Equities Sector Coverage: Wall Street Ends Flat

Sector Recap |

The Dow Industrial Average dipped to 13,139.08 then rebounded to 13,195.35 moving above its 50-day and 200-day simple moving average at 13,142.23 and 12,999.65. The Nasdaq dipped to 2971.56 than rebounded to 2997.64 staying below its 50-day SMA at 3004.18 and trading back and forth around its 200-day SMA at to 2988.36.

Asian stocks were higher on Monday. The Nikkei 225 closed at 9534 – up 0.07%. The Hang Seng closed at 22,277 – up 0.39%. European exchanges opened lower on Monday, but closed slightly higher. The FTSE 100 ended the day at 5,922 – up 0.12%. The DAX ended the day at 7,531 – up 0.17%. The CAC 40 ended the day at 3,612 – up 0.18%. The yield on the 10-Year US Treasury rose from 1.596% to 1.627% staying below the 50-day and 200-day simple moving averages at 1.677% and 1.750%.

Comex gold rebounded from $1703.3 the Troy ounce to $1718.8 staying between the 200-day simple moving average at $16635 and the 50-day simple moving average at $1731.0. Nymex crude oil rebounded from $85.90 per barrel to $86.78 then declined to $85.33 staying below the 50-day and 200-day simple moving averages at $88.12 and $93.33. The euro versus the dollar traded up from 1.2889 to 1.2941 staying above its 200-day simple moving average at 1.2783 with the 50-day at 1.2916.

Energy

Canada approved a proposal from China’s state-owned CNOOC (CEO) to buy Nexen Inc. (NXY) for $15.1 billion. Miller Energy Resources (MILL) missed estimates by 7 cents and revenue by $0.8M. Lufkin Industries (LUFK) gets initiated with a Market Perform at Wells Fargo. Apache Corp. (APA) is now Neutral from Outperform at Robert W. Baird. Noble Energy (NBL) upgraded elsewhere today, is now Neutral from Buy at Sterne Agee. Big Movers – Nexen (NXY) is up about 14%. Alpha Natural Resources (ANR) is up about 8%. Dow components – Chevron (CVX) is down about 0.2%. Exxon Mobil (XOM) is down about 0.2%. Energy Select Sector SPDR (XLE) was trading at $71.53 at 3:30 PM on Monday, down 0.04% on the day – up 3.47% year-to-date.

Materials

Freeport-McMoRan Copper & Gold (FCX) is a new Neutral at Bank of America-Merrill. Fibria Celulose (FBR) is now Sell from Neutral at Citigroup. United States Steel (X) gets cut to Underperform from Neutral at Longbow. Big Movers – Molycorp (MCP) is up about 16%. Avalon Rare Metals (AVL) is up about 10%. Rare Elements (REE) is up about 9.25%. Dow Components – Alcoa (AA) is up about 0.8%. DuPont (DD) is relatively unchanged. The Materials Select Sector SPDR (XLB) was trading at $36.33 at 3:30 PM on Monday, up 0.78% on the day – up 8.45% year-to-date.

Industrials

Honeywell (HON) has agreed to buy Intermec (IN) for $603.4 million ($10 per share, a 25% premium). Ingersoll-Rand (IR) has reportedly reached a compromise with activist investor Nelson Peltz and agreed to spin off its security-technology business rather than break up into three companies, as Peltz had originally advocated. Ingersoll-Rand will also repurchase $2B in shares and increase its dividend. Acacia Research Corporation (ACTG) is covered at Outperform by Cowen. Quanta Services (PWR) gets begun with a Buy at Deutsche Bank. GrafTech (GTI) gets taken to Hold from Buy at Jefferies. Big Mover – GrafTech (GTI) is down about 8.25%. Dow components – Boeing Co (BA) is up about 1%. Caterpillar (CAT) is up about 0.3%. General Electric (GE) is down about 0.25%. 3M Company (MMM) is up about 0.5%. United Technologies (UTX) is up about 0.2%. The Industrial Select Sector SPDR (XLI) was trading at $37.71 at 3:30 PM on Monday, up 0.57% on the day – up 11.73% year-to-date.

Consumer Discretionary

According to Bloomberg, Apple (AAPL) and Google (GOOG) have finally teamed up to buy Eastman Kodak's (EKDKQ) portfolio of patents out of bankruptcy for an estimated $500 million. Panasonic (PC), Sony (SNE) and Sharp (SHCAF) are selling real estate, business units, their shares in other companies, and other assets in a "garage sale" that could bring in a combined $3B. New York Mayor Michael Bloomberg is reportedly running his eye over the Financial Times, which analysts reckon is loss-making but could be worth $1.2B. Another potential bidder, should Pearson (PSO) decide to sell - and the drumbeat of speculation is starting to get louder - is Bloomberg rival Thomson Reuters (TRI). Best Buy (BBY) is launched as an Underperform at Bank of America-Merrill Lynch. Nexstar Broadcasting (NXST) is an Outperform with Wells. Deutsche Bank downgrades Omnicom (OMC) and WPP Group (WPPGY) to Hold from Buy. It slashes Publicis Groupe (PUBGY) to Sell from Hold. McGraw-Hill (MHP) is cut to Neutral from Buy at Lazard Capital. Priceline.com (PCLN) gets downgraded to Hold from Buy at Deutsche Bank. Big Mover – Eastman Kodak (EKDKQ) is up about 22.5%. Dow Components – Disney (DIS) is up about 0.25%. Home Depot (HD) is down about 1.9%. McDonalds (MCD) is up about 1.3%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $47.21 at 3:30 PM on Monday, down 0.44% on the day – up 20.99% year-to-date.

Consumer Staples

Diamond Foods Inc. (DMND) on Friday reported a loss for its fiscal fourth quarter, but after adjusting for costs tied to an accounting probe the snack company beat market expectations. Today marks the deadline for interested parties to submit bids for the well-known products of Hostess Brands, with estimates for the lot pegged at $1B-$1.5B. A major focus is on Flowers Foods (FLO) after the snack-foods company expanded its credit facility last week to prepare to jump into the fray. Diageo (DEO) reportedly held talks earlier this year with Japanese peer Suntory about joining up to buy bourbon whiskey producer Beam (BEAM) for over $10B. A bid for Beam, whose market cap is $9.5B, would mark a departure by Diageo from its strategy of acquiring spirits brands in fast-growing emerging markets. Big Mover – Diamond Foods (DMND) is down about 10%. Dow components – Coca Cola (KO) is down about 0.3%. Procter & Gamble (PG) is up slightly. Wal-Mart (WMT) is down slightly. The Consumer Staples Select Sector SPDR (XLP) was trading at $36.155 at 3:30 PM on Monday, down 0.07% on the day – up 11.28% year-to-date.

Health Care

Acura Pharmaceuticals, Inc. (ACUR) announced the launch of Nexafed®, a 30 mg immediate-release next generation pseudoephedrine product, combining effective nasal-congestion relief with a unique technology that disrupts the conversion of pseudoephedrine into the dangerous drug, methamphetamine. Celldex Therapeutics Inc. (CLDX) reported positive clinical trial results for an experimental treatment for breast cancer. Geron Corp. (GERN) reported early clinical trial results for its drug imetelstat as a treatment for a blood platelet disorder. The company said 100% of patients responded to the drug, and most patients who had a specific gene mutation responded to the drug. Infinity Pharmaceutical (INFI) reported Phase 1 data showing clinical activity in B-cell and T-cell malignancies. Preliminary data from the study showed that IPI-145 was well tolerated to date and clinically active in patients with both B-cell and T-cell malignancies, including chronic lymphocytic leukemia, indolent non-Hodgkin's lymphoma, mantle cell lymphoma, Hodgkin's lymphoma and T-cell lymphoma. The U.S. government health experts overwhelmingly voted against a stronger version of Zogenix’s hydrocodone. Zogenix (ZGNX) is downgraded to Hold from Buy at Stifel Nicolaus. Big Movers – Acura Pharmaceuticals (ACUR) is up about 55%. CombiMatrix (CBMX) is up about 36%. Celldex Therapeutics (CLDX) is up about 26%. Infinity Pharmaceuticals (INFI) is up about 20%. Geron (GERN) is up about 19%. Zogenix (ZGNX) is down about 50%. Dow Components – Johnson & Johnson (JNJ) is up about 0.2%. Merck (MRK) is down about 0.2%. Pfizer (PFE) is down about 0.5%. United Health Group (UNH) is up about 0.75%. The Health Care Select Sector SPDR (XLV) was trading at $40.655 at 3:30 PM on Monday, up 0.43% on the day – up 17.20% year-to-date.

Financials

AIG (AIG) has agreed to sell an 80.1% stake in its plane-leasing unit, ILFC, for $4.23B in a deal that values the entire business at $5.28B. The good news: AIG's continued refocus on core operations and the raising of cash to buy back shares. The bad news: the sale price is about two-thirds of ILFC's book value and less than what AIG hoped it might raise in an IPO. While the Libor scandal has grabbed much of the attention, the EU is reportedly poised to accuse multiple banks of trying to rig Euribor, a sin that Barclays (BCS) has already admitted to. UBS (UBS) is nearing a deal to settle accusations that it tried to rig rates, including Euribor. CME Group (CME) gets slashed to Sell from Neutral at Goldman Sachs. Big Mover – E House China Holdings (EJ) is up about 28%. Dow Components – American Express (AXP) is up about 0.3%. Bank of America (BAC) is down about 0.5%. JP Morgan Chase (JPM) is down about 0.5%. The Travelers Companies (TRV) is up slightly. The Financial Select Sector SPDR (XLF) was trading at $16.00 at 3:30 PM on Monday, down 0.16% on the day – up 23.08% year-to-date.

Information Technology

According to Bloomberg, Apple (AAPL) and Google (GOOG) have finally teamed up to buy Eastman Kodak's (EKDKQ) portfolio of patents out of bankruptcy for an estimated $500 million. Uni-Pixel (UNXL) announced a multi-million dollar preferred price and capacity license agreement to introduce products with its UniBoss-Based touch screens. Honeywell (HON) has agreed to buy Intermec (IN) for $603.4 million ($10 per share, a 25% premium). Cable infrastructure vendor Arris (ARRS) and U.K. set-top box maker Pace have reportedly "made the most compelling bids" for Motorola's set-top/cable infra unit. A complex financing structure in which Google (GOOG) would maintain equity and patents might prevent a deal from closing this year. P-E firms are uninterested in the unit, which has to contend with a shift towards cloud-based apps and litigation with TiVo (TIVO). Panasonic (PC), Sony (SNE) and Sharp (SHCAF) are selling real estate, business units, their shares in other companies, and other assets in a "garage sale" that could bring in a combined $3B. STMicroelectronics (STM) is in negotiations to exit ST-Ericsson, its loss-making mobile chip joint venture with Ericsson (ERIC), by Q3 2013. STMicro's move is part of a strategy to refocus on products such as motion sensors and chips for cars as the semiconductor company looks to return to profitability and achieve an operating margin of 10%. Ruckus Wireless (RKUS) is a new Buy at Lazard. Teradyne (TER) is a new Buy at Needham. Big Movers – Uni-Pixel (UNXL) is up about 44%. Intermec (IN) is up about 23%. Netlist (NLST) is up about 18.5%. NQ Mobile (NQ) is down about 10.5%. Dow Components – Cisco Systems (CSCO) is up about 2.1%. Hewlett-Packard (HPQ) is up about 1.75%. IBM (IBM) is up about 0.5%. Intel Corp (INTC) is down about 0.7%. Microsoft (MSFT) is up about 1.4%. The Technology Select Sector SPDR (XLK) was trading at $28.868 at 3:30 PM on Monday, up 0.34% the day – up 13.43% year-to-date.

Telecommunication Services

STMicroelectronics (STM) is in negotiations to exit ST-Ericsson, its loss-making mobile chip joint venture with Ericsson (ERIC), by Q3 2013. STMicro's move is part of a strategy to refocus on products such as motion sensors and chips for cars as the semiconductor company looks to return to profitability and achieve an operating margin of 10%. Big Mover – Neutral Tandem (IQNT) is up about 10%. Dow Components – AT&T (T) is relatively unchanged. Verizon (VZ) is down about 0.8%. The NASDAQ Telecommunications Index (IXTC) was trading at $200.04 at 3:30 PM on Monday, up 1.19% on the day – up 1.58% year-to-date.

Utilities

Ferrellgas Partners L.P. (FGP) beat estimates by 26 cents on revenue of $362.9M. Duke Energy (DUK) is a new Overweight at Morgan Stanley. The Big Names – Dominion Resources (D) is down about 0.25%. Edison International (EIX) is down about 0.7%. First Energy (FE) is down slightly. PG&E Corp (PCG) is up about 0.2%. Southern Company (SO) is down about 0.25%. The Utilities Select Sector SPDR (XLU) was trading at $35.465 at 3:30 PM on Monday, up 0.03% on the day – down 1.43% year-to-date.

STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KO, PG, WMT, JNJ, MRK, PFE, UNH, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, CEO, NXY, ANR, MILL, LUFK, APA, NBL, FCX, FBR, X, HON, IN, IR, ACTG, PWR, GTI, AAPL, EKDKQ, PC, SNE, SHCAF, PSO, TRI, BBY, NXST, OMC, WPPGY, PUBGY, MHP, PCLN, DMND, FLO, DEO, BEAM, ACUR, CLDX, GERN, INFI, ZGNX, AIG, BCS, UBS, CME, UNXL, ARRS, GOOG, TIVO, STM, ERIC, RKUS, TER, FGP, SUK, MCP, AVL, REE, EJ, NLST, NQ, IQNT

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
REE Rare Element Resources n/a n/a n/a n/a
FLO Flowers Foods Inc. 15.48 0.16 1.04 1,632,910
CEO CNOOC Limited 133.92 -0.74 -0.55 84,866
MMM 3M Company 172.43 -0.20 -0.12 1,871,524
STM STMicroelectronics N.V. 9.93 0.09 0.91 2,101,722
UNH UnitedHealth Group Incorporated (DE) 160.73 -0.21 -0.13 3,480,032
ACTG Acacia Research Corp. 7.05 0.25 3.68 202,676
DEO Diageo plc 100.39 0.44 0.44 1,626,852
PG Procter & Gamble Company (The) 82.40 0.54 0.66 9,079,412
GE General Electric Co 31.34 -0.05 -0.16 21,401,028
TER Teradyne Inc. 23.94 0.51 2.18 1,855,971
CVX Chevron Corporation 113.00 -0.29 -0.26 6,167,368
SO Southern Company (The) 46.76 0.17 0.36 4,386,169
PCG Pacific Gas & Electric Co. 58.28 0.24 0.41 2,343,089
JNJ Johnson & Johnson 111.96 0.58 0.52 6,167,740
WMT Wal-Mart Stores Inc. 70.88 0.21 0.30 6,674,206
AA Alcoa Inc. 29.04 0.16 0.55 3,870,822
INTC Intel Corporation 34.16 0.40 1.18 21,492,534
IBM International Business Machines Corp 160.02 0.20 0.13 2,740,867
NXST Nexstar Broadcasting Group Inc. 59.20 -0.28 -0.46 422,348
D Dominion Resources Inc. 73.78 1.03 1.42 2,952,469
TRV The Travelers Companies Inc. 115.65 0.24 0.21 1,885,339
NLST Netlist Inc. 1.02 -0.06 -5.56 529,693
AAPL Apple Inc. 109.90 0.41 0.37 26,527,997
BCS Barclays PLC 10.70 -0.21 -1.92 4,624,332
ACUR Acura Pharmaceuticals Inc. 0.89 -0.02 -2.04 23,677
UNXL Uni-Pixel Inc. 1.10 0.06 5.77 295,734
EIX Edison International 69.40 0.84 1.23 1,435,505
ANCI ANCI n/a n/a n/a 0
IR Ingersoll-Rand plc (Ireland) 74.50 -0.09 -0.12 2,508,392
OMC Omnicom Group Inc. 86.34 -1.27 -1.45 2,004,070
NQ NQ Mobile Inc. American Depositary Shares each rep 3.31 -0.09 -2.65 774,711
PCLN The Priceline Group Inc. 1,473.00 -6.66 -0.45 336,892
JPM JP Morgan Chase 81.60 -0.19 -0.23 16,931,504
AXP American Express Company 71.86 -0.67 -0.92 2,959,077
FGP Ferrellgas Partners L.P. 5.65 0.44 8.45 1,998,437
HON Honeywell International Inc. 112.45 -1.22 -1.07 3,537,095
TRI Thomson Reuters Corp 43.31 0.13 0.30 595,173
UTX United Technologies Corporation 108.22 0.74 0.69 3,124,427
PWR Quanta Services Inc. 33.80 -0.29 -0.85 1,568,312
CSCO Cisco Systems Inc. 29.25 -0.20 -0.68 27,069,499
ERIC Ericsson 5.16 0.04 0.78 4,465,404
DIS Walt Disney Company (The) 98.50 -0.44 -0.44 7,737,193
FBR Fibria Celulose S.A. 9.16 0.07 0.77 1,055,009
VZ Verizon Communications Inc. 49.81 -0.06 -0.12 10,650,716
GERN Geron Corporation 2.01 0.05 2.55 727,954
BAC Bank of America Corporation 21.23 -0.27 -1.26 128,468,708
GOOG Alphabet Inc. 750.50 2.58 0.34 1,452,484
MCD McDonald\'s Corporation 118.24 -0.23 -0.19 3,348,723
FCX Freeport-McMoRan Inc. 15.42 0.39 2.59 27,354,571
PSO Pearson Plc 9.95 0.17 1.74 665,358
APA Apache Corporation 65.11 -0.03 -0.05 2,072,971
WPPGY WPP plc American Depositary Shares each representi 105.59 1.25 1.20 111,457
DD E.I. du Pont de Nemours and Co. 73.13 -0.49 -0.67 3,233,772
UBS UBS Group AG Registered 15.66 -0.30 -1.88 2,019,718
ZGNX Zogenix Inc. 13.05 0.35 2.76 139,072
RKUS Ruckus Wireless n/a n/a n/a 0
BBY Best Buy Co. Inc. 45.67 0.22 0.48 3,815,484
ARRS ARRIS International plc 28.06 0.15 0.54 1,554,981
INFI Infinity Pharmaceuticals Inc. 1.20 0.01 0.84 244,048
X United States Steel Corp. 33.61 1.58 4.93 13,634,876
HD Home Depot Inc. (The) 129.87 0.40 0.31 3,738,338
XOM Exxon Mobil Corporation 87.04 -0.20 -0.23 9,706,646
PFE Pfizer Inc. 31.63 0.17 0.54 19,007,839
AIG American International Group Inc. New 63.75 -0.36 -0.56 5,651,035
HPQ HP Inc. 15.12 0.06 0.40 8,377,096
BA Boeing Company (The) 152.25 -0.14 -0.09 2,105,577
MRK Merck & Company Inc. (new) 61.13 0.37 0.61 7,993,092
NBL Noble Energy Inc. 38.82 -0.05 -0.13 3,524,471
FE FirstEnergy Corporation 30.57 -0.42 -1.36 5,280,823
KO Coca-Cola Company (The) 40.36 0.19 0.47 11,176,301
CME CME Group Inc. 115.64 0.72 0.63 1,643,586
SNE Sony Corporation 28.06 -0.16 -0.57 952,644
T AT&T Inc. 38.61 -0.27 -0.69 16,102,161
CAT Caterpillar Inc. 95.14 -1.10 -1.14 5,038,257
DMND Diamond Foods Inc. n/a n/a n/a 0
EJ E-House (China) Holdings Limited American Deposita n/a n/a n/a 0
MSFT Microsoft Corporation 59.25 0.05 0.08 25,515,665
IQNT Inteliquent Inc. 22.66 0.02 0.09 589,981
CLDX Celldex Therapeutics Inc. 3.55 -0.02 -0.56 1,834,829

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