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. 17.96 0.22 1.24 1,367,110 Trade
CEO CNOOC Limited 112.15 -0.77 -0.68 93,937 Trade
MMM 3M Company 200.05 1.02 0.51 2,175,700 Trade
STM STMicroelectronics N.V. 16.51 -0.54 -3.17 7,321,726 Trade
UNH UnitedHealth Group Incorporated (DE) 188.93 -1.82 -0.95 2,632,077 Trade
ACTG Acacia Research Corp. 4.15 0.15 3.75 481,468 Trade
DEO Diageo plc 127.23 6.62 5.49 1,206,163 Trade
PG Procter & Gamble Company (The) 90.68 1.38 1.55 11,089,531 Trade
GE General Electric Co 25.79 0.20 0.78 39,909,529 Trade
TER Teradyne Inc. 34.38 -2.42 -6.58 11,251,107 Trade
CVX Chevron Corporation 106.11 0.99 0.94 5,932,268 Trade
SO Southern Company (The) 47.82 0.42 0.89 4,629,321 Trade
PCG Pacific Gas & Electric Co. 67.55 -0.35 -0.52 2,842,161 Trade
JNJ Johnson & Johnson 130.83 -0.12 -0.09 5,839,307 Trade
WMT Wal-Mart Stores Inc. 79.78 0.88 1.12 8,053,227 Trade
AA Alcoa Inc. 36.36 -0.27 -0.74 2,045,659 Trade
INTC Intel Corporation 34.97 0.22 0.63 43,209,996 Trade
IBM International Business Machines Corp 145.07 -0.29 -0.20 6,430,909 Trade
NXST Nexstar Broadcasting Group Inc. 66.25 0.00 0.00 630,209 Trade
D Dominion Resources Inc. 77.12 0.07 0.09 1,553,339 Trade
TRV The Travelers Companies Inc. 125.88 -0.12 -0.10 1,694,031 Trade
NLST Netlist Inc. 1.21 0.05 4.31 273,625 Trade
AAPL Apple Inc. 150.56 -2.90 -1.89 32,533,332 Trade
BCS Barclays PLC 10.87 -0.17 -1.54 3,736,193 Trade
ACUR Acura Pharmaceuticals Inc. 0.50 -0.02 -3.85 4,026
UNXL Uni-Pixel Inc. 0.38 0.00 0.03 666,820 Trade
EIX Edison International 79.22 0.31 0.39 1,312,466 Trade
ANCI ANCI n/a n/a n/a 0 Trade
IR Ingersoll-Rand plc (Ireland) 87.78 0.84 0.97 2,199,201 Trade
OMC Omnicom Group Inc. 78.87 0.04 0.05 3,836,018 Trade
NQ NQ Mobile Inc. American Depositary Shares each rep 3.42 0.01 0.29 411,405 Trade
PCLN The Priceline Group Inc. 2,025.09 -8.12 -0.40 488,167 Trade
JPM JP Morgan Chase 91.55 -0.38 -0.41 12,335,239 Trade
AXP American Express Company 83.85 -1.45 -1.70 6,119,409 Trade
FGP Ferrellgas Partners L.P. 4.57 -0.13 -2.77 244,779 Trade
HON Honeywell International Inc. 136.98 -1.51 -1.09 3,670,437 Trade
TRI Thomson Reuters Corp 45.88 -0.07 -0.15 1,158,170 Trade
UTX United Technologies Corporation 118.69 -0.85 -0.71 4,257,321 Trade
PWR Quanta Services Inc. 33.94 0.17 0.50 1,040,788 Trade
CSCO Cisco Systems Inc. 31.57 -0.09 -0.28 21,438,830 Trade
ERIC Ericsson 6.24 -0.06 -0.95 3,286,882 Trade
DIS Walt Disney Company (The) 110.00 3.06 2.86 10,468,859 Trade
FBR Fibria Celulose S.A. 10.46 0.05 0.48 942,162 Trade
VZ Verizon Communications Inc. 47.81 3.41 7.68 44,713,668 Trade
GERN Geron Corporation 2.84 -0.09 -3.07 1,151,506 Trade
BAC Bank of America Corporation 24.11 -0.10 -0.41 63,045,769 Trade
GOOG Alphabet Inc. 934.09 -13.71 -1.45 3,220,602 Trade
MCD McDonald\'s Corporation 156.95 0.44 0.28 4,624,200 Trade
FCX Freeport-McMoRan Inc. 14.50 -0.56 -3.72 32,970,052 Trade
PSO Pearson Plc 8.50 0.12 1.43 440,425 Trade
APA Apache Corporation 50.22 1.36 2.78 3,714,587 Trade
WPPGY WPP plc American Depositary Shares each representi 101.29 0.14 0.14 128,284 Trade
DD E.I. du Pont de Nemours and Co. 84.59 0.16 0.19 2,191,226 Trade
UBS UBS Group AG Registered 17.98 -0.13 -0.72 1,681,059 Trade
ZGNX Zogenix Inc. 12.30 -0.55 -4.28 143,337 Trade
RKUS Ruckus Wireless n/a n/a n/a 0 Trade
BBY Best Buy Co. Inc. 57.05 1.48 2.66 3,249,539 Trade
ARRS ARRIS International plc 27.84 -0.25 -0.89 1,038,881 Trade
INFI Infinity Pharmaceuticals Inc. 1.33 -0.08 -5.67 353,462 Trade
X United States Steel Corp. 25.00 -1.20 -4.58 21,611,362 Trade
HD Home Depot Inc. (The) 147.73 1.04 0.71 5,400,465 Trade
XOM Exxon Mobil Corporation 80.83 0.46 0.57 11,385,705 Trade
PFE Pfizer Inc. 33.00 0.11 0.33 16,663,747 Trade
AIG American International Group Inc. New 65.17 -0.02 -0.03 4,289,310 Trade
HPQ HP Inc. 19.21 -0.05 -0.26 14,731,886 Trade
BA Boeing Company (The) 241.00 7.55 3.23 10,869,438 Trade
MRK Merck & Company Inc. (new) 63.69 1.89 3.06 21,864,541 Trade
NBL Noble Energy Inc. 29.15 0.51 1.78 3,339,106 Trade
FE FirstEnergy Corporation 31.25 0.15 0.48 5,909,171 Trade
KO Coca-Cola Company (The) 46.12 0.38 0.83 15,195,961 Trade
CME CME Group Inc. 121.36 -0.47 -0.39 1,349,589 Trade
SNE Sony Corporation 41.29 0.49 1.20 1,456,891 Trade
T AT&T Inc. 39.41 1.38 3.63 62,001,442 Trade
CAT Caterpillar Inc. 114.37 0.85 0.75 5,583,681 Trade
DMND Diamond Foods Inc. n/a n/a n/a 0 Trade
EJ E-House (China) Holdings Limited American Deposita n/a n/a n/a 0 Trade
MSFT Microsoft Corporation 73.16 -0.89 -1.20 36,878,499 Trade
IQNT Inteliquent Inc. n/a n/a n/a 0 Trade
CLDX Celldex Therapeutics Inc. 2.30 -0.08 -3.36 1,477,403 Trade

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