Equities Sector Coverage: Wall Street Continues to Trend Lower

Sector Recap |

In review, on Friday Nonfarm Payrolls for March rose by just 120,000 nearly half of what Wall Street economists had projected. The Unemployment Rate down-ticked to 8.2%, but this was caused by an increase in the number of Americans discouraged about their job prospects. The labor participation rate is just 63.8% of the total US labor pool as 164,000 stopped looking for a job in March. The Dow Industrial Average traded down to 12,903.78 below its 50-day simple moving average at 12,980.18 trending away from its 52-week high at 13,297.11 set on April 2nd. The NASDAQ’s declined to 3032.22 well below its 52-week high at 3134.17 set on March 27th.

On Good Friday the Nikkei 225 ended their session at 9,688 – down 0.81% on the day. On Monday the Nikkei 225 lost another 1.47% ending that session at 9,546. The Hang Seng was closed on both Friday and Monday. The European exchanges were also closed on Friday and Monday. The US Treasury market was open until noon on Good Friday and the yield on the 10-Year declined to 2.040 percent and is slightly lower today at 2.017 percent.

Gold did not trade on Friday, and rebounded from $1636.7 the Troy ounce to $1649.9 on Monday well below its 200-day and 50-day simple moving averages at $1687.7 and $1702.5. Crude oil did not trade on Friday, and traded down from $102.55 per barrel to $100.81 then up to $102.60 trending below its 50-day simple moving average at $103.95. The euro versus the dollar declined from 1.3099 to 1.3038 then rebounded to 1.3132 trending below its 50-day simple moving average at 1.3211.

Energy

Marathon (MRO) is seeking sustainable growth of 5% to 7% not pushing for double-digit growth. Tesoro Logistics LP (TLLP) is initiated with a Neutral rating at JP Morgan. Helmerich & Payne (HP) has been upgraded to Buy from Neutral at Guggenheim. Oiltanking Partners (OILT) has been downgraded to Neutral from Overbought at JP Morgan. Dow components Chevron (CVX) and Exxon Mobil (XOM) declined 1.3% in morning trading.

Energy Select Sector SPDR (XLE) was trading at $69.76 at 3:30 PM on Monday, down 1.05% on the day – up 0.91% year-to-date.

Materials

Randgold Resources (GOLD) have been upgraded to Buy from Hold with a $110 price target at Stifel Nicolaus. Eastman Chemical (EMN) have been added to Goldman Sachs’ Conviction Buy List. Monsanto (MON) has been moved to Buy from Conviction Buy at Goldman Sachs after recent share price appreciation. Dow components Alcoa (AA) was down 0.2% the day before offering its earnings report Tuesday after the close. DuPont (DD) was lower by 15%.
The Materials Select Sector SPDR (XLB) was trading at $36.00 at 3:30 PM on Monday, down 1.32% on the day – up 7.46% year-to-date.

Industrials

Tyco International (TYC) has been upgraded to Buy from Hold with a $65 price target at Argus. HEICO (HEI) has been upgraded to Outperform from Sector Perform at RBC Capital. United Rentals (URI) has been moved to Outperform from Top Pick at RBC Capital. Dow components Boeing Co (BA) was down 1.7%, Caterpillar (CAT) lost 2.5%, General Electric (GE) slumped 2.0%, 3M Company (MMM) was lower by 1.5%, and United Technologies (UTX) was lower by 2.0%.

The Industrial Select Sector SPDR (XLI) was trading at $36.45 at 3:30 PM on Monday, down 1.41% on the day – up 8.00% year-to-date.

Consumer Discretionary

Priceline.com (PCLN) is initiated with an Outperform rating at Pacific Crest with a price target at $885. Pacific Crest starts TripAdvisor (TRIP) and Expedia (EXPE) with Market Perform ratings. DR Horton (DHI) has been added to the Short-Term Buy List at Deutsche Bank. Dick’s Sporting Goods (DKS) and Under Armour (UA) are both upgraded to Buy from Neutral at Sterne Agee. True Religion (TRLG) has been upgraded to Buy from Hold at The Benchmark Company with a $32 price target.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.632 at 3:30 PM on Monday, down 0.84% on the day – up 14.38% year-to-date.

Consumer Staples

Avon Products (ACP) named Sherilyn McCoy formerly from Johnson & Johnson as its new CEO replacing Andrea Jung. Titan Machinery (TITN) has been upgraded to Outperform from Neutral with a price target of $37 at Robert W. Baird. Citigroup has downgraded five media stocks to Neutral from Buy; Walt Disney (DIS), CBS Corp (CBS), Scripps (SNI), News Corp(NWSA), and Discovery Communications (DISCA). Citigroup cites a slowdown in cable advertising and the contraction of network television’s total day ratings for these downgrades.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.79 at 3:30 PM on Monday, down 0.76% on the day – up 4.00% year-to-date.

Health Care

NuVasive (NUVA) is initiated with a Market Perform rating at Wells Fargo. Centene (CNC) have been downgraded to Neutral from Positive at Susquehanna. InterMune (ITMN) has been downgraded to Sector Perform from Outperform at RBC Capital. Molina Healthcare (MOH) has been downgraded to Hold from Buy at Cantor Fitzgerald, as the company failed to win a role in Ohio’s expanded Medicaid program. Dow Components Johnson & Johnson (JNJ) lost 0.5%, Merck (MRK) was down 0.4% and Pfizer (PFE) slumped 1.3%.
The Health Care Select Sector SPDR (XLV) was trading at $37.10 at 3:30 PM on Monday, down 1.09% on the day – up 6.95% year-to-date.

Financials

Charles Schwab (SCHW) is initiated with a Buy rating at Goldman Sachs and E*TRADE (DTFC) and TD Ameritrade (AMTD) are started as Neutral. Evercore (EVR) has been downgraded to Neutral from Buy at Bank of America-Merrill Lynch. Dow Components American Express (AXP) lost 1.7%, Bank of America (BAC) slumped 3.4%, and JP Morgan (JPM) was down 1.8%.
The Financial Select Sector SPDR (XLF) was trading at $15.34 at 3:30 PM on Monday, down 1.29% on the day – up 18.00% year-to-date (the strongest performing sector).

Information Technology

AOL (AOL) is selling over 800 patents to Microsoft (MSFT) as part of a $1.06 billion deal that also gives Microsoft a non-exclusive license to AOL's remaining intellectual property of over 300 patents. AOL shares jumped 42% on this news. Sony (SNE) plans to cut 10,000 jobs, which is 6% of its workforce, as the company attempts to end a streak of four consecutive annual losses. LinkedIn (LNKD) has been initiated with a Hold rating at Needham saying that a premium valuation reflects its strong business trends and competitive advantages. Flextronics (FLEX) has been upgraded to Strong Buy from Outperform at Raymond James. Apple Inc (AAPL) has been downgraded to Neutral from Buy at BTIG Research. F5 Networks (FFIV) has been downgraded to Hold from Sell at Stifel Nicolaus due to valuation concerns. Infosys (INFY) has been downgraded to Market Perform from Outperform by brokerage William Blair. Parametric (PMTC) has been downgraded to Hold from Buy at Canaccord Genuity. Polycom (PLCM) has been downgraded to Sector Perform from Outperform at RBC Capital.
The Technology Select Sector SPDR (XLK) was trading at $30.02 at 3:30 PM on Monday, down 0.50% on the day – up 17.96% year-to-date.

Telecommunication Services

AT&T (T) avoided a mass walkout after an early Sunday deadline was extended for labor negotiations between the company and the Communications Workers of America union. A two-week strike last August at Verizon (VZ) has yet to result in an agreement. SBA Communications (SBAC) has been upgraded to Buy from Neutral at Citigroup. MetroPCS (PCS) has been downgraded to Neutral from Outperform at Macquarie. Dow components AT&T (T) fell 1.2% while Verizon (VZ) lost 0.4%.
The NASDAQ Telecommunications Index (IXTC) was trading at $211.49 at 3:30 PM on Monday, down 1.00% on the day – up 7.39% year-to-date.

Utilities

El Paso Electric (EEP) has been upgraded to Buy from Hold at Jefferies. Dominion Resources (D) was down 0.4%, Edison International (EIX) was down 0.3%, First Energy (FE) was down 0.3%, and PG&E Corp (PCG) was down 0.6%.
The Utilities Select Sector SPDR (XLU) was trading at $34.76 at 3:30 PM on Monday, down 0.37% on the day – down 3.39% year-to-date (the weakest performing sector / the only negative sector).

STOCKS: CVX, XOM, MRO, TLLP, HP, OILT, AA, DD, GOLD, EMN, MON, BA, CAT, GE, MMM, UTX, TYC, HEI, URI, PCLN, TRIP, EXPE, DHI, DKS, UA, TRLG, ACP, TITN, DIS, CBS, SNI, NWSA, DISCA, NUVA, CNC, ITMN, MOH, JNJ, MRK, PFE, AXP, BAC, JPM, SCHW, DTFC, AMTD, EVR, AOL, SNE, LNKD, FLEX, AAPL, FFIV, INFY, PMTC, PLCM, T, VZ, SBAC, PCS, EEP, D, EIX, FE, PCG

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. 9.62 -0.07 -0.67 6,774,269
AAPL Apple Inc. 112.87 -0.02 -0.01 14,346,868
AMTD TD Ameritrade Holding Corporation 32.50 -0.06 -0.17 1,105,530
AXP American Express Company 64.35 0.93 1.47 1,964,723
BA Boeing Company (The) 131.46 0.89 0.68 906,989
BAC Bank of America Corporation 15.19 0.10 0.66 45,748,741
CAT Caterpillar Inc. 82.71 0.34 0.41 2,453,096
CBS CBS Corporation Class B 51.99 0.86 1.68 2,370,958
CNC Centene Corporation 68.65 0.52 0.76 363,668
CVX Chevron Corporation 99.58 0.80 0.81 3,603,093
D Dominion Resources Inc. 76.38 -0.22 -0.29 974,871
DD E.I. du Pont de Nemours and Co. 67.17 0.65 0.98 800,390
DHI D.R. Horton Inc. 30.25 0.33 1.10 1,528,915
DIS Walt Disney Company (The) 91.54 -0.42 -0.46 4,378,571
DKS Dick\'s Sporting Goods Inc 59.94 -0.07 -0.12 819,696
EEP Enbridge Energy L.P. Class A 24.59 -0.06 -0.25 185,036
EIX Edison International 75.09 -0.46 -0.61 1,003,214
EMN Eastman Chemical Company 65.16 0.08 0.12 367,626
EVR Evercore Partners Inc Class A 50.28 0.12 0.24 105,633
EXPE Expedia Inc. 112.84 3.75 3.44 1,221,002
FE FirstEnergy Corporation 33.98 -0.60 -1.74 2,057,091
FFIV F5 Networks Inc. 121.66 2.21 1.85 251,106
FLEX Flextronics International Ltd. 13.60 0.00 0.00 1,541,775
GBDC Golub Capital BDC Inc. 18.65 -0.04 -0.21 70,367
GE General Electric Co 29.94 0.40 1.37 13,289,743
HEI Heico Corporation 69.30 0.36 0.52 99,471
HP Helmerich & Payne Inc. 58.22 0.69 1.20 1,055,764
INFY Infosys Limited American Depositary Shares 15.98 0.11 0.66 1,266,066
JNJ Johnson & Johnson 119.00 1.22 1.04 2,350,564
JPM JP Morgan Chase 66.22 0.44 0.67 7,249,598
LNKD LinkedIn Corporation Class A 192.48 -0.56 -0.29 2,061,138
MMM 3M Company 176.89 0.94 0.53 1,063,921
MOH Molina Healthcare Inc 57.86 0.30 0.52 137,794
MON Monsanto Company 102.52 0.39 0.38 1,481,130
MRK Merck & Company Inc. (new) 62.67 0.52 0.83 2,954,619
MRO Marathon Oil Corporation 14.16 -0.26 -1.77 8,389,182
NUVA NuVasive Inc. 66.98 0.83 1.25 177,357
NWSA News Corporation 13.93 0.11 0.76 872,213
PCG Pacific Gas & Electric Co. 63.51 -0.39 -0.61 1,607,449
PCLN The Priceline Group Inc. 1,449.22 2.07 0.14 235,843
PFE Pfizer Inc. 33.87 0.23 0.68 8,290,237
PLCM Polycom Inc. 12.47 0.00 0.00 0
SBAC SBA Communications Corporation 112.18 0.78 0.70 180,271
SCHW Charles Schwab Corporation (The) 30.61 0.15 0.49 3,320,669
SNE Sony Corporation 33.51 0.05 0.15 375,422
SNI Scripps Networks Interactive Inc 62.18 0.08 0.13 661,128
T AT&T Inc. 41.64 0.50 1.22 9,881,862
TITN Titan Machinery Inc. 10.64 0.01 0.09 25,444
TLLP Tesoro Logistics LP representing Limited Partner I 47.99 0.01 0.02 51,764
TRIP TripAdvisor Inc. 64.53 2.64 4.27 1,190,318
TYC Tyco International plc (Ireland) n/a n/a n/a 0
URI United Rentals Inc. 73.18 -0.77 -1.04 910,690
UTX United Technologies Corporation 102.65 0.42 0.41 2,053,901
VZ Verizon Communications Inc. 52.55 0.40 0.77 4,107,262
XOM Exxon Mobil Corporation 83.29 0.23 0.28 4,630,506

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