The Nation’s international trade deficit in goods and services increased to $52.6 billion in January from $50.4 billion (revised) in December. Nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. The Dow Jones Industrial Average traded between the narrow range of 12,906 and 12,969; ending the day above the key 21- day simple moving average at 12916. The daily cycle is now neutral. The NASDAQ traded between the narrow range of 2974 and 2994.
Asian stocks traded high, again, today. The Nikkei 225 ended their session at 9,930 – up 1.65% on the day. The Hang Seng ended their session at 21.086 – up 0.89% on the day. European stocks were also up on the day. The FTSE 100 ended their session at 5,,887 – up 0.47% on the day, the DAX ended their session at 6,880 – up 0.67% on the day, and the CAC 40 ended their session at 3,487 – up 0.26% on the day.
The yield on the 10-Year US Treasury traded 2.007 and 2.059 percent remaining above the 2 percent threshold. Gold traded between $1677.0 and $1714.9 the Troy ounce, remaining above the 200- day simple moving average at $1675.7. Crude oil traded between $106.13 and $108.20 per barrel. The euro versus the dollar traded to a high of 1.3276 (versus the 21- day simple moving average at 1.3234), before weakening to a low of 1.3100 (versus the 50- day simple moving average at 1.3086).
Energy
The daily cycle shifted to positive. Heckmann (HEK) missed estimates by 2 cents and revenue by $2M. The company lowers estimates for Q1, now anticipating total revenues of $54M (versus the consensus of $58M). Alon USA Energy (ALJ) reported Q4 EPS of -$0.23 (versus consensus of -$0.13), while missing revenue by $40M. Cloud Peak Energy (CLD) is increased to Outperform from Market Perform by BMO Capital. Statoil (STO) is lifted to Buy from Hold at Deutsche Bank, while Goldman slashed the company to Sell from Neutral. Arch Coal (ACI) is moved to Market Perform from Outperform by BMO Capital. ENI S.p.A. (E) and Ensco (ESV) are moved to Market Perform from Outperform by Sanford Bernstein.
Energy Select Sector SPDR (XLE) was trading at $74.19 at 4:00 PM on Friday, down slightly on the day – up 7.32% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%
Big Mover: (DVR) +10%, (HEK) -9.5%, (DNN) -9.25%.
Materials
The daily cycle shifted to positive. Molycorp (MCP) agreed to acquire Canada’s Neo Material Technologies (NEMFF) in a ~C$1.3B cash and stock deal that will give the rare earths miner access to Neo’s rare earths processing capabilities and patents. KMG Chemicals (KMGB) missed estimates by 9 cents with revenue in-line with estimates. TPC Group (TPCG) beat estimates by 16 cents and revenue by $101M. Georgia Gulf (GGC) gets upgraded to Outperform from Market Perform with Wells Fargo. Zep Inc (ZEP) is upgraded to Buy from Hold at BB&T Capital.
The Materials Select Sector SPDR (XLB) was trading at $36.64 at 4:00 PM on Friday, relatively unchanged on the day – up 9.37% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.
Big Movers: (REE) +18.5%, (MCP) +16.5%.
Industrials
The daily cycle shifted to positive. UPS (UPS) and TNT Express are said to be near a merger agreement after initially rejecting a €4.9B ($6.5B) offer. LMI Aerospace (LMIA) missed estimates by 6 cents and revenue by $2.5M. Dolan Company (DM) beat estimates by 9 cents, while missing revenue by $3.7M. Fushi Copperweld (FSIN) missed estimates by 7 cents and revenue by $2M. The company guided its FY12 lower, now seeing its EPS between $0.76 – $0.86 (versus the Street view of $1.13). PowerSecure International (POWR) beat estimates by 2 cents and revenue by $4.7M. Energy Recovery (ERII) reported Q4 EPS of -$0.19 (versus consensus of -$0.04), while missing revenue by $1.8M. Pall Corp (PLL) is downgraded by both Wedbush (Neutral from Outperform) and JPMorgan (Underweight from Neutral.)
The Industrial Select Sector SPDR (XLI) was trading at $37.02 at 4:00 PM on Friday, up 0.22% on the day – up 9.69% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Consumer Discretionary
The daily cycle shifted to positive. Starbucks (SBUX) announced its new Verismo single-cup coffee system, through which the company says it’s targeting “global leadership” in the market. Starbucks partner and single-cup market leader Green Mountain Coffee (GMCR) fell heavily in after-hours trading, though it pared its losses after Starbucks said its Verismo machine and pods will coexist with Green Mountain’s Keurig brewers and K-Cups. Carnival (CCL) beat estimates by 6 cents with revenue in-line with estimates. The company sees Q2 adjusted EPS of $0.05-$0.09 (vs. $0.21 consensus) and lowers FY12 EPS to $1.40-$1.70 from prior $2.55-$2.85 (vs. $2.08 consensus). AnnTaylor (ANN) beat estimates by 2 cents, while missing revenue by $11.2M. China Automotive Systems (CAAS) beat estimates by 3 cents and revenue by $3.3M. Hibbett Sporting Goods (HIBB) beat estimates by 3 cents, while missing revenue by $1.4M. Citi Trends (CTRN) beat estimates by 2 cents with revenue in-line with estimates. Ulta Salon, Cosmetics & Fragrance (ULTA) beat estimates by 6 cents and revenue by $4M. Aeropostale (ARO) beat estimates by 7 cents and revenue by $4M. The company issued a downbeat forecast for the current quarter, now seeing $0.08 – $0.10 per share (versus estimates of $0.12). Smith & Wesson (SWHC) beat estimates by 3 cents and revenue by $3M. Thor Industries (THO) beat estimates by a penny and revenue by $95M. Quiksilver (ZQK) missed estimates by 3 cents, while beating revenue by $12M. Body Central (BODY) beat estimates by a penny with revenue in-line with estimates. Zumiez (ZUMZ) reported Q4 EPS of $0.60 (in-line) and revenue of $184M (in-line). Vitamin powerhouse Herbalife (HLF) and Weight Watchers (WTW) are each initiated with Overweights by Barclays. Nautilus Group (NLS) is a new Outperform at Northland Securities, which assigns it a $6 target price. Dick’s Sporting Goods (DKS) is a new Buy ($55 target) at Argus. Kohl’s Corp (KSS) is raised to Buy from Hold at Jefferies. Aeropostale (ARO) is upgraded to Above Average from Average at Caris & Company. Meritage Homes (MTH) and Ryland Group (RYL) are each upgraded to Neutral from Underperform at Credit Suisse. Williams-Sonoma (WSM) is moved to Market Perform from Outperform with Wells.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.98 at 4:00 PM on Friday, up 0.57% on the day – up 12.71% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.
Big Movers: (SWHC) +22.5%, (ZQK) -9%.
Consumer Staples
The daily cycle shifted to positive. Wal-Mart (WMT) won the final go-ahead for its $2.4B acquisition of Massmart after a South African court dismissed an appeal from the government and unions. Starbucks (SBUX) announced its new Verismo single-cup coffee system, through which the company says it’s targeting “global leadership” in the market. Starbucks partner and single-cup market leader Green Mountain Coffee (GMCR) fell heavily in after-hours trading, though it pared its losses after Starbucks said its Verismo machine and pods will coexist with Green Mountain’s Keurig brewers and K-Cups. Coffee Holdings (JVA) reported Q4 EPS of $0.24 and revenues of $56.6M (vs. consensus of $0.24 and revenues of $43M). Vitamin powerhouse Herbalife (HLF) and Weight Watchers (WTW) are each initiated with Overweights by Barclays. Green Mountain Coffee Roasters (GMCR) is lowered to Neutral from Buy by Bank of America-Merrill Lynch. SABMiller Plc (SBMRY) is now Neutral from Buy at Natixis.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.47 at 4:00 PM on Friday, up 0.33% on the day – up 3.02% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.
Big Movers: (JVA) +36.5%, (GMCR) -15.75%.
Health Care
The daily cycle shifted to positive. Boston Scientific (BSX) agreed to buy privately-held Cameron Health for $150M in cash and up to $1.2B in additional payments if the company’s new kind of defibrillator achieves certain regulatory and sales milestones. Novavax (NVAX) beat estimates by a penny, while missing revenue by $1M. Halozyme Therapeutics (HALO) missed estimates by 2 cents and revenue by $2.8M. BioScrip (BIOS) beat estimates by 3 cents and revenue by $24M. Cooper Companies (COO) beat estimates by 8 cents and revenue by $9M. The company raised its current-year earnings forecast, now expecting to earn between $4.90 – $5.15 per share. Complete Genomics (GNOM) reported a Q4 loss of $0.67 per share on revenue of $2.5M (versus estimates of $0.65 on revenues of $3.15M). Obagi Medical Products (OMPI) beat estimates by 8 cents with revenue in-line with estimates. Emergent Biosolutions (EBS) beat estimates by 6 cents, while missing revenue by $1M. Zogenix (ZGNX) reported Q4 EPS of -$0.36 (in-line), while missing revenue by $2.1M. WuXi PharmaTech (WX) beat estimates by 5 cents and revenue by $2M. DepoMed (DEPO) beat estimates by 6 cents and revenue by $1.2M. Alimera Sciences (ALIM) beat estimates by 5 cents. Healthcare Services (AHS) beat estimates by a penny with revenue in-line with estimates. Johnson & Johnson (JNJ) is named a Hold at Jefferies. Nobel Biocare (NBHGF) gets upgraded at Goldman Sachs, which adds the name to its Conviction Buy list from a previous rating of Neutral. Medicis (MRX) is moved to Buy from Neutral at Goldman. Cigna (CI) is upgraded to Positive from Neutral at Susquehanna. Volcano Corp (VOLC) is moved to Buy from Neutral at Goldman. Dublin’s Warner Chilcott (WCRX) and London’s Smith & Nephew (SNN) are each now Neutral from Buy at Goldman. Medtronic (MDT) gets moved to Sell from Hold at Argus.
The Health Care Select Sector SPDR (XLV) was trading at $36.47 at 4:00 PM on Friday, up 0.41% on the day – up 5.13% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (PPHM) -22.75%, (ZGNX) -16%, (ASTM) +21%, (BSPM) +20.5%, (ZLTQ) +17.5%.
Financials
The daily cycle shifted to positive. Bank of America (BAC) has reportedly struck a side deal with the government over foreclosures which will allow the bank to reduce its penalties in exchange for bigger reductions of mortgage balances. Deutsche Bank (DB) tapped the ECB’s lending program last week for €5B-10B, sources say. THL Credit (TCRD) reported Q4 EPS of $0.30 (in-line). American Express (AXP) is a new Neutral at Piper Jaffray. JPMorgan Chase (JPM) gets begun with a Buy recommendation and $50 price objective at Guggenheim. Campus Crest Communities (CCG) is begun with an Equal Weight at Barclays. AvalonBay (AVB) is raised to Top Pick from Outperform at RBC Capital. GFI Group (GFIG) is upgraded to Outperform from Market Perform at Keefe Bruyette. XL Capital (XL) is upgraded to Outperform from Market Perform at JMP Securities.
The Select Sector SPDR (XLF) was trading at $14.89 at 4:00 PM on Friday, up 0.81% on the day – up 14.54% year-to-date. The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.
Big Mover: (ABKFQ) -10.75%.
Information Technology
The daily cycle shifted to positive. Texas Instruments (TXN) used its mid-quarter update to guide for Q1 revenue of $2.99B-3.11B ($3.02B-$3.28B prior) and EPS of $0.15-$0.19 ($0.16-$0.24 prior). Altera (ALTR) guided on its mid-quarter update for Q1 revenue to fall 7%-9% Q/Q. Prior guidance was for a 5%-9% drop. Comtech Telecommunications (CMTL) beat estimates by 6 cents and revenue by $6M. Cavium Networks (CAVM) is hoisted to Buy from Hold at Jefferies.
The Technology Select Sector SPDR (XLK) was trading at $29.18 at 4:00 PM on Friday, up 0.45% on the day – up 14.66% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.
Big Mover: (QSFT) +24%.
Telecommunication Services
The daily cycle shifted to positive. The FCC has requested more info about the marketing agreements proposed in airwaves deals between Verizon Wireless (VZ), (VOD) and several cable operators following competition complaints from rivals and public interest groups. China Mobile (CHL) is moved to Buy from Neutral at Goldman.
The NASDAQ Telecommunications Index (IXTC) was trading at $212.10 at 4:00 PM on Friday, up 0.69% on the day – up 7.70% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.
Big Mover: (TSTRQ) +12.5%.
Heavily Traded: (S) +8%, (CLWR) -3.2%, (T) +0.4%, (FTR) +0.9%, (AMTL) -1.4%, (VZ) -0.5%.
Utilities
The daily cycle shifted to positive. A court-appointed examiner said Dynegy (DYN) harmed creditors by fraudulently transferring some coal-powered plant assets to itself before putting a unit into bankruptcy, and urged that the transfer be reversed. Piedmont Natural Gas (PNY) missed estimates by 15 cents and revenue by $213M. Ferrellgas Partners (FGP) reported FQ2 EPS of $0.47 (versus consensus of $0.82) with revenue in-line with estimates.
The Utilities Select Sector SPDR (XLU) was trading at $35.17 at 4:00 PM on Friday, up 0.40% on the day – down 2.25% year-to-date. The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
Big Mover: (DYN) -40.5%.
Heavily Traded: (GEN) +1.6%, (EXC) +0.9%, (DUK) flat, (CPN) +3.4%.
STOCKS: HEK, ALJ, CLD, STO, ACI, E, ESV, DVR, DNN, MCP, NEMFF, KMGB, TPCG, GGC, ZEP, REE, UPS, LMIA, DM, FSIN, POWR, ERII, PLL, SBUX, GMCR, CCL, ANN, CAAS, HIBB, CTRN, ULTA, ARO, SWHC, THO, ZQK, BODY, ZUMZ, HLF, WTW, NLS, DKS, KSS, MTH, RYL, WSM, WMT, JVA, SBMRY, BSX, NVAX, HALO, BIOS, COO, GNOM, OMPI, EBS, ZGNX, WX, DEPO, ALIM, AHS, JNJ, NBHGF, MRX, CI, VOLC, WCRX, SNN, MDT, PPHM, ASTM, BSPM, ZLTQ, BAC, DB, TCRD, AXP, JPM, CCG, AVB, GFIG, XL, ABKFQ, TXN, ALTR, CMTL, CAVM, QSFT, VZ, VOD, CHL, TSTRQ, S, CLWR, T, FTR, AMTL, DYN, PNY, FGP, GEN, EXC, DUK, CPN
