Equities Sector Coverage: U.S. Employment Improves, Overshadowed By Europe

Sector Recap |

Help WantedInitial Jobless Claims declined to 388,000 last week, but remains well above the 350,000 recessionary threshold. Housing Starts fell 0.3% to an annual rate of 628,000 in October with Permits at 653,000. As a sign of stability in the housing market single-family starts rose by 3.9% to 430,000 unit rate. The Philly Fed Manufacturing Index fell to 3.6 in November versus 8.7 in October. The Dow Jones Industrial Average traded down from 11,913.01 to 11,833.54 then up to 11,948.43, which was below its 200-day simple moving average at 11,976. Afternoon weakness saw the Dow as low as 11,676.35. The NASDAQ traded down from 2637.56 to 2613.86 Thursday morning below its 200-day at 2687. The NASDAQ slipped to a day’s low at 2576.22 in afternoon trading.

Asian stocks were mixed on Thursday with the Nikkei 225 up 0.19% to 8,480 and the Hang Seng down 0.76% to 18,817. European stocks traded lower as a Spanish bond auction came close to a 7 percent yield. The FTSE 100 declined 1.61% to 5,420 with the DAX losing 1.07% to 5,850 and the CAC 40 slumping by 1.78% to 3,010. The yield on the US Treasury 10-Year note traded down from 2.014 percent to 1.962 then up to 2.040 holding its 50-day simple moving average at 2.042. This yield declined to 1.938 in afternoon trading. Gold traded down from $1768.0 the Troy ounce to $1711.0. Crude oil traded down from $103.37 per barrel to $98.28, as strength above $100 proved to be tough to sustain. The euro versus the dollar traded between 1.3425 and 1.3538 staying below its 50-day simple moving average at 1.3678.

Energy

Helmerich & Payne (HP) beat estimates by 6 cents and revenue by $26M. Enbridge (ENB) gets a Buy-from-Hold boost at TD Newcrest. Western Refining (WNR) is downgraded to Hold from Buy at Deutsche Bank. Marathon Petroleum (MPC) is pulled from Morgan Stanley’ Best Ideas list. In afternoon trading: Shares of Treaty Energy (TECO) are down about 11%. Shares of Western Refining are down about 8.5%. Shares of Patriot Coal (PCX) are down about 7.5%. Shares of Magnum Hunter (MHR) are down about 7.5%. Shares of ATP Oil & Gas (APTG) are UP about 7.5%.

Energy Select Sector SPDR (XLE) was trading at $68.56 at 4:00 PM on Thursday, down 2.28% on the day – up 0.45% year-to-date.

Materials

In afternoon trading: Shares of Ternium SA (TX) are down about 16%. Shares of CF Industries (CF) are down about 10%. Shares of Mechel OAO (MTL) are down about 10%. Shares of Stillwater Mining (SWC) are down about 7%. Shares of Endeavour Silver (EXK) are down about 7%. Shares of Silver Standard Resources (SSRI) are down about 6.5%. Shares of New Gold (NGD) are down about 6.5%.

The Materials Select Sector SPDR (XLB) was trading at $33.08 at 4:00 PM on Thursday, down 2.85% on the day – down 13.88% year-to-date.

Industrials

GE (GE) plans to invest $1B in software development over the next three years as it seeks to make its industrial equipment more productive. In afternoon trading: Shares of ACCO Brands (ABD) are up about 21.5%. Shares of Meritor (MTOR) are down about 7.5%. Shares of Tata Motors (TTM) are down about 7.5%. Shares of DryShips (DRYS) are down about 7.25%. Shares of AMR Corp. (AMR) are down about 6.5%.

The Industrial Select Sector SPDR (XLI) was trading at $32.84 at 4:00 PM on Thursday, down 1.74% on the day – down 5.82% year-to-date.

Consumer Discretionary

After pricing its IPO at $22, Delphi Automotive (DLPH) failed to gain traction. The company's stock opened at $21.25 a share on the New York Stock Exchange (-3.4%). Dollar Tree Stores (DLTR) beat estimates by 4 cents with revenue in-line with estimates. Sears (SHLD) missed estimates by 33 cents with revenue in-line with estimates. Williams-Sonoma (WSM) beat estimates by 3 cents and revenue by $11M. Limited Brands (LTD) beat estimates by a penny and revenue by $10M. Xueda Education (XUE) reported Q3 revenue of $51.5M and EPS of -$0.07 (the former beat by $0.6M, while the latter was in-line). Target's (TGT) expects Q4 EPS to fall in a range of $1.43-$1.53. HSBC Securities rolls out Neutral rated coverage on Royal Caribbean (RCL) - $30 target price, Carnival Corp (CCL) - $34 target price, and Intercontinental Hotels Group (IHG). Volkswagen AG (VLKAY) gets reinstated with an Outperform at Credit Suisse. Lululemon Athletica (LULU) is lifted to Buy from Hold with a $64 target at Stifel Nicolaus. Abercrombie & Fitch (ANF) is downgraded to Hold from Buy at ISI Group. Guess (GES) is moved to Underperform from Neutral by Bank of America-Merrill Lynch. Daimler AG (DDAIF) is lowered to Neutral from Outperform at Credit Suisse. Sally Beauty (SBH) is cut to Equal Weight from Overweight by Barclays. In afternoon trading: Shares of Perry Ellis (PERY) are down about 35%. Shares of OfficeMax (OMX) are down about 10%. Shares of Children’s Place (PLCE) are up about 15%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.90 at 4:00 PM on Thursday, down 1.76% on the day – up 1.31% year-to-date.

Consumer Staples

Imperial Tobacco (ITYBY) is now Reduce from Buy at Nomura. The Fresh Market (TFM) is moved to Neutral from Overweight at Piper Jaffray. In afternoon trading: Actives: Shares of Green Mountain Coffee Roasters (GMCR) are down about 1%. Shares of Pepsico (PEP) are down about 1.9%. Shares of Wal-Mart (WMT) are down about 0.3%. Shares of Altria Group (MO) are up slightly. Shares of Walgreens (WAG) are up slightly. Shares of CVS Caremark (CVS) are down about 0.4%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $30.97 at 4:00 PM on Thursday, down 0.35% on the day – up 5.66% year-to-date.

Healthcare

An FDA advisory panel has backed extending to the over-50s the use of Pfizer's (PFE) Prevnar 13 vaccine for helping to prevent pneumonia. Zeltiq Aesthetics (ZLTQ) reported Q3 revenue of $17.7M and GAAP EPS of -$3.17. Nxstage Medical (NXTM) is picked up at Overweight by Piper Jaffray. Cadence Pharmaceuticals (CADX) is upgraded to Perform from Underperform at Oppenheimer. In afternoon trading: Shares of Zoll Medical (ZOLL) are up about 22.5%. Shares of Dendreon (DNDN) are up about 7.25%. Shares of SXC Health Solutions (SXCI) are up about 7%.

The Health Care Select Sector SPDR (XLV) was trading at $32.92at 4:00 PM on Thursday, down 1.05% on the day – up 4.51% year-to-date.

Financials

Federal prosecutors have issued subpoenas for MF Global (MFGLQ) records, as the Justice Department intensifies its criminal investigation into the firm's collapse. Progressive (PGR) is a new Outperform at Sanford Bernstein. Bank of New York Mellon (BK) is downgraded to Neutral from Buy at SunTrust. Eaton Vance (EV) is now Neutral from Buy at Sterne Agee. State Street (STT) gets a Neutral-from-Buy recommendation reduction at Suntrust. Toronto-Dominion Bank (TD) is lowerd to Market Perform from Outperform. In afternoon trading: Shares of Washington Mutual (WAMUQ) are up about 28%.

The Financial Select Sector SPDR (XLF) was trading at $12.46 at 4:00 PM on Thursday, down 1.97% on the day – down 21.88% year-to-date.

Information Technology

Applied Materials' (AMAT) beat estimates by a penny and revenue by $30M. The company expects FQ1 EPS of $0.08-$0.16 (below $0.18 consensus) and revenue is expected to decline 5%-15% Q/Q (versus consensus of a 5.6% drop). Angie's List (ANGI) debuted at $18.01 (39% above its $13 offering price). As expected, Google (GOOG) has launched a music service which allows users to store and stream up to 20,000 songs in the cloud. It features deep Google+ and Android integration, and contains an iTunes (AAPL) Match-like ability to stream songs users own without them having to upload them. Apple has commissioned an audit of the environmental practices of its suppliers in China after critical reports by activists. Qihoo 360 (QIHU) reported Q3 revenue $47.5M and EPS of $0.15 (blowing past Street estimates by $5.4M and $0.05). The company is guiding for Q4 revenue of $55M-$56M (well above a consensus of $46.5M). Youku.com (YOKU) missed estimates by 2 cents, while beating revenue by $1M. The company expects Q4 revenue to be up 90%-100% Y/Y (below consensus for 107.7% growth). NetApp (NTAP) beat estimates by 4 cents with revenue in-line with estimates. The company expects FQ3 revenue of $1.52B-$1.61B and EPS of $0.56-$0.60 (below a consensus of $1.64B and $0.63). TiVo Inc (TIVO) is a new Outperform at JMP Securities. Fairchild Semiconductor (FCS) is a new Buy and $18 price objective at Ticonderoga. Micron Technology (MU) is moved to Outperform from Perform at Oppenheimer, with an $8 objective. Infineon (IFNNY) is cut to Hold from Buy at Societe Generale and removed from Goldman’s Pan Europe Conviction Buy List. Rambus (RMBS) is reduced to Neutral from Overweight at JPMorgan. Marvell (MRVL) gets moved to Underperform from Market Perform at JMP Securities. NetApp (NTAP) is cut to Neutral from Buy at Collins Stewart with a new target of $40. In afternoon trading: Shares of Youku.com are down about 21%. Shares of NetApp are down about 12.5%. Shares of Rambus are up about 19%. Shares of Energy Conversion Devices (ENER) are up about 11.25%.

The Technology Select Sector SPDR (XLK) was trading at $25.42 at 4:00 PM on Thursday, down 1.93% on the day – up 0.91% year-to-date.

Telecommunications Services

Jefferies has a Hold and $33 price target on AT&T Inc (T), and assigns an identical rating on Leap Wireless (LEAP) - $10 target. It has Buys on Verizon (VZ) and MetroPCS (PCS), with respective price objectives of $45 and $12. Sprint Nextel (S) is started with an Underperform - $2.50 target. American Tower (AMT) is added to Goldman Sachs’ list of Conviction Buys. In afternoon trading: Shares of Leap Wireless are down about 8.25%. Shares of MetroPCS are down about 5.25%. Shares of Sprint Nextel are down about 3.75%, while shares of AT&T are down about 0.9% and shares of Verizon are down about a quarter of a percent.

The NASDAQ Telecommunications Index (IXTC) was trading at $202.30 at 4:00 PM on Thursday, down 1.43% on the day – down 10.24% year-to-date.

Utilities

In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 1%. Shares of AES Corp. (AES) are down about 2%. Shares of Exelon (EXC) are down about 1%. Shares of Southern Company (SO) are down about 0.4%. Shares of Genon Energy (GEN) are down slightly. Shares of FirstEnergy (FE) are down about 1.9%. Shares of CenterPoint Energy (CNP) are relatively unchanged.

The Utilities Select Sector SPDR (XLU) was trading at $34.40 at 4:00 PM on Thursday, down 0.52% on the day – up 9.76% year-to-date.

STOCKS: HP, ENB, WNR, MPC, TECO, PCX, MHR, APTG, TX, CF, MTL, SWC, EXK, SSRI, NGD, GE, ABD, MTOR, TTM, DRYS, AMR, DLPH, DLTR, SHLD, WSM, LTD, XUE, TGT, RCL, CCL, IHG, VLKAY, LULU, ANF, GES, DDAIF, SBH, PERY, OMX, PLCE, ITYBY, TFM, GMCR, PEP, WMT, MO, WAG, CVS, PFE, ZLTQ, NXTM, CADX, ZOLL, DNDN, SXCI, MFGLQ, PGR, BK, EV, STT, TD, WAMUQ, AMAT, ANGI, GOOG, AAPL, QIHU, YOKU, NTAP, TIVO, FCS, MU, IFNNY, RMBS, MRVL, NTAP, ENER, T, LEAP, VZ, PCS, S, AMT, DUK, AES, EXC, SO, GEN, FE, CNP

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
AAPL Apple Inc. 112.71 -1.91 -1.67 52,481,151
AES The AES Corporation 13.26 0.07 0.53 3,955,833
AMAT Applied Materials Inc. 29.66 -0.63 -2.08 13,971,788
AMT American Tower Corporation (REIT) 112.99 0.71 0.63 2,459,804
ANF Abercrombie & Fitch Company 16.72 -0.12 -0.71 2,355,780
ANGI Angie\'s List Inc. 10.25 -0.12 -1.16 240,976
BK Bank of New York Mellon Corporation (The) 40.20 -0.15 -0.37 5,712,275
CCL Carnival Corporation 47.26 0.42 0.90 8,279,882
CF CF Industries Holdings Inc. 22.63 -0.60 -2.58 6,960,761
CNP CenterPoint Energy Inc (Holding Co) 24.19 0.08 0.33 3,008,593
CVS CVS Health Corporation 90.60 0.03 0.03 3,865,273
DLPH Delphi Automotive plc 69.51 -0.72 -1.03 1,088,513
DLTR Dollar Tree Inc. 80.09 0.02 0.02 2,675,282
DRYS DryShips Inc. 0.48 0.00 0.50 1,360,400
DUK Duke Energy Corporation (Holding Company) 82.52 0.01 0.01 2,348,821
ENB Enbridge Inc 43.70 -0.29 -0.66 2,585,115
EV Eaton Vance Corporation 39.25 -0.33 -0.83 565,400
EXC Exelon Corporation 34.80 -0.42 -1.19 3,946,652
EXK Endeavour Silver Corporation (Canada) 5.23 -0.24 -4.39 2,168,025
FCS Fairchild Semiconductor International Inc. 19.86 0.00 0.00 0
FE FirstEnergy Corporation 34.49 -0.35 -1.00 4,010,237
GE General Electric Co 29.89 -0.15 -0.50 22,821,677
GEN Genesis Healthcare Inc. 2.72 -0.07 -2.51 154,075
GES Guess? Inc. 14.93 -0.05 -0.33 630,599
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GOOG Alphabet Inc. 786.90 -0.31 -0.04 1,411,937
HP Helmerich & Payne Inc. 57.59 -2.03 -3.40 1,504,970
IHG Intercontinental Hotels Group American Depositary 43.11 -0.11 -0.25 362,267
KMI.WS Kinder Morgan Inc. Warrants Expiring 2017 0.01 -0.00 -3.45 497,431
LULU lululemon athletica inc. 65.19 -0.54 -0.82 1,522,803
MHR Magnum Hunter Resources Corp n/a n/a n/a 0
MO Altria Group Inc. 63.87 -0.25 -0.39 4,428,499
MPC Marathon Petroleum Corporation 42.28 -0.41 -0.96 7,784,258
MRVL Marvell Technology Group Ltd. 13.01 0.05 0.39 5,331,995
MTL Mechel PAO American Depositary Shares (Each rep. 1 2.86 -0.01 -0.35 688,237
MTOR Meritor Inc. 10.80 -0.31 -2.79 546,754
MU Micron Technology Inc. 17.48 -0.11 -0.63 17,947,621
NGD New Gold Inc. 4.57 -0.15 -3.18 4,767,946
NTAP NetApp Inc. 35.66 -0.30 -0.83 2,481,797
NXTM NxStage Medical Inc. 24.78 -0.17 -0.68 269,510
PEP Pepsico Inc. 107.34 -0.48 -0.45 3,235,889
PERY Perry Ellis International Inc. 20.03 -0.06 -0.30 45,173
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
PGR Progressive Corporation (The) 31.15 -0.12 -0.38 3,035,370
PLCE Children\'s Place Inc. (The) 79.51 -0.17 -0.21 245,235
QIHU Qihoo 360 Technology Co. Ltd. American Depositary n/a n/a n/a 0
RMBS Rambus Inc. 12.54 -0.18 -1.42 548,467
S Sprint Corporation 6.64 0.02 0.30 8,699,931
SBH Sally Beauty 26.61 0.15 0.57 785,708
SHLD Sears Holdings Corporation 11.54 -0.17 -1.45 401,235
SO Southern Company (The) 53.53 0.05 0.09 4,282,665
SSRI Silver Standard Resources Inc. 12.69 -0.48 -3.64 1,689,309
SWC Stillwater Mining Company ($0.01 Par Value) 13.13 0.00 0.00 1,760,026
T AT&T Inc. 41.28 0.17 0.41 18,867,573
TD Toronto-Dominion Bank 44.15 -0.45 -1.01 922,112
TFM The Fresh Market Inc. n/a n/a n/a 0
TGT Target Corporation 68.77 0.21 0.31 3,541,859
TTM Tata Motors Ltd Limited 41.03 -0.70 -1.68 656,486
TX Ternium S.A. American Depositary Shares (each repr 19.58 0.06 0.31 236,332
VZ Verizon Communications Inc. 52.56 0.21 0.40 13,014,796
WMT Wal-Mart Stores Inc. 72.35 0.08 0.11 7,696,449
WNR Western Refining Inc. Inc. 27.52 -0.52 -1.85 3,123,860
WSM Williams-Sonoma Inc. (DE) 50.29 -0.17 -0.34 1,039,911
XUE Xueda Education Group ADR (Sponsored) n/a n/a n/a 0
YOKU Youku Tudou Inc ADR (Sponsored) n/a n/a n/a 0
ZLTQ ZELTIQ Aesthetics Inc. 40.24 0.31 0.78 508,005

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