Equities Sector Coverage: Wall Street Slides Lower on Growing Concerns

Sector Recap |

Wall Street SignThe 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 127.19 -0.42 -0.33 113,436 Trade
MMM 3M Company 221.32 2.08 0.95 1,647,816 Trade
GEN Genesis Healthcare Inc. 1.04 0.02 1.96 254,872 Trade
ARO Aeropostale Inc. n/a n/a n/a n/a
DECK Deckers Outdoor Corporation 66.09 1.29 1.99 431,501 Trade
PG Procter & Gamble Company (The) 88.25 -3.34 -3.65 19,997,800 Trade
GE General Electric Co 23.83 0.25 1.06 192,404,370 Trade
CVX Chevron Corporation 118.64 0.44 0.37 4,924,257 Trade
SO Southern Company (The) 52.21 0.21 0.40 4,122,806 Trade
MOS Mosaic Company (The) 21.41 0.31 1.47 2,353,319 Trade
PCG Pacific Gas & Electric Co. 57.86 0.86 1.51 7,758,334 Trade
AKS AK Steel Holding Corporation 6.19 0.15 2.48 16,818,138 Trade
CEL Cellcom Israel Ltd. 9.66 -0.06 -0.62 3,997 Trade
KBH KB Home 27.05 0.02 0.07 1,609,968 Trade
JNJ Johnson & Johnson 142.40 0.36 0.25 5,634,523 Trade
WMT Wal-Mart Stores Inc. 87.44 1.04 1.20 7,617,753 Trade
AA Alcoa Inc. 47.93 1.39 2.99 4,209,075 Trade
INTC Intel Corporation 40.43 0.34 0.85 18,335,672 Trade
IBM International Business Machines Corp 162.07 1.17 0.73 7,868,803 Trade
RGC Regal Entertainment Group Class A 16.29 -0.27 -1.63 2,023,987 Trade
D Dominion Resources Inc. 80.00 0.05 0.06 2,198,168 Trade
TRV The Travelers Companies Inc. 133.32 0.15 0.11 1,838,805 Trade
BYD Boyd Gaming Corporation 28.70 0.30 1.06 1,119,228 Trade
AAPL Apple Inc. 156.25 0.27 0.17 23,974,146 Trade
CVC Cablevision Systems Corp. n/a n/a n/a 0 Trade
BRRPF BRRPF n/a n/a n/a 0 Trade
WLL Whiting Petroleum Corporation 5.10 0.07 1.39 8,680,084 Trade
S Sprint Corporation 6.93 -0.14 -1.98 15,423,862 Trade
AKRX Akorn Inc. 33.28 0.13 0.39 1,311,566 Trade
EIX Edison International 79.60 0.13 0.16 1,795,688 Trade
NRG NRG Energy Inc. 25.40 -0.14 -0.55 3,744,115 Trade
TWX Time Warner Inc. New 101.83 -0.37 -0.36 5,503,223 Trade
JPM JP Morgan Chase 99.51 1.40 1.43 15,326,608 Trade
AXP American Express Company 92.09 0.19 0.21 4,442,193 Trade
KGC Kinross Gold Corporation 4.16 -0.14 -3.26 9,415,975 Trade
ALB Albemarle Corporation 140.78 1.29 0.92 925,475 Trade
UTX United Technologies Corporation 120.93 1.44 1.21 2,514,652 Trade
CSCO Cisco Systems Inc. 34.25 0.50 1.48 24,361,352 Trade
DIS Walt Disney Company (The) 99.40 0.39 0.39 5,938,716 Trade
VZ Verizon Communications Inc. 49.53 0.32 0.65 16,259,580 Trade
VRSN VeriSign Inc. 108.94 0.75 0.69 702,554 Trade
BAC Bank of America Corporation 27.17 0.59 2.22 83,764,655 Trade
ILMN Illumina Inc. 209.88 4.70 2.29 727,020 Trade
MCD McDonald\'s Corporation 166.30 -0.20 -0.12 5,577,713 Trade
MDC M.D.C. Holdings Inc. 36.34 -0.19 -0.52 449,177 Trade
BT BT Group plc American Depositary Shares 18.12 -0.10 -0.55 396,607 Trade
DD E.I. du Pont de Nemours and Co. 83.93 0.00 0.00 0 Trade
HD Home Depot Inc. (The) 163.43 0.19 0.12 4,166,481 Trade
XOM Exxon Mobil Corporation 83.11 0.37 0.45 9,574,086 Trade
PFE Pfizer Inc. 36.42 0.18 0.50 17,502,245 Trade
APRI Apricus Biosciences Inc 1.82 0.00 0.00 108,843 Trade
BIIB Biogen Inc. 338.10 -4.32 -1.26 1,909,267 Trade
ELN Elan Corp. PLC ADS n/a n/a n/a 0 Trade
HPQ HP Inc. 22.02 0.06 0.27 8,621,009 Trade
BA Boeing Company (The) 264.75 5.71 2.20 3,955,922 Trade
WTFC Wintrust Financial Corporation 81.42 1.82 2.29 266,440 Trade
GWR Genesee & Wyoming Inc. Class A 72.84 1.14 1.59 343,768 Trade
MRK Merck & Company Inc. (new) 63.88 0.13 0.20 10,304,201 Trade
ACOR Acorda Therapeutics Inc. 27.20 0.50 1.87 619,321 Trade
CNK Cinemark Holdings Inc Inc. 35.90 0.10 0.28 758,436 Trade
FE FirstEnergy Corporation 32.13 -0.17 -0.53 3,054,639 Trade
CY Cypress Semiconductor Corporation 15.70 0.09 0.58 2,703,125 Trade
KO Coca-Cola Company (The) 46.38 -0.21 -0.45 9,646,790 Trade
T AT&T Inc. 35.54 -0.15 -0.42 37,835,452 Trade
CAT Caterpillar Inc. 131.36 0.59 0.45 3,086,775 Trade
PENN Penn National Gaming Inc. 25.13 0.21 0.84 432,029 Trade
SLB Schlumberger N.V. 63.15 -1.35 -2.09 19,259,629 Trade
CHU China Unicom (Hong Kong) Ltd 14.35 -0.10 -0.69 338,690 Trade
MSFT Microsoft Corporation 78.81 0.90 1.16 22,866,426 Trade
TXT Textron Inc. 53.74 0.64 1.21 3,015,183 Trade
NWS News Corporation 14.10 0.20 1.44 457,273 Trade
NIHD NII Holdings Inc. 0.46 -0.01 -2.13 527,631 Trade

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