The Dow Jones Industrial Average opened lower trading down to 10,869.64 versus the 200-week simple moving average at 10,730. The Dow turned around in morning trading to 11,086.40 then traded to a day’s low in the afternoon at 10,814.24 going into the final half hour of trading. The NASDAQ traded down to 2353.32 then rebounded to 2415.18 and then traded to a day’s low in the afternoon at 2338.66 staying above the important support, which is the August 9th low at 2331.65.
Asian stocks declined again on Friday as fears of a global economic slowdown gain negative traction. The Nikkei 225 traded down by 2.51% to 8,719 with the Hang Seng lower by 3.08% to 19,400. European stocks traded lower again on Friday as European banks get scrutinized. The FTSE 100 lost 1.01% to 5,041, the DAX dropped by 2.19% to 5,480 and the CAC 40 declined by 1.92% to 3,017. Record low US Treasury yields and all time highs for gold are clear signs of risk aversion. The yield on the 10-Year US Treasury note consolidated Thursday’s move to a record low yield at 1.973 percent on Friday as this yield rose from 2.007 to 2.128 then traded mid-range. Gold rallied to another new record high at $1881.4 the Troy ounce on Friday then consolidated to $1840.8. Crude oil traded down to $79.17 per barrel then rebounded to $83.55 staying below its 200-week simple moving average at $83.94. The euro versus the US dollar traded up from 1.4263 to 1.4449.
New York AG Eric Schneiderman has reportedly sent subpoenas to Range Resources (RRC), Cabot Oil & Gas (COG) and Goodrich Petroleum (GDP) requesting information about formulas used to predict gas output from their wells and their assumptions about drilling costs. Yingli Green Energy (YGE) beat estimates by 7 cents and revenue by $64.6M. Chevron (CVX) is upgraded to Strong Buy from Outperform at Raymond James. Anadarko Petroleum (APC) is upgraded to Buy from Hold at Ticonderoga. Subsea 7 SA (SUBCY) gets downgraded to Underweight from Neutral at JPMorgan. Technip (TKPPY) is moved to Neutral from Overweight at JPMorgan. In afternoon trading: Shares of LDK Solar (LDK) are down about 21.25%. Shares of Basic Energy Services (BAS) are down about 10%.
Energy Select Sector SPDR (XLE) was trading at $63.24 at 4:00 PM on Friday, down 1.77% on the day – down 7.34% year-to-date.
In afternoon trading: Shares of Golden Star Resources (GSS) are up about 7.5%. Shares of Jaguar Mining (JAG) are up about 7.5%. Shares of Randgold Resources (GOLD) are up about 5.5%. Shares of Silver Wheaton (SLW) are up about 4.25%. Shares of IAMGOLD (IAG) are up about 4.25%. Shares of Molycorp (MCP) are down about 6.75%. Shares of Huntsman (HUN) are down about 5.25%. Shares of Mechel (MTL) are down about 5%. Shares of Harmony Gold (HMY) are down about 4.5%.
The Materials Select Sector SPDR (XLB) was trading at $32.00 at 4:00 PM on Friday, down 1.60% on the day – down 16.69% year-to-date.
Roadrunner Transportation (RRTS) is a new Buy at KeyBanc Capital. Verisk Analytics (VRSK) is upgraded to Outperform from Market Perform at Keefe Bruyette. Genesee & Wyoming (GWR) is moved to Overweight from Neutral at JPMorgan. In afternoon trading: Shares of Meritor (MTOR) are down about 9.75%. Shares of Titan International (TWI) are down about 9.25%. Shares of DryShips (DRYS) are down about 8.75%. Shares of United Rentals (URI) are down about 8.5%.
The Industrial Select Sector SPDR (XLI) was trading at $29.13 at 4:00 PM on Friday, down 1.54% on the day – down 16.46% year-to-date.
Sprint Nextel (S) is reportedly in talks with Comcast (CMCSA), Cox and Cablevision (CVC) about a possible investment in Sprint that would give it the money to buy the remaining shares of Clearwire (CLWR). Clearwire needs funding to undertake a $600M upgrade of its network to better compete with AT&T (T) and Verizon (VZ). Liberty Media (LCAPA) has abandoned its attempt to purchase Barnes & Noble (BKS) and instead opted to invest $204M in the book retailer in return for a 16.6% stake. GAP's (GPS) Q2 EPS fell to $0.35 from $0.36 a year ago but beat estimates by 2 cents while revenue rose 2% to $3.38B (beating estimated by $40M), with margins suffering from deep discounting and rising production costs. GAP reiterated its FY EPS forecast of $1.88-$1.93 but warned that shoppers' confidence will probably worsen in H2. The company reaffirms FY11 guidance. Ann Inc. (ANN) beat estimates by 2 cents and revenue by $8M, and sees Q3 revenue of $565M and FY11 revenue of $2.25B. Aeropostale (ARO) beat estimates by a penny, but missed revenue by $23M. The company lowers guidance for FY11, now expecting Q3 EPS to be between $0.02 and $0.03. Foot Locker (FL) beat estimates by 12 cents and revenue by $100M. DeVry (DV) and Strayer Education (STRA) are assigned Holds with Wunderlich. Career Education (CECO) is a new Buy and $23 price target at Wunderlich. Chipotle Mexican Grill (CMG) gets moved to Outperform from Market Perform with a $330 target at Morgan Keegan. Buckle (BKE) is boosted to Buy from Neutral at Sterne Agee with a target of $47. Lululemon Athletica (LULU) is lowered to Underweight from Hold at KeyBanc. Gaylord Entertainment (GET) gets cut to Perform from Outperform at FBR Capital with a new target of $31. In afternoon trading: Shares of New York & Co (NWY) are down about 23.25%. Shares of Barnes & Noble are down about 16.75%. Shares of Aeropastale are down about 14.75%. Shares of Ann Inc. are up about 11.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $34.05 at 4:00 PM on Friday, down 1.45% on the day – down 8.98% year-to-date.
Koninklijke Ahold (AHONY) is now Neutral from Buy at Goldman Sachs. In afternoon trading: Shares of Dole Food (DOLE) are down about 7%. Shares of Pilgrim’s Pride (PPC) are down about 6.5%. Shares of Chiquita Brands (CQB) are down about 5%. Shares of Mead Johnson (MJN) are down about 4.5%. Shares of Elizabeth Arden (RDEN) are down about 4.25%. Actives: Shares of Wal-Mart (WMT) are up about 1.4%. Shares of Altria Group (MO) are up about 0.5%. Shares of Procter & Gamble (PG) are up about 0.75%. Shares of Kraft Foods (KFT) are down about 0.4%. Shares of Coca Cola (KO) are down about 0.8%. Shares of Pepsico (PEP) are down about 1.5%. Shares of Phillip Morris (PM) are up about 1%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $29.55 at 4:00 PM on Friday, down 0.47% on the day – up 0.82% year-to-date.
In afternoon trading: Shares of Progenics Pharmaceuticals (PGNX) are up about 10%. Shares of Amarin Corp (AMRN) are down about 8.5%. Shares of YM BioSciences (YMI) are down about 7.75%. Shares of Inhibitex (INHX) are down about 7.75%. Shares of Sunrise Senior Living (SRZ) are down about 6.25%. Shares of Merge Healthcare (MRGE) are down about 5.75%. Shares of Pacific Biosciences (PACB) are down about 5.75%. Shares of Syneron Medical (ELOS) are down about 5.5%. Shares of Sirona Dental Systems (SIRO) are down about 5.5%.
The Health Care Select Sector SPDR (XLV) was trading at $31.03 at 4:00 PM on Friday, down 0.26% on the day – down 1.49% year-to-date.
Bank of America (BAC) reportedly intends to cut 3,500 jobs this quarter as part of a larger restructuring that may see at least 10,000 positions (3.5% of the firm's workforce) eliminated. BB&T Corp (BBT) gets begun with a Hold at Citigroup. American Equity Investment Life (AEL) is picked up with a Buy at Jefferies. Charles Schwab (SCHW) is now Neutral from Outperform at Macquarie. In afternoon trading: Shares of The PMI Group (PMI) are down about 12.5%. Shares of Commerzbank (CRZBY) are down about 8.25%. Shares of The Royal Bank of Scotland (RBS) are down about 6.5%. Shares of Regions Financial (RF) are down about 6.5%. Shares of CB Richard Ellis Group (CBG) are down about 6%. Shares of Lloyds Banking Group (LYG) are down about 6%.
The Financial Select Sector SPDR (XLF) was trading at $12.13 at 4:00 PM on Friday, down 2.02% on the day – down 23.95% year-to-date.
In one of the most dramatic restructurings in corporate history, HP (HPQ) may sell or spin off its mammoth PC division, and it plans to close its tablet computer and smartphone business. The company also intends to buy cloud search-software specialist Autonomy (AUTNF) for about $10B. Hewlett-Packard beat estimates by a penny with revenue in-line with estimates. Salesforce.com (CRM) beat estimates by 4 cents and revenue by $17M, while Q2 deferred revenue balance rose 37% Y/Y to $935M and sales to the Americas rose 8% Q/Q. Salesforce expects FY12 revenue of $2.22B-$2.23B (above a prior forecast of $2.15B-$2.17B), while EPS guidance of $1.30-$1.32 is unchanged. Mentor Graphics (MENT) beat estimates by 6 cents and revenue by $4M. The company reaffirms guidance for FY11, and boosts its Q3 forecast, now expecting an EPS of $0.21 and revenue of $245M (versus expectations for $0.19 and $238.55M). Silicon Graphics (SGI) reported a record FQ4 EPS of $0.12 (beating estimates by 15 cents on revenue of $190M (beating estimates by $29M) and raised its FY12 guidance, now seeing revenue at $740M to $780M and EPS between $0.60 and $0.80 (versus expectations of $722M and $0.83). Marvell Technology Group (MRVL) beat estimates by a penny and revenue by $8.5M. The company reaffirms guidance in the mid-range of estimates for FY11. Intuit (INTU) beat estimates by 2 cents and revenue by $10M. The company guides FY12 higher, now expecting non-GAAP EPS of $2.85 to $2.94 on revenue of $4.185B to $4.285B (versus expectations of $2.84 on $4.1B). Brocade Communications Systems (BRCD) beat estimates by a penny with revenue in-line with estimates. Dell Inc (DELL) is initiated with a Sell and price objective of $9.25 at Ticonderoga. Dell is upgraded to Buy from Hold with a $17 target at Needham. Sina Corp (SINA) is begun with a Buy and $128 target price at Brean Murray. Cree Inc (CREE) is picked up with a Buy and target of $39 at Ticonderoga. Veeco Instruments (VECO) is initiated with a Buy at Ticonderoga. Research In Motion (RIMM) is raised to Hold from Underperform at Jefferies. Intuit (INTU) is increased to Overweight from Equal Weight at First Analysis. Hewlett-Packard is downgraded by Robert Baird (to Neutral), Needham (to Underperform), and Sterne Agee (to Neutral). Motorola Mobility (MMI) gets moved to Perform at Oppenheimer after its acquisition. In afternoon trading: Shares of Silicon Graphics are up about 26.25%. Shares of Mentor Graphics are up about 11%. Shares of Hewlett Packard are down about 20.25%. Shares of Autodesk (ADSK) are down about 13%.
The Technology Select Sector SPDR (XLK) was trading at $22.52 at 4:00 PM on Friday, down 2.43% on the day – down 10.60% year-to-date.
Sprint Nextel (S) is reportedly in talks with Comcast (CMCSA), Cox and Cablevision (CVC) about a possible investment in Sprint that would give it the money to buy the remaining shares of Clearwire (CLWR). Clearwire needs funding to undertake a $600M upgrade of its network to better compete with AT&T (T) and Verizon (VZ). In afternoon trading: Shares of Clearwire are up over 30%. Shares of Sprint Nextel (S) are down about 1.2%, while shares of AT&T (T) are down about 1.4% and shares of Verizon (VZ) are down about 0.8%. Shares of Level 3 Communications (LVLT) are down about 2.8%. Shares of Frontier Communications (FTR) are down about 3.1%. Shares of Vodafone (VOD) are down about 2.6%.
The NASDAQ Telecommunications Index (IXTC) was trading at $177.71 at 4:00 PM on Friday, down 1.28% on the day – down 21.15% year-to-date.
In afternoon trading: Actives: Shares of Duke Energy (DUK) are down about 0.5%. Shares of Genon Energy (GEN) are up about 0.5%. Shares of PPL Corp (PPL) are up slightly. Shares of AES Corp (AES) are down about 2.4%. Shares of Calpine Corp (CPN) are down about 2.7%. Shares of NV Energy (NVE) are up about 1.4%. Shares of Southern Co (SO) are down about 0.5%. Shares of Dominion Resources (D) are down about 2%.
The Utilities Select Sector SPDR (XLU) was trading at $32.38 at 4:00 PM on Friday, down 0.64% on the day – up 3.32% year-to-date.
STOCKS: RRC, COG, GDP, YGE, CVX, APC, SUBCY, TKPPY, LDK, BAS, GSS, JAG, GOLD, SLW, IAG, MCP, HUN, MTL, HMY, RRTS, VRSK, GWR, MTOR, TWI, DRYS, URI, S, CMCSA, CVC, CLWR, T, VZ, LCAPA, BKS, GPS, ANN, ARO, FL, DV, STRA, CECO, CMG, BKE, LULU, GET, NWY, AHONY, DOLE, PPC, CQB, MJN, RDEN, WMT, MO, PG, KFT, KO, PEP, PM, PGNX, AMRN, YMI, INHX, SRZ, MRGE, PACB, ELOS, SIRO, BAC, BBT, AEL, SCHW, PMI, CRZBY, RBS, RF, CBG, LYG, HPQ, AUTNF, CRM, MENT, SGI, MRVL, INTU, BRCD, DELL, SINA, CREE, VECO, RIMM, MMI, ADSK, LVLT, FTR, VOD, DUK, GEN, PPL, AES, CPN, NVE, SO, D
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