Equities Sector Coverage: Wall Street Falls on Fed's Minutes

Sector Recap  |

Factory Orders rose by 1.5% in February. The markets fell sharply after the minutes from the Federal Reserve’s last meeting indicated that the central bank was considering additional economic stimulus measures, but is not ready to act yet. The Dow Jones Industrial Average declined to 13,131.21 following the Fed minutes staying below its 52-week high set at 13,297.11 on April 2nd. The NASDAQ’s declined from 3126.82 to 3097.41 shy of its 52-week high at 3134.17 set on March 27th.

Asian stocks were mixed again on Tuesday. The Nikkei 225 ended their session at 10,050 – down 0.59% on the day. The Hang Seng ended their session at 20,791 – up 1.31% on the day. European stocks opened higher then drifted lower with weakness into their closes. The FTSE 100 ended their session at 5,838 – down 0.62% on the day. The DAX ended their session at 6,982 – down 1.05% on the day. The CAC 40 ended their session at 3,407 – down 1.62% on the day. The yield on the 10-Year US Treasury declined from 2.202 percent to 2.150 then rose to 2.297 following the Fed minutes that suggest no near term additional easing of monetary policy.

Gold rebounded from $1672.4 the Troy ounce to $1682.7 then declined to $1640.2 staying below its 200-day simple moving average at $1686.9. Crude oil declined from $105.13 per barrel to $104.13 then rebounded to $105.18 before declining again to $103.59 versus its 50-day simple moving average at $103.73. The euro versus the dollar declined from 1.3366 to 1.3217 testing its 50-day simple moving average at 1.3217.

Energy

Fuel Systems Solutions (FSYS) and Clean Energy Fuels (CLNE) are initiated with Neutral ratings at Macquarie. Schlumberger (SLB) has been upgraded to Buy from Neutral at Sterne Agee with a $93 price target. Morning losers were Baker Hughes (BHI), Chesapeake Energy (CHK), Chevron (CVX) and Exxon Mobil (XOM).

Energy Select Sector SPDR (XLE) was trading at $71.47 at 3:30 PM on Tuesday, down 1.35% on the day – up 3.38% year-to-date.

Materials

Goldcorp (GG) is initiated with a Neutral rating at Citigroup with a $47 price target. Kinross Gold (KGC) is initiated with a Buy rating and a $13 price target. Newmont Mining (NEM) has been downgraded to Neutral from Buy at Citigroup. Morning losers were Alcoa (AA), DuPont (DD), Freeport McMoRan (FCX) and US Steel (X).

The Materials Select Sector SPDR (XLB) was trading at $37.06 at 3:30 PM on Tuesday, down 1.15% on the day – up 10.63% year-to-date.

Industrials

Fastenal (FAST) has been downgraded to Market Perform from Outperform at William Blair. Dow components were mixed on Tuesday; Boeing Co (BA), Caterpillar (CAT), General Electric (GE), 3M Company (MMM) and United Technologies (UTX).

The Industrial Select Sector SPDR (XLI) was trading at $37.26 at 3:30 PM on Tuesday, down 1.06% on the day – up 10.40% year-to-date.

Consumer Discretionary

Grand Canyon Education (LOPE) is initiated with a Buy rating at Deutsche Bank with Bridgepoint Education (BPI) and Capella Education (CPLA) initiated with Hold ratings. Western Union (WU) is initiated with a Neutral rating at Bank of America-Merrill Lynch. AutoZone (AZO) has been added to the Conviction Buy List at Goldman Sachs. Urban Outfitters (URBN) has been upgraded to Neutral from Sell at Citigroup. Best Buy (BBY) has been downgraded to Sell from Buy at McAdams Wright Ragen, as confidence in management’s desire to prudently deploy its cash flows has waned. Netflix (NFLX) has been downgraded to Equal Weight from Overweight by Barclays.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $45.04 at 3:30 PM on Tuesday, down 0.38% on the day – up 15.43% year-to-date.

Consumer Staples

Molson Coors (TAP) will buy StarBev from CVC Capital for $3.5 billion in a deal that l allows Molson to expand in the central and eastern European beer markets. The SEC is is reviewing Groupon (GRPN) following the company's first revisions as a public company. GRPN gets initiated with a Neutral rating at Sterne Agee. Imperial Tobacco (ITYBY.PK) is initiated with an Underperform rating at BNP Paribas while British American Tobacco (BTI) gets tapped with an Outperform rating. Constellation Brands (STZ) has been upgraded to Buy from Neutral at Goldman. Coca-Cola (KO) has been downgraded to Hold at Stifel Nicolaus due to valuation. Beam Inc (BEAM), the recent alcoholic spirits spin-off has been downgraded to Neutral from Buy at Goldman.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.09 at 3:30 PM on Tuesday, down 0.76% on the day – up 4.92% year-to-date.

Health Care

The Danish drug maker Novo Nordisk (NVO) has been added to the Europe 1 List at Bank of America-Merrill Lynch. Accretive Health (AH) has been downgraded to Neutral from Buy at Goldman. Dow Components were mixed on Tuesday; Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE). Bio Rad Laboratories (BIO) gained 12.7% in morning trading.

The Health Care Select Sector SPDR (XLV) was trading at $37.62 at 3:30 PM on Tuesday, down 0.32% on the day – up 8.45% year-to-date.

Financials

The CFTC has charged Royal Bank of Canada (RY) of wash trading using futures contracts to create tax benefits from its shareholdings. The SEC may soon bring charges against Goldman Sachs (GS) over another mortgage-bond deal - Fremont Home Loan Trust. Western Alliance Bancorp (WAL) has been upgraded to Buy from Neutral at Sterne Agee. Global Payments (GPN) will likely have higher security spending following the recent credit card data breach and thus Nomura cuts its rating to Neutral from Buy with a price target of $46.US Bancorp (USB) has been downgraded to Hold from Buy at Stifel Nicolaus. Waddell & Reed (WDR) has been downgraded to Neutral from Buy at Sterne Agee.

The Financial Select Sector SPDR (XLF) was trading at $15.76 at 3:30 PM on Tuesday, down 1.01% on the day – up 21.23% year-to-date (the strongest performing sector).

Information Technology

Oracle (ORCL) and Google (GOOG) have come to an impasse in settlement negotiations relative to Oracle's patent and copyright lawsuit against Google over programming language Java. The EU has started two probes into Motorola Mobility (MMI) over complaints from Microsoft (MSFT) and Apple (AAPL) that Motorola set unfair fees for use of its patents. Apple Inc (AAPL) traded to another all time high as shares are initiated with a Buy rating and $700 price target at Auriga. Amazon.com (AMZN) was initiated as a Market Perform at JMP Securities with Pandora Media (P) as an Outperform.

The Technology Select Sector SPDR (XLK) was trading at $30.33 at 3:30 PM on Tuesday, down 0.49% on the day – up 19.17% year-to-date.

Telecommunication Services

It was a quiet day in Telecom. Dow components were little changed. AT&T (T) was fractionally higher Tuesday morning while Verizon (VZ) traded around the flat line.

The NASDAQ Telecommunications Index (IXTC) was trading at $218.66 at 3:30 PM on Tuesday, down 1.76% on the day – up 11.03% year-to-date.

Utilities

It was a quiet day in the Utilities sector. Sempra Energy (SRE) has been upgraded to Outperform from Sector Perform at RBC Capital. In late morning trade; (DUK) -0.15%, (GEN) -1.86%, (CNP) -0.33%, (EXC) -0.54%, (AES) flat, (AEP) flat, (PPL) -0.57%.

The Utilities Select Sector SPDR (XLU) was trading at $35.12 at 3:30 PM on Tuesday, down 0.28% on the day – down 2.39% year-to-date (the weakest performing sector / the only negative sector).

STOCKS: FSYS, CLNE, SLB, BHI, CHK, CVX, XOM, GG, NEM, AA, DD, FCX, X, FAST, BA, CAT, GE, MMM, UTX, LOPE, BPI, CPLA, WU, AXO, URBN, BBY, NFLX, TAP, GRPN, ITYBY.PK, BTI, STZ, KO, BEAM, NVO, AH, JNJ, MRK, PFE, BIO, RY, GPN, GS, WAL, USB, WDR, ORCL, GOOG, MMI, MSFT, AAPL, AMZN, P, T, V, SRE, DUK, GEN, CNP, EXC, AES, AEP, PPL

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
MMM 3M Company 208.53 0.12 0.06 1,879,145 Trade
WDR Waddell & Reed Financial Inc. 18.10 0.28 1.57 1,117,608 Trade
ORCL Oracle Corporation 51.77 -0.25 -0.48 13,440,874 Trade
WAL Western Alliance Bancorporation (DE) 47.14 0.63 1.35 505,969 Trade
GEN Genesis Healthcare Inc. 1.59 0.02 1.27 57,164 Trade
BIO Bio-Rad Laboratories Inc. Class A 272.74 2.68 0.99 202,905 Trade
GE General Electric Company 10.10 -0.03 -0.30 48,648,592 Trade
CVX Chevron Corporation 120.28 0.97 0.81 5,940,587 Trade
SRE Sempra Energy 117.13 0.86 0.74 1,437,149 Trade
GPN Global Payments Inc. 125.94 1.57 1.26 1,741,452 Trade
JNJ Johnson & Johnson 136.35 0.66 0.49 6,089,752 Trade
AA Alcoa Corporation 29.24 1.03 3.65 6,520,035 Trade
CNP CenterPoint Energy Inc (Holding Co) 30.98 0.06 0.19 4,870,314 Trade
SKM SK Telecom Co. Ltd. 25.52 -0.11 -0.43 211,626 Trade
LOPE Grand Canyon Education Inc. 97.16 0.24 0.25 346,571 Trade
PPL PPL Corporation 31.18 0.50 1.63 6,098,707 Trade
GG Goldcorp Inc. 11.52 0.25 2.22 15,383,643 Trade
UTX United Technologies Corporation 128.43 -0.21 -0.16 6,301,221 Trade
RY Royal Bank of Canada 78.02 0.95 1.23 868,439 Trade
V Visa Inc. 144.73 0.29 0.20 5,283,077 Trade
FAST Fastenal Company 62.10 -0.36 -0.58 2,388,119 Trade
FSYS Fuel Systems Solutions Inc. n/a n/a n/a 0 Trade
AES The AES Corporation 17.15 -0.03 -0.17 4,653,117 Trade
GS Goldman Sachs Group Inc. (The) 198.60 -0.07 -0.04 2,265,991 Trade
USB U.S. Bancorp 51.60 0.29 0.57 7,722,931 Trade
GOOG Alphabet Inc. 1,113.80 -4.76 -0.43 1,087,817 Trade
FCX Freeport-McMoRan Inc. 13.35 0.26 1.99 38,188,411 Trade
URBN Urban Outfitters Inc. 30.18 -0.01 -0.03 1,922,813 Trade
BBY Best Buy Co. Inc. 60.32 -0.02 -0.03 2,878,647 Trade
X United States Steel Corporation 24.00 0.97 4.21 10,874,088 Trade
PFE Pfizer Inc. 42.20 -0.40 -0.94 25,953,408 Trade
NVO Novo Nordisk A/S 49.70 -0.62 -1.23 1,063,803 Trade
BPI Bridgepoint Education Inc. 9.33 -0.22 -2.30 104,915 Trade
NFLX Netflix Inc. 359.91 -2.01 -0.56 8,110,741 Trade
MRK Merck & Company Inc. (new) 79.43 0.19 0.24 8,581,602 Trade
GRPN Groupon Inc. 3.42 -0.07 -2.01 6,386,506 Trade
KO Coca-Cola Company (The) 45.10 0.27 0.60 27,463,983 Trade
EXC Exelon Corporation 48.13 -0.02 -0.04 5,817,574 Trade
T AT&T Inc. 30.85 0.22 0.72 24,749,090 Trade
CAT Caterpillar Inc. 140.31 4.51 3.32 6,199,038 Trade
NEM Newmont Mining Corporation 35.39 0.86 2.49 11,737,046 Trade
DUK Duke Energy Corporation (Holding Company) 88.85 0.91 1.03 3,471,191 Trade
SLB Schlumberger N.V. 45.90 0.36 0.79 8,565,647 Trade
MMI Marcus & Millichap Inc. 39.07 -0.49 -1.24 253,735 Trade
WU Western Union Company (The) 17.84 0.00 0.00 4,081,501 Trade
MSFT Microsoft Corporation 107.15 -1.02 -0.94 21,607,671 Trade
CHK Chesapeake Energy Corporation 2.75 0.07 2.61 35,203,649 Trade
AEP American Electric Power Company Inc. 80.52 0.44 0.55 2,218,117 Trade
TAP Molson Coors Brewing Company Class B 61.39 0.28 0.46 3,103,227 Trade
CLNE Clean Energy Fuels Corp. 2.24 0.24 12.00 1,412,939 Trade
AAPL Apple Inc. 172.03 1.10 0.64 26,114,362 Trade
AMZN Amazon.com Inc. 1,622.10 -5.48 -0.34 3,337,589 Trade
XOM Exxon Mobil Corporation 78.53 0.30 0.38 12,633,126 Trade
BA The Boeing Company 421.55 5.29 1.27 3,990,102 Trade

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Symbol Last Price Change % Change
AAPL

     
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IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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