Equities Sector Coverage: Stocks Recover As Earnings Remain Mixed

Sector Recap |

Apple AAPLThe Producer Price Index rose 0.8% in September much stronger than expected. The National Association of Home Builders Housing Market Index bounced four points to 18, the highest reading since May 2010. Keep in mind however that a reading of 50 is neutral for the NAHB HMI. The Dow Jones Industrial Average traded down from 11,401.09 to 11,296.12 testing its five-week modified moving average at 11,301 then rebounded strongly to a high of 11,652.74 into the final hour of trading. The NASDAQ traded down from 2618.56 to 2586.31 then rebounded to 2667.57 into the final hour of trading. Stocks reacted to a story that Europe was considering a larger than expected bailout plan to resolve their massive debt crisis.

Asian stocks slumped on Tuesday as China’s economy grows at its slowest pace in two years. The Nikkei 225 lost 1.55% to 8,742 with the Hang Seng crushed by 4.23% to 18,076. European stocks were mixed on Tuesday. The FTSE 100 lost 0.48% to 5,410 with the DAX up 0.31% to 5,877 and the CAC 40 down 0.79% to 3,141. The US Treasury 10-Year yield declined from 2.182 percent to 2.077 on Tuesday then rose to 2.210 into the final hour of trading. Gold traded down from $1678.2 the Troy ounce to $1628.2 on Tuesday then consolidated the sell-off. Crude oil traded up from $85.55 per barrel to $89.03 on Tuesday staying well above its 50-day simple moving average at $84.95. The euro versus the dollar traded up from 1.3656 to 1.3816 on Tuesday.

Energy

Chevron (CVX) plans to start its first offshore southern China drill before year-end, following in the path of Husky (HUSKF) and BG Group (BRGYY) who have found gas reserves there recently. Chesapeake Energy (CHK) is now Neutral from Overweight at JP Morgan. El Paso Pipeline Partners (EPB) is downgraded to Perform from Outperform at Morgan Keegan with a target of $36. Brigham Exploration (BEXP) is cut to Sector Perform from Outperform at RBC Capita. In afternoon trading: Shares of GeoMet (GMET) are up about 30%. Shares of Uranium Resources (URRE) are up about 18.75%. Shares of Kodiak Oil & Gas (KOG) are up about 10%.

Energy Select Sector SPDR (XLE) was trading at $67.49 at 4:00 PM on Tuesday, up 3.21% on the day – down 1.11% year-to-date.

Materials

Alcoa (AA) is begun with a Buy and $13 price objective at Stifel Nicolaus. Celanese (CE) is started with a Buy and $52 price objective at Ticonderoga. Thompson Creek Metals (TC) is initiated with an Underperform at Bank of America-Merrill Lynch. AK Steel (AKS) is now Neutral from Sell at Goldman Sachs. U.S. Steel (X) is downgraded to Sell from Neutral at Goldman. In afternoon trading: Shares of STR Holdings (STRI) are down about 11.5%. Shares of Koppers Holdings (KOP) are down about 6%. Shares of Aluminum of China (ACH) are down about 5.5%. Shares of AK Steel are up about 9%. Shares of Senomyx (SNMX) are up about 6.75%. Shares of Cemex (CX) are up about 5.5%.

The Materials Select Sector SPDR (XLB) was trading at $33.17 at 4:00 PM on Tuesday, up 2.57% on the day – down 13.64% year-to-date.

Industrials

One day after China Eastern scrapped 24 Dreamliner orders, Boeing (BA) warns of more cancellations. Also, China Southern Airlines (ZNH) said the delivery of its first Dreamliner will likely be delayed by at least another seven months. RailAmerica (RA) is resumed with a Sector Perform at RBC Capital, which has Outperforms on KC Southern (KSU) and Genesee & Wyoming (GWR). A123 Systems (AONE) gets downgraded to Sell from Neutral at Goldman Sachs. Badger Meter (BMI) is taken to Neutral from Buy at Janney Montgomery Scott. In afternoon trading: Shares of Badger Meter are down about 15.5%. Shares of A123 Systems are down about 9%. Shares of Swift Transportation (SWFT) are up about 8%.

The Industrial Select Sector SPDR (XLI) was trading at $32.17 at 4:00 PM on Tuesday, up 2.88% on the day – down 7.74% year-to-date.

Consumer Discretionary

Shares of Apple (AAPL) dropped as much as 6 percent after the company missed its Q4 results. Green Mountain Coffee (GMCR) closed down 10.4% yesterday after David Einhorn said he's bearish on the single-serve coffee kingpin. Einhorn is critical of Green Mountain's accounting work, considers its K-Cups to be too expensive, and thinks the company's deal with Starbucks (SBUX) will prove less lucrative than some expect. Coach (COH) is initiated with a Hold at Deutsche Bank. FBR Capital covers the following at Outperform: Urban Outfitters (URBN), ANN Inc (ANN), Chico’s FAS (CHS), and Abercrombie & Fitch (ANF). Its Market Performs include Fossil (FOSL), Aeropostale (ARO), and American Eagle Outfitters (AEO). Children’s Place Retail Stores (PLCE) is an Underperform amid macro uncertainty and input cost inflation. Cheesecake Factory (CAKE) is upgraded to Overweight from Neutral at Piper Jaffray. Michelin (MGDDY) is moved to Overweight from Neutral at JP Morgan. Hasbro (HAS) is taken to Neutral from Buy at Goldman. Ctrip.com (CTRP) gets cut to Neutral from Overweight at Piper Jaffray. PF Chang’s (PFCB) is downgraded to Underweight from Neutral at Piper Jaffray. Whirlpool (WHR) gets downgraded to Sell from Neutral at Goldman. In afternoon trading: Shares of Crocs (CROX) are down about 38.5% after warning about a possible 25% decrease in its earnings for the quarter. Shares of American Public Education (APEI) are down about 21.5%. Shares of New Oriental Education (EDU) are down about 11%. U.S. homebuilders rose the most in two years after an index of developer sentiment unexpectedly increased to its highest level since May 2010, spurring optimism that demand for new houses may be improving. Shares of Beazer Homes (BZH) are up about 12.5%. Shares of Meritage Homes (MTH) are up about 11.25%. Shares of Toll Brothers (TOL) are up about 11%. Shares of PulteGroup (PHM) are up about 9.5%. Shares of DR Horton (DHI) are up about 9.5%. Shares of Ryland Group (RYL) are up about 9.5%. Shares of Standard Pacific (SPF) are up about 8.5%. Shares of Lennar (LEN) are up about 8.25%. Shares of KB Home (KBH) are up about 8%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.65 at 4:00 PM on Tuesday, up 2.03% on the day – up 3.31% year-to-date.

Consumer Staples

Green Mountain Coffee (GMCR) closed down 10.4% yesterday after David Einhorn said he's bearish on the single-serve coffee kingpin. Einhorn is critical of Green Mountain's accounting work, considers its K-Cups to be too expensive, and thinks the company's deal with Starbucks (SBUX) will prove less lucrative than some expect. PepsiCo (PEP) is upgraded to Buy from Hold at Argus with a $72 price target. Walgreen (WAG) is lowered to Hold from Buy at Jefferies. In afternoon trading: Shares of Pilgrim’s Pride (PPC) are up about 8.5%. Shares of WD-40 (WDFC) are up about 6%. Shares of Star Scientific (CIGX) are up about 5.25%. Shares of Central European Distribution (CEDC) are up about 5.25%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.89 at 4:00 PM on Tuesday, up 0.75% on the day – up 5.39% year-to-date.

Healthcare

GlaxoSmithKline (GSK) may bid $25 / share for Human Genome Sciences (HGSI), according to media reports citing their partnership in developing the FDA-approved lupus drug Benlysta. Merck (MRK) and Biogen (BIIB) are also interested. Johnson & Johnson (JNJ) reported earnings of $1.24 / share (versus estimates of $1.21 / share). Medtronic (MDT) is a fresh Outperform at Cowen & Company, which has new Neutrals on both Boston Scientific (BSX) and St. Jude Medical (STJ). Sequenom (SQNM) is now Neutral from Overweight at Piper Jaffray. In afternoon trading: Shares of Hospira (HSP) are down about 21.5%. Shares of Sequenom are down about 10.25%. Shares of Halozyme Therapeutics (HALO) are up about 17.5%. Shares of GTx Inc. (GTXI) are up about 14.5%. Shares of Human Genome Sciences are up about 8.25%.

The Health Care Select Sector SPDR (XLV) was trading at $32.55 at 4:00 PM on Tuesday, up 0.74% on the day – up 3.33% year-to-date.

Financials

Bank of America (BAC) swung to a Q3 profit of $6.2B - $0.56 / share (topping estimates of $0.28 / share). Revenue rose 6.4% to $28.45B, $2.5B ahead of consensus. Goldman Sachs (GS) reported Q3 earnings of $0.84 / share with net revenues of $3.59B. Bank of America (BAC) reported a profit per diluted share of 56 Cents on revenue of $28.7B (versus estimates of $25.94B). Brokerage William Blair begins American Express (AXP), Mastercard (MA), Visa (V), Western Union (WU), Dollar Financial (DLLR), Moneygram (MGI), Cardtronics (CATM), and Financial Engines (FNGN) with Outperforms. It assigns Market Performs on Alliance Data Systems (ADS), Capital One Financial (COF), and credit card company Discover Financial Services (DFS). Green Dot (GDOT) gets picked up at Outperform by William Blair. ProAssurance (PRA) is downgraded to Neutral from Buy at Suntrust. Progressive (PGR) is downgraded to Hold from Buy at Argus. In afternoon trading: Shares of The PMI Group (PMI) are up about 24.5%. Shares of Brown & Brown (BRO) are up about 9.25%. Shares of MGIC Investment (MTG) are up about 9.25%. Shares of MBIA Inc. (MBI) are up about 9%.

The Financial Select Sector SPDR (XLF) was trading at $12.79 at 4:00 PM on Tuesday, up 4.75% on the day – down 19.81% year-to-date.

Information Technology

Shares of Apple (AAPL) dropped as much as 6 percent after the company missed its Q4 results. IBM (IBM) beat earnings expectations and raised its full-year EPS outlook for the third quarter in a row. Broadcom (BRCM) is begun with a Buy at Societe Generale, which has a Hold on Qualcomm (QCOM). Wright Express (WXS) is assigned an Outperform at William Blair. TE Connectivity (TEL) is taken to Overweight from Underweight at JP Morgan. International Business Machines (IBM) is downgraded by both BMO Capital (Market Perform from Outperform) and FBN Securities (Sector Perform from Outperform). Molex (MOLX) is moved to Neutral from Overweight at JP Morgan. VMware (VMW) is reduced to Hold from Buy at Jefferies. In afternoon trading: Shares of Changyou.com (CYOU) are down about 9.75%. Shares of Ingram Micro (IM) are down about 7.75%. Shares of VMware are up about 6.25%.

The Technology Select Sector SPDR (XLK) was trading at $25.82 at 4:00 PM on Tuesday, up 0.90% on the day – up 2.50% year-to-date.

Telecommunications Services

In afternoon trading: Actives: Shares of Sprint Nextel (S) are up slightly. Shares of Level 3 Communications (LVLT) are up about 1.25%. Shares of AT&T (T) are up slightly. Shares of Frontier Communications (FTR) are down about 0.75%. Shares of Verizon (VZ) are up about a quarter of a percent. Shares of Vodafone (VOD) are down slightly. Shares of Windstream (WIN) are up about 0.4%. Shares of Mobile Telesystems (MBT) are down about 0.7%.

The NASDAQ Telecommunications Index (IXTC) was trading at $198.26 at 4:00 PM on Tuesday, up 1.90% on the day – down 12.03% year-to-date.

Utilities

In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about a quarter of a percent. Shares of AES Corp. (AES) are up about 2.9%. Shares of Genon Energy (GEN) are up about 2.4%. Shares of NiSource (NI) are up about 1.6%. Shares of Exelon (EXC) are down about 0.3%. Shares of Calpine (CPN) are up about 2%. Shares of CenterPoint Energy (CNP) are up about 0.7%. Shares of NV Energy (NVE) are up about 1.3%. Shares of Southern Co. (SO) are down slightly.

The Utilities Select Sector SPDR (XLU) was trading at $34.08 at 4:00 PM on Tuesday, up 0.71% on the day – up 8.74% year-to-date.

STOCKS: CVX, HUSKF, BRGYY, CHK, EPB, BEXP, GMET, URRE, KOG, AA, CE, TC, AKS, X, STRI, KOP, ACH, SNMX, CX, BA, ZNH, RA, KSU, GWR, AONE, BMI, SWFT, GMCR, SBUX, COH, URBN, ANN, CHS, ANF, FOSL, ARO, AEO, PLCE, CAKE, MGDDY, HAS, CTRP, PFCB, WHR, CROX, APEI, EDU, BZH, MTH, TOL, PHM, DHI, RYL, SPF, LEN, KBH, PEP, WAG, PPC, WDFC, CIGX, CEDC, GSK, HGSI, MRK, BIIB, JNJ, MDT, BSX, STJ, SQNM, HSP, HALO, GTXI, BAC, GS, BAC, AXP, MA, V, WU, DLLR, MGI, CATM, FNGN, ADS, COF, DFS, GDOT, PRA, PGR, PMI, BRO, MTG, MBI, IBM, BRCM, QCOM, WXS, TEL, MOLX, VMW, CYOU, IM, S, LVLT, T, FTR, VZ, VOD, WIN, MBT, DUK, AES, GEN, NI, EXC, CPN, CNP, NVE, 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
AA Alcoa Inc. 9.65 -0.03 -0.31 11,470,339
ACH Aluminum Corporation of China Limited American Dep 8.98 -0.03 -0.33 13,601
ADS Alliance Data Systems Corporation 213.47 2.03 0.96 485,538
AEO American Eagle Outfitters Inc. 18.11 0.25 1.40 2,781,363
AES The AES Corporation 13.08 -0.04 -0.30 4,674,105
AKS AK Steel Holding Corporation 4.85 -0.22 -4.34 10,815,512
ANF Abercrombie & Fitch Company 16.24 0.10 0.62 2,946,510
APEI American Public Education Inc. 19.23 -0.05 -0.26 66,214
ARO Aeropostale Inc. n/a n/a n/a n/a
AXP American Express Company 64.28 0.86 1.36 3,916,263
BA Boeing Company (The) 131.32 0.75 0.57 1,939,020
BAC Bank of America Corporation 15.29 0.20 1.33 81,992,827
BIIB Biogen Inc. 314.53 4.71 1.52 1,104,517
BMI Badger Meter Inc. 33.52 0.24 0.72 89,366
BRCM Broadcom Corp. n/a n/a n/a 0
BRO Brown & Inc. 37.50 0.31 0.83 404,721
BSX Boston Scientific Corporation 23.72 -0.01 -0.04 12,317,512
BZH Beazer Homes USA Inc. 11.43 0.01 0.09 582,720
CAKE The Cheesecake Factory Incorporated 51.44 -0.52 -1.00 748,250
CATM Cardtronics plc 43.60 -0.18 -0.41 195,760
CHK Chesapeake Energy Corporation 6.23 -0.39 -5.89 83,665,778
CHS Chico\'s FAS Inc. 12.27 -0.01 -0.08 1,166,089
CIFC CIFC LLC 11.15 0.00 0.00 5,819
CNP CenterPoint Energy Inc (Holding Co) 23.88 -0.38 -1.57 3,284,966
COF Capital One Financial Corporation 71.80 0.99 1.40 2,405,590
COH Coach Inc. 35.65 0.08 0.22 2,300,415
CPN Calpine Corporation 13.47 -0.20 -1.46 4,038,814
CROX Crocs Inc. 8.31 0.06 0.73 563,137
CTRP Ctrip.com International Ltd. 46.25 0.70 1.54 3,012,481
CVX Chevron Corporation 98.98 0.20 0.20 6,476,099
CX Cemex S.A.B. de C.V. Sponsored ADR 7.94 0.39 5.17 10,700,198
CYOU Changyou.com Limited 27.29 0.31 1.15 238,492
DFS Discover Financial Services 57.07 0.34 0.60 2,975,787
DHI D.R. Horton Inc. 30.02 0.10 0.33 3,389,229
DUK Duke Energy Corporation (Holding Company) 81.43 -0.72 -0.88 2,268,288
EDU New Oriental Education & Technology Group Inc. Spo 47.17 0.68 1.46 1,492,715
EXC Exelon Corporation 34.18 -0.64 -1.84 4,765,713
FNGN Financial Engines Inc. 29.11 0.20 0.69 138,999
FOSL Fossil Group Inc. 28.75 -0.02 -0.07 507,115
FTR Frontier Communications Corporation 4.34 -0.02 -0.46 13,582,166
GDOT Green Dot 22.90 0.07 0.31 154,887
GEN Genesis Healthcare Inc. 2.76 0.05 1.85 80,070
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GS The Goldman Sachs Group Inc. 162.89 1.41 0.87 2,602,686
GSK GlaxoSmithKline PLC 43.32 0.36 0.84 2,087,459
GTXI GTx Inc. 0.76 0.00 0.00 62,573
GWR Genesee & Wyoming Inc. Class A 66.22 -0.10 -0.15 247,978
HALO Halozyme Therapeutics Inc. 12.51 0.53 4.42 1,227,807
HAS Hasbro Inc. 79.87 0.50 0.63 1,030,723
IBM International Business Machines Corp 156.77 2.79 1.81 2,987,195
IM Ingram Micro Inc. 34.48 -0.13 -0.38 950,241
JNJ Johnson & Johnson 119.22 1.44 1.22 5,349,466
KBH KB Home 16.41 0.34 2.12 3,854,983
KOP Koppers Holdings Inc. 30.71 -0.26 -0.84 76,518
KSU Kansas City Southern 91.60 1.50 1.66 1,984,665
LEN Lennar Corporation Class A 42.72 -0.23 -0.54 1,946,235
LVLT Level 3 Communications Inc. 47.06 0.03 0.06 2,645,564
MBI MBIA Inc. 7.52 -0.06 -0.79 772,660
MBT Mobile TeleSystems PJSC 7.58 -0.17 -2.19 2,579,009
MDT Medtronic plc. 86.67 0.54 0.63 3,722,731
MGI Moneygram International Inc. 7.09 0.02 0.28 24,973
MRK Merck & Company Inc. (new) 62.57 0.42 0.68 7,340,756
MTG MGIC Investment Corporation 7.98 0.06 0.76 4,392,103
MTH Meritage Homes Corporation 34.36 0.43 1.27 426,025
NI NiSource Inc 24.69 -0.41 -1.63 2,358,360
PEP Pepsico Inc. 107.49 0.46 0.43 3,779,284
PGR Progressive Corporation (The) 31.43 0.21 0.67 3,574,569
PHM PulteGroup Inc. 19.89 0.12 0.61 3,538,439
PLCE Children\'s Place Inc. (The) 79.36 0.25 0.32 366,260
PPC Pilgrim\'s Pride Corporation 20.90 0.00 0.00 1,093,647
PRA ProAssurance Corporation 52.12 0.37 0.71 127,355
QCOM QUALCOMM Incorporated 63.31 1.00 1.60 5,228,449
S Sprint Corporation 6.73 0.08 1.20 9,741,591
SBUX Starbucks Corporation 54.19 0.15 0.28 6,463,769
SNMX Senomyx Inc. 4.53 -0.02 -0.44 89,074
SO Southern Company (The) 52.84 -0.47 -0.88 5,774,119
SPF null n/a n/a n/a 0
SQNM Sequenom Inc. n/a n/a n/a 0
STJ St. Jude Medical Inc. 79.60 0.85 1.08 2,345,013
SWFT Swift Transportation Company Class A 21.21 0.28 1.34 1,381,490
T AT&T Inc. 41.46 0.32 0.78 18,445,784
TC TC n/a n/a n/a 0
TEL TE Connectivity Ltd. New Switzerland Registered Sh 64.54 1.05 1.65 1,179,422
TOL Toll Brothers Inc. 29.30 0.03 0.10 1,571,253
URBN Urban Outfitters Inc. 35.13 0.12 0.34 1,886,466
URRE Uranium Resources Inc. 1.32 -0.09 -6.38 722,795
V Visa Inc. 82.16 0.35 0.43 7,969,487
VMW Vmware Inc. Class A 73.60 0.16 0.22 1,317,516
VOD Vodafone Group Plc 29.27 0.20 0.69 4,169,310
VZ Verizon Communications Inc. 52.49 0.34 0.65 8,259,032
WDFC WD-40 Company 114.70 -1.35 -1.16 132,071
WHR Whirlpool Corporation 162.81 2.20 1.37 612,927
WIN Windstream Holdings Inc. 10.16 0.16 1.60 1,378,663
WU Western Union Company (The) 20.26 -0.01 -0.05 3,758,202
ZNH China Southern Airlines Company Limited 28.85 0.66 2.34 35,313

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