The Dow Jones Industrial Average traded down to 12,311.79 at Friday’s low then consolidated to above 12,400 into the final hour of trading. The NASDAQ traded down from 2712.93 to 2689.58 then consolidated to above 2710 into the final hour of trading. Import Prices slipped by 0.1% in December. International Trade Deficit rose to $47.75 billion in November.
Asian stocks rebounded on Friday with the Nikkei 225 ending their session at 8,500 – up 1.36% on the day, and the Hang Seng ending their session at 19,204 – up 0.57% on the day. European stocks were higher on Friday until some countries were put on credit watch, which took the averages into the red. The FTSE 100 ended their session at 5,637 – down 0.46% on the day; the DAX ended their session at 6,143 – down 0.58% on the day; and the CAC 40 ended their session at 3,196 – down 0.11% on the day.
The yield on the 10-Year US Treasury note traded down from 1.940 percent to 1.834 staying below its 50-day simple moving average at 1.974. Gold traded down from $1650.7 the Troy ounce to $1625.7, but closed above its 200-day simple moving average at $1632.2. Crude oil declined from $100.19 per barrel to $97.70 between its 50-day and 200-day simple moving averages at $98.61 and $95.62. The euro versus the dollar traded down from 1.2879 to 1.2629 setting a new 52-week low.
Total S.A. (TOT) gets an Overweight-from-Neutral upgrade at JPMorgan. McDermott International (MDR) gets downgraded to Neutral from Buy at Goldman. Tesco ADR (TESO) is moved to Neutral from Outperform at Credit Suisse. In afternoon trading: Shares of Patriot Coal (PCX) are down about 13.25%. Shares of Arch Coal (ACI) are down about 10.75%. Shares of Alpha Natural Resources (ANR) are down about 10.75%.
Energy Select Sector SPDR (XLE) was trading at $69.44 at 4:00 PM on Friday, down 0.50% on the day – up 0.45% year-to-date. The 2011 change was +1.29%.
CEMEX S.A. (CX) is moved to Equal Weight from Overweight by Barclays. In afternoon trading: Shares of Georgia Gulf (GGC) are up about 36.5%. Shares of Zagg Inc. (ZAGG) are up about 14.5%. Heavily Traded Stocks: Shares of Vale SA (VALE) are down about 2.5%. Shares of Alcoa (AA) are down about 2.25%.
The Materials Select Sector SPDR (XLB) was trading at $36.10 at 4:00 PM on Friday, down 0.66% on the day – up 7.76% year-to-date. The 2011 change was -12.78%.
US Airways (LCC) has reportedly joined Delta Air Lines (DAL) and TPG as a potential bidder for American Airlines (AAMRQ), although Deal Journal reckons Delta might have trouble getting any deal past foreign regulators due to its plans for AMR’s global alliances. A federal judge has refused to throw out a lawsuit that accuses GE (GE) and its CEO of misleading investors about the firm’s financial health and exposure to risky debt during the financial crisis. Beacon Roofing Supply (BECN) is reduced to Neutral from Buy at Suntrust. Canadian National Railway (CNI) is cut by both JPMorgan (Underweight from Neutral) and Canaccord Genuity (Hold from Buy). United Parcel Service (UPS) gets downgraded to Neutral from Overweight at JPMorgan.
The Industrial Select Sector SPDR (XLI) was trading at $35.495 at 4:00 PM on Friday, down 0.77% on the day – up 5.17% year-to-date. The 2011 change was -3.21%.
Fallen giant Eastman Kodak (EK) is said to be in advanced talks with Citigroup (C) to obtain financing in the event of a bankruptcy filing. Private equity firm TPG Capital is willing to pump $1B into scandal-stricken Olympus (OCPNY) in a joint deal with Sony (SNE) or another suitor. TPG has reportedly reached out to executives at Canon (CAJ), Fujifilm (FUJIY) and Panasonic (PC), as well as Sony, about the possibility of a joint approach. Bally Technologies (BYI) gets a Buy-from-Neutral boost at Goldman Sachs. Children’s Place (PLCE) is raised to Buy from Underperform at Bank of America-Merrill Lynch. Chipotle Mexican Grill (CMG) is moved to Outperform from Market Perform with brokers William Blair. Beazer Homes (BZH) and PulteGroup (PHM) both get downgraded to Neutral from Buy at Guggenheim. Shutterfly (SFLY) gets cut to Equal Weight from Overweight at Morgan Stanley. Williams-Sonoma (WSM) is now Neutral from Outperform with Wedbush. In afternoon trading: Shares of Eastman Kodak (EK) are down about 22.25%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $40.38 at 4:00 PM on Friday, down 0.12% on the day – up 3.49% year-to-date. The 2011 change was +4.30%.
Pepsi’s (PEP) months-long strategic review is most likely to result in a renewed marketing push for its core soft drinks business and a cost-cutting effort, rather than a dramatic restructuring of the company or a rebuke of CEO Indra Nooyi, who’s been under pressure due to Pepsi Cola’s falling market share. Safeway (SWY) gets hoisted to Buy from Hold at Jefferies. In afternoon trading: Shares of Diamond Foods (DMND) are down about 13%. Heavily Traded Stocks: Shares of Safeway (SWY) are up about 1.5%. Shares of SUPERVALU (SVU) are down about 2.75%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $32.14 at 4:00 PM on Friday, down slightly on the day – down 1.08% year-to-date. The 2011 change was +10.85%.
Novartis (NVS) will cut nearly 2,000 positions in the U.S. ahead of the patent loss of top-selling blood pressure drug Diovan, and will take a $900M Q4 charge after a clinical trial showed patients taking blood pressure pill Rasilez actually did worse. VCA Antech (WOOF) is now Buy from Neutral at Suntrust. Health Net (HNT) is slashed to Underweight from Equal Weight at Morgan Stanley. Metabolix (MBLX) gets cut to Hold from Buy at Jefferies. In afternoon trading: Shares of Metabolix (MBLX) are down about 56%. Shares of Idenix Pharmaceuticals (IDIX) are up about 11%.
The Health Care Select Sector SPDR (XLV) was trading at $35.43 at 4:00 PM on Friday, down 0.45% on the day – up 2.13% year-to-date. The 2011 change was +10.32%.
JPMorgan (JPM) has reported Q4 EPS of $0.90 (in-line with estimates), although revenue slumped 17% to $22.2B and missed forecasts. The New York Fed may reportedly auction $7B worth of mortgage bonds it obtained when it rescued AIG in 2008 after receiving an approach from a potential buyer. A group of up to five dealers, including Goldman Sachs (GS) may be asked to bid. Bank of America (BAC) has reportedly told U.S. regulators it’s willing to withdraw from some parts of the country if its financial problems deteriorate. Fallen giant Eastman Kodak (EK) is said to be in advanced talks with Citigroup (C) to obtain financing in the event of a bankruptcy filing. Charles Schwab Corp (SCHW) is downgraded to Market Perform from Outperform with Wells Fargo. MetLife (MET) is reduced to Market Perform from Strong Buy at Raymond James. In afternoon trading: Shares of Ambac Financial Group (ABKFQ) are up about 29%.
The Financial Select Sector SPDR (XLF) was trading at $13.815 at 4:00 PM on Friday, down 0.75% on the day – up 6.27% year-to-date. The 2011 change was -18.50%; the weakest performing sector for the year.
Apple (AAPL) has aborted retail sales of the iPhone 4S in China after customers queuing overnight in freezing temperatures became aggressive in a botched debut that saw the flagship store fail to open while other stores sold out of the phone in one day. Private equity firm TPG Capital is willing to pump $1B into scandal-stricken Olympus (OCPNY) in a joint deal with Sony (SNE) or another suitor. TPG has reportedly reached out to executives at Canon (CAJ), Fujifilm (FUJIY) and Panasonic (PC), as well as Sony, about the possibility of a joint approach. Citrix Systems (CTXS) is moved to Buy from Neutral at Citigroup. Akamai Technologies (AKAM) is now Neutral from Buy at DA Davidson with a price objective of $36. JDA Software (JDAS) is moved to Market Perform from Outperform at JMP Securities. JA Solar (JASO) is taken to Underperform from Market Perform at Raymond James. VMware (VMW) gets taken to Sell from Neutral at Citigroup. In afternoon trading: Shares of Energy Conversion Devices (ENER) are up about 61% after making an interest payment that it had previously deferred. Shares of JDA Software Group are down about 13.75%.
The Technology Select Sector SPDR (XLK) was trading at $26.08 at 4:00 PM on Friday, down 0.57% on the day – up 2.48% year-to-date. The 2011 change was +1.03%.
Nomura increases both British-based BT Group (BT) — Buy from Reduce — and Vodafone (VOD) — Buy from Neutral. In afternoon trading: Heavily Traded Stocks: Shares of Vodafone (VOD) are down about 3.5%. Shares of AT&T (T) are down about 0.9%, while shares of Sprint Nextel (S) are down about 2.1% and shares of Verizon (VZ) are down about 0.4%. Shares of Frontier Communications (FTR) are u pabout 1.3%. Shares of Windstream (WIN) are up about 1.3%.
The NASDAQ Telecommunications Index (IXTC) was trading at $204.67 at 4:00 PM on Friday, down 1.03% on the day – up 3.93% year-to-date. The 2011 change was -12.62%.
Exelon (EXC) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. Robert W. Baird gives Neutral-from-Outperform ratings reductions to Alliant Energy (LNT) – $28 target price, Hawaiian Electric (HE) – $28 target price, UIL Holdings (UIL) – $35 target price and Wisconsin Energy (WEC) – $35 target price. In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are down about 2.8%. Shares of Exelon (EXC) are down about 1.1%. Shares of NiSource (NI) are up about 2.7%. Shares of Duke Energy (DUK) are down slightly.
The Utilities Select Sector SPDR (XLU) was trading at $34.89 at 4:00 PM on Friday, down slightly on the day – down 3.03% year-to-date. The 2011 change was +14.81%; the strongest performing sector for the year.
STOCKS: TOT, MDR, TESO, PCX, ACI, ANR, CX, GGC, ZAGG, VALE, AA, LCC, DAL, AAMRQ, GE, BECN, CNI, UPS, EK, C, OCPNY, SNE, CAJ, FUJIY, PC, BYI, PLCE, CMG, BZH, PHM, SFLY, WSM, PEP, SWY, DMND, SWY, SVU, NVS, WOOF, HNT, MBLX, IDIX, JPM, GS, BAC, SCHW, MET, ABKFQ, AAPL, CTXS, AKAM, JDAS, JASO, VMW, ENER, BT, VOD, T, S, VZ, FTR, WIN, EXC, LNT, HE, UIL, WEC, GEN, NI, DUK