Equities Sector Coverage: Stocks Recover in Late Move Up

Sector Recap |

Wall StreetThe S&P/Case-Shiller Home Price Index rose 1.3% in April versus March, but was down 1.9% year over year. The Conference Board Consumer Confidence Index for June fell to 62.0 the lowest level since January. The Dow Jones Industrial Average traded up to 12,543.76 at the open, declined to 12,452.03 after the weaker than expected consumer confidence reading then rallied in the afternoon to 12,576.41 going into the final half hour of trading. The NASDAQ traded up to 2858.21 at the open, traded down to 2832.02 as a morning low then rallied to an afternoon high at 2862.15.

Asian stocks were mixed on Tuesday. The Nikkei 225 ended the day at 8,664 – down 0.81%. The Hang Seng ended the day at 18,982 – up 0.45%. European exchanges were mixed on Tuesday. The FTSE 100 ended the day at 5,460 – up 0.16%. The DAX ended the day at 6,143 – up 0.17%. The CAC 40 ended the day at 3,010 – down 0.38%. The yield on the 10-Year US Treasury rose from 1.606% to 1.652%.

Gold declined from $1588.4 the Troy ounce to $1568.2 versus the 50-day and 200-day simple moving averages at $1606.8 and $1669.4. Crude oil traded up to $79.62 per barrel early trading, fell to $78.36 then rebounded to $79.78, below the 200-week simple moving average at $80.69. The euro versus the dollar traded down from 1.2528 to 1.2445.


The EU has decided to start an embargo on Iranian oil on July 1. With the sharp drop in WTI oil prices are helping relieve fears that the sanctions will spark a price rise which would harm the global economy. Precision Drilling (PDS) and Patterson-UTI Energy (PTEN) have been downgraded to Sector Perform from Outperform at RBC Capital. Yingli Green Energy (YGE) - The Chinese alternative energy company has been downgraded to Sell from Neutral at Goldman. Dow components – Chevron (CVX) up 0.81%, Exxon Mobil (XOM) up 0.55%.

Energy Select Sector SPDR (XLE) was trading at $62.72 at 3:30 PM on Tuesday, up 1.13% on the day – down 9.27% year-to-date.


Silver Wheaton (SLW) has been initiated with an Outperform rating at RBC Capital. Tronox (TROX) has been initiated with a Buy rating at UBS. Dow Chemical (DOW) has been downgraded to Neutral from Overweight at JP Morgan. Methanex (MEOH) has been downgraded to Market Perform from Outperform at Raymond James. Dow components – Alcoa (AA) down 0.36%, DuPont (DD) down 1.30%.

The Materials Select Sector SPDR (XLB) was trading at $33.90 at 3:30 PM on Tuesday, up 0.38% on the day – up 1.19% year-to-date.


Raytheon (RTN) has been initiated with a Buy recommendation and $63 price target at Stifel Nicolaus, which has Hold ratings on Lockheed Martin (LMT) and Northrop Grumman (NOC). Dow components – Boeing Co (BA) down 0.53%, Caterpillar (CAT) down 1.09%, General Electric (GE) up 0.52%, 3M Company (MMM) down 0.42%, United Technologies (UTX) down 1.07%.

The Industrial Select Sector SPDR (XLI) was trading at $34.21 at 3:30 PM on Tuesday, up 0.32% on the day – up 1.36% year-to-date.

Consumer Discretionary

A recent survey conducted by comScore shows a significant impact of the showroom phenomenon on in-store sales. Consumers check out items in the stores before buying them online. Best Buy (BBY) has been impacted by this retail development. Over 60% of survey respondents have bought a consumer-electronics item online after viewing it in a store, 43% for apparel, 29% for books, and 22% for appliances and toys. Coinstar (CSTR) shares plunged 5.2% in after hours after announcing it has closed its deal to purchase NCR's DVD-kiosk business. Coinstar predicted that the deal will reduce 2012 EPS by $0.40-$0.50, as they swap out NCR's Blockbuster kiosks with Redbox kiosks. The acquisition will also increase 2012 capex by $40M-$45M, but Coinstar says the deal will become accretive in 2013. eBay Inc. (EBAY) has been initiated with a Buy rating at Needham with a target price at $50. Dow Components – Disney (DIS) up 0.62%, Home Depot down 0.31%, McDonalds (MCD) up 0.64%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.25 at 3:30 PM on Tuesday, up 1.43% on the day – up 10.84% year-to-date.

Consumer Staples

Rupert Murdoch appears to be considering splitting News Corp. (NWS) into two companies, one focused on publishing and the other on entertainment. Coca-Cola (KO) has more than doubled its investment plans for India in order to benefit from the fast growth of the non-alcoholic drinks market. Spending in India will rise to $5 billion by 2020 up from $2 billion by 2017. The investment is part of the Coca-Cola strategy to doube revenues this decade. Gannett (GCI) - The owner of USA Today has been initiated with an Outperform rating and a $21 price target at Imperial Capital. Dow components – Kraft (KFT) down 1.30%, Coca Cola (KO) down 0.19%, Procter & Gamble (PG) flat, Wal-Mart (WMT) up 0.48%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.81 at 3:30 PM on Tuesday, up 0.33% on the day – up 4.06% year-to-date.

Health Care

Medical Device Makers Stryker (SYK) and Zimmer (ZMH) have been initiated with Hold ratings at Cantor Fitzgerald with respective price targets at $56 and $65. Celgene (CELG) had been upgraded to Outperform from Neutral at Cowen & Company. Shire plc (SHPGY) has been upgraded to Buy from Hold at Société Générale. Edwards Lifesciences (EW) has been downgraded to Neutral from Buy at UBS. Dow Components – Johnson & Johnson (JNJ) down 0.06%, Merck (MRK) down 0.06%, Pfizer (PFE) down 0.14%.

The Health Care Select Sector SPDR (XLV) was trading at $37.14 at 3:30 PM on Tuesday, up 0.49% on the day – up 7.06% year-to-date.


The Regional banks not considered “too big to fail” have picked up the slack in lending. Lending by “too big to fail” JPMorgan (JPM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) dropped 4.9% year over year to $3.04 trillion in the first quarter, while loans at the 17 smallest banks in the KBW Bank Index (BKX) climbed 9.8% to $1.27 trillion. Moody's cut the long-term debt and deposit ratings of 28 Spanish banks between one and four notches. This move followed a downgrade of the Spain’s sovereign debt earlier in the month. The only banks rated above the sovereign are Banco Santander (SAN) and Santander Consumer Finance, due to diversification and sufficient Tier 1 capital. JP Morgan (JPM) has been added to the Conviction Buy List at Goldman Sachs. Morgan Stanley (MS) has been removed from the list of Conviction Buys at Goldman. National Bank of Greece (NBG) - The beleaguered bank has been downgraded to Reduce from Neutral at Nomura. Dow Components – American Express (AXP) down 0.12%, Bank of America (BAC) down 1.45%, JP Morgan Chase (JPM) up 0.85%, Travelers (TRV) down 0.32%.

The Financial Select Sector SPDR (XLF) was trading at $14.14 at 3:30 PM on Tuesday, up 0.71% on the day – up 8.77% year-to-date.

Information Technology

Facebook (FB) has named COO Sheryl Sandberg, who is considered the second-most-powerful person at the company, to its board of directors. Bankrate (RATE) has been resumed with a Buy rating at Canaccord Genuity. Google (GOOG) has been resumed with an Equal Weight at Morgan Stanley. Pitney Bowes (PBI) has been upgraded to Neutral from Sell at Goldman. Veeco Instruments (VECO) has been upgraded to Buy from Hold at Stifel Nicolaus with a $48 price target. Cognizant (CTSH) and Sapient (SAPE) have been downgraded to Sell from Neutral at Goldman. Dow Components – Cisco Systems (CSCO) down 1.39%, Hewlett-Packard (HPQ) down 1.41%, IBM (IBM) down 0.95%, Intel Corp (INTC) down 1.00%, Microsoft (MSFT) up 0.55%.

The Technology Select Sector SPDR (XLK) was trading at $28.04 at 3:30 PM on Tuesday, up 0.50% on the day – up 10.18% year-to-date.

Telecommunication Services

Alaska Communications (ALSK) fell 5.48%. Cellcom Israel (CEL) declined 5.25%. Premiere Global Services (PGI) rose by 5.13%. Dow components – AT&T (T) down 0.14%, Verizon (VZ) flat.

The NASDAQ Telecommunications Index (IXTC) was trading at $181.61 at 3:30 PM on Tuesday, up 0.09% on the day – down 7.78% year-to-date.


E.ON AG (EONGY) - The German utility giant is up in Europe today after getting upgraded by Bank of America-Merrill Lynch to Buy from Neutral. Public Service (PEG) has been downgraded to Hold from Buy at Jefferies. Dominion Resources (D) up 0.17%, Edison International (EIX) up 0.67%, First Energy (FE) down 0.42%, PG&E Corp (PCG) up 0.57%, Southern Company (SO) flat.

The Utilities Select Sector SPDR (XLU) was trading at $36.34 at 3:30 PM on Tuesday, up 0.41% on the day – up 1.00% year-to-date.


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Symbol Name Price Change % Volume
MMM 3M Company 208.24 1.06 0.51 472,944 Trade
LMT Lockheed Martin Corporation 305.57 -0.63 -0.21 322,740 Trade
PG Procter & Gamble Company (The) 92.86 0.66 0.71 2,329,022 Trade
GE General Electric Co 25.17 0.03 0.10 7,379,010 Trade
CVX Chevron Corporation 107.32 -0.17 -0.16 1,207,352 Trade
SO Southern Company (The) 48.97 0.01 0.02 590,977 Trade
PCG Pacific Gas & Electric Co. 69.30 -0.05 -0.07 232,286 Trade
CEL Cellcom Israel Ltd. 8.68 -0.10 -1.13 1,306 Trade
SAN Banco Santander SA ADR 6.63 0.04 0.55 1,307,869 Trade
FB Facebook Inc. 170.16 -0.84 -0.49 6,888,942 Trade
RTN Raytheon Company 178.04 -0.18 -0.10 574,599 Trade
JNJ Johnson & Johnson 134.53 1.15 0.86 1,637,559 Trade
WMT Wal-Mart Stores Inc. 80.85 0.08 0.10 4,054,253 Trade
AA Alcoa Inc. 38.72 1.22 3.25 1,199,149 Trade
EW Edwards Lifesciences Corporation 115.08 0.25 0.22 256,338 Trade
INTC Intel Corporation 35.79 -0.21 -0.58 6,034,057 Trade
IBM International Business Machines Corp 142.64 0.57 0.40 1,215,799 Trade
D Dominion Resources Inc. 78.09 0.19 0.24 684,572 Trade
TRV The Travelers Companies Inc. 129.85 0.80 0.62 524,948 Trade
CTSH Cognizant Technology Solutions Corporation 71.85 0.18 0.25 854,994 Trade
EBAY eBay Inc. 35.28 0.03 0.09 1,040,257 Trade
HMC Honda Motor Company Ltd. 27.73 0.08 0.29 161,651 Trade
ALSK Alaska Communications Systems Group Inc. 2.17 -0.01 -0.46 36,515 Trade
C Citigroup Inc. 67.68 -0.29 -0.43 4,214,055 Trade
EIX Edison International 80.00 0.08 0.09 410,232 Trade
MS Morgan Stanley 46.35 -0.09 -0.18 1,747,989 Trade
JPM JP Morgan Chase 92.69 -0.04 -0.04 2,420,565 Trade
AXP American Express Company 87.33 0.54 0.62 864,238 Trade
UTX United Technologies Corporation 116.96 1.70 1.48 852,732 Trade
PBI Pitney Bowes Inc. 12.68 -0.01 -0.04 329,935 Trade
PDS Precision Drilling Corporation 2.66 -0.11 -3.97 1,047,918 Trade
CSCO Cisco Systems Inc. 32.40 0.31 0.97 8,200,154 Trade
DIS Walt Disney Company (The) 102.15 0.64 0.63 1,944,641 Trade
MEOH Methanex Corporation 44.63 0.88 2.00 208,453 Trade
VZ Verizon Communications Inc. 48.23 -0.26 -0.53 3,049,902 Trade
NOC Northrop Grumman Corporation 270.68 -0.47 -0.17 158,492 Trade
BAC Bank of America Corporation 24.38 -0.10 -0.39 16,523,735 Trade
NBG National Bank of Greece S.A. ADS n/a n/a n/a 0
GOOG Alphabet Inc. 928.77 6.55 0.71 383,417 Trade
MCD McDonald\'s Corporation 158.76 1.14 0.72 520,014 Trade
YGE Yingli Green Energy Holding Company Limited ADR 2.38 0.12 5.22 8,416 Trade
DD E.I. du Pont de Nemours and Co. 81.43 -0.15 -0.18 338,815 Trade
TROX Tronox Limited Class A $0.01 par 19.64 -0.27 -1.36 272,069 Trade
VECO Veeco Instruments Inc. 19.83 0.33 1.67 102,963 Trade
BBY Best Buy Co. Inc. 60.29 1.32 2.24 912,679 Trade
HD Home Depot Inc. (The) 152.38 2.21 1.47 2,588,407 Trade
XOM Exxon Mobil Corporation 77.77 -0.27 -0.35 2,505,901 Trade
PFE Pfizer Inc. 33.44 0.06 0.16 3,393,465 Trade
PGI Premiere Global Services n/a n/a n/a 0 Trade
WFC Wells Fargo & Company 52.90 0.05 0.09 3,300,049 Trade
HPQ HP Inc. 18.95 -0.09 -0.47 2,404,805 Trade
BA Boeing Company (The) 239.48 0.31 0.13 949,978 Trade
CELG Celgene Corporation 131.65 0.28 0.21 788,285 Trade
MRK Merck & Company Inc. (new) 62.92 0.42 0.67 1,432,233 Trade
FE FirstEnergy Corporation 32.68 -0.02 -0.06 688,063 Trade
SLW Silver Wheaton Corp (Canada) n/a n/a n/a n/a
KO Coca-Cola Company (The) 46.24 0.05 0.11 2,944,180 Trade
T AT&T Inc. 38.21 0.05 0.12 5,133,926 Trade
CAT Caterpillar Inc. 114.08 0.43 0.38 633,308 Trade
SYK Stryker Corporation 147.51 0.07 0.05 186,624 Trade
MSFT Microsoft Corporation 73.55 0.33 0.44 5,328,755 Trade
PEG Public Service Enterprise Group 46.58 0.29 0.63 459,005 Trade
NWS News Corporation 13.80 0.10 0.73 125,069 Trade
PTEN Patterson-UTI Energy Inc. 16.05 -0.20 -1.23 1,038,063 Trade
GCI Gannett Co Inc (New) 8.30 0.03 0.36 116,929 Trade


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