Equities Sector Coverage: Stocks Rebound From Major Drop

Sector Recap |

The Dow Jones Industrial Average traded up to 12,662.46 consolidating Thursday’s decline. The NASDAQ traded up to 2890.11 consolidating Thursday’s decline.

Asian stocks were lower on Friday. The Nikkei 225 ended the day at 8,798 – down 0.29%. The Hang Seng ended the day at 19,009 – down 1.33%. European exchanges closed lower on Friday. The FTSE 100 ended the day at 5,512 – down 0.98%. The DAX ended the day at 6,258 – down 1.34%. The CAC 40 ended the day at 3,091 – down 0.75%. The yield on the 10-Year US Treasury rose from 1.613% to 1.674%.

Gold rebounded to $1573.2 the Troy ounce then declined to $1558.6 versus the 50-day and 200-day simple moving averages at $1609.8 and $1672.0. Crude oil declined to $77.56 per barrel then rebounded $80.37 versus the 200-week simple at $80.69. The euro versus the dollar rebounded from 1.2523 to 1.2582.

Energy

McMoRan Exploration (MMR) says it take a $56 million charge in its June quarter due to the expiration of its Boudin lease at Eugene Island Block 26. The company requested a lease extension from the Department of the Interior to provide additional time to assess potential alternatives, but the request was denied, and shares fell 4.0% in after hours trading on Thursday. Cloud Peak Energy (CLD) has been initiated with a Neutral rating at JP Morgan. Synergy Resources (SYRG) has been initiated with a Buy rating at Wunderlich. Weatherford International (WFT) has been initiated with an Outperform rating at Macquarie. Tesoro Logistics LP (TLLP) has been upgraded to Overweight from Neutral at JP Morgan. Ecopetrol (EC) - Citigroup downgraded the Colombian crude oil company to Sell from Neutral. Key Energy (KEG) has been downgraded to Perform from Outperform at FBR Capital. Dow components – Chevron (CVX) down 0.39%, Exxon Mobil (XOM) up 0.59%.
Energy Select Sector SPDR (XLE) was trading at $63.51 at 3:30 PM on Friday, up 0.78% on the day – down 8.13% year-to-date.

Materials

Westlake Chemical (WLK) has been resumed with a Neutral rating at JP Morgan. Gold stocks felt the pressure of lower gold prices with Barrick Gold (ABX) down 1.18% and Newmont Mining (NEM) flat. Dow components – Alcoa (AA) down 0.35%, DuPont (DD) up 0.40%.
The Materials Select Sector SPDR (XLB) was trading at $34.20 at 3:30 PM on Friday, up 0.53% on the day – up 2.09% year-to-date.

Industrials

The National Association of Manufacturers has warned that the upcoming cuts in Pentagon spending that begins in January will result in a loss of more than a million jobs, including 130,000 manufacturing jobs by 2014. This is the latest warning by industry groups about the impact of the automatic spending cuts put into law last year by the Budget Control Act. Ryder (R) cut its Q2 and FY guidance due to weaker than expected results in its Fleet Management Solutions business and unusually high medical benefit costs. The guidance was below street expectations and shares fell 8.0% in after hours trading on Thursday. Ryder System (R) has been downgraded to Market Perform from Outperform with Wells Fargo. Apogee Enterprises (APOG) beat Q1 earnings estimates across the board this week, swinging to a profit as the industrial-glass maker's margins strengthened and as its architectural segment continued to benefit from higher prices and volume growth. ITT Industries (ITT) has been downgraded to Underperform from Perform at FBR Capital dropping their price target to $15.50 from $24 citing weak markets in Europe. Dow components – Boeing Co (BA) up 0.20%, Caterpillar (CAT) up 0.40%, General Electric (GE) up 0.51%, 3M Company (MMM) flat, United Technologies (UTX) up 0.41%.
The Industrial Select Sector SPDR (XLI) was trading at $34.72 at 3:30 PM on Friday, up 0.29% on the day – up 2.87% year-to-date.

Consumer Discretionary

Darden Restaurants' FQ4 (DRI) - Longhorn Steakhouse sales growth, helped offset declines at Olive Garden and Red Lobster. DRI plans to open 100-110 new restaurants. For FY13, the company forecasts total sales growth of 6%-7% and EPS tol be 8%-12% higher. Shares declined 3.8% premarket. JP Morgan establishes new Neutral ratings on Polo Ralph Lauren (RL), Warnaco Group (WRC), and PVH Corp (PVH), the former Phillips-Van Heusen. JP Morgan initiates V.F. Corp (VFC) with an Overweight rating. Crocs Inc (CROX) has been initiated with a Buy rating and $23 price target by Benchmark Company. Jack in the Box (JACK) - Bank of America-Merrill Lynch upgraded the fast food stock to Buy from Underperform. Pep Boys (PBY) has been upgraded to Buy from Hold at Argus with a $12 price target. Nike (NKE) has been downgraded to Sell from Hold at McAdams Wright Ragen. Dow Components – Disney (DIS) down 0.46%, Home Depot up 1.09%, McDonalds (MCD) up 0.82%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.29 at 3:30 PM on Friday, up 0.42% on the day – up 10.94% year-to-date.

Consumer Staples

Monster Beverage (MNST) will be added to the S&P 500 and Sara Lee (SLE) removed on June 28. Sara Lee is spinning off its international Coffee & Tea business to shareholders to be effective after the close of trading on June 28. Beam Inc. (BEAM) – JP Morgan starts the spirits maker with a Neutral rating. Elizabeth Arden (RDEN) and Estée Lauder (EL) have been initiated with Outperform rateings at Wells Fargo. Kimberly-Clark (KMB) - The Kleenex maker has been upgraded to Buy from Hold with a $92 price target at Argus stating that the company enjoys especially strong prospects in emerging markets, where they expect it to benefit from rising incomes and birth rates. The Fresh Market (TFM) - The grocer has been upgraded to Overweight from Neutral at Piper Jaffray. Procter & Gamble (PG) - The blue chip is removed from Credit Suisse’s US Focus List. Dow components – Kraft (KFT) up 0.15%, Coca Cola (KO) up 0.29%, Procter & Gamble (PG) up 0.75%, Wal-Mart (WMT) down 0.15%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.94 at 3:30 PM on Friday, up 0.41% on the day – up 4.46% year-to-date.

Health Care

The FDA has blocked Johnson & Johnson's (JNJ) application to widen the use the blood thinner Xarelto. This blood thinner is used to prevent heart attacks and strokes in patients with acute coronary syndrome. Mizuho initiates Buy ratings on AmerisourceBergen (ABC) with a price target at $42. It has new Neutral ratings on Cardinal Health (CAH) and McKesson (MCK). Masimo Corp (MASI) - The medical appliance company is initiated with a Buy rating at ThinkEquity. Merck (MRK) has been added to the US Focus List at Credit Suisse. Illumina (ILMN) has been added to the US Focus List at Credit Suisse. Watson Pharmaceuticals (WPI) has been upgraded to Outperform from Market Perform by Sanford Bernstein. Dow Components – Johnson & Johnson (JNJ) up 0.45%, Merck (MRK) up 1.93%, Pfizer (PFE) up 0.53%.
The Health Care Select Sector SPDR (XLV) was trading at $37.34 at 3:30 PM on Friday, up 0.84% on the day – up 7.64% year-to-date.

Financial

Shares in the banks that Moody's downgraded after the close on Thursday opened higher on Friday as the downgrades were factored into market weakness on Thursday. Or perhaps investors don’t care about what the ratings agencies think? Telsey Advisory Group initiates Positive ratings on American Express (AXP) - $68 price target, Discover Financial (DFS) - $40 price target, Alliance Data Systems (ADS) - $151 price target, and Capital One Financial (COF) - $69 price target. Goldman Sachs initiated Evercore (EVR) with a Sell rating, begins Raymond James (RJF) with a Buy rating, and new Neutral ratings on Duff & Phelps (DUF), Greenhill (GHL), Jefferies Group (JEF), Lazard (LAZ), LPL Investment (LPLA), and Stifel Financial (SF). Dow Components – American Express (AXP) up 0.59%, Bank of America (BAC) down up 0.38%, JP Morgan Chase (JPM) up 2.45%, Travelers (TRV) up 1.07%.
The Financial Select Sector SPDR (XLF) was trading at $14.34 at 3:30 PM on Friday, up 0.99% on the day – up 10.31% year-to-date.

Information Technology

Cisco Systems (CSCO) - ThinkEquity initiates the stock with a Hold rating and $18 price target. Skyworks (SWKS) has been initiated with a Buy rating at Canaccord Genuity, which has Hold ratings on RF Micro Devices (RFMD) and TriQuint Semiconductor (TQNT). Universal Display (PANL) - Deutsche Bank initiated the company with a Buy rating. Corning (GLW) has been upgraded to Neutral from Underweight at JP Morgan. Electronic Arts (EA) - The video game maker has been downgraded to Neutral from Buy at Citigroup. Dow Components – Cisco Systems (CSCO) up 0.38%, Hewlett-Packard (HPQ) up 0.32%, IBM (IBM) up 0.70%, Intel Corp (INTC) up 0.60%, Microsoft (MSFT) up 0.28%.
The Technology Select Sector SPDR (XLK) was trading at $28.39 at 3:30 PM on Friday, up 1.02% on the day – up 11.55% year-to-date.

Telecommunication Services

Novatel Wireless (NVTL) gained 2.38%. Boingo Wireless (WIFI) gained 4.40%. Dow components – AT&T (T) up 0.20%, Verizon (VZ) up 0.87%.
The NASDAQ Telecommunications Index (IXTC) was trading at $183.66 at 3:30 PM on Friday, up 1.02% on the day – down 6.74% year-to-date.

Utilities

Dominion Resources (D) down 0.26%, Edison International (EIX) down 0.65%, First Energy (FE) up 0.25%, PG&E Corp (PCG) down 0.66%, Southern Company (SO) up 0.22%.
The Utilities Select Sector SPDR (XLU) was trading at $36.33 at 3:30 PM on Friday, up 0.22% on the day – up 0.97% year-to-date.

STOCKS: CVX, XOM, MMR, CLD, SYRG, WFT, TLLP, EC, KEG, AA, DD, WLK, ABX, NEM, BA, CAT, GE, MMM, UTX, R, APOG, ITT, DIS, HD, MCD, DRI, RL, WRC, PVH, VFC, CROX, JACK, PBY, NKE, KFT, KO, PG, WMT, MNST, SLE, BEAM, EL, RDEN, KMB, TFM, JNJ, MRK, PFE, ABC, CAH, MCK, MASI, ILMN, WPI, AXP, BAC, JPM, TRV, DFS, ADS, COF, EVR, RJF, DUF, GHL, JEF, LAZ, LPLA, SF, CSCO, HPQ, IBM, INTC, MSFT, SWKS, RFMD, TQNT, PANL, EA, T, VZ, NVTL, WIFI, D, EIX, FE, PCG, SO

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
SYRG Synergy Resources Corporation 9.82 -0.03 -0.30 3,810,741
MMM 3M Company 178.49 2.61 1.48 2,650,644
WLK Westlake Chemical Corporation 57.21 -0.72 -1.24 548,364
EC Ecopetrol S.A. American Depositary Shares 8.74 0.13 1.51 539,260
MCK McKesson Corporation 146.25 2.91 2.03 2,304,901
LAZ Lazard LTD. LTD. Class A 43.01 -0.91 -2.07 687,439
PG Procter & Gamble Company (The) 84.37 0.87 1.04 8,004,453
GE General Electric Co 31.78 0.25 0.79 31,227,376
CVX Chevron Corporation 115.81 0.64 0.56 5,771,551
SO Southern Company (The) 47.94 0.53 1.12 5,025,251
PCG Pacific Gas & Electric Co. 59.33 0.14 0.24 3,849,639
TLLP Tesoro Logistics LP representing Limited Partner I 48.21 -0.25 -0.52 419,855
WPI Watson Pharmaceuticals Inc. n/a n/a n/a 0
JNJ Johnson & Johnson 112.26 1.27 1.14 7,672,088
WMT Wal-Mart Stores Inc. 70.08 -0.26 -0.37 10,756,653
AA Alcoa Inc. 32.05 0.74 2.36 4,344,295
INTC Intel Corporation 35.76 0.06 0.17 16,326,925
IBM International Business Machines Corp 166.52 1.16 0.70 3,146,930
CLD Cloud Peak Energy Inc 6.38 0.03 0.47 1,276,411
D Dominion Resources Inc. 74.53 1.03 1.40 2,224,948
TRV The Travelers Companies Inc. 119.19 0.81 0.68 2,138,835
EA Electronic Arts Inc. 78.75 0.97 1.25 2,073,919
ABC AmerisourceBergen Corporation 78.90 2.02 2.63 1,790,907
XYL Xylem Inc. New 51.48 -0.41 -0.79 814,093
EL Estee Lauder Companies Inc. (The) 79.71 0.42 0.53 1,618,871
EIX Edison International 69.97 0.53 0.76 3,307,626
PVH PVH Corp. 106.50 -1.74 -1.61 1,189,191
JPM JP Morgan Chase 85.49 0.37 0.43 14,567,202
AXP American Express Company 74.77 -0.14 -0.19 2,566,883
RDEN Elizabeth Arden Inc. n/a n/a n/a 0
ITT ITT Inc. 42.73 0.59 1.40 713,263
RJF Raymond James Financial Inc. 73.14 -0.85 -1.15 841,138
UTX United Technologies Corporation 109.79 1.36 1.25 3,429,005
APOG Apogee Enterprises Inc. 50.82 0.78 1.56 308,098
JACK Jack In The Box Inc. 112.52 0.58 0.52 495,051
MNST Monster Beverage Corporation 44.04 0.99 2.30 2,528,602
CSCO Cisco Systems Inc. 30.06 0.11 0.37 21,361,984
DIS Walt Disney Company (The) 104.86 1.48 1.43 12,173,909
VZ Verizon Communications Inc. 51.49 0.36 0.70 10,101,462
VFC V.F. Corporation 56.55 -0.53 -0.93 2,695,144
ABX Barrick Gold Corporation 15.45 -0.47 -2.95 15,558,354
NKE Nike Inc. 51.72 0.17 0.33 5,869,828
BAC Bank of America Corporation 23.09 0.14 0.61 130,590,406
COF Capital One Financial Corporation 90.45 -0.16 -0.18 3,428,137
LPLA LPL Financial Holdings Inc. 35.86 -0.05 -0.14 1,130,450
ILMN Illumina Inc. 123.20 -0.28 -0.23 1,387,998
MCD McDonald\'s Corporation 121.26 0.81 0.67 2,623,713
WFT Weatherford International plc (Ireland) 5.46 0.11 2.06 29,837,913
DD E.I. du Pont de Nemours and Co. 74.85 0.17 0.23 2,358,921
MASI Masimo Corporation 64.69 0.95 1.49 272,351
EVR Evercore Partners Inc Class A 70.15 -1.35 -1.89 384,446
HD Home Depot Inc. (The) 133.39 0.86 0.65 5,174,577
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
KEG Key Energy Services Inc. n/a n/a n/a n/a
TFM The Fresh Market Inc. n/a n/a n/a 0
HPQ HP Inc. 15.78 -0.38 -2.35 9,865,108
BA Boeing Company (The) 156.49 1.10 0.71 2,707,872
SWKS Skyworks Solutions Inc. 76.93 -2.59 -3.26 4,750,178
MRK Merck & Company Inc. (new) 61.23 1.11 1.85 10,516,352
DFS Discover Financial Services 72.82 0.77 1.07 3,063,950
PBY Pep Boys-Manny Moe & Jack n/a n/a n/a 0
WIFI Boingo Wireless Inc. 12.56 -0.11 -0.87 176,410
DRI Darden Restaurants Inc. 78.60 -0.34 -0.43 1,612,014
FE FirstEnergy Corporation 30.73 0.20 0.66 3,913,199
KMB Kimberly-Clark Corporation 114.61 1.21 1.07 1,854,133
KO Coca-Cola Company (The) 42.00 1.02 2.49 28,125,775
SF Stifel Financial Corporation 52.06 -0.37 -0.71 359,653
T AT&T Inc. 40.38 -0.03 -0.07 17,105,180
CAT Caterpillar Inc. 95.53 -0.74 -0.77 6,550,220
GHL Greenhill & Co. Inc. 28.05 -0.30 -1.06 339,068
NEM Newmont Mining Corporation 32.79 -1.08 -3.19 9,196,191
CROX Crocs Inc. 7.61 -0.05 -0.65 839,538
CAH Cardinal Health Inc. 73.04 1.93 2.71 3,048,168
ADS Alliance Data Systems Corporation 232.20 -7.67 -3.20 932,751
MSFT Microsoft Corporation 61.97 0.96 1.57 27,349,356
RL Ralph Lauren Corporation 109.00 0.12 0.11 488,162
PANL Pangaea Logistics Solutions Ltd. 3.16 -0.03 -0.94 518
R Ryder System Inc. 82.24 -2.45 -2.89 659,763

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