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
MMM 3M Company 192.55 -8.81 -4.38 8,255,645 Trade
WLK Westlake Chemical Corporation 72.78 -2.43 -3.23 956,815 Trade
EC Ecopetrol S.A. American Depositary Shares 24.74 -1.06 -4.11 3,527,074 Trade
MCK McKesson Corporation 127.29 0.56 0.44 1,185,261 Trade
LAZ Lazard LTD. LTD. Class A 40.25 -1.23 -2.97 1,275,142 Trade
PG Procter & Gamble Company (The) 87.16 0.56 0.65 16,269,531 Trade
GE General Electric Company 12.69 0.31 2.50 81,885,020 Trade
CVX Chevron Corporation 113.40 -3.81 -3.25 8,095,268 Trade
SO Southern Company (The) 44.73 -0.24 -0.53 5,034,554 Trade
PCG Pacific Gas & Electric Co. 47.29 -0.49 -1.03 4,676,782 Trade
TLLP ANDX Tesoro Logistics LP representing Limited Partner I
WPI Watson Pharmaceuticals Inc. n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 138.93 0.25 0.18 8,282,724 Trade
WMT Walmart Inc. 97.80 0.66 0.68 9,405,824 Trade
AA Alcoa Corporation 37.32 -2.14 -5.42 3,192,870 Trade
INTC Intel Corporation 44.50 -0.51 -1.13 38,590,347 Trade
IBM International Business Machines Corporation 131.21 1.19 0.92 6,463,580 Trade
CLD Cloud Peak Energy Inc 2.12 -0.06 -2.75 369,681 Trade
D Dominion Energy Inc. 72.91 -0.36 -0.49 3,225,548 Trade
TRV The Travelers Companies Inc. 123.80 -0.27 -0.22 2,000,962 Trade
EA Electronic Arts Inc. 99.09 -2.27 -2.24 6,842,910 Trade
ABC AmerisourceBergen Corporation 90.28 0.06 0.07 940,609 Trade
XYL Xylem Inc. New 68.36 -0.99 -1.43 1,617,859 Trade
EL Estee Lauder Companies Inc. (The) 125.30 -0.89 -0.71 2,667,253 Trade
EIX Edison International 69.55 -0.31 -0.44 1,138,724 Trade
PVH PVH Corp. 120.51 -1.07 -0.88 831,613 Trade
JPM JP Morgan Chase & Co. 105.25 -1.11 -1.04 21,407,548 Trade
AXP American Express Company 104.38 -0.13 -0.12 4,223,784 Trade
RDEN Elizabeth Arden Inc. n/a n/a n/a 0 Trade
ITT ITT Inc. 49.12 -1.07 -2.13 1,417,622 Trade
RJF Raymond James Financial Inc. 82.92 -1.48 -1.75 1,493,281 Trade
UTX United Technologies Corporation 130.02 3.62 2.86 7,030,624 Trade
APOG Apogee Enterprises Inc. 36.80 -1.28 -3.36 270,984 Trade
JACK Jack In The Box Inc. 76.38 -1.39 -1.79 520,080 Trade
MNST Monster Beverage Corporation 52.64 0.55 1.06 4,085,937 Trade
CSCO Cisco Systems Inc. 45.42 -0.34 -0.74 21,836,153 Trade
DIS The Walt Disney Company 117.85 -0.42 -0.36 8,607,373 Trade
VZ Verizon Communications Inc. 57.21 2.23 4.06 29,328,713 Trade
VFC V.F. Corporation 77.71 0.11 0.14 3,486,307 Trade
ABX Barrick Gold Corporation 13.34 0.25 1.91 29,114,802 Trade
NKE Nike Inc. 73.35 -1.55 -2.07 11,423,769 Trade
BAC Bank of America Corporation 27.02 -0.36 -1.31 102,392,522 Trade
COF Capital One Financial Corporation 87.04 -1.50 -1.69 6,864,388 Trade
LPLA LPL Financial Holdings Inc. 55.75 -1.90 -3.30 1,169,143 Trade
ILMN Illumina Inc. 313.80 -3.43 -1.08 1,727,771 Trade
MCD McDonald's Corporation 177.15 10.52 6.31 12,918,331 Trade
WFT Weatherford International plc (Ireland) 2.32 -0.08 -3.33 16,853,023 Trade
MASI Masimo Corporation 115.76 -0.06 -0.05 362,242 Trade
EVR Evercore Inc. Class A 85.30 -3.02 -3.42 1,348,184 Trade
HD Home Depot Inc. (The) 178.53 -0.22 -0.12 7,004,926 Trade
XOM Exxon Mobil Corporation 79.84 -1.31 -1.61 15,465,125 Trade
PFE Pfizer Inc. 44.10 -0.27 -0.61 21,890,987 Trade
KEG Key Energy Services Inc. 9.38 -0.40 -4.09 40,341 Trade
TFM Fresh Market Inc (The) n/a n/a n/a 0 Trade
HPQ HP Inc. 23.94 -0.17 -0.71 9,621,910 Trade
BA The Boeing Company 350.05 -5.93 -1.67 4,389,559 Trade
SWKS Skyworks Solutions Inc. 84.32 -0.88 -1.03 2,338,881 Trade
MRK Merck & Company Inc. (new) 72.10 -0.47 -0.65 11,561,871 Trade
DFS Discover Financial Services 74.01 -0.31 -0.42 1,887,033 Trade
PBY Prospect Capital Corporation 6.25% Notes due 2028 24.70 0.01 0.02 13,640 Trade
WIFI Boingo Wireless Inc. 32.38 -0.42 -1.28 272,493 Trade
DRI Darden Restaurants Inc. 107.20 0.07 0.07 1,120,062 Trade
FE FirstEnergy Corp. 38.24 -0.38 -0.98 3,328,483 Trade
KMB Kimberly-Clark Corporation 104.14 -2.26 -2.12 4,400,091 Trade
KO Coca-Cola Company (The) 46.36 0.39 0.85 17,483,862 Trade
SF Stifel Financial Corporation 45.73 -1.07 -2.29 408,437 Trade
T AT&T Inc. 33.02 0.35 1.07 53,428,177 Trade
CAT Caterpillar Inc. 118.98 -9.73 -7.56 24,113,349 Trade
GHL Greenhill & Co. Inc. 25.41 -1.39 -5.19 397,358 Trade
NEM Newmont Mining Corporation 32.41 0.44 1.38 9,212,519 Trade
CROX Crocs Inc. 19.46 -0.34 -1.72 766,026 Trade
CAH Cardinal Health Inc. 51.83 -0.18 -0.35 3,209,221 Trade
ADS Alliance Data Systems Corporation 205.48 -2.48 -1.19 641,965 Trade
MSFT Microsoft Corporation 108.10 -1.53 -1.40 43,770,429 Trade
RL Ralph Lauren Corporation 127.83 -0.23 -0.18 1,020,507 Trade
PANL Pangaea Logistics Solutions Ltd. 3.31 0.01 0.30 14,239 Trade
R Ryder System Inc. 62.66 -1.80 -2.79 635,278 Trade

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