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 116.63 0.20 0.17 36,570 Trade
MMM 3M Company 196.61 1.48 0.76 806,924 Trade
PG Procter & Gamble Company (The) 88.41 -1.59 -1.77 5,180,284 Trade
GE General Electric Co 29.45 0.00 0.00 13,447,643 Trade
HBI Hanesbrands Inc. 22.02 0.06 0.27 1,455,359 Trade
CVX Chevron Corporation 107.22 0.49 0.46 1,920,236 Trade
PCG Pacific Gas & Electric Co. 67.66 -0.01 -0.01 638,308 Trade
FINL The Finish Line Inc. 15.74 0.46 3.01 519,667 Trade
JNJ Johnson & Johnson 124.05 0.62 0.50 1,419,710 Trade
WMT Wal-Mart Stores Inc. 75.68 0.63 0.84 2,125,325 Trade
AA Alcoa Inc. 36.27 -0.22 -0.60 2,663,805 Trade
INTC Intel Corporation 37.05 0.18 0.47 10,677,952 Trade
IBM International Business Machines Corp 160.53 0.14 0.09 1,323,490 Trade
CLD Cloud Peak Energy Inc 4.01 0.09 2.30 299,072 Trade
D Dominion Resources Inc. 77.91 0.21 0.27 322,463 Trade
ABC AmerisourceBergen Corporation 81.55 0.06 0.07 313,812 Trade
DSCI Derma Sciences Inc. n/a n/a n/a 0 Trade
NOR Noranda Aluminum Holding n/a n/a n/a 0
MO Altria Group Inc. 72.08 -0.36 -0.49 1,761,948 Trade
FL Foot Locker Inc. 76.95 0.35 0.46 424,745 Trade
JCI Johnson Controls Inc. 43.50 0.30 0.69 1,116,251 Trade
PPL PPL Corp 38.24 0.08 0.21 693,575 Trade
EIX Edison International 80.82 0.00 0.00 432,343 Trade
JAZZ Jazz Pharmaceuticals plc 157.14 2.24 1.45 117,419 Trade
UA Under Armour Inc. Class A 18.08 0.11 0.61 1,880,069 Trade
SNSS Sunesis Pharmaceuticals Inc. 3.78 -0.02 -0.51 38,197 Trade
JPM JP Morgan Chase 88.49 0.23 0.26 4,121,831 Trade
AXP American Express Company 80.40 -0.23 -0.29 1,300,777 Trade
UTX United Technologies Corporation 118.64 1.77 1.51 1,936,096 Trade
TOL Toll Brothers Inc. 36.33 0.70 1.95 629,760 Trade
BKS Barnes & Noble Inc. 8.88 0.08 0.85 331,693 Trade
VMW Vmware Inc. Class A 94.00 1.00 1.08 469,784 Trade
AMZN Amazon.com Inc. 910.54 2.92 0.32 1,255,238 Trade
CSCO Cisco Systems Inc. 33.63 0.21 0.61 5,506,268 Trade
DIS Walt Disney Company (The) 115.88 0.70 0.60 1,538,356 Trade
VZ Verizon Communications Inc. 47.24 0.54 1.15 10,533,432 Trade
NKE Nike Inc. 55.59 0.14 0.25 3,358,141 Trade
BAC Bank of America Corporation 24.11 0.13 0.54 34,376,579 Trade
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0 Trade
NOK Nokia Corporation Sponsored American Depositary Sh 5.41 -0.03 -0.46 12,227,917 Trade
GOOG Alphabet Inc. 871.64 -0.66 -0.08 443,193 Trade
MCD McDonald\'s Corporation 141.30 -0.40 -0.28 2,555,542 Trade
EGO Eldorado Gold Corporation 3.36 -0.05 -1.32 2,153,587 Trade
JBHT J.B. Hunt Transport Services Inc. 91.60 -0.53 -0.58 335,438 Trade
DD E.I. du Pont de Nemours and Co. 81.83 -0.38 -0.46 1,043,969 Trade
CNX CONSOL Energy Inc. 16.30 0.39 2.45 1,035,002 Trade
LEN Lennar Corporation Class A 50.94 0.24 0.47 848,036 Trade
BBY Best Buy Co. Inc. 52.25 0.48 0.93 772,136 Trade
HD Home Depot Inc. (The) 154.10 1.07 0.70 1,677,715 Trade
XOM Exxon Mobil Corporation 82.09 0.36 0.43 2,925,268 Trade
PFE Pfizer Inc. 34.00 0.24 0.70 6,510,050 Trade
WFC Wells Fargo & Company 54.86 0.30 0.55 5,704,723 Trade
PHM PulteGroup Inc. 22.60 0.40 1.80 3,427,861 Trade
HPQ HP Inc. 18.69 0.08 0.43 1,975,749 Trade
BA Boeing Company (The) 181.58 -1.93 -1.05 2,027,720 Trade
CELG Celgene Corporation 125.84 0.32 0.25 1,107,934 Trade
MRK Merck & Company Inc. (new) 62.75 0.45 0.71 2,518,295 Trade
AMT American Tower Corporation (REIT) 123.76 -0.18 -0.15 572,949 Trade
ITW Illinois Tool Works Inc. 139.50 0.24 0.17 618,291 Trade
FE FirstEnergy Corporation 31.00 0.39 1.27 2,828,730 Trade
SBAC SBA Communications Corporation 123.52 -0.50 -0.40 268,021 Trade
KO Coca-Cola Company (The) 43.31 0.20 0.45 5,017,549 Trade
INFY Infosys Limited American Depositary Shares 14.49 -0.06 -0.38 1,762,076 Trade
T AT&T Inc. 40.16 0.22 0.55 11,289,511 Trade
CAT Caterpillar Inc. 105.27 0.85 0.81 4,713,161 Trade
DOV Dover Corporation 81.58 0.31 0.38 411,526 Trade
MNKD MannKind Corporation 0.88 -0.02 -2.20 552,759 Trade
MSFT Microsoft Corporation 68.28 0.36 0.53 10,160,674 Trade

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