Equities Sector Coverage: Wall Street Trades Higher as Investors Remain Optimistic

Sector Recap |

NYSE Wall StreetThe Dow Jones Industrial Average traded down to 12,782.57 then traded above 12,900 going into the final hour of trading, which was above its May 2nd 2011 high at 12,876.00. The NASDAQ opened below 2900 on Tuesday but then rebounded to 2910.27. The S&P 500, Dow Transports and Russell 2000 still lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.

Asian stocks closed slightly lower on Tuesday with the Nikkei 225 ending their session 8,918 – down 0.13% on the day. The Hang Seng closed at 20,699 – down 0.05% on the day. European stocks opened lower as German production plummets in December, but by the closes these markets were mixed. The FTSE 100 ended their session at 5,890 – down 0.03% on the day; the DAX ended their session at 6,754 – down 0.16% on the day; and the CAC 40 ended their session at 3,412 – up 0.18% on the day.

The yield on the 10-Year US Treasury rose from 1.896 percent to 1.993 above its 50-day simple moving average at 1.949. Gold traded down to $1712.6 the Troy ounce then up to $1752.6. Crude oil traded down to $95.84 per barrel then up to $99.13 versus 50-day and 200-day simple moving averages at $99.18 and $94.81. The euro versus the dollar rebounded from 1.3092 to 1.3268.

Energy

House Republicans will to try to push through the approval of the Keystone pipeline using a highway funding bill after President Obama blocked TransCanada's (TRP) $7B project last month. BP (BP) reported Q4 EPS of $2.41 (versus consensus of $0.26) and revenue of $96.34B (versus consensus of $108.02B). Anadarko Petroleum’s (APC) Q4 beats across the board minus Deepwater Horizon charges as core earnings climb on an increase in domestic production. Pioneer Natural Resources (PXD) beat estimates by 17 cents and revenue by $4M. Lufkin Industries (LUFK) is lifted to Buy from Neutral at Suntrust. Newfield Exploration (NFX) is taken to Neutral from Buy at UBS. Repsol SA (REPYY) is reduced to Neutral from Buy at Natixis.

Energy Select Sector SPDR (XLE) was trading at $74.02 at 4:00 PM on Tuesday, up 0.52% on the day – up 7.07% year-to-date. The January change was +2.26%. The 2011 change was -1.29%.

Materials

Xstrata (XSRAY) has formally announced that it has agreed to merge with Glencore in an all-share deal that will create a company worth $90B. The tie-up values Xstrata at £39.1B ($61.9B), or £12.90 a share, a 15.2% premium on its stock price before news of the deal emerged last week. ArcelorMittal (MT) reported Q4 EPS loss of $0.65 (versus consensus of $0.14), while missing revenue by $0.6B. Rentech Nitrogen Partners (RNF) is resumed with an Outperform recommendation and $30 price objective at Imperial Capital. Globe Specialty Metals (GSM) is moved to Neutral from Overweight at JP Morgan. Yamana Gold (AUY) is downgraded to Hold from Buy at Dahlman Rose due to valuation issues. Zoltek (ZOLT) is now Underperform from Hold at Needham. In afternoon trading: Shares of RTI International Metals (RTI) are down about 13%.

The Materials Select Sector SPDR (XLB) was trading at $37.63 at 4:00 PM on Tuesday, down 0.11% on the day – up 12.33% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Industrials

Emerson Electric Company (EMR) missed estimates by a penny, while beating revenue by $20M, and sees sales growth of 2%-4% in FY12 with EPS falling in a range of $3.45-$3.60. Dun & Bradstreet (DNB) beat estimates by 11 cents, while missing revenue by $2.5M. Seaspan (SSW) is moved to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of TBS International (TBSI) are down about 61% as the company has filed for Chapter 11 bankruptcy protection, yesterday. Shares of SatCon Technology (SATC) are up about 51% after announcing a partnership with Great Wall Computer Company Limited (GWPC), a majority-owned subsidiary of China Electronics Corporation.

The Industrial Select Sector SPDR (XLI) was trading at $37.13 at 4:00 PM on Tuesday, down 0.11% on the day – up 10.01% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Consumer Discretionary

Toyota's (TM) FQ3 net profit slipped 13.5% to ¥80.9B ($1.05B) but topped analyst forecasts as revenue rose 4.1% to ¥4.865T. However, a faster-than-expected recovery in demand and cost cuts prompted Toyota to raise its FY 2012 profit forecast to ¥200B from ¥180B. Yum! Brands (YUM) beat estimates by a penny and revenue by $80M. Standard Pacific (SPF) beat estimates by 3 cents and revenue by $18M. Coinstar's (CSTR) Q4: Redbox revenue +39.5% Y/Y, coin revenue +4.8% Y/Y. The company expects Q1 revenue of $530M-$555M and EPS of $0.76-$0.91, compared with Street estimates of $514.5M and $0.86. It expects 2012 revenue of $2.075B-$2.25B and EPS of $3.80-$4.30, compared with estimates of $2.17B and $3.86. Sirius XM Radio (SIRI) is a new Underweight at Barclays. PetSmart (PETM) is picked up with a Neutral at Northcoast. Bayerische Motoren Werke (BAMXY) aka BMW Group is boosted to Overweight from Neutral at HSBC Securities. Hanesbrands (HBI) gets hoisted to Buy from Hold at BB&T Capital. Select Comfort (SCSS) is boosted to Outperform from Neutral at Wedbush. Urban Outfitters (URBN) is slashed to Sell from Hold with a $23 target at Brean Murray. Warnaco Group (WRC) gets cut to Hold from Buy by the broker. Fossil (FOSL) is taken to Hold from Buy. Porsche (POAHY) is now Neutral from Overweight at HSBC Securities. Gannett (GCI) is downgraded to Neutral from Buy at Lazard. In afternoon trading: Shares of The McClatchy Company (MNI) are up about 24%. Shares of Coinstar (CSTR) are up about 18.5%. Shares of Standard Pacific (SPF) are up about 17%. Shares of K12 Inc. (LRN) are down about 11%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.37 at 4:00 PM on Tuesday, up 0.47% on the day – up 8.59% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Consumer Staples

Coca-Cola (KO) has given a sweet forecast to a sugar conference in Dubai, saying that it aims to double net revenues to over $200B by 2020 from $100B in 2010. Coca-Cola's (KO) Q4: Flagship brand Coca-Cola saw sales up 3% Y/Y. Energy drinks volume up 19% Y/Y. Geographic sales growth: Europe +4.2%, North America +3.5%, Latin America +8.5%, Pacific +11.6%. Walgreen (WAG) is slashed to Sell from Neutral at Citigroup. Carrefour SA (CRRFY) is lowered to Neutral from Buy at BNP Paribas. In afternoon trading: Heavily Traded Stocks: Shares of Coca Cola (KO) are up about 0.9%. Shares of Walgreens (WAG) are down about 2.2%. Shares of Altria Group (MO) are up about 0.7%. Shares of Procter & Gamble (PG) are up about 0.4%. Shares of CVS Caremark (CVS) are up about 0.2%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.49 at 4:00 PM on Tuesday, up slightly on the day – unchanged year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Health Care

GlaxoSmithKline (GSK) reported Q4 EPS of 0.28 pence (misses by 0.02) on revenue of £6.97B. Becton Dickinson (BDX) beat estimates by 4 cents with revenue in-line with estimates. Lincare (LNCR) reported Q4 EPS of $0.51 (in-line), while beating revenue by $9M. Amylin Pharmaceuticals (AMLN) reported Q4 EPS of $0.09 (versus consensus of -$0.16) and revenue of $164.9M (in-line). AstraZeneca (AZN) is moved to Underperform from Neutral at Bank of America-Merrill Lynch. Achillion Pharmaceuticals (ACHN) is lowered to Underperform from Neutral at Bank of America-Merrill Lynch. Henry Schein Inc (HSIC) is cut to Neutral from Outperform at Credit Suisse. In afternoon trading: Shares of Biosante Pharmaceuticals (BPAX) are down about 16%. Shares of Achillion Pharmaceuticals (ACHN) are down about 13%.

The Health Care Select Sector SPDR (XLV) was trading at $36.15 at 4:00 PM on Tuesday, up 0.36% on the day – up 4.21% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Financials

UBS's (UBS) Q4 net profit plummeted 76% to 393M Swiss francs ($427.9M) and came in way below analyst expectations as revenue fell 16% to 5.97B francs. The New York Fed is set to auction off another $6B of former AIG mortgage bonds this week, The Wall Street Journal reports, and has invited Barclays (BCS), Credit Suisse (CS), Goldman Sachs (GS), Morgan Stanley (MS) and RBS to participate. UBS (UBS) missed estimates by CHF0.09 and revenue by CHF 0.21B. UnumProvident (UNM) beat estimates by 3 cents with revenue in-line with estimates. Cantor Fitzgerald covers CoreSite Realty (COR) at a Buy, has a Hold on BioMed Realty (BMR), and starts Digital Realty Trust (DLR) with a Sell. Charles Schwab Corp (SCHW) is lifted to Buy from Hold at ISI Group. Mid-America Apartment Communities (MAA) is juiced to Buy from Hold at Jefferies. SL Green Realty (SLG) is moved to Hold from Buy at Jefferies. Aon Corp (AON) is now Neutral from Buy at Citigroup. In afternoon trading: Shares of MF Global (MFGLQ) are down about 20.5%.

The Financial Select Sector SPDR (XLF) was trading at $14.660 at 4:00 PM on Tuesday, down slightly on the day – up 12.77% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Information Technology

Oracle (ORCL) has rejected a $272M award in an IP theft case against SAP (SAP) as it looks for a bigger payout to match an original jury verdict of $1.3B in the case. Facebook's (FB) definition of an active user appears to be very broad, according to details sifted out of its prospectus by The New York Times. Users that click on the "Like" button or share content are counted as active, as well as anyone that uses their Facebook log-in credentials on other sites. Vishay Intertechnology (VSH) missed estimates by 4 cents and revenue by $19M. Bankrate’s (RATE) Q4 beats estimates across the board on a 47% Y/Y jump in revenue. PMC-Sierra’s (PMCS) Q4 EPS comes in line but misses on revenue. NCR (NCR) beat estimates by 8 cents and revenue by $60M. International Business Machines (IBM) is begun with a Buy at Sterne Agee. Diebold (DBD) is moved to Neutral from Underweight at JP Morgan. Sohu.com (SOHU) is now Neutral from Positive at Susquehanna and Hold from Buy with the Royal Bank of Scotland. Changyou.com (CYOU) is moved to Neutral from Buy at Goldman. Bankrate (RATE) is reduced to Hold from Buy at Stifel Nicolaus. In afternoon trading: Shares of FriendFinder Networks (FFN) are up about 15.25%. Shares of Smith Micro Software (SMSI) are up about 14%.

The Technology Select Sector SPDR (XLK) was trading at $27.80 at 4:00 PM on Tuesday, up 0.25% on the day – up 9.23% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Telecommunication Services

In afternoon trading: Heavily Traded Stocks: Shares of Sprint Nextel (S) are up about 0.8%, while shares of AT&T (T) are up about a 0.3% and shares of Verizon (VZ) are down about 0.7%. Shares of Frontier Communications (FTR) are down about 1.3%. Shares of Clearwire (CLWR) are up about 4.4%. Shares of Vodafone (VOD) are down about 1.1%.

The NASDAQ Telecommunications Index (IXTC) was trading at $217.80 at 4:00 PM on Tuesday, up 0.14% on the day – up 10.60% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Utilities

In afternoon trading: Heavily Traded Stocks: Shares of Genon Energy (GEN) are up about 1.9%. Shares of Duke Energy (DUK) are up about 1.2%. Shares of Exelon (EXC) are up about 0.3%. Shares of CenterPoint Energy (CNP) are up about 0.8%. Shares of Southern Company (SO) are up about 0.8%. Shares of American Electric Power (AEP) are up about 0.8%.

The Utilities Select Sector SPDR (XLU) was trading at $34.93 at 4:00 PM on Tuesday, up 0.72% on the day – down 2.92% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

STOCKS: TRP, BP, APC, PXD, LUFK, NFX, REPYY, XSRAY, MT, RNF, GSM, AUY, ZOLT, RTI, EMR, DNB, SSW, TBSI, SATC, GWPC, TM, YUM, SPF, CSTR, SIRI, PETM, BAMXY, HBI, SCSS, URBN, WRC, FOSL, POAHY, GCI, MNI, LRN, KO, WAG, CRRFY, WAG, MO, PG, CVS, GSK, BDX, LNCR, AMLN, AZN, ACHN, HSIC, BPAX, UBS, BCS, CS, GS, MS, UNM, COR, BMR, DLR, SCHW, MAA, SLG, AON, MFGLQ, ORCL, SAP, FB, VSH, RATE, PMCS, NCR, IBM, DBD, SOHU, CYOU, FFN, SMSI, S, T, VZ, FTR, CLWR, VOD, GEN, DUK, EXC, CNP, SO, AEP

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
ACHN Achillion Pharmaceuticals Inc. 8.69 0.25 2.96 4,856,974
AEP American Electric Power Company 66.66 0.06 0.09 2,031,124
AON Aon plc Class A (UK) 112.15 -1.21 -1.07 799,849
APC Anadarko Petroleum Corporation 59.50 -1.71 -2.79 11,432,700
AUY Yamana Gold Inc. (Canada) 4.49 -0.20 -4.26 19,561,614
AZN Astrazeneca PLC 33.97 -0.31 -0.90 3,795,020
BCS Barclays PLC 8.83 -0.20 -2.21 4,993,335
BDX Becton Dickinson and Company 179.50 -2.05 -1.13 1,175,868
BMR Biomed Realty Trust Inc n/a n/a n/a 0
BP BP p.l.c. 33.96 -0.30 -0.88 5,138,003
CNP CenterPoint Energy Inc (Holding Co) 24.19 0.08 0.33 3,008,593
COR CoreSite Realty Corporation 77.47 -0.25 -0.32 331,305
CVS CVS Health Corporation 90.60 0.03 0.03 3,865,273
CYOU Changyou.com Limited 27.66 -1.02 -3.56 453,356
DBD Diebold Incorporated 24.49 -0.20 -0.81 902,151
DLR Digital Realty Trust Inc. 97.95 -0.14 -0.14 2,209,675
DNB Dun & Bradstreet Corporation (The) 135.17 -0.48 -0.35 163,053
DUK Duke Energy Corporation (Holding Company) 82.52 0.01 0.01 2,348,821
EMR Emerson Electric Company 51.92 -0.88 -1.67 2,997,351
EXC Exelon Corporation 34.80 -0.42 -1.19 3,946,652
FB Facebook Inc. 127.96 -2.12 -1.63 28,326,266
FOSL Fossil Group Inc. 30.35 0.21 0.70 870,672
FTR Frontier Communications Corporation 4.33 0.00 0.00 19,247,444
GCI Gannett Co Inc (New) 11.75 0.20 1.73 804,559
GEN Genesis Healthcare Inc. 2.72 -0.07 -2.51 154,075
GS The Goldman Sachs Group Inc. 165.13 -2.89 -1.72 3,421,183
GSK GlaxoSmithKline PLC 43.42 -0.16 -0.37 2,128,068
GSM Ferroglobe PLC 8.84 -0.23 -2.54 1,187,494
HBI Hanesbrands Inc. 25.81 -0.34 -1.30 1,583,037
HSIC Henry Schein Inc. 164.45 -2.83 -1.69 679,837
IBM International Business Machines Corp 154.98 -1.13 -0.72 2,702,153
KO Coca-Cola Company (The) 42.74 -0.22 -0.51 8,852,719
LRN K12 Inc 13.98 -0.21 -1.48 143,699
MAA Mid-America Apartment Communities Inc. 96.18 0.30 0.31 853,379
MNI McClatchy Company (The) 15.18 0.01 0.07 12,158
MO Altria Group Inc. 63.87 -0.25 -0.39 4,428,499
MS Morgan Stanley 31.91 -0.33 -1.02 9,400,557
MT ArcelorMittal 6.06 0.11 1.85 16,724,071
NCR NCR Corporation 31.74 -0.20 -0.63 585,713
NFX Newfield Exploration Company 41.64 -1.66 -3.83 1,989,880
ORCL Oracle Corporation 39.23 -0.28 -0.71 14,017,314
PG Procter & Gamble Company (The) 87.76 -1.23 -1.38 48,281,375
PMCS PMC-Sierra Inc. n/a n/a n/a 0
PXD Pioneer Natural Resources Company 175.53 -3.52 -1.97 1,366,217
RNF Rentech Nitrogen Partners L.P. n/a n/a n/a 0
S Sprint Corporation 6.64 0.02 0.30 8,699,931
SAP SAP SE ADR (Sponsored) 91.54 -0.82 -0.89 726,275
SCHW Charles Schwab Corporation (The) 30.67 -0.57 -1.82 5,727,548
SCSS Select Comfort Corporation 25.56 -0.25 -0.97 319,134
SIRI Sirius XM Holdings Inc. 4.21 0.00 0.00 43,030,687
SLG SL Green Realty Corporation 113.83 0.15 0.13 522,801
SMSI Smith Micro Software Inc. 2.28 -0.17 -6.90 84,405
SO Southern Company (The) 53.53 0.05 0.09 4,282,665
SOHU Sohu.com Inc. 44.00 -0.48 -1.08 100,912
SPF null n/a n/a n/a 0
SSW Seaspan Corporation 13.94 -0.15 -1.06 232,831
T AT&T Inc. 41.28 0.17 0.41 18,867,573
TM Toyota Motor Corporation 117.66 -3.14 -2.60 402,204
TRP TransCanada Corporation 47.80 -0.48 -0.99 1,170,529
UBS UBS Group AG Registered 13.81 -0.16 -1.15 1,147,236
UNM Unum Group 35.01 -0.50 -1.41 964,967
URBN Urban Outfitters Inc. 35.66 -0.07 -0.20 1,359,119
VOD Vodafone Group Plc 29.15 -0.48 -1.62 6,594,085
VSH Vishay Intertechnology Inc. 13.98 -0.26 -1.83 855,014
VZ Verizon Communications Inc. 52.56 0.21 0.40 13,014,796
YUM Yum! Brands Inc. 90.64 0.17 0.19 2,180,788

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