Equities Sector Coverage: Wall Street Dips Into the Red

Sector Recap |

Wall Street Dips Into the RedPersonal Income came in at +0.4% in March with Spending up 0.3%. The Chicago PMI came in at 56.2 in April, below expectations, and the lowest reading since November 2009. The Dow Jones Industrial Average traded down to 13,176.01 then rebounded above 13,200 into the final half hour of trading staying below its March 16th high at 13,289.08. The NASDAQ’s traded down to 3043.25 staying below it’s March 27th high at 3134.17.

Asian stocks were mixed on Monday. The Nikkei 225 was closed on Monday. The Hang Seng ended their session at 21,094 – up 1.70% on the day. European exchanges were lower on Monday. The FTSE 100 ended their session at 5,738 – down 0.19% on the day. The DAX ended their session at 6,761 – down 0.59% on the day. The CAC 40 ended their session at 3,213 – down 1.64% on the day. The yield on the 10-Year US Treasury declined from 1.951 percent to 1.905 below its 50-day and 200-day simple moving averages, which are forming a ‘Death Cross” at 2.080 and 2.082.

Gold declined from $1666.5 the Troy ounce to $1645.1 then back up to $1667.0 still below the “death cross” defined by the 50-day simple moving average at $1678.1 being below the 200-day simple moving average at $1697.7. Crude oil declined from $105.04 per barrel to $103.88 then back up to $105.16, staying below its 50-day simple moving average at $105.16. The euro versus the dollar traded down from 1.3266 and 1.3212 versus its 50-day simple moving average at 1.3210.

Energy

The number of natural gas rigs in the US fell to 613, the lowest level in 10 years as low prices force producers to cut back. The number of rigs drilling for oil remains near a 25-year high. Energy Transfer Partners (ETP) is buying Sunoco (SUN) for $5.3 billion in cash and stock. The offer is $50.13 a share, which is a 29% premium to Sunoco's 20-day average closing price as of Friday. LDK Solar (LDK) plunged 12.2% premarket after reporting an FQ4 loss of $4.63 a share and revenue at just $420.2 million missing consensus. SandRidge Energy (SD) has been upgraded to Overweight from Neutral at J.P. Morgan with a price target at $13. Boardwalk Pipeline Partners (BWP) reported in-line Q1 EPS, but missed on the revenue line. Chesapeake Energy (CHK) has been upgraded to Outperform from Market Perform at BMO Capital. TransCanada Corp (TRP) has been is downgraded Sector Perform from Outperform at CIBC World Markets. Dow components - Chevron (CVX) gained 0.25% in morning trading with Exxon Mobil (XOM) up 0.2%.

Energy Select Sector SPDR (XLE) was trading at $71.04 at 3:30 PM on Monday, up 0.34% on the day – up 2.76% year-to-date.

Materials

LyondellBasell Industries (LYB) missed Q1 EPS estimates by a penny with a miss on the revenue line. Compass Minerals (CMP) has been upgraded to Buy from Hold at Keybanc. Kaiser Aluminum (KALU) has been upgraded to Buy from Hold with a $70 price target at Dahlman Rose, on improved inventory of aluminum plate. Randgold Resources (GOLD) has been downgraded to Reduce from Neutral at Nomura citing political risks in Mali. Dow components - Alcoa (AA) was flat still below the $10 threshold. DuPont (DD) slipped 0.3%.

The Materials Select Sector SPDR (XLB) was trading at $36.63 at 3:30 PM on Monday, down 0.81% on the day – up 9.34% year-to-date.

Industrials

China Eastern Airlines has confirmed it will buy 20 Boeing (BA) 777 airliners for $5.94 billion. General Motors (GM) plans to buy a 10% stake in Isuzu Motors (ISUZY.PK) in an agreement to jointly develop and sell commercial vehicles in Asia and Latin America. Ford (F) has been downgraded to Hold from Buy at Craig-Hallum. Armstrong World Industries (AWI) missed Q1 EPS estimates with below consensus revenue. Pall Corp (PLL) will sell some of its blood collection, filtration and processing product lines to Haemonetics Corp (HAE) for 550 million. Arkansas Best (ABFS): has been downgraded to Underperform from Neutral at Bank of America-Merrill Lynch. Castle (CAS) has been downgraded to Hold from Buy at Keybanc. Dow components - Boeing Co (BA) was down 1.3% in morning trading, with Caterpillar (CAT) down 1.4%, General Electric (GE) slumped 1.2%, 3M Company (MMM) slipped 0.3%, and United Technologies (UTX) lost 0.5%.

The Industrial Select Sector SPDR (XLI) was trading at $36.96 at 3:30 PM on Monday, down 1.07% on the day – up 9.51% year-to-date.

Consumer Discretionary

Microsoft (MSFT) will invest $300 million in Barnes & Noble's (BKS) Nook and College businesses, which will become one unit with a valuation of $1.7 billion. Barnes will own 82.4% of the yet-to-be-named new company and Microsoft 17.6%. Collective Brands (PSS) has chosen a consortium led by Wolverine World Wide (WWW) and Golden Gate Capital in an effort to sell the company. Harman International Industries (HAR) reported in-line Q3 EPS with in-line revenue. Supervalu (SVU) has been initiated with a Sell rating at Goldman Sachs. Dow Components - Disney (DIS) was down 0.6% in morning trading with McDonalds (MCD) down just 0.1%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.59 at 3:30 PM on Monday, down 0.61% on the day – up 16.84% year-to-date.



Consumer Staples

Microsoft (MSFT) will invest $300 million in Barnes & Noble's (BKS) Nook and College businesses, which will become one unit with a valuation of $1.7 billion. Barnes will own 82.4% of the yet-to-be-named new company and Microsoft 17.6%.Anheuser-Busch InBev's (BUD) reported that Q1 core profit rose 7.4% to $3.55 billion, slightly below consensus. Revenue edged up 3.7% to $9.33 billion on a rise in beer sales in the U.S. for the first time in three years. Credit Suisse has an Outperform rating on Kraft (KFT) ahead of its earnings report set for Thursday, calling for an earnings beat on lower coffee and chocolate prices. Wal-Mart (WMT) plan to expand in a several large metropolitan cities is under scrutiny after the retailer's Mexico bribery scandal. Dollar General (DG) has been upgraded to Strong Buy from Outperform at Raymond James. Procter & Gamble (PG): has been downgraded to Perform from Outperform at Oppenheimer on sluggish market growth and market share losses. Dow components - Home Depot (HD) lost 0.4% in morning trading with Kraft (KFT) up 1.1%, Coca Cola (KO) down 0.8%, Procter & Gamble (PG) down 1.4%, and Wal-Mart (WMT) down 0.5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.16 at 3:30 PM on Monday, down 0.32% on the day – up 5.14% year-to-date.

Health Care

Warner Chilcott (WCRX) may is considering a possible deal to sale sell itself potential private equity buyers, which adds to speculation last week of a looming offer from Bayer (BAYRY.PK). Watson Pharma (WPI) reported better than expected earnings that were boosted by Watson's generic versions of the Lipitor cholesterol drug and Lovenox blood thinner. Hologic (HOLX) will acquire Gen-Probe (GPRO) for $3.7 billion in cash, pairing two midcap healthcare diagnostics companies. GPRO investors will receive $82.75 per share about 20% above its April 27 closing price. Protalix BioTherapeutics (PLX) has been downgraded to Hold from Buy at Auriga. ResMed (RMD) has been downgraded to Neutral from Buy at Bank of America-Merrill Lynch. Dow Components - Johnson & Johnson (JNJ) gained 0.3%, Merck (MRK) was up 1.9%, and Pfizer (PFE) lost 0.7%.

The Health Care Select Sector SPDR (XLV) was trading at $37.47 at 3:30 PM on Monday, down 0.16% on the day – up 8.01% year-to-date.

Financials

S&P has downgraded 11 Spanish banks, including Santander (STD) and Banco Bilbao Vizcaya (BBVA), which followed the rating agency’s two-notch downgrade of Spanish sovereign debt last week. Loews Corp (L) reported Q1 EPS of 92 cents with revenue of $3.74 billion. NYSE Euronext (NYX) missed Q1 EPS estimates by two cents with a miss on the revenue line. Profits were hurt by a slowdown in trading, and the costs from its failed merger with Deutsche Boerse. Federated Investors (FII) has been upgraded to Neutral from Sell at Citigroup. Citizens Republic Bancorp (CRBC) has been downgraded to Perform from Outperform at Oppenheimer due to valuation. Dow Components - American Express (AXP) was flat in morning trading, Bank of America (BAC) fell 1.1%, JP Morgan (JPM) lost 0.9%, and Travelers (TRV) gained 0.2%.

The Financial Select Sector SPDR (XLF) was trading at $15.37 at 3:30 PM on Monday, down 0.97% on the day – up 18.23% year-to-date.

Information Technology

Microsoft (MSFT) will invest $300 million in Barnes & Noble's (BKS) Nook and College businesses, which will become one unit with a valuation of $1.7 billion. Barnes will own 82.4% of the yet-to-be-named new company and Microsoft 17.6%. According to Barron’s Apple (AAPL) and Google (GOOG) could become Dow components to keep the index "relevant for a 21st century market." Sohu.com (SOHU) beat Q1 EPS estimates by seven cents with in-line revenue. VeriFone (PAY) has been downgraded to Sell from Hold at Deutsche Bank. Dow Components - Cisco Systems (CSCO) slipped 0.3% in morning trading, Hewlett-Packard (HPQ) slipped 0.2%, IBM (IBM) was up just 0.15%, Intel Corp (INTC) was flat, and Microsoft (MSFT) was flat.

The Technology Select Sector SPDR (XLK) was trading at $29.79 at 3:30 PM on Monday, down 0.80% on the day – up 17.05% year-to-date.

Telecommunication Services

Nokia (NOK) has been downgraded to Sector Perform from Outperform at RBC Capital. Alcatel-Lucent (ALU) has been downgraded to Underperform from Sector Perform at RBC Capital. Dow components - AT&T (T) was up 0.7% in morning trading with Verizon (VZ) up 0.3%. The NASDAQ Telecommunications Index (IXTC) was trading at $210.90 at 3:30 PM on Monday, down 0.14% on the day – up 7.09% year-to-date.

Utilities

UniSource Energy (UNS) missed Q1 EPS estimates by six cents on revenue of $318.8 million, down 7.5% year over year. Calpine (CPN) has been upgraded to Buy from Hold at Jefferies. Veolia Environment (VE) has been upgraded to Overweight from Neutral at HSBC Securities. PPL Corp (PPL) has been downgraded to Hold from Buy at Jefferies. Dominion Resources (D) was up 0.2% in morning trading, Edison International (EIX) was up 0.1%, First Energy (FE) slipped 0.4%, PG&E Corp (PCG) was up 0.2%, and Southern Company (SO) slipped 0.1%.

The Utilities Select Sector SPDR (XLU) was trading at $35.66 at 3:30 PM on Monday, up 0.14% on the day – down 0.89% year-to-date.

STOCKS: CVX, XOM, ETP, SUN, LDK, SD, BWP, CHK, TRP, AA, DD, LYB, CMP, KALU, GOLD, BA, CAT, GE, MMM, UTX, GM, ISUZY.PK, F, AWI, PLL, HAE, ABFS, CAS, DIS, MCD, BKS, WWW, HAR, SVU, PSS, HD, KFT, KO, PG, WMT, BUD, JNJ, MRK, PFE, WCRX, BAYRY.PK, WPI, HOLX, GPRO, PLX, RMD, AXP, BAC, JPM, TRV, STD, BBVA, L, NYX, FII, CRBC, CSCO, HPQ, IBM, INTC, MSFT, AAPL, GOOG, SOHU, PAY, T, VZ, NOK, ALU, D, EIX, FE, PCG, SO, UNS, CPN, VE, PPL

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
PLX Protalix BioTherapeutics Inc. (DE) 0.50 -0.01 -1.77 1,084,130
MMM 3M Company 178.49 -0.19 -0.11 1,761,850
FII Federated Investors Inc. 27.27 0.07 0.26 658,958
PG Procter & Gamble Company (The) 87.45 2.75 3.25 22,944,405
GE General Electric Co 30.53 -0.68 -2.18 83,552,728
CVX Chevron Corporation 115.60 0.02 0.02 6,730,924
BWP Boardwalk Pipeline Partners LP 18.07 0.00 0.00 282,345
SO Southern Company (The) 49.06 0.01 0.02 3,598,528
PCG Pacific Gas & Electric Co. 61.36 0.26 0.43 1,763,952
GPRO GoPro Inc. 9.51 0.34 3.71 4,287,323
BBVA Banco Bilbao Vizcaya Argentaria S.A. 6.56 0.02 0.31 1,786,089
WPI Watson Pharmaceuticals Inc. n/a n/a n/a 0
HAE Haemonetics Corporation 40.08 0.06 0.15 497,778
JNJ Johnson & Johnson 114.15 -0.05 -0.04 7,502,425
WMT Wal-Mart Stores Inc. 67.18 -0.44 -0.65 12,054,682
AA Alcoa Inc. 35.66 0.24 0.68 5,330,864
WWW Wolverine World Wide Inc. 23.27 0.35 1.53 672,369
INTC Intel Corporation 36.94 0.37 1.01 23,950,936
IBM International Business Machines Corp 170.55 3.74 2.24 12,690,029
D Dominion Resources Inc. 75.79 0.17 0.22 1,739,289
TRV The Travelers Companies Inc. 118.02 0.03 0.03 1,222,280
BTE:CA Baytex Energy Corp. 5.41 0.03 0.56 4,573,690
AAPL Apple Inc. 120.00 0.22 0.18 32,597,892
PPL PPL Corp 34.40 0.17 0.50 2,596,527
EIX Edison International 71.97 0.25 0.35 921,218
L Loews Corporation 46.03 0.33 0.72 646,897
JPM JP Morgan Chase 83.67 0.37 0.44 18,436,790
AXP American Express Company 76.20 -0.49 -0.64 8,465,939
CAS Castle (A.M.) & Co. n/a n/a n/a n/a
UTX United Technologies Corporation 110.79 0.06 0.05 3,134,293
HOLX Hologic Inc. 39.35 -0.25 -0.63 1,782,864
BKS Barnes & Noble Inc. 10.75 -0.70 -6.11 1,369,194
AWI Armstrong World Industries Inc 39.85 0.15 0.38 489,765
CMP Compass Minerals Intl Inc 80.70 0.25 0.31 186,185
CSCO Cisco Systems Inc. 30.10 0.12 0.40 22,754,366
DIS Walt Disney Company (The) 107.66 0.38 0.35 5,648,970
LYB LyondellBasell Industries NV Class A (Netherlands) 90.89 1.13 1.26 3,372,712
PAY Verifone Systems Inc. 18.29 -0.21 -1.14 2,016,770
VZ Verizon Communications Inc. 52.72 0.36 0.69 15,473,748
GM General Motors Company 37.01 -0.29 -0.78 14,001,523
SVU SuperValu Inc. 4.21 -0.06 -1.41 4,069,885
BAC Bank of America Corporation 22.64 0.11 0.49 102,564,870
NOK Nokia Corporation Sponsored American Depositary Sh 4.76 0.02 0.42 6,356,085
CPN Calpine Corporation 12.07 -0.12 -0.98 4,522,912
GOOG Alphabet Inc. 805.02 2.85 0.35 1,670,045
MCD McDonald\'s Corporation 122.26 0.08 0.07 4,887,114
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 105.39 0.53 0.51 1,434,666
DD E.I. du Pont de Nemours and Co. 73.03 0.08 0.11 3,231,085
SOHU Sohu.com Inc. 39.10 -0.06 -0.15 146,663
HD Home Depot Inc. (The) 135.60 0.21 0.16 4,853,902
F Ford Motor Company 12.36 -0.07 -0.56 29,269,964
XOM Exxon Mobil Corporation 85.89 1.16 1.37 18,739,659
PFE Pfizer Inc. 31.77 0.07 0.22 30,159,695
KALU Kaiser Aluminum Corporation 79.91 1.01 1.27 75,909
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0
HPQ HP Inc. 14.73 -0.13 -0.87 14,687,037
BA Boeing Company (The) 159.53 0.53 0.33 3,384,525
RMD ResMed Inc. 63.65 0.75 1.19 614,642
TRP TransCanada Corporation 46.90 0.40 0.86 832,320
MRK Merck & Company Inc. (new) 62.53 2.20 3.65 25,240,347
SUN Sunoco LP representing limited partner interests 26.70 0.04 0.15 651,210
SD SandRidge Energy 21.55 -0.50 -2.27 80,304
FE FirstEnergy Corporation 30.04 -0.27 -0.89 4,713,891
KO Coca-Cola Company (The) 41.32 0.18 0.44 14,695,409
T AT&T Inc. 41.45 0.45 1.10 25,164,892
CAT Caterpillar Inc. 94.58 1.20 1.29 5,045,228
HAR Harman International Industries Incorporated 110.59 0.04 0.04 1,324,379
MSFT Microsoft Corporation 62.74 0.44 0.71 30,213,462
CHK Chesapeake Energy Corporation 6.69 0.07 1.06 32,988,681

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