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
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