Equities Sector Coverage: Wall Street Ends Mostly Flat Ahead of Jobs Report

Sector Recap |

Wall Street Ends Mostly Flat Ahead of Jobs ReportInitial Jobless Claims fell to 367,000 but remain above the 350,000 recessionary threshold. Nonfarm Productivity rose 0.7% in the 4th quarter 2011 with Unit Labor Costs up 1.2%. The Dow Jones Industrial Average opened slightly higher at 12,741.89 then dipped to 12,676.05 staying below its May 2nd 2011 high at 12,876.00. The NASDAQ traded up to 2868.23 staying below its May 2nd 2011 high at 2887.75. The day’s low was 2849.40. Both the Dow and NASDAQ entered the final hour of trading around the middle of the day’s trading ranges.

Asian stocks were higher on Thursday with the Nikkei 225 ending their session 8,877 – up 0.76% on the day. The Hang Seng closed at 20,739 – up 2.00% on the day. European stocks were also higher on Thursday. The FTSE 100 ended their session at 5,797 – up 0.12% on the day; the DAX ended their session at 6,655 – up 0.58% on the day; and the CAC 40 ended their session at 3,377 – up 0.27% on the day. The yield on the 10-Year US Treasury note declined from 1.853 percent to 1.811.

Gold traded up to another year to date high at $1763.8 the Troy ounce after testing $1743.3. Crude oil traded down from $97.99 per barrel to $95.44 versus 50-day and 200-day simple moving averages at $99.14 and $95.00. The euro versus the dollar traded down from 1.3196 to 1.3089.

Energy

Shell (RDS.A) unveiled ambitious new growth plans amid tepid Q4 results. Adjusted Q4 net income of $4.85B missed consensus of $5.17B. Shell projects production, currently 3.215M boe/d (down 3% Y/Y), will rise to 4M by 2017-2018; production has fallen in every year since 2002 except 2010. National-Oilwell (NOV) beat estimates by 7 cents and revenue by $230M. Spectra Energy (SE) missed estimates by 5 cents and revenue by $30M. Patriot Coal (PCX) missed estimates by 12 cents and revenue by $40M. Patterson-UTI Energy (PTEN) missed estimates by 7 cents and revenue by $2M. Diamond Offshore Drilling (DO) beat estimates by 36 cents and revenue by $9.5M. In afternoon trading: Shares of GMX Resources (GMXR) are up about 45% in response to a Stifel Nicolaus upgrade to Hold from Sell. Shares of Treaty Energy (TECO) are up about 14%. Shares of Patriot Coal (PCX) are up about 13%. Shares of Ur Energy (URG) are down about 11.5%. Shares of Sandridge Energy (SD) are down about 9.5%.

Energy Select Sector SPDR (XLE) was trading at $71.51 at 4:00 PM on Wednesday, up 0.76% on the day – up 3.44% year-to-date. The January change was +2.26%. The 2011 change was -1.29%.

Materials

Glencore (GLCNF) is in talks to acquire the 66% of Swiss miner Xstrata (XSRAY) it doesn't already own. International Paper (IP) beat estimates by 5 cents, while missing revenue by $130M. Dow Chemical (DOW) missed estimates by 5 cents and revenue by $100M. AK Steel (AKS) is now Underperform from Neutral at Bank of America-Merrill Lynch, which lowers Steel Dynamics (STLD) to Neutral from Buy. Norsk Hydro (NHYDY) is cut to Sell at Citigroup. In afternoon trading: Shares of Xstrata PLC (XSRAY) are up about 10.25%. Shares of Rare Element (REE) are up about 10.25%. Shares of Cemex (CX) are up about 8%. Shares of NovaGold (NG) are down about 9%.

The Materials Select Sector SPDR (XLB) was trading at $37.37 at 4:00 PM on Wednesday, down 0.48% on the day – up 11.55% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Industrials

Cummins (CMI) beat estimates by 30 cents and revenue by $210M. Old Dominion Freight Line (ODFL) beat estimates by 12 cents and revenue by $7M. Northrop Grumman (NOC) gets downgraded to Underperform from Neutral by Bank of America-Merrill Lynch. Sykes Enterprises (SYKE) is reduced to Neutral from Outperform at broker Robert W. Baird with a $20 target. In afternoon trading: Shares of Kelly Services (KELYA) are down about 16.5% despite beating estimates by 22 cents. Shares of Sterling Construction (STRL) are down about 9.5%. Shares of Ryder System (R) are down about 8%. Shares of RailAmerica (RA) are up about 14.25%. Shares of Capstone Turbine (CPST) are up about 9.5%.

The Industrial Select Sector SPDR (XLI) was trading at $36.63 at 4:00 PM on Wednesday, up slightly on the day – up 8.53% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Consumer Discretionary

U.S. auto sales surged another 11% in January to a four-year high of 14.18M vehicles/year. Key gainers included Ford (F) (+7.3%), Toyota (TM) (+7.5%), Honda (HMC) (+8.8%) and Chrysler (+44%). GM's (GM) sales fell 6.1%, including a halving of Volt sales. Sony (SNE) shed more than $2B in FQ3 and now predicts a full-year loss of ¥220B, up from ¥90B in November. Sony (SNE) reported FQ3 EPS of -$2.03 (-¥158.40) and revenue of $23.37B (¥1,823B), which beat estimates by $3B. Viacom (VIA) reported FQ1 EPS of $1.06 (in-line) and revenue of $3.9B (in-line). Lear (LEA) missed estimates by 15 cents, while beating revenue by $30M. Pulte Homes (PHM) beat estimates by 4 cents and revenue by $120M. Beazer (BZH) beat estimates by 49 cents, while missing revenue by $22M. Starwood Hotels (HOT) beat estimates by 14 cents and revenue by $110M. Shutterfly (SFLY) reported Q4 EPS of $0.97 (versus consensus of $0.85), while beating revenue by $3M. Men’s Wearhouse (MW) is started with a Buy and $42 target price at Sterne Agee. Sirius XM Radio (SIRI) is an Outperform at Macquarie. Autoliv (ALV) is slashed to Sell from Buy at Citigroup. ANN Inc (ANN) is now Underweight from Neutral at Piper Jaffray. Luxottica (LUX) is lowered to Neutral from Buy at UBS. Nutrisystem (NTRI) is lowered to Neutral from Outperform with Wedbush. In afternoon trading: Shares of Education Management (EDMC) are down about 17%. Shares of Abercrombie & Fitch (ANF) are down about 11.5%. Shares of Gap Inc. (GPS) are up about 10.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $41.41 at 4:00 PM on Wednesday, down 0.12% on the day – up 6.13% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.



Consumer Staples

Sara Lee (SLE) beat estimates by 2 cents, while missing revenue by $60M. Imperial Tobacco (ITYBY) is raised to Neutral from Reduce at Nomura. In afternoon trading: Shares of Green Mountain Coffee (GMCR) are up about 22% after blowing away FQ1 estimates. Green Mountain's results were fueled by increases of 115% and 76% in K-Cup and brewer/accessory sales, and a 410 bps Y/Y increase in its gross margin to 29.1%. Shares of Central European Distribution (CEDC) are up about 20.5%. Shares of Feihe International (ADY) are up about 9.25%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.38 at 4:00 PM on Wednesday, up 0.37% on the day – down 0.34% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Health Care

Cardinal Health (CAH) beat estimates by 4 cents and revenue by $200M. Merck (MRK) beat estimates by 2 cents, while missing revenue by $230M, and sees 2012 full-year EPS of $3.75-$3.85. Boston Scientific (BSX) beat estimates by 5 cents, while missing revenue by $60M. AstraZeneca (AZN) beat estimates by 4 cents and revenue by $60M. Edwards Lifesciences (EW) is cut to Neutral from Outperform at Credit Suisse. Vanguard Health Systems (VHS) is moved to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of Amylin Pharmaceuticals (AMLN) are up about 12.5%. Shares of Affymax (AFFY) are up about 9.5%.

The Health Care Select Sector SPDR (XLV) was trading at $36.01 at 4:00 PM on Wednesday, down 0.39% on the day – up 3.81% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Financials

Deutsche Bank (DB) swung to a Q4 pretax loss of €351M, missing consensus of €572M, on Greek debt write-downs and trading losses. CME Group (CME) missed estimates by 17 cents and revenue by $17.5M. Deutsche Bank (DB) swung to a Q4 pretax loss of €351M (missing consensus of €572M). MasterCard (MA) beat estimates by 10 cents and revenue by $30M. Allstate (ALL) beat estimates by 53 cents and revenue by $1.7B. Simon Properties (SPG) is resumed at an Outperform and $150 objective at Imperial Capital. Franklin Resources (BEN) is lifted to Neutral from Underweight at JP Morgan. Nomura Holdings (NMR) is taken substantially higher, to Buy from Underperform at Jefferies. NASDAQ OMX Group (NDAQ) is reduced to Outperform from Strong Buy at Raymond James. In afternoon trading: Shares of MF Global (MFGLQ) are up about 16% on news the company raised its dividend.

The Financial Select Sector SPDR (XLF) was trading at $14.35 at 4:00 PM on Wednesday, up 0.49% on the day – up 10.38% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Facebook (FB) filed its much-anticipated S-1 filing. As expected, Facebook plans to raise $5B through its IPO. Facebook reported 2011 revenue of $3.7B (+88% Y/Y), operating income of $1.8B, and net income of $1B. 85% of its revenues were from ad sales, but "payments and other fees," including virtual-goods sales, rocketed 425% to $557M. Google's (GOOG) mobile search ad requests more than doubled in Dec. 2011 from the year-ago period, according to a company exec. Google has a dominant share of the mobile ad market, which Cowen estimates could reach $5.8B in sales this year, and $17.4B by 2015. MasterCard (MA) beat estimates by 10 cents and revenue by $30M. Openwave Systems (OPWV) missed estimates by a penny, while beating revenue by $3.7M. Open Text (OTEX) beat estimates by 17 cents and revenue of $9M. Electronic Arts (EA) beat estimates on both EPS and revenue due to strong sales of new videogame releases. However, the company cuts its forecast for FQ4, now saying that earnings will come in around $0.10 - $0.20, below Wall Street expectations of $0.30. JDS Uniphase (JDSU) beat estimates by 5 cents and revenue by $22M. Qualcomm (QCOM) beat estimates by 7 cents and revenue by $100M, and expects FQ2 revenue of $4.6B-$5B and EPS of $0.91-$0.97 (above consensus of $4.5B and $0.89) and FY12 revenue of $18.7B-$19.7B and EPS of $3.55-$3.75 (mostly above consensus of $18.48B and $3.59). TiVo Inc (TIVO) is initiated with an Outperform and $14 price target at Barrington Research. Broadcom (BRCM) is a new Buy and $45 price objective at Canaccord Genuity. Akamai Technologies (AKAM) is a new Buy at Capstone. Dell Inc (DELL) is upgraded to Overweight from Equal Weight at JPMorgan. Infineon (IFNNY) gets a Buy-from-Hold hoist at Jefferies. Radware (RDWR) is increased to Outperform from Sector Perform at RBC Capital. JDS Uniphase (JDSU) is lowered to Neutral from Buy at UBS. In afternoon trading: Shares of ShoreTel (SHOR) are down about 19%. Shares of Dice Holdings (DHX) are down about 17%. Shares of Brightpoint (CELL) are down about 16%. Shares of Zynga (ZNGA) are up about 18.5%. Shares of Open Text (OTEX) are up about 16.5%.

The Technology Select Sector SPDR (XLK) was trading at $27.37 at 4:00 PM on Wednesday, up 0.26% on the day – up 7.54% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Telecommunication Services

AT&T Inc (T) is covered with an Overweight at Morgan Stanley. In afternoon trading: Shares of TerreStar (TSTRQ) are up about 19%. Shares of NII Holdings (NIHD) are up about 9.5%. Heavily Traded Stocks: Shares of Sprint Nextel (S) are down about 0.9%, while shares of AT&T (T) are up about 0.9% and shares of Verizon (VZ) are down about 0.6%. Shares of Frontier Communications (FTR) are up about 0.7%.

The NASDAQ Telecommunications Index (IXTC) was trading at $213.09 at 4:00 PM on Wednesday, up 0.33% on the day – up 8.21% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Utilities

TECO Energy (TE) missed estimates by 4 cents and revenue by $95M. Xcel Energy (XEL) missed estimates by a penny and revenue by $190M. Calpine (CPN) is a fresh Overweight at JP Morgan. UniSource Energy (UNS) is juiced to Buy from Hold at Jefferies. In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are up about 3.4%. Shares of FirstEnergy (FE) are up about 3.6%. Shares of Xcel Energy (XEL) are down about 0.6%. Shares of TECO Energy (TE) are down about 1.2%. Shares of Southern Company (SO) are down about 2.4%.

The Utilities Select Sector SPDR (XLU) was trading at $34.74 at 4:00 PM on Wednesday, down 0.17% on the day – down 3.45% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

STOCKS: RDS.A, NOV, SE, PCX, PTEN, DO, GMXR, TECO, URG, SD, GLCNF, XSRAY, IP, DOW, AKS, STLD, NHYDY, REE, CX, NG, CMI, ODFL, NOC, SYKE, KELYA, STRL, R, RA, CPST, F, TM, HMC, GM, SNE, VIA, LEA, PHM, BZH, HOT, SFLY, MW, SIRI, ALV, ANN, LUX, NTRI, EDMC, ANF, GPS, SLE, ITYBY, GMCR, CEDC, ADY, CAH, MRK, BSX, AZN, EW, VHS, AMLN, AFFY, DB, CME, ALL, SPG, BEN, NMR, NDAQ, MFGLQ, FB, GOOG, MA, OPWV, OTEX, EA, JDSU, QCOM, TIVO, BRCM, AKAM, DELL, IFNNY, RDWR, SHOR, DHX, CELL, ZNGA, T, TSTRQ, S, VZ, FTR, TE, XEL, CPN, UNS, GEN, FE, XEL, SO

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
NG Novagold Resources Inc. 5.95 -0.09 -1.49 2,353,776
REE Rare Element Resources n/a n/a n/a n/a
URG Ur Energy Inc (Canada) 0.80 -0.01 -1.25 773,833
MW Men's Wearhouse, Inc. (The) n/a n/a n/a 0
GEN Genesis Healthcare Inc. 3.88 0.00 0.00 460,342
FTR Frontier Communications Corporation 3.32 0.03 0.91 26,777,333
XEL Xcel Energy Inc. 42.43 0.43 1.02 1,813,488
TM Toyota Motor Corporation 114.30 0.60 0.53 269,484
SO Southern Company (The) 48.28 0.48 1.00 8,673,299
AKS AK Steel Holding Corporation 9.06 0.22 2.49 23,043,059
ODFL Old Dominion Freight Line Inc. 92.23 -0.13 -0.14 293,250
FB Facebook Inc. 133.72 0.19 0.14 14,752,114
STRL Sterling Construction Company Inc 9.54 -0.01 -0.10 251,052
IP International Paper Company 52.76 0.61 1.17 2,517,775
EW Edwards Lifesciences Corporation 92.67 2.93 3.27 3,732,155
SFLY Shutterfly Inc. 47.18 -0.88 -1.83 1,314,608
NTRI NutriSystem Inc 37.70 1.25 3.43 240,733
ORN Orion Group Holdings Inc. Common 10.10 0.17 1.71 61,331
NOV National Oilwell Varco Inc. 39.56 0.25 0.64 2,407,491
EA Electronic Arts Inc. 87.54 0.24 0.27 1,871,737
HMC Honda Motor Company Ltd. 31.78 0.17 0.54 1,303,302
TE TECO Energy Inc. n/a n/a n/a 0
S Sprint Corporation 9.27 -0.03 -0.32 12,082,370
AKAM Akamai Technologies Inc. 62.64 0.30 0.48 1,808,256
SPG Simon Property Group Inc. 185.16 4.07 2.25 1,521,200
SE Spectra Energy Corp 41.36 0.27 0.66 4,259,762
BZH Beazer Homes USA Inc. 13.06 0.26 2.03 464,547
BEN Franklin Resources Inc. 43.03 0.50 1.18 2,395,880
DB Deutsche Bank AG 19.58 0.17 0.88 3,193,668
JDSU Viavi Solutions Inc n/a n/a n/a 0
SYKE Sykes Enterprises Incorporated 28.64 -0.08 -0.28 142,674
BSX Boston Scientific Corporation 25.28 -0.11 -0.43 7,566,482
OTEX Open Text Corporation 33.65 0.11 0.33 981,822
VZ Verizon Communications Inc. 49.43 0.24 0.49 19,204,254
GMCR Keurig Green Mountain Inc n/a n/a n/a 0
CMI Cummins Inc. 154.51 1.60 1.05 1,890,113
NOC Northrop Grumman Corporation 244.12 0.54 0.22 828,898
GM General Motors Company 37.81 0.59 1.59 14,549,153
CPN Calpine Corporation 11.74 0.27 2.35 4,292,984
GOOG Alphabet Inc. 831.66 3.59 0.43 1,261,327
LEA Lear Corporation 141.78 -0.59 -0.41 674,185
GPS Gap Inc. (The) 25.03 0.56 2.29 5,801,731
LUX Luxottica Group S.p.A. 51.90 -0.31 -0.59 119,607
DHX DHI Group Inc. 5.40 0.00 0.00 199,912
CPST Capstone Turbine Corporation 0.77 -0.03 -3.75 481,365
DO Diamond Offshore Drilling Inc. 17.36 0.37 2.18 2,432,484
ALL Allstate Corporation (The) 80.62 0.18 0.22 2,436,741
SIRI Sirius XM Holdings Inc. 5.04 0.10 2.02 24,467,915
F Ford Motor Company 12.69 0.11 0.87 29,155,681
NDAQ Nasdaq Inc. 71.37 -0.14 -0.20 973,268
ZNGA Zynga Inc. 2.71 0.03 1.12 10,078,397
ALV Autoliv Inc. 105.62 -0.25 -0.24 635,859
PHM PulteGroup Inc. 21.61 0.21 0.98 4,343,814
AZN Astrazeneca PLC 29.01 -0.15 -0.51 4,472,091
MRK Merck & Company Inc. (new) 65.48 0.09 0.14 7,386,072
ANF Abercrombie & Fitch Company 12.40 0.20 1.64 2,618,349
SHOR ShoreTel Inc. 6.85 0.00 0.00 796,998
SD SandRidge Energy 20.24 0.44 2.22 228,820
FE FirstEnergy Corporation 31.33 0.32 1.03 5,193,542
BRCM Broadcom Corp. n/a n/a n/a 0
CME CME Group Inc. 121.05 -1.57 -1.28 1,385,690
SNE Sony Corporation 31.23 -0.11 -0.35 727,212
T AT&T Inc. 41.73 0.25 0.60 17,504,381
HOT Starwood Hotels & Resorts Worldwide Inc. n/a n/a n/a 0
CAH Cardinal Health Inc. 81.34 0.63 0.78 2,170,266
VIA Viacom Inc. 47.60 0.60 1.28 25,485
CX Cemex S.A.B. de C.V. Sponsored ADR 9.02 0.34 3.92 9,992,905
QCOM QUALCOMM Incorporated 56.75 0.29 0.51 9,877,686
NMR Nomura Holdings Inc ADR American Depositary Shares 6.71 0.08 1.21 286,477
RDWR Radware Ltd. 15.94 -0.35 -2.15 665,571
KELYA Kelly Services Inc. Class A Common Stock 21.75 -0.24 -1.09 98,554
STLD Steel Dynamics Inc. 37.59 0.43 1.16 2,516,358
PTEN Patterson-UTI Energy Inc. 27.66 0.23 0.84 2,966,000
R Ryder System Inc. 76.99 -0.18 -0.23 689,469

Comments

Emerging Growth

PixarBio Corp

PixarBio Corp is a specialty pharmaceutical/biotechnology company focused on pre-clinical and commercial development of novel neurological drug delivery systems for post-operative pain.

Private Markets

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.

GoCoin

Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…