Equities Sector Coverage: Wall Street Slides Lower on Growing Concerns

Sector Recap  |

The Dow Jones Industrial Average declined to a day’s low at 12,583.41 then cut the day’s loss by more than a half. The NASDAQ declined to 2852.88 then rebounded to a day’s high at 2898.05, still in the red.

Asian stocks moved lower on Monday. The Nikkei 225 ended the day at 8,508 – down 1.86%. The Hang Seng ended the day at 19,053 – down 2.99%. European exchanges were crushed on Monday on renewed fears related to the debt crisis. The FTSE 100 ended the day at 5,534 – down 2.09%. The DAX ended the day at 6,419 – down 3.18%. The CAC 40 ended the day at 3,102 – down 2.89%. The yield on the 10-Year US Treasury note declined to 1.398% setting a new all time low as the “flight to quality” intensified, then rose to 1.445%.

Gold declined from $1582.4 the Troy ounce to $1562.0 as the 50-day and 200-day simple moving averages decline to $1587.1 and $1658.6. Crude oil declined from $91.64 per barrel to $87.91 with the 50-day simple moving average at $86.51. The euro versus the dollar gapped lower trading down to 1.2071 with the June 2010 low looming at 1.1880, then rebounded to 1.2143.

Energy

Cnooc (CEO) has agreed to acquire Canada's Nexen (NXY) for $15.1 billion in a deal that enhances Cnooc's presence in Nigeria and the Gulf of Mexico, and in Canada. The $27.50 per share price represents a 61% premium to Nexen's Friday closing price. Chesapeake Midstream Partners (CHKM) has been reinstated with an Overweight rating by Barclays. Schlumberger (SLB) - Argus upgrades the oil services company to Buy from Hold on its impressive execution. Valero Energy (VLO) has been upgraded to Buy from Neutral at UBS, with a $26 price target. Whiting Petroleum (WLL) has been upgraded to Positive from Neutral at Susquehanna. Dow components – Chevron (CVX) down 2.07%, Exxon Mobil (XOM) down 1.53%.

Energy Select Sector SPDR (XLE) was trading at $68.06 at 3:30 PM on Monday, down 1.06% on the day – down 1.55% year-to-date.

Materials

Mosaic (MOS) has been upgraded to Buy from Neutral at Citigroup, which cites the recent rise in corn prices. The new target is $66 per share. AK Steel (AKS) has been downgraded to Neutral from Buy at UBS. Albemarle (ALB) has been removed from the Top Picks Live list at Citigroup. Kinross Gold (KGC) - Macquarie downgrades the miner to Neutral from Outperform. Dow Components – Alcoa (AA) down 2.30%, DuPont (DD) down 1.53%.

The Materials Select Sector SPDR (XLB) was trading at $34.89 at 3:30 PM on Monday, down 1.50% on the day – up 4.15% year-to-date.

Industrials

Genesee & Wyoming (GWR) will buy RailAmerica (RA) for $2 billion, with the $27.50 per share, which is a 10.6% premium to Friday close. That was the last before RailAmerica said it would explore strategic alternatives. Gardner Denver (GDI) has been downgraded by some analyst this morning, but not at Credit Suisse who upgrades the stock to Outperform from Neutral. Gardner Denver (GDI) has been downgraded to Neutral from Buy at Janney Capital, which cites concerns including overcapacity. Goldman added MDC Holdings (MDC) to its Conviction Buy list, and upgraded KB Home (KBH) to Buy from Neutral. Textron (TXT) has been downgraded to Sector Perform from Outperform at RBC Capital. Dow components – Boeing Co (BA) down 1.57%, Caterpillar (CAT) up 0.26%, General Electric (GE) flat, 3M Company (MMM) down 1.42%, United Technologies (UTX) down 1.86%.

The Industrial Select Sector SPDR (XLI) was trading at $35.07 at 3:30 PM on Monday, down 0.26% on the day – up 3.91% year-to-date.

Consumer Discretionary

Warner Bros.' (TWX) "The Dark Knight Rises" earned $161 million at the weekend despite the horrific shooting near Denver on Friday. The amount is below the $185 million estimates of the film before the terrible event. McDonald's (MCD) missed Q2 EPS estimates by six cents with a miss on the revenue line. Goldman Sachs has initiated Neutral ratings on Cinemark (CNK) and Regal Entertainment (RGC), and initiates MAX Corp. (IMAX) with a Buy rating. Boyd Gaming (BYD) has been upgraded to Neutral from Underperform at Sterne Agee amid an increasingly attractive valuation. Cablevision (CVC) has been upgraded to Buy from Neutral at Bank of America-Merrill Lynch. Deckers Outdoor (DECK) has been downgraded to Underperform from Neutral at Sterne Agee. Penn National Gaming (PENN) has been downgraded to Hold from Buy at KeyBanc. Dow Components – Disney (DIS) down 2.08%, Home Depot up 0.39%, McDonalds (MCD) down 3.05%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.22 at 3:30 PM on Monday, down 1.21% on the day – up 10.76% year-to-date.

Consumer Staples

Rupert Murdoch has resigned from the boards of a several of News Corp. (NWS) businesses, including News International, following the long-running hacking scandal. This move may be a precursor to the proposed split of News Corp and the subsequent sale of the newspapers. Aeropostale (ARO) has been upgraded to Overweight from Neutral at Piper Jaffray, on an optimistic call on its back-to-school price increase. The price target is $24 as share. Danone (DANOY) - The world’s biggest yogurt maker has been downgraded to Hold from Buy at Société Générale. Walgreen (WAG) has been downgraded to Neutral from Buy at UBS. Dow components – Kraft (KFT) down 2.07%, Coca Cola (KO) down 0.64%, Procter & Gamble (PG) down 0.49%, Wal-Mart (WMT) down 0.74%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.77 at 3:30 PM on Monday, down 0.80% on the day – up 7.02% year-to-date.

Health Care

Apricus Biosciences (APRI) - Ascendiant Capital initiates the stock with a Strong Buy with a $6 price target, on their impressive portfolio of drugs to treat oncology. Leerink Swann initiates Irish drug maker ELAN (ELN) with a Market Perform rating, and initiates Outperform ratings on Acorda Therapeutics (ACOR), Biogen (BIIB), and Questcor Pharmaceuticals (QCOR). Illumina (ILMN) - Leerink Swann upgrades the stock to Outperform from Market Perform. Onyx Pharmaceuticals (ONXX) has been upgraded to Buy from Hold at Jefferies. Akorn (AKRX) has been downgraded to Hold from Buy at Deutsche Bank amid a weaker than expected Vancomycin launch. Dow Components – Johnson & Johnson (JNJ) down 1.09%, Merck (MRK) down 0.33%, Pfizer (PFE) down 0.46%.

The Health Care Select Sector SPDR (XLV) was trading at $37.86 at 3:30 PM on Monday, down 1.02% on the day – up 9.77% year-to-date.

Financial

Associated Estates (AEC) – This Reit has been downgraded to Hold from Buy at Jefferies. EastGroup (EGP) – This Reit has been downgraded to Hold from Buy with Wunderlich due to valuation issues. LaSalle Hotel Properties (LHO) has been downgraded to Neutral from Buy at Goldman. Wintrust Financial (WTFC) has been downgraded to Neutral from Outperform at Macquarie. Dow Components – American Express (AXP) down 1.20%, Bank of America (BAC) down 1.56%, JP Morgan Chase (JPM) up 0.50%, Travelers (TRV) down 1.67%.

The Financial Select Sector SPDR (XLF) was trading at $14.27 at 3:30 PM on Monday, down 0.76% on the day – up 9.77% year-to-date.

Information Technology

The ITC has dismissed Kodak's (EKDKQ.PK) infringement suit against Apple (AAPL) and RIM (RIMM), affirming the May decision by an administrative law judge. Kodak will appeal the ruling, which relates to an image-preview patent for digital cameras. Cypress Semiconductor (CY) - Cantor Fitzgerald upgrades the stock to Hold from Sell, saying fourth quarter earnings have upside potential. Microsoft (MSFT) has been upgraded to Buy from Neutral at Hilliard Lyons. VeriSign (VRSN) has been downgraded to Neutral from Buy at Citigroup amid a lack of catalysts. The new lower price target is $46. Dow Components – Cisco Systems (CSCO) down 1.96%, Hewlett-Packard (HPQ) down 2.83%, IBM (IBM) down 1.14%, Intel Corp (INTC) down 1.68%, Microsoft (MSFT) down 3.27%.

The Technology Select Sector SPDR (XLK) was trading at $28.55 at 3:30 PM on Monday, down 0.73% on the day – up 12.18% year-to-date.

Telecommunication Services

BT Group (BT) declined 2.88%, Cellcom Israel (CEL) declined 3.93%, China Unicom (CHU) declined 3.78%, France Telecom (FTE) declined 3.01%, Leap Wireless (LEAP) declined 4.45%, NII Holdings (NIHD) declined 5.24%, MetroPCS (PCS) declined 3.12%, and Sprint Nextel (S) declined 4.37%. Dow Components – AT&T Inc (T) flat, Verizon (VZ) down 0.67%.
The NASDAQ Telecommunications Index (IXTC) was trading at $175.62 at 3:30 PM on Monday, down 1.33% on the day – down 10.82% year-to-date.

Utilities

NRG Energy (NRG) will acquire GenOn Energy (GEN) for $1.7 billion in stock, which creates one of the largest independent electricity utility in the US. The deal is the latest in the power sector as companies attempt to cope with falling prices. GenOn Energy (GEN) has been upgraded to Outperform from Neutral with a $3 price target at Macquarie. Dominion Resources (D) down 0.89%, Edison International (EIX) down 0.89%, First Energy (FE) down 0.89%, PG&E Corp (PCG) down 1.06%, Southern Company (SO) down 0.31%.

STOCKS:  CVX, XOM, CEO, NXY, CHKM, SLB, WLL, AA, DD, MOS, AKS, ALB, KGC, BA, CAT, GE, MMM, UTX, GWR, RA, GDI, MDC, KBH, TXT, DIS, HD, MCD, TWX, CNK, RGC, IMAX, BYD, CVC, DECK, PENN, KFT, KO, PG, WMT, NWS, ARO, DANOY, WAG, JNJ, MRK, PFE, APRI, ELN, ACOR, BIIB, QCOR, ILMN, ONXX, AKRX, AXP, BAC, JPM, TRV, AEC, EGPLHO, WTFC, CSCO, HPQ, IBM, INTC, MSFT, EKDKQ.PK, AAPL, CY, VRSN, T, VZ, BT, CEL, CHU, FTE, LEAP, NIHD, PCS, S, D, EIX, FE, PCG, SO, NRG, GEN

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Companies

Symbol Name Price Change % Volume
CEO CNOOC Limited 163.99 -1.25 -0.76 169,173 Trade
MMM 3M Company 198.24 -4.44 -2.19 2,254,486 Trade
GEN Genesis Healthcare Inc. 1.60 -0.02 -1.23 194,482 Trade
ARO Manulife Financial Corporation n/a n/a n/a n/a
DECK Deckers Outdoor Corporation 120.41 -7.61 -5.94 554,794 Trade
PG Procter & Gamble Company (The) 92.45 -1.10 -1.18 7,996,809 Trade
GE General Electric Company 7.01 -0.34 -4.63 114,480,098 Trade
CVX Chevron Corporation 115.49 -0.42 -0.36 9,114,442 Trade
SO Southern Company (The) 46.98 0.46 0.99 5,787,141 Trade
MOS Mosaic Company (The) 33.52 -1.03 -2.98 4,314,657 Trade
PCG Pacific Gas & Electric Co. 25.79 -0.24 -0.92 6,837,428 Trade
AKS AK Steel Holding Corporation 2.84 -0.11 -3.73 9,513,722 Trade
CEL Cellcom Israel Ltd. 7.05 0.10 1.44 3,688 Trade
KBH KB Home 20.41 -0.17 -0.83 1,281,864 Trade
JNJ Johnson & Johnson 145.43 -0.48 -0.33 9,444,459 Trade
WMT Walmart Inc. 93.19 -1.58 -1.67 8,496,467 Trade
AA Alcoa Corporation 28.82 -0.83 -2.80 3,383,928 Trade
INTC Intel Corporation 46.24 -2.13 -4.40 34,016,375 Trade
IBM International Business Machines Corporation 119.34 -4.57 -3.69 7,019,616 Trade
D Dominion Energy Inc. 75.61 0.83 1.11 5,232,884 Trade
TRV The Travelers Companies Inc. 123.56 -1.08 -0.87 1,679,622 Trade
BYD Boyd Gaming Corporation 23.75 -0.62 -2.54 2,210,532 Trade
AAPL Apple Inc. 168.49 -6.23 -3.57 42,281,631 Trade
CVC Cablevision Systems Corporation Class A n/a n/a n/a 0 Trade
BRRPF BRRPF n/a n/a n/a 0 Trade
WLL Whiting Petroleum Corporation 29.90 0.98 3.39 8,360,871 Trade
S Sprint Corporation 6.01 -0.12 -1.96 13,121,102 Trade
AKRX Akorn Inc. 4.26 -1.33 -23.79 26,549,351 Trade
EIX Edison International 58.51 0.97 1.69 1,910,086 Trade
NRG NRG Energy Inc. 40.53 -0.03 -0.07 4,017,963 Trade
JPM JP Morgan Chase & Co. 103.29 -1.90 -1.81 19,248,595 Trade
AXP American Express Company 106.68 -1.57 -1.45 4,419,413 Trade
KGC Kinross Gold Corporation 2.85 0.03 1.06 23,449,382 Trade
ALB Albemarle Corporation 88.65 -2.54 -2.79 1,523,483 Trade
UTX United Technologies Corporation 119.45 -2.00 -1.65 7,503,568 Trade
CSCO Cisco Systems Inc. 46.44 -1.95 -4.03 38,297,966 Trade
DIS The Walt Disney Company 111.98 -1.47 -1.30 8,305,465 Trade
VZ Verizon Communications Inc. 57.68 -0.40 -0.69 16,948,126 Trade
VRSN VeriSign Inc. 153.95 -3.45 -2.19 827,304 Trade
BAC Bank of America Corporation 25.43 -0.85 -3.23 107,477,614 Trade
ILMN Illumina Inc. 321.41 -12.91 -3.86 1,086,551 Trade
MCD McDonald's Corporation 182.96 -2.49 -1.34 3,087,954 Trade
MDC M.D.C. Holdings Inc. 28.78 0.00 0.00 512,957 Trade
BT BT Group plc American Depositary Shares 16.18 -0.25 -1.52 792,458 Trade
HD Home Depot Inc. (The) 172.79 -3.17 -1.80 6,226,078 Trade
XOM Exxon Mobil Corporation 77.64 -0.75 -0.96 16,224,694 Trade
PFE Pfizer Inc. 43.92 -1.06 -2.36 26,531,218 Trade
APRI Apricus Biosciences Inc. 0.29 -0.01 -1.98 389,011 Trade
BIIB Biogen Inc. 316.73 -9.97 -3.05 1,172,144 Trade
ELN Elan Corp. PLC ADS n/a n/a n/a 0 Trade
HPQ HP Inc. 22.93 -1.09 -4.54 17,395,261 Trade
BA The Boeing Company 323.22 -8.68 -2.62 4,526,264 Trade
WTFC Wintrust Financial Corporation 71.85 -0.36 -0.50 380,299 Trade
GWR Genesee & Wyoming Inc. Class A 78.45 -1.74 -2.17 764,529 Trade
MRK Merck & Company Inc. (new) 76.72 -1.65 -2.11 12,622,990 Trade
ACOR Acorda Therapeutics Inc. 18.63 -0.18 -0.96 686,844 Trade
CNK Cinemark Holdings Inc Inc. 38.93 -0.70 -1.77 1,296,699 Trade
FE FirstEnergy Corp. 39.23 0.15 0.38 3,541,480 Trade
CY Cypress Semiconductor Corporation 12.95 -0.42 -3.14 5,872,450 Trade
KO Coca-Cola Company (The) 49.09 -0.29 -0.59 15,565,697 Trade
T AT&T Inc. 30.14 -0.39 -1.28 37,474,553 Trade
CAT Caterpillar Inc. 123.55 -4.82 -3.75 6,413,735 Trade
PENN Penn National Gaming Inc. 22.58 -0.31 -1.35 2,925,186 Trade
SLB Schlumberger N.V. 43.04 0.72 1.70 14,196,917 Trade
CHU China Unicom (Hong Kong) Ltd 11.19 -0.21 -1.84 648,401 Trade
MSFT Microsoft Corporation 104.82 -4.37 -4.00 45,044,937 Trade
TXT Textron Inc. 51.22 -1.79 -3.38 2,212,840 Trade
NWS News Corporation 12.71 -0.15 -1.17 343,297 Trade
NIHD NII Holdings Inc. 4.54 -0.44 -8.84 1,695,655 Trade

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