Equities Sector Coverage: Wall Street Ends Lower As Market Enters Possible Holding Pattern

Sector Recap |

Wall Street TraderThe Dow Jones Industrial Average stayed below 13,000 with a day’s low at 12,927.77. The NASDAQ stayed below 3000 for the second day with a day’s low at 2968.00. Dow Transports and Russell 2000 continue to lag their 2011 all time highs at 5627.85 and 868.57 respectively.

Asian stocks were higher on Friday with the Nikkei 225 ending their session 9,777 – up 0.72% on the day. The Hang Seng ended their session at 21,562 – up 0.81% on the day. European stocks were mixed on Friday. The FTSE 100 ended their session at 5,914 – down 0.29% on the day, the DAX ended their session at 6,921 down 0.29% on the day, and the CAC 40 ended their session at 3,501 – up 0.04% on the day.

The yield on the 10-Year US Treasury declined from 2.038 percent to 1.969 staying above its 50-day simple moving average at 1.948. Gold traded down from $1725.4 the Troy ounce to $1705.4 staying below last week’s low of $1727.0. Since this week’s high was a year to date high, gold ended the week with a weekly key reversal. Crude oil traded down from $109.03 per barrel to $105.80 as Thursday’s late report of a Saudi pipeline explosion proved to be false. The euro versus the dollar traded down from 1.3331 to 1.3190.

Energy

McDermott International (MDR) missed on its Q4 results across the board. However, the company noted its outlook for FY12 has improved based on positive developments in Brazil and Mexico. Alcoa (AA) is a new Neutral at Nomura, along with Cliffs Natural Resources (CLF), and Teck Resources (TCK). Buys are begun on CONSOL Energy (CNX) and Vale S.A. (VALE). Nomura has new Neutrals on Peabody Energy (BTU), Alpha Natural Resources (ANR), and Walter Energy (WLT). It resumes Arch Coal (ACI) and Patriot Coal (PCX) with Reduce ratings. Cobalt International Energy (CIE) is now Outperform from Sector Perform at RBC Capital. Seadrill Ltd (SDRL) is downgraded to Neutral from Overweight at HSBC Securities.

Energy Select Sector SPDR (XLE) was trading at $74.74 at 4:00 PM on Friday, down 1.14% on the day – up 8.12% year-to-date. The February 2012 change was +5.93%. The 2011 change was -1.29%

Big Mover: (ATPG) +10.25%.

Materials

Alcoa (AA) is a new Neutral at Nomura, along with Cliffs Natural Resources (CLF), and Teck Resources (TCK). Buys are begun on CONSOL Energy (CNX) and Vale S.A. (VALE).
The Materials Select Sector SPDR (XLB) was trading at $37.29 at 4:00 PM on Friday, down 0.24% on the day – up 11.31% year-to-date. The February 2012 change was -0.56%. The 2011 change was -12.78%.

Heavily Traded: (AA) down slightly, (FCX) -2.6%, (CX) +2.6%, (VALE) -0.3%.

Industrials

Flow International (FLOW) beat estimates by 2 cents with revenue in-line with estimates. Boeing (BA) is a new Buy at Maxim Group, which establishes a price objective of $90. Private jet maker Embraer (ERJ) is also begun with a Buy and assigned a $38 target price. A123 Systems (AONE) is now Underperform from Buy at Bank of America-Merrill Lynch. ITT Corp (ITT) is downgraded to Neutral from Buy at Janney Montgomery Scott. Landstar System (LSTR) is lowered to Hold at Stifel Nicolaus Stifel Nicolaus. JB Hunt Transportation (JBHT) is cut to Hold from Buy at Keybanc Capital.

The Industrial Select Sector SPDR (XLI) was trading at $37.14 at 4:00 PM on Friday, down 0.59% on the day – up 10.04% year-to-date. The February 2012 change was +2.79%. The 2011 change was -3.21%.

Consumer Discretionary

GM (GM) cars may be assembled at Peugeot's (PEUGY) factories as part of the companies' alliance, although it wouldn't occur before 2016, Peugeot CEO Philippe Varin said today. Overstock.com (OSTK) missed estimates by 60 cents and revenue by $63, which has caused trading in the company’s shares to be halted. Big Lots (BIG) beat estimates by 2 cents, while missing revenue by $30M. William Blair calls SodaStream (SODA) attractive at current levels following yesterday's selloff over its Q4 results and 2012 guidance. Lowe’s (LOW) is lifted to Equal Weight from Overweight at Morgan Stanley. Staples (SPLS) is upgraded to Above Average from Average at Caris & Company. Ann Inc (ANN) gets increased to Buy from Neutral at Suntrust. Brunswick (BC) is raised to Strong Buy from Market Perform at Raymond James. News Corp (NWSA) is now Outperform from Top Pick at RBC Capital. Fossil (FOSL) is now Neutral from Buy at Citigroup. Kenneth Cole (KCP) is cut to Neutral from Buy at Sterne Agee.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.52 at 4:00 PM on Friday, relatively unchanged on the day – up 11.53% year-to-date. The February 2012 change was +10.09%. The 2011 change was +4.30%.

Big Mover: (OSTK) -13%.

Consumer Staples

DE International, Sara Lee's (SLE) coffee and tea business, intends to sell up to $4.6B of shares in its IPO on the Amsterdam stock exchange, which it plans to undertake by mid-2012.
The Consumer Staples Select Sector SPDR (XLP) was trading at $33.21 at 4:00 PM on Friday, relatively unchanged on the day – up 2.22% year-to-date. The February 2012 change was +3.75%. The 2011 change was +10.85%.

Heavily Traded: (RAD) +5.25%, (SLE) +6.5%, (WMT) +0.6%, (WAG) flat.

Health Care

St. Jude Medical (STJ) is a new Market Perform at Northland Securities, which has a $46 target. Boston Scientific (BSX) is begun at Outperform and has an objective of $7.50. Eli Lilly (LLY) is now Neutral from Underweight at JP Morgan. IRIS International (IRIS) is upgraded to Buy from Hold with a $12.50 target at The Benchmark Company.

The Health Care Select Sector SPDR (XLV) was trading at $36.31 at 4:00 PM on Friday, down 0.16% on the day – up 4.67% year-to-date. The February 2012 change was +1.06%. The 2011 change was +10.32%.

Big Mover: (AMRN) -10.75%.

Financials

Investors in Empire State Realty Trust (ESB), the owner of the namesake building, are suing to halt the company's planned IPO, claiming the offering only benefits the Malkin Family, which controls the trust. Barclays (BCS) tapped LTRO II for €8.2B, an unexpected move as it had indicated it had no plans to take any funds and it didn't borrow any cash at the previous offer in December. Deutsche Bank's (DB) board has refused to approve a proposed €800M settlement over decade-old claims that a former CEO helped drive German media company Kirch Group into bankruptcy. Bank of America (BAC) has denied reports that it is testing plans to charge customers for keeping a checking account. Bill Gross has taken to the airwaves to pump his new and highly anticipated Total Return ETF (TRXT), which launched yesterday. First American Financial (FAF) is covered with a Market Perform at Keefe Bruyette. Everest Re (RE) is raised to Overweight from Equal Weight at Morgan Stanley. Unum Group (UNM) is now Outperform from Sector Perform at RBC Capital. Regions Financial (RF) is raised to Outperform from Market Perform at Raymond James. Travelers (TRV) gets downgraded to Equal Weight from Overweight at Morgan Stanley. BlackRock (BLK) gets moved to Neutral from Outperform at Credit Suisse. Comerica (CMA) is cut to Market Perform from Outperform at Raymond James. Royal Bank of Canada (RY) is reduced to Hold from Buy at TD Securities.

The Financial Select Sector SPDR (XLF) was trading at $14.865 at 4:00 PM on Friday, down 0.37% on the day – up 14.35% year-to-date. The February 2012 change was +5.02%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

PC Mall’s (MALL) Q4 misses estimates on a drop in net sales. Revenue declined 8% Y/Y, largely due to a program change in Q4 by a large vendor. Fusion-io (FIO) is a fresh Overweight at Morgan Stanley. Motorola Solutions (MSI) is moved to Outperform from Neutral at Credit Suisse. Aixtron (AIXG) is now Neutral from Sell at Citigroup. Echelon (ELON) is taken to Overweight from Neutral at Piper Jaffray. Total System (TSS) is taken to Positive from Neutral at Susquehanna. Alcatel-Lucent (ALU) is moved to Market Perform from Outperform by Sanford Bernstein. Monster Worldwide (MWW) is now Neutral from Buy at UBS.

The Technology Select Sector SPDR (XLK) was trading at $29.08 at 4:00 PM on Friday, down 0.14% on the day – up 14.26% year-to-date. The February 2012 change was +7.08%. The 2011 change was +1.03%.

Big Movers: (PEGA) +34%, (CYDE) +32%, (MWW) +13%.

Telecommunication Services

Vivendi (VIVEF) is now Neutral from Overweight at JPMorgan.
The NASDAQ Telecommunications Index (IXTC) was trading at $212.41 at 4:00 PM on Friday, down 0.65% on the day – up 7.86% year-to-date. The February 2012 change was +1.63%. The 2011 change was -12.62%.

Big Movers: (CBWWF) +18.25%, (ALSK) +11%.
Heavily Traded: (T) +1%, (S) +0.2%.

Utilities

Edison International (EIX) missed on Q4 revenue but beat EPS estimates late yesterday. Earnings actually swung to a loss on the quarter, largely due to several large write-downs, but the Street is taking it as a positive as it helps to clarify the company's strategy for its merchant power unit. Veolia Environnement (VE) is upgraded to Add from Neutral at WestLB. American Water (AWK) is now Neutral from Outperform at Robert W. Baird.

The Utilities Select Sector SPDR (XLU) was trading at $34.96 at 4:00 PM on Friday, relatively unchanged on the day – down 2.83% year-to-date. The February 2012 change was +0.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Big Mover: (DYN) +9.5%.
Heavily Traded: (GEN) +0.8%, (NRG) +1.3%, (DUK) down slightly, (CNP) +0.5%.

STOCKS: MDR, AA, CLF, TCK, CNX, VALE, BTU, ANR, WLT, ACI, PCX, CIE, SDRL, ATPG, FCX, CX, FLOW, BA, ERJ, AONE, ITT, LSTR, JBHT, GM, PEUGY, OSTK, BIG, SODA, LOW, SPLS, ANN, BC, NWSA, FOSL, KCP, SLE, RAD, WMT, WAG, STJ, BSX, LLY, IRIS, AMRN, ESB, BCS, DB, BAC, TRXT, FAF, RE, UNM, RF, TRV, BLK, CMA, RY, MALL, FIO, MSI, AIXG, ELON, TSS, ALU, MWW, PEGA, CYDE, VIVEF, CBWWF, ALSK, T, S, EIX, VE, AWK, DYN, GEN, NRG, DUK, CNP

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
AA Alcoa Inc. 9.96 0.08 0.81 26,881,953
ACI Arch Coal Inc. n/a n/a n/a 0
AIXG Aixtron SE 6.00 -0.09 -1.48 15,698
ALSK Alaska Communications Systems Group Inc. 1.70 0.02 1.19 149,702
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0
AMRN Amarin Corporation plc 3.13 -0.11 -3.40 1,750,777
AWK American Water Works Company Inc. 74.98 -1.25 -1.64 939,090
BA Boeing Company (The) 131.03 -1.20 -0.91 2,199,395
BAC Bank of America Corporation 15.16 -0.22 -1.43 78,997,682
BC Brunswick Corporation 48.25 -0.73 -1.49 704,503
BCS Barclays PLC 8.39 -0.33 -3.78 9,428,653
BIG Big Lots Inc. 47.81 1.03 2.20 1,226,109
BSX Boston Scientific Corporation 23.30 -0.45 -1.89 7,278,915
BTU Peabody Energy Corp n/a n/a n/a 0
CIE Cobalt International Energy Inc. COBALT INTERNATIO 1.24 0.02 1.64 11,152,978
CLF Cliffs Natural Resources Inc 5.86 -0.44 -6.98 13,393,030
CMA Comerica Incorporated 46.63 -1.05 -2.20 1,911,368
CNP CenterPoint Energy Inc (Holding Co) 23.58 -0.54 -2.24 3,571,312
CNX CONSOL Energy Inc. 18.76 -0.48 -2.49 5,140,583
CX Cemex S.A.B. de C.V. Sponsored ADR 8.19 0.09 1.11 18,872,187
DB Deutsche Bank AG 11.48 -0.82 -6.67 51,994,337
DUK Duke Energy Corporation (Holding Company) 80.31 -0.79 -0.97 2,898,863
EIX Edison International 72.68 -1.02 -1.38 1,311,465
ELON Echelon Corporation 5.23 0.01 0.19 3,174
ERJ Embraer S.A. 17.40 -0.79 -4.34 1,825,942
ESXB Community Bankers Trust Corporation. 5.38 -0.03 -0.55 600
FAF First American Corporation (New) 39.46 -0.78 -1.94 321,996
FCX Freeport-McMoRan Inc. 10.69 -0.22 -2.02 25,147,855
FLOW SPX FLOW Inc. 30.51 0.82 2.76 347,054
FOSL Fossil Group Inc. 27.58 -0.72 -2.54 621,698
GEN Genesis Healthcare Inc. 2.62 -0.09 -3.32 82,535
GM General Motors Company 31.48 -0.42 -1.32 8,821,201
ITT ITT Inc. 35.56 0.01 0.03 562,152
JBHT J.B. Hunt Transport Services Inc. 80.40 1.19 1.50 1,395,462
LLY Eli Lilly and Company 79.74 -0.97 -1.20 3,269,150
LOW Lowe\'s Companies Inc. 72.01 0.25 0.35 6,404,541
LSTR Landstar System Inc. 67.10 0.21 0.31 224,696
MDR McDermott International Inc. 4.82 0.01 0.21 3,619,586
MWW Monster Worldwide Inc. 3.55 -0.01 -0.28 691,932
NRG NRG Energy Inc. 11.10 -0.32 -2.80 4,856,358
NWSA News Corporation 13.89 -0.13 -0.93 2,697,681
OSTK Overstock.com Inc. 15.15 -0.32 -2.07 33,740
PEGA Pegasystems Inc. 29.49 -0.09 -0.30 374,762
RAD Rite Aid Corporation 7.57 -0.15 -1.94 23,550,756
RF Regions Financial Corporation 9.67 -0.16 -1.63 17,502,477
RY Royal Bank of Canada 61.74 -0.42 -0.68 905,493
S Sprint Corporation 6.66 -0.12 -1.77 11,222,097
SDRL Seadrill Limited (Bermuda) 2.49 0.18 7.79 29,936,431
SODA SodaStream International Ltd. 26.34 -0.35 -1.31 163,264
SPLS Staples Inc. 8.34 -0.03 -0.36 3,919,802
STJ St. Jude Medical Inc. 78.96 -0.77 -0.97 2,345,676
T AT&T Inc. 40.73 -0.12 -0.29 17,046,784
TCK Teck Resources Ltd 18.70 -0.18 -0.95 6,581,787
TRV The Travelers Companies Inc. 113.87 -1.14 -0.99 1,212,640
TSS Total System Services Inc. 46.72 -1.02 -2.14 1,278,026
UNM Unum Group 34.69 -0.53 -1.50 1,093,694
VALE VALE S.A. American Depositary Shares Each Represen 5.53 -0.12 -2.12 19,621,208
WMT Wal-Mart Stores Inc. 70.73 -1.06 -1.48 7,996,767

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