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
MMM 3M Company 200.67 1.13 0.57 1,410,620 Trade
XEL Xcel Energy Inc. 47.30 0.04 0.08 1,588,616 Trade
SDRL Seadrill Limited (Bermuda) 0.52 -0.01 -1.90 5,131,519 Trade
PG Procter & Gamble Company (The) 87.25 0.39 0.45 4,337,023 Trade
GE General Electric Co 27.45 -0.04 -0.15 30,624,045 Trade
CVX Chevron Corporation 104.72 -0.39 -0.37 3,752,505 Trade
SO Southern Company (The) 50.45 -0.05 -0.10 3,265,939 Trade
PCG Pacific Gas & Electric Co. 67.37 0.08 0.12 4,077,071 Trade
TI Telecom Italia S.P.A. New 9.67 -0.10 -1.02 38,568 Trade
JNJ Johnson & Johnson 126.92 -0.61 -0.48 4,005,234 Trade
WMT Wal-Mart Stores Inc. 78.13 -0.18 -0.23 6,125,781 Trade
AA Alcoa Inc. 33.27 0.18 0.54 2,410,586 Trade
INTC Intel Corporation 36.26 0.00 0.00 11,145,523 Trade
IBM International Business Machines Corp 152.49 -0.71 -0.46 2,443,507 Trade
D Dominion Resources Inc. 81.03 0.06 0.07 2,080,678 Trade
TRV The Travelers Companies Inc. 123.66 -0.06 -0.05 925,556 Trade
OSUR OraSure Technologies Inc. 14.84 0.04 0.27 427,268 Trade
MORN Morningstar Inc. 73.73 -0.06 -0.08 60,097 Trade
AAPL Apple Inc. 153.61 -0.26 -0.17 21,927,637 Trade
SINA Sina Corporation 104.25 3.25 3.22 1,640,888 Trade
EIX Edison International 79.96 0.01 0.01 775,774 Trade
SPLS Staples Inc. 8.98 -0.08 -0.88 4,192,050 Trade
JPM JP Morgan Chase 85.36 0.01 0.01 8,113,464 Trade
AXP American Express Company 77.46 0.02 0.03 1,858,801 Trade
UTX United Technologies Corporation 121.85 -0.40 -0.33 2,126,166 Trade
VOD Vodafone Group Plc 29.98 0.07 0.23 7,251,414 Trade
ARNA Arena Pharmaceuticals Inc. 1.31 -0.05 -3.68 1,225,879 Trade
AVGO Broadcom Limited 241.21 0.35 0.15 1,312,045 Trade
IVN Ivanhoe Mines Ltd n/a n/a n/a 0 Trade
CSCO Cisco Systems Inc. 31.50 0.06 0.19 16,403,052 Trade
DIS Walt Disney Company (The) 108.41 1.14 1.06 6,236,779 Trade
MPO Midstates Petroleum Co Inc 17.29 -0.07 -0.40 42,096 Trade
PTR PetroChina Company Limited 67.78 -0.35 -0.51 101,716 Trade
VZ Verizon Communications Inc. 45.32 0.01 0.02 5,999,937 Trade
HCBK Hudson City Bancorp Inc n/a n/a n/a 0 Trade
GM General Motors Company 33.07 0.47 1.44 16,813,681 Trade
VIAB Viacom Inc. 35.13 0.21 0.60 4,714,487 Trade
BAC Bank of America Corporation 23.24 -0.01 -0.04 50,399,458 Trade
BHP BHP Billiton Limited 35.84 -0.37 -1.02 1,350,535 Trade
GOOG Alphabet Inc. 971.47 1.93 0.20 1,252,010 Trade
MCD McDonald\'s Corporation 149.86 0.08 0.05 3,258,239 Trade
FCX Freeport-McMoRan Inc. 11.67 -0.03 -0.26 9,747,397 Trade
BAM Brookfield Asset Management Inc. 38.04 0.43 1.14 734,402 Trade
DD E.I. du Pont de Nemours and Co. 77.85 0.46 0.59 1,120,305 Trade
WIN Windstream Holdings Inc. 4.42 0.03 0.68 1,479,322 Trade
HD Home Depot Inc. (The) 154.90 -1.56 -1.00 4,284,660 Trade
XOM Exxon Mobil Corporation 81.55 -0.20 -0.24 8,227,074 Trade
PFE Pfizer Inc. 32.14 -0.02 -0.06 11,699,041 Trade
SLF Sun Life Financial Inc. 32.87 0.20 0.62 216,910 Trade
HPQ HP Inc. 18.47 0.10 0.54 14,525,992 Trade
BA Boeing Company (The) 186.59 -0.48 -0.26 1,735,778 Trade
MRK Merck & Company Inc. (new) 64.92 -0.12 -0.18 3,685,720 Trade
SUN Sunoco LP representing limited partner interests 30.35 -0.13 -0.43 371,460 Trade
SD SandRidge Energy 19.97 0.33 1.68 168,616 Trade
FE FirstEnergy Corporation 28.92 0.06 0.21 2,475,868 Trade
KO Coca-Cola Company (The) 45.39 -0.02 -0.04 11,341,383 Trade
T AT&T Inc. 38.12 -0.11 -0.29 13,725,914 Trade
CAT Caterpillar Inc. 105.66 0.64 0.61 2,894,109 Trade
JCP J.C. Penney Company Inc. Holding Company 4.71 0.05 1.07 11,427,742 Trade
MSFT Microsoft Corporation 69.96 0.34 0.49 19,827,923 Trade

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