Equities Sector Coverage: Wall Street Enjoys Best January in Over a Decade

Sector Recap  |

The S&P Case Shiller Home Price Index showed that the 20-City Composite showed a 1.3% decline in prices in November versus October and 3.7% year over year. The Chicago PMI Index fell to 60.2 in January with an elevated Prices Paid component at 62.4 and with the Employment Index slumping to 54.7. Consumer Confidence declined to 61.1 in January well below the expected reading of 70.0. The Present Situation component fell to 38.4 from 46.5. Remember that the neutral zone for this measure of confidence is 90 to 120.

The Dow Jones Industrial Average traded higher at the open to 12,720.10 still below last Thursday’s year to date high at 12,841.95 and below its May 2nd 2011 high at 12,876.00. After digesting weaker than expected economic data the Dow fell to 12,567.33 then rebounded above 12,640 into the final half hour of trading. The NASDAQ traded higher at the open to 2830.45 versus its year to date high at 2834.30 set last Thursday, which was below its May 2nd 2011 high at 2887.75. After digesting weaker than expected economic data the NASDAQ fell to 2798.77 then traded above 2815 into the final half hour of trading.

Asian stocks were higher on Tuesday with the Nikkei 225 ending their session 8,803 – up 0.11% on the day. The Hang Seng closed at 20,390 – up 1.14% on the day. European stocks were higher on Tuesday as Greek debt fears recede for now. The FTSE 100 ended their session at 5,682 – up 0.19% on the day; the DAX ended their session at 6,459 – up 0.22% on the day; and the CAC 40 ended their session at 3,299 – up 1.01% on the day. The yield on the 10-Year US Treasury note declined from 1.882 percent to 1.795.

Gold traded up from $1729.5 the Troy ounce to $1747.7 a new high for 2012 then declined to $1725.00 before consolidating with a positive close. Crude oil traded up from $98.86 per barrel to $101.29 then declined below to $96.20 into the final half hour of trading. The euro versus the dollar traded up to 1.3212 then faded to 1.3045.

Energy

Valero (VLO) missed estimates by 58 cents, while beating revenue by $2.3B. Exxon Mobil (XOM) reported Q4 EPS of $1.97 (in-line), while missing revenue by $4.2B. Cloud Peak Energy (CLD) is cut to Equal Weight from Overweight at Morgan Stanley. In afternoon trading: Shares of Trina Solar (TSL) are down about 8.5%. Shares of Canadian Solar (CSIQ) are down about 8%. Shares of Ur Energy (URG) are up about 7.75%. Shares of Treaty Energy (TECO) are up about 7.5%.

Energy Select Sector SPDR (XLE) was trading at $70.69 at 4:00 PM on Tuesday, down 0.63% on the day – up 2.26% year-to-date. The January change was +2.26%. The 2011 change was +1.29%.

Materials

U.S. Steel (X) missed estimates by 30 cents, while beating $90M. Celanese (CE) beat estimates by 2 cents and revenue by $0.05B. Headwaters (HW) reported FQ1 EPS of -$0.31 (versus consensus of -$0.13), while missing revenue by $2M. CF Industries (CF) is upgraded to Buy from Neutral at Goldman and also adds it to their Conviction Buy list. CEMEX S.A. (CX) is lifted to Buy from Neutral at Bank of America-Merrill Lynch. Goldman gives a Neutral-from-Buy ratings reduction to Potash (POT) and takes rival Intrepid Potash (IPI) to Sell from Neutral. In afternoon trading: Shares of Rare Elements (REE) are up about 15%. Shares of Zagg Inc. (ZAGG) are up about 11.5%. Shares of Avalon Rare Metals (AVL) are up about 9.5%.

The Materials Select Sector SPDR (XLB) was trading at $37.18 at 4:00 PM on Tuesday, up slightly on the day – up 10.99% year-to-date. The January change was +10.99%. The 2011 change was    -12.78%.

Industrials

Avery Dennison (AVY) missed estimates by 8 cents and revenue by $150M. UPS (UPS) beat estimates by 3 cents, while missing revenue by $280M. Guidance: FY EPS $4.75-$5.00 (versus consensus of $4.80). Illinois Tool Works (ITW) beat estimates by 2 cents, while missing revenue by $40M. Paccar (PCAR) beat estimates by 11 cents and revenue by $610M. L-3 Communications (LLL) beat estimates by 12 cents, while missing revenue by $160M. Oshkosh Truck (OSK) beat estimates by 11 cents and revenue by $20M. Tyco International (TYC) beat estimates by 5 cents, while missing revenue by $60M. Danaher (DHR) beat estimates by 3 cents, while missing revenue by $30M. Philips Electronics (PHG) is lowered to Hold from Buy at Deutsche Bank. In afternoon trading: Shares of Pinnacle Airlines (PNCL) are up about 55.5%. Shares of Polypore International (PPO) are down about 26.5%.

The Industrial Select Sector SPDR (XLI) was trading at $36.22 at 4:00 PM on Tuesday, down 0.30% on the day – up 7.32% year-to-date. The January change was +7.32%. The 2011 change was        -3.21%.

Consumer Discretionary

Amazon (AMZN) is expected to report another sharp drop in profits when it releases its Q4 results later, with analysts forecasting that EPS fell 79.1% to $0.19 due to the company's prodigious spending. Revenues are seen jumping 41% to $18.2B. Investors will be looking out for sales of the Kindle Fire, for which Stifel Nicolaus has predicted 6M vs. Apple's 15.4M, as well as updates on Amazon's Instant Video and Web services. Honda's (HMC) FQ3 operating profit fell 65% to ¥44.3B ($580M) (far below the ¥81.2B consensus). The company expects full-year operating profit to be down 65% as well, to ¥200B (¥283B consensus). Gentex (GNTX) missed revenue by 2 cents and revenue by $12.8M. Meritage Homes (MTH) reported Q4 EPS of -$0.36 (versus consensus of $0.09), while missing revenue by $2.8M. McGraw-Hill (MHP) beat estimates by 6 cents, while missing revenue by $50M. Mattel (MAT) beat estimates by 6 cents, while missing revenue by $100M. Tesla Motors (TSLA) is a new Buy at Jefferies. Time Warner (TWX) and Rupert Murdoch’s News Corp (NWSA) are each assigned Outperforms with Wells Fargo. The brokerage is less bullish on Viacom (VIA.B) and Dow member Walt Disney (DIS), starting Market Performs on both. Groupon (GRPN) gets a Market Perform initiation at Raymond James. Williams-Sonoma (WSM) is picked up at a Buy at Jefferies. Nike (NKE) is now Buy from Hold at Argus with a $118 target. Under Armour (UA) is lifted to Buy from Hold at Needham with an objective of $86. Dick’s Sporting Goods (DKS) is added to the Focus List of favored stocks JP Morgan. Carnival (CCL) is moved to Equal Weight from Overweight at Barclays. RadioShack (RSH) is now Neutral from Buy at Janney Montgomery Scott. Magna (MGA) gets moved to Neutral from Overweight with JPMorgan. Pep Boys (PBY) is reduced to Hold from Buy with a $15 target at The Benchmark Company. In afternoon trading: Shares of RadioShack (RSH) are down about 30%. Shares of Meritage Homes (MTH) are down about 13.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $41.32 at 4:00 PM on Tuesday, up slightly on the day – up 5.89% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Consumer Staples

Coca-Cola (KO) plans to invest $5B in Mexico over the next five years as it attempts to boost production and increase local sales. Coke's two largest Latin American bottlers, Coca-Cola Femsa (KOF) and Arca Continental (EMBVF), are based out of Mexico, and so is juice brand Jugos del Valle, which has annual sales of above $1B. Archer Daniels Midland (ADM) missed estimates by 26 cents and revenue by $23.3B. In afternoon trading: Shares of China-Biotics (CHBT) are down about 10%. Shares of Andersons (ANDE) are down about 6.5%. Shares of Feihe International (ADY) are up about 8.75%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.03 at 4:00 PM on Tuesday, up slightly on the day – down 1.42% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Health Care

McKesson's (MCK) FQ3 earnings exceeded consensus as EPS rose 9.4% to $1.40 and revenue climbed 9% to $30.8B, with the pharmaceutical distributor benefiting from a strong performance in the U.S., and increasing sales of higher-margin products and services. Pfizer (PFE) beat estimates by 3 cents and revenue by $90M. Potlatch (PCH) missed estimates by 19 cents and revenue by $8M. Eli Lilly (LLY) beat estimates by 7 cents and revenue by $60M. Theravance (THRX) is started with an Underweight at Morgan Stanley. In afternoon trading: Shares of Parexel International (PRXL) are up about 19.25%. Shares of MannKind (MNKD) are down about 13.25%.

The Health Care Select Sector SPDR (XLV) was trading at $35.80 at 4:00 PM on Tuesday, up slightly on the day – up 3.20% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Financials

BB&T Corp (BBT) is begun with a Buy and $34 target price at Wunderlich. Boston Properties (BXP) is resumed at an In-Line and price objective of $103 at Imperial Capital. Aon Corp (AON) is now Neutral from Underperform at Credit Suisse. Barclays PLC (BCS) is downgraded to Add from Buy at WestLB. ISI Group gives Hold-from-Buy cuts to both NYSE Euronext (NYX) and CME Group (CME). Plum Creek Timber (PCL) is slashed to Sell from Neutral at UBS. TCF Financial (TCB) is taken to Equal Weight from Overweight at Morgan Stanley. Zurich Financial (ZFSVY) is now Neutral from Overweight at JPMorgan. In afternoon trading: Shares of Waddell & Reed Financial (WDR) are down about 8.75%. Shares of Washington Mutual (WAMUQ) are down about 8%.

The Financial Select Sector SPDR (XLF) was trading at $14.055 at 4:00 PM on Tuesday, up 0.39% on the day – up 8.12% year-to-date. The January change was +8.12%. The 2011 change was        -18.50%; the weakest performing sector for the year.

Information Technology

Apple (AAPL) has hired John Browett to run its retail operations, taking the rare step of filling its most high-profile vacancy with an outsider after ending a seven-month search. Browett is the CEO of Dixons (DSITY), one of Europe's largest electronics chains. Tellabs (TLAB) beat estimates by 2 cents with revenue in-line with estimates. Kulicke and Soffa Industries (KLIC) missed estimates by a penny, while beating revenue by $4M. Harris Corporation (HRS) beat estimates by 3 cents, while missing revenue by $50M. Veeco Instruments (VECO) is a new Neutral at BNP Paribas. Sohu.com (SOHU) is a Hold at ThinkEquity. Zillow Inc (Z) is begun with a Buy and $35 objective at Benchmark. In afternoon trading: Shares of FriendFinder (FFN) are up about 31%. Shares of Renren (RENN) are down about 9.25%.

The Technology Select Sector SPDR (XLK) was trading at $27.03 at 4:00 PM on Tuesday, up 0.19% on the day – up 6.21% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Telecommunication Services

France Telecom (FTE) is moved to buy from Hold at Jefferies. In afternoon trading: Shares of TerreStar (TSTRQ) are up about 22.25%. Heavily Traded Stocks: Shares of Sprint Nextel (S) are down about 2.5%, while shares of AT&T (T) are up about a half of a percent and shares of Verizon (VZ) are up about a quarter of a percent. Shares of Frontier Communications (FTR) are up about a half of a percent.

The NASDAQ Telecommunications Index (IXTC) was trading at $210.06 at 4:00 PM on Tuesday, up slightly on the day – up 6.67% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Utilities

Entergy (ETR) beat estimates by 4 cents, while missing revenue by $0.24B. Veolia Environment (VE) is upgraded to Equal Weight from Underweight at Morgan Stanley. In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are down about 1.4%. Shares of Duke Energy (DUK) are up about a half of a percent. Shares of NV Energy (NVE) are down slightly. Shares of Dominion Resources (D) are up about 1.1%.

The Utilities Select Sector SPDR (XLU) was trading at $34.68 at 4:00 PM on Tuesday, up 0.49% on the day – down 3.61% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Stocks: VLO, XOM, CLD, TSL, CSIQ, URG, TECO, XLE, X, CE, HW, CF, CX, POT, IPI, REE, ZAGG, AVL, XLB, AVY, UPS, ITW, PCAR, LLL, OSK, TYC, DHR, PHG, PNCL, XLI, AMZN, HMC, GNTX, MTH, MHP, MAT, TSLA, TWX, NWSA, VIA.B, DIS, GRPN, WSM, NKE, UA, DKS, CCL, RSH, MGA, PBY, RSH, MTH, XLY, KO, KOF, EMBVF, ADM, CHBT, ANDE, ADY, XLP, MCK, PFE, PCH, LLY, THRX, PRXL, XLV, BBT, BXP, AON, BCS, NYX, CME, PCL, TCB, ZFSVY, WDR, WAMUQ, XLF, AAPL, DSITY, TLAB, KLIC, HRS, VECO, SOHU, Z, FFN, RENN, XLK, FTE, TSTRQ, S, T, VZ, FTR, IXTC, ETR, VE, GEN, DUK, NVE, D, XLU

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
URG Ur-Energy Inc (Canada) 0.77 -0.03 -3.48 296,603
WDR Waddell & Reed Financial Inc. 16.96 -0.78 -4.40 1,254,697 Trade
CCL Carnival Corporation 56.42 -0.84 -1.47 3,514,541 Trade
UPS United Parcel Service Inc. 107.35 -2.45 -2.23 2,727,867 Trade
MCK McKesson Corporation 118.54 -3.69 -3.02 1,115,846 Trade
GEN Genesis Healthcare Inc. 1.40 -0.04 -2.78 164,874 Trade
CF CF Industries Holdings Inc. 39.01 -2.10 -5.11 4,735,122 Trade
FTR Frontier Communications Corporation 2.20 -0.21 -8.71 4,555,126 Trade
TSLA Tesla Inc. 264.53 -9.49 -3.46 8,745,609 Trade
IPI Intrepid Potash Inc 3.68 -0.20 -5.15 950,085 Trade
NRIM Northrim BanCorp Inc 33.55 -1.79 -5.07 29,845 Trade
VLO Valero Energy Corporation 84.63 -1.75 -2.03 2,877,691 Trade
CLD Cloud Peak Energy Inc 0.19 -0.01 -3.17 4,162,338 Trade
D Dominion Energy Inc. 75.52 0.41 0.55 5,324,247 Trade
HW Headwaters Incorporated n/a n/a n/a 0 Trade
GNTX Gentex Corporation 19.94 -0.48 -2.35 1,042,609 Trade
HMC Honda Motor Company Ltd. 27.28 -0.38 -1.37 544,884 Trade
BCS Barclays PLC 8.17 -0.20 -2.39 3,994,328 Trade
S Sprint Corporation 6.25 -0.04 -0.64 6,830,591 Trade
UA Under Armour Inc. Class C 18.41 -0.87 -4.51 2,131,058 Trade
RENN Renren Inc. American Depositary Shares each representing fifteen Class A 1.59 -0.04 -2.45 109,489 Trade
MTH Meritage Homes Corporation 43.31 0.06 0.14 384,249 Trade
ANDE The Andersons Inc. 32.64 -1.31 -3.86 93,630 Trade
WSM Williams-Sonoma Inc. (DE) 57.00 -2.22 -3.75 2,763,199 Trade
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) n/a n/a n/a 0 Trade
VZ Verizon Communications Inc. 59.76 1.47 2.52 25,125,385 Trade
PHG Koninklijke Philips N.V. NY Registry Shares 39.65 -1.13 -2.77 810,890 Trade
MAT Mattel Inc. 13.21 -0.29 -2.15 5,195,735 Trade
BBT BB&T Corporation 45.09 -2.05 -4.35 9,014,287 Trade
NWSA News Corporation 12.63 -0.22 -1.71 3,032,191 Trade
NKE Nike Inc. 82.19 -5.82 -6.61 21,659,776 Trade
PCAR PACCAR Inc. 67.03 -1.16 -1.70 2,087,912 Trade
KLIC Kulicke and Soffa Industries Inc. 22.14 -0.79 -3.45 293,529 Trade
LLL L3 Technologies Inc. 205.30 -3.43 -1.64 380,132 Trade
LLY LLY.WD Eli Lilly and Company 128.30 -0.01 -0.01 15,332,895 Trade
ADM Archer-Daniels-Midland Company 42.62 -0.26 -0.61 2,594,399 Trade
BXP Boston Properties Inc. 131.51 -1.40 -1.05 1,092,481 Trade
SOHU Sohu.com Limited 16.54 -0.96 -5.49 483,251 Trade
HRS Harris Corporation 159.28 -2.89 -1.78 649,302 Trade
MGA Magna International Inc. 47.45 -1.37 -2.81 2,358,904 Trade
DHR Danaher Corporation 129.69 -2.60 -1.97 2,943,097 Trade
VECO Veeco Instruments Inc. 11.31 -0.67 -5.59 399,480 Trade
TYC Tyco International plc (Ireland) n/a n/a n/a 0
OSK Oshkosh Corporation (Holding Company)Common Stock 72.38 -3.00 -3.98 465,918 Trade
X United States Steel Corporation 19.09 -1.21 -5.96 15,197,021 Trade
PFE Pfizer Inc. 41.85 -0.50 -1.18 18,614,890 Trade
KOF Coca Cola Femsa S.A.B. de C.V. 63.00 -1.99 -3.06 103,220 Trade
CSIQ Canadian Solar Inc. 18.75 -0.53 -2.75 3,732,557 Trade
DKS Dick's Sporting Goods Inc 34.35 -0.90 -2.55 1,715,946 Trade
ETR Entergy Corporation 96.12 1.17 1.23 1,778,670 Trade
PBY Prospect Capital Corporation 6.25% Notes due 2028 24.43 -0.12 -0.48 5,080 Trade
TCB TCF Financial Corporation n/a n/a n/a 0
Z Zillow Group Inc. 35.71 -0.51 -1.41 2,282,402 Trade
PCH PotlatchDeltic Corporation 36.36 -1.06 -2.83 341,466 Trade
GRPN Groupon Inc. 3.38 -0.15 -4.25 4,060,464 Trade
AVY Avery Dennison Corporation 108.99 -2.25 -2.02 515,258 Trade
ITW Illinois Tool Works Inc. 141.65 -4.82 -3.29 1,570,140 Trade
AON Aon plc Class A (UK) 166.31 -1.89 -1.12 822,720 Trade
KO Coca-Cola Company (The) 45.93 0.42 0.92 19,055,939 Trade
CME CME Group Inc. 163.32 -1.01 -0.61 2,894,911 Trade
PCL Plum Creek Timber Co. Inc. n/a n/a n/a 0 Trade
T AT&T Inc. 31.07 0.01 0.03 33,171,404 Trade
DUK Duke Energy Corporation (Holding Company) 90.70 0.79 0.88 4,174,371 Trade
THRX Theravance Inc n/a n/a n/a 0
CX Cemex S.A.B. de C.V. Sponsored ADR 4.54 -0.37 -7.54 21,713,365 Trade
ZAGG ZAGG Inc 9.24 -0.35 -3.65 680,542 Trade
AAPL Apple Inc. 191.05 -4.04 -2.07 42,407,666 Trade
AMZN Amazon.com Inc. 1,764.77 -54.49 -3.00 6,362,983 Trade
DIS The Walt Disney Company 108.23 -0.43 -0.40 24,133,840 Trade
XOM Exxon Mobil Corporation 80.48 -1.31 -1.60 12,497,707 Trade

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Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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