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
