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

Sector Recap |

Wall Broad Street Stock MarketFactory 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
AA Alcoa Inc. 9.76 -0.02 -0.20 12,146,577
AAPL Apple Inc. 112.71 -1.91 -1.67 52,481,151
AEP American Electric Power Company 66.66 0.06 0.09 2,031,124
AES The AES Corporation 13.26 0.07 0.53 3,955,833
AMZN Amazon.com Inc. 805.75 1.05 0.13 2,353,511
BA Boeing Company (The) 131.78 -0.09 -0.07 2,330,720
BBY Best Buy Co. Inc. 37.99 -0.48 -1.25 3,930,193
BHI Baker Hughes Incorporated 49.24 -0.91 -1.81 3,602,859
BIO Bio-Rad Laboratories Inc. Class A 161.34 -0.53 -0.33 80,559
BPI Bridgepoint Education Inc. 6.82 -0.18 -2.57 25,528
BTI British American Tobacco Industries p.l.c. ADR 127.93 0.62 0.49 250,376
CAT Caterpillar Inc. 82.44 -1.06 -1.27 3,031,533
CHK Chesapeake Energy Corporation 6.63 -0.24 -3.49 30,559,871
CLNE Clean Energy Fuels Corp. 4.30 -0.12 -2.71 1,631,811
CNP CenterPoint Energy Inc (Holding Co) 24.19 0.08 0.33 3,008,593
CPLA Capella Education Company 58.59 -1.04 -1.74 45,805
CVX Chevron Corporation 99.22 -0.76 -0.76 7,396,784
DD E.I. du Pont de Nemours and Co. 66.77 -0.08 -0.12 2,661,570
DUK Duke Energy Corporation (Holding Company) 82.52 0.01 0.01 2,348,821
EXC Exelon Corporation 34.80 -0.42 -1.19 3,946,652
FAST Fastenal Company 40.44 -0.11 -0.27 1,688,600
FCX Freeport-McMoRan Inc. 10.63 -0.35 -3.19 22,336,624
FSYS Fuel Systems Solutions Inc. n/a n/a n/a 0
GE General Electric Co 29.89 -0.15 -0.50 22,821,677
GEN Genesis Healthcare Inc. 2.72 -0.07 -2.51 154,075
GG Goldcorp Inc. 16.66 -0.43 -2.52 5,532,511
GOOG Alphabet Inc. 786.90 -0.31 -0.04 1,411,937
GPN Global Payments Inc. 75.42 -0.63 -0.83 663,155
GRPN Groupon Inc. 5.32 -0.11 -2.03 2,873,575
GS The Goldman Sachs Group Inc. 165.13 -2.89 -1.72 3,421,183
JNJ Johnson & Johnson 118.81 -0.65 -0.54 4,772,980
KO Coca-Cola Company (The) 42.74 -0.22 -0.51 8,852,719
LOPE Grand Canyon Education Inc. 40.42 -0.61 -1.49 212,572
MMI Marcus & Millichap Inc. 25.27 -0.48 -1.86 46,365
MMM 3M Company 177.39 -2.46 -1.37 1,910,978
MRK Merck & Company Inc. (new) 62.96 -0.06 -0.10 7,679,801
MSFT Microsoft Corporation 57.43 -0.39 -0.67 19,955,336
NEM Newmont Mining Corporation 39.56 -1.21 -2.97 7,188,990
NFLX Netflix Inc. 95.94 0.11 0.11 6,179,471
NVO Novo Nordisk A/S 44.88 -0.69 -1.51 3,873,940
ORCL Oracle Corporation 39.23 -0.28 -0.71 14,017,314
P Pandora Media Inc. 14.09 0.08 0.57 5,348,079
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
PPL PPL Corp 35.70 -0.12 -0.34 4,155,500
RY Royal Bank of Canada 61.78 -0.86 -1.37 606,785
SKM SK Telecom Co. Ltd. 22.04 -0.14 -0.63 247,442
SLB Schlumberger N.V. 75.92 -1.09 -1.42 6,847,404
SRE Sempra Energy 109.91 -0.67 -0.61 1,073,497
T AT&T Inc. 41.28 0.17 0.41 18,867,573
TAP Molson Coors Brewing Company Class B 105.97 -0.81 -0.76 1,373,903
URBN Urban Outfitters Inc. 35.66 -0.07 -0.20 1,359,119
USB U.S. Bancorp 42.96 -0.21 -0.49 5,960,313
UTX United Technologies Corporation 102.56 -0.44 -0.43 2,646,428
V Visa Inc. 82.54 -0.82 -0.98 8,283,718
WAL Western Alliance Bancorporation (DE) 37.36 0.16 0.43 582,148
WDR Waddell & Reed Financial Inc. 17.74 -0.20 -1.11 788,580
WU Western Union Company (The) 20.30 -0.02 -0.10 3,147,513
XOM Exxon Mobil Corporation 83.45 -0.09 -0.11 12,667,106

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