Equities Sector Coverage: Stocks Rally to Recover From Last Week's Downtrend

Sector Recap |

Pending Home Sales unexpectedly fell 0.5% in January, but were up 9.2% year over year. Keep in mind that this data series is not adjusted for cancellations. Ben Bernanke gave some dovish comments to the NABE pre-market on Monday, and the idea that the Fed’s accommodative policy would continue gave US stocks a boost as the week begins. The Dow Jones Industrial Average traded up to a day’s high at 13,241.78 going into the final half hour of trading versus its 52-week high at 12,289.08 set on March 16th. The NASDAQ’s traded up to a day’s high at 3121.61 going into the final half hour of trading setting a new 52-week high.

Asian stocks were mixed on Monday as reports say that China is headed for a soft landing. The Nikkei 225 ended their session at 10,018 – up 0.07% on the day. The Hang Seng ended their session at 20,669 – unchanged on the day. European stocks were higher on the day. The FTSE 100 ended their session at 5,903 – up 0.82% on the day. The DAX ended their session at 7,079 – up 1.20% on the day. The CAC 40 ended their session at 3,502 – up 0.74% on the day. The yield on the 10-Year US Treasury rose from 2.241 percent to 2.291 then declined to 2.237 staying above its 200-day simple moving average at 2.199.

Gold rebounded from $1655.1 the Troy ounce to $1692.0 closing above its 200-day simple moving average at $1682.6 after being below it for seven consecutive days. Crude oil rebounded from $106.19 per barrel to $107.32. The euro versus the dollar rebounded from 1.3195 to 1.3347.

Energy

EU and U.S. sanctions are making it almost impossible for Shell (RDS.A) to pay off nearly $1B that it owes Iran for crude oil, Reuters reports. Baker Hughes (BHI) is cut to Market Perform from Outperform at Wells Fargo.

Energy Select Sector SPDR (XLE) was trading at $72.80 at 4:00 PM on Monday, up 0.75% on the day – up 5.31% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.
Big Movers: (DHT) +8.75%, (JRCC) -7.75%.
Heavily Traded: (SD) -1.2%, (XOM) +1.5%.

Materials

KapStone Paper and Packaging (KS) is initiated with an Outperform and $22.50 target price at BMO Capital. Celanese (CE) is now Outperform from Neutral at Macquarie. PolyOne (POL) is upgraded to Outperform from Market Perform with Wells Fargo.

The Materials Select Sector SPDR (XLB) was trading at $37.39 at 4:00 PM on Monday, up 1.30% on the day – up 11.61% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.
Big Movers: (CAGC) -16.25%, (CDTI) +11%, (AUMN) +8.5%.
Heavily Traded: (FCX) +0.6%, (AA) +0.6%.

Industrials

WABCO Holdings (WBC) is a new Neutral at Goldman Sachs.
The Industrial Select Sector SPDR (XLI) was trading at $37.71 at 4:00 PM on Monday, up 1.48% on the day – up 11.73% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Movers: (CRTP) +200%, (EJETF) +12%, (AONE) -12.5%.
Heavily Traded: (GE) +1%, (GLW) +2.8%, (LUV) +0.6%.

Consumer Discretionary

Lions Gate (LGF) has generated its first blockbuster franchise with action film, "The Hunger Games," which earned $155M at U.S. and Canadian cinemas at the weekend, the largest domestic opening for a movie that isn't a sequel. BJ Restaurants (BJRI) gets increased to Outperform from Neutral with Wedbush. Cabela’s (CAB) is moved to Neutral from Underweight at JP Morgan. Tesla Motors (TSLA) is taken to Buy from Hold with a new higher objective of $49 with Wunderlich. Pearson Plc (PSO) is now Neutral from Outperform at Macquarie.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.36 at 4:00 PM on Monday, up 1.59% on the day – up 16.25% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.
Big Movers: (CCME) +18.25%, (DEER) +16.75%, (TSLA) +10.5%.

Consumer Staples

Safeway (SWY) gets downgraded to Neutral from Outperform at Credit Suisse.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.99 at 4:00 PM on Monday, up 0.68% on the day – up 4.62% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.
Heavily Traded: (SWY) -3.75%, (MO) +0.6%, (WAG) +1.6%, (RAD) +1.4%.

Health Care

Roche (RHHBY) has once again extended its tender offer for Illumina (ILMN), this time to April 20, but has kept the price unchanged at $44.50 despite the latter continuing to view the offer as "grossly inadequate.
The Health Care Select Sector SPDR (XLV) was trading at $37.26 at 4:00 PM on Monday, up 1.75% on the day – up 7.41% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (ARNA) +28.25%.
Heavily Traded: ARNA) +28.25%, (PFE) +1.6%, (THC) +5%.

Financials

While investment banks have significantly cut their balance sheets over the past year or so, increased costs and regulatory requirements to boost capital could force them to make another $1T in reductions within the next two years, a joint report from Morgan Stanley and consultants Oliver Wyman forecasts. An email obtained by The New York Times could support Jon Corzine's denial that he ordered MF Global's (MFGLQ) customer funds to be moved to JPMorgan to cover an overdraft. The email indicates that a transfer of $175M was a "House Wire," meaning that it came from the firm’s own money. MetLife (MET) and Prudential (PRU) are among the insurers considering bids for ING's (ING) Asian life insurance arm, The Wall Street Journal reports. New U.K. banking firm NBNK is set to make a sweetened £1.5B bid for 632 branches being sold by Lloyds (LYG), The Daily Telegraph reports. NBNK's investors include BlackRock (BLK), Invesco (IVZ) and Aviva (AV). HomeStreet (HMST) is begun with an Outperform and $45 price objective at FBR Capital. Cypress Sharpridge Investments (CYS) gets boosted to Buy from Neutral at Nomura. SVB Financial Group (SIVB) is slashed to Neutral from Buy at Sterne Agee.

The Financial Select Sector SPDR (XLF) was trading at $15.977 at 4:00 PM on Monday, up 1.57% on the day – up 22.90% year-to-date (the strongest performing sector). The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Yahoo (YHOO) has appointed three new independent directors to join its board next month. The overhaul will leave the board with 10 members who joined since 2010, and none of the directors who rejected Microsoft's $45B buyout offer for Yahoo in 2008. Mitek Systems (MITK) is a new Buy at Needham. Ancestry.com (ACOM) is upgraded to Buy from Neutral at Bank of America-Merrill Lynch. Polycom (PLCM) is raised to Buy from Neutral at UBS. SAIC Inc (SAI) is upgraded to Buy from Hold at Jefferies with a target of $16. Lexmark (LXK) is lowered to Market Perform from Outperform by Sanford Bernstein. Micron (MU) gets moved to Perform from Outperform at Oppenheimer. ViaSat (VSAT) is cut to Underperform from Neutral at Macquarie.

The Technology Select Sector SPDR (XLK) was trading at $30.43 at 4:00 PM on Monday, up 1.48% on the day – up 19.57% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.
Big Movers: (AUDC) -15.25%, (GWRE) +12.25%, (UBNT) +10.5%.

Telecommunication Services

The NASDAQ Telecommunications Index (IXTC) was trading at $220.44 at 4:00 PM on Monday, up 1.53% on the day – up 11.94% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.
Big Movers: (TSTRQ) +30.25%.
Heavily Traded: (S) +3.3%, (T) +0.7%, (VZ) -0.5%, (FTR) -1.2%.

Utilities

Alliant Energy (LNT) is lifted to Overweight from Equal Weight by Barclays. DTE Energy (DTE) is moved to Outperform from Neutral at Macquarie, which takes TECO Energy (TE) to Neutral from Underperform. Wisconsin Energy (WEC) is upgraded to Overweight from Equal Weight by Barclays, which lifts Westar Energy (WR) to Overweight from Equal Weight.
Utilities Select Sector SPDR (XLU) was trading at $34.84 at 4:00 PM on Monday, up 0.69% on the day – down 3.17% year-to-date (the weakest performing sector / the only negative sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
Heavily Traded: (GEN) -3.4%, (DUK) +0.5%, (CPN) -2.6%, (EXC) flat, (AES) +1.2%.

STOCKS: RDS.A, BHI, DHT, JRCC, SD, XOM, KS, CE, POL, CAGC, CDTI, AUMN, FCX, AA, WBC, CRTP, EJETF, AONE, GE, GLW, LUV, LGF, BJRI, CAB, TSLA, PSO, CCME, DEER, TSLA, SWY, MO, WAG, RAD, RHHBY, ILMN, ARNA, PFE, THC, MFGLQ, MET, PRU, ING, LYG, BLK, IVZ, AV, HMST, CYS, SIVB, YHOO, MITK, ACOM, PLCM, SAI, LXK, MU, VSAT, AUDC, GWRE, UBNT, TSTRQ, S, T, VZ, FTR, LNT, DTE, TE, WEC, WR, GEN, DUK, CPN, EXC, AES

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
AA Alcoa Inc. 9.68 -0.08 -0.82 10,108,885
AES The AES Corporation 13.12 -0.14 -1.06 2,636,128
ALOG Analogic Corporation 90.89 -1.31 -1.42 145,769
ARNA Arena Pharmaceuticals Inc. 1.73 -0.01 -0.57 713,284
AUDC AudioCodes Ltd. 5.55 0.03 0.54 170,098
AUMN Golden Minerals Company 0.75 -0.02 -2.99 264,084
AV Aviva plc Unsponsored ADR (UK) 11.40 -0.32 -2.73 265,080
BHI Baker Hughes Incorporated 49.16 -0.08 -0.16 2,932,924
BJRI BJ\'s Restaurants Inc. 37.07 -0.81 -2.14 154,238
CAB Cabela\'s Inc Class A 52.25 0.36 0.69 610,514
CDTI Clean Diesel Technologies Inc. 3.72 -0.06 -1.59 13,912
CPN Calpine Corporation 13.67 -0.23 -1.65 3,235,383
CYS CYS Investments Inc. 8.79 0.02 0.23 1,219,995
DHT DHT Holdings Inc. 4.08 -0.09 -2.16 1,292,389
DTE DTE Energy Company 96.63 -0.22 -0.23 787,245
DUK Duke Energy Corporation (Holding Company) 82.15 -0.37 -0.45 2,717,958
EXC Exelon Corporation 34.82 0.02 0.06 3,545,719
FCX Freeport-McMoRan Inc. 10.51 -0.12 -1.13 24,047,117
FTR Frontier Communications Corporation 4.36 0.03 0.69 11,914,084
GE General Electric Co 29.54 -0.35 -1.17 25,138,356
GEN Genesis Healthcare Inc. 2.71 -0.01 -0.37 149,647
GLW Corning Incorporated 23.00 -0.14 -0.61 8,077,497
GWRE Guidewire Software Inc. 59.42 -0.23 -0.39 527,219
HMST HomeStreet Inc. 24.96 -0.22 -0.87 151,002
ILMN Illumina Inc. 178.47 -0.86 -0.48 645,769
ING ING Group N.V. 12.14 -0.19 -1.54 2,625,614
IVZ Invesco Ltd 30.28 -0.26 -0.85 2,779,400
KS KapStone Paper and Packaging Corporation 18.93 -0.94 -4.73 1,025,884
LGF Lions Gate Entertainment Corporation 20.11 -0.59 -2.85 2,111,508
LNT Alliant Energy Corporation 40.26 0.15 0.37 1,468,382
LUV Southwest Airlines Company 36.87 -0.37 -0.99 5,695,991
LXK Lexmark International Inc. 35.70 -0.29 -0.81 1,031,266
LYG Lloyds Banking Group Plc American Depositary Share 2.88 -0.07 -2.37 11,727,243
MET MetLife Inc. 43.40 -1.12 -2.52 7,138,342
MITK Mitek Systems Inc. 8.02 -0.09 -1.11 207,266
MO Altria Group Inc. 63.03 -0.84 -1.32 4,725,024
MU Micron Technology Inc. 17.36 -0.12 -0.69 19,524,681
PFE Pfizer Inc. 33.64 -0.62 -1.81 29,446,346
PLCM Polycom Inc. 12.47 -0.01 -0.08 1,864,938
POL PolyOne Corporation 32.38 0.45 1.41 396,741
PRU Prudential Financial Inc. 79.41 -0.93 -1.16 2,930,237
PSO Pearson Plc 9.46 -0.39 -3.96 819,365
RAD Rite Aid Corporation 8.04 -0.05 -0.62 11,536,512
S Sprint Corporation 6.65 0.01 0.15 13,882,201
SD SandRidge Energy n/a n/a n/a 0
SIVB SVB Financial Group 106.15 -3.54 -3.23 374,484
T AT&T Inc. 41.14 -0.14 -0.34 16,396,759
TE TECO Energy Inc. n/a n/a n/a 0
THC Tenet Healthcare Corporation 21.35 -0.62 -2.82 1,772,498
TSLA Tesla Motors Inc. 208.99 1.54 0.74 2,389,849
UBNT Ubiquiti Networks Inc. 53.13 -0.07 -0.13 252,583
VSAT ViaSat Inc. 74.56 -0.46 -0.61 137,535
VZ Verizon Communications Inc. 52.15 -0.41 -0.78 10,545,000
WBC Wabco Holdings Inc. 108.12 -0.64 -0.59 411,822
WEC WEC Energy Group Inc. 62.76 -0.21 -0.33 1,480,794
WR Westar Energy Inc. 56.70 0.22 0.39 639,384
XOM Exxon Mobil Corporation 83.06 -0.39 -0.47 10,813,030
YHOO Yahoo! Inc. 42.29 -0.51 -1.19 12,743,263

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