Equities Sector Coverage: Wall Street Slumps on Europe

Sector Recap  |

The Dow Jones Industrial Average opened higher to 12,730.09 but by 10:00 AM was down to 12,653.46. After a short period of stabilization the Dow slumped to 12,521.84 in afternoon trading, which is a test of the 200-day simple moving average at 12,523. The NASDAQ opened higher at 2896.56 but by 10:00AM was down to 2880.67. After stabilizing, the NASDAQ plunged to 2847.22, which is above its 200-day at 2827.

Asian stocks moved lower again on Tuesday. The Nikkei 225 ended the day at 8,488 – down 0.24%. The Hang Seng ended the day at 18,903 – down 0.79%. European exchanges traded back and forth around the flat line, but closes lower on Tuesday. The FTSE 100 ended the day at 5,499 – down 0.63%. The DAX ended the day at 6,390 – down 0.45%. The CAC 40 ended the day at 3,075 – down 0.87%. The yield on the 10-Year US Treasury note rose from 1.418% to 1.465% then declined to 1.393%, which is a new “flight to quality” low.

Gold declined to $1571.0 the Troy ounce then rose to $1584.0, and then declined to $1567.8 as the 50-day and 200-day simple moving averages decline to $1587.0 and $1658.3. Crude oil rebounded from $87.43 per barrel to $89.09 with the 50-day simple moving average at $86.34. The euro versus the dollar traded down from 1.2137 to 1.2045 setting a new 2012 low with the June 2010 low looming at 1.1880.

Energy

Rosneft said it will start talks with BP (BP) about acquiring the BP’s 50% stake in its TNK-BP Russian joint venture. Peabody (BTU) beat Q2 EPS estimates by twenty cents with a miss on the revenue line. Talisman Energy (TLM) has been upgraded to Buy from Hold at Canaccord Genuity. Berry Petroleum (BRY) has been downgraded to Hold from Buy at Stifel Nicolaus. CNOOC (CEO) ahs been downgraded to Underperform from Hold at Jefferies. Dow components – Chevron (CVX) down 2.29%, Exxon Mobil (XOM) down 1.40%.

Energy Select Sector SPDR (XLE) was trading at $66.75 at 3:30 PM on Tuesday, down 2.03% on the day – down 3.44% year-to-date.

Materials

Potlatch (PCH) beat Q2 EPS estimates by three cents with better than expected revenue. Air Products and Chemicals (APD) reported in-line FQ3 EPS with a miss on the revenue line. DuPont (DD) beat Q2 EPS estimates by two cent with a miss on the revenue line. Steel Dynamics (STLD) beat Q2 EPS estimates by a penny with a miss on the revenue line. Celanese (CE) beat Q2 EPS estimates by a nickel with a miss on the revenue line. Dow Components – Alcoa (AA) down 1.11%, DuPont (DD) down 2.04%.

The Materials Select Sector SPDR (XLB) was trading at $34.23 at 3:30 PM on Tuesday, down 1.81% on the day – up 2.18% year-to-date.

Industrials

Carlyle Group (CG) and BC Partners are in joint talks to buy United Tech's (UTX) industrial businesses in a deal likely to be worth more than $3.5 billion. United Parcel Services (UTX) issued downside guidance for FY2012 this morning by lowering expected EPS to $4.50-$4.70 from $4.75-$5.00 versus the $4.83 analyst consensus citing greater uncertainties on behalf of their customers. Shares fell 3.7% pre-market. Illinois Tool Works (ITW) beat Q2 EPS estimates by a penny, but missed on the revenue line. Genesee & Wyoming (GWR) has been upgraded to Overweight from Equal-Weight at Morgan Stanley. Goodyear Tire (GT) has been upgraded to Neutral from Sell at Goldman, whose price target is $13. PulteGroup (PHM) has been downgraded to Negative from Neutral at Susquehanna. Dow components – Boeing Co (BA) down 1.65%, Caterpillar (CAT) down 0.58%, General Electric (GE) down 1.29%, 3M Company (MMM) down 1.63%, United Technologies (UTX) down 1.97%.

The Industrial Select Sector SPDR (XLI) was trading at $34.48 at 3:30 PM on Tuesday, down 1.43% on the day – up 2.16% year-to-date.

Consumer Discretionary

Domino's Pizza (DPZ) beat Q2 EPS estimates by a penny with a miss on the revenue line. Under Armour (UA) reported that earnings were up 6% year over year and raised 2012 guidance and shares traded 3.8% higher premarket. Jarden (JAH) beat Q2 EPS estimates by four cents with in-line revenue. Burger King (BKW) has been initiated with a Neutral rating at Credit Suisse, whose price target it $16. Dunkin’ Brands (DNKN) has been initiated with a Neutral rating at Janney Capital. Apollo Group (APOL) has been initiated with an Overweight rating at JP Morgan, who initiated Neutral ratings on both Bridgepoint Education (BPI) and Capella Education (CPLA) Brinker International (EAT) has been initiated with a Neutral rating at Davenport, which initiates Buy ratings on Bravo Brio Restaurant (BBRG), Darden Restaurants (DRI), and Red Robin Gourmet Burgers (RRBG). Chipotle Mexican Grill (CMG) has been downgraded to Hold from Buy at Argus. DeVry (DV) has been downgraded to Perform from Outperform at Oppenheimer due to revenue and margin concerns. Dow Components – Disney (DIS) flat, Home Depot down 0.24%, McDonalds (MCD) down 1.23%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.73 at 3:30 PM on Tuesday, down 0.88% on the day – up 9.51% year-to-date.

Consumer Staples

Altria (MO) reported that their quarterly earnings increased by 9.3% year over year, and they raised 2012 full-year adjusted guidance. HSN (HSNI) has been initiated with a Market Perform rating at Wells Fargo. JC Penney (JCP) has been initiated with a Neutral rating at Atlantic Equities and an Outperform rating at Oppenheimer. RadioShack (RSH) has been downgraded to Sell from Neutral at UBS. Dow components – Kraft (KFT) down 0.43%, Coca Cola (KO) down 0.77%, Procter & Gamble (PG) down 0.65%, Wal-Mart (WMT) down 0.04%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $34.58 at 3:30 PM on Tuesday, down 0.46% on the day – up 6.43% year-to-date.

Health Care

Health Management Associates (HMA) has been downgraded to Hold from Buy at Jefferies. InterMune (ITMN) has been downgraded to Hold from Buy at Canaccord Genuity. Biogen Idec (BIIB) beat Q2 EPS estimates by 26 cents with a beat on the revenue line. Dow Components – Johnson & Johnson (JNJ) down 1.25%, Merck (MRK) down 1.92%, Pfizer (PFE) down 1.74%.

The Health Care Select Sector SPDR (XLV) was trading at $37.33 at 3:30 PM on Tuesday, down 1.24% on the day – up 7.61% year-to-date.

Financial

Regions Financial (RF) reported better than expected earnings pre-market and the stock rose by 3.3%. PrivateBancorp (PVTB) beat Q2 EPS by three cents. Synovus Financial (SNV) beat Q2 EPS estimates by a penny. American International Group (AIG) has been initiated with an Overweight rating at Evercore. Dow Components – American Express (AXP) down 0.75%, Bank of America (BAC) down 0.92%, JP Morgan Chase (JPM) up 0.15%, Travelers (TRV) down 1.46%.

The Financial Select Sector SPDR (XLF) was trading at $14.17 at 3:30 PM on Tuesday, down 0.63% on the day – up 9.00% year-to-date.

Information Technology

Texas Instruments' (TXN) profit declined 34% to $446 million in the second quarter as revenue slid 4% to $3.3 billion. EPS beat forecasts by three cents. TXN offered sales guidance that was below consensus, warning that economic conditions are causing customers to become "increasingly cautious" in placing new orders. Cisco (CSCO) will lay off another 1,300 workers, or 2% of its workforce, which follows last year's huge restructuring when Cisco slashed 6,500 jobs. VMware (VMW) will acquire Nicira, a start-up with very little revenue for $1.26 billion. Nicira provides software that helps networks run more efficiently, and this will help bolster VMware's efforts to be a top IT infrastructure-management vendor. Akamai Technology (AKAM) has been initiated with an Outperform rating by William Blair. Dow Components – Cisco Systems (CSCO) down 5.79%, Hewlett-Packard (HPQ) down 1.67%, IBM (IBM) down 0.52%, Intel Corp (INTC) down 0.95%, Microsoft (MSFT) down 0.56%.

The Technology Select Sector SPDR (XLK) was trading at $28.12 at 3:30 PM on Tuesday, down 1.26% on the day – up 10.49% year-to-date.

Telecommunication Services

AT&T (T) reported that earnings rose 10% year over year in the second quarter on 5.1 million smartphone sales, 3.7 million iPhone activations, and shares rose 1.5% premarket. This followed the report that AT&T beat Q2 EPS estimates by three cents with a miss on the revenue line. MetroPCS (PCS) has been upgraded to Outperform from Neutral at Macquarie. Motorola Solutions (MSI) has been upgraded to Perform from Underperform at FBR Capital, who set a new price target at $49, on stronger-than-expected government sales. Crown Castle (CCI) and American Tower (AMT) have been downgraded to Equal Weight from Overweight at Evercore. Dow Components – AT&T Inc (T) down 2.85%, Verizon (VZ) down 1.56%.

The NASDAQ Telecommunications Index (IXTC) was trading at $169.76 at 3:30 PM on Tuesday, down 3.11% on the day – down 13.80% year-to-date.

Utilities

Portland General Electric (POR) has been upgraded by Goldman to Neutral-from-Sell. NorthWestern Corporation (NEW) beat Q2 EPS estimates by two cents with a miss on the revenue line. Dominion Resources (D) down 1.31%, Edison International (EIX) down 0.81%, First Energy (FE) down 0.90%, PG&E Corp (PCG) down 1.18%, Southern Company (SO) down 1.19%.

The Utilities Select Sector SPDR (XLU) was trading at $37.05 at 3:30 PM on Tuesday, down 0.99% on the day – up 2.97% year-to-date.

STOCKS: CVX, XOM, BP, BTU, TLM, BRY, CEO, AA, DD, PCH, APD, STLD, CE, BA, CAT, GE, MMM, UTX, CG, ITW, GT, PHM, DIS, HD, MCD, DPZ, UA, JAH, BKW, DNKN, APOL, BPI, CPLA, EAT, BBRG, DRI, RRBG, CMG, DV, KFT, KO, PG, WMT, MO, HSNI, JCP, RSH, JNJ, MRK, PFE, HMA, BIIB, ITMN, AXP, BAC, JPM, TRV, RF, PVTB, SNV, AIG, CSCO, HPQ, IBM, INTC, MSFT, TXN, VMW, AKAM, T, VZ, PCS, MSI, CCI, AMT, D, EIX, FE, PCG, SO, POR, NEW

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CEO CNOOC Limited 161.62 -5.22 -3.13 58,920 Trade
MMM 3M Company 196.10 -6.03 -2.98 2,473,515 Trade
CMG Chipotle Mexican Grill Inc. 457.83 -14.90 -3.15 696,976 Trade
APD Air Products and Chemicals Inc. 155.41 -1.87 -1.19 996,617 Trade
PG Procter & Gamble Company (The) 96.64 0.15 0.16 12,657,340 Trade
GE General Electric Company 7.10 -0.10 -1.39 128,800,697 Trade
CVX Chevron Corporation 113.83 -2.11 -1.82 6,195,492 Trade
SO Southern Company (The) 47.33 -0.22 -0.46 3,710,628 Trade
PCG Pacific Gas & Electric Co. 26.01 -0.50 -1.89 12,100,220 Trade
APOL Apollo Education Group Inc. n/a n/a n/a 0 Trade
GT The Goodyear Tire & Rubber Company 20.78 -0.56 -2.62 3,697,441 Trade
JAH Jarden Corp n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 133.00 -14.84 -10.04 58,140,194 Trade
CG The Carlyle Group L.P. 16.28 -0.80 -4.68 897,703 Trade
AA Alcoa Corporation 28.61 -0.49 -1.68 3,358,975 Trade
INTC Intel Corporation 47.86 -0.43 -0.89 26,372,077 Trade
D Dominion Energy Inc. 76.92 0.87 1.14 9,081,638 Trade
TRV The Travelers Companies Inc. 120.55 -0.95 -0.78 2,097,783 Trade
POR Portland General Electric Co 48.96 -0.53 -1.07 495,685 Trade
MO Altria Group Inc. 52.73 -1.19 -2.21 9,411,611 Trade
ALLY.P.A GMAC Capital Trust I Fixed Rate Floating Rate Trust Preferred Securities Series 2 25.34 0.10 0.40 194,890 Trade
AKAM Akamai Technologies Inc. 65.10 -2.15 -3.20 1,522,742 Trade
DPZ Domino's Pizza Inc 249.01 -1.15 -0.46 528,082 Trade
EIX Edison International 59.64 0.11 0.18 2,377,271 Trade
UA Under Armour Inc. Class C 17.73 -0.08 -0.45 4,256,150 Trade
AXP American Express Company 105.70 -1.00 -0.94 5,245,408 Trade
UTX United Technologies Corporation 118.80 -0.45 -0.38 4,011,638 Trade
TXN Texas Instruments Incorporated 94.26 -1.58 -1.65 6,318,260 Trade
VMW Vmware Inc. Class A 158.58 -2.83 -1.75 1,323,526 Trade
CSCO Cisco Systems Inc. 45.82 -1.65 -3.48 27,364,513 Trade
BTU Peabody Energy Corporation 30.48 -2.01 -6.19 1,123,510 Trade
VZ Verizon Communications Inc. 57.08 -0.01 -0.02 13,960,870 Trade
DNKN Dunkin' Brands Group Inc. 69.44 -1.36 -1.92 972,757 Trade
BAC Bank of America Corporation 24.48 0.08 0.33 92,762,595 Trade
PVTB PrivateBancorp Inc. n/a n/a n/a 0 Trade
MCD McDonald's Corporation 183.29 -3.14 -1.68 4,450,192 Trade
RF Regions Financial Corporation 13.47 -0.31 -2.25 15,312,926 Trade
PFE Pfizer Inc. 43.80 -0.77 -1.73 31,333,031 Trade
BIIB Biogen Inc. 314.55 -5.59 -1.75 1,233,819 Trade
AIG American International Group Inc. 37.49 0.20 0.54 8,176,098 Trade
PHM PulteGroup Inc. 25.61 -0.20 -0.77 4,200,455 Trade
BPI Bridgepoint Education Inc. 7.86 -0.18 -2.24 161,547 Trade
HPQ HP Inc. 22.01 -0.28 -1.26 11,959,572 Trade
MRK Merck & Company Inc. (new) 76.48 -1.98 -2.52 13,259,931 Trade
DRI Darden Restaurants Inc. 103.20 -1.02 -0.98 1,630,996 Trade
PCH PotlatchDeltic Corporation 33.87 -1.09 -3.12 624,476 Trade
AMT American Tower Corporation (REIT) 166.60 -0.20 -0.12 2,193,401 Trade
BP BP p.l.c. 38.66 -0.63 -1.60 6,394,398 Trade
ITW Illinois Tool Works Inc. 131.04 -2.20 -1.65 1,985,761 Trade
FE FirstEnergy Corp. 39.12 -0.32 -0.81 11,758,644 Trade
KO Coca-Cola Company (The) 49.34 -0.13 -0.26 13,836,073 Trade
T AT&T Inc. 30.22 0.31 1.04 42,741,389 Trade
CAT Caterpillar Inc. 126.77 0.87 0.69 4,483,281 Trade
DV ATGE Brown Forman Inc Class B n/a n/a n/a 0
CCI Crown Castle International Corp. (REIT) 114.55 -0.50 -0.43 2,231,127 Trade
JCP J.C. Penney Company Inc. 1.20 -0.07 -5.51 7,317,672 Trade
MSFT Microsoft Corporation 106.03 -3.42 -3.12 47,043,136 Trade
SNV Synovus Financial Corp. 32.20 -0.94 -2.84 2,019,499 Trade
STLD Steel Dynamics Inc. 32.20 -0.18 -0.56 2,989,530 Trade
WMT Walmart Inc. 91.85 -1.11 -1.19 11,493,836 Trade
IBM International Business Machines Corporation 119.90 -0.83 -0.69 4,554,204 Trade
JPM JP Morgan Chase & Co. 100.29 -0.83 -0.82 19,879,525 Trade
DIS The Walt Disney Company 112.20 -1.19 -1.05 7,602,301 Trade
HD Home Depot Inc. (The) 172.29 -1.58 -0.91 4,265,183 Trade
XOM Exxon Mobil Corporation 75.58 -1.40 -1.82 12,669,300 Trade
BA The Boeing Company 318.75 -6.72 -2.06 3,298,436 Trade

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

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