Equities Sector Coverage: Strong Jobs Numbers Push Wall Street Higher

Sector Recap |

Strong Jobs Numbers Push Wall Street HigherNonfarm Payrolls rose by a statistically skewed 243,000 and with the Unemployment Rate down to 8.3%. Factory Orders rise by 1.1% in December. Nonmanufacturing ISM rose to 56.8 in January. The Dow Jones Industrial Average traded to a day’s high at 12,869.95 versus its May 2nd 2011 high at 12,876.00. The NASDAQ traded as high as 2908.13 above its May 2nd 2011 high at 2887.75. The S&P 500, Dow Transports and Russell 2000 lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.

Asian stocks were mixed on Friday with the Nikkei 225 ending their session 8,832 – down 0.51% on the day. The Hang Seng closed at 20,757 – up 0.08% on the day. European stocks were flat before the payroll data was released in the US then popped higher. The FTSE 100 ended their session at 5,901 – up 1.81% on the day; the DAX ended their session at 6,767 – up 1.67% on the day; and the CAC 40 ended their session at 3,428 – up 1.52% on the day. The yield on the 10-Year US Treasury rose from 1.807 percent to its 50-day simple moving average at 1.951.

Gold traded up to another year to date high at $1765.9 the Troy ounce then declined to $1727.4 into the final half hour of trading. Crude oil rebounded from $96.01 per barrel to $98.03 versus 50-day and 200-day simple moving averages at $99.13 and $94.95. The euro versus the dollar traded down from 1.3193 to 1.3070.

Energy

Spectra Energy (SEP) missed estimates by a penny and revenue by $1.5M. Credit Suisse assigns Outperforms on Apache (APA) and Noble Energy (NBL). National Oilwell Varco (NOV) is moved to Overweight from Equal Weight at Morgan Stanley. Southern Union (SUG) and El Paso (EP) are each now Neutral from Buy at Citigroup. In afternoon trading: Shares of Treaty Energy (TECO) are up about 14.5%.

Energy Select Sector SPDR (XLE) was trading at $72.77 at 4:00 PM on Friday, up 1.76% on the day – up 5.27% year-to-date. The January change was +2.26%. The 2011 change was -1.29%.

Materials

Eastman Chemical (EMN) is lifted 180 degree, to Buy from Sell at Goldman. International Paper (IP) is cut to Sector Perform from Outperform at RBC Capital with a target of $34. In afternoon trading: Shares of STR Holdings (STRI) are down about 21%. Shares of Mechel OAO (MTL) are up about 10%.

The Materials Select Sector SPDR (XLB) was trading at $37.88 at 4:00 PM on Friday, up 1.36% on the day – up 13.07% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Industrials

Con-Way (CNW) missed estimates by 10 cents with revenue in-line with estimates. Tetra Tech (TTEK) is taken to Outperform from Neutral at Robert Baird with a target of $30. kforce.com, Inc (KFRC) is moved to Hold from Buy at Deutsche Bank. In afternoon trading: Shares of Meritor (MTOR) are up about 13%. Shares of SatCon Technology (SATC) are up about 13%. Shares of American Superconductor (AMSC) are up about 11.25%.

The Industrial Select Sector SPDR (XLI) was trading at $37.26 at 4:00 PM on Friday, up 1.72% on the day – up 10.40% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Consumer Discretionary

Panasonic (PC) has reported a ¥197.6B ($2.6B) net loss for FQ3 and now expects its full year results to be its worst ever at a projected loss of ¥780B. Having only recently reinstated its dividend, Ford (F) could increase its payout to shareholders in the next year or two. Political headwinds are building up against a marketing alliance between Verizon Wireless (VZ) and Comcast (CMCSA), as worries grow that such cooperation could restrict competition and lead to higher prices. bebe stores (BEBE) beat estimates by a penny and revenue by $6M. Wynn Resorts’ (WYNN) Q4 beats on a per share basis but comes up just shy on revenue. JP Morgan establishes a fresh Overweight on Family Dollar (FDO) and has a new Neutral on Dollar General (DG). Peet’s Coffee & Tea (PEET) gets an Outperform-from-Neutral boost at Robert W. Baird with a new price objective of $76. Urban Outfitters (URBN) is upgraded to Buy frm Neutral at Janney Montgomery Scott with a $31 target price. Liberty Media (LINTA) is lifted to Overweight from Equal Weight at Morgan Stanley. Advance Auto Parts (AAP) is raised to Neutral from Underweight at JP Morgan. RadioShack (RSH) is reduced to Equal Weight from Overweight at Morgan Stanley. CarMax (KMX) is cut to Sector Perform from Outperform at RBC Capital. Cablevision (CVC) is moved to Underweight from Neutral at JP Morgan. Wynn Resorts (WYNN) is lowered to Neutral from Buy at Lazard.  In afternoon trading: Shares of Bon Ton (BONT) are up about 14%. Shares of KB Home (KBH) are up about 14%. Shares of Sony (SNE) are up about 12.5%. Shares of MDC Holdings (MDC) are u pabout 11.5%.Shares of Tenneco (TEN) are up about 11%. Shares of Beazer Homes (BZH) are up about 10.75%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.26 at 4:00 PM on Friday, down 2.05% on the day – up 8.30% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Consumer Staples

Estee Lauder (EL) reported FQ2 EPS of $1.01 in-line, while missing revenue by $10M. Tyson Foods (TSN) beat estimates by 8 cents and revenue by $30M. Unilever NV (UN) is now Hold from Buy at Société Générale. In afternoon trading: Shares of China-Biotics (CHBT) are up about 10.5%. Shares of Ruddick (RDK) are up about 8%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.48 at 4:00 PM on Friday, up 0.31% on the day – down 0.03% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.



Health Care

Gilead Sciences’ (GILD) beat on revenue but missed on a per share basis due to higher R&D and SG&A expenses. PerkinElmer (PKI) beat estimates by 11 cents and revenue by $17M. Vertex Pharmaceuticals (VRTX) beat estimates by 10 cents and revenue by $45M. Regeneron Pharmaceuticals (REGN) is a new Buy at ThinkEquity. Alexion Pharmaceuticals (ALXN) gets added to the Conviction Buy List at Goldman Sachs. Merck (MRK) is lowered to Neutral from Buy at Davenport. Aetna (AET) is removed from Goldman’s list of Conviction Buys. Vertex Pharmaceuticals (VRTX) gets downgraded by both Goldman (Neutral from Buy) and Cowen (Neutral from Outperform). In afternoon trading: Shares of MannKind (MNKD) are down about 13%. Shares of Idenix Pharmaceuticals (IDIX) are down about 12%. Shares of Edwards Lifesciences (EW) are down about 11%. Shares of Gilead Sciences (GILD) are up about 10.75%.

The Health Care Select Sector SPDR (XLV) was trading at $36.22 at 4:00 PM on Friday, up 0.58% on the day – up 4.41% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Financials

Blackstone (BX) is considering a leveraged buyout of Brocade Communications Systems (BRCD), a developer of switches for data-storage networks. Bank of America (BAC) has won a dismissal in a lawsuit filed by Allstate (ALL) over losses incurred from mortgage-backed securities purchased from BofA-acquired Countrywide Financial. Switzerland is investigating a dozen U.S., European and Japanese banks suspected of conspiring to manipulate interbank lending rates. [Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), HSBC (HBC), JPMorgan (JPM), UBS (UBS) and RBS (RBS)]. Swiss financial regulators have started formal administrative enforcement proceedings against UBS (UBS) for oversight gaps that enabled an employee to make unauthorized trades last year that resulted in $2.3B in losses. Genworth Financial (GNW) beat estimates by 20 cents with revenue in-line with estimates. Simon Property Group (SPG) reported Q4 FFO of $1.91 (in-line) and revenue of $1.17B (in-line). Weyerhaeuser (WY) beat estimates by 7 cents and revenue by $10M. Cantor Fitzgerald resumes Sell rated coverage on Extra Space Storage (EXR) and Public Storage (PSA). It has a Hold on Sovran Self Storage (SSS) and begins a Buy on CubeSmart (CUBE). BB&T Corp (BBT) is raised to Equal Weight from Underweight by Barclays. Banco Bilbao Vizcaya (BBVA) is slashed to Sell from Neutral at UBS. Banco Santander (SAN) is now Underweight from Neutral at JP Morgan. In afternoon trading: Shares of Genworth Financial (GNW) are up about 13.5%. Shares of Radian Group (RDN) are up about 10.25%.

The Financial Select Sector SPDR (XLF) was trading at $14.735 at 4:00 PM on Friday, up 2.68% on the day – up 13.35% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

TranSwitch (TXCC) missed estimates by 3 cents and revenue by $0.3M. TeleCommunication Systems (TSYS) beat estimates by a penny with revenue in-line with the estimates. Digital River (DRIV) Q4 expects Q1 revenue of $99M-$101M and EPS of $0.27-$0.30 (below a consensus of $104.4M and $0.33). The company is guiding for 2012 revenue of $402M-$409M and EPS of $1.20-$1.28 (the former is below a $420.1M consensus, but the latter is mostly above a Street forecast of $1.21). Atmel (ATML) warns it expects Q4 revenue of $384M, down 20% Q/Q and well below a $412.1M consensus. Extreme Networks (EXTR) missed estimates by a penny and revenue by $0.8M. Fiserv (FISV) reported Q4 EPS of $1.27 (in-line), while beating revenue by $30M. Take-Two Interactive (TTWO) expects FQ4 revenue of $112M-$162M and EPS of -$0.65 to -$0.50 (well below a consensus of $185M and -$0.11). Novellus Systems (NVLS) beat estimates by 26 cents and revenue by $5M. Infinera (INFN) is moved to Neutral from Underweight at JP Morgan. Research In Motion (RIMM) gets downgraded to Underperform from Hold at Jefferies. OpenTable (OPEN) is reduced to Hold from Buy at ThinkEquity. Acme Packet (APKT) is now Underperform from Neutral at Mizuho with an objective of $18. Brocade (BRCD) gets taken to Market Perform from Outperform at JMP Securities. In afternoon trading: Shares of Motricity (MOTR) are up about 32.25%. Shares of Tudou Holdings (TUDO) are up about 26.5%. Shares of THQ Inc. (THQI) are down about 27.25%.

The Technology Select Sector SPDR (XLK) was trading at $27.715 at 4:00 PM on Friday, up 1.26% on the day – up 8.90% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Telecommunication Services

Political headwinds are building up against a marketing alliance between Verizon Wireless (VZ) and Comcast (CMCSA), as worries grow that such cooperation could restrict competition and lead to higher prices. In afternoon trading: Heavily Traded Stocks: Shares of Sprint Nextel (S) are up about 4%, while shares of AT&T (T) are up about 0.3% and shares of Verizon (VZ) are up about 0.6%. Shares of Frontier Communications (FTR) are up about 3.5%.

The NASDAQ Telecommunications Index (IXTC) was trading at $216.98 at 4:00 PM on Friday, up 1.83% on the day – up 10.18% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Utilities

National Fuel Gas (NFG) missed estimates by 8 cents and revenue by $55M. In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are up about 1.9%. Shares of Duke Energy (DUK) are relatively unchanged. Shares of CenterPoint Energy (CNP) are up about 1.5%. Shares of PPL Corp (PPL) are down about 0.3%.

The Utilities Select Sector SPDR (XLU) was trading at $34.83 at 4:00 PM on Friday, up 0.26% on the day – down 3.20% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

STOCKS: SEP, APA, NBL, NOV, SUG, EP, TECO, EMN, IP, STRI, MTL, CNW, TTEK, KFRC, MTOR, SATC, AMSC, PC, F, VZ, CMCSA, BEBE, WYNN, FDO, DG, PEET, URBN, LINTA, AAP, RSH, KMX, CVC, BONT, KBH, SNE, MDC, TEN, BZH, EL, TSN, UN, CHBT, RDK, GILD, PKI, VRTX, REGN, ALXN, MRK, AET, VRTX, MNKD, IDIX, EW, BX, BRCD, BAC, ALL, C, CS, DB, HBC, JPM, UBS, RBS, GNW, SPG, WY, EXR, PSA, SSS, CUBE, BBT, BBVA, SAN, RDN, TXCC, TSYS, DRIV, ATML, EXTR, FISV, TTWO, NVLS, INFN, RIMM, OPEN, APKT, BRCD, MOTR, TUDO, THQI, VZ, CMCSA, S, T, VZ, FTR, NFG, GEN, DUK, CNP, PPL

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
BX The Blackstone Group L.P. Representing Limited Par 34.35 -0.07 -0.20 3,140,172 Trade
GEN Genesis Healthcare Inc. 1.48 0.04 2.78 183,253 Trade
TSN Tyson Foods Inc. 61.61 -0.27 -0.44 1,222,579 Trade
FTR Frontier Communications Corporation 14.56 -0.29 -1.95 1,775,549 Trade
EXTR Extreme Networks Inc. 9.52 -0.03 -0.31 740,139 Trade
BRCD Brocade Communications Systems Inc. 12.63 0.00 0.00 4,391,566 Trade
AMSC American Superconductor Corporation 3.57 -0.03 -0.83 364,129 Trade
BBVA Banco Bilbao Vizcaya Argentaria S.A. 8.82 0.14 1.61 4,224,007 Trade
ALXN Alexion Pharmaceuticals Inc. 130.74 -1.05 -0.80 1,749,521 Trade
SAN Banco Santander SA ADR 6.71 0.10 1.51 6,944,045 Trade
SSS Sovran Self Storage Inc. n/a n/a n/a 0
GNW Genworth Financial Inc 3.42 -0.08 -2.29 3,058,367 Trade
FISV Fiserv Inc. 126.48 -0.23 -0.18 767,560 Trade
KBH KB Home 23.40 0.10 0.43 1,567,281 Trade
IP International Paper Company 56.75 0.11 0.19 1,233,027 Trade
EW Edwards Lifesciences Corporation 117.14 -0.87 -0.74 1,337,378 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.17 0.02 0.07 2,890,028 Trade
MBI MBIA Inc. 10.33 -0.10 -0.96 1,459,395 Trade
NOV National Oilwell Varco Inc. 33.18 -0.27 -0.81 2,067,376 Trade
CVC Cablevision Systems Corp. n/a n/a n/a 0 Trade
EL Estee Lauder Companies Inc. (The) 97.75 -0.20 -0.20 858,997 Trade
BONT The Bon-Ton Stores Inc. 0.65 -0.15 -18.73 1,177,654 Trade
C Citigroup Inc. 66.10 0.10 0.15 14,847,896 Trade
S Sprint Corporation 8.54 0.01 0.12 8,147,984 Trade
PPL PPL Corp 38.40 -0.15 -0.39 3,767,786 Trade
SPG Simon Property Group Inc. 160.04 -0.54 -0.34 1,221,284 Trade
RDN Radian Group Inc. 17.39 -0.15 -0.86 1,592,926 Trade
GILD Gilead Sciences Inc. 74.39 0.63 0.85 8,942,887 Trade
BZH Beazer Homes USA Inc. 13.37 0.04 0.30 219,230 Trade
INFN Infinera Corporation 12.21 -0.12 -0.97 1,654,875 Trade
JPM JP Morgan Chase 91.28 0.39 0.43 10,724,716 Trade
MTOR Meritor Inc. 17.89 0.11 0.62 438,851 Trade
NVLS Nivalis Therapeutics Inc. 2.40 0.05 2.13 25,377 Trade
MTL Mechel PAO American Depositary Shares (Each rep. 1 4.88 -0.08 -1.61 119,804 Trade
DB Deutsche Bank AG 18.67 0.45 2.47 3,435,879 Trade
WY Weyerhaeuser Company 34.13 -0.30 -0.87 2,798,449 Trade
TEN Tenneco Inc. 57.84 -0.02 -0.03 374,756 Trade
UN Unilever NV 57.61 -0.51 -0.88 1,397,097 Trade
VZ Verizon Communications Inc. 43.71 -0.52 -1.18 11,894,585 Trade
BBT BB&T Corporation 46.59 0.31 0.67 4,245,317 Trade
BAC Bank of America Corporation 23.91 0.11 0.46 51,368,722 Trade
DG Dollar General Corporation 71.98 -0.22 -0.30 2,108,622 Trade
RBS Royal Bank of Scotland Group Plc New (The) ADS 6.51 0.02 0.31 841,524 Trade
SEP Spectra Energy Partners LP representing Limited Pa 45.12 0.21 0.47 185,185 Trade
AET Aetna Inc. 156.08 -0.23 -0.15 1,288,572 Trade
PSA Public Storage 209.00 0.06 0.03 643,574 Trade
EMN Eastman Chemical Company 85.80 0.15 0.18 526,949 Trade
ATML Atmel Corp n/a n/a n/a 0 Trade
MDC M.D.C. Holdings Inc. 35.67 0.06 0.17 357,218 Trade
APA Apache Corporation 47.96 -0.45 -0.93 2,620,066 Trade
BEBE bebe stores inc. 5.91 0.11 1.81 3,200 Trade
TTEK Tetra Tech Inc. 46.85 0.00 0.00 146,387 Trade
UBS UBS Group AG Registered 18.06 0.40 2.27 1,838,559 Trade
URBN Urban Outfitters Inc. 17.47 -0.48 -2.67 2,729,917 Trade
CNW Con-way Inc. n/a n/a n/a 0 Trade
ALL Allstate Corporation (The) 89.77 0.61 0.68 1,222,579 Trade
F Ford Motor Company 11.29 -0.24 -2.08 48,113,524 Trade
KFRC Kforce Inc. 19.00 -0.35 -1.81 97,355 Trade
EXR Extra Space Storage Inc 78.64 -0.33 -0.42 883,986 Trade
MRK Merck & Company Inc. (new) 62.57 -0.06 -0.10 7,783,339 Trade
NBL Noble Energy Inc. 28.18 -0.20 -0.70 2,278,626 Trade
NFG National Fuel Gas Company 58.80 -0.05 -0.08 393,565 Trade
TTWO Take-Two Interactive Software Inc. 79.67 0.42 0.53 1,417,328 Trade
REGN Regeneron Pharmaceuticals Inc. 521.22 5.30 1.03 474,355 Trade
SNE Sony Corporation 40.61 -0.20 -0.49 766,393 Trade
KMX CarMax Inc 65.70 -0.39 -0.59 1,528,416 Trade
T AT&T Inc. 36.23 -0.28 -0.77 22,403,192 Trade
DUK Duke Energy Corporation (Holding Company) 84.55 -0.65 -0.76 2,541,732 Trade
PKI PerkinElmer Inc. 69.37 -0.15 -0.22 348,629 Trade
VRTX Vertex Pharmaceuticals Incorporated 166.11 2.94 1.80 2,444,471 Trade
CUBE CubeSmart 24.04 -0.08 -0.33 962,787 Trade
MNKD MannKind Corporation 1.25 -0.05 -3.85 1,715,323 Trade
AAP Advance Auto Parts Inc W/I 103.17 -2.10 -1.99 1,413,681 Trade
CMCSA Comcast Corporation Class A Common Stock 39.47 -0.16 -0.40 11,227,430 Trade
TSYS TeleCommunication Systems Inc. n/a n/a n/a 0 Trade

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