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.

Energy

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.

Materials

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.

Industrials

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.

Financials

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.

Utilities

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.

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, FTI, BHI, SLB, WFT, CAM, HAL, DNR, HP, OSG, PKG, AEM, ABX, EGO, IAG, KCG, NEM, GG, AUY, BZ, MTL, AONE, ITW, MWA, ACM, UPS, EXPD, BPI, SMFG, MTU, RSNHF, PC, VLKAY, F, GM, BAMXF, DPZ, MAT, WWW, JOEZ, GPC, IILG, FOSL, PM, BTI, KO, WDFC, KR, LO, UNH, ICUI, JNJ, OSUR, MDCO, ISIS, RBS, SFTBF, S, GS, PNC, BRO, C, AON, CBF, HLSS, BEE, TWGP, INTC, IBM, MCHP, GLUU, ADS, LPL, RVBD, ZTCOY, RATE, TEF, CLWR

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 195.66 3.95 2.06 1,403,162 Trade
UNH UnitedHealth Group Incorporated (DE) 263.91 4.14 1.59 1,986,782 Trade
UPS United Parcel Service Inc. 101.26 1.68 1.69 1,776,702 Trade
EXPD Expeditors International of Washington Inc. 69.44 1.50 2.21 692,614 Trade
KR Kroger Company (The) 29.45 0.52 1.80 2,040,965 Trade
PG Procter & Gamble Company (The) 91.61 0.97 1.06 5,135,512 Trade
GE General Electric Company 9.18 0.04 0.38 49,812,602 Trade
CVX Chevron Corporation 113.93 1.97 1.76 3,732,140 Trade
SO Southern Company (The) 47.07 0.00 0.00 1,974,983 Trade
PCG Pacific Gas & Electric Co. 6.92 0.56 8.73 30,155,855 Trade
GLUU Glu Mobile Inc. 9.75 0.19 1.99 1,193,007 Trade
TEF Telefonica SA 8.80 0.11 1.27 700,395 Trade
PKG Packaging Corporation of America 91.89 1.66 1.84 325,975 Trade
JNJ Johnson & Johnson 130.92 1.83 1.42 4,746,035 Trade
FOSL Fossil Group Inc. 17.90 -0.10 -0.56 806,121 Trade
AA Alcoa Corporation 29.21 -0.38 -1.28 3,958,415 Trade
WWW Wolverine World Wide Inc. 33.45 0.39 1.18 282,109 Trade
INTC Intel Corporation 49.23 0.76 1.57 14,589,449 Trade
MTU MUFG Mitsubishi UFJ Financial Group Inc. n/a n/a n/a n/a
D Dominion Energy Inc. 68.59 -0.35 -0.51 1,739,643 Trade
TRV The Travelers Companies Inc. 123.83 0.89 0.72 694,840 Trade
PNC PNC Financial Services Group Inc. (The) 124.68 2.79 2.29 1,410,831 Trade
OSUR OraSure Technologies Inc. 12.41 0.33 2.73 526,724 Trade
IAG Iamgold Corporation 2.88 -0.13 -4.42 5,635,301 Trade
HP Helmerich & Payne Inc. 53.69 0.11 0.21 473,412 Trade
C Citigroup Inc. 62.97 0.50 0.80 10,371,219 Trade
S Sprint Corporation 6.12 0.11 1.83 2,780,312 Trade
LJPC La Jolla Pharmaceutical Company 6.13 -0.12 -1.92 589,727 Trade
DPZ Domino's Pizza Inc 263.25 4.31 1.66 557,001 Trade
EIX Edison International 54.24 0.73 1.36 1,445,660 Trade
GG Goldcorp Inc. 10.48 0.14 1.35 6,319,130 Trade
AXP American Express Company 99.73 0.24 0.24 6,023,722 Trade
UTX United Technologies Corporation 113.98 1.21 1.07 2,455,706 Trade
MDCO The Medicines Company 19.76 -0.19 -0.95 252,451 Trade
AEM Agnico Eagle Mines Limited 39.24 -0.22 -0.56 495,331 Trade
ISIS Isis Pharmaceuticals Inc. n/a n/a n/a 0 Trade
MTL Mechel PAO American Depositary Shares (Each rep. 1) 2.34 0.01 0.43 28,811 Trade
CSCO Cisco Systems Inc. 45.18 0.97 2.19 13,903,390 Trade
CAM Cameron International Corp n/a n/a n/a 0 Trade
SMFG Sumitomo Mitsui Financial Group Inc Unsponsored American Depositary Shares (Japan) 7.25 0.06 0.83 911,317 Trade
GS Goldman Sachs Group Inc. (The) 201.35 2.26 1.14 3,062,141 Trade
MCHP Microchip Technology Incorporated 77.57 1.42 1.86 1,186,713 Trade
VZ Verizon Communications Inc. 56.94 0.11 0.18 9,164,257 Trade
MAT Mattel Inc. 12.50 -0.17 -1.34 2,306,736 Trade
ABX GOLD Barrick Gold Corporation (BC) n/a n/a n/a n/a
GM General Motors Company 38.62 0.36 0.93 5,466,757 Trade
ICUI ICU Medical Inc. 238.15 4.65 1.99 110,141 Trade
BAC Bank of America Corporation 29.35 0.36 1.22 58,765,439 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 6.44 0.17 2.63 674,984 Trade
IILG Interval Leisure Group Inc. n/a n/a n/a n/a
MCD McDonald's Corporation 182.45 1.34 0.74 1,576,423 Trade
EGO Eldorado Gold Corporation 2.73 -0.10 -3.37 506,108 Trade
WFT Weatherford International plc (Ireland) 0.56 0.04 7.38 13,066,765 Trade
AUY Yamana Gold Inc. (Canada) 2.35 -0.08 -3.29 8,415,519 Trade
ACM AECOM 30.07 0.87 2.98 324,793 Trade
JOEZ Joe's Jeans Inc. n/a n/a n/a n/a
WDFC WD-40 Company 177.83 0.27 0.15 34,638 Trade
DNR Denbury Resources Inc. 2.22 0.04 1.61 5,472,844 Trade
PM Philip Morris International Inc 73.55 1.03 1.42 4,348,186 Trade
F Ford Motor Company 8.58 0.22 2.57 27,618,319 Trade
PFE Pfizer Inc. 42.55 0.08 0.19 17,134,280 Trade
BEE Strategic Hotels & Resorts Inc. n/a n/a n/a 0 Trade
BPI Bridgepoint Education Inc. 8.16 0.28 3.49 59,469 Trade
HPQ HP Inc. 21.69 0.46 2.17 4,734,812 Trade
MRK Merck & Company Inc. (new) 75.99 0.39 0.52 7,771,049 Trade
BRO Brown & Brown Inc. 28.56 0.38 1.35 276,425 Trade
ITW Illinois Tool Works Inc. 137.10 4.43 3.34 776,709 Trade
FE FirstEnergy Corp. 38.75 0.04 0.10 1,771,291 Trade
AON Aon plc Class A (UK) 154.51 2.01 1.32 378,518 Trade
KO Coca-Cola Company (The) 47.56 0.50 1.06 5,835,033 Trade
T AT&T Inc. 30.91 0.27 0.89 22,329,922 Trade
LPL LG Display Co Ltd AMERICAN DEPOSITORY SHARES 9.06 0.05 0.55 114,180 Trade
MWA MUELLER WATER PRODUCTS 9.71 0.14 1.46 326,738 Trade
CAT Caterpillar Inc. 137.06 3.38 2.53 2,964,225 Trade
HAL Halliburton Company 31.70 0.80 2.60 7,913,574 Trade
NEM Newmont Mining Corporation 32.09 0.47 1.49 3,620,370 Trade
ADS Alliance Data Systems Corporation 171.21 1.52 0.90 375,474 Trade
GPC Genuine Parts Company 97.48 0.42 0.43 461,075 Trade
FTI TechnipFMC plc 23.75 0.48 2.06 1,826,365 Trade
SLB Schlumberger N.V. 44.56 3.19 7.71 13,892,388 Trade
MSFT Microsoft Corporation 107.85 1.73 1.63 22,048,221 Trade
WMT Walmart Inc. 97.81 1.07 1.10 3,059,179 Trade
IBM International Business Machines Corporation 124.57 2.38 1.95 2,674,780 Trade
JPM JP Morgan Chase & Co. 104.57 1.65 1.60 8,865,375 Trade
DIS The Walt Disney Company 111.22 0.21 0.19 4,374,938 Trade
HD Home Depot Inc. (The) 179.65 4.78 2.73 3,251,566 Trade
XOM Exxon Mobil Corporation 72.59 0.46 0.64 7,984,148 Trade
BA The Boeing Company 366.39 7.30 2.03 2,628,617 Trade

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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