According to S&P Case Shiller home prices rose 3.6% in the second quarter, but were down 5.9% year over year. According to the Conference Board Consumer Confidence plunged to 44.5 in August from 59.5 in July the lowest reading since April 2009. This is an extremely depressed reading as the neutral zone is 90 to 120. The Dow Jones Industrial Average opened slightly lower, but fell by more than 100 points following the weak consumer confidence data to a low of 11,429.39. By mid-day the Dow moved above the flat line to a day’s high in the final hour of trading above 11,600. The Dow is thus up more than up 1,000 points from its August 9th low. The NASDAQ declined from 2561.55 to 2534.68 in reaction to consumer confidence. The NASDAQ moved into the green late morning and traded above 2585 into the final hour of trading.
Asian stocks traded higher on Tuesday following the gains in the U.S. from Monday. The Nikkei 225 rose by 1.16% to 8,954, and the Hang Seng gained 1.71% to 20,204. In Europe, the markets were concerned about economic growth and the credit crisis. The FTSE 100, which was closed on Monday, rebounded by 2.70% to 5,227. The DAX lost 0.46% to 5,644. The CAC 40 was slightly higher by 0.18% to 3,160. The yield on the 10-Year US Treasury declined from 2.273 percent to 2.156 still within the post-FOMC range of 2.360 to 1.973. Gold rebounded from $1786.2 the Troy ounce to $1840.0 on Tuesday. Crude oil traded up from $86.46 per barrel to $89.21 staying well above its 200-week simple moving average at $83.85. The euro versus the US dollar traded down from 1.4532 to 1.4388.
Energy
Peabody Energy (BTU) and ArcelorMittal (MT) have finally received the backing of Macarthur Coal (MACDF) for a takeover of the world’s biggest producer of pulverized coking coal after increasing their combined bid from A$15.50 a share to A$16.00, or A$4.8B ($5.11B). Shell (RDS.A) looks poised to be the big winner in a deal to develop Iraq’s huge southern gas and oil fields, with Reuters reporting that BP (BP), Exxon (XOM), China’s CNPC and Italy’s Eni (E) may have to surrender most of the gas from the fields to a Shell-led processing and export project. Universal Display (PANL) announced a licensing deal and material supply agreement with a joint venture owned by Panasonic (PC) and Idemitsu Kosan (IDKOY). LDK Solar (LDK) reported Q2 revenue of $499.4M and EPS of -$0.62 (missing consensus by $20M and $0.29). The company expects 2011 revenue of $2.5B-$2.7B (above a $2.4B consensus). Alpha Natural Resources (ANR) is a new Neutral at JP Morgan. Alliance Resource (ARLP) is an Overweight and $82 price objective at JP Morgan. Ensco (ESV) and Rowan Companies (RDC) are each upgraded to Outperform from Neutral at Macquarie. Atwood Oceanics (ATW) is upgraded to Outperform from Neutral at Macquarie. LDK Solar (LDK) is lowered by Wells Fargo (Underperform from Market Perform) and Needham (Hold from Buy). Transocean (RIG) is downgraded to Neutral from Outperform at Macquarie, which also downgrades Diamond Offshore (DO) to Underperform from Neutral. In afternoon trading: Shares of Frontline (FRO) are up about 14%. Shares of GMX Resources (GMXR) are up about 9.5%.
Energy Select Sector SPDR (XLE) was trading at $68.13 at 4:00 PM on Tuesday, up 0.59% on the day – down 0.18% year-to-date.
Materials
Peabody Energy (BTU) and ArcelorMittal (MT) have finally received the backing of Macarthur Coal (MACDF) for a takeover of the world’s biggest producer of pulverized coking coal after increasing their combined bid from A$15.50 a share to A$16.00, or A$4.8B ($5.11B). Aluminum Corporation of China (ACH) reported a 22% drop in H1 net profit. Martin Marietta (MLM) is reinstated with a Hold at KeyBanc Capital. The broker also has Holds on Vulcan Materials (VMC), Texas Industries (TXI), and small cap stock U.S. Concrete (USCR). SunCoke Energy (SXC) is picked up as an Outperform at Credit Suisse. Aurico Gold (AUG) gets increased to Outperform from Sector Perform at CIBC World Markets. Eagle Materials (EXP) gets upgraded to Buy from Hold at Jefferies. In afternoon trading: Shares of China GengSheng Minerals (CHGS) are up about 13%. Shares of Silvercorp Metals (SVM) are up about 10%.
The Materials Select Sector SPDR (XLB) was trading at $35.25 at 4:00 PM on Tuesday, up 0.84% on the day – down 8.23% year-to-date.
Industrials
Donaldson Company (DCI) beat EPS estimates by 5 cents on revenue of $625M, sees sales growth at 7%-15% for FY12, and sets EPS guidance at $3.15-$4.15. CB&I (CBI) is picked up as a Buy and $41 price target at UBS. Boeing (BA) is a Neutral-from-Reduce upgrade at Nomura. Emerson (EMR) is downgraded to Hold at Argus. In afternoon trading: Shares of SatCon Technology (SATC) are up about 14%. Shares of Excel Maritime Carriers (EXM) are up about 10.5%. Shares of Genco Shipping & Trading (GNK) are up about 9.5%.
The Industrial Select Sector SPDR (XLI) was trading at $32.18 at 4:00 PM on Tuesday, up 0.85% on the day – down 7.71% year-to-date.
Consumer Discretionary
Dollar General’s (DG) FQ2 earnings beat expectations as EPS increased 25% to $0.52 (beating estimates by 4 cents) and revenue rose 11.2% to $3.58B (beating estimates by $40M). The company ups the low-end of its FY earnings guidance range to reflect same-store sales growth of 4%-6%; the company now expects total sales to rise 12%-14% and adjusted EPS of $2.22-$2.30. Universal Display (PANL) announced a licensing deal and material supply agreement with a joint venture owned by Panasonic (PC) and Idemitsu Kosan (IDKOY). DSW (DSW) beat estimates by 12 cents and revenue by $17.3M, and sees FY11 EPS of $2.70-2.85. Culp (CFI) reported FQ1 EPS of $0.14 and revenue of $60.3M (beating estimates by $2.9M). AnnTaylor (ANN) and Dick’s Sporting Goods (DKS) are each added to the Top Picks Live list at Citigroup. KB Home (KBH) is now Neutral from Negative at Susquehanna, which takes Toll Brothers (TLB) to Positive from Neutral. PulteGroup (PHM) is now Buy from Neutral with a $6.50 target at Ticonderoga. American Eagle (AEO) is downgraded to Hold from Buy at Citigroup. Sony (SNE) is now Neutral from Outperform at Macquarie. Bob Evans Farms (BOBE) and Cracker Barrel (CBRL) are both now Neutral from Buy at Suntrust. In afternoon trading: Shares of Corinthian Colleges (COCO) are up about 20.25%. Shares of Barnes & Noble (BKS) are up about 14%. Shares of Eastman Kodak (EK) are up about 11.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.34 at 4:00 PM on Tuesday, up 0.46% on the day – down 0.19% year-to-date.
Consumer Staples
Nestle (NSRGY) is cut by Bernstein to Market Perform from Outperform. In afternoon trading: Shares of Imperial Sugar (IPSU) are up about 14.25%. Shares of Nu Skin Enterprises (NUS) are up about 6.5%. Shares of Darling International (DAR) are up about 5%. Shares of China-Biotics (CHBT) are down about 11%. Shares of Central European Distribution (CEDC) are down about 9.5%. Shares of Star Scientific (CIGX) are down about 7.75%. Shares of Spartan Stores (SPTN) are down about 5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.79 at 4:00 PM on Tuesday, up 0.26% on the day – up 5.05% year-to-date.
Healthcare
Smith & Nephew (SNN) is begun with a Buy at Deutsche Bank. Peregrine Pharmaceuticals (PPHM) is a new Outperform at JMP Securities. In afternoon trading: Shares of AEterna Zentaris (AEZS) are up about 9.5%. Shares of Sun Heatlhcare Group (SUNH) are up about 9.5%. Shares of Echo Therapeutics (ECTE) are up about 6.5%. Shares of Optimer Pharmaceuticals (OPTR) are up about 6.5%. Shares of Alkermes (ALKS) are up about 6.25%. Shares of Pacira Pharmaceuticals (PCRX) are down about 7.75%.
The Health Care Select Sector SPDR (XLV) was trading at $33.17 at 4:00 PM on Tuesday, up 0.33% on the day – up 5.30% year-to-date.
Financials
China Construction Bank (CICHY) will sign a five-year strategic cooperation agreement with Bank of America (BAC) within the next few days despite BofA yesterday saying it is selling half its 10% stake in the company for over $8B. Lehman (LEHMQ) will today ask a bankruptcy judge to allow creditors to vote on its $65B payout plan, which would provide an average of $0.20 on the dollar and up to nearly $0.28 for some groups. KKR Financial (KFN) is covered with a Hold at Jefferies. Royal Bank of Scotland (RBS) is boosted to Buy from Hold at Deutsche Bank. BB&T Corp (BBT) is boosted to Neutral from Underperform at Macquarie. In afternoon trading: Shares of FelCor Lodging Trust (FCH) are up about 12%.
The Financial Select Sector SPDR (XLF) was trading at $13.21 at 4:00 PM on Tuesday, down 0.68% on the day – down 17.18% year-to-date.
Information Technology
Universal Display (PANL) announced a licensing deal and material supply agreement with a joint venture owned by Panasonic (PC) and Idemitsu Kosan (IDKOY). Data aggregator CoreLogic (CLGX) is forming an independent committee to explore its strategic options, including a possible spinoff, merger or sale. MIPS Tech (MIPS) is upgraded to Buy from Hold at Capstone. In afternoon trading: Shares of CoreLogic are up about 27.5%. Shares of Monster Worldwide (MWW) are up about 17%. Shares of Sequans Communications (SQNS) are up about 14%. Shares of JDS Uniphase (JDSU) are up about 8.5%. Shares of Oclaro (OCLR) are up about 8.25%.
The Technology Select Sector SPDR (XLK) was trading at $24.50 at 4:00 PM on Tuesday, up 0.41% on the day – down 2.74% year-to-date.
Telecommunications Services
In afternoon trading: Shares of Sprint Nextel (S) are up about 3.2%. Shares of Level 3 Communications (LVLT) are down about 1.6%. Shares of AT&T (T) are up about 1.4%. Shares of Verizon (VZ) are up about 0.6%. Shares of Vodafone (VOD) are down about 0.6%. Shares of Frontier Communications (FTR) are up about 1.2%. Shares of Windstream (WIN) are up about 1.2%.
The NASDAQ Telecommunications Index (IXTC) was trading at $192.97 at 4:00 PM on Tuesday, up 0.51% on the day – down 14.38% year-to-date.
Utilities
In afternoon trading: Shares of Duke Energy (DUK) are up about a quarter of a percent. Shares of Southern (SO) are up about 0.3%. Shares of AES Corp (AES) are down about 2.2%. Shares of CenterPoint Energy (CNP) are up about 0.4%. Shares of Exelon (EXC) are down about 0.3%. Shares of Genon Energy (GEN) are up about 0.8%. Shares of Pepco Holdings (POM) are up about 0.3%.
The Utilities Select Sector SPDR (XLU) was trading at $33.67 at 4:00 PM on Tuesday, up slightly on the day – up 7.43% year-to-date.
STOCKS: BTU, MT, MACDF, RDS.A, BP, XOM, E, PANL, PC, IDKOY, LDK, ANR, ARLP, ESV, RDC, ATW, RIG, DO, FRO, GMXR, ACH, MLM, VMC, TXI, USCR, SXC, AUG, EXP, CHGS, SVM, DCI, CBI, BA, EMR, SATC, EXM, GNK, DG, DSW, CFI, ANN, DKS, KBH, TLB, PHM, AEO, SNE, BOBE, CBRL, COCO, BKS, EK, NSRGY, IPSU, NUS, DAR, CHBT, CEDC, CIGX, SPTN, SNN, PPHM, AEZS, SUNH, ECTE, OPTR, ALKS, PCRX, CICHY, BAC, LEHMQ, KFN, RBS, BBT, FCH, CLGX, MIPS, MWW, SQNS, JDSU, OCLR, S, LVLT, T, VZ, VOD, FTR, WIN, DUK, SO, AES, CNP, EXC, GEN, POM
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