First 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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