Personal 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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