Equities Sector Coverage: Wall Street Inches Lower on Fed Statements

Sector Recap  |

The Dow Jones Industrial Average traded up to 12,860.26 then declined to 12,803.46. The decline extended to 12,744.92 after the Fed Statement holding the 50-day simple moving average at 12,746. The Dow then rebounded to 12,877.18 before consolidating into the final half hour of trading. The NASDAQ traded up to 2934.95 then down to 2919.50. The decline extended to 2910.00 after the Fed Statement. The NASDAQ then rebounded to 2942.28 then declined to the 50-day simple moving average at 2917.

Asian stocks were higher on Wednesday. The Nikkei 225 ended the day at 8,752 – up 1.11%. The Hang Seng ended the day at 19,531 – up 0.59%. European exchanges traded on both sides of the flat line again on Wednesday and closed higher. The FTSE 100 ended the day at 5,622 – up 0.64%. The DAX ended the day at 6,392 – up 0.45%. The CAC 40 ended the day at 3,127 – up 0.28%. The yield on the 10-Year US Treasury traded up from 1.603% to 1.679% before the Fed Statement, then declined to 1.598% after the statement as the FOMC extended “operation twist” through year end. After this decline the yield rose again to 1.685%. Gold declined from $1623.6 the Troy ounce to $1595.1 versus the 50-day and 200-day simple moving averages at $1614.0 and $1674.7.

Gold dropped to $1590.5 after the Fed Statement then consolidated the day’s range. Crude oil rose traded up to $84.34 per barrel then declined to $80.91 after the Fed Statement. The euro versus the dollar traded up from 1.2665 to 1.2722, then fell to 1.2641 after the Fed Statement then rose to a day’s high at 1.2741 and then consolidated the day’s range.


The Bureau of Ocean Energy Management says that it received 593 bids on 454 blocks in advance of the first US lease sale in the Gulf of Mexico since the 2010 Macondo blowout and oil spill. Shares of Samson Oil & Gas (SSN) plunged 21.55 after the company provided negative updates on its Hawk Springs and Roosevelt projects. JinkoSolar Holding (JKS) missed Q1 EPS estimates by $1.54 per share, but beat on the revenue line. Plains All American (PAA) has been initiated with a Buy rating at Janney Montgomery Scott. Tesoro (TSO) has been upgraded to Neutral from Sell at Goldman. ConocoPhillips (COP) has been downgraded to Sell from Neutral at Goldman. China Petroleum (SNP) has been removed from Goldman’s list of Conviction Buys. Western Refining (WNR) has been downgraded to Neutral from Buy at Goldman. Dow components – Chevron (CVX) down 0.64%, Exxon Mobil (XOM) up 0.23%.
Energy Select Sector SPDR (XLE) was trading at $65.32 at 3:30 PM on Wednesday, down 0.99% on the day – down 5.51% year-to-date.


Rio Tinto (RIO) will commit $4.2 billion to develop its tier one iron ore business so that the company can generate the most attractive returns for shareholders during a period of economic uncertainties. Archer Daniels Midland (ADM) declined 3.6% on Tuesday after reporting that ethanol margins declined in the current quarter, and that profits in its grain-handling segment are running below forecast. Dow components – Alcoa (AA) up 0.22%, DuPont (DD) up 0.24%.
The Materials Select Sector SPDR (XLB) was trading at $35.07 at 3:30 PM on Wednesday, down 0.85% on the day – up 4.69% year-to-date.


Lockheed Martin (LMT) could face millions of dollars in business claims from suppliers if the $500 billion in additional defense spending cuts take effect in January as currently mandated. CEO Bob Stevens warns that the near-term industry horizon is "completely obscured by a fog of uncertainty," calling it a "fiction" that the U.S. defense industry was robust enough to survive such cuts. Actuant (ATU) beat FQ3 EPS estimates by a penny with in-line revenue. Progessive Waste (BIN) has been upgraded to Top Pick from Outperform at RBC Capital. Rockwell Collins (COL) has been downgraded to Sell from Neutral at Goldman. Dow components – Boeing Co (BA) up 0.22%, Caterpillar (CAT) down 1.79%, General Electric (GE) up 0.40%, 3M Company (MMM) flat, United Technologies (UTX) down 0.35%.
The Industrial Select Sector SPDR (XLI) was trading at $35.21 at 3:30 PM on Wednesday, down 0.84% on the day – up 4.33% year-to-date.

Consumer Discretionary

The Wall Street Journal reports that News Corp. (NWS) has offered $2 billion to acquire Consolidated Media Holdings, the Australian holding company invested in subscription TV. Barnes & Noble (BKS) declined 4% on Tuesday following its FQ4 report as Wall Street is concerned above declining Nook hardware sales. Dow Components – Disney (DIS) up 0.67%, Home Depot flat, McDonalds (MCD) down 0.90%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.97 at 3:30 PM on Wednesday, down 0.36% on the day – up 12.69% year-to-date.

Consumer Staples

ConAgra Foods (CAG) released a statement in response to a class action lawsuit that questions the kosher status of its Hebrew National products. The company says that its Hebrew National products are kosher and have been under the close rabbinical supervision of the preparation and packaging for move than 100 years. Procter & Gamble (PG) shares were down 1.9% premarket after the company cut its FQ4 guidance citing slower than expected growth in developed markets and currency fluctuations. Express (EXPR) has been initiated with a Buy rating at SunTrust. Whole Foods (WFM) at an all time high has been initiated with a Buy rating and $104 price target at Cantor Fitzgerald, which says improved profitability for new stores is still not fully appreciated. Walgreen (WAG) has been downgraded to Neutral from Outperform at Macquarie. Dow components – Kraft (KFT) flat, Coca Cola (KO) down 0.42%, Procter & Gamble (PG) down 3.25%, Wal-Mart (WMT) up 0.74%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.15 at 3:30 PM on Wednesday, down 0.70% on the day – up 5.11% year-to-date.

Health Care

Aetna (AET) has been awarded a group Medicare Advantage contract with the Teacher Retirement System of Texas effective January 1, 2013. The conversion of existing members to the Medicare product should result in over $800 million in additional Medicare premiums in 2013. Dyax (DYAX) has been initiated with a Buy rating and $3.50 price target at Needham, which highlights its Kalbitor, which is an internally developed therapy for acute treatment of HAE attacks. AthenaHealth (ATHN) has been downgraded to Underperform from Neutral at Sterne Agee. Dow Components – Johnson & Johnson (JNJ) up 0.19%, Merck (MRK) down 0.08%, Pfizer (PFE) down 0.09%.
The Health Care Select Sector SPDR (XLV) was trading at $37.46 at 3:30 PM on Wednesday, down 0.50% on the day – up 7.99% year-to-date.


A federal judge ruled against JP Morgan (JPM) in a case about securities backed by risky home equity loans. The ruling implies that plaintiff does not to prove that warranty breaches caused underlying loans to default in order to force a JPM to buy back the underlying loans. This ruling could strengthen claims by mortgage insurers looking to hold banks responsible for similar losses. Regulatory delays likely mean that MetLife (MET) will miss its June 30th goal for completing the sale of its online banking business. This is a setback for the company as its attempt to shed any connection to banking so the Fed will allow the insurer to start raising its dividend and repurchasing shares. Huntington Bancshares (HBAN) has been initiated wit a Neutral rating at JP Morgan. Dow Components – American Express (AXP) up 1.33%, Bank of America (BAC) up 0.49%, JP Morgan Chase (JPM) up 3.70%, Travelers (TRV) up 0.90%.
The Financial Select Sector SPDR (XLF) was trading at $14.47 at 3:30 PM on Wednesday, down 0.21% on the day – up 11.31% year-to-date.

Information Technology

Apple (AAPL) goes before a federal judge today in the company’s effort against Google's (GOOG) Motorola Mobility unit that some Motorola phones should be barred from being sold. Research in Motion (RIMM) confirmed that the company is cutting another $1 billion in operating expenses by cutting the number of manufacturing sites, and some analyst expect head count cuts of 2,000 to 3,000 jobs. Jabil (JBL) reported in-line FQ3 EPS, but revenue was a bit shy. Net earnings dipped 3% year over year due to distressed customer charges. Adobe (ADBE) beat FQ2 EPS estimates by a penny with better than expected revenue, but lowered guidance had the stock 5.1% lower in pre-market trading. Cisco Systems (CSCO) has been upgraded to Outperform from Market Perform at BMO Capital. Applied Materials (AMAT) has been upgraded to Overweight from Equal Weight at Barclays. Cirrus Logic (CRUS) - Needham downgrades the stock to Buy from Strong Buy based on valuation. Dow Components – Cisco Systems (CSCO) up 1.95%, Hewlett-Packard (HPQ) up 1.64%, IBM (IBM) up 0.04%, Intel Corp (INTC) up 0.65%, Microsoft (MSFT) up 0.85%.
The Technology Select Sector SPDR (XLK) was trading at $28.76 at 3:30 PM on Wednesday, down 0.14% on the day – up 13.01% year-to-date.

Telecommunication Services

China Unicom (CHU) declined by 3.7% in Hong Kong trading after the company announced a 6.6% decline in subscriber growth in May versus April. Analysts contributed the result to weaker consumer spending. Dow components – AT&T (T) down 0.17%, Verizon (VZ) down 0.53%.
The NASDAQ Telecommunications Index (IXTC) was trading at $186.40 at 3:30 PM on Wednesday, up 0.26% on the day – down 5.35% year-to-date.


NV Energy (NVE) has been upgraded to Buy from Neutral at Bank of America-Merrill Lynch. CH Energy (CHG) has been downgraded to Sell from Hold by Brean Murray. Southern Company (SO) has been downgraded to Neutral from Buy at Bank of America-Merrill Lynch. Dominion Resources (D) down 0.22%, Edison International (EIX) down 0.65%, First Energy (FE) down 0.81%, PG&E Corp (PCG) down 1.04%, Southern Company (SO) down 2.01%.
The Utilities Select Sector SPDR (XLU) was trading at $36.63 at 3:30 PM on Wednesday, down 0.97% on the day – up 1.81% year-to-date.


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Symbol Name Price Change % Volume
SSN Defined Japan Index n/a n/a n/a n/a
MMM 3M Company 200.41 1.26 0.63 437,912 Trade
EXPR Express Inc. 7.60 0.13 1.74 233,715 Trade
LMT Lockheed Martin Corporation 296.58 2.72 0.93 282,732 Trade
PG Procter & Gamble Company (The) 91.74 -0.36 -0.39 2,451,922 Trade
GE General Electric Company 7.83 0.18 2.29 30,160,067 Trade
RIO Rio Tinto Plc 49.69 0.63 1.28 441,253 Trade
CVX Chevron Corporation 117.47 1.37 1.18 1,453,397 Trade
SO Southern Company (The) 46.12 -0.55 -1.17 1,391,476 Trade
PCG Pacific Gas & Electric Co. 24.11 0.60 2.55 2,337,705 Trade
JNJ Johnson & Johnson 142.73 -3.72 -2.54 2,526,179 Trade
WMT Walmart Inc. 93.52 -0.64 -0.68 2,358,015 Trade
AA Alcoa Corporation 32.97 0.29 0.87 535,024 Trade
INTC Intel Corporation 47.43 0.04 0.08 5,540,917 Trade
IBM International Business Machines Corporation 118.85 1.65 1.41 1,650,866 Trade
ATHN athenahealth Inc. 131.47 -0.11 -0.08 364,566 Trade
D Dominion Energy Inc. 73.97 -0.69 -0.92 641,975 Trade
TRV The Travelers Companies Inc. 128.77 0.40 0.31 417,111 Trade
AAPL Apple Inc. 178.17 1.19 0.67 12,870,552 Trade
CIQ.UN:CA Canadian High Income Equity Fund 7.86 0.00 0.00 0
TSO ANDV Tesoro Corporation n/a n/a n/a 0
ADBE Adobe Inc. 226.59 6.86 3.12 1,719,538 Trade
EIX Edison International 53.90 1.12 2.12 654,088 Trade
MET MetLife Inc. 43.61 0.77 1.80 1,847,792 Trade
SNP China Petroleum & Chemical Corporation 83.61 1.25 1.52 66,873 Trade
JPM JP Morgan Chase & Co. 109.02 0.57 0.53 3,093,455 Trade
AXP American Express Company 107.06 0.97 0.91 567,333 Trade
UTX United Technologies Corporation 127.01 1.01 0.80 471,418 Trade
BIN Liberty Media Corp (DE) n/a n/a n/a n/a
BKS Barnes & Noble Inc. 6.91 0.41 6.33 648,967 Trade
CSCO Cisco Systems Inc. 44.56 0.07 0.16 4,946,188 Trade
COP ConocoPhillips 65.02 1.03 1.61 1,642,765 Trade
DIS The Walt Disney Company 113.39 1.52 1.36 1,887,696 Trade
VZ Verizon Communications Inc. 59.20 -0.27 -0.45 5,028,880 Trade
HBAN Huntington Bancshares Incorporated 14.64 0.07 0.48 2,753,062 Trade
ATU Actuant Corporation 25.41 0.31 1.22 43,734 Trade
BAC Bank of America Corporation 27.60 0.22 0.79 12,953,877 Trade
AET Aetna Inc. 205.49 1.49 0.73 820,101 Trade
GOOG Alphabet Inc. 1,041.07 15.31 1.49 515,986 Trade
MCD McDonald's Corporation 184.07 0.36 0.20 982,022 Trade
ADM Archer-Daniels-Midland Company 45.59 0.26 0.57 811,099 Trade
JBL Jabil Inc. 24.46 0.48 2.00 115,609 Trade
JKS JinkoSolar Holding Company Limited American Depositary Shares (each representing 4) 9.16 0.25 2.80 91,259 Trade
HD Home Depot Inc. (The) 170.19 1.14 0.67 1,504,299 Trade
XOM Exxon Mobil Corporation 77.59 0.62 0.80 2,577,949 Trade
PFE Pfizer Inc. 42.96 -0.57 -1.31 6,343,939 Trade
COL Rockwell Collins Inc. 130.38 0.53 0.41 265,159 Trade
HPQ HP Inc. 22.87 0.26 1.15 1,937,164 Trade
BA The Boeing Company 317.72 0.02 0.00 1,438,309 Trade
MRK Merck & Company Inc. (new) 74.51 -0.27 -0.36 2,426,292 Trade
FE FirstEnergy Corp. 37.36 -0.59 -1.55 1,190,591 Trade
KO Coca-Cola Company (The) 48.94 -0.44 -0.89 3,278,189 Trade
T AT&T Inc. 29.79 0.37 1.26 8,131,305 Trade
CAT Caterpillar Inc. 125.20 2.93 2.39 1,722,695 Trade
CAG ConAgra Brands Inc. 32.86 -0.38 -1.13 1,137,034 Trade
CHU China Unicom (Hong Kong) Ltd 11.17 0.10 0.90 37,058 Trade
MSFT Microsoft Corporation 103.25 1.54 1.51 9,734,708 Trade
DYAX Dyax Corp n/a n/a n/a 0 Trade
NWS News Corporation 13.00 0.05 0.39 96,895 Trade


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