Equities Sector Coverage: Wall Street Soars As Fed Eases Pressure from Europe

Sector Recap |

Ben Bernanke President Barack ObamaStocks advanced as central banks around the world lowered rates on dollar swaps by 50 basis points. The Federal Reserve said that these actions were done to ease strain in the financial markets. Mortgage applications fell 11.7% in the week ending November 25th. The ADP employment report said that the private sector added 206,000 jobs in November. The Chicago PMI improved to 62.6 in November. On Thursday national manufacturing ISM should be 52.0 in November with Construction Spending up 0.1% in October. Then we have the drum-roll for November’s Employment Data with the economy creating 125,000 jobs with a 9.0% unemployment rate. The Dow Jones Industrial Average surged at the open to a morning high at 11,994.60. A rally into the close reached a high of 12045.04. A close today above 11,791 keeps the monthly chart neutral. The NASDAQ traded between 2582.49 and 2607.53 in morning trading above its 50-day simple moving average at 2582. A rally into the close reached a high of 2620.10. A close today below 2642 shifts the monthly chart to negative.

Asian stocks declined on Wednesday with the Nikkei 225 down 0.51% to 8,435 and the Hang Seng down 1.46% to 17,989.  The FTSE 100 gained 2.85% to 5,489, the DAX surged 4.86% to 6,082 and the CAC 40 also surged 4.22% to 3,155. The yield on the US Treasury 10-Year note rose from 1.974 to 2.108 above the 50-day simple moving average at 2.041. Gold tested and held its 50-day simple moving average at $1699.8 and traded as high as $1749.2 the Troy ounce. Crude oil traded up from $98.92 per barrel to $101.75. The oversold euro versus the dollar traded up from 1.3262 to 1.3530.

Energy

SeaDrill (SDRL) reported Q3 EPS of $0.07 (may not be comparable to consensus of $0.72), while beating revenue by $20M. Subsea 7 SA (SUBCY) is initiated with an Overweight at HSBC Securities. Barclays gives Overweight-from-Equal Weight boosts to Anadarko Petroleum (APC), Cenovus Energy (CVE), Nexen (NXY), and Spain’s Repsol SA (REPYY). Cameron International (CAM) is upgraded to Overweight from Neutral at HSBC Securities with a target price of $63. FirstEnergy (FE) is lifted to Buy from Hold at ISI Group. OAO Gazprom (OGZPY) is upgraded to Neutral from Underperform at Credit Suisse. Southwestern Energy (SWN) is downgraded to Equal Weight from Overweight by Barclays. Transocean (RIG) is reduced to Hold from Buy at Argus. In afternoon trading: Shares of Patriot Coal (PCX) are up about 18.25%. Shares of James River Coal (JRCC) are up about 18.25%. Shares of Canadian Solar (CSIQ) are up about 17.5%. Shares of Trina Solar (TSL) are up about 15%.

Energy Select Sector SPDR (XLE) was trading at $70.87 at 4:00 PM on Wednesday, up 5.51% on the day – up 3.84% year-to-date.

Materials

Alcoa (AA) is a new Neutral at Macquarie, which assigns Underperforms on U.S. Steel (X) and AK Steel (AKS) and has an Outperform on Freeport-McMoRan Copper & Gold (FCX). Syngenta (SYT) is a new Buy at Jefferies. Agrium (AGU) is upgraded to Action List Buy from Buy at TD Securities. OM Group (OMG) is upgraded to Buy from Hold at Keybanc. Vulcan Materials (VMC) is moved to Sell from Neutral at Goldman. In afternoon trading: Shares of Avalon Rare Metals (AVL) are up about 19.5%. Shares of U.S. Steel are up about 14%. Shares of ArcelorMittal (MT) are up about 13.5%.

The Materials Select Sector SPDR (XLB) was trading at $34.52 at 4:00 PM on Wednesday, up 5.73% on the day – down 10.13% year-to-date.

Industrials

Siemens (SI) and Diageo (DEO) are among the multinational companies that are preparing for a possible eurozone break-up. Navistar International (NAV) gets boosted to Neutral from Sell at Goldman. Corning (GLW) is cut by 180 degrees, to Underperform from Outperform, at Credit Agricole. In afternoon trading: Shares of AMR Corp. (AMR) are up about 25%. Shares of Manitowoc (MTW) are up about 14%. Shares of A123 Systems (AONE) are up about 11%. Shares of YRC Worldwide (YRCW) are DOWN about 10%.

The Industrial Select Sector SPDR (XLI) was trading at $33.89 at 4:00 PM on Wednesday, up 5.12% on the day – down 2.81% year-to-date.

Consumer Discretionary

Culp’s (CFI) FQ2 beats estimates on a 19% Y/Y jump in revenue. New Oriental Education & Technology (EDU) is covered at Outperform at Credit Suisse. American Axle (AXL), Dana Holding (DAN), and Lear Corp (LEA) are all launched at Sector Perform by RBC Capital, which assigns Outperforms on both Borg Warner (BWA) and Johnson Controls (JCI), and names Tenneco (TEN) a Top Pick. Netflix (NFLX) is now Underperform from Neutral with Wedbush with a price objective of $45. Daimler AG (DDAIF) gets lowered to Neutral from Overweight at JPMorgan. In afternoon trading: Shares of China MediaExpress Holdings (CCME) are up about 300%. Shares of Sotheby’s (BID) are up about 14.5%. Shares of Melco Crown Entertainment (MPEL) are up about 13.25%. Shares of Exide Tech (XIDE) are up about 12%. Shares of Boyd Gaming (BYD) are up about 12%. Shares of Shutterfly (SFLY) are DOWN about 12%. Shares of StoneMor Partners (STON) are DOWN about 11.5%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.74 at 4:00 PM on Wednesday, up 3.11% on the day – up 3.56% year-to-date.

Consumer Staples

Siemens (SI) and Diageo (DEO) are among the multinational companies that are preparing for a possible eurozone break-up. Ralcorp (RAH) missed estimates by 4 cents with revenue in-line with estimates. ConAgra (CAG) is a new Buy at Janney Montgomery Scott. In afternoon trading: Shares of Imperial Sugar (IPSU) are down about 19.25%. Shares of United Natural Foods (UNFI) are up about 8%. Shares of Winn Dixie (WINN) are up about 7.75%. Shares of Central European Distribution (CEDC) are up about 7.5%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $31.90 at 4:00 PM on Wednesday, up 2.34% on the day – up 8.84% year-to-date.

Healthcare

The patent on Pfizer's (PFE) Lipitor, which has generated over $130B in sales, ends today, although the company is hoping it can hold onto a third of the three million Americans who take it. Citigroup begins Buys on British based GlaxoSmithKline (GSK) and Shire PLC (SHPGY) and assigns a Neutral on AstraZeneca (AZN). Accretive Health (AH) gets increased to Outperform from Perform at Oppenheimer. In afternoon trading: Shares of Progenics Pharmaceuticals (PGNX) are up about 18.25%. Shares of Metabolix (MBLX) are up about 17.5%.

The Health Care Select Sector SPDR (XLV) was trading at $33.88 at 4:00 PM on Wednesday, up 3.61% on the day – up 7.56% year-to-date.

Financials

S&P yesterday lowered the rating on 37 of the largest financial institutions in the world, including almost all major U.S. banks, with Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Goldman Sachs (GS) among those hit. RenaissanceRe (RNR) is a new Buy at Goldman Sachs. RLJ Lodging Trust (RLJ) is a new Neutral at Janney Montgomery Scott, which begins Chesapeake Lodging Trust (CHSP) with a Buy. Amerisafe (AMSF) is taken to Neutral from Buy at Suntrust. In afternoon trading: Shares of Ambac Financial Group (ABKFQ) are up about 23.75%. Shares of MBIA Inc. (MBI) are up about 17.5%. Shares of Regions Financial (RF) are up about 12%. Shares of Alpha Bank (ALBKY) are DOWN about 23%.

The Financial Select Sector SPDR (XLF) was trading at $12.81 at 4:00 PM on Wednesday, up 6.17% on the day – down 19.69% year-to-date.

Information Technology

The consortium led by Silver Lake and Microsoft (MSFT) has bid around $16.60 a share for a minority stake in Yahoo (YHOO), somewhat lower than an offer made by TPG Capital. OmniVision Technologies’ (OVTI) reported Q2 EPS of $0.48 on revenue of $217.9M (versus consensus of $0.32 and $214.6M). The company is guiding for FQ3 revenue of $160M-$180M and EPS of $0.05-$0.17 (well below a consensus of $201.4M and $0.26). Moneygram (MGI) is a new Neutral at JPMorgan. SanDisk (SNDK) is named a Long Research Tactical Idea at Morgan Stanley. In afternoon trading: Shares of Zoom Tech (ZOOM) are up about 24%. Shares of Hanwha SolarOne (HSOL) are up about 18.5%. Shares of JA Solar (JASO) are up about 16.25%.

The Technology Select Sector SPDR (XLK) was trading at $25.62 at 4:00 PM on Wednesday, up 3.85% on the day – up 1.71% year-to-date.

Telecommunications Services

Despite approving AT&T's (T) request to withdraw its T-Mobile (DTEGY) application, the FCC yesterday issued a blistering 109-page report saying the $39B deal would limit competition in virtually every U.S. city. Leap Wireless (LEAP) is lifted to Outperform from Sector Perform at RBC Capital. In afternoon trading: Shares of Leap Wireless are up about 15.25%. Shares of Towerstream (TWER) are up about 9.25%. Shares of Neutral Tandem (TNDM) are up about 8.25%. Shares of MetroPCS (PCS) are up about 7.75%.

The NASDAQ Telecommunications Index (IXTC) was trading at $201.13 at 4:00 PM on Wednesday, up 4.26% on the day – down 10.76% year-to-date.

Utilities

Calpine (CPN) is cut to Hold from Buy at Jefferies. In afternoon trading: Shares of Dynegy (DYN) are up about 9%. Shares of Veolia Environment (VE) are up about 6.6%. Actives: Shares of Duke Energy (DUK) are up about 2.4%. Shares of Southern Company (SO) are up about 0.8%. Shares of AES Corp. (AES) are up about 1.8%. Shares of Exelon (EXC) are up about 2.25%. Shares of PPL Corp. (PPL) are up about 2%. Shares of Genon Energy (GEN) are up about 4%. Shares of PG&E (PCG) are up about 1.3%.

The Utilities Select Sector SPDR (XLU) was trading at $35.21 at 4:00 PM on Wednesday, up 2.89% on the day – up 12.35% year-to-date.

STOCKS: SDRL, SUBCY, APC, CVE, NXY, REPYY, CAM, FE, OGZPY, SWN, RIG, PCX, JRCC, CSIQ, TSL, AA, X, AKS, FCX, SYT, AGU, OMG, VMC, AVL, MT, SI, DEO, NAV, GLW, AMR, MTW, AONE, YRCW, CFI, EDU, AXL, DAN, LEA, BWA, JCI, TEN, NFLX, DDAIF, CCME, BID, MPEL, XIDE, BYD, SFLY, STON, RAH, CAG, IPSU, UNFI, WINN, CEDC, PFE, GSK, SHPGY, AZN, AH, PGNX, MBLX, BAC, C, MS, GS, RNR, RLJ, CHSP, AMSF, ABKFQ, MBI, RF, ALBKY, MSFT, YHOO, OVTI, MGI, SNDK, ZOOM, HSOL, JASO, T, DTEGY, LEAP, TWER, TNDM, PCS, CPN, DYN, VE, DUK, SO, AES, PPL, GEN, PCG

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
AA Alcoa Inc. 9.60 -0.05 -0.52 3,867,673
AES The AES Corporation 12.99 -0.09 -0.69 864,845
AGU Agrium Inc. 90.58 0.69 0.76 81,620
AKS AK Steel Holding Corporation 4.89 0.04 0.72 5,002,117
AMSF AMERISAFE Inc. 59.00 0.22 0.37 38,009
APC Anadarko Petroleum Corporation 58.17 -0.10 -0.17 1,182,320
AXL American Axle & Manufacturing Holdings Inc. 16.32 -0.10 -0.61 116,174
AZN Astrazeneca PLC 33.78 0.17 0.51 2,349,977
BAC Bank of America Corporation 15.18 -0.12 -0.75 19,447,892
BID Sotheby\'s 36.48 -0.40 -1.07 141,653
BWA BorgWarner Inc. 34.35 -0.14 -0.41 507,977
BYD Boyd Gaming Corporation 19.37 0.11 0.57 298,729
C Citigroup Inc. 46.24 -0.14 -0.29 4,814,365
CAG ConAgra Foods Inc. 43.11 -0.14 -0.31 603,836
CAM Cameron International Corp n/a n/a n/a 0
CFI Culp Inc. 31.18 -0.30 -0.95 7,214
CHSP Chesapeake Lodging Trust of Beneficial Interest 22.77 0.05 0.22 40,767
CPN Calpine Corporation 13.35 -0.12 -0.89 1,042,439
CSIQ Canadian Solar Inc. 13.49 0.32 2.47 1,009,350
CVE Cenovus Energy Inc 12.96 -0.15 -1.11 571,137
DAN Dana Holding Corporation When-Issued 15.05 0.05 0.33 352,521
DEO Diageo plc 116.51 0.06 0.05 103,555
DUK Duke Energy Corporation (Holding Company) 80.54 -0.89 -1.09 561,592
EDU New Oriental Education & Technology Group Inc. Spo 45.99 -1.18 -2.50 191,771
FCX Freeport-McMoRan Inc. 10.32 0.11 1.08 9,152,504
FE FirstEnergy Corporation 33.35 -0.32 -0.95 720,989
GEN Genesis Healthcare Inc. 2.62 -0.14 -5.07 41,179
GLW Corning Incorporated 23.42 0.09 0.41 2,409,884
GS The Goldman Sachs Group Inc. 162.11 -0.78 -0.48 413,868
GSK GlaxoSmithKline PLC 43.35 0.03 0.07 628,816
HSOL HSOL n/a n/a n/a 0
JASO JA Solar Holdings Co. Ltd. 6.09 0.03 0.50 192,128
JCI Johnson Controls Inc. 45.19 0.21 0.46 1,887,015
LEA Lear Corporation 119.13 0.42 0.35 90,644
MBI MBIA Inc. 7.51 -0.01 -0.13 141,891
MBLX Metabolix Inc. 0.43 0.02 4.90 103,812
MGI Moneygram International Inc. 7.04 -0.06 -0.78 5,930
MPEL Melco Crown Entertainment Limited 16.03 -0.06 -0.37 424,078
MS Morgan Stanley 31.39 0.04 0.13 1,828,296
MSFT Microsoft Corporation 57.79 -0.16 -0.28 5,011,712
MT ArcelorMittal 6.03 0.00 0.00 8,327,100
MTW Manitowoc Company Inc. (The) 4.44 0.01 0.23 134,044
NAV Navistar International Corporation 21.73 0.36 1.68 275,150
NFLX Netflix Inc. 96.41 -0.66 -0.68 2,125,110
OMG OM Group, Inc. n/a n/a n/a 0
OVTI OmniVision Technologies Inc. n/a n/a n/a 0
PCG Pacific Gas & Electric Co. 61.85 -0.51 -0.82 475,766
PFE Pfizer Inc. 33.76 -0.08 -0.22 3,530,767
PGNX Progenics Pharmaceuticals Inc. 5.98 -0.08 -1.32 190,766
PPL PPL Corp 34.86 -0.38 -1.08 1,412,072
RF Regions Financial Corporation 9.67 -0.05 -0.46 4,237,190
RIG Transocean Ltd (Switzerland) 9.31 -0.11 -1.17 7,542,257
RLJ RLJ Lodging Trust of Beneficial Interest $0.01 par 20.88 0.08 0.38 110,242
RNR RenaissanceRe Holdings Ltd. 120.30 -0.04 -0.03 27,903
SDRL Seadrill Limited (Bermuda) 1.88 -0.05 -2.71 2,603,699
SFLY Shutterfly Inc. 44.10 -0.06 -0.14 51,009
SNDK SanDisk Corp. n/a n/a n/a 0
SO Southern Company (The) 52.56 -0.28 -0.54 1,435,328
STON StoneMor Partners L.P. Rep Limited Partnership Int 24.96 -0.08 -0.31 20,342
SWN Southwestern Energy Company 12.96 -0.17 -1.29 2,433,730
SYT Syngenta AG 87.94 0.12 0.14 137,887
T AT&T Inc. 40.76 -0.71 -1.70 8,007,625
TEN Tenneco Inc. 56.96 0.00 0.00 69,033
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.39 -0.03 -0.24 910,139
TWER Towerstream Corporation 1.40 0.03 2.19 1,190,832
UNFI United Natural Foods Inc. 39.00 -0.14 -0.36 78,164
VMC Vulcan Materials Company (Holding Company) 114.58 0.46 0.40 920,058
YELP Yelp Inc. Class A 40.47 -1.20 -2.88 927,806
YHOO Yahoo! Inc. 43.28 -0.09 -0.21 2,259,376
YRCW YRC Worldwide Inc. 11.84 -0.27 -2.23 78,331

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