Equities Sector Coverage: Wall Street Continues to Fall Lower

Sector Recap |

Frustrated Stock TraderMortgage applications tumbled 8.4% as purchase demand declines. NY Fed Empire manufacturing survey rose to 19.53 in February. Industrial production was weaker than expected in January with a flat reading, while capacity utilization fell by a notch to 78.5. The National Association of Home Builders Housing Market Index rose by four points to 29 in February the highest reading since May 2007.

The Dow Jones Industrial Average declined from 12,899.47 to 12,753.62 into the final hour of trading. The NASDAQ traded between 2937.93 and 2958.19 on Wednesday morning then declined to 2911.33 into the final hour of trading. The S&P 500, Dow Transports and Russell 2000 continue to lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.

Asian stocks closed higher on Wednesday with the Nikkei 225 ending their session 9,260 – up 2.30% on the day. The Hang Seng closed at 21,365 – up 2.14% on the day. European stocks traded higher as Greece pledged to approve austerity measures that would allow their debt bailout. The closes were mixed however. The FTSE 100 ended their session at 5,892 – down 0.13% on the day; the DAX ended their session at 6,758 – up 0.44% on the day; and the CAC 40 ended their session at 3,390 – up 0.44% on the day. The yield on the 10-Year US Treasury traded down from 1.962 percent to 1.990 versus its 50-day simple moving average at 1.941.

Gold rebounded from $1720.3 the Troy ounce to $1739.2 then consolidated. Crude oil rallied from $100.61 per barrel to $102.54 then consoldiated. The euro versus the dollar traded down from 1.3189 to 1.3048 versus its 50-day simple moving average at 1.3023.

Energy

Cimarex Energy Co (XEC) beat estimates by 6 cents and revenue by $15M. FMC Technologies (FTI) missed estimates by 9 cents, while beating revenue by $60M. Golar LNG Partners (GMLP) is initiated with a Buy rating and $40 price objective at Dahlman Rose. Solazyme (SZYM) is a new Buy at Canaccord Genuity. In afternoon trading: Shares of Cimarex Energy (XEC) are up about 18.25%. Shares of Comstock Resources (CRK) are up about 9%.

Energy Select Sector SPDR (XLE) was trading at $73.63 at 4:00 PM on Wednesday, down 0.16% on the day – up 6.51% year-to-date. The January change was +2.26%. The 2011 change was -1.29%.

Materials

AngloGold Ashanti (AU) missed estimates by 36 cents on revenue of $1.86B. Citigroup begins Harry Winston Diamond (HWD) and Movado Group (MOV) with Buys on both. Anglo American (AAUKY) is moved to Neutral from Buy at Citigroup. In afternoon trading: Heavily Traded Stocks: Shares of Freeport McMoran (FCX) are down about 1.7%. Shares of Alcoa (AA) are down about 1%. Shares of Vale SA (VALE) are down about 3%. Shares of Cemex SAB (CX) are up about 0.2%.

The Materials Select Sector SPDR (XLB) was trading at $36.70 at 4:00 PM on Wednesday, up slightly on the day – up 9.55% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Industrials

Deere (DE) beat estimates by 6 cents and revenue by $290M. Owens Corning (OC) missed estimates by 8 cents and revenue by $60M. Curtiss-Wright (CW) reported Q4 EPS of $0.84 (in-line), while missing revenue by $12M. Copa Holdings (CPA) gets an Overweight-from-Equal Weight boost by Barclays. Lockheed Martin (LMT) is lowered to Market Perform from Outperform by Bernstein. Generac (GNRC) gets downgraded to Neutral from Outperform with a $28 objective at Robert Baird. In afternoon trading: Shares of Digitalglobe (DGI) are down about 10.25%.

The Industrial Select Sector SPDR (XLI) was trading at $36.80 at 4:00 PM on Wednesday, down 1.31% on the day – up 9.04% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Consumer Discretionary

Comcast’s (CMCSA) free cash flow +67.4% Y/Y to $1.9B. Abercrombie & Fitch (ANF) missed estimates by 3 cents with revenue in-line with estimates. Peet's Coffee & Tea (PEET) missed estimates by a penny and revenue by $1.4M. Grocery business was +29% Y/Y with retail revenue up only 3% Y/Y.  Peet's is guiding for 2012 revenue growth of 10% (9.9% consensus) and EPS of $1.70-$1.80 ($1.79 consensus). Bob Evans Farms (BOBE) beat estimates by 9 cents with revenue in-line with estimates. Weight Watchers International (WTW) missed estimates by a penny and revenue by $11M. Citigroup begins Harry Winston Diamond (HWD) and Movado Group (MOV) with Buys on both. TripAdvisor (TRIP) is picked up at a Neutral by Piper Jaffray. National Cinemedia (NCMI) is lifted to Overweight from Neutral at Piper Jaffray. Arbitron (ARB) is lowered to Hold from Buy at Deutsche Bank. Children’s Place (PLCE) is now Neutral from Outperform with Wedbush. Fossil (FOSL) is taken to Hold from Buy by Benchmark Company. Publicis Groupe (PUBGY) gets downgraded to Neutral from Overweight at HSBC Securities. Hasbro (HAS) is slashed to Neutral from Buy at Sterne Agee. Intercontinental Hotels Group (IHG) is now Neutral from Outperform at BNP Paribas. Weight Watchers International (WTW) is slimmed down by both Wedbush (Neutral from Outperform) and Auriage (Hold from Buy).

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.41 at 4:00 PM on Wednesday, down 0.45% on the day – up 8.69% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Consumer Staples

Procter & Gamble (PG) has said it has agreed to divest Pringles to Kellogg (K) for $2.7B, with Diamond Foods (DMND) announcing that it has ended its attempt to purchase the snack-food unit. Safeway (SWY) gets an Outperform-from-Neutral upgrade at Credit Suisse. Kimberly-Clark (KMB) is cut to Neutral from Buy at Janney Montgomery Scott. In afternoon trading: Shares of American Oriental Bioengineering (AOB) are down about 16%. Shares of Imperial Sugar (IPSU) are down about 14%. Shares of Dean Foods (DF) are up about 10.25%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.82 at 4:00 PM on Wednesday, relatively unchanged on the day – up 1.02% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Health Care

Shareholders have filed a class action suit against Illumina (ILMN), alleging its directors adopted a poison pill plan against a takeover by Roche (RHHBY) based on bad advice from Goldman Sachs. Henry Schein (HSIC) beat estimates by 3 cents and revenue of $130M. Teva Pharmaceutical (TEVA) beat estimates by a penny and revenue by $0.07B. Given Imaging's (GIVN) Q4 – A 10.8% Y/Y increase in sales to the Americas, and an 18.9% increase in sales to Asia-Pac offset a 2.6% drop in EMEA sales. The company is guiding for 2012 revenue of $190M-$200M and EPS of $0.70-$0.80 (largely above a consensus of $191.2M and $0.64). Syneron Medical (ELOS) is a Buy at Cantor Fitzgerald. Omnicare (OCR) is taken to Outperform from Neutral at Credit Suisse. Fresenius Medical (FMS) is cut to Neutral from Add at WestLB. In afternoon trading: Shares of Biosante Pharmaceuticals (BPAX) are up about 25%. Shares of Alnylam Pharmaceuticals (ALNY) are up about 17.25%.

The Health Care Select Sector SPDR (XLV) was trading at $36.16 at 4:00 PM on Wednesday, down 0.19% on the day – up 4.24% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Financials

The Fed has approved Capital One's (COF) plan to acquire ING's (ING) U.S. online banking unit, but in a nod to criticism the deal would create the next too-big-to-fail banking giant, COF has been ordered to ensure that its risk management and compliance structure keep up with its growth and the complexity of the firm. Tanger Factory Outlet Centers (SKT) beat estimates by a penny and revenue by $2M. American Campus Communities (ACC) reported Q4 FFO of $0.50 (versus consensus of $0.49), while missing revenue by $24M. MetLife (MET) beat estimates by 6 cents, while missing revenue by $400M. BioMed Realty (BMR) is lifted to Buy from Hold with a $21 price target at Stifel Nicolaus. Fidelity National Information Services (FIS) is moved to Neutral from Underweight at JP Morgan. Bank of America (BAC) is moved to Market Perform from Outperform by Sanford Bernstein. Banco Bilbao Vizcaya (BBVA) is lowered to Underperform from Market Perform by BNP Paribas. Robert Baird reduces ratings on Host Hotels (HST) - $17 objective, LaSalle Hotel (LHO) - $28 objective, and Pebblebrook Hotel Trust (PEB), all now Neutral from Outperform. Deutsche Börse (DBOEY) is now Neutral from Add at WestLB. In afternoon trading: Shares of Washington Mutual (WAMUQ) are down about 10.75%. Shares of Willis Group Holdings (WSH) are down about 10%.

The Financial Select Sector SPDR (XLF) was trading at $14.47 at 4:00 PM on Wednesday, down 0.62% on the day – up 11.31% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Tim Cook has added fuel to rising hopes that Apple (AAPL) will pay a dividend by saying that the company's board is discussing what it should do with its giant cash pile, which is probably over $100B at this point. Zynga's (ZNGA) Q4 earnings forecasts with adjusted EPS of $0.05 (beating estimates by 2 cents) on revenues that jumped 59% to $311.2M (beating estimates by $8.8M). However, Zynga swung to a net loss of $435M from a profit of $42M, due to a $510M expense related to stock-based compensation. The company expects 2012 EPS of $0.24-$0.28 (above $0.22 consensus). Apple's (AAPL) gargantuan size has prompted some analysts to analyze overall corporate earnings while excluding the tech giant's impact. Renren (RENN) preannounced Q4 revenue of $31M-$33M (versus $32.6M consensus), and an operating loss of $15M-$17M (suggests EPS worse than the -$0.01 consensus). Sapient (SAPE) beat estimates by 4 cents with revenue in-line with estimates. Quest Software (QSFT) missed estimates by a penny with revenue in-line with estimates. eBay Inc (EBAY) is added to the Best Ideas List with Wedbush. Fusion-io (FIO) is hoisted to Buy from Hold with a $30 target price at The Benchmark Company. Dell Inc (DELL) is cut to Underperform from Neutral at Sterne Agee with an objective of $15. Oracle (ORCL) is taken to Above Average from Buy at Caris & Company. Zynga (ZNGA) is now Neutral from Outperform with a new $13 target at Robert W. Baird. In afternoon trading: Shares of Powerwave Tech (PWAV) are down about 16%. Shares of Zynga (ZNGA) are up about 15%. Shares of Energy Conversion Devices (ENER) are down about 13%. Shares of CyberDefender (CYDE) are down about 11.5%.

The Technology Select Sector SPDR (XLK) was trading at $28.11 at 4:00 PM on Wednesday, down 0.53% on the day – up 10.45% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Telecommunication Services

In afternoon trading: Heavily Traded Stocks: Shares of Frontier Communications (FTR) are up about 6.2%. Shares of Sprint Nextel (S) are down about 2.2%, while shares of AT&T (T) are down about 0.9% and shares of Verizon (VZ) are down about 0.7%. Shares of Clearwire (CLWR) are up about 1.5%. Shares of Atmel (ATML) are up about 4.7%.

The NASDAQ Telecommunications Index (IXTC) was trading at $215.65 at 4:00 PM on Wednesday, down 0.22% on the day – up 9.51% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Utilities

In afternoon trading: Heavily Traded Stocks: Shares of Duke Energy (DUK) are down about 2.7%. Shares of Genon Energy (GEN) are down about 0.9%. Shares of CenterPoint Energy (CNP) are up about 0.7%. Shares of Exelon (EXC) are relatively unchanged. Shares of AES Corp (AES) are down about a half of a percent.

The Utilities Select Sector SPDR (XLU) was trading at $34.70 at 4:00 PM on Wednesday, down 0.20% on the day – down 3.56% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

STOCKS: XEC, FTI, GMLP, SZYM, CRK, AU, HWD, MOV, AAUKY, FCX, AA, VALE, CX, DE, OC, CW, CPA, LMT, GNRC, DGI, CMCSA, ANF, PEET, BOBE, WTW, TRIP, NCMI, ARB, PLCE, FOSL, PUBGY, HAS, IHG, PG, K, DMND, SWY, KMB, AOB, IPSU, DF, ILMN, RHHBY, HSIC, TEVA, GIVN, ELOS, OCR, FMS, BPAX, ALNY, COF, ING, SKT, ACC, MET, BMR, FIS, BAC, BBVA, HST, LHO, PEB, DBOEY, WAMUQ, WSH, AAPL, ZNGA, AAPL, RENN, SAPE, QSFT, EBAY, FIO, DELL, ORCL, PWAV, ENER, CYDE, FTR, S, T, VZ, CLWR, ATML, DUK, GEN, CNP, EXC, AES

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
AA Alcoa Inc. 9.68 -0.08 -0.82 10,113,424
AAPL Apple Inc. 112.88 0.17 0.15 29,915,162
ACC American Campus Communities Inc 51.47 0.38 0.74 679,234
AES The AES Corporation 13.12 -0.14 -1.06 2,636,128
ALNY Alnylam Pharmaceuticals Inc. 76.00 0.43 0.57 382,362
ANF Abercrombie & Fitch Company 16.14 -0.58 -3.47 3,023,410
ATML Atmel Corp n/a n/a n/a 0
AU AngloGold Ashanti Limited 15.94 -0.26 -1.60 2,229,390
BAC Bank of America Corporation 15.09 -0.43 -2.77 94,980,306
BBVA Banco Bilbao Vizcaya Argentaria S.A. 5.96 -0.19 -3.09 1,987,877
BMR Biomed Realty Trust Inc n/a n/a n/a 0
BOBE Bob Evans Farms Inc. 38.69 -0.79 -2.00 112,863
CMCSA Comcast Corporation Class A Common Stock 65.81 -1.34 -2.00 7,822,463
CNP CenterPoint Energy Inc (Holding Co) 24.26 0.07 0.29 1,913,201
COF Capital One Financial Corporation 70.81 -0.47 -0.66 3,075,322
CPA Copa Holdings S.A. Class A 86.15 -4.35 -4.81 1,329,770
CRK Comstock Resources Inc. 7.29 0.35 5.04 595,829
CX Cemex S.A.B. de C.V. Sponsored ADR 7.55 -0.18 -2.33 10,192,765
DE Deere & Company 83.58 0.24 0.29 3,409,833
DF Dean Foods Company 16.53 0.03 0.18 1,697,408
DGI DigitalGlobe Inc 26.92 -0.07 -0.26 189,655
DMND Diamond Foods Inc. n/a n/a n/a 0
DUK Duke Energy Corporation (Holding Company) 82.15 -0.37 -0.45 2,718,086
EBAY eBay Inc. 31.67 -0.40 -1.25 6,223,692
ELOS Syneron Medical Ltd. 7.02 0.04 0.57 127,245
EXC Exelon Corporation 34.82 0.02 0.06 3,545,719
FCX Freeport-McMoRan Inc. 10.51 -0.12 -1.13 24,070,055
FIS Fidelity National Information Services Inc. 76.87 -0.21 -0.27 943,679
FMS Fresenius Medical Care AG 44.16 -0.92 -2.04 133,351
FOSL Fossil Group Inc. 28.77 -1.58 -5.21 917,289
FTI FMC Technologies Inc. 27.53 0.08 0.29 3,099,844
FTR Frontier Communications Corporation 4.36 0.03 0.69 11,918,772
GEN Genesis Healthcare Inc. 2.71 -0.01 -0.37 149,647
GMLP Golar LNG Partners LP 19.19 -0.10 -0.52 184,013
GNRC Generac Holdlings Inc. 34.29 -0.30 -0.87 400,695
HAS Hasbro Inc. 79.37 -0.79 -0.99 1,033,731
HSIC Henry Schein Inc. 162.62 -1.83 -1.11 308,669
HST Host Hotels & Resorts Inc. 16.01 -0.24 -1.48 8,064,419
IHG Intercontinental Hotels Group American Depositary 40.66 -2.45 -5.68 479,200
ILMN Illumina Inc. 178.47 -0.86 -0.48 645,775
ING ING Group N.V. 12.14 -0.19 -1.54 2,625,814
K Kellogg Company 77.39 -0.32 -0.41 1,210,964
KMB Kimberly-Clark Corporation 125.51 -1.22 -0.96 1,336,850
LHO LaSalle Hotel Properties 24.29 -0.77 -3.07 973,771
LMT Lockheed Martin Corporation 245.53 -0.31 -0.13 880,702
MET MetLife Inc. 43.40 -1.12 -2.52 7,162,353
MOV Movado Group Inc. 21.76 -0.74 -3.29 125,401
NCMI National CineMedia Inc. 14.54 0.04 0.28 242,935
OC Owens Corning Inc New 53.48 0.15 0.28 1,281,185
ORCL Oracle Corporation 39.03 -0.20 -0.51 9,840,941
PAC Grupo Aeroportuario Del Pacifico S.A. B. de C.V. d 89.24 -1.46 -1.61 68,836
PEB Pebblebrook Hotel Trust of Beneficial Interest 26.14 -0.45 -1.69 1,189,382
PG Procter & Gamble Company (The) 87.85 0.09 0.10 60,276,563
PLCE Children\'s Place Inc. (The) 79.11 -0.40 -0.50 269,329
RENN Renren Inc. American Depositary Shares each repres 1.92 -0.03 -1.54 700,729
S Sprint Corporation 6.65 0.01 0.15 13,903,550
SKT Tanger Factory Outlet Centers Inc. 39.90 0.20 0.50 405,048
SZYM Solazyme Inc. n/a n/a n/a n/a
T AT&T Inc. 41.14 -0.14 -0.34 16,647,271
TEVA Teva Pharmaceutical Industries Limited American De 50.27 -1.20 -2.33 4,242,813
TRIP TripAdvisor Inc. 61.89 0.02 0.03 999,651
VALE VALE S.A. American Depositary Shares Each Represen 5.38 -0.04 -0.74 13,179,566
VZ Verizon Communications Inc. 52.15 -0.41 -0.78 10,559,198
WSH Willis Group Holdings n/a n/a n/a 0
WTW Weight Watchers International Inc 10.35 -0.09 -0.86 392,233
XEC Cimarex Energy Co 124.58 0.78 0.63 1,005,169
ZNGA Zynga Inc. 2.83 -0.01 -0.35 14,559,505

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