New Home Sales declined 0.7% in July to 298,000 units annualized. The inventory of new single family homes fell to a new record low at 165,000. The Richmond Fed Manufacturing Index fell to -10 in August. The Dow Jones Industrial Average remains above its 200-week simple moving average at 10,729. The Dow opened higher at 10,932.61, dipped to 10,862.51, then rebounded to 11,170.41 in the final hour of trading. The NASDAQ remains above its August 9th low at 2331.65. The NASDAQ opened higher, dipped to 2349.08 then rebounded to 2442.17 into the final hour of trading.
Asian stocks rebounded on Tuesday despite China’s below 50 PMI reading. The Nikkei 225 tacked on 1.22% to 8,733 with the Hang Seng surging 1.99% to 19,876. European stocks also rebounded on Tuesday despite a contraction of Eurozone manufacturing. The FTSE 100 gained 0.67% to 5,129; the DAX gained 1.07% to 5,532 and the CAC 40 rallied by 1.08% to 3,084. The yield on the 10-Year U.S. Treasury note rose from 2.094 percent to 2.167 Tuesday morning then declined to 2.090, as the market sets up this week’s auctions. The U.S. Treasury sold $35 billion 2-Year notes at 0.222% with a strong bid to cover at 3.44. Tomorrow the US Treasury auctions $35 billion 5-Year notes. On Thursday $29 billion 7-Year notes will be up for the bidding. Yields will be sensitive to Fed Chairman Bernanke’s speech at Jackson Hole on Friday, as some look for additional Fed stimulus.
Gold rallied to another new record high at $1917.9 the Troy ounce on Tuesday then plunged to $1830.0, and the close was below Monday’s low at $1858.0 defining a key reversal day. Crude oil rebound from $84.05 per barrel to $86.06, faded to $83.40, then rebounded to $86.39, as oil’s 200-week simple moving average at $83.90 remains a magnet. The euro versus the US dollar traded between 1.4357 and 1.4498.
Energy
Suntech Power (STP) reported Q2 EPS of -$0.19 (which may not be comparable to consensus of $0.16), while beating revenue by $31M.The company sees 2011 revenue of $3.2B-$3.4B (in-line with $3.3B consensus). Suntech Power (STP) is cut to Sell from Neutral with a new lower target of $4 at Collins Stewart. In afternoon trading: Shares of Yingli Green Energy (YGE) are up about 11%. Shares of LDK Solar (LDK) are up about 10%. Shares of Trina Solar (TSL) are up about 8.5%. Shares of Canadian Solar (CSIQ) are up about 8.5%.
Energy Select Sector SPDR (XLE) was trading at $65.56 at 4:00 PM on Tuesday, up 4.51% on the day – down 3.94% year-to-date.
Materials
Ivanhoe Mines (IVN) is moved to Buy from Hold at TD Newcrest. In afternoon trading: Shares of Ivanhoe Mine are up about 16%. Shares of Lundin Mining (LUNMF) are up about 8.5%. Shares of Temple-Inland (TIN) are down about 16%. Shares of Gold Fields (GFI) are up about 7.25%. Shares of Rangold Resources (GOLD) are up about 7%.
The Materials Select Sector SPDR (XLB) was trading at $33.13 at 4:00 PM on Tuesday, up 3.53% on the day – down 13.75% year-to-date.
Industrials
McGrath RentCorp (MGRC) gets begun with a Buy at KeyBanc Capital with a target price of $28. Mobile Mini (MINI) is a new Hold at KeyBanc.cv American Airlines parent AMR Corp (AMR), US Airways (LCC), and Hawaiian Holdings (HA) are all upgraded by Bank of America-Merrill Lynch. In afternoon trading: Shares of American Semiconductor (AMSC) are up about 15.25%. Shares of HEICO (HEI) are up about 11.5%. Shares of EnerNOC (ENOC) are up about 10%.
The Industrial Select Sector SPDR (XLI) was trading at $30.27 at 4:00 PM on Tuesday, up 3.52% on the day – down 13.19% year-to-date.
Consumer Discretionary
Melco Crown Entertainment (MPEL) beat estimates by a penny and revenue by $35M. Williams-Sonoma (WSM) beat estimates by a penny, but missed revenue by $8.9M, sees FY11 revenue of $3,671-3,716B and comparable store sales growth of 2.0-3.5%, and isues FY11 EPS guidance to $2.17-$2.22 on revenue growth of 5%-6%. Focus Media Holding’s (FMCN) Q2 earnings climbed 69%, helped by a recovery in advertising and better management of its revenue seasonality. Focus Media (FMCN) beat estimates by 7 cents and revenue by $16M. Tuesday Morning (TUES) reports FQ4 revenues largely in-line with estimates, but raises its FY11 guidance as operating margins improve slightly on inventory reductions. Priceline.com (PCLN) is picked up with an Outperform at Credit Suisse, which has a new Neutral on rival Expedia (EXPE). Children’s Place (PLCE) is a new Neutral at Janney Scott with a price objective of $45. Coach (COH) is raised to Buy from Hold with a $60 target at Jefferies. Intercontinental Hotels Group (IHG) is cut to Neutral from Outperform at Credit Suisse. In afternoon trading: Shares of Fossil (FOSL) are up about 16.25%. Shares of Sotheby’s (ID) are up about 14%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $35.47 at 4:00 PM on Tuesday, up 3.87% on the day – down 5.19% year-to-date.
Consumer Staples
Heinz (HNZ) beat estimates by 2 cents and revenue by $70M, and re-affirmed FY12 EPS outlook of $3.24-3.32, as revenue grew 14.9% to $2.85B and EPS excluding special charges rose 4% to $0.70. Foster’s (FBRWY) plans to return at least A$500M ($521M) to shareholders via a capital reduction or a share buyback as it looks to receive support for its defense against SABMiller’s (SBMRY) hostile A$9.5B offer. Sanderson Farms (SAFM) is moved to Neutral from Overweight at JP Morgan. Hormel Foods (HRL) is cut to Market Perform from Outperform by BMO Capital. In afternoon trading: Shares of Prestige Brands (PBH) are up about 11%. Shares of Green Mountain Coffee (GMCR) are up about 9.5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.25 at 4:00 PM on Tuesday, up 2.06% on the day – up 3.21% year-to-date.
Healthcare
ConvaTec’s offer for wound-care company Kinetic (KCI) is reportedly worth over 40B Swedish kroner ($6.3B) compared with a proposal from Apax and two Canadian pension funds valued at $5B, or $6.3B including debt. Medtronic (MDT) reported FQ1 EPS of $0.79 (in-line), while beating revenue by $70M. The company reiterates FY12 revenue growth outlook of 1-3% and EPS guidance of $3.43-$3.50. Human Genome Sciences (HGSI) is begun with a Buy and $22 price target at brokers Brean Murray. Avanir Pharmaceuticals (AVNR) is established at Outperform at JMP Securities. Aetna (AET) is lifted to Buy from Hold at Jefferies with a new objective of $51. Alkermes (ALKS) is now Buy from Neutral at UBS with a new target of $21. Healthways (HWAY) is lifted to Market Perform from Underperform at JMP Securities. Lincare (LNCR) is lowered to Hold from Buy at Citigroup.
The Health Care Select Sector SPDR (XLV) was trading at $32.02 at 4:00 PM on Tuesday, up 3.26% on the day – up 1.65% year-to-date.
Financials
Facing increasing regulatory expenses and a record high Swiss franc, UBS (UBS) intends to cut 3,500 jobs in order to save 2B francs ($2.54B) by the end of 2013, with almost half the losses to come from the company’s investment bank. Deutsche Bank (DB) knew in 2006 that MortgageIT, a lender it was preparing to acquire, lied about its mortgages but made the purchase anyway in 2007, the Justice Department said. A judge has granted the request of dozens of investors to intervene in Bank of America’s (BAC) proposed $8.5B settlement with 22 major institutions that lost money on mortgage-backed securities. The U.S. Committee on Foreign Investment has approved Deutsche Boerse’s (DBOEY) proposed purchase of NYSE Euronext (NYX). Bank of Montreal (BMO) beat estimates by 3 cents. Cathay Bancorp (CATY) is hoisted to Buy from Hold at Cantor Fitzgerald. City National (CYN) is increased to Overweight from Equal Weight at Evercore. Capital One Financial (COF) is added to Stifel’s Select List of favored stocks.
The Financial Select Sector SPDR (XLF) was trading at $12.37 at 4:00 PM on Tuesday, up 3.24% on the day – down 22.46% year-to-date.
Information Technology
AOL Inc (AOL) is initiated with an Outperform at Credit Agricole. Juniper Networks (JNPR) is lifted to Outperform from Market Perform at Morgan Keegan. Perfect World (PWRD) is boosted to Buy from Hold at ThinkEquity. In afternoon trading: Shares of Universal Display (PANL) are up about 15%. Shares of Perfect World (PWRD) are up about 14.25%. Shares of MEMC Electronic (WFR) are up about 13%. Shares Power-One (PWER) are up about 11.5%.
The Technology Select Sector SPDR (XLK) was trading at $23.47 at 4:00 PM on Tuesday, up 3.67% on the day – down 6.83% year-to-date.
Telecommunications Services
In afternoon trading: Shares of AT&T (T) are up about 1.25%. Shares of Verizon (VZ) are up about 2.5%. Shares of Sprint Nextel (S) are up about 4%. Shares of Level 3 Communications (LVLT) are up about 4.5%. Shares of Frontier Communications (FTR) are up about 1.6%. Shares of Vodafone (VOD) are up about 2.8%.
The NASDAQ Telecommunications Index (IXTC) was trading at $184.15 at 4:00 PM on Tuesday, up 3.66% on the day – down 18.29% year-to-date.
Utilities
CenterPoint (CNP) is taken to Buy from Neutral at Suntrust. NRG Energy (NRG) is lifted to Buy from Neutral boost at UBS. Public Service (PEG) is now Neutral from Buy at UBS. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down slightly. Shares of Genon Energy (GEN) are up about 0.5%. Shares of CenterPoint Energy are up about 2.4%. Shares of Southern (SO) are up about 1%. Shares of Dominion Resources (D) are up about 0.8%.
The Utilities Select Sector SPDR (XLU) was trading at $32.89 at 4:00 PM on Tuesday, up 1.80% on the day – up 4.95% year-to-date.
STOCKS: STP, YGE, LDK, TSL, CSIQ, IVN, LUNMF, TIN, GFI, GOLD, MGRC, MINI, AMR, LCC, HA, AMSC, HEI, ENOC, MPEL, WSM, FMCN, TUES, PCLN, EXPE, PLCE, COH, IHG, FOSL, ID. HNZ, FBRWY, SBMRY, SAFM, HRL, PBH, GMCR, KCI, MDT, HGSI, AVNR, AET, ALKS, HWAY, LNCR, UBS, DB, BAC, DBOEY, NYX, BMO, CATY, CYN, COF, AOL, JNPR, PWRD. PANL, WFR, PWER, T, VZ, S, LVLT, FTR, VOD, CNP, NRG, PEG, DUK, GEN, SO, D
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