Equities Sector Coverage: Stocks Take Off As Europe Prepares to Act

Sector Recap |

RBS, LYG, ING, DB, BCS, CS, C, MS, BX, AIG, banks, euro, european union, eurozone, Mario Draghi, ECB, IMF, bond-buying, interest rates, debt crisisFirst Quarter Productivity fell more than expected, down 0.9% with labor costs up 1.3%. The Federal Reserve’s “beige book” of regional economic activity showed consumer spending was unchanged to up slightly in most regions, auto sales were strong, construction spending was picking up and capital spending plans were mostly positive. The Dow Jones Industrial Average traded up to 12,364.54 back above its 200-day simple moving average at 12,271. The NASDAQ traded up to 2840.80.

Asian stocks rebounded on Wednesday. The Nikkei 225 ended the day at 8,534 – up 1.81%. The Hang Seng ended the day at 18,521 – up 1.43%. European exchanges were higher on Wednesday. The FTSE 100 ended the day at 5,384 – up 2.36% on Friday. The DAX ended the day at 6,094 – up 2.09%. The CAC 40 ended the day at 3,058 – up 2.42%. The yield on the 10-Year US Treasury declined to 1.552% than rose to 1.671%.

Gold traded up from $1616.5 the Troy ounce to $1642.4 between the 50-day and 200-day simple moving averages at $1621.7 and $1685.2. Crude oil traded up from $84.03 per barrel to $86.27. The euro versus the dollar traded up from 1.2443 to 1.2571.

Energy

Chesapeake Energy (CHK) is in discussions to sell its 45.2% limited partner interest in Chesapeake Midstream (CHKM) and other pipeline assets to Global Infrastructure for over $4 billion. Mitcham Industries (MIND) missed Q1 EPS estimates by a penny with a miss on the revenue line. Continental Resources (CLR) has been upgraded to Buy from Hold at Jefferies. Forest Oil (FST) has been upgraded to Buy from Hold at Canaccord Genuity. Hess (HES) has been upgraded to Buy from Accumulate at Tudor Pickering. Dow components – Chevron (CVX) up 2.57%, Exxon Mobil (XOM) up 2.47%.

Energy Select Sector SPDR (XLE) was trading at $64.02 at 3:30 PM on Wednesday, up 2.40% on the day – down 7.39% year-to-date.

Materials

Midway Gold (MDW) has been initiated with a Buy rating at Stifel Nicolaus on the development assets in Nevada and Washington with total attributable resources of 4.8 million ounces of gold. Dow components – Alcoa (AA) up 1.57%, DuPont (DD) up 2.45%.

The Materials Select Sector SPDR (XLB) was trading at $34.09 at 3:30 PM on Wednesday, up 1.94% on the day – up 1.76% year-to-date.

Industrials

Defense cuts may be on the horizon, Lockheed Martin (LMT) won a preliminary contract valued at up to $2.02 billion to build at least 42 interceptor missiles for the Pentagon's missile defense agency. PulteGroup (PHM) and Ryland Group (RYL) have been upgraded to Outperform from Neutral at Credit Suisse. Tata Motors (TTM) - The Indian auto maker has been upgraded to Hold from Sell at Deutsche Bank. Dow components – Boeing Co (BA) up 1.61%, Caterpillar (CAT) up 2.51%, General Electric (GE) up 1.97%, 3M Company (MMM) up 2.12%, United Technologies (UTX) up 3.13%.

The Industrial Select Sector SPDR (XLI) was trading at $34.16 at 3:30 PM on Wednesday, up 2.12% on the day – up 1.21% year-to-date.

Consumer Discretionary

Home Depot (HD) reaffirmed its sales and EPS guidance for 2012 and set new targets for an operating margin of 12% and return on invested capital of 24%. Coinstar (CSTR) has a deal with Starbucks (SBUX) to roll out thousands of Rubi coffee kiosks featuring Seattle's Best Coffee in groceries, drugstores and mass merchants. Vail Resorts (MTN) reported in-line FQ3 EPS with a beat on the revenue line. Oxford Industries (OXM) beat Q1 EPS estimates by a nickel with in-line revenue. Vera Bradley Inc (VRA) has been upgraded to Buy from Hold at KeyBanc with a price target at $26. Dow Components – Disney (DIS) up 1.29%, Home Depot up 3.03%, McDonalds (MCD) up 1.26%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.84 at 3:30 PM on Wednesday, up 1.73% on the day – up 9.79% year-to-date.

Consumer Staples

Coinstar (CSTR) has a deal with Starbucks (SBUX) to roll out thousands of Rubi coffee kiosks featuring Seattle's Best Coffee in groceries, drugstores and mass merchants. Brown-Forman Group (BF.B) missed FQ4 EPS estimates by three cents with better than expected revenue. Bob Evans (BOBE) missed FQ4 earnings on all counts with flat revenue year over year. Net earnings rose 20% on fewer charges and improved operating margins. Same-store sales were down 0.6%, and Evans lowered guidance for the fiscal year. Mattress Firm (MFRM) beat earnings estimate on a per share basis but was short on the revenue line. Ulta Salon (ULTA) beat Q1 estimates on a 22% year over year. Dick's Sporting Goods (DKS) have been upgraded to Outperform from Market Perform with Wells Fargo. Dow components – Kraft (KFT) up 0.61%, Coca Cola (KO) up 1.37%, Procter & Gamble (PG) up 0.55%, Wal-Mart (WMT) up 0.34%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.56 at 3:30 PM on Wednesday, up 0.99% on the day – up 3.29% year-to-date.

Health Care

Cyberonics (CYBX) beat FQ4 EPS estimates by three cents with better than expected revenue. NuVasive (NUVA) has been upgraded to Outperform from Sector Perform at RBC Capital. Dow Components – Johnson & Johnson (JNJ) up 0.42%, Merck (MRK) up 0.55%, Pfizer (PFE) up 0.93%.

The Health Care Select Sector SPDR (XLV) was trading at $36.14 at 3:30 PM on Wednesday, up 0.98% on the day – up 4.18% year-to-date.

Financial

Fannie Mae (FNMA.OB) named general counsel Timothy Mayopoulos as its new CEO. Mayopoulos was fired from Bank of America (BAC) on the just before their takeover of Merrill Lynch to make way for Brian Moynihan. Barclays (BCS) will likely recover around $1.5 billion of disputed assets related to the Lehman's bankruptcy, as a US federal judge ruled yesterday partially reversing a February 2011 decision. CIT Group (CIT) has been initiated with a Buy rating at Janney. First Republic Bank (FRC) has been initiated with an Outperform at Wells Fargo. FirstMerit Corp. (FMER) has been downgraded to Underperform from Neutral by Robert W. Baird with a price target reduced $2 to $13. Dow Components – American Express (AXP) up 2.06%, Bank of America (BAC) up 6.34%, JP Morgan Chase (JPM) up 2.53%, Travelers (TRV) up 0.72%.

The Financial Select Sector SPDR (XLF) was trading at $13.92 at 3:30 PM on Wednesday, up 2.50% on the day – up 7.08% year-to-date.

Information Technology

Ancestry.com (ACOM) surged 24% premarket after a Bloomberg report that the company is considering a sale and enlisted the help of tech banker Frank Quattrone to find buyers. American Superconductor (AMSC) beat FQ4 EPS estimates by six cents with in-line revenue. Facebook (FB) has been initiated with an Outperform at JPM Securities with a $37 price target. VeriSign (VRSN) has been initiated with an Outperform at Wells Fargo. Rackspace (RAX) has been downgraded to Hold from Buy at Jefferies. Symantec (SYMC) has been downgraded to Perform from Outperform at FBR Capital with the price target down to $16 from $20. Dow Components – Cisco Systems (CSCO) up 2.70%, Hewlett-Packard (HPQ) up 2.54%, IBM (IBM) up 2.15%, Intel Corp (INTC) up 2.12%, Microsoft (MSFT) up 1.91%.

The Technology Select Sector SPDR (XLK) was trading at $28.49 at 3:30 PM on Wednesday, up 1.89% on the day – up 10.18% year-to-date.

Telecommunication Services

Dow components – AT&T (T) up 0.82%, Verizon (VZ) up 0.95%.

The NASDAQ Telecommunications Index (IXTC) was trading at $179.97 at 3:30 PM on Wednesday, up 1.86% on the day – down 8.61% year-to-date.

Utilities
Dominion Resources (D) up 1.15%, Edison International (EIX) up 0.84%, First Energy (FE) up 0.98%, PG&E Corp (PCG) up 1.69%, Southern Company (SO) up 1.43%.

The Utilities Select Sector SPDR (XLU) was trading at $36.35 at 3:30 PM on Wednesday, up 1.08% on the day – up 1.03% year-to-date.

STOCKS: CVX, XOM, CHK, CHKM, MIND, CLR, FST, AA, DD, MDW, BA, CAT, GE, MMM, UTX, LMT, PHM, RYL, TTM, DIS, HD, MCD, CSTR, SBUX, MTN, OXM, VRA, KFT, KO, PG, WMT, BF.B, BOBE, MFRM, ULTA, DKS, JNJ, MRK, PFE, CYBX, NUVA, AXP, BAC, JPM, TRV, FNMA.OB, BCS, CIT, FRC, FMER, CSCO, HPQ, IBM, INTC, MSFT, ACOM, AMSC, FB, VRSN, RAX, SYMC, T, VZ, D, EIX, FE, PCG, SO, NU

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. 9.71 0.06 0.62 5,973,427
AMSC American Superconductor Corporation 6.89 -0.12 -1.71 10,617
AXP American Express Company 63.88 -0.40 -0.62 1,509,450
BA Boeing Company (The) 131.01 -0.31 -0.24 675,320
BAC Bank of America Corporation 15.21 -0.08 -0.49 29,641,391
BCS Barclays PLC 8.67 0.01 0.15 2,542,271
BOBE Bob Evans Farms Inc. 38.38 -0.27 -0.70 50,401
CAT Caterpillar Inc. 84.61 1.73 2.09 3,707,658
CHK Chesapeake Energy Corporation 6.41 0.18 2.89 20,542,571
CIT CIT Group Inc (DEL) 35.85 0.37 1.04 407,248
CLR Continental Resources Inc. 45.02 0.73 1.65 1,954,255
CSCO Cisco Systems Inc. 31.42 -0.06 -0.19 6,818,110
CVX Chevron Corporation 99.70 0.72 0.73 2,113,205
CYBX Cyberonics Inc. n/a n/a n/a 0
D Dominion Resources Inc. 75.60 -0.18 -0.24 863,105
DD E.I. du Pont de Nemours and Co. 66.58 -0.68 -1.01 768,433
DIS Walt Disney Company (The) 91.85 0.13 0.14 3,823,240
DKS Dick\'s Sporting Goods Inc 59.15 -1.27 -2.10 876,168
EIX Edison International 73.64 -0.12 -0.16 608,165
FB Facebook Inc. 128.96 0.27 0.21 6,682,547
FE FirstEnergy Corporation 33.59 -0.08 -0.24 1,690,884
FMER FirstMerit Corporation n/a n/a n/a 0
FRC FIRST REPUBLIC BANK 77.58 -0.06 -0.08 281,197
GE General Electric Co 29.63 -0.25 -0.84 10,078,158
HD Home Depot Inc. (The) 127.72 0.90 0.71 2,993,679
HPQ HP Inc. 15.34 0.00 0.00 4,295,336
IBM International Business Machines Corp 157.09 0.32 0.20 1,216,179
INTC Intel Corporation 37.28 0.10 0.27 6,996,265
JNJ Johnson & Johnson 119.13 -0.09 -0.08 1,826,192
JPM JP Morgan Chase 66.26 -0.10 -0.16 5,154,961
KO Coca-Cola Company (The) 42.09 -0.50 -1.17 7,028,760
LMT Lockheed Martin Corporation 245.17 -0.62 -0.25 361,793
MCD McDonald\'s Corporation 115.11 -1.77 -1.51 2,902,713
MFRM Mattress Firm Holding Corp. n/a n/a n/a 0
MIND Mitcham Industries Inc. 3.10 0.10 3.33 2,203
MMM 3M Company 177.06 0.76 0.43 627,187
MRK Merck & Company Inc. (new) 62.94 0.37 0.59 5,319,905
MSFT Microsoft Corporation 57.87 -0.08 -0.14 8,127,438
MTN Vail Resorts Inc. 156.01 0.15 0.10 133,154
NUVA NuVasive Inc. 66.86 -0.27 -0.40 125,754
OXM Oxford Industries Inc. 67.04 -0.97 -1.43 69,587
PCG Pacific Gas & Electric Co. 62.28 -0.08 -0.13 775,516
PFE Pfizer Inc. 33.79 -0.04 -0.12 5,558,294
PG Procter & Gamble Company (The) 88.75 0.39 0.44 42,290,391
PHM PulteGroup Inc. 19.96 0.07 0.35 1,462,014
RAX Rackspace Hosting Inc 31.64 0.05 0.16 1,213,287
SBUX Starbucks Corporation 53.79 -0.40 -0.74 4,601,928
SO Southern Company (The) 52.85 0.01 0.02 2,420,522
SYMC Symantec Corporation 25.13 -0.03 -0.12 2,743,318
T AT&T Inc. 40.66 -0.80 -1.93 11,613,375
TRV The Travelers Companies Inc. 114.48 0.07 0.06 307,558
TTM Tata Motors Ltd Limited 40.34 0.36 0.90 322,206
ULTA Ulta Salon Cosmetics & Fragrance Inc. 240.05 -3.61 -1.48 234,101
UTX United Technologies Corporation 101.81 -0.54 -0.53 2,033,268
VRA Vera Bradley Inc. 15.31 -0.40 -2.55 164,678
VRSN VeriSign Inc. 79.26 0.62 0.79 244,943
VZ Verizon Communications Inc. 51.99 -0.50 -0.95 4,156,685
WMT Wal-Mart Stores Inc. 71.63 -0.70 -0.97 2,667,619
XOM Exxon Mobil Corporation 84.29 1.05 1.26 5,574,314

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