Equities Sector Coverage: Wall Street Continues to Inch Higher

Sector Recap  |

Initial 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
INN Summit Hotel Properties Inc. 11.82 -0.02 -0.17 505,686 Trade
AHT Ashford Hospitality Trust Inc 3.16 0.03 0.96 988,390 Trade
GEN Genesis Healthcare Inc. 1.35 -0.07 -4.93 161,736 Trade
FTR Frontier Communications Corporation 1.01 -0.08 -7.34 1,985,148 Trade
ADTN ADTRAN Inc. 11.42 0.01 0.09 143,850 Trade
KR Kroger Company (The) 25.82 0.60 2.38 10,137,836 Trade
PG Procter & Gamble Company (The) 121.90 0.49 0.40 4,747,456 Trade
CVX Chevron Corporation 123.66 -0.52 -0.42 4,054,527 Trade
TD Toronto Dominion Bank (The) 57.55 0.32 0.56 813,914 Trade
ADP Automatic Data Processing Inc. 159.35 1.58 1.00 1,854,439 Trade
AYR Aircastle Limited 22.99 -0.11 -0.48 255,388 Trade
SON Sonoco Products Company 58.09 -0.80 -1.36 380,774 Trade
VALE VALE S.A. American Depositary Shares Each Representing one 11.58 -0.19 -1.61 13,767,039 Trade
WYN WYND Pembina Pipeline Corporation n/a n/a n/a 0
RST Rosetta Stone Inc. 18.91 -0.16 -0.84 159,593 Trade
H Hyatt Hotels Corporation Class A 76.75 1.08 1.43 787,243 Trade
AA Alcoa Corporation 21.94 0.27 1.25 2,992,223 Trade
CNP CenterPoint Energy Inc (Holding Co) 30.04 0.07 0.23 3,456,120 Trade
AX.PR.A:CA Artis Real Estate Investment Trust Preferred Units, Series A 22.75 0.00 0.00 1,100
PEGA Pegasystems Inc. 71.86 -0.50 -0.69 180,463 Trade
C Citigroup Inc. 69.73 -0.36 -0.51 10,130,900 Trade
S Sprint Corporation 6.74 0.01 0.15 4,792,445 Trade
EIX Edison International 72.63 0.56 0.78 1,325,905 Trade
BEN Franklin Resources Inc. 29.56 0.12 0.41 2,358,878 Trade
MS Morgan Stanley 44.02 -0.34 -0.77 6,478,600 Trade
ANDE The Andersons Inc. 26.84 -0.49 -1.79 190,550 Trade
FNSR Finisar Corporation 23.07 0.06 0.26 1,422,428 Trade
DAR Darling Ingredients Inc. 19.94 -0.20 -0.99 621,422 Trade
VOD Vodafone Group Plc 19.96 0.49 2.52 3,180,195 Trade
TROW T. Rowe Price Group Inc. 116.00 -1.11 -0.95 1,029,722 Trade
V Visa Inc. 175.96 0.67 0.38 7,024,244 Trade
TRIP TripAdvisor Inc. 40.29 -0.68 -1.66 1,382,961 Trade
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
MDR McDermott International Inc. 1.58 -0.58 -26.85 101,688,927 Trade
GS Goldman Sachs Group Inc. (The) 215.23 -1.85 -0.85 1,606,370 Trade
SYKE Sykes Enterprises Incorporated 31.01 -0.28 -0.89 179,270 Trade
MAR Marriott International 129.55 -0.64 -0.49 1,089,333 Trade
MWW Monster Worldwide Inc. n/a n/a n/a 0 Trade
HST Host Hotels & Resorts Inc. 17.27 -0.03 -0.17 4,273,786 Trade
BAC Bank of America Corporation 29.82 -0.18 -0.60 44,053,804 Trade
BID Sotheby's 56.94 0.04 0.07 1,228,163 Trade
RNO RNO n/a n/a n/a 0
KMI Kinder Morgan Inc. 20.69 0.02 0.10 9,057,036 Trade
MSO Martha Stewart Living Omnimedia Inc. n/a n/a n/a 0 Trade
FCX Freeport-McMoRan Inc. 10.45 0.09 0.87 19,976,029 Trade
YGE Yingli Green Energy Holding Company Limited ADR n/a n/a n/a n/a
TC TuanChe Limited 2.60 -0.02 -0.76 12,984 Trade
LIZ Liz Claiborne Inc. n/a n/a n/a 0 Trade
WEN Wendy's Company (The) 20.55 0.44 2.19 4,298,591 Trade
QEP QEP Resources Inc. 4.13 0.01 0.24 5,711,009 Trade
DNR Denbury Resources Inc. 1.32 -0.04 -2.94 16,427,156 Trade
FSLR First Solar Inc. 67.07 1.32 2.01 1,817,939 Trade
VNR Vanguard Natural Resources LLC n/a n/a n/a 0
HEES H&E Equipment Services Inc. 28.12 -0.07 -0.25 212,294 Trade
MTZ MasTec Inc. 64.53 -0.32 -0.49 876,075 Trade
SD SandRidge Energy Inc. 5.46 -0.21 -3.70 151,583 Trade
IVZ Invesco Ltd 17.05 0.11 0.65 3,967,423 Trade
CVI CVR Energy Inc. 44.17 0.42 0.96 537,746 Trade
IACI IAC/InterActiveCorp n/a n/a n/a 0 Trade
EXC Exelon Corporation 47.80 -0.14 -0.29 4,196,294 Trade
CME CME Group Inc. 211.95 -4.22 -1.95 1,375,914 Trade
T AT&T Inc. 37.15 0.39 1.06 27,212,891 Trade
YPF YPF Sociedad Anonima 9.23 0.43 4.89 3,124,564 Trade
DUK Duke Energy Corporation (Holding Company) 94.49 0.23 0.24 2,052,883 Trade
HOT Starwood Hotels & Resorts Worldwide Inc. n/a n/a n/a 0 Trade
SYK Stryker Corporation 221.05 0.57 0.26 998,206 Trade
CX Cemex S.A.B. de C.V. Sponsored ADR 3.98 0.00 0.00 4,583,800 Trade
WU Western Union Company (The) 22.71 -0.10 -0.44 4,303,609 Trade
AEP American Electric Power Company Inc. 93.18 0.16 0.17 1,256,227 Trade
FARO FARO Technologies Inc. 53.17 1.00 1.92 110,458 Trade
PAYX Paychex Inc. 82.50 -0.27 -0.33 1,126,870 Trade
WMT Walmart Inc. 117.11 -0.05 -0.04 3,392,035 Trade
JPM JP Morgan Chase & Co. 119.38 -0.38 -0.32 9,395,440 Trade

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