Equities Sector Coverage: Wall Street Ends Flat As Investors Watch Super Committee

Sector Recap |

Stock Price 52 Week Range High LowNext week’s economic data include Existing Home Sales on Monday. Preliminary GDP for Q3 should be revised down to 2.2% from 2.5%. On Wednesday we get Durable Goods Orders, Personal Income and Spending and Michigan Consumer Sentiment. The US Treasury auctions $35 billion 2-Year notes on Monday, $35 billion 5-Year notes on Tuesday and $29 billion 7-Year notes. The Dow Jones Industrial Average traded up to 11,854.81 Friday morning then down to 11,755.82 in the afternoon before rebounding within the day’s trading range. The NASDAQ traded down from 2595.84 to 2567.15 Friday morning then rebounded within the day’s range in afternoon trading.

Asian stocks slumped on Friday with the Nikkei 225 down 1.23% to 8,375 and the Hang Seng slumping 1.73% to 18,491. European stocks slipped on Friday. The FTSE 100 declined 0.98% to 5,370 with the DAX down 0.67% to 5,811 and the CAC 40 drifting lower by 0.44% to 2,997. The yield on the US Treasury 10-Year note traded between 1.946 percent and 2.036 staying below its 50-day simple moving average at 2.043. Gold traded rebounded from $1711.4 the Troy ounce to $1738.5. Crude oil traded up from $98.01 per barrel to $100.15 then declined to $96.64. The euro versus the dollar rebounded from 1.3451 and 1.3612 staying below its 50-day simple moving average at 1.3676.

Energy

Arch Coal (ACI), Alpha Natural Resources (ANR), and Peabody Energy (BTU) are all initiated with Fair Values at CRT Capital, which has a more bullish Buy on CONSOL Energy (CNX). In afternoon trading: Shares of Treaty Energy (TECO) are down about 10%. Shares of GMX Resources (GMXR) are down about 6.75%. Shares of LDK Solar (LDK) are down about 5.25%. Shares of Exco Resources (XCO) are down about 5%.

Energy Select Sector SPDR (XLE) was trading at $68.15 at 4:00 PM on Friday, down 0.60% on the day – down 0.15% year-to-date.

Materials

Intrepid Potash (IPI) is a new Neutral at Lazard, which begins Buy rated coverage on Agrium (AGU), Mosaic (MOS), CF Industries (CF), and Potash Corp (POT). In afternoon trading: Shares of Kronos Worldwide (KRO) are down about 7.75%. Shares of Molycorp (MCP) are down about 6.5%.

The Materials Select Sector SPDR (XLB) was trading at $33.26 at 4:00 PM on Friday, up 0.54% on the day – down 13.41% year-to-date.

Industrials

Flowserve (FLS) is a new Outperform and $120 target price at Wedbush. AMR Corp (AMR) is raised to Hold from Sell at Dahlman Rose. Cintas (CTAS) get a Buy-from-Neutral boost at Citigroup. Transdigm Group (TDG) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. In afternoon trading: Shares of Broadwind Energy (BWEN) are down about 11%. Shares of Meritor (MTOR) are down about 10%.

The Industrial Select Sector SPDR (XLI) was trading at $32.92 at 4:00 PM on Friday, up 0.24% on the day – down 5.59% year-to-date.

Consumer Discretionary

GAP's (GPS) difficult year continued in FQ3 as EPS slumped 36% to $0.38, but beat forecasts by 2 cents, while revenue slipped 2% to $3.58B, which was in-line with estimates. AnnTaylor (ANN) beat estimates by 4 cents with revenue in-line with estimates. Focus Media (FMCN) beat estimates by 11 cents and revenue by $24M. Foot Locker (FL) beat estimates by 4 cents with revenue in-line with estimates. PetSmart (PETM) reported FQ3 sales of $1.5B and EPS of $0.50 (beating consensus by $10M and $0.02). The company expects FQ4 EPS of $0.85-$0.89 ($0.89 consensus). GameStop (GME) reported Q3 EPS of $0.39 (in-line) and revenue of $1.95B (in-line), and expects EPS of $1.66-$1.76 ($1.74 consensus). Ross Stores (ROST) reported Q3 EPS of $1.26 (in-line) and revenue of $2.04B (in-line). Jefferies rolls out Buy recommendations on both Royal Caribbean Cruises (RCL) and Carnival Corp (CCL). Groupon (GRPN) is now a Neutral with Wedbush. Sirius XM Radio (SIRI) is lifted to Buy from Neutral at Lazard. Darden Restaurants (DRI) gets moved to Equal Weight from Overweight at Morgan Stanley. Lennar (LEN) is lowered to Neutral from Buy at Citigroup. Perry Ellis (PERY) gets cut to Neutral from Buy at Suntrust. In afternoon trading: Shares of Global Education & Technology (GEDU) are up about 27%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.88 at 4:00 PM on Friday, down slightly on the day – up 1.26% year-to-date.

Consumer Staples

Heinz (HNZ) beat estimates by a penny, while missing revenue by $80M. J.M. Smucker (SJM) beat earnings estimates on a profit that narrowed from last year due to higher costs for ingredients. The firm guides FY12 EPS to a range of $4.90-$5.00 (below the consensus estimate of analysts of $5.11). Dow component Coca-Cola (KO) is covered with a Buy at Jefferies, which begins rival PepsiCo (PEP) at a Hold. The respective price objectives are $80 and $70. J.M. Smucker (SJM) is added to JPMorgan’s Focus List. Smithfield Foods (SFD) is upgraded to Outperform from Neutral at Credit Suisse. Central European Distribution Corp (CEDC) is downgraded by both Credit Suisse (Underperform from Neutral) and Nomura (Reduce from Neutral). In afternoon trading: Shares of Central European Distribution are down about 17%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $31.06 at 4:00 PM on Friday, up 0.29% on the day – up 5.97% year-to-date.

Healthcare

Zoll Medical (ZOLL) reported FQ4 EPS of $0.52 (versus $0.33 in the year-ago period and better than analyst estimates of $0.49). In afternoon trading: Shares of Merge Healthcare (MRGE) are down about 8.75%. Shares of MedAssets (MDAS) are down about 6%. Shares of Achillion Pharmaceuticals (ACHN) are up about 7%.

The Health Care Select Sector SPDR (XLV) was trading at $32.85 at 4:00 PM on Friday, down 0.21% on the day – up 4.29% year-to-date.

Financials

Looking to gain EU antitrust approval for their $9B merger, Deutsche Boerse (DBOEY) and NYSE Euronext (NYX) have submitted proposals to sell European equity-option operations, and to provide competitors with access to a major derivatives clearinghouse. It's looking like outright theft at MF Global (MFGLQ), where investigators believe that customer accounts were raided to pay off losing bets, meaning that the $600M officials are looking for may not just be missing, it may be gone. Equity One (EQY) is raised to Buy from Hold at ISI Group. Commerzbank AG (CRZBY) gets lowered to Sell from Neutral at UBS. Glacier Bancorp (GBCI) gets a Neutral-from-Buy ratings reduction at Sterne Agee. Annaly Capital Management (NLY) is cut to Market Perform from Outperform at Keefe Bruyette. IntercontinentalExchange (ICE) is cut 180 degrees, to Underperform from Outperform at Credit Agricole.

The Financial Select Sector SPDR (XLF) was trading at $12.50 at 4:00 PM on Friday, up 0.32% on the day – down 21.63% year-to-date.

Information Technology

Alcatel-Lucent (ALU) has informally approached potential outside successors to CEO Ben Verwaaye as shareholder pressure grows to replace him. Private-equity firm Silver Lake has held talks with Microsoft (MSFT), Canada Pension Plan Investment Board and other potential partners about buying Yahoo (YHOO). Hewlett Packard's (HPQ) board, which doesn't have the best of press, has added Ralph Whitworth as a director after he accumulated a stake of around 1%. Salesforce.com (CRM) beat estimates by 3 cents and revenue by $13M, and sees FQ4 Revenue at $620-$624M ($609.8M consensus), EPS at $0.39-$0.40 ($0.40 consensus). The company raised FY12 guidance: revenue at $2.255B-$2.259B, EPS at $1.32-$1.39. Marvell Technology (MRVL) beat estimates by a penny and revenue by $9M, and guides for FQ4 EPS of $0.21-$0.25 (below a $0.27 consensus, but better than many feared). Aruba Networks (ARUN) reported FQ1 EPS of $0.14 (in-line), while missing revenue by $3M. NetEase.com (NTES) reported Q3 revenue of $314.8M and EPS of $0.99 (beating consensus by a solid $33M and $0.11). Veeco Instruments (VECO) is a new Neutral at Goldman Sachs, which begins Buys on both Universal Display (PANL) and LED lighting outfit Cree Inc (CREE). Pegasystems (PEGA) is a new Buy and $37 target at The Benchmark Company. Hewlett-Packard (HPQ) is upgraded to Buy from Neutral with a $34 target at Sterne Agee. Blue Coat Systems (BCSI) is now Neutral from Sell at Sterne Agee. In afternoon trading: Shares of Mentor Graphics (MENT) are up about 14.25%. Shares of Dolby Labs (DLB) are up about 11%. Shares of Salesforce.com are down about 11.25%.

The Technology Select Sector SPDR (XLK) was trading at $25.21 at 4:00 PM on Friday, down 0.83% on the day – up 0.08% year-to-date.

Telecommunications Services

In afternoon trading: Shares of Clearwire (CLWR) are down about 23%. Shares of TerreStar (TSTRQ) are down about 5.25%. Actives: Shares of Sprint Nextel (S) are down about 5.25%, while shares of AT&T (T) are up slightly and shares of Verizon (VZ) are down about 0.6%. Shares of Frontier Communications (FTR) are up about 0.6%.

The NASDAQ Telecommunications Index (IXTC) was trading at $200.63 at 4:00 PM on Friday, down 0.83% on the day – down 10.98% year-to-date.

Utilities

Xcel Energy (XEL) is moved to Outperform from Neutral at Macquarie. In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about a half of a percent. Shares of AES Corp (AES) are up about 2.25%. Shares of Exelon (EXC) are up about 0.7%. Shares of Southern Company (SO) are up about a half of a percent. Shares of NRG Energy (NRG) are down about 0.6%. Shares of PPL Corp. (PPL) are up about 0.9%.

The Utilities Select Sector SPDR (XLU) was trading at $34.64 at 4:00 PM on Friday, up 0.70% on the day – up 10.53% year-to-date.

STOCKS: ACI, ANR, BTU, CNX, TECO, GMXR, LDK, XCO, IPI, AGU, MOS, CF, POT, KRO, MCP, FLS, AMR, CTAS, TDG, BWEN, MTOR, GPS, ANN, FMCN, FL, PETM, GME, ROST, RCL, CCL, GRPN, SIRI, DRI, LEN, PERY, GEDU, HNZ, SJM, KO, PEP, SFD, CEDC, ZOLL, MRGE, MDAS, ACHN, DBOEY, NYX, MFGLQ, EQY, CRZBY, GBCI, NLY, ICE, ALU, MSFT, YHOO, HPQ, CRM, MRVL, ARUN, NTES, VECO, PANL, CREE, PEGA, BCSI, MENT, DLB, CLWR, TSTRQ, S, T, VZ, FTR, XEL, DUK, AES, EXC, SO, NRG, PPL

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
ACHN Achillion Pharmaceuticals Inc. 8.25 -0.09 -1.08 1,584,960
ACI Arch Coal Inc. n/a n/a n/a 0
AES The AES Corporation 13.08 -0.04 -0.30 4,674,105
AGU Agrium Inc. 89.90 0.43 0.48 356,727
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0
BTU Peabody Energy Corp n/a n/a n/a 0
BWEN Broadwind Energy Inc. 4.16 -0.07 -1.65 43,379
CCL Carnival Corporation 48.35 1.88 4.05 7,852,571
CF CF Industries Holdings Inc. 22.89 0.25 1.10 5,472,414
CNX CONSOL Energy Inc. 18.28 0.11 0.61 3,696,248
CREE Cree Inc. 25.36 0.47 1.89 527,185
CRM Salesforce.com Inc 70.05 -0.14 -0.20 8,179,528
CTAS Cintas Corporation 113.43 0.24 0.21 731,948
DLB Dolby Laboratories 54.36 0.45 0.83 225,079
DRI Darden Restaurants Inc. 61.52 -0.95 -1.52 1,587,447
DUK Duke Energy Corporation (Holding Company) 81.43 -0.72 -0.88 2,268,288
EQY Equity One Inc. 31.20 -0.36 -1.14 394,837
EXC Exelon Corporation 34.18 -0.64 -1.84 4,765,713
FL Foot Locker Inc. 68.08 0.50 0.74 2,150,778
FLS Flowserve Corporation 45.63 0.37 0.82 1,371,131
FTR Frontier Communications Corporation 4.34 -0.02 -0.46 13,582,166
GBCI Glacier Bancorp Inc. 28.34 0.11 0.39 484,979
GME Gamestop Corporation 27.43 -0.21 -0.76 1,443,040
GPS Gap Inc. (The) 22.29 0.06 0.27 4,746,587
GRPN Groupon Inc. 5.33 0.15 2.90 5,416,662
HPQ HP Inc. 15.34 0.32 2.13 9,061,256
ICE Intercontinental Exchange Inc. 273.53 -0.51 -0.19 480,621
IPI Intrepid Potash Inc 1.07 0.00 0.00 1,180,482
KO Coca-Cola Company (The) 42.59 0.54 1.28 11,920,432
KRO Kronos Worldwide Inc 8.16 0.10 1.24 188,839
LEN Lennar Corporation Class A 42.72 -0.23 -0.54 1,946,235
MDAS MedAssets Inc. n/a n/a n/a 0
MENT Mentor Graphics Corporation 24.48 0.03 0.12 1,504,712
MOS Mosaic Company (The) 23.99 -0.15 -0.62 6,960,433
MRVL Marvell Technology Group Ltd. 13.09 0.22 1.71 5,479,160
MSFT Microsoft Corporation 57.95 1.05 1.85 28,065,105
MTOR Meritor Inc. 10.60 0.04 0.38 327,901
NLY Annaly Capital Management Inc 10.63 -0.03 -0.28 9,544,494
NRG NRG Energy Inc. 11.19 -0.11 -0.97 3,556,134
NTES NetEase Inc. 244.15 2.94 1.22 1,032,059
PANL Pangaea Logistics Solutions Ltd. 2.54 -0.11 -4.15 2,650
PEGA Pegasystems Inc. 29.38 0.32 1.10 479,245
PEP Pepsico Inc. 107.49 0.46 0.43 3,779,284
PERY Perry Ellis International Inc. 19.48 0.08 0.41 47,657
POT Potash Corporation of Saskatchewan Inc. 16.06 0.15 0.94 5,161,269
PPL PPL Corp 35.24 -0.52 -1.45 4,739,105
PSA.P.S Public Storage DEP SH REPSTG PFD SH BEN INT SER S 25.45 0.01 0.05 16,252
ROST Ross Stores Inc. 64.39 0.63 0.99 2,200,689
S Sprint Corporation 6.73 0.08 1.20 9,741,591
SIRI Sirius XM Holdings Inc. 4.16 -0.01 -0.12 22,051,566
SJM J.M. Smucker Company (The) New 133.65 -4.07 -2.96 1,481,061
SO Southern Company (The) 52.84 -0.47 -0.88 5,774,119
T AT&T Inc. 41.46 0.32 0.78 18,445,784
TDG Transdigm Group Incorporated Inc. 290.57 0.39 0.13 269,767
VECO Veeco Instruments Inc. 19.38 0.15 0.78 135,160
VZ Verizon Communications Inc. 52.49 0.34 0.65 8,259,032
XCO EXCO Resources Inc. Exco Resources Inc. 0.99 -0.04 -3.88 733,819
XEL Xcel Energy Inc. 42.37 -0.73 -1.69 3,301,714
YHOO Yahoo! Inc. 43.37 1.08 2.55 8,765,715

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