (PG) is up about 0.4%. Wal-Mart (WMT) is down about 0.6%. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.14 at 3:30 PM on Tuesday, up 0.14% on the day – up 11.23% year-to-date.

Health Care

UnitedHealth's (UNH) Q3 net profit jumped 28% to $1.6B and EPS of $1.50 handily beat forecasts, while revenue climbed 8% to $27.3B, missing expectations. UnitedHealth raised it 2012 EPS outlook to $5.20-$5.25, above consensus of $5.10. ICU Medical (ICUI) beat estimates by 14 cents with revenue in-line with estimates. Johnson & Johnson (JNJ) beat EPS and revenue expectations earning $1.25 a share, on revenue of $17.1 billion. OraSure Technologies (OSUR) is initiated with a Market Perform at Raymond James. Medicines Co. (MDCO) is moved to Buy from Hold at Jefferies. Big Mover – Isis Pharmaceuticals (ISIS) is down about 21.5%. Dow Components – Johnson & Johnson (JNJ) is up about 1.1%. Merck (MRK) is up about 1.3%. Pfizer (PFE) is up about 1%. United Health Group (UNH) is down about 1.1%. The Health Care Select Sector SPDR (XLV) was trading at $41.26 at 3:30 PM on Tuesday, up 0.90% on the day – up 18.94% year-to-date.


RBS (RBS) will be given permission this week to leave the Asset Protection Scheme, a state-backed insurance program covering the bank's old "toxic assets," the FT reports. Japanese banks Sumitomo Mitsui (SMFG), Mitsubishi UFJ (MTU) and Resona (RSNHF) are providing Panasonic (PC) with $7.6B of loan commitments, allowing the electronics giant to avoid having to raise money in the markets. Sumitomo and Mitsubishi are also reportedly helping Softbank (SFTBF) finance its $20.1B acquisition of Sprint (S). Goldman Sachs (GS) beat estimates by 66 cents and revenue by $1.2B. PNC Financial Services (PNC) beat estimates by 4 cents and revenue by $70M. Brown & Brown (BRO) missed estimates by a penny and revenue by $8M. Citigroup’s (C) CEO – Vikram Pandit and President / COO – John Havens - will resign. Aon Corp. (AON) is initiated with a Buy at MKM Partners. Capital Bank (CBF) is initiated with an Outperform at FBR Capital. Home Loan Servicing (HLSS) is a new Buy at Bank of America-Merrill Lynch. Citigroup (C) is moved to Strong Buy from Outperform at Raymond James. Strategic Hotels & Resorts (BEE) is raised to Overweight from Neutral at JPMorgan. Tower Group (TWGP) is placed on the Top Picks List at FBR Capital. Dow Components – American Express (AXP) is up about 1.8% Bank of America (BAC) is down about 0.2%. JP Morgan Chase (JPM) is up about 0.6%. The Travelers Companies (TRV) is up about 1.7%. The Financial Select Sector SPDR (XLF) was trading at $16.065 at 3:30 PM on Tuesday, up 0.47% on the day – up 23.58% year-to-date.

Information Technology

Intel (INTC) and IBM (IBM) are expected to report contrasting fortunes when they release their Q3 earnings after the close today. Analysts estimate that Intel's EPS fell to $0.50 from $0.65 a year ago as revenue dropped 7.1% to $13.23B. IBM's EPS is seen rising to $3.61 from $3.28 but revenue slipping 3% to $25.36B. Microchip (MCHP) warned it expects to report FQ2 revenue of $407M-$408M, below a consensus of $420.3M. Glu Mobile (GLUU) gets begun with a Buy rating at Stifel Nicolaus. Alliance Data Systems (ADS) is listed to Outperform from Market Perform at Wells Fargo. LG Display (LPL) gets lifted to Outperform from Sell at Crédit Agricole. Riverbed Technology (RVBD) is now Neutral from Buy at Citigroup. ZTE Corp. (ZTCOY) is taken to Neutral from Buy at UBS. Big Mover – Bankrate (RATE) is down about 25.5%. Dow Components – Cisco Systems (CSCO) is up about 1.8%. Hewlett-Packard (HPQ) is up about 0.6%. IBM (IBM) is up about 0.7%. Intel Corp (INTC) is up about 2.4%. Microsoft (MSFT) is down slightly. The Technology Select Sector SPDR (XLK) was trading at $30.45 at 3:30 PM on Tuesday, up 1.26% the day – up 19.65% year-to-date.

Telecommunication Services

Telefonica (TEF) plans to raise up to €1.68B in the IPO of Telefonica Deutschland by selling 225M shares in the German unit at €5.25-€6.50 each. Japanese banks Sumitomo Mitsui (SMFG), Mitsubishi UFJ (MTU) are reportedly helping Softbank (SFTBF) finance its $20.1B acquisition of Sprint (S). Softbank's (SFTBF) $20.1B acquisition of Sprint (S) will bring foreign purchases by Japanese corporations to $75B this year, surpassing last year's record $69B and highlighting how the companies have been increasingly making large overseas acquisitions as a way to expand beyond their mature domestic market. Sprint (S) is taken to Market Perform from Underperform by Sanford Bernstein, which says the Softbank (SFTBY) deal makes “bankruptcy risk…de minimis.” Sprint (S) is now Neutral from Outperform at Robert W. Baird, which says the telecom firm still faces many of the same competitive and structural challenges even after the Softbank (SFTBY) deal. Big Mover – Clearwire (CLWR) is down about 17%. Dow Components – AT&T (T) is up about 0.2%. Verizon (VZ) is down about 1%. The NASDAQ Telecommunications Index (IXTC) was trading at $196.52 at 3:30 PM on Tuesday, up 1.07% on the day – down 0.21% year-to-date.


The Big Names – Dominion Resources (D) is down about 0.5%. Edison International (EIX) is up about 0.5%. First Energy (FE) is up about 0.4%. PG&E Corp (PCG) is relatively unchanged. Southern Company (SO) is up about 0.2%. The Utilities Select Sector SPDR (XLU) was trading at $36.695 at 3:30 PM on Tuesday, up 0.12% on the day – up 1.99% year-to-date.


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Symbol Name Price Change % Volume
MMM 3M Company 198.37 1.33 0.67 2,168,809 Trade
UNH UnitedHealth Group Incorporated (DE) 269.22 -3.16 -1.16 2,516,970 Trade
UPS United Parcel Service Inc. 109.40 1.68 1.56 3,578,263 Trade
EXPD Expeditors International of Washington Inc. 71.43 0.80 1.13 1,011,975 Trade
KR Kroger Company (The) 31.38 0.01 0.03 6,806,053 Trade
PG Procter & Gamble Company (The) 93.47 0.77 0.83 13,438,750 Trade
GE General Electric Company 8.61 0.62 7.76 205,815,973 Trade
CVX Chevron Corporation 115.35 -2.04 -1.74 6,846,504 Trade
SO Southern Company (The) 47.27 0.38 0.81 5,165,719 Trade
PCG Pacific Gas & Electric Co. 32.72 -0.26 -0.79 17,907,547 Trade
GLUU Glu Mobile Inc. 7.50 -0.22 -2.85 2,697,128 Trade
TEF Telefonica SA 8.46 0.11 1.32 1,781,440 Trade
PKG Packaging Corporation of America 95.44 0.55 0.58 751,923 Trade
JNJ Johnson & Johnson 144.68 -0.94 -0.65 7,432,438 Trade
FOSL Fossil Group Inc. 19.17 -0.49 -2.49 1,219,852 Trade
WMT Walmart Inc. 102.94 -0.93 -0.90 7,956,688 Trade
AA Alcoa Corporation 34.72 0.99 2.94 4,016,944 Trade
WWW Wolverine World Wide Inc. 33.47 -0.26 -0.77 726,618 Trade
INTC Intel Corporation 47.39 0.74 1.59 29,315,924 Trade
IBM International Business Machines Corporation 120.84 -0.06 -0.05 4,084,385 Trade
MTU MUFG Mitsubishi UFJ Financial Group Inc. n/a n/a n/a n/a
D Dominion Energy Inc. 74.02 0.59 0.80 2,821,920 Trade
TRV The Travelers Companies Inc. 126.81 -0.23 -0.18 1,419,931 Trade
PNC PNC Financial Services Group Inc. (The) 135.59 2.82 2.12 4,139,023 Trade
OSUR OraSure Technologies Inc. 12.95 -0.54 -4.00 333,365 Trade
IAG Iamgold Corporation 2.94 -0.07 -2.33 3,272,078 Trade
HP Helmerich & Payne Inc. 58.18 -2.36 -3.90 1,392,855 Trade
C Citigroup Inc. 64.78 0.57 0.89 14,121,261 Trade
S Sprint Corporation 6.21 0.12 1.97 24,689,643 Trade
LJPC La Jolla Pharmaceutical Company 15.00 0.64 4.46 265,380 Trade
DPZ Domino's Pizza Inc 264.71 -4.38 -1.63 357,056 Trade
EIX Edison International 55.54 1.98 3.70 5,180,623 Trade
GG Goldcorp Inc. 8.88 -0.12 -1.33 6,594,721 Trade
JPM JP Morgan Chase & Co. 109.59 0.64 0.59 13,746,059 Trade
AXP American Express Company 107.86 1.37 1.29 3,021,822 Trade
UTX United Technologies Corporation 129.12 0.82 0.64 3,433,021 Trade
MDCO The Medicines Company 22.80 0.46 2.06 890,177 Trade
AEM Agnico Eagle Mines Limited 33.59 -0.41 -1.21 1,042,014 Trade
ISIS Isis Pharmaceuticals Inc. n/a n/a n/a 0 Trade
MTL Mechel PAO American Depositary Shares (Each rep. 1) 2.63 -0.11 -4.01 12,088 Trade
CSCO Cisco Systems Inc. 45.12 -0.50 -1.10 26,196,749 Trade
CAM Cameron International Corp n/a n/a n/a 0 Trade
DIS The Walt Disney Company 116.85 0.15 0.13 4,650,588 Trade
SMFG Sumitomo Mitsui Financial Group Inc Unsponsored American Depositary Shares (Japan) 7.79 0.05 0.65 5,430,267 Trade
GS Goldman Sachs Group Inc. (The) 205.05 -1.00 -0.49 6,984,798 Trade
MCHP Microchip Technology Incorporated 70.86 1.20 1.72 3,782,324 Trade
VZ Verizon Communications Inc. 58.66 -0.06 -0.10 13,047,907 Trade
MAT Mattel Inc. 13.44 -0.10 -0.74 2,891,409 Trade
ABX Barrick Gold Corporation 12.43 -0.15 -1.19 11,115,642 Trade
GM General Motors Company 35.93 0.24 0.67 8,593,970 Trade
ICUI ICU Medical Inc. 221.05 1.67 0.76 441,185 Trade
BAC Bank of America Corporation 27.76 0.01 0.04 57,423,447 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 6.54 0.16 2.51 2,446,365 Trade
IILG Interval Leisure Group Inc.
MCD McDonald's Corporation 184.01 -0.36 -0.20 2,358,173 Trade
EGO Eldorado Gold Corporation 0.61 -0.01 -1.11 4,491,178 Trade
WFT Weatherford International plc (Ireland) 0.97 -0.05 -5.31 25,258,462 Trade
AUY Yamana Gold Inc. (Canada) 2.06 -0.04 -1.90 10,928,865 Trade
ACM AECOM 31.44 0.46 1.48 2,020,896 Trade
JOEZ Joe's Jeans Inc.
WDFC WD-40 Company 170.11 -4.42 -2.53 56,089 Trade
DNR Denbury Resources Inc. 2.60 -0.22 -7.80 24,469,696 Trade
PM Philip Morris International Inc 86.40 -1.56 -1.77 7,054,516 Trade
HD Home Depot Inc. (The) 179.00 -0.43 -0.24 14,274,029 Trade
F Ford Motor Company 9.54 0.05 0.53 33,097,995 Trade
XOM Exxon Mobil Corporation 78.00 -1.83 -2.29 15,530,229 Trade
PFE Pfizer Inc. 43.52 -0.59 -1.34 19,126,232 Trade
BEE Strategic Hotels & Resorts Inc. n/a n/a n/a 0 Trade
BPI Bridgepoint Education Inc. 8.13 -0.02 -0.25 167,638 Trade
HPQ HP Inc. 23.95 -0.04 -0.17 7,820,566 Trade
BA The Boeing Company 349.51 -7.52 -2.11 4,959,999 Trade
MRK Merck & Company Inc. (new) 74.61 -0.08 -0.11 15,827,652 Trade
BRO Brown & Brown Inc. 28.89 0.10 0.35 681,852 Trade
ITW Illinois Tool Works Inc. 132.98 1.79 1.36 2,799,397 Trade
FE FirstEnergy Corp. 38.68 -0.11 -0.28 2,752,756 Trade
AON Aon plc Class A (UK) 163.30 0.41 0.25 957,221 Trade
KO Coca-Cola Company (The) 49.86 -0.01 -0.02 13,873,127 Trade
T AT&T Inc. 30.33 -0.45 -1.46 25,640,955 Trade
LPL LG Display Co Ltd AMERICAN DEPOSITORY SHARES 8.03 0.28 3.61 413,915 Trade
MWA MUELLER WATER PRODUCTS 10.90 -0.03 -0.27 543,237 Trade
CAT Caterpillar Inc. 125.96 0.96 0.77 5,820,210 Trade
HAL Halliburton Company 32.27 -1.89 -5.53 21,537,027 Trade
NEM Newmont Mining Corporation 31.41 -0.12 -0.38 5,414,319 Trade
ADS Alliance Data Systems Corporation 205.27 2.14 1.05 255,982 Trade
GPC Genuine Parts Company 101.41 1.12 1.12 705,820 Trade
FTI TechnipFMC plc 23.53 -1.24 -5.01 5,799,461 Trade
SLB Schlumberger N.V. 47.34 -2.11 -4.27 19,044,120 Trade
MSFT Microsoft Corporation 106.94 0.07 0.07 35,374,583 Trade


Emerging Growth

MGX Minerals Inc.

MGX Minerals is a diversified Canadian mining company listed on the Canadian Securities Exchange. MGX is engaged in the acquisition and development of industrial mineral deposits in western Canada that…