Equities Sector Coverage: Wall Street Continues to Inch Higher

Sector Recap |

Bull Wall StreetInitial Jobless Claims came in at 351,000 flirting with breaking below the recessionary threshold of 350,000 for several weeks in a row now. Personal Income for January came in weaker than expected at +0.3% with Spending below estimates at 0.2%. ISM Manufacturing came in weaker than expected at 52.4 with prices paid elevated at 61.5. Construction Spending fell for the first time in six months. The Dow Jones Industrial Average moved back above 13,000 at Thursday’s open, but dipped below that milestone after the 10:00 AM ISM and Construction data. The Dow traded back and forth around 13,000 in afternoon trading. The NASDAQ stayed below 3000 after a morning low at 2974.59. Dow Transports and Russell 2000 continue to lag their 2011 all time highs at 5627.85 and 868.57 respectively.

Asian stocks were lower on Thursday with the Nikkei 225 ending their session 9,707 – down 0.16% on the day. The Hang Seng ended their session at 21,388 – down 1.35% on the day. European stocks ended higher on Thursday. The FTSE 100 ended their session at 5,931 – up 1.02% on the day, the DAX ended their session at 6,942 up 1.25% on the day, and the CAC 40 ended their session at 3,500 – up 1.37% on the day. The yield on the 10-Year US Treasury rose from 1.976 percent to 2.064 trending above its 50-day simple moving average at 1.942. Gold rebounded from $1695.1 the Troy ounce to $1727.3. Crude oil rebounded from $106.55 per barrel to $108.90 then spiked to $110.55 on a Saudi pipeline explosion. The euro versus the dollar traded down from 1.3355 to 1.3286.

Energy

CVR Energy's (CVI) board has rejected Carl Icahn's $2.6B bid for the company, calling the offer "inadequate" and urging shareholders to vote against it. Chevron (CVX) has helds talks with Russia over possibly helping to drill for the vast oil reserves in the Arctic, an area it sees as "a huge gap in our portfolio." Kinder Morgan (KMI) scored a win when a judge refused to block its acquisition of El Paso (EP), disappointing the latter's shareholders who had argued that a conflict in interest resulted in a deal that undervalued EP's shares. James River Coal (JRCC) reported Q4 EPS of -$0.05 (versus consensus of $0.04), while missing revenue by $9M. Vanguard Natural Resources (VNR) reported Q4 EPS of $0.76 (versus consensus of $0.50), while beating revenue by $4M. Rio Narcea Gold Mines (RNO) beat estimates by 7 cents with revenue in-line with estimates. McDermott International (MDR) missed estimates by 16 cents and revenue by $85M. Atwood Oceanics (ATW) gets a Buy-from-Hold boost at Dahlman Rose. Denbury Resources (DNR) gets a Neutral-from-Sell increase at Sterne Agee. Linn Energy (LINE) is increased to Outperform from Neutral at Credit Suisse. Sonoco Products (SON) is raised to Outperform from Neutral at brokerage Robert W. Baird. Copano Energy (CPNO) is trimmed to Long-term Buy from Buy at Hilliard Lyons. QEP Resources (QEP) is now Underperform from Neutral at Sterne Agee. SandRidge Energy (SD) is slashed to Sell from Hold at Canaccord Genuity.
Energy Select Sector SPDR (XLE) was trading at $75.60 at 4:00 PM on Thursday, up 0.96% on the day – up 9.36% year-to-date. The 2011 change was -1.29%

Big Movers: (MDR) +14.5%, (YPF) +14.25%, (JRCC) +12%.

Materials

Thompson Creek Metals (TC) is taken to Sector Perform from Outperform at RBC Capital.
The Materials Select Sector SPDR (XLB) was trading at $37.38 at 4:00 PM on Thursday, up 1.11% on the day – up 11.58% year-to-date. The 2011 change was -12.78%.

Heavily Traded: (AA) +0.7%, (FCX) +0.8%, (VALE) +1.7%, (CX) +1.2%.

Industrials

H&E Equipment Services (HEES) beat estimates by 15 cents and revenue by $34M. Joy Global’s (JOYG) FQ1 earnings missed estimates today. First Analysis downgrades Sykes Enterprises (SYKE) on the back of its Q4 report due to weak guidance and revenue growth concerns. Aircastle (AYR) is cut to Market Perform from Outperform at FBR Capital.
The Industrial Select Sector SPDR (XLI) was trading at $37.36 at 4:00 PM on Thursday, up 0.35% on the day – up 10.70% year-to-date. The 2011 change was -3.21%.
Big Movies: (DGI) -15.75%, (HEES) +15.25%, (MTZ) +12.75%.

Consumer Discretionary

Wendy's Arby's Group (WEN) beat estimates by 2 cents and revenue by $6M. Martha Stewart Living Omnimedia (MSO) missed estimates by 3 cents and revenue by $2M. Kenneth Cole Productions (KCP) beat estimates by 15 cents and revenue by $5M. PetSmart (PETM) beat estimates by a penny with revenue in-line with estimates. The company also raises its Q1 forecast above Street estimates, now expecting to earn between $0.70 - $0.74 per share (versus consensus expectations of $0.70). Sotheby's (BID) missed estimates by 24 cents and revenue by $14M. Cantor Fitzgerald has Holds on Host Hotels (HST), Hyatt Hotels (H), and Starwood Hotels (HOT). It begins Buys on Marriott International (MAR), Ashford Hospitality (AHT), and Wyndham Worldwide (WYN). Liz Claiborne Inc (LIZ) is launched at an Outperform with Wedbush. Wendy’s (WEN) is now Neutral from Buy at Janney Montgomery Scott. TripAdvisor (TRIP) is taken to Neutral from Buy by Bank of America-Merrill Lynch. Summit Hotel (INN) is now Neutral from Buy at Janney Montgomery Scott.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.55 at 4:00 PM on Thursday, up 0.83% on the day – up 11.61% year-to-date. The 2011 change was +4.30%.

Big Movers: (LIZ) +12%, (BID) -11%.

Consumer Staples

Kroger (KR) beat estimates by a penny with revenue in-line with estimates. Andersons Inc (ANDE) is a fresh Market Perform at BMO Capital. Walgreen (WAG) is lowered to Underperform from Neutral at Bank of America-Merrill Lynch.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.18 at 4:00 PM on Thursday, down 0.15% on the day – up 2.12% year-to-date. The 2011 change was +10.85%.

Big Mover: (DAR) +10%
Heavily Traded: (WMT) -0.5%, (KR) +2.1%, (WAG) -1.3%, (PG) -1.7%.

Health Care

Furiex Pharmaceuticals (FURX) is resumed at Outperform at Cowen & Company. Savient Pharmaceuticals (SVNT) is started with an Outperform by brokers William Blair. Stryker (SYK) is assigned an Outperform with Wells Fargo. Uroplasty (UPI) is a new Buy at Boutique broker MLV & Co. LHC Group (LHCG) is hoisted to Buy from Hold at Deutsche Bank.
The Health Care Select Sector SPDR (XLV) was trading at $36.37 at 4:00 PM on Thursday, up 0.53% on the day – up 4.84 year-to-date. The 2011 change was +10.32%.

Big Mover: (AMRN) +11%.

Financials

The five biggest U.S. banks BofA (BAC), JP Morgan (JPM), Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) are too powerful and should be broken up, Dallas Fed President Richard Fisher said after a speech lauding Mexico's economic reforms. Bank of America (BAC) is working on plans to once again revamp its fee system, tagging some clients with monthly charges unless they agree to bank online, buy more products or maintain certain balances. HSBC (HBC) is nearing a deal to sell its general insurance business for around $1B, Reuters reports, as the bank continues to sell non-core assets worldwide. Toronto Dominion Bank (TD) beat estimates by 9 cents with revenue in-line with estimates. BlackRock (BLK), Invesco (IVZ) and T. Rowe Price (TROW) are all initiated with Market Performs by Sanford Bernstein, which begins Franklin Resources (BEN) at Outperform. CME Group (CME) is cut 180 degrees, to Underperform from Outperform at Crédit Agricole. Protective Life (PL) is lowered to Underperform from Neutral at Bank of America-Merrill Lynch.
The Financial Select Sector SPDR (XLF) was trading at $14.92 at 4:00 PM on Thursday, up 1.08% on the day – up 14.77% year-to-date. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Pegasystems (PEGA) beat estimates by 11 cents and revenue by $11M. The company expects 2012 revenue of $500M and EPS of $0.91 (compared with a consensus of $490.2M and $0.98). Rosetta Stone (RST) reported Q4 EPS of -$0.09 (versus consensus of -$0.28), while beating revenue by $13M. Finisar (FNSR) beat estimates by a penny, while missing revenue by $2.2M. The company expects FQ4 revenue of $235M-$250M and EPS of $0.18-$0.22 (below a consensus of $253.5M and $0.25). Yingli Green Energy (YGE) posted a mixed Q4, beating on its EPS but coming up short on the revenue side of the equation. Citigroup maintains a Hold on First Solar's (FSLR), despite the company’s poor Q4 results and reduced 2012 revenue outlook. FARO Technologies (FARO) is cut to Neutral at Baird on the back of its Q4 results released yesterday. MasterCard (MA), Visa (V), VeriFone (PAY), and Western Union (WU) are all new Neutrals at UBS, which begins Buys on both Automatic Data Processing (ADP) and Paychex (PAYX). Fusion-io Inc (FIO) is a new Outperform at Credit Suisse. IAC/InterActiveCorp (IACI) is upgraded to Buy from Neutral at Bank of America-Merrill Lynch. ADTRAN Inc (ADTN) is moved to Equal Weight from Overweight at Morgan Stanley. Spreadtrum Communications (SPRD) is now Buy from Strong Buy at Needham.
The Technology Select Sector SPDR (XLK) was trading at $29.12 at 4:00 PM on Thursday, up 0.60% on the day – up 14.42% year-to-date. The 2011 change was +1.03%.

Big Movers: (PEGA) +34%, (CYDE) +32%, (MWW) +13%.

Telecommunication Services

Tata Communications (TCL) is reportedly considering a bid for Cable & Wireless Worldwide (CBWWY), the same fiber-network operator that Vodafone (VOD) said it may try to acquire.
The NASDAQ Telecommunications Index (IXTC) was trading at $213.81 at 4:00 PM on Thursday, up 0.15% on the day – up 8.57% year-to-date. The 2011 change was -12.62%.

Heavily Traded: (CLWR) -2.8%, (S) +1.3%, (T) flat, (FTR) -1.2%, (PCS) +3.3%.

Utilities

The Utilities Select Sector SPDR (XLU) was trading at $34.98 at 4:00 PM on Thursday, up 0.25% on the day – down 2.78% year-to-date. The 2011 change was +14.81%; the strongest performing sector for the year.

Big Mover: (VE) +15.25%.
Heavily Traded: (DUK) +0.6%, (CNP) -0.5%, (GEN) +0.4%, (AEP) +0.4%, (EIX) +2.5%, (EXC) -0.2%.

STOCKS: CVI, CVX, KMI, EP, JRCC, VNR, RNO, MDR, ATW, DNR, LINE, SON, CPNO, QEP, SD, YPF, TC, AA, FCX, VALE, CX, HEES, JOYG, SYKE, AYR, DGI, MTZ, WEN, MSO, KCP, PETM, BID, HST, H, HOT, MAR, AHT, WYN, LIZ, TRIP, INN, KR, ANDE, WAG, DAR, WMT, PG, FURX, SVNT, SYK, UPI, LHCG, BAC, JPM, GS, MS, C, HBC, TD, BLK, IVZ, TROW, BEN, CME, PL, PEGA, RST, FNSR, YGE, FSLR, FARO, MA, V, PAY, WU, ADP, PAYX, FIO, IACI, ADTN, SPRD, CYDE, MWW, TCL, CBWWY, VOD, CLWR, S, T, FTR, PCS, VE, DUK, CNP, GEN, AEP, EIX, EXC

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. 10.14 0.18 1.81 22,888,915
ADP Automatic Data Processing Inc. 88.20 0.99 1.14 2,689,838
ADTN ADTRAN Inc. 19.14 0.23 1.22 269,002
AEP American Electric Power Company 64.21 -0.29 -0.45 4,152,613
AHT Ashford Hospitality Trust Inc 5.89 -0.03 -0.51 830,524
ANDE The Andersons Inc. 36.18 1.30 3.73 155,083
ATW Atwood Oceanics Inc. 8.69 0.12 1.40 4,770,229
AYR Aircastle Limited 19.86 0.28 1.43 502,093
BAC Bank of America Corporation 15.65 0.49 3.23 119,428,684
BEN Franklin Resources Inc. 35.57 0.83 2.39 3,100,154
BID Sotheby\'s 38.02 1.24 3.37 739,014
C Citigroup Inc. 47.23 1.43 3.12 25,563,084
CME CME Group Inc. 104.52 -0.20 -0.19 2,069,677
CNP CenterPoint Energy Inc (Holding Co) 23.23 -0.35 -1.48 5,115,785
CVI CVR Energy Inc. 13.77 0.17 1.25 646,341
CVX Chevron Corporation 102.92 1.65 1.63 9,431,524
CX Cemex S.A.B. de C.V. Sponsored ADR 7.94 -0.25 -3.05 14,598,842
DAR Darling Ingredients Inc. 13.51 0.21 1.58 1,141,415
DGI DigitalGlobe Inc 27.50 0.24 0.88 281,543
DNR Denbury Resources Inc. 3.23 0.08 2.54 12,867,765
DUK Duke Energy Corporation (Holding Company) 80.04 -0.27 -0.34 3,883,040
EIX Edison International 72.25 -0.43 -0.59 1,734,361
EXC Exelon Corporation 33.29 0.00 0.00 5,529,887
FARO FARO Technologies Inc. 35.95 0.33 0.93 103,875
FCX Freeport-McMoRan Inc. 10.86 0.17 1.59 26,469,580
FNSR Finisar Corporation 29.80 0.32 1.09 1,654,443
FSLR First Solar Inc. 39.49 0.41 1.05 2,818,097
FTR Frontier Communications Corporation 4.16 -0.09 -2.12 20,358,312
GEN Genesis Healthcare Inc. 2.67 0.05 1.91 172,362
GS The Goldman Sachs Group Inc. 161.27 2.32 1.46 4,497,189
H Hyatt Hotels Corporation Class A 49.22 0.41 0.84 342,749
HEES H&E Equipment Services Inc. 16.76 0.05 0.30 293,401
HOT Starwood Hotels & Resorts Worldwide Inc. 77.05 0.00 0.00 0
HST Host Hotels & Resorts Inc. 15.57 -0.08 -0.51 13,911,481
IACI IAC/InterActiveCorp n/a n/a n/a 0
INN Summit Hotel Properties Inc. 13.16 -0.09 -0.68 600,339
IVZ Invesco Ltd 31.27 0.83 2.73 3,411,362
JPM JP Morgan Chase 66.59 0.94 1.43 21,680,093
KMI Kinder Morgan Inc. 23.13 0.37 1.63 15,056,338
KR Kroger Company (The) 29.68 0.18 0.61 26,199,603
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
LIZ Liz Claiborne Inc. n/a n/a n/a 0
MAR Marriott International 67.33 0.23 0.34 6,088,174
MDR McDermott International Inc. 5.01 0.19 3.94 3,538,805
MS Morgan Stanley 32.06 1.02 3.29 16,269,726
MSO Martha Stewart Living Omnimedia Inc. n/a n/a n/a 0
MTZ MasTec Inc. 29.74 -0.12 -0.40 575,895
MWW Monster Worldwide Inc. 3.61 0.06 1.69 933,113
PAY Verifone Systems Inc. 15.74 -0.03 -0.19 1,884,232
PAYX Paychex Inc. 57.87 0.71 1.24 2,444,829
PEGA Pegasystems Inc. 29.49 0.00 0.00 301,698
PG Procter & Gamble Company (The) 89.75 1.52 1.72 123,735,748
QEP QEP Resources Inc. 19.53 0.20 1.03 4,372,461
RNO RNO n/a n/a n/a 0
RST Rosetta Stone Inc. 8.48 0.26 3.16 41,745
S Sprint Corporation 6.63 -0.03 -0.45 14,655,332
SD SandRidge Energy n/a n/a n/a 0
SON Sonoco Products Company 52.83 0.34 0.65 357,282
SYK Stryker Corporation 116.41 0.71 0.61 1,196,878
SYKE Sykes Enterprises Incorporated 28.13 0.63 2.29 159,888
T AT&T Inc. 40.61 -0.12 -0.29 19,381,624
TC TC n/a n/a n/a 0
TD Toronto-Dominion Bank 44.40 0.09 0.20 1,413,577
TRIP TripAdvisor Inc. 63.18 0.18 0.29 1,690,269
TROW T. Rowe Price Group Inc. 66.50 0.96 1.46 1,798,957
V Visa Inc. 82.70 0.78 0.95 9,776,837
VALE VALE S.A. American Depositary Shares Each Represen 5.50 -0.03 -0.54 13,523,281
VNR Vanguard Natural Resources LLC 0.90 -0.11 -10.45 2,254,853
VOD Vodafone Group Plc 29.15 0.03 0.10 4,732,148
WMT Wal-Mart Stores Inc. 72.12 1.39 1.97 9,982,598
WU Western Union Company (The) 20.82 0.33 1.61 6,330,773
WYN Wyndham Worldwide Corp Common Stock 67.33 0.27 0.40 1,598,687
YGE Yingli Green Energy Holding Company Limited ADR 3.87 0.03 0.78 40,165
YPF YPF Sociedad Anonima 18.22 0.31 1.73 456,808

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