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.
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%.
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%.
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%.
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%.
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%.
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%.
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.
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%.
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%.
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