Equities Sector Coverage: Wall Street Closes Lower Despite Solid Earnings

Sector Recap |

JPMorgan, JPMThe Consumer Price Index rose 0.3% in March, in line with estimates. Excluding the food and energy, prices were up 0.2%, also matching estimates. The preliminary reading on the University of Michigan consumer sentiment survey for the month of April came in at 75.7, below the final March reading of 76.2. The Dow Jones Industrial Average declined to 12,876.99 going into the final half hour of trading staying below its 50-day simple moving average at 12,991. The NASDAQ’s declined to 3011.12 staying above its 50-day simple moving average at 2997.

Asian stocks were higher again on Friday. The Nikkei 225 ended their session at 9,638 – up 1.19% on the day. The Hang Seng ended their session at 20,701 – up 1.84% on the day. European stocks were lower on Friday. The FTSE 100 ended their session at 5,652 – down 1.03% on the day. The DAX ended their session at 6,584 – down 2.36% on the day. The CAC 40 ended their session at 3,189 – down 2.47% on the day. The yield on the 10-Year US Treasury declined from 2.049 percent to 1.977 below its 50-day and 200-day simple moving averages at 2.077 and 2.137.

Gold declined from $1679.2 the Troy ounce to $1649.7 staying below its 50-day and 200-day simple moving averages at $1696.3 and $1692.0, converging towards a “death cross”. Crude oil traded up from $102.86 per barrel to $103.90 then down to $102.61 versus its 50-day simple moving average at $104.22. The euro versus the dollar declined from 1.3199 to 1.3073 versus its 50-day simple moving average at 1.3212.

Energy

Kinder Morgan (KMP) will spend $5 billion to expand its west-coast Canada oil pipeline, doubling the capacity of crude oil shipped to Vancouver and Washington's Puget Sound. This expansion will increase the volume shipped from Alberta to Vancouver to 850,000 barrels per day from 300,000. Alpha Natural Resources (ANR) have been upgraded to Buy from Neutral at Nomura. CNOOC Ltd (CEO), the China oil giant has been upgraded to Outperform from Neutral by Credit Suisse. Cloud Peak Energy (CLD) and CONSOL Energy (CNX) have been downgraded to Neutral from Outperform at Credit Suisse. Dow components - Chevron (CVX) declined 0.8% Friday morning with Exxon Mobil (XOM) down 0.3%.
Energy Select Sector SPDR (XLE) was trading at $68.95 at 3:30 PM on Friday, down 1.15% on the day – down 0.26% year-to-date.

Materials

Dow Chemical (DOW)’s Board of Directors has declared a 28% increase in its Q2 dividend, from 25 cents per share to 32 cents. The move reflects growing confidence in the company’s ability to achieve higher and more sustainable earnings. Eldorado Gold (EGO) surged 12.06% on Thursday has been upgraded to Outperform from Market Perform at BMO Capital and was added to the Action List Buy from Buy at TD Securities. Dow components - Alcoa (AA) declined 2.0% on Friday morning with DuPont (DD) slipping 0.3%.
The Materials Select Sector SPDR (XLB) was trading at $36.25 at 3:30 PM on Friday, down 0.85% on the day – up 8.21% year-to-date.

Industrials

J.B. Hunt Transport Services (JBHT) beat EPS estimates by six cents with in-line revenue. JBHT has been downgraded to Neutral from Buy at Sterne Agee. Dover Corp (DOV) has been upgraded to Equal Weight from Underweight at Morgan Stanley. Home builders Lennar (LEN), Toll Brothers (TOL), and Pulte Group (PHM) have been upgraded to Buy from Hold at Keybanc. Johnson Controls (JCI) has been upgraded to Buy from Hold at Deutsche Bank. Illinois Tool Works (ITW) has been downgraded to Underweight from Equal Weight at Morgan Stanley. Dow components - Boeing Co (BA) fell 1.1%, Caterpillar (CAT) slipped 0.5%, General Electric (GE) declined by 1.6% 3M Company (MMM) was lower by 1.1%, and United Technologies (UTX) lost 1.3% all in morning trading.

The Industrial Select Sector SPDR (XLI) was trading at $36.47 at 3:30 PM on Friday, down 0.90% on the day – up 8.06% year-to-date.



Consumer Discretionary

Barnes & Noble (BKS) has a new version of its Nook including the first E Ink device with patent-pending lighting technology. The new Nook will sell at $139. Amazon (AMZN)’s Kindle Touch goes for $99, and that company is working on a front-lit Kindle. Best Buy (BBY) Board will lead the global search for a new CEO, two days after CEO Brian Dunn stepped down from the post. Talbots (TLB) missed Q4 EPS consensus estimates but beats on revenue. Revenues fell 1.1% year over year and the retailer guided lower below Wall Street estimates. Dow Components - Disney (DIS) lost 0.5%, and McDonalds (MCD) slipped by 0.3%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.73 at 3:30 PM on Friday, up 0.13% on the day – up 14.63% year-to-date.

Consumer Staples

Coinstar (CSTR) pre-announced a blowout Q1 earnings report, citing strong demand for a number of hit titles, and with lower-than-expected expenses. Janney Montgomery Scott initiates Buy ratings on Nike (NKE), Finish Line (FINL), Foot Locker (FL), and Hanesbrands (HBI). Janney initiates new Neutral ratings on Under Armour (UA) and Hibbett Sports (HIBB) with price targets at $102 and $52 respectively. Altria (MO), the tobacco company has been upgraded to Buy from Neutral at Davenport. Dow components - Home Depot (HD) tacked on 0.7%, Kraft (KFT) gained 0.5%, Coca Cola (KO) slipped 0.2%, Procter & Gamble (PG) was flat and Wal-Mart (WMT) slipped 0.4% all in morning trading.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.76 at 3:30 PM on Friday, up 0.39% on the day – up 3.91% year-to-date.

Health Care

Derma Sciences (DSCI) are initiated with an Overweight rating at Piper Jaffray. MAKO Surgical (MAKO) is initiated with a Perform rating at Oppenheimer, which reflects the excitement over the company’s strong partial-knee replacement performance. Mannkind (MNKD) has been initiated with a Neutral rating at Cowen. Jazz Pharmaceuticals (JAZZ) has been initiated with an Outperform at Leerink Swann. Sunesis Pharmaceuticals (SNSS) is a small cap stock that’s been initiated with a Buy rating at Cantor Fitzgerald. AmerisourceBergen (ABC) has been downgraded to Equal Weight from Overweight at Morgan Stanley. Celgene (CELG) has been downgraded to Hold from Buy at Auriga. Dow Components - Johnson & Johnson (JNJ) slipped 0.4%, Merck (MRK) lost 0.8%, and Pfizer (PFE) gained 0.4% in morning trading.
The Health Care Select Sector SPDR (XLV) was trading at $36.70 at 3:30 PM on Friday, down 0.68% on the day – up 5.79% year-to-date.

Financials

JPMorgan (JPM) beats the Street’s EPS estimates by 16 cents on a revenue beat of 6% at $27.4 billion. Wells Fargo (WFC) reported first-quarter EPS of 75 cents on revenue of $21.6 billion, beating analysts’ expectations of 73 cents on $20.51 billion respectively. Dow Components - American Express (AXP) slipped 0.6%, Bank of America (BAC) slumped 2.0%, JP Morgan (JPM) fell 1.5%, and Travelers (TRV) lost 0.6% all in morning trading.
The Financial Select Sector SPDR (XLF) was trading at $15.20 at 3:30 PM on Friday, down 1.87% on the day – up 16.92% year-to-date.

Information Technology

Google (GOOG) beat on Q1 EPS, and effectively announced a 2-for-1 stock split by issuing a new class of nonvoting shares. The new Class C shares will have a different ticker and will not have voting rights. Infosys Technologies (INFY) shares plunged 12.8% premarket on an earnings disappointment. VMware (VMW) is initiated as an Overweight rating at Piper Jaffray. Dangdang (DANG), the Chinese Internet stock has been downgraded to Neutral from Outperform at Credit Suisse. Dow Components - Cisco Systems (CSCO) lost 1.4%, Hewlett-Packard (HPQ) was down 1.1%, IBM (IBM) slipped 0.6%, Intel Corp (INTC) fell 0.3%, and Microsoft (MSFT) gained 0.2% all in morning trading.
The Technology Select Sector SPDR (XLK) was trading at $29.72 at 3:30 PM on Friday, down 1.20% on the day – up 16.78% year-to-date.

Telecommunication Services

SBA Communications (SBAC) have been upgraded to Overweight from Neutral at Piper Jaffray. American Tower (AMT) has been downgraded to Neutral from Overweight at Piper Jaffray. Nokia (NOK) has been downgraded for the third day in a row this time to Equal Weight from Overweight by Barclays. Dow components - AT&T (T) slipped by 0.6% while Verizon (VZ) lost 0.7% in morning trading.

The NASDAQ Telecommunications Index (IXTC) was trading at $209.83 at 3:30 PM on Friday, down 1.06% on the day – up 6.55% year-to-date.

Utilities

Nokia (NOK) has been downgraded for the third day in a row this time to Equal Weight from Overweight by Barclays. Edison International (EIX) has been upgraded to Outperform from Market Perform with Wells Fargo. PPL Corp (PPL) has been removed from the Conviction Buy List at Goldman Sachs. Dominion Resources (D) gained 1.2%, Edison International (EIX) was up 1.3%, First Energy (FE) was up 0.6%, and PG&E Corp (PCG) was up 0.3% in morning trading.

The Utilities Select Sector SPDR (XLU) was trading at $34.41 at 3:30 PM on Friday, down 0.12% on the day – down 4.36% year-to-date.

STOCKS: CVX, XOM, KMP, ANR, CEO, CLD, CNX, AA, DD, DOW, EGO, BA, CAT, GE, MMM, UTX, JBHT, DOV, LEN, TOL, PHM, JCI, ITW, DIS, MCD, BKS, AMZN, BBY, TLB, HD, KFT, KO, PG, WMT, CSTR, NKE, FINL, FL, HBI, UA, MO, JNJ, MRK, PFE, DSCI, MAKO, MNKD, JAZZ, SNSS, ABC, CELG, AXP, BAC, JPM, WFC, CSCO, HPQ, IBM, INTC, MSFT, GOOG, VMW, INFY, DANG, T, VZ, SBAC, AMT, NOK, D, EIX, FE, PCG, 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
CEO CNOOC Limited 121.92 0.92 0.76 93,323
MMM 3M Company 187.19 1.15 0.62 2,401,641
PG Procter & Gamble Company (The) 91.13 -0.31 -0.34 7,611,638
GE General Electric Co 30.02 -0.07 -0.23 28,947,909
HBI Hanesbrands Inc. 20.92 -0.35 -1.65 7,871,465
CVX Chevron Corporation 111.02 0.64 0.58 8,659,712
PCG Pacific Gas & Electric Co. 65.41 0.65 1.00 2,069,229
FINL The Finish Line Inc. 16.65 -0.62 -3.59 1,137,876
JNJ Johnson & Johnson 121.70 2.18 1.82 9,980,945
WMT Wal-Mart Stores Inc. 71.31 -0.40 -0.56 12,799,700
AA Alcoa Inc. 34.32 -2.28 -6.23 7,139,960
INTC Intel Corporation 36.18 0.11 0.30 22,774,979
IBM International Business Machines Corp 181.65 0.50 0.28 2,282,526
CLD Cloud Peak Energy Inc 5.13 -0.55 -9.68 22,986,661
D Dominion Resources Inc. 76.16 0.81 1.08 2,513,319
ABC AmerisourceBergen Corporation 91.61 0.27 0.30 2,169,821
DSCI Derma Sciences Inc. 7.00 0.00 0.00 57,497
NOR Noranda Aluminum Holding n/a n/a n/a 0
MO Altria Group Inc. 74.46 0.86 1.17 4,116,768
FL Foot Locker Inc. 68.58 -2.44 -3.44 4,304,007
JCI Johnson Controls Inc. 41.49 -0.68 -1.61 5,052,925
PPL PPL Corp 36.52 0.32 0.88 2,609,592
EIX Edison International 77.90 0.71 0.92 1,750,856
JAZZ Jazz Pharmaceuticals plc 135.40 0.45 0.33 417,234
UA Under Armour Inc. Class A 19.64 -0.14 -0.71 3,444,352
SNSS Sunesis Pharmaceuticals Inc. 4.19 -0.06 -1.41 212,582
JPM JP Morgan Chase 91.13 0.07 0.08 11,066,952
AXP American Express Company 80.05 0.19 0.24 3,339,493
UTX United Technologies Corporation 112.09 -0.57 -0.51 3,471,711
TOL Toll Brothers Inc. 33.96 0.03 0.09 3,909,141
BKS Barnes & Noble Inc. 10.05 -0.40 -3.83 755,225
VMW Vmware Inc. Class A 90.74 -1.02 -1.11 681,037
AMZN Amazon.com Inc. 852.19 -3.42 -0.40 3,461,984
CSCO Cisco Systems Inc. 34.04 -0.05 -0.15 17,450,074
DIS Walt Disney Company (The) 109.73 -0.39 -0.35 5,470,661
VZ Verizon Communications Inc. 50.31 0.64 1.29 16,211,994
NKE Nike Inc. 57.39 -0.85 -1.46 12,316,307
BAC Bank of America Corporation 24.58 -0.21 -0.85 85,845,982
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0
NOK Nokia Corporation Sponsored American Depositary Sh 5.15 0.05 0.98 21,960,692
GOOG Alphabet Inc. 831.33 0.57 0.07 1,472,771
MCD McDonald\'s Corporation 128.27 0.42 0.33 3,177,951
EGO Eldorado Gold Corporation 3.61 -0.04 -1.10 4,872,228
JBHT J.B. Hunt Transport Services Inc. 97.31 -1.03 -1.05 1,254,838
DD E.I. du Pont de Nemours and Co. 79.59 -0.21 -0.26 4,412,314
CNX CONSOL Energy Inc. 16.34 -0.70 -4.11 6,189,362
LEN Lennar Corporation Class A 47.15 -0.16 -0.34 1,689,694
BBY Best Buy Co. Inc. 44.31 -1.41 -3.08 4,135,263
HD Home Depot Inc. (The) 144.71 -0.54 -0.37 4,184,046
XOM Exxon Mobil Corporation 81.78 0.85 1.05 13,847,038
PFE Pfizer Inc. 34.06 0.47 1.40 30,477,129
WFC Wells Fargo & Company 58.49 0.13 0.22 13,841,369
PHM PulteGroup Inc. 21.60 -0.11 -0.51 3,746,198
HPQ HP Inc. 17.60 1.40 8.64 37,118,842
BA Boeing Company (The) 176.86 1.50 0.86 3,502,645
CELG Celgene Corporation 119.46 0.19 0.16 4,410,062
MRK Merck & Company Inc. (new) 65.85 0.56 0.86 6,855,571
AMT American Tower Corporation (REIT) 112.20 1.18 1.06 2,233,348
ITW Illinois Tool Works Inc. 130.42 0.30 0.23 1,588,962
FE FirstEnergy Corporation 31.39 0.60 1.95 5,776,154
SBAC SBA Communications Corporation 111.19 -0.47 -0.42 578,462
KO Coca-Cola Company (The) 41.66 0.06 0.14 12,856,844
INFY Infosys Limited American Depositary Shares 15.19 0.15 1.00 4,669,751
T AT&T Inc. 41.95 0.36 0.87 19,218,542
CAT Caterpillar Inc. 95.55 -2.65 -2.70 6,024,786
DOV Dover Corporation 80.29 -0.63 -0.78 1,459,753
MNKD MannKind Corporation 0.50 0.01 2.24 9,247,997
MSFT Microsoft Corporation 64.62 0.26 0.40 20,273,128

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