Equities Sector Coverage: Wall Street Edges Higher to End Rough Week

Sector Recap |

New Home Sales for February fell 1.6% to an annual rate of 313,000. The inventory of new homes remains at a record low of 150,000 units. The Dow Jones Industrial Average traded down to a morning low at 13,002.77 then rebounded to 13,099.91 going into the final half hour of trading. The NASDAQ’s traded down to a morning low at 3044.67 then rebounded to 3070.93 going into the final half hour of trading.

Asian stocks were lower on Friday on continued concerns about the global economy. The Nikkei 225 ended their session at 10,011 – down 1.14% on the day. The Hang Seng ended their session at 20,669 – down 1.11% on the day. European stocks drifted lower after a higher start on Friday before rebounding to close in the green. The FTSE 100 ended their session at 5,855 – up 0.16% on the day. The DAX ended their session at 6,996 – up 0.21% on the day. The CAC 40 ended their session at 3,476 – up 0.11% on the day. The yield on the 10-Year US Treasury declined from 2.296 percent to 2.208 staying above its 200-day simple moving average at 2.203.

Gold rebounded from $1641.5 the Troy ounce to $1666.3 staying below its 200-day simple moving averages at $1681.9 for seven consecutive days. Crude oil rebounded from $105.15 per barrel to $108.25 then consolidated. The euro versus the dollar rebounded from 1.3194 to 1.3292.

Energy

Chevron (CVX) wasn't negligent in the drilling of a well that caused an offshore oil spill in November, Brazil's oil regulator said yesterday. That finding may help Chevron fight an $11B lawsuit and criminal charges, although regulators did say Chevron and Transocean (RIG) committed operational and safety violations, and improperly designed the well. Linn Energy (LINE) is a new Buy at Bank of America-Merrill Lynch. Cameron International (CAM) is upgraded to Top Pick from Outperform at RBC Capital. CGGVeritas (CGV) is now Neutral from Underweight at JP Morgan. CONSOL Energy (CNX), Peabody Energy (BTU) and Alpha Natural Resources (ANR) are all downgraded to Neutral from Buy at Davenport.

Energy Select Sector SPDR (XLE) was trading at $72.26 at 4:00 PM on Friday, up 1.09% on the day – up 4.53% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%.

Materials

U.S. Silica (SLCA) is a new Buy at Bank of America-Merrill Lynch. Mosaic (MOS) is moved to Overweight from Neutral at JP Morgan. Yara International (YARIY) is moved to Buy from Hold at ING Groep. Randgold Resources (GOLD) is cut to Neutral from Buy at Citigroup.
The Materials Select Sector SPDR (XLB) was trading at $36.91 at 4:00 PM on Friday, up 1.07% on the day – up 10.18% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.
Heavily Traded: (AA) +1.8%, (FCX) +0.75%, (VALE) +0.7%.

Industrials

US Airways (LCC), which is mulling a bid for AMR (AAMRQ), has received positive feedback from the latter's creditors committee, Bloomberg reports. Flow International (FLOW) is a fresh Buy and $6 traget at Dougherty & Company. United Continental (UAL) is a new Outperform at Raymond James.

The Industrial Select Sector SPDR (XLI) was trading at $37.16 at 4:00 PM on Friday, up 0.16% on the day – up 10.10% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.
Big Movers: (CRTP) -60%.
Heavily Traded: (GE) down slightly, (GLW) +1.1%.

Consumer Discretionary



Nike (NKE) provided a positive outlook for the coming months as it looks to cash in on the Olympics and soccer's European Championships after beating profit expectations in FQ3. EPS rose 11% to $1.20 and revenues climbed 15% to $5.8B (beating estimates by 3 cents with revenue in-line with estimates). KB Home (KBH) missed estimates by 36 cents and revenue by $82M. Darden Restaurants (DRI) beat estimates by 2 cents and revenue by $20M, and expects same-restaurant sales growth of 2.5%-3% and EPS growth between 4% and 7% for FY12. Signet Jewelers (SIG) beat estimates on a per share basis but came up short on revenue. Monarch Casino & Resort (MCRI) is initiated with an Outperform and price objective of $12.50 at Imperial Capital. Teavana (TEA) is a new Buy and $28 target at KeyBanc. WPP Group (WPPGY) gets upgraded to Overweight from Equal Weight at Morgan Stanley. Dollar General (DG) is now Buy from Neutral at Nomura. Nike (NKE) is removed from Citigroup’s Top Picks Live. Wet Seal (WTSLA) is reduced to Neutral from Overweight at Piper Jaffray.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.65 at 4:00 PM on Friday, up 0.11% on the day – up 14.43% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.

Consumer Staples

Altria (MO) is taken to Outperform from Market Perform with Wells Fargo. Reynolds American (RAI) is cut to Market Perform from Outperform at Wells Fargo.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.76 at 4:00 PM on Friday, up 0.24% on the day – up 3.91% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.
Heavily Traded: (KR) +1.8%, (RAD) -0.6%, (MO) +0.8%.

Health Care

Cubist Pharmaceuticals (CBST) is begun with a Buy at ThinkEquity. HCA Holdings (HCA) is covered at a Buy at Cantor Fitzgerald. Medidata Solutions (MDSO) is juiced to Buy from Hold at Jefferies. Coventry Health Care (CVH) is moved to Buy from Hold at Goldman. Volcano (VOLC) is hoisted to Buy from Hold at Jefferies. Aetna (AET) gets downgraded to Neutral from Buy at Goldman Sachs.
The Health Care Select Sector SPDR (XLV) was trading at $36.62 at 4:00 PM on Friday, up 0.30% on the day – up 5.56% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.
Big Movers: (ARNA) +15.25%.
Heavily Traded: (PFE) +0.5%.

Financials

Bank of America (BAC) is launching a small pilot program that will let homeowners at risk of foreclosure hand over the deeds to their houses and then sign leases for BofA to rent the homes back to them at market rates. Credit Suisse (CS) has cut CEO Brady Dougan's total compensation package by 55% for 2011 after profits fell an even-bigger 62%. AIG (AIG) has made a final $1.5B payment to the Treasury to retire the government's interest in AIA Aurora, a special purpose vehicle created to hold the ordinary shares of American International Assurance. Discover Financial Services (DFS) is added to Goldman’s Conviction Buy List. Goldman Sachs (GS) and Morgan Stanley (MS) are each upgraded to Sector Perform from Underperform at RBC Capital, which boosts Deutsche Bank (DB) to Outperform from Sector Perform. Dupont Fabros Tech (DFT) is upgraded to Buy from Neutral at Citigroup. Bank of America (BAC) is moved to Equal Weight from Overweight at Evercore Partners. Sandy Spring Bancorp (SASR) is moved to Neutral from Buy at Janney Montgomery Scott.
The Financial Select Sector SPDR (XLF) was trading at $15.73 at 4:00 PM on Friday, up 0.87% on the day – up 21.00% year-to-date (the strongest performing sector). The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Accenture (ACN) beat estimates by 11 cents and revenue by $160M, and raised its FY13 EPS outlook to a range of $3.82 - $3.90 (above Street estimates of $3.82). Micron Technology (MU) missed estimates by 3 cents, while beating revenue by $50M. Zynga (ZNGA) is a new Underperform at Needham. Atmel (ATML) and Cypress Semiconductor (CY) are both new Buys at Nomura. Monster Worldwide (MWW) is upgraded to Outperform from Perform with a $15 target at Robert Baird. Neustar (NSR) is now Outperform from Neutral at Baird. Convergys (CVG) is taken to Hold from Buy at Stifel Nicolaus due to valuation concerns. CoreSite Realty (COR) is now Neutral from Buy at Citigroup. Xilinx (XLNX) is taken to Hold from Buy at Auriga.

The Technology Select Sector SPDR (XLK) was trading at $29.985 at 4:00 PM on Friday, down slightly on the day – up 17.82% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.
Big Movers: (KITD) -23%, (OVRL) -13%, (GLUU) +20%.

Telecommunication Services

BT Group (BT) has announced a new pension funding plan in which it will pay £2B this year and then £325M annually for the next nine years. Abovenet (ABVT) is now Neutral from Outperform at Cowen & Company.
The NASDAQ Telecommunications Index (IXTC) was trading at $217.12 at 4:00 PM on Friday, down 0.39% on the day – up 10.25% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.
Heavily Traded: (S) +0.2%, (T) -0.6%, (FTR) -1.9%, (ATML) +0.7%, (CLWR) +2.2%, (VZ) -0.6%.

Utilities

The Utilities Select Sector SPDR (XLU) was trading at $34.60 at 4:00 PM on Friday, up slightly on the day – down 3.84% year-to-date (the weakest performing sector / the only negative sector). The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.
Heavily Traded: (GEN) -1.6%, (DUK) -0.2%, (PPL) +0.25%, (EXC) -0.2%, (AEP) +0.5%, (CNP) +0.25%.

STOCKS: CVX, RIG, LINE, CAM, CGV, CNX, BTU, ANR, SLCA, MOS, YARIY, GOLD, AA, FCX, VALE, LCC, AAMRQ, FLOW, UAL, CRTP, GE, GLW, NKE, KBH, DRI, SIG, MCRI, TEA, WPPGY, DG, WTSLA, MO, RAI, KR, RAD, MO, CBST, HCA, MDSO, CVH, VOLC, AET, ARNA, PFE, BAC, CS, AIG, DFS, GS, MS, DB, DFT, SASR, ACN, MU, ZNGA, ATML, CY, MWW, NSR, CVG, COR, XLNX, KITD, OVRL, GLUU, BT, ABVT, S, T, FTR, ATML, CLWR, VZ, GEN, DUK, PPL, EXC, AEP, CNP

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
FLOW SPX FLOW Inc. 36.40 0.19 0.52 218,772 Trade
GLW Corning Incorporated 30.23 0.24 0.80 5,814,525 Trade
RAI Reynolds American Inc 65.75 0.10 0.15 4,099,171 Trade
GEN Genesis Healthcare Inc. 1.84 -0.04 -2.13 183,995 Trade
CVG Convergys Corporation 24.27 0.03 0.12 436,514 Trade
MDSO Medidata Solutions Inc. 77.73 -2.17 -2.72 862,379 Trade
FTR Frontier Communications Corporation 1.14 -0.08 -6.56 30,014,620 Trade
KR Kroger Company (The) 22.61 0.01 0.04 12,221,754 Trade
UAL United Continental Holdings 77.03 0.24 0.31 2,545,132 Trade
GE General Electric Co 27.61 0.04 0.15 28,501,565 Trade
CVX Chevron Corporation 104.14 -0.86 -0.82 3,602,490 Trade
MOS Mosaic Company (The) 23.23 0.26 1.13 3,467,519 Trade
GLUU Glu Mobile Inc. 2.67 -0.03 -1.11 5,792,897 Trade
RIG Transocean Ltd (Switzerland) 8.15 0.06 0.74 10,914,852 Trade
VALE VALE S.A. American Depositary Shares Each Represen 8.34 0.17 2.08 20,460,096 Trade
DFT Dupont Fabros Technology Inc. 65.11 -0.10 -0.15 1,316,883 Trade
KBH KB Home 22.78 0.37 1.65 2,381,848 Trade
SLCA U.S. Silica Holdings Inc. 33.88 0.01 0.03 1,858,039 Trade
AA Alcoa Inc. 31.18 0.09 0.29 2,936,282 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.38 0.33 1.18 2,761,280 Trade
RAD Rite Aid Corporation 4.05 0.94 30.23 137,071,738 Trade
T35 AT&T Inc 2.450% Global Nts 2035 n/a n/a n/a 0 Trade
MO Altria Group Inc. 76.53 0.04 0.05 3,969,222 Trade
XLNX Xilinx Inc. 67.36 -0.17 -0.25 2,226,753 Trade
S Sprint Corporation 8.01 -0.04 -0.50 8,513,938 Trade
ACN Accenture plc Class A (Ireland) 122.34 -0.40 -0.33 2,622,970 Trade
PPL PPL Corp 39.29 0.46 1.18 3,743,338 Trade
SASR Sandy Spring Bancorp Inc. 39.62 0.36 0.92 100,130 Trade
MS Morgan Stanley 44.00 0.31 0.71 5,780,382 Trade
HCA HCA Holdings Inc. 86.62 0.38 0.44 1,420,346 Trade
ARNA Arena Pharmaceuticals Inc. 15.08 0.20 1.34 574,294 Trade
SIG Signet Jewelers Limited 60.25 1.84 3.15 1,150,928 Trade
DB Deutsche Bank AG 16.88 0.24 1.44 3,099,499 Trade
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a 0
CAM Cameron International Corp n/a n/a n/a 0 Trade
GS The Goldman Sachs Group Inc. 220.44 3.25 1.50 2,589,455 Trade
BTU Peabody Energy Corp 23.31 0.30 1.30 1,352,919 Trade
VZ Verizon Communications Inc. 45.75 0.36 0.79 10,107,247 Trade
MWW Monster Worldwide Inc. n/a n/a n/a 0 Trade
NKE Nike Inc. 53.28 0.43 0.81 7,966,304 Trade
BAC Bank of America Corporation 22.89 0.07 0.31 61,308,079 Trade
DG Dollar General Corporation 70.41 0.66 0.95 3,159,466 Trade
AET Aetna Inc. 151.19 -0.91 -0.60 1,490,766 Trade
ATML Atmel Corp n/a n/a n/a 0 Trade
FCX Freeport-McMoRan Inc. 11.82 0.06 0.51 13,970,151 Trade
BT BT Group plc American Depositary Shares 18.62 0.13 0.70 469,953 Trade
WPPGY WPP plc American Depositary Shares each representi 105.93 0.11 0.10 97,555 Trade
MCRI Monarch Casino & Resort Inc. 30.53 -1.29 -4.05 46,533 Trade
CNX CONSOL Energy Inc. 14.63 0.48 3.39 3,129,217 Trade
NSR Neustar Inc. Class A 33.40 0.05 0.15 285,355 Trade
PFE Pfizer Inc. 34.04 -0.13 -0.38 14,172,264 Trade
ZNGA Zynga Inc. 3.78 -0.01 -0.26 14,680,087 Trade
AIG American International Group Inc. New 63.18 0.16 0.25 3,839,835 Trade
COR CoreSite Realty Corporation 109.35 -1.17 -1.06 529,489 Trade
DFS Discover Financial Services 60.61 0.57 0.95 1,827,812 Trade
DRI Darden Restaurants Inc. 90.08 1.35 1.52 3,427,325 Trade
CY Cypress Semiconductor Corporation 13.36 0.16 1.21 7,339,275 Trade
MU Micron Technology Inc. 32.50 0.77 2.43 34,752,533 Trade
EXC Exelon Corporation 37.21 0.71 1.95 4,874,561 Trade
T AT&T Inc. 38.15 0.20 0.53 18,406,357 Trade
DUK Duke Energy Corporation (Holding Company) 86.70 0.74 0.86 2,834,523 Trade
AEP American Electric Power Company 71.87 0.32 0.45 2,026,068 Trade

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