Equities Sector Coverage: Wall Street Slumps on Europe

Sector Recap |

Wall StreetThe 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

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Companies

Symbol Name Price Change % Volume
CEO CNOOC Limited 162.21 4.88 3.10 45,027 Trade
MMM 3M Company 196.24 0.72 0.37 536,491 Trade
CMG Chipotle Mexican Grill Inc. 473.20 10.04 2.17 295,300 Trade
APD Air Products and Chemicals Inc. 157.85 1.38 0.88 248,419 Trade
PG Procter & Gamble Company (The) 77.28 0.84 1.10 2,614,484 Trade
GE General Electric Company 12.87 0.11 0.82 15,017,455 Trade
CVX Chevron Corporation 125.32 2.73 2.23 2,191,900 Trade
SO Southern Company (The) 45.59 0.30 0.66 915,118 Trade
PCG Pacific Gas & Electric Co. 42.04 1.51 3.73 3,508,852 Trade
APOL Apollo Education Group Inc. n/a n/a n/a 0 Trade
GT The Goodyear Tire & Rubber Company 24.57 0.00 0.00 826,745 Trade
JAH Jarden Corp n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 122.77 1.32 1.09 1,145,620 Trade
CG The Carlyle Group L.P. 22.55 0.20 0.89 67,375 Trade
WMT Walmart Inc. 84.61 0.40 0.48 1,892,142 Trade
AA Alcoa Corporation 45.40 0.59 1.32 770,200 Trade
INTC Intel Corporation 52.46 0.27 0.52 10,231,532 Trade
IBM International Business Machines Corporation 141.24 -0.01 -0.01 830,022 Trade
D Dominion Energy Inc. 66.92 0.32 0.48 545,165 Trade
TRV The Travelers Companies Inc. 125.06 1.61 1.30 247,374 Trade
POR Portland General Electric Co 42.52 0.53 1.27 146,726 Trade
MO Altria Group Inc. 57.12 0.43 0.76 1,810,523 Trade
ALLY.P.A GMAC Capital Trust I Fixed Rate Floating Rate Trust Preferred Securities Series 2 25.96 -0.01 -0.05 17,881 Trade
AKAM Akamai Technologies Inc. 80.41 -1.28 -1.57 509,326 Trade
DPZ Domino's Pizza Inc 292.32 1.56 0.54 148,203 Trade
EIX Edison International 61.46 0.79 1.30 505,849 Trade
UA Under Armour Inc. Class C 20.97 -0.11 -0.51 574,100 Trade
JPM JP Morgan Chase & Co. 107.39 -0.12 -0.11 3,488,713 Trade
AXP American Express Company 97.76 1.13 1.17 974,390 Trade
UTX United Technologies Corporation 124.41 0.93 0.75 669,649 Trade
TXN Texas Instruments Incorporated 111.87 -0.25 -0.22 916,642 Trade
VMW Vmware Inc. Class A 148.22 -3.81 -2.51 555,541 Trade
CSCO Cisco Systems Inc. 43.05 -0.11 -0.24 5,674,810 Trade
DIS The Walt Disney Company 106.54 0.65 0.61 2,094,237 Trade
BTU Peabody Energy Corporation 45.98 0.31 0.68 150,059 Trade
VZ Verizon Communications Inc. 49.60 0.97 1.99 6,359,426 Trade
DNKN Dunkin' Brands Group Inc. 70.02 0.69 0.99 387,507 Trade
BAC Bank of America Corporation 29.32 0.03 0.10 18,326,833 Trade
PVTB PrivateBancorp Inc. n/a n/a n/a 0 Trade
MCD McDonald's Corporation 162.96 2.43 1.51 1,168,968 Trade
RF Regions Financial Corporation 18.76 -0.16 -0.85 2,782,367 Trade
HD Home Depot Inc. (The) 199.39 -0.92 -0.46 948,067 Trade
XOM Exxon Mobil Corporation 81.58 1.89 2.37 3,935,337 Trade
PFE Pfizer Inc. 36.46 0.16 0.43 2,774,879 Trade
BIIB Biogen Inc. 296.04 -1.30 -0.44 342,959 Trade
AIG American International Group Inc. 54.49 0.24 0.44 715,034 Trade
PHM PulteGroup Inc. 28.78 -0.39 -1.34 1,526,816 Trade
BPI Bridgepoint Education Inc. 6.80 -0.16 -2.33 31,496 Trade
HPQ HP Inc. 23.78 0.28 1.19 2,966,066 Trade
BA The Boeing Company 338.08 0.42 0.12 1,002,146 Trade
MRK Merck & Company Inc. (new) 61.61 0.43 0.69 1,540,826 Trade
DRI Darden Restaurants Inc. 108.77 1.71 1.60 978,340 Trade
PCH PotlatchDeltic Corporation 48.45 0.85 1.79 132,676 Trade
AMT American Tower Corporation (REIT) 141.80 0.12 0.08 367,789 Trade
BP BP p.l.c. 45.92 1.76 3.99 4,297,088 Trade
ITW Illinois Tool Works Inc. 142.24 1.48 1.05 237,166 Trade
FE FirstEnergy Corp. 35.22 0.07 0.18 651,029 Trade
KO Coca-Cola Company (The) 43.18 0.09 0.21 4,372,952 Trade
T AT&T Inc. 31.75 0.15 0.46 17,407,282 Trade
CAT Caterpillar Inc. 140.44 0.91 0.65 1,849,653 Trade
DV ATGE Brown Forman Inc Class B n/a n/a n/a 0
CCI Crown Castle International Corp. (REIT) 103.08 0.17 0.17 177,338 Trade
JCP J.C. Penney Company Inc. Holding Company 2.69 -0.07 -2.54 3,351,911 Trade
MSFT Microsoft Corporation 99.89 -1.25 -1.24 10,649,831 Trade
CPLA Capella Education Company 100.90 -0.05 -0.05 11,211 Trade
SNV Synovus Financial Corp. 55.40 0.68 1.24 489,460 Trade
STLD Steel Dynamics Inc. 47.35 0.84 1.81 381,799 Trade

Comments

Emerging Growth

Margaux Resources Ltd.

Margaux Resources Ltd is a Calgary based resource company. The Company is focused on its Jersey Emeral Tungsten-Zinc property located in the southeast portion of British Columbia.