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
AA Alcoa Inc. 9.76 -0.02 -0.20 12,146,577
ACN Accenture plc Class A (Ireland) 113.09 -0.57 -0.50 2,265,179
AEP American Electric Power Company 66.66 0.06 0.09 2,031,124
AET Aetna Inc. 115.63 -1.30 -1.11 1,815,146
AIG American International Group Inc. New 58.73 -0.26 -0.44 6,306,925
ARNA Arena Pharmaceuticals Inc. 1.74 -0.03 -1.69 1,415,905
ATML Atmel Corp n/a n/a n/a 0
BAC Bank of America Corporation 15.52 -0.08 -0.51 51,604,424
BT BT Group plc American Depositary Shares 25.86 -0.22 -0.84 409,694
BTU Peabody Energy Corp n/a n/a n/a 0
CAM Cameron International Corp n/a n/a n/a 0
CNP CenterPoint Energy Inc (Holding Co) 24.19 0.08 0.33 3,008,593
CNX CONSOL Energy Inc. 17.40 -0.17 -0.97 3,199,323
COR CoreSite Realty Corporation 77.47 -0.25 -0.32 331,305
CVG Convergys Corporation 29.61 -0.40 -1.33 333,257
CVX Chevron Corporation 99.22 -0.76 -0.76 7,396,784
CY Cypress Semiconductor Corporation 11.78 -0.11 -0.93 2,400,729
DB Deutsche Bank AG 12.75 -0.25 -1.92 6,149,046
DFS Discover Financial Services 57.39 -0.41 -0.71 2,952,079
DFT Dupont Fabros Technology Inc. 43.00 -0.96 -2.18 774,188
DG Dollar General Corporation 72.09 0.20 0.28 2,711,844
DRI Darden Restaurants Inc. 63.05 1.06 1.71 1,704,297
DUK Duke Energy Corporation (Holding Company) 82.52 0.01 0.01 2,348,821
EXC Exelon Corporation 34.80 -0.42 -1.19 3,946,652
FCX Freeport-McMoRan Inc. 10.63 -0.35 -3.19 22,336,624
FLOW SPX FLOW Inc. 29.98 -0.33 -1.09 474,981
FTR Frontier Communications Corporation 4.33 0.00 0.00 19,247,444
GE General Electric Co 29.89 -0.15 -0.50 22,821,677
GEN Genesis Healthcare Inc. 2.72 -0.07 -2.51 154,075
GLUU Glu Mobile Inc. 2.22 0.01 0.45 664,799
GLW Corning Incorporated 23.14 0.03 0.13 10,115,486
GS The Goldman Sachs Group Inc. 165.13 -2.89 -1.72 3,421,183
HCA HCA Holdings Inc. 76.12 -0.26 -0.34 1,959,167
KBH KB Home 15.70 0.05 0.32 2,179,514
KR Kroger Company (The) 30.45 -0.30 -0.98 8,599,347
LINE Linn Energy LLC Unit Repstg Ltd Liability Co Ints n/a n/a n/a n/a
MCRI Monarch Casino & Resort Inc. 23.93 -0.08 -0.33 27,400
MDSO Medidata Solutions Inc. 56.51 -0.08 -0.14 167,062
MO Altria Group Inc. 63.87 -0.25 -0.39 4,428,499
MOS Mosaic Company (The) 24.82 -0.73 -2.86 5,474,153
MS Morgan Stanley 31.91 -0.33 -1.02 9,400,557
MU Micron Technology Inc. 17.48 -0.11 -0.63 17,947,621
MWW Monster Worldwide Inc. 3.55 -0.02 -0.56 851,230
NKE Nike Inc. 55.15 -0.26 -0.47 8,921,732
NSR Neustar Inc. Class A 27.33 -0.14 -0.51 283,345
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
PPL PPL Corp 35.70 -0.12 -0.34 4,155,500
RAD Rite Aid Corporation 8.09 -0.03 -0.37 5,640,605
RAI Reynolds American Inc 48.58 -0.20 -0.41 3,637,494
RIG Transocean Ltd (Switzerland) 9.10 -0.55 -5.70 21,742,529
S Sprint Corporation 6.64 0.02 0.30 8,699,931
SASR Sandy Spring Bancorp Inc. 30.71 -0.21 -0.68 27,005
SIG Signet Jewelers Limited 78.97 1.70 2.20 1,438,322
SLCA U.S. Silica Holdings Inc. 42.88 -2.17 -4.82 2,609,506
T AT&T Inc. 41.28 0.17 0.41 18,867,573
T35 AT&T Inc 2.450% Global Nts 2035 n/a n/a n/a 0
UAL United Continental Holdings 50.95 -0.09 -0.18 3,411,605
VALE VALE S.A. American Depositary Shares Each Represen 5.42 0.00 0.00 15,016,506
VZ Verizon Communications Inc. 52.56 0.21 0.40 13,014,796
WPPGY WPP plc American Depositary Shares each representi 117.66 -2.09 -1.75 57,436
XLNX Xilinx Inc. 53.12 -0.32 -0.60 1,197,167
ZNGA Zynga Inc. 2.84 0.00 0.00 6,456,245

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