Existing Home Sales declined 0.8% in June to an annual rate of 4.77 million units, which was below expectations. Inventory of unsold homes rose by 3.3% to 3.765 million, a 9.5 month supply. Distressed sales were 30% and the cancellation rate rose to 16% from 4% in May. The Dow Jones Industrial Average opened lower on Wednesday trading down to 12,547 then rebounded with an afternoon high just above 12,600. The NASDAQ opened lower trading down from 2840 to 2808 then consolidated that range in afternoon trading.
Asian stocks rallied on Wednesday with the Nikkei 225 up 1.2% to 10,006. The Hang Seng was up just 0.2% to 21,934. European stocks gained for the second consecutive day on Wednesday. The FTSE 100 gained 1.1% to 5,854. The DAX bounced 0.4% to 7,221. The CAC 40 picked up 1.6% to 3,755. The yield on the 10-Year US Treasury note rose from 2.889 to 2.942 on Wednesday. Gold traded down to $1581.1 the Troy ounce on Wednesday then rebounded to $1600.8. Crude oil declined from $99.02 per barrel to $96.64 then consolidated that trading range. The euro versus the U.S. dollar rebounded on Wednesday but stayed below its 50-day simple moving average at 1.4299.
CNOOC (CEO), China's biggest offshore oil and gas producer, has agreed to buy bankrupt OPTI Canada at a cost of $2.1B in a deal that adds to a number of Chinese investments in the Canadian oil-sands sector. ClearBridge Energy MLP Opportunity Fund (EMO) is a new Neutral and $22 target at brokerage Robert W. Baird. CNOOC Ltd (CEO) is now Neutral from Buy at Nomura. Hanwha SolarOne (HSOL) and Canadian Solar (CSIQ) are lowered to Hold from Buy at Canaccord Genuity. In afternoon trading: Shares of Uranerz Energy (URZ) are up about 11%.
Energy Select Sector SPDR (XLE) was trading at $77.80 at 4:00 PM on Wednesday, down 0.25% on the day – up 13.99% year-to-date.
Cleaning products giant Ecolab (ECL) could announce today that it is buying chemicals firm Nalco (NLC) for around $8B, including $3B in debt (valuing Nalco at $5B - 25% above market cap). Crown Holdings (CCK) beat estimates by 2 cents on revenue of $2.28B. Monsanto (MON) is added to the Conviction Buy List at Goldman Sachs. Agnico-Eagle Mines (AEM) is reduced to Sector Perform from Outperform at RBC Capital. In afternoon trading: Shares of Nalco are up nearly 24%, while shares of Ecolab are down about 7.75%.
The Materials Select Sector SPDR (XLB) traded at $39.66 at 4:00 PM on Wednesday, down slightly on the day – up 3.25% year-to-date.
American Airlines' (AMR) mega-order comes in even larger than the whisper numbers, with the company planning to buy 460 planes from Boeing (BA) and Airbus (EADSY). Lockheed Martin (LMT) is offering voluntary leaving packages to 6,500 U.S. employees as it looks to improve profitability and pricing. Textron (TXT) beat estimates by 5 cents on revenue of $2.7B, and sees FY'11 EPS of $1.00-1.15. AMR (AMR) missed estimates by 12 cents on revenue of $6.1B. United Technologies (UTX) reported EPS of $1.45 versus estimates of $1.41. Cintas (CTAS) beat estimates by 6 cents on revenue of $1.01B. CSX (CSX) beat estimates by 2 cents on revenue of $3.01B. United Rentals (URI) missed estimates by 3 cents on revenue of $524M. Raytheon (RTN) is raised to Buy from Hold at Jefferies. Cintas (CTAS) gets an Outperform-from-Market Perform boost by Barrington Research. A.O. Smith (AOS) gets raised to Overweight from Neutral at Piper Jaffray. Heartland Express (HTLD) gets moved to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of Textron are up about 11%. Shares of Cintas are up about 10.25%. Shares of Swisher Hygiene (SWSH) are up about 10.25%. Shares of YRC Worldwide (YRCW) are down about 10.5%.
The Industrial Select Sector SPDR (XLI) traded at $36.67 at 4:00 PM on Wednesday, up 0.19% on the day – up 5.16% year-to-date.
The U.K. parliament's Home Affairs select committee today accused News Corp. (NWS) of "deliberate attempts" to thwart investigations into phone hacking. Skullcandy (SKUL), a maker of designer headphones, is set to start trading at $20 after raising $188M, which was more than expected. Hanesbrands (HBI) beat estimates by a penny on revenue of $1.23B, and sees FY'11 EPS of $2.70-2.90 and revenue of $4.9-5B. Johnson Controls (JCI) beat estimates by 3 cents on revenue of $10.4B. Abercrombie & Fitch (ANF) is a fresh Outperform at Cowen. Deutsche Bank begins Buy rated coverage on both TAL Education (XRS) and Xueda Education (XUE). News Corp (NWS) is upgraded to Outperform from Neutral at Cowen & Company. Collective Brands (PSS) is taken to Buy from Neutral with a $19 price target at Ticonderoga. Chipotle Mexican Grill (CMG) is moved to Market Perform from Underperform with Wells Fargo. In afternoon trading: Shares of China MediaExpress (CCME) are down about 19%. Shares of Citi Trends (CTRN) are down about 16.75%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.46 at 4:00 PM on Wednesday, down 0.52% on the day – up 8.15% year-to-date.
Altria (MO) reported Q2 EPS of $0.53 (in-line) on revenue of $4B, and sees FY'11 EPS of $1.70-1.76. Winn-Dixie Stores (WINN) is upgraded to Buy from Hold at Jefferies with a new target of $10.50. Ahold NV (AHONY) is now Neutral from Buy at UBS. In afternoon trading: Shares of Winn-Dixie are up about 18% on over 3x average daily volume. Shares of Elizabeth Arden (RDEN) are up about 6% on over 3x average daily volume. Shares of Zhongpin (HOGS) are down about 7.25%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.54 at 4:00 PM on Wednesday, down 0.16% on the day – up 7.61% year-to-date.
Quest Diagnostics (DGX) reported Q2 EPS of $1.12 (in-line) on revenue of $1.9B. Intuitive Surgical (ISRG) beat estimates by 20 cents on revenue of $425.7M. Stryker (SYK) reported Q2 EPS of $0.90 (in-line) on revenue of $2.05B. Gen-Probe (GPRO) is boosted by both Piper Jaffray (Overweight from Neutral) and Robert Baird (Outperform from Neutral). Gen-Probe is also downgraded to Neutral from Accumulate at Madison Williams. Intuitive Surgical (ISRG) is now Neutral from Sell at Goldman. Express Scripts (ESRX) is now Neutral from Reduce at Citadel, which also moves Medco Health Solutions (MHS) to Neutral from Reduce. In afternoon trading: Shares of AMAG Pharmaceuticals (AMAG) are down about 14%.
The Health Care Select Sector SPDR (XLV) traded at $35.12 at 4:00 PM on Wednesday, down 0.34% on the day – up 11.49% year-to-date.
Rising property prices in major cities have attracted several banks and private-equity firms to Anglo Irish Bank's U.S. real-estate loan portfolio, which could pick up $7B-$8B in an upcoming auction. Goldman Sachs (GS), Deutsche Bank (DB) and Blackstone (BX) have tentatively teamed up to buy the portfolio, while a group including AIG (AIG) and BlackRock (BLK) are also interested. Host Hotels & Resorts, Inc. (HST) beat estimates by a penny on revenue of $1.29B. BlackRock (BLK) beat estimates by 11 cents on revenue of $2.35B. Knight Capital Group (KCG) missed estimates by 2 cents on revenue of $326M. PNC Financial Services (PNC) beat estimates by 20 cents on revenue of $3.6B. Fidelity National Information Services (FIS) beat estimates by a penny on revenue of $1.4B. Kohlberg Capital (KCAP) is covered with a Buy at Janney Montgomery Scott. Commerzbank AG (CRZBY) is lifted to Add from Neutral at WestLB. Duke Realty (DRE) is boosted to Buy from Hold at Deutsche Bank. KeyCorp (KEY) is upgraded to Outperform from Sector Perform at RBC Capital. Bank of America (BAC) is downgraded to Outperform from Buy at Credit Agricole. In afternoon trading: Shares of E*Trade (ETFC) are up about 15.5% after shareholder Citadel Group suggested that the online brokerage should hire a financial adviser and consider a sale. Shares of Piper Jaffray (PJC) are up about 15% as profit climbs 45%. Shares of Knight Capital are up about 9.5%.
The Financial Select Sector SPDR (XLF) traded at $15.00 at 4:00 PM on Wednesday, up 1.14% on the day – down 5.96% year-to-date.
Apple's (AAPL) FQ3 results slayed even the most bullish expectations as net profit soared to $7.31B from $3.25B a year earlier and revenues jumped 82% to $28.6B. Earnings were boosted by huge increases in sales of the iPad and iPhone, with China particularly strong, while an expansion of carriers also helped. Apple beat estimates by $1.95 on revenue of $28.5B. Intel's (INTC) Q2 earnings are due out after the bell, when it is expected to report that while revenues grew 19% from a year earlier to $12.8B, EPS remained stuck at $0.51. The pressure on Yahoo (YHOO) CEO Carol Bartz is likely to continue mounting after another disapointing earnings report. Although Q2 net profit rose 11% to $237M, helped by costs cuts, net revenue fell 5% to $1.1B. This was below analyst expectations and a sharp contrast to the 36% sales increase that Google (GOOG) enjoyed. Enthusiasm for even relatively small Internet companies continues apace, with Zillow (Z) due to debut today on Nasdaq after raising $70M in its IPO by selling 3.5M shares at $20 each. TE Connectivity (TEL) beat estimates by 7 cents on revenue of $3.7B. EMC (EMC) beat estimates by a penny on revenue of $4.85B. Altera (ALTR) beat estimates by a penny on revenue of $548M. Fortinet (FTNT) beat estimates by a penny on revenue of $103M. Infinera (INFN) reported Q2 non-GAAP EPS of -$0.11 (in-line), while beating revenue by $1.5M and reported non-GAAP gross margin of 41%, down from 48% in Q1 and 44% in Q2 2010. Riverbed (RVBD) reports FQ2 EPS of $0.21 (in-line), while revenue fell short of estimates by $2.6M. VMware (VMW) beat estimates by 4 cents on revenue of $921M. Ultimate Software (ULTI) is initiated with a Buy rating and $65 price objective at Kaufman Brothers. Taleo (TLEO) is reinstated with a Hold and $37 target price at Kaufman, which has a new Buy and $46 objective on NetSuite (N). Youku.com (YOKU) is picked up at Neutral at Susquehanna. JDS Uniphase (JDSU) is initiated with an Equal Weight at Morgan Stanley. Riverbed Technology (RVBD) is raised to Outperform from Neutral at Robert W. Baird with an objective of $40. Sanford Bernstein boosts LG Display (LPL) and AU Optronics (AUO) to Outperform from Market Perform. VMware (VMW) is upgraded to Neutral from Underperform at Credit Suisse. Hanwha SolarOne (HSOL) and Canadian Solar (CSIQ) are lowered to Hold from Buy at Canaccord Genuity. In afternoon trading: Shares of InterDigital (IDCC) are up about 30% on news that Google (GOOG) is interested in bidding on InterDigital. Shares of Riverbed are down about 22.75%. Shares of Fortinet are down about 21%.
The Technology Select Sector SPDR (XLK) traded at $26.37 at 4:00 PM on Wednesday, down 0.30% on the day – up 4.68% year-to-date.
SBA Communications (SBAC) is now Overweight from Equal Weight at Evercore Partners. In afternoon trading: Actives: Shares of Sprint Nextel (S) are down about 1.8%. Shares of AT&T (T) are down slightly. Shares of Level 3 (LVLT) are down about 0.4%. Shares of Verizon (VZ) are up about 1%. Shares of Frontier (FTR) are down about 0.7%. Shares of TerreStar (TSTRQ) are down about 9.5%. Shares of Centurylink (CTL) are down about a half of a percent.
The NASDAQ Telecommunications Index (IXTC) traded at $208.89 at 4:00 PM on Wednesday, down 0.59% on the day – down 7.31% year-to-date.
El Paso Electric (EE) is cut to Hold from Buy at Jefferies. In afternoon trading: Actives: Shares of Genon Energy (GEN) are down about 2%. Shares of Duke Energy (DUK) are up about 0.4%. Shares of CenterPoint Energy (CNP) are up about 2%. Shares of AES Corp (AES) are up about 0.3%. Shares of Exelon (EXC) are up about 0.7%. Shares of PPL Corp (PPL) are up about 0.4%. Shares of Southern (SO) are up slightly. Shares of NiSource (NI) are up about 1.4%. Shares of Calpine (CPN) are down about 0.8%.
The Utilities Select Sector SPDR (XLU) traded at $33.53 at 4:00 PM on Wednesday, up 0.60% on the day – up 6.99% year-to-date.
STOCKS: CEO, EMO, HSOL, CSIQ, URZ, ECL, NLC, CCK, MON, AEM, AMR, BA, EADSY, LMT, TXT, UTX, CTAS, CSX, URI, RTN, AOS, HTLD, SWSH, YRCW, NWS, SKUL, HBI, JCI, ANF, XRS, XUE, PSS, CMG, CCME, CTRN, MO, WINN, AHONY, RDEN, HOGS, DGX, ISRG, SYK, GPRO, ESRX, MHS, AMAG, GS, DB, BX, AIG, BLK, HST, KCG, PNC, FIS, KCAP, CRZBY, DRE, KEY, BAC, ETFC, PJC, AAPL, INTC, YHOO, GOOG, Z, TEL, EMC, ALTR, FTNT, INFN, RVBD, VMW, ULTI, TLEO, N, YOKU, JDSU, LPL, AUO, IDCC, SBAC, S, T, LVLT, VZ, FTR, TSTRQ, CTL, EE, GEN, DUK, CNP, AES, EXC, PPL, SO, NI, CPN
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