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
AUMN Golden Minerals Company 0.71 -0.08 -9.90 765,949
GLW Corning Incorporated 24.56 -0.32 -1.29 11,681,853
GEN Genesis Healthcare Inc. 4.14 0.13 3.24 304,082
WEC WEC Energy Group Inc. 57.16 0.69 1.22 1,520,841
FTR Frontier Communications Corporation 3.67 -0.03 -0.81 20,546,897
DTE DTE Energy Company 97.45 1.26 1.31 873,422
HMST HomeStreet Inc. 32.75 1.70 5.48 924,601
GE General Electric Co 31.78 0.25 0.79 31,227,376
THC Tenet Healthcare Corporation 15.18 -0.06 -0.39 1,539,920
CAB Cabela\'s Inc Class A 62.48 -0.08 -0.13 318,821
TSLA Tesla Motors Inc. 192.18 -0.11 -0.06 2,722,505
LGF Lions Gate Entertainment Corporation 26.09 0.00 0.00 0
AA Alcoa Inc. 32.05 0.74 2.36 4,344,295
RAD Rite Aid Corporation 8.44 0.29 3.56 36,613,328
ALOG Analogic Corporation 82.35 -1.15 -1.38 160,462
MO Altria Group Inc. 66.27 0.91 1.39 7,464,496
TE TECO Energy Inc. n/a n/a n/a 0
S Sprint Corporation 8.48 -0.26 -2.97 19,560,796
AUDC AudioCodes Ltd. 6.23 -0.02 -0.32 118,267
MITK Mitek Systems Inc. 6.50 0.35 5.69 550,765
MET MetLife Inc. 57.39 0.20 0.35 5,053,683
ARNA Arena Pharmaceuticals Inc. 1.41 0.04 2.92 2,597,080
AV Aviva plc Unsponsored ADR (UK) 12.20 -0.10 -0.81 187,743
LUV Southwest Airlines Company 49.79 0.19 0.38 6,700,895
AES The AES Corporation 11.92 0.08 0.68 4,492,687
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,101,462
CYS CYS Investments Inc. 8.10 -0.01 -0.12 1,806,341
CPN Calpine Corporation 11.66 0.38 3.37 9,061,382
SIVB SVB Financial Group 170.80 0.34 0.20 428,014
ILMN Illumina Inc. 123.20 -0.28 -0.23 1,387,998
FCX Freeport-McMoRan Inc. 15.75 0.15 0.96 25,150,243
PSO Pearson Plc 10.10 0.29 2.96 545,340
BJRI BJ\'s Restaurants Inc. 39.85 0.10 0.25 160,291
LYG Lloyds Banking Group Plc American Depositary Share 3.14 -0.05 -1.57 4,423,285
VSAT ViaSat Inc. 69.08 -1.61 -2.28 571,264
WR Westar Energy Inc. 57.18 -0.07 -0.12 721,636
BHI Baker Hughes Incorporated 66.32 0.51 0.77 2,219,982
LNT Alliant Energy Corporation 36.83 0.39 1.07 989,539
POL PolyOne Corporation 34.38 -0.03 -0.09 403,355
GWRE Guidewire Software Inc. 53.99 -0.71 -1.30 407,472
XOM Exxon Mobil Corporation 89.00 0.68 0.77 8,021,683
PFE Pfizer Inc. 31.70 0.76 2.46 29,350,843
CDTI Clean Diesel Technologies Inc. 2.38 0.07 3.03 30,559
YHOO Yahoo! Inc. 41.76 0.35 0.85 6,836,112
PRU Prudential Financial Inc. 106.02 -0.55 -0.52 2,595,373
KS KapStone Paper and Packaging Corporation 21.78 -0.36 -1.63 840,250
PLCM Polycom Inc. n/a n/a n/a 0
DHT DHT Holdings Inc. 4.02 0.08 2.03 3,900,571
ING ING Group N.V. 14.45 -0.14 -0.96 3,979,539
SD SandRidge Energy 23.20 0.04 0.17 118,382
IVZ Invesco Ltd 32.79 -0.37 -1.12 2,636,911
MU Micron Technology Inc. 20.50 -0.16 -0.77 23,977,968
EXC Exelon Corporation 34.90 0.70 2.05 10,118,837
T AT&T Inc. 40.38 -0.03 -0.07 17,105,180
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
LXK Lexmark International Inc. n/a n/a n/a 0
UBNT Ubiquiti Networks Inc. 56.24 -1.49 -2.58 312,245

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