Housing Starts declined 5.8% in March to an annual rate of 654,000 units. Industrial Production was flat in March with Capacity Utilization down slightly to 78.6%. The Dow Jones Industrial Average traded up to 13,130.68 on Tuesday back above its 50-day simple moving average at 13,002. The NASDAQ’s traded up to 3052.76 moving back above its 50-day simple moving average at 3005.
Asian stocks were lower again on Tuesday. The Nikkei 225 ended their session at 9,465 – down 0.06% on the day. The Hang Seng ended their session at 20,562 – down 0.23% on the day. European stocks continued higher on Tuesday. The FTSE 100 ended their session at 5,767 – up 1.78% on the day. The DAX ended their session at 6,801 – up 2.65% on the day. The CAC 40 ended their session at 3,293 – up 2.72% on the day. The yield on the 10-Year US Treasury moved higher from 1.961 percent to 2.017 below its 50-day and 200-day simple moving averages at 2.082 and 2.126.
Gold declined to $1635.2 the Troy ounce then rebounded to $1658.4 staying below its 50-day and 200-day simple moving averages at $1692.9 and $1693.6 with the 50-day below the 200-day for the first time since February 12, 2009, confirming a “death cross”. Crude oil traded up from $102.66 per barrel to $105.07, but the close was below its 50-day simple moving average at $104.49. The euro versus the dollar rose from 1.3093 to 1.3168 below its 50-day simple moving average at 1.3208.
Energy
Delta (DAL) may be entering the refining business this week when the airline finalizes the $100 to $125 million purchase of the shuttered Conoco’s (COP) near Philadelphia. Delta is hopeful that the acquisition will help the airline save a portion of the billions it spends on jet fuel each year. Chesapeake Oilfield Services, which is a spinoff of Chesapeake Energy (CHK) will raise $862.5 million. in an IPO which will trade with the symbol COS. Laredo Petroleum (LPI) has been initiated with an Outperform rating at BMO Capital. Trina Solar (TSL) has been upgraded to Buy from Hold at Auriga. Oasis Petroleum (OAS) and Newfield Exploration (NFX) were upgraded to Buy from Hold at Jefferies. GenOn Energy (GEN) has been upgraded to Hold from Sell at Deutsche Bank, where NRG Energy (NRG) has been upgraded to Buy from Hold. First Solar (FSLR) on news that the company will cut 30% of its workforce, the company has been downgraded to Neutral from Buy at Goldman Sachs. Dow components – Chevron (CVX) rose a solid 2.2% Tuesday morning with Exxon Mobil (XOM) up 1.6%%.
Energy Select Sector SPDR (XLE) was trading at $69.47 at 3:30 PM on Tuesday, up 1.80% on the day – up 0.49% year-to-date.
Materials
China Gerui Advanced Materials (CHOP) missed Q1 EPS estimates by nine cents and shares slumped 6.3% premarket. Cameco (CCJ) has been initiated with an Overweight rating at JPMorgan. Century Aluminum (CENX) was up 4.4% in late morning trading. Eagle Materials (EXP) rose by 6.1%. Freeport McMoRan (FCX) gained 2.7%. Dow components – Alcoa (AA) recaptured the $10 threshold with a gain of 1.6%. DuPont (DD) was up 1.6%.
The Materials Select Sector SPDR (XLB) was trading at $36.84 at 3:30 PM on Tuesday, up 1.66% on the day – up 9.97% year-to-date.
Industrials
Delta (DAL) may be entering the refining business this week when the airline finalizes the $100 to $125 million purchase of the shuttered Conoco’s (COP) near Philadelphia. Delta is hopeful that the acquisition will help the airline save a portion of the billions it spends on jet fuel each year. USG (USG) beat Q1 EPS estimates by sixteen cents and shares traded 1.1% higher premarket. W.W. Grainger (GWW) beat Q1 EPS estimated by a nickel on in-line revenue. Omnicom Group (OMC) beat Q1 EPS estimates by three cents with in-line revenue. Rollins Inc. (ROL) has been initiated with a Hold rating at KeyBanc Capital. Teekay Tankers (TNK) has been upgraded to Neutral from Underperform at Bank of America-Merrill Lynch. Terex (TEX) has been upgraded to Outperform from Market Perform at Wells Fargo. CSX Corp (CSX) has been downgraded to Hold from Buy at Argus, on the belief that there is risk to profit growth due to continued weakness in its coal business. Dow components – Boeing Co (BA) was up 1.8%, Caterpillar (CAT) rallied by 1.5%, General Electric (GE) gained 1.7% 3M Company (MMM) was higher by 1.2%, and United Technologies (UTX) gained 1.4% in morning trading.
The Industrial Select Sector SPDR (XLI) was trading at $37.07 at 3:30 PM on Tuesday, up 1.76% on the day – up 9.84% year-to-date.
Consumer Discretionary
New Oriental Education & Tech (EDU) reports in-line Q3 EPS and revenue. Tiffany & Co. (TIF), the luxury jeweler has been initiated with a Neutral rating at Macquarie. Fossil (FOSL) is initiated with an Outperform rating at Macquarie. AutoNation (AN) has been upgraded to Market Perform from Underperform at Wells Fargo. Cabela’s (CAB), the hunting and shooting retailer has been downgraded to Hold from Buy with a $40 price target at Feltl & Co. Dow Components – Disney (DIS) gained 1.4%, and McDonalds (MCD) picked up 0.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.95 at 3:30 PM on Tuesday, up 1.26% on the day – up 15.20% year-to-date.
Consumer Staples
Coca-Cola (KO) beat Q1 EPS estimates by a penny with a beat on the revenue line. Dow components – Home Depot (HD) inched higher by 0.1%, Kraft (KFT) gained 1.3%, Coca Cola (KO) surged 2.6%, Procter & Gamble (PG) gained 0.4, and Wal-Mart (WMT) gained 2.0% in morning trading.
The Consumer Staples Select Sector SPDR (XLP) was trading at $34.17 at 3:30 PM on Tuesday, up 1.18% on the day – up 5.17% year-to-date.
Health Care
The Supreme Court heard arguments on Monday on whether or not pharmaceutical company reps who promote company’s medicines at doctors’ offices are salesmen on commissions and thus not entitled to overtime pay. The defendant is GlaxoSmithKline (GSK) and if the court decides that reps should get overtime, the drug companies could face billions in liabilities. Forest Laboratories (FRX) beat their Q4 EPS estimates by eight cents with in-line revenue. Johnson & Johnson (JNJ) beat Q1 EPS estimates by seven cents but missed on the revenue line. Lincare (LNCR) beat Q1 EPS estimates by a penny with in-line revenue. ICU Medical (ICUI) beat Q1 EPS estimates by four cents with in-line revenue. Credit Suisse initiates Vertex Pharmaceuticals (VRTX) with an Outperform rating. Cerus Corp (CERS) has been initiated with a Buy rating at Cantor Fitzgerald with a $5.50 price target. Dow Components – Johnson & Johnson (JNJ) lost 0.2%, Merck (MRK) gained 0.8%, and Pfizer (PFE) gained 0.9% in morning trading.
The Health Care Select Sector SPDR (XLV) was trading at $37.16 at 3:30 PM on Tuesday, up 1.56% on the day – up 7.12% year-to-date.
Financials
Senate Republicans blocked the “Buffett Rule” with a 51-45 vote on Monday. The rule would have set a tax of 30% on those earning $2 million annually. The measure needed 60 votes to continue the debate on this subject. Webster Financial (WBS) beat Q1 EPS estimates by two cents. Northern Trust (NTRS) beat Q1 EPS estimates by a penny with a slight miss on revenue. Goldman Sachs (GS) beat Q1 EPS estimates by 39 cents with a slight win on revenues. Goldman raised its quarterly dividend to 46 cents per share from 35 cents. State Street (STT) missed Q1 EPS estimates by three cents, but beat on the revenue line. U.S. Bancorp (USB) beats Q1 EPS estimates by three cents. Comerica (CMA) beat Q1 EPS estimates by ten cents. Susquehanna initiates Raymond James Financial (RJF) with a Positive, with new Neutral ratings Jefferies (JEF) and Greenhill (GHL), and new Negative ratings on LPL Investment (LPLA) and Lazard (LAZ). Travelers (TRV), the property and casualty insurance company has been upgraded to Equal Weight from Underweight at Evercore. Dow Components – American Express (AXP) gained 0.6%, Bank of America (BAC) gained 1.25%, JP Morgan (JPM) gained 0.5%, and Travelers (TRV) gained 1.4% in morning trading.
The Financial Select Sector SPDR (XLF) was trading at $15.48 at 3:30 PM on Tuesday, up 1.57% on the day – up 19.08% year-to-date.
Information Technology
Apple Inc. (AAPL) has been initiated with a Strong Buy rating at Raymond James with an $800 price target. Qualcomm (QCOM) has been initiated with an Outperform rating at Raymond James. SAP AG (SAP) has been downgraded to Neutral from Overweight at HSBC Securities, on execution issues in North America. Synaptics (SYNA) has been downgraded to Neutral from Buy at Mizuho, which cut its price target by $2 to $35. Infosys (INFY) has been downgraded to Neutral from Buy at Goldman. Dow Components – Cisco Systems (CSCO) was up 1.3%, Hewlett-Packard (HPQ) was up 2.5%, IBM (IBM) gained 1.7%, Intel Corp (INTC) gained 0.25%, and Microsoft (MSFT) gained 1.4% in morning trading.
The Technology Select Sector SPDR (XLK) was trading at $29.98 at 3:30 PM on Tuesday, up 2.32% on the day – up 17.80% year-to-date.
Telecommunication Services
It was a quiet sector on Tuesday with moves of 2% on several names; ALSK, CBEY, FTE, LEAP, RCI and USM. Dow components – AT&T (T) gained 0.9% matching the gain for Verizon (VZ).
The NASDAQ Telecommunications Index (IXTC) was trading at $212.65 at 3:30 PM on Tuesday, up 1.89% on the day – up 7.98% year-to-date.
Utilities
Progress Energy (PGN) has been downgraded to Equal Weight from Overweight at Barclays. Dominion Resources (D) gained 0.6%, Edison International (EIX) was up 0.9%, First Energy (FE) was up 0.6%, and PG&E Corp (PCG) slipped by 0.3% in morning trading.
The Utilities Select Sector SPDR (XLU) was trading at $34.87 at 3:30 PM on Tuesday, up 0.61% on the day – down 3.09% year-to-date.
STOCKS: CVX, XOM, COP, CHK, LPI, TSL, OAS, NFX, GEN, FSLR, AA, DD, CHOP, CCJ, CENX, EXP, FCX, BA, CAT, GE, MMM, UTX, DAL, USG, OMC, ROL, TNK, TEX, CSX, DIS, MCD, EDU, TIF, FOSL, AN, CAB, HD, KFT, KO, PG, WMT, JNJ, MRK, PFE, GSK, FRX, LNCR, ICUI, VRTX, CERS, AXP, BAC, JPM, TRV, WBS, NTRS, GS, STT, USB, CMA, JEF, LPLA, LAZ, CSCO, HPQ, IBM, INTC, MSFT, AAPL, QCOM, SAP, SYNA, INFY, T, VZ, ALSK, CBEY, FTE, LEAP, RCI, USM, D, EIX, FE, PCG, PGN
