Nonfarm Payrolls rose by a better than expected 117,000 with a rise of 154,000 in private sector jobs. The Unemployment Rate fell to 9.1%, but the labor force decreased by 193,000. U.S. stocks opened higher on the better than expected employment data. The Dow Jones Industrial Average jumped to 11,555.41 in the opening five minutes, but quickly turned into the red with a year to date low set mid-day at 11,139.00. The Dow then spent the remainder of the session trading between red and green. The NASDAQ had an opening pop to 2592.04 then declined to a new year to date low mid-day at 2464.87. The NASDAQ rebounded significantly, but had a difficult time sustaining probes into the green in afternoon trading.
Asian stocks plunged following Thursday’s Dow decline of 512 points. The Nikkei 225 slumped by 3.72% to 9,300. The Hang Seng shed 4.29% to 20,946. European stocks were mixed on Friday on worries about Italy and Spain. The FTSE 100 fell by another 2.53% to 5,257. The DAX plunged 2.78% to 6,236. The CAC 40 slipped by 1.26% to 3,279. The yield on the 10-Year US Treasury note declined to a new year to date low yield at 2.334, then rose to 2.461 before the Employment Report. This yield rose to 2.579 Friday afternoon on the better than expected Employment Report. Gold rose from $1642.6 the Troy ounce to $1671.2 versus Thursday’s new all time high at $1683.5 then consolidated that gain. Crude oil declined from $87.09 to $83.54 per barrel, so the 200-week simple moving average has held at $83.97. Oil spiked to $88.32 following the Employment Report then consolidated within the day’s range. The euro versus the US dollar rebounded from 1.4059 to 1.4185 then popped to 1.4297 in afternoon trade on hopes of an Italian austerity plan.
Energy
First Solar’s (FSLR) gross margin declined to 36.6% from 48.3% in Q2 2010, as lower sales and price pressure took their toll. The company now expects 2011 revenue of $3.6B-$3.7B and EPS of $9.00-$9.50 (compared with consensus of $3.75B and $9.24). Free cash flow is expected to be negative. First Solar (FSLR) is downgraded to Hold from Buy at ThinkEquity. In afternoon trading: Shares of Sandridge Energy (SD) are down about 22.5% after missing estimates by 3 cents. Shares of Uranium Resources (URRE) are down about 16.25%. Shares of Western Refining (WNR) are down about 15% after Q2 sales and earnings fell short of Wall Street’s targets. Shares of Dril Quip (DRQ) are down about 15% after missing estimates by 4 cents.
Energy Select Sector SPDR (XLE) was trading at $68.07 at 4:00 PM on Friday, down 0.96% on the day – down 0.26% year-to-date.
Materials
Allied Nevada Gold Corp. (ANV) missed estimates by 4 cents and revenue by $3M. In afternoon trading: Shares of Senomyx (SNMX) are down about 15.75%. Shares of Walter Energy (WLT) are down about 14%. Shares of US Energy (USEG) are down about 12.25%. Shares of Zagg (ZAGG) are down about 12.25%. Shares of New Gold (NGD) are down about 11.5%. Shares of Avalon Rare Metals (AVL) are down about 11.5%. Shares of AK Steel (AKS) are down about 11.5%.
The Materials Select Sector SPDR (XLB) traded at $34.32 at 4:00 PM on Friday, down 0.23% on the day – down 10.65% year-to-date.
Industrials
Ultralife (ULBI) is upgraded to Accumulate from Hold at Ardour Capital. Seaspan (SSW) is boosted to Buy from Hold at Cantor Fitzgerald with an objective of $18. American Science & Engineering (ASEI) is downgraded to Market Perform from Outperform at Morgan Keegan. In afternoon trading: Shares of Broadwind Energy (BWEN) are down about 27.5%. Shares of American Science are down about 18.5%. Shares of Fuel Tech (FTEK) are down about 15%. Shares of Kratos Defense (KTOS) are down about 14%.
The Industrial Select Sector SPDR (XLI) traded at $31.76 at 4:00 PM on Friday, unchanged on the day – down 8.92% year-to-date.
Consumer Discretionary
Talks between Hitachi (HIT) and Mitsubishi Heavy Industries (MHVYF) about a tie-up are reportedly in danger of collapsing, as Hitachi wants a full merger while Mitsubishi prefers to combine selected businesses. Weight Watchers (WTW) beat estimates by 5 cents with revenue in-line with estimates, and raised FY11 EPS guidance to $3.85-$4.05, from $3.75-$4.00. Viacom, Inc (VIA.B) beat estimates by 14 cents on revenue of $3.77B. Priceline (PCLN) reported Q2 revenue of $1.1B and EPS of $5.49 (beating consensus of $1.07B and $4.87), Q3 revenue growth guidance of 37-42% (beats consensus of 35.9%), and EPS guidance of $9.10-$9.30 (beats $7.94 consensus). Grand Canyon Education (LOPE) gets upgraded to Outperform from Neutral at Robert W. Baird. Boyd Gaming (BYD) is now Neutral from Sell at Goldman Sachs. In afternoon trading: Shares of ReachLocal (RLOC) are down about 11.75%. Shares of Career Education (CECO) are down about 11.5%. Shares of Corinthian Colleges (COCO) are down about 11.5%. Shares of Morgans Hotels (MHGC) are down about 11.5%. Shares of Magna International (MGA) are down about 11.5%. Shares of Mazda Motors (MZDAF) are down about 11.25%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $36.34 at 4:00 PM on Friday, down slightly on the day – down 2.86% year-to-date.
Consumer Staples
Procter & Gamble (PG) beat estimates by 2 cents and revenue by $270M, and sees FY12 EPS of $4.17-4.33 (in-line) and 1Q12 EPS of $1.00-1.04 (missing estimates). In afternoon trading: Shares of Imperial Sugar (IPSU) are down about 58% as they reported a Q3 loss of $1.35 per share on revenue of $197 (versus estimates of a profit of 46 cents and revenue of $224.3). Shares of China-Biotics (CHBT) are down about 17.25%. Shares of Medifast (MED) are down about 11.5%. Shares of AgFeed Industries (FEED) are down about 11%. Shares of Central European Distribution (CEDC) are down about 10.5%.
The Consumer Staples Select Sector SPDR (XLP) traded at $29.91 at 4:00 PM on Friday, up 1.42% on the day – up 2.05% year-to-date.
Healthcare
Warner Chilcott (WCRX) beat estimates by 4 cents, but missed revenue by $6M. Emdeon (EM) is moved to Market Perform from Outperform at Morgan Keegan. Pacific Biosciences (PACB) is downgraded to Neutral from Overweight at JP Morgan. In afternoon trading: Shares of Pacific Biosciences are down about 36.5%. Shares of Chindex International (CHDX) are down about 24%. Shares of Biodel (BIOD) are down about 20.5%. Shares of Gentiva Health Services (GTIV) are down about 18.5%. Shares of Zalicus (ZLCS) are down about 16%.
The Health Care Select Sector SPDR (XLV) traded at $31.81 at 4:00 PM on Friday, up 0.76% on the day – up 0.98% year-to-date.
Financials
Bank of America’s (BAC) mortgage liability woes continued yesterday after New York Attorney General Eric Schneiderman asked a judge to reject the bank’s proposed $8.5B settlement with investors over toxic loans. RBS (RBS) made a far greater-than-expected H1 net loss of £1.43B ($2.33B) compared with a net profit of £9M a year earlier. AIG (AIG) swung to a Q2 net profit of $1.84B from a loss of $2.66B a year earlier, when it was saddled with charges tied to discontinued operations. AIG also benefited from a rise in the market cap of Asian life insurer AIA Group (AAIGY), in which it owns a third. California Attorney General Kamala Harris has reportedly subpoenaed Citigroup (C), seeking information about how it sold mortgage-backed securities in the state. Brookfield Properties (BPO) beat estimates by 4 cents, but missed estimates by $135M. RBS (RBS) missed estimates by £859M on revenue of 14.34B. Public Storage (PSA) beat estimates by 5 cents and revenue by $3M. U-Store-It (YSI) is upgraded to Outperform from Neutral at Robert W. Baird. SunTrust Banks (STI) gets hoisted to Buy from Hold at Jefferies. Bank of America (BAC) is downgraded to Market Perform from Outperform at Wells Fargo. In afternoon trading: Shares of The PMI Group (PMI) are down about 37.5%. Shares of Strategic Hotels (BEE) are down about 14.5%. Shares of Bank of America are down about 11%. Shares of Synovus Financial (SNV) are down about 10.5%. Shares of CapitalSource (CSE) are down about 10.25%.
The Financial Select Sector SPDR (XLF) traded at $13.43 at 4:00 PM on Friday, down 1.90% on the day – down 15.80% year-to-date.
Information Technology
Talks between Hitachi (HIT) and Mitsubishi Heavy Industries (MHVYF) about a tie-up are reportedly in danger of collapsing, as Hitachi wants a full merger while Mitsubishi prefers to combine selected businesses. iGATE (IGTE) beat estimates by 2 cents, but missed revenue by $4M. LinkedIn’s (LNKD) members grew 61% Y/Y to 115.8M, and unique visitors were up 83%. The Hiring Solutions business grew 170% Y/Y, and now accounts for 48% of revenue. 2011 revenue guidance was $475M-$485M (above the $467.7M consensus). Applied Materials (AMAT) is initiated with a Perform and $15 price objective at Oppenheimer, which has an Outperform and $65 target price on SanDisk (SNDK), an Outperform on KLA-Tencor (KLAC), a Perform on Micron (MU), and a Perform on Veeco Instruments (VECO). STEC Inc (STEC) is a new Hold at Needham. Symantec (SYMC) is upgraded to Outperform from Market Perform at FBR Capital. MIPS Tech (MIPS) is moved to Hold from Sell at Capstone. VMware (VMW) and Salesforce.com (CRM) are upgraded to Outperform from Market Perform at Wells Fargo. Brooks Automation (BRKS)is upgraded to Hold from Sell at Citigroup. Dolby Labs (DLB) is lowered to Neutral from Buy at Collins Stewart with a $45 target. Blue Coat (BCSI) is cut to Perform from Outperform at FBR Capital. In afternoon trading: Shares of Cogo Group (COGO) are down about 43%. Shares of MIPS Technology (MIPS) are down about 33%. Shares of Novatel Wireless (NVTL) are down about 32%. Shares of Brocade Communications (BRCD) are down about 31.5%. Shares of Dolby Labs are down about 23.5%. Shares of TTM Tech (TTMI) are down about 20.25%.
The Technology Select Sector SPDR (XLK) traded at $24.33 at 4:00 PM on Friday, down 0.61% on the day – down 3.41% year-to-date.
Telecommunications Services
Telecom Italia (TI) posted a €2B net loss ($2.8B) in the first half compared with a net profit of €1.2B a year earlier after taking a goodwill write-down of €3.2B due to the deterioration of the financial markets and rising interest rates. Windstream (WIN) reported Q2 EPS of $0.19 (in-line) while beating revenue by $10M. Cogent Communications (CCOI) is upgraded to Buy from Neutral at Collins Stewart. In afternoon trading: Shares of General Communications (GNCMA) are down about 13.75%. Shares of Global Crossing (GLBC) are down about 11.25%. Shares of Level 3 Communications (LVLT) are down about 10%. Shares of CBeyond (CBEY) are down about 9.5%. Shares of NTELOS Holdings (NTLS) are down about 9.5%. Shares of Telecom Italia are up about 8.5%. Shares of MetroPCS (PCS) are up about 7.75%.
The NASDAQ Telecommunications Index (IXTC) traded at $187.65 at 4:00 PM on Friday, down 0.78% on the day – down 16.74% year-to-date.
Utilities
PPL Corp. (PPL) reported Q2 EPS of $0.45 (in-line) while beating revenue by $230M, and reaffirmed FY11 EPS guidance of $2.50-2.75. AES (AES) missed estimates by a penny, but beat revenue by $340M, and reaffirmed FY11 EPS of $ 0.97-1.03. Consolidated Edison (ED) beat estimates by 4 cents and sees FY11 EPS $3.45 – $3.65 (versus consensus of $3.55). Ormat Tech (ORA) is taken to Accumulate from Hold at Ardour Capital. In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 1.5%. Shares of Genon Energy (GEN) are down about 4%. Shares of AES are down about 3.3%. Shares of Southern (SO) are down about 0.3%. Shares of Exelon (EXC) are down about 2.5%.
The Utilities Select Sector SPDR (XLU) traded at $31.89 at 4:00 PM on Friday, up 0.82% on the day – up 1.75% year-to-date.
STOCKS: FSLR, SD, URRE, WNR, DRQ, ANV, SNMX, WLT, USEG, ZAGG, NGD, AVL, AKS, ULBI, SSW, ASEI, BWEN, FTEK, KTOS, HIT, MHVYF, MTW, VIA.B, PCLN, LOPE, BYD, RLOC, CECO, COCO, MHGC, MGA, MZDAF, PG, IPSU, CHBT, MED, FEED, CEDC, WRCX, EM, PACB, CHDX, BIOD, GTIV, ZLCS, BAC, RBS, AIG, AAIGY, C, BPO, PSA, YSI, STI, PMI, BEE, SNV, CSE, IGTE, LNKD, AMAT, SNDK, KLAC, MU, VECO, STEC, SYMC, MIPS, VMW, CRM, BRKS, DLB, BCSI, COGO, NVTL, BRCD, TTMI, TI, WIN, CCOI, GNCMA, GLBC, LVLT, CBEY, NTLS, PCS, PPL, AES, ED, ORA, DUK, GEN, SO, EXC
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