Equities Sector Coverage: Wall Street Closes Lower

Sector Recap |

Wall Street Closes LowerExisting Home Sales fell 0.9% in February to an annual rate of 4.59 million homes, weaker than expectations. The Dow Jones Industrial Average traded between 13,158.11 and 13,190.02 in the opening half hour then declined to a day’s low at 13,112.93. The NASDAQ’s traded between 3076.14 and 3084.23 in the opening half hour then declined to a day’s low at 3069.09 and rebounded to 3090.08 into the final hour of trading.

Asian stocks were lower on Wednesday on lingering concerns about the Chinese economy. The Nikkei 225 ended their session at 10,086 – down 0.55% on the day. The Hang Seng ended their session at 20,857 – down 0.15% on the day. European stocks were mixed on Wednesday. The FTSE 100 ended their session at 5,892 – up 0.01% on the day. The DAX ended their session at 7,071 – down 0.23% on the day. The CAC 40 ended their session at 3,527 – down 0.10% on the day. The yield on the 10-Year US Treasury declined from 2.383 percent to 2.283 staying above its 200-day simple moving average at 2.211.

Gold declined from $1660.0 the Troy ounce to $1646.3 then rebounded to $1661.9 staying below its 200-day simple moving averages at $1680.8 for fifth consecutive days. Crude oil declined from $106.86 per barrel to $106.06 then rebounded to $107.64. The euro versus the dollar declined from 1.3283 to 1.3183.

Energy

President Obama will tomorrow announce a fast-tracking of the approval of the southern half of TransCanada's (TRP) Keystone XL pipeline, CNN reports. Shell (RDS.A) has signed its first-ever production-sharing contract to explore, develop and produce shale gas in China. The deal adds to one that Total (TOT) is finalizing with Sinopec (SNP) as China looks to foreign firms for their technical and operational know-how to develop its huge reserves of the fuel. Linn Energy (LINE) CEO Mark Ellis expects the company "to do $1B to $2B transactions each year for the foreseeable future," as the oil and gas firm looks to continue its scorching growth. Baker Hughes (BHI) warns its pretax op profit will fall on a quarterly basis in Q1, with the N. American margin set to drop to 13.2%-14.2% from 18.7% in Q4, and that for its international ops to decline to 12.2%-13.2% from 15.6%. Precision Drilling (PDS) is a new Market Perform at Wells Fargo. Hercules Offshore (HERO) is moved to Perform from Underperform at FBR Capital.
Energy Select Sector SPDR (XLE) was trading at $73.13 at 4:00 PM on Wednesday, down 1.19% on the day – up 5.79% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.
Big Movers: (DHT) -13%.

Materials

EU regulators are taking a closer look at the proposed $90B tie-up between Glencore (GLCNF) and Xstrata (XSRAY) after receiving complaints that the deal might give the merged firm unfair power over zinc, nickel and coal. GSE Holdings (GSE) is picked up with an Outperform at Oppenheimer. U.S. Silica (SLCA) is initiated with a Buy at Dahlman Rose. Agrium (AGU) is upgraded to Outperform from Neutral at Macquarie. Royal Gold (RGLD) gets raised to Outperform from Perform at National Bank.
The Materials Select Sector SPDR (XLB) was trading at $37.12 at 4:00 PM on Wednesday, unchanged on the day – up 10.81% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.
Big Movers: (OMN) +19%.

Industrials

Cintas (CTAS) beat estimates by 6 cents with revenue in-line with estimates. Enpro Industries (NPO) is a new Buy at Capstone Investments. AeroVironment (AVAV) is moved to Market Perform from Outperform at FBR Capital. Cintas (CTAS) is downgraded to Neutral from Outperform with a $45 target at Robert W. Baird. Corrections Corporation of America (CXW) is now Neutral from Buy at SunTrust.
The Industrial Select Sector SPDR (XLI) was trading at $37.52 at 4:00 PM on Wednesday, down slightly on the day – up 11.17% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Movers: (MTOR) +11.5%, (USG) +11.5%, (AIR) -10.5%.

Consumer Discretionary

Thomson Reuters (TRI) is close to a sale of its healthcare business in a deal that could bring in as much as $1B, The Wall Street Journal reports. Krispy Kreme Doughnuts (KKD) missed estimates by a penny with revenue in-line with estimates. The company is reaffirming guidance for FY13 EPS of $0.35-$0.41 ($0.35 consensus), and now expects to open 75 international franchises in FY13, up from a prior 60. Caesars Entertainment (CZR) is a new Neutral at Bank of America-Merrill Lynch. News Corp (NWSA) is now Neutral from Sell at Macquarie. Luxottica (LUX) is lowered to Reduce from Neutral at Nomura.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.71 at 4:00 PM on Wednesday, down 0.12% on the day – up 14.58% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.
Big Movers: (LIMAF) +53%, (CAAS) +10.5%, (CCME) -21.5%.

Consumer Staples

General Mills (GIS) reported FQ3 EPS of $0.55 (in-line), while beating revenue by $40M, and reaffirms its 2012 EPS guidance of $2.53-$2.55. Molson Coors Brewing (TAP) is initiated with a Buy rating and $48 target by brokers William Smith.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.65 at 4:00 PM on Wednesday, up 0.15% on the day – up 3.57% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.
Big Movers: (SEED) +30%, (FEED) +16%, (GMCR) +10%, (CHBT) -16%.

Health Care

Thomson Reuters (TRI) is close to a sale of its healthcare business in a deal that could bring in as much as $1B, The Wall Street Journal reports. OraSure Technologies (OSUR) is boosted to Buy from Hold at MLV & Co. Allscripts-Misys Healthcare (MDRX) is downgraded to Neutral from Overweight at JPMorgan.
The Health Care Select Sector SPDR (XLV) was trading at $36.635 at 4:00 PM on Wednesday, down slightly on the day – up 5.61% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (ALIM) -9%, (CRME) -8%, (WPI) +8%.

Financials

Bowing to investor pressure, Hartford Financial (HIG) will exit its annuity business and weigh the sale of a large portion of its life-insurance operations. Guggenheim upgrades Capital One (COF) and Regions Financial (RF), both to Buy from Neutral. Assurant (AIZ) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. BlackRock (BLK) gets cut to Equal Weight from Overweight at Morgan Stanley. Guggenheim downgrades BB&T Corp (BBT), M&T Bank (MTB), and SunTrust (STI), all now Neutral from Buy.

The Financial Select Sector SPDR (XLF) was trading at $15.805 at 4:00 PM on Wednesday, down 0.44% on the day – up 21.58% year-to-date (the strongest performing sector). The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.
Big Movers: (AGO) -15%.

Information Technology

Oracle (ORCL) beat estimates by 6 cents with revenue in-line with estimates. Sales of new software licenses increased 7%, above expectations for a 3% rise. Oracle (ORCL) was once looking for $6B in damages from Google (GOOG) over Android's use of Java, but now it looks like the final settlement figure for the bitter legal dispute between the companies will be well under $100M. Hewlett-Packard (HPQ) reportedly intends to merge its PC and printing operations as part of a major reorganization that will also include the departure of printing chief V.J. Joshi. Jabil Circuit (JBL) beat estimates by a penny and revenue by $150M, but now expects to earn between $0.49 - $0.59 per share (versus estimates of $0.58). Micron (MU) is resumed with an Outperform at RBC Capital. Aruba Networks (ARUN) is a new Buy at Auriga. MicroStrategy (MSTR) is initiated with a Buy at ThinkEquity Synacor (SYNC) is a new Buy at Bank of America-Merrill Lynch and Needham. Ubiquiti Networks (UBNT) is a new Buy and $31 target at Auriga. Equinix (EQIX) is initiated with a Buy at Jefferies. LinkedIn (LNKD) is lifted to Buy from Neutral at Goldman Sachs. OpenTable (OPEN) is boosted to Buy from Hold at The Benchmark Company. Accenture (ACN) gets increased to Hold from Sell at Société Générale. Saba Software (SABA) is now Buy from Hold at Benchmark. Silicon Labs (SLAB) is lifted to Buy from Neutral at UBS. Perfect World (PWRD) is downgraded to Neutral from Buy at Nomura.
The Technology Select Sector SPDR (XLK) was trading at $30.06 at 4:00 PM on Wednesday, down slightly on the day – up 18.11% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.
Big Movers: (PWAV) +18%, (CNIT) +13.5%, (TGE) -13.5%, (TSL) -11%.

Telecommunication Services

AT&T Inc (T) is begin with a Buy and $34 price target at Telsay Advisory Group. Vodafone Group (VOD) is added to Goldman’s Conviction Buy List. China Telecom (CHA) is now Neutral from Overweight at JP Morgan.
The NASDAQ Telecommunications Index (IXTC) was trading at $217.18 at 4:00 PM on Wednesday, down 0.14% on the day – up 10.28% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.
Heavily Traded: (S) +0.7%, (T) +0.3%, (CLWR) -0.6%, (ATML) +2.7%, (VOD) -0.2%, (VZ) +0.6%.

Utilities

NiSource (NI) is now Buy from Hold at Keybanc Capital.
The Utilities Select Sector SPDR (XLU) was trading at $34.51 at 4:00 PM on Wednesday, down 0.20% on the day – down 4.09% year-to-date (the weakest performing sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
Heavily Traded: (DUK) -0.2%, (GEN) +0.2%, (NRG) +3.1%, (PEG) up slightly,
(EXC) -0.4%, (AEP) -0.4%, (PPL) -0.7%.

STOCKS: TRP, RDS.A, TOT, SNP, LINE, BHI, PDS, HERO, DHT, GLCNF, XSRAY, GSE, SLCA, AGU, RGLD, OMN, CTAS, NPO, AVAV, CTAS, CXW, MTOR, USG, AIR, TRI, KKD, CZR, NWSA, LUX, LIMAF, CAAS, CCME, GIS, TAP, SEED, FEED, GMCR, CHBT, OSUR, MDRX, ALIM, CRME, WPI, HIG, COF, RF, AIZ, BLK, BBT, MTB, STI, AGO, ORCL, GOOG, HPQ, JBL, MU, ARUN, MSTR, SYNC, UBNT, EQIX, LNKD, OPEN, ACN, SABA, SLAB, PWRD, PWAV, CNIT, TGE, TSL, T, VOD, CHA, S, CLWR, ATML, VZ, NI, DUK, GEN, NRG, PEG, EXC, AEP, 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
ACN Accenture plc Class A (Ireland) 122.17 0.53 0.44 4,815,794
AEP American Electric Power Company 64.21 -0.29 -0.45 4,152,613
AGO Assured Guaranty Ltd. 27.75 0.25 0.91 573,307
AGU Agrium Inc. 90.69 -0.07 -0.08 444,204
AIR AAR Corp. 31.32 1.32 4.40 625,948
AIZ Assurant Inc. 92.25 0.78 0.85 373,215
ALIM Alimera Sciences Inc. 1.49 0.00 0.00 574,762
ATML Atmel Corp n/a n/a n/a 0
AVAV AeroVironment Inc. 24.41 0.20 0.83 211,342
BBT BB&T Corporation 37.72 0.44 1.18 4,264,479
BHI Baker Hughes Incorporated 50.47 0.26 0.52 4,441,008
CAAS China Automotive Systems Inc. 4.15 0.01 0.24 38,189
CHA China Telecom Corp Ltd ADS 51.04 0.40 0.79 13,921
CNIT China Information Technology Inc. 0.81 0.01 1.25 13,017
COF Capital One Financial Corporation 71.83 1.47 2.09 3,198,792
CRME Cardiome Pharma Corporation 3.13 0.03 0.97 93,656
CTAS Cintas Corporation 112.60 1.24 1.11 1,414,000
CXW Corrections Corporation of America 13.87 0.05 0.36 3,942,729
CZR Caesars Entertainment Corporation 7.45 0.05 0.68 2,115,236
DHT DHT Holdings Inc. 4.19 0.14 3.46 3,473,016
DUK Duke Energy Corporation (Holding Company) 80.04 -0.27 -0.34 3,883,040
EQIX Equinix Inc. 360.25 0.30 0.08 611,349
EXC Exelon Corporation 33.29 0.00 0.00 5,529,887
GEN Genesis Healthcare Inc. 2.67 0.05 1.91 172,362
GIS General Mills Inc. 63.88 0.22 0.35 3,328,379
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
GOOG Alphabet Inc. 777.29 2.28 0.29 1,585,333
HIG Hartford Financial Services Group Inc. (The) 42.82 0.47 1.11 3,564,753
HPQ HP Inc. 15.53 0.14 0.91 11,457,298
JBL Jabil Circuit Inc. 21.82 0.07 0.32 2,154,975
KKD Krispy Kreme Doughnuts Inc. n/a n/a n/a 0
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
LNKD LinkedIn Corporation Class A 191.12 0.25 0.13 2,150,795
LUX Luxottica Group S.p.A. 47.82 -0.33 -0.69 44,059
MDRX Allscripts Healthcare Solutions Inc. 13.17 0.26 2.01 1,589,918
MSTR MicroStrategy Incorporated 167.44 1.70 1.03 124,744
MTB M&T Bank Corporation 116.10 1.56 1.36 708,905
MTOR Meritor Inc. 11.13 0.56 5.30 890,147
MU Micron Technology Inc. 17.78 0.24 1.37 21,363,073
NI NiSource Inc 24.11 -0.10 -0.41 2,937,683
NRG NRG Energy Inc. 11.21 0.11 0.99 4,397,911
NWSA News Corporation 13.98 0.09 0.65 3,181,043
OMN OMNOVA Solutions Inc. 8.44 0.39 4.84 622,691
ORCL Oracle Corporation 39.28 0.16 0.41 12,861,882
OSUR OraSure Technologies Inc. 7.97 0.08 1.01 670,533
PDS Precision Drilling Corporation 4.18 -0.01 -0.24 2,492,883
PEG Public Service Enterprise Group 41.87 -0.24 -0.57 3,589,566
PPL PPL Corp 34.57 -0.25 -0.72 4,998,489
RF Regions Financial Corporation 9.87 0.20 2.07 15,485,470
RGLD Royal Gold Inc. 77.43 -1.39 -1.76 554,194
S Sprint Corporation 6.63 -0.03 -0.45 14,655,332
SEED Origin Agritech Limited 2.37 0.05 2.16 522,105
SLAB Silicon Laboratories Inc. 58.80 1.02 1.77 601,076
SLCA U.S. Silica Holdings Inc. 46.56 1.24 2.74 1,420,666
SNP China Petroleum & Chemical Corporation 73.85 1.44 1.99 117,795
STI SunTrust Banks Inc. 43.80 0.65 1.51 3,614,508
SYNC Synacor Inc. 2.91 -0.03 -1.02 66,003
T AT&T Inc. 40.61 -0.12 -0.29 19,381,624
TAP Molson Coors Brewing Company Class B 109.80 1.36 1.25 3,028,348
TCON TRACON Pharmaceuticals Inc. 6.67 0.12 1.83 57,736
TGE TGE n/a n/a n/a 0
TOT Total S.A. 47.70 0.06 0.13 2,365,964
TRI Thomson Reuters Corp 41.38 0.48 1.17 1,172,741
TRP TransCanada Corporation 47.56 -0.04 -0.08 664,251
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.24 -0.03 -0.29 2,463,032
UBNT Ubiquiti Networks Inc. 53.50 -0.34 -0.63 565,812
USG USG Corporation 25.85 0.11 0.43 1,537,529
VOD Vodafone Group Plc 29.15 0.03 0.10 4,732,148
VZ Verizon Communications Inc. 51.98 -0.14 -0.27 13,077,552
WPI Watson Pharmaceuticals Inc. n/a n/a n/a 0

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