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.

Energy

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.

Materials

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.

Industrials

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.

Financial

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.

Utilities

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.

STOCKS: CVX, XOM, PDS, PTEN, YGE, AA, DD, SLW, TROX, DOW, MEOH, BA, CAT, GE, MMM, UTX, RTN, LMT, NOC, DIS, HD, MCD, BBY, CSTR, EBAY, KFT, KO, PG, WMT, NWS, GCI, JNJ, MRK, PFE, SYK, ZMH, CELG, SHPGY, EW, AXP, BAC, JPM, TRV, C, WFC, BKX, SAN, MS, NBG, CSCO, HPQ, IBM, INTC, MSFT, FB, RATE, GOOG, PBI, VECO, CTSH, SAPE, T, VZ, ALSK, CEL, PGI, D, EIX, FE, PCG, SO, EONGY, PEG

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
MMM 3M Company 248.18 2.27 0.92 2,013,467 Trade
LMT Lockheed Martin Corporation 332.00 -1.00 -0.30 1,511,840 Trade
PG Procter & Gamble Company (The) 91.07 0.89 0.99 9,364,027 Trade
GE General Electric Co 16.26 -0.51 -3.04 214,947,168 Trade
CVX Chevron Corporation 131.30 -0.29 -0.22 6,048,904 Trade
SO Southern Company (The) 44.44 -0.46 -1.02 8,808,602 Trade
PCG Pacific Gas & Electric Co. 44.39 -0.11 -0.25 4,337,721 Trade
CEL Cellcom Israel Ltd. 9.93 0.11 1.12 9,547 Trade
SAN Banco Santander SA ADR 7.25 0.06 0.83 3,945,793 Trade
FB Facebook Inc. 181.29 1.49 0.83 26,826,540 Trade
RTN Raytheon Company 196.68 0.97 0.50 1,226,788 Trade
JNJ Johnson & Johnson 147.36 0.44 0.30 8,738,791 Trade
WMT Wal-Mart Stores Inc. 104.59 0.29 0.28 8,378,580 Trade
AA Alcoa Inc. 53.10 0.10 0.19 5,759,602 Trade
EW Edwards Lifesciences Corporation 123.91 2.19 1.80 1,255,480 Trade
INTC Intel Corporation 44.82 0.34 0.76 25,780,217 Trade
IBM International Business Machines Corp 162.37 -6.75 -3.99 21,172,488 Trade
D Dominion Resources Inc. 74.99 0.10 0.13 6,529,907 Trade
TRV The Travelers Companies Inc. 137.85 0.51 0.37 1,628,130 Trade
CTSH Cognizant Technology Solutions Corporation 77.29 0.54 0.70 3,178,743 Trade
EBAY eBay Inc. 38.43 -0.31 -0.80 12,723,975 Trade
HMC Honda Motor Company Ltd. 36.24 0.38 1.06 372,473 Trade
ALSK Alaska Communications Systems Group Inc. 2.49 0.02 0.81 152,142 Trade
C Citigroup Inc. 78.30 0.91 1.18 17,813,995 Trade
EIX Edison International 62.12 0.20 0.32 3,222,289 Trade
MS Morgan Stanley 57.46 1.62 2.90 15,124,237 Trade
JPM JP Morgan Chase 113.01 -0.25 -0.22 18,785,468 Trade
AXP American Express Company 98.03 -1.83 -1.83 12,306,039 Trade
UTX United Technologies Corporation 135.90 1.29 0.96 3,235,284 Trade
PBI Pitney Bowes Inc. 12.66 0.13 1.04 1,502,000 Trade
PDS Precision Drilling Corporation 3.75 0.15 4.17 4,258,200 Trade
CSCO Cisco Systems Inc. 41.29 -0.01 -0.02 24,582,041 Trade
DIS Walt Disney Company (The) 110.59 0.17 0.15 10,514,262 Trade
MEOH Methanex Corporation 59.25 0.95 1.63 491,487 Trade
VZ Verizon Communications Inc. 51.91 0.36 0.70 23,761,297 Trade
NOC Northrop Grumman Corporation 316.37 2.07 0.66 873,975 Trade
BAC Bank of America Corporation 31.72 0.24 0.76 66,490,985 Trade
NBG National Bank of Greece S.A. ADS n/a n/a n/a 0
GOOG Alphabet Inc. 1,137.51 7.72 0.68 1,778,229 Trade
MCD McDonald\'s Corporation 176.12 1.55 0.89 3,746,267 Trade
YGE Yingli Green Energy Holding Company Limited ADR 1.90 0.03 1.60 229,826 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
TROX Tronox Limited Class A $0.01 par 21.36 1.06 5.22 1,924,267 Trade
VECO Veeco Instruments Inc. 16.95 0.05 0.30 1,031,186 Trade
BBY Best Buy Co. Inc. 76.86 2.17 2.91 3,445,673 Trade
HD Home Depot Inc. (The) 201.33 3.00 1.51 5,809,640 Trade
XOM Exxon Mobil Corporation 87.15 -0.28 -0.32 13,090,032 Trade
PFE Pfizer Inc. 36.94 -0.05 -0.14 29,538,600 Trade
PGI Premiere Global Services n/a n/a n/a 0 Trade
WFC Wells Fargo & Company 64.22 0.27 0.42 16,524,008 Trade
HPQ HP Inc. 23.70 0.41 1.76 11,551,429 Trade
BA Boeing Company (The) 337.73 -2.43 -0.71 7,264,401 Trade
CELG Celgene Corporation 102.65 0.93 0.91 8,112,136 Trade
MRK Merck & Company Inc. (new) 61.28 0.15 0.25 12,161,865 Trade
FE FirstEnergy Corporation 29.40 -0.16 -0.54 6,574,475 Trade
SLW Silver Wheaton Corp (Canada) n/a n/a n/a n/a
KO Coca-Cola Company (The) 47.16 0.28 0.60 16,187,425 Trade
T AT&T Inc. 37.21 0.06 0.16 27,919,839 Trade
CAT Caterpillar Inc. 170.41 2.36 1.40 5,796,683 Trade
SYK Stryker Corporation 161.28 1.00 0.62 1,196,712 Trade
MSFT Microsoft Corporation 90.00 -0.10 -0.11 36,875,013 Trade
PEG Public Service Enterprise Group 49.80 0.06 0.12 2,690,085 Trade
NWS News Corporation 17.55 0.15 0.86 389,687 Trade
PTEN Patterson-UTI Energy Inc. 24.48 0.60 2.51 2,953,284 Trade
GCI Gannett Co Inc (New) 12.11 0.17 1.42 595,502 Trade

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