Equities Sector Coverage: Wall Street Continues to Slump

Sector Recap |

Wall Street Continues to SlumpHousing starts for April rose by 2.6% to an annual rate of 717,000, which topped estimates for a 680,000-unit rate. Permits to build new homes fell 7% to a 715,000-unit rate, which was short of the 730,000-unit rate expected. Industrial Production rose a stronger than expected 1.1% in April with Capacity Utilization at 79.2. The Dow Jones Industrial Average rebounded to 12,722.63 on Wednesday morning then declined to a low of 12,611.42 into the final half hour of trading. The NASDAQ traded between 2896.82 and 2913.90 in morning trading then dipped to 2873.28 going into the final half hour of trading.

Asian stocks were lower on Wednesday. The Nikkei 225 ended their session at 8,801 – down 1.12% on the day. The Hang Seng ended their session at 19,260 – down 3.19% on the day. European exchanges opened lower on Wednesday, but clawed their way into positive territory before the US open then closed mixed. The FTSE 100 ended their session at 5,405 – down 0.60% on the day. The DAX ended their session at 6,384 – down 0.26% on the day. The CAC 40 ended their session at 3,049 – up 0.31% on the day. The yield on the 10-Year US Treasury declined to another YTD low at 1.747 percent then rose to 1.819 and then consolidated that range, well below its 50-day and 200-day simple moving averages at 2.050 and 2.026.

Gold traded down to a new year to date low of $1526.7 the Troy ounce then rebounded to $1552.2 before consolidating well below the “Death Cross” 50-day and 200-day simple moving averages at $1646.5 and $1697.4. Crude oil traded down to $91.81 per barrel then rebounded to $94.16 then consolidated still below its 200-day simple moving average at $96.24. The euro versus the dollar traded down to 1.2684 then rebounded to 1.2757 below its 50-day simple moving average at 1.3137.

Energy

Energy Transfer Partners (ETP) could raise $1.8 billion for the 4,900 gasoline stations it acquired when it agreed to buy Sunoco (SUN) last month in a $5.3 billion deal. Midstates Petroleum (MPO) has been initiated with a Buy rating at Suntrust. Patriot Coal (PCX) has been initiated with an Underperform at Imperial Capital, whose target price is $2.50. PetroChina (PTR) has been upgraded to Buy from Hold at Deutsche Bank. SandRidge Energy (SD) has been upgraded to Hold from Sell at Canaccord Genuity. SeaDrill Limited (SDRL) has been upgraded to Buy from Neutral at Citigroup. Dow components – Chevron (CVX) – down 0.19%, Exxon Mobil (XOM) up 0.87%.
Energy Select Sector SPDR (XLE) was trading at $64.92 at 3:30 PM on Wednesday, down 0.31% on the day – down 6.09% year-to-date.

Materials

BHP Billiton (BHP) has indicated that the company no longer plans to invest $80 billion in new projects over five years, as further easing of commodity prices adds to the uncertainty in the global economy. Ivanhoe Mines Ltd (IVN) missed Q1 EPS estimates by a nickel with a miss on the revenue line. The company wants to change its name to Turquoise Hill Resources. Freeport-McMoRan (FCX) expects Chinese demand to boost copper prices and thus the company will increase its capex budget to $4.3 billion in 2012 and $4.2 billion in 2013 versus $2.5 billion last year. Dow components – Alcoa (AA) down 0.29%, DuPont (DD) up 0.30%.
The Materials Select Sector SPDR (XLB) was trading at $33.73 at 3:30 PM on Wednesday, down 0.82% on the day – up 0.69% year-to-date.

Industrials

Dow components – Boeing Co (BA) up 0.61%, Caterpillar (CAT) flat, General Electric (GE) up 4.13%, 3M Company (MMM) flat, United Technologies (UTX) down 0.59%.
The Industrial Select Sector SPDR (XLI) was trading at $35.07 at 3:30 PM on Wednesday, down 0.03% on the day – up 3.91% year-to-date.

Consumer Discretionary

Berkshire Hathaway (BRK.A) has disclosed that it owns 10 million shares in General Motors (GM), which sent the car maker's shares 4.8% higher in after hours trading on Tuesday. Berkshire has also added Viacom (VIAB) to its holdings. Multiband (MBND) missed Q1 EPS estimates by sic cents with a miss on the revenue line. Dow Components – Disney (DIS) up 0.69%, Home Depot up 0.75%, McDonalds (MCD) up 0.43%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.60 at 3:30 PM on Wednesday, up 0.11% on the day – up 11.74% year-to-date.

Consumer Staples

J.C. Penney (JCP) plunged 12.2% in after hours trading on Tuesday after the retailer reported FQ1 results that missed expectations, included a cut of 20 cents to its dividend, and a cut to FY12 forecasts. Staples' (SPLS) reported in their Q1 earnings release that their North American Retail revenue was flat year over year, while International Operations slipped 8%. Outlook for 2012 assumes low growth in the U.S. and soft demand in Europe. The stock was 2.6% lower premarket Wednesday. Ralcorp (RAH) announced late yesterday that it will delay its FQ@ earnings report because on ongoing internal and external in-depth reviews associated with its previously announced financial restatements. Dow components – Kraft (KFT) flat, Coca Cola (KO) down 0.20%, Procter & Gamble (PG) up 1.54%, Wal-Mart (WMT) up 0.49%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.02 at 3:30 PM on Wednesday, up 0.507% on the day – up 4.71% year-to-date.

Health Care

An FDA advisory panel gave its unanimous approval to allow Orasure's (OSUR) HIV test kit to be sold in retail stores, allowing consumers to test for the virus at home. Arena Pharmaceuticals (ARNA) announced that it has filed a secondary offering with no share amount yet given. Dow Components – Johnson & Johnson (JNJ) flat, Merck (MRK) up 1.35%, Pfizer (PFE) up 1.21%.
The Health Care Select Sector SPDR (XLV) was trading at $36.77 at 3:30 PM on Wednesday, up 0.27% on the day – up 6.00% year-to-date.

Financials

Berkshire Hathaway (BRK.A) has disclosed that it owns 10 million shares in General Motors (GM), which sent the car maker's shares 4.8% higher in after hours trading on Tuesday. Berkshire has also added Viacom (VIAB) to its holdings. Canadian insurer Sun Life Financial (SLF) is considering selling its U.K. arm as foreign firms and retreat from the British market. Brookfield Asset Management (BAM) will bundle a wide array of commercial property into a new publicly traded subsidiary looking for further growth. Aetna (AET) has been downgraded to Hold from Buy at Argus due to a negative outlook for its medical utilization. Hudson City Bancorp (HCBK) has been downgrade to Neutral from Buy at Compass Point. Dow Components – American Express (AXP) up 0.43%, Bank of America (BAC) down 0.48%, JP Morgan Chase (JPM) up 0.34%, Travelers (TRV) flat.
The Financial Select Sector SPDR (XLF) was trading at $14.25 at 3:30 PM on Wednesday, down 1.25% on the day – up 9.62% year-to-date.

Information Technology

Google (GOOG) is planning a major overhaul of its Android strategy according to the Wall Street Journal. Instead of partnering to build a handful of devices through its Nexus line, Google will form hardware agreements with up to five manufacturers. The idea is that this strategy will allow Android gear to better compete with Apple’s iPhone. Sina (SINA) beat Q1 EPS estimates by two cents with a beat on the revenue line. Apple (AAPL) plans to use Nvidia (NVDA) graphics processors (GPUs) in their next generation MacBook Pro models. Mobile power amplifier vendors TriQuint (TQNT) and Avago (AVGO) have agreed to end all litigation between the two and enter into a patent cross-licensing agreement. Dow Components – Cisco Systems (CSCO) up 0.60%, Hewlett-Packard (HPQ) down 0.23%, IBM (IBM) up 0.71%, Intel Corp (INTC) down 0.35%, Microsoft (MSFT) down 1.12%.
The Technology Select Sector SPDR (XLK) was trading at $28.13 at 3:30 PM on Wednesday, down 0.81% on the day – up 10.53% year-to-date.

Telecommunication Services

The FCC is asking for needs more details from Verizon Wireless (VZ, VOD) on its offer to sell some wireless spectrum, if and when regulators approve its plan to purchase another set of airwaves for $3.9 billion. KIT digital (KITD) missed Q1 EPS estimates by twenty cents with a miss on the revenue line. Dow components – AT&T (T) down 0.19%, Verizon (VZ) down 0.39%.

The NASDAQ Telecommunications Index (IXTC) was trading at $183.76 at 3:30 PM on Wednesday, down 0.39% on the day – down 6.69% year-to-date.

Utilities

Xcel Energy (XEL) has been downgraded to Hold on valuation at Jefferies, noting that the stock is currently trading near its target premium. Telecom Italia (TI) has been upgraded to Neutral from Sell at Goldman Sachs. Windstream (WIN) has been upgraded to Buy from Hold at Stifel Nicolaus, on a dividend yield that can support higher valuations. Dominion Resources (D) flat, Edison International (EIX) up 0.34%, First Energy (FE) down 0.27%, PG&E Corp (PCG) up 0.21%, Southern Company (SO) down 0.20%.

The Utilities Select Sector SPDR (XLU) was trading at $35.67 at 3:30 PM on Wednesday, up 0.08% on the day – down 0.86% year-to-date.

STOCKS: CVX, XOM, ETP, SUN, MPO, PCX, PTR, SD, SDRL, AA, DD, BHP, IVN, FCX, BA, CAT, GE, MMM, UTX, GM, DIS, HD, MCD, VIAB, MBND, KFT, KO, PG, WMT, JCP, SPLS, RAH, JNJ, MRK, PFE, OSUR, ARNA, AXP, BAC, JPM, TRV, BRK.A, SLF, BAM, SET, HCBK, CSCO, HPQ, IBM, INTC, MSFT, GOOG, SINA, AAPL, TQNT, AVGO, T, VZ, VOD, KITD, D, EIX, FE, PCG, SO, XEL, WIN, TI

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Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.86 0.10 0.97 3,221,719
AAPL Apple Inc. 113.10 0.39 0.34 13,827,378
ARNA Arena Pharmaceuticals Inc. 1.74 -0.00 -0.02 144,573
AVGO Broadcom Limited 167.10 0.45 0.27 1,148,128
AXP American Express Company 63.39 -0.46 -0.72 1,172,941
BA Boeing Company (The) 131.51 -0.27 -0.20 490,163
BAC Bank of America Corporation 15.40 -0.12 -0.77 25,896,157
BAM Brookfield Asset Management Inc. 34.88 -0.05 -0.14 148,733
BHP BHP Billiton Limited 32.83 0.29 0.89 1,381,064
CAT Caterpillar Inc. 82.50 0.06 0.07 1,057,188
CSCO Cisco Systems Inc. 31.14 -0.21 -0.65 7,402,203
CVX Chevron Corporation 100.01 0.79 0.80 1,766,249
D Dominion Resources Inc. 76.54 -0.47 -0.61 513,431
DD E.I. du Pont de Nemours and Co. 66.21 -0.56 -0.84 635,786
DIS Walt Disney Company (The) 92.34 -0.93 -1.00 2,335,121
EIX Edison International 75.44 -0.18 -0.24 326,571
FCX Freeport-McMoRan Inc. 10.70 0.07 0.66 8,937,248
FE FirstEnergy Corporation 34.65 0.16 0.46 631,599
GE General Electric Co 29.74 -0.15 -0.50 6,860,595
GM General Motors Company 32.00 -0.12 -0.37 4,195,874
GOOG Alphabet Inc. 776.12 -10.78 -1.37 522,730
HCBK Hudson City Bancorp Inc n/a n/a n/a 0
HD Home Depot Inc. (The) 125.81 -1.98 -1.55 1,394,540
HPQ HP Inc. 15.11 0.02 0.13 1,700,088
IBM International Business Machines Corp 153.84 -1.14 -0.74 613,932
INTC Intel Corporation 36.74 -0.45 -1.21 8,141,451
IVN Ivanhoe Mines Ltd n/a n/a n/a 0
JCP J.C. Penney Company Inc. Holding Company 9.68 -0.10 -1.02 3,216,390
JNJ Johnson & Johnson 117.68 -1.13 -0.95 1,498,481
JPM JP Morgan Chase 66.51 -0.75 -1.11 4,797,997
KO Coca-Cola Company (The) 42.49 -0.26 -0.60 2,482,237
MCD McDonald\'s Corporation 116.55 -0.62 -0.53 927,347
MMM 3M Company 176.25 -1.14 -0.64 404,838
MORN Morningstar Inc. 78.90 -0.77 -0.96 34,049
MPO Midstates Petroleum Co Inc n/a n/a n/a 0
MRK Merck & Company Inc. (new) 62.06 -0.90 -1.43 1,992,148
MSFT Microsoft Corporation 56.91 -0.52 -0.91 6,247,110
OSUR OraSure Technologies Inc. 8.26 -0.06 -0.66 156,967
PCG Pacific Gas & Electric Co. 63.93 -0.27 -0.42 401,203
PFE Pfizer Inc. 33.76 -0.51 -1.47 8,005,116
PG Procter & Gamble Company (The) 87.74 -0.02 -0.03 10,109,102
PTR PetroChina Company Limited 64.41 -0.04 -0.06 30,688
SD SandRidge Energy n/a n/a n/a 0
SDRL Seadrill Limited (Bermuda) 2.09 0.06 2.96 2,103,821
SINA Sina Corporation 75.53 -1.11 -1.45 776,728
SLF Sun Life Financial Inc. 31.84 -0.47 -1.45 124,738
SO Southern Company (The) 53.36 -0.17 -0.32 1,280,238
SPLS Staples Inc. 8.37 -0.17 -2.01 1,745,448
SUN Sunoco LP representing limited partner interests 30.00 -0.16 -0.53 155,678
T AT&T Inc. 41.23 -0.05 -0.13 5,341,895
TI Telecom Italia S.P.A. New 8.29 -0.19 -2.24 21,253
TRV The Travelers Companies Inc. 114.20 -1.11 -0.96 308,561
UTX United Technologies Corporation 102.59 0.03 0.03 982,282
VIAB Viacom Inc. 35.13 -0.37 -1.04 928,815
VOD Vodafone Group Plc 29.09 -0.06 -0.21 2,024,746
VZ Verizon Communications Inc. 52.08 -0.48 -0.91 3,008,038
WIN Windstream Holdings Inc. 10.20 0.27 2.67 482,817
WMT Wal-Mart Stores Inc. 71.88 -0.47 -0.65 1,644,186
XEL Xcel Energy Inc. 42.91 -0.16 -0.37 1,296,932
XOM Exxon Mobil Corporation 83.68 0.23 0.28 2,404,101

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