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
AA Alcoa Inc. 26.94 0.25 0.94 2,763,065
ALSK Alaska Communications Systems Group Inc. 1.68 -0.02 -1.08 5,964
AXP American Express Company 66.93 0.15 0.22 3,298,428
BA Boeing Company (The) 135.63 -0.21 -0.15 983,192
BAC Bank of America Corporation 16.55 -0.01 -0.06 29,179,821
BBY Best Buy Co. Inc. 39.49 0.01 0.03 856,852
C Citigroup Inc. 49.31 -0.27 -0.54 5,261,455
CAT Caterpillar Inc. 86.09 -0.54 -0.62 1,429,226
CEL Cellcom Israel Ltd. 7.71 -0.11 -1.41 14,973
CELG Celgene Corporation 99.06 -0.97 -0.96 1,568,207
CSCO Cisco Systems Inc. 30.03 -0.14 -0.45 7,562,331
CTSH Cognizant Technology Solutions Corporation 49.82 -0.26 -0.52 1,372,653
CVX Chevron Corporation 101.18 -0.69 -0.68 2,142,352
D Dominion Resources Inc. 72.80 -0.31 -0.42 501,370
DD E.I. du Pont de Nemours and Co. 69.18 -0.28 -0.40 734,417
DIS Walt Disney Company (The) 92.04 0.01 0.01 4,202,786
EBAY eBay Inc. 28.77 -0.25 -0.86 7,789,345
EIX Edison International 70.98 -0.77 -1.07 377,961
EW Edwards Lifesciences Corporation 117.02 -0.84 -0.71 548,109
FB Facebook Inc. 130.20 0.20 0.15 5,787,075
FE FirstEnergy Corporation 33.04 0.19 0.57 916,415
GCI Gannett Co Inc (New) 10.38 0.02 0.19 259,905
GE General Electric Co 28.59 -0.48 -1.65 31,505,847
GOOG Alphabet Inc. 797.00 0.03 0.00 465,130
HD Home Depot Inc. (The) 125.87 -0.38 -0.30 1,298,136
HMC Honda Motor Company Ltd. 29.81 0.14 0.47 191,565
HPQ HP Inc. 13.87 -0.23 -1.63 3,669,670
IBM International Business Machines Corp 150.04 -1.48 -0.98 1,616,183
INTC Intel Corporation 35.27 -0.16 -0.45 8,778,102
JNJ Johnson & Johnson 113.37 -1.51 -1.31 3,287,599
JPM JP Morgan Chase 68.17 -0.09 -0.13 5,513,557
KO Coca-Cola Company (The) 41.81 -0.12 -0.29 4,412,345
LMT Lockheed Martin Corporation 230.28 -1.55 -0.67 534,165
MCD McDonald\'s Corporation 113.30 2.73 2.47 4,364,335
MEOH Methanex Corporation 38.94 -0.04 -0.10 251,443
MMM 3M Company 168.09 -1.77 -1.04 855,394
MRK Merck & Company Inc. (new) 61.26 -0.66 -1.07 2,879,749
MS Morgan Stanley 33.08 0.18 0.55 4,142,803
MSFT Microsoft Corporation 59.88 2.63 4.60 44,133,784
NBG National Bank of Greece S.A. ADS n/a n/a n/a 0
NOC Northrop Grumman Corporation 215.42 -1.94 -0.89 298,825
NWS News Corporation 13.80 0.00 0.00 236,453
PBI Pitney Bowes Inc. 17.25 0.06 0.32 329,876
PCG Pacific Gas & Electric Co. 60.40 -0.44 -0.72 471,833
PDS Precision Drilling Corporation 4.75 0.10 2.15 2,581,293
PEG Public Service Enterprise Group 41.03 -0.25 -0.61 606,766
PFE Pfizer Inc. 32.27 -0.27 -0.83 6,742,497
PG Procter & Gamble Company (The) 84.28 -0.65 -0.77 5,090,428
PGI Premiere Global Services n/a n/a n/a 0
PTEN Patterson-UTI Energy Inc. 24.16 0.06 0.25 856,032
RTN Raytheon Company 136.86 -0.45 -0.33 464,165
SAN Banco Santander SA ADR 4.65 0.01 0.22 4,080,671
SLW Silver Wheaton Corp (Canada) 24.42 0.01 0.04 1,028,399
SO Southern Company (The) 50.53 -0.20 -0.38 1,187,065
SYK Stryker Corporation 113.33 -1.22 -1.07 246,159
T AT&T Inc. 37.63 -1.02 -2.64 27,039,767
TROX Tronox Limited Class A $0.01 par 9.10 -0.07 -0.76 138,721
TRV The Travelers Companies Inc. 107.42 -2.10 -1.92 1,304,562
UTX United Technologies Corporation 97.92 -1.37 -1.38 1,415,216
VECO Veeco Instruments Inc. 21.25 0.00 0.00 47,736
VZ Verizon Communications Inc. 48.22 -0.93 -1.88 8,474,521
WFC Wells Fargo & Company 45.10 0.17 0.38 7,933,153
WMT Wal-Mart Stores Inc. 68.11 -0.62 -0.90 3,021,688
XOM Exxon Mobil Corporation 86.03 -1.19 -1.36 4,887,859
YGE Yingli Green Energy Holding Company Limited ADR 4.02 -0.00 -0.07 15,260


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