Equities Sector Coverage: Wall Street Turning Bearish?

Sector Recap  |

The Dow Jones Industrial Average declined to a day’s low at 12,845.58 below its 50-day simple moving average at 13,012. The NASDAQ’s declined to a day’s low at 2946.04 below its 50-day simple moving average at 3013. Asian stocks were lower on Monday. The Nikkei 225 ended their session at 9,542 – down 0.20% on the day. The Hang Seng ended their session at 20,624 – up 1.84% on the day. European stocks moved higher on Friday. European exchanges began the week with heavy losses in reaction to potentially perilous political developments in the Netherlands and France. There were also several disappointing economic reports from across the world. The FTSE 100 ended their session at 5,666 – down 1.85% on the day. The DAX ended their session at 6,523 – down 3.36% on the day. The CAC 40 ended their session at 3,098 – down 2.83% on the day.

The yield on the 10-Year US Treasury declined from 1.966 percent to 1.909 below its 50-day and 200-day simple moving averages at 2.080 and 2.107. Gold declined from $1644.2 the Troy ounce to $1623.6 below the “death cross” defined by the 50-day simple moving average at $1685.1 being below the 200-day simple moving average at $1695.7. Crude oil declined from $103.90 per barrel to $101.82, staying below its 50-day simple moving average at $104.80. The euro versus the dollar declined from 1.3209 to 1.3108 back below its 50-day simple moving average at 1.3202.

Energy

SandRidge's (SD) shares are down 44% in the past year, but the company expected to double its ail output over the next three years. Helix Energy Solutions Group (HLX) beat Q1 EPS estimates by seventeen cents with a beat on the revenue line. Suncor Energy (SU) has been upgraded to Outperform from Market Perform at BMO Capital. Exxon Mobil (XOM) has been upgraded to Outperform from Market Perform at Raymond James. First Solar (FSLR) have been downgraded to Sell from Hold with a $9 price target at Maxim Group. Dow components - Chevron (CVX) was down 1.2% in morning trading with Exxon Mobil (XOM) slipping 0.4%.

Energy Select Sector SPDR (XLE) was trading at $68.93 at 3:30 PM on Monday, down 0.04% on the day – down 0.29% year-to-date.

Materials

Given the “death cross” in gold futures the major gold mining stocks are down about 4.0% in morning trading. This weakness includes Barrick Gold (ABX) and Newmont Mining (NEM). Potlatch (PCH) beat Q1 EPS estimates by six cents with better than expected revenue. Dow components - Alcoa (AA) is down 2.2% in morning trading around $9.50 per share as the $10 threshold provides resistance. DuPont (DD) declined 2.0%.

The Materials Select Sector SPDR (XLB) was trading at $35.93 at 3:30 PM on Monday, down 1.51% on the day – up 7.25% year-to-date.

Industrials

Eaton (ETN) beat Q1 EPS estimates by two cents with in-line revenue. D.R. Horton (DHI) beat FQ2 EPS of $0.13 estimates by nine cents with a beat on the revenue line. BE Aerospace (BEAV) beat Q1 EPS estimates by a nickel with better than expected revenue. Westport Innovations (WPRT) has been upgraded to Sector Perform from Underperform at CIBC World Markets. Forward Air (FWRD) has been downgraded to Neutral from Outperform at Robert W. Baird, whose price target is $40. Lennar (LEN) has been downgraded to Fair Value from Buy at CRT Capital. Dow components - Boeing Co (BA) lost 1.4% in morning trading, with Caterpillar (CAT) down 1.9%, General Electric (GE) losing 2.0%, 3M Company (MMM) down 1.4%, and United Technologies (UTX) slumping 1.5%.

The Industrial Select Sector SPDR (XLI) was trading at $36.33 at 3:30 PM on Monday, down 1.20% on the day – up 7.64% year-to-date.

Consumer Discretionary

Philips Electronics' (PHG) reported that their Q1 net profit jumped over 80%. Despite this favorable report the company plans to shed 4,500 jobs by 2014. Netflix (NFLX) is scheduled to release its Q1 results after the close today, and is expected to report a loss per share of 27 cents down from a profit of 1.11. A key to improved revenue will be the growth in online customers in the US. Hasbro (HAS) missed Q1 EPS estimates by eight cents with a miss on the revenue line. Wolverine World Wide (WWW) reported Q1 EPS of 64 cents with a miss on the revenue line. Lions Gate Entertainment (LGF) has been upgraded to Above Average from Average by Caris & Company following an 18.1% decline in the share price. Dow Components - Disney (DIS) lost 1.1% in morning trading with McDonalds (MCD) down 0.7%.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $44.16 at 3:30 PM on Monday, down 1.08% on the day – up 13.17% year-to-date.

Consumer Staples

Nestle (NSRGY.PK) is paying $11.85 billion in cash to acquire Pfizer's (PFE) baby food business, which allows Nestle to expand its infant-formula business into emerging markets, particularly in China. Facing evidence of widespread corruption in Mexico, Wal-Mart (WMT) shut down an internal investigation and failed to notify officials with regard to the retailers allegations of widespread corruption in Mexico. Groupon (GRPN) has been upgraded to Overweight from Equal Weight at Evercore. Dow components - Home Depot (HD) slipped 1.1% in morning trading with Kraft (KFT) down 1.3%, Coca Cola (KO) lower by 0.6%, Procter & Gamble (PG) down 1.2%, and Wal-Mart (WMT) crushed by nearly 5.0%.

The Consumer Staples Select Sector SPDR (XLP) was trading at $33.81 at 3:30 PM on Monday, down 1.46% on the day – up 4.06% year-to-date.

Health Care

AstraZeneca (AZN) will acquire Ardea Biosciences (RDEA) for $1.26 billion giving the company access to a new drug for treating gout patients. AstraZeneca (AZN) has been upgraded to Equal Weight from Underweight by Barclays. HeartWare (HTWR) has been upgraded to Overweight from Equal Weight at Barclays. Novo-Nordisk A/S (NVO) has been downgraded to Underweight from Equal Weight at Barclays. Dow Components - Johnson & Johnson (JNJ) slipped 0.3%, Merck (MRK) lost 0.7%, and Pfizer (PFE) was down 0.6%.

The Health Care Select Sector SPDR (XLV) was trading at $36.99 at 3:30 PM on Monday, down 0.80% on the day – up 6.63% year-to-date.

Financials

MGIC Investment (MTG) beat Q1 EPS estimates by 27 cents with better than expected revenue. Bank of Hawaii (BPH) beat Q1 EPS estimates by thirteen cents. SunTrust Banks (STI) beat Q1 EPS estimates by twelve cents with in-line revenue. Royal Bank of Canada (RY) has been upgraded to Buy from Neutral at Bank of America-Merrill Lynch. Progressive Corp (PGR) has been downgraded to Neutral from Buy at Citigroup. Dow Components - American Express (AXP) lost 1.4%, Bank of America (BAC) slumped 3.6%, JP Morgan (JPM) fell 0.9%, and Travelers (TRV) lost 1.0%.

The Financial Select Sector SPDR (XLF) was trading at $15.07 at 3:30 PM on Monday, down 0.72% on the day – up 15.92% year-to-date.

Information Technology

Texas Instruments (TXN) is expected to report that earnings fell for the fourth quarter in a row, with EPS dropping to 29 cents from 55 cents with revenue at $3.06 billion. TI is a supplier to Apple (AAPL) and Nokia (NOK). Xerox (XRX) beat Q1 EPS estimates by a penny with in-line revenue. Check Point Software (CHKP) beat Q1 EPS estimates by two cents with in-line revenue. Research In Motion (RIMM) has been initiated with a Hold rating at TD Securities. F5 Networks (FFIV) has been initiated with an Overweight rating by Morgan Stanley. ARM Holdings (ARMH) the maker of chips for Apple’s iPad and iPhone has been upgraded to Neutral from Underweight at JPMorgan. BMC Software (BMC) has been upgraded to Positive from Neutral at Susquehanna. Rambus (RMBS) has been downgraded to Hold from Buy at BWS Financial. Dow Components - Cisco Systems (CSCO) was down 1.3% in morning trading, Hewlett-Packard (HPQ) lost 1.3%, IBM (IBM) declined 1.2%, Intel Corp (INTC) clipped 0.2%, and Microsoft (MSFT) lost 0.8%.

The Technology Select Sector SPDR (XLK) was trading at $29.07 at 3:30 PM on Monday, down 0.72% on the day – up 14.22% year-to-date.

Telecommunication Services

Vodafone (VOD) agreed to acquire Cable & Wireless Worldwide for $1.7 billion in cash, which allows Vodafone to offload surging Internet traffic in the UK to a fixed network with more capacity. Research In Motion (RIMM) has been initiated with a Hold rating at TD Securities. France Telecom (FTE) has been upgraded to Buy from Reduce at Nomura. Dow components - AT&T (T) was down 0.6% in morning trading with Verizon (VZ) down 0.5%.

The NASDAQ Telecommunications Index (IXTC) was trading at $207.07 at 3:30 PM on Monday, down 1.11% on the day – up 5.15% year-to-date.

Utilities

Abovenet (ABVT) has been downgraded to Sector Perform from Outperform at RBC Capital. Dominion Resources (D) was down 0.5% in morning trading, Edison International (EIX) lost 1.4%, First Energy (FE) was down 0.5%, and PG&E Corp (PCG) lost 0.5%.
The Utilities Select Sector SPDR (XLU) was trading at $34.82 at 3:30 PM on Monday, down 0.57% on the day – down 3.22% year-to-date.

STOCKS: CVX, XOM, SD, HLX, SU, FSLR, AA, DD, ABX, NEM PCH, BA, CAT, GE, MMM, UTX, ETN, BEAV, FWRD, LEN, WPRT, DIS, MCD, PHG, NFLX, HAS, WWW, LGF, HD, KFT, KO, PG, WMT, NSRGY.PK, GRPN, JNJ, MRK, PFE, RDEA, AZN, HTWR, NVO, AXP, BAC, JPM, TRV, MTG, BPH, STI, RY, PGR, CSCO, HPQ, IBM, INTC, MSFT, TXN, AAPL, NOK, CHKP, FFIV, RIMM, ARMH, BMC, RMBS, T, VZ, VOD, FTE, D, EIX, FE, PCG, ABVT

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.


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Companies

Symbol Name Price Change % Volume
MMM 3M Company 149.91 3.06 2.08 2,562,010 Trade
BEAV B/E Aerospace Inc. n/a n/a n/a 0 Trade
PG Procter & Gamble Company (The) 120.78 -0.65 -0.54 2,791,487 Trade
GE General Electric Company 11.09 -0.23 -2.00 41,689,431 Trade
CVX Chevron Corporation 99.69 -1.02 -1.01 5,194,484 Trade
PCG Pacific Gas & Electric Co. 17.37 -0.20 -1.14 2,265,755 Trade
RMBS Rambus Inc. 14.51 0.09 0.62 217,540 Trade
ARMH ARM Holdings plc n/a n/a n/a 0 Trade
LGF Lions Gate Entertainment Corporation n/a n/a n/a 0 Trade
JNJ Johnson & Johnson 144.53 -0.12 -0.09 3,628,828 Trade
AA Alcoa Corporation 14.45 -0.05 -0.34 1,942,779 Trade
WWW Wolverine World Wide Inc. 28.15 -0.26 -0.92 322,885 Trade
INTC Intel Corporation 59.81 0.08 0.13 13,467,840 Trade
D Dominion Energy Inc. 87.70 -0.09 -0.10 1,443,294 Trade
TRV The Travelers Companies Inc. 129.41 -1.38 -1.06 615,579 Trade
LOB Live Oak Bancshares Inc. 16.80 0.01 0.06 46,098 Trade
EIX Edison International 74.68 -0.40 -0.53 643,581 Trade
AXP American Express Company 120.04 -0.86 -0.71 2,127,535 Trade
UTX United Technologies Corporation 140.20 1.39 1.00 3,923,106 Trade
VOD Vodafone Group Plc 18.71 -0.11 -0.58 1,709,408 Trade
HTWR Heartware International Inc. n/a n/a n/a 0 Trade
TXN Texas Instruments Incorporated 118.84 0.46 0.38 2,765,790 Trade
RY Royal Bank of Canada 78.94 -0.85 -1.07 692,450 Trade
CSCO Cisco Systems Inc. 42.41 -0.33 -0.77 19,370,771 Trade
VZ Verizon Communications Inc. 57.32 0.20 0.34 7,505,044 Trade
PHG Koninklijke Philips N.V. NY Registry Shares 43.82 -0.15 -0.34 588,274 Trade
ABX GOLD Barrick Gold Corporation (BC) n/a n/a n/a 0
BAC Bank of America Corporation 30.84 -0.24 -0.77 42,203,538 Trade
ETN Eaton Corporation PLC 98.08 -0.14 -0.14 1,465,617 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 3.97 0.06 1.53 25,286,662 Trade
MCD McDonald's Corporation 211.83 -0.27 -0.13 1,671,774 Trade
LEN Lennar Corporation Class A 65.69 -0.76 -1.14 1,852,787 Trade
PFE Pfizer Inc. 35.11 1.18 3.48 23,663,093 Trade
NVO Novo Nordisk A/S 61.15 0.53 0.87 561,891 Trade
FSLR First Solar Inc. 47.31 -1.26 -2.59 1,285,360 Trade
WPRT Westport Fuel Systems Inc 2.14 -0.03 -1.38 520,634 Trade
HPQ HP Inc. 23.05 -0.30 -1.28 8,684,684 Trade
AZN Astrazeneca PLC 47.54 0.46 0.97 1,744,480 Trade
NFLX Netflix Inc. 375.65 15.56 4.32 4,929,620 Trade
MRK Merck & Company Inc. (new) 80.54 0.27 0.34 5,306,208 Trade
HLX Helix Energy Solutions Group Inc. 7.21 0.07 0.91 739,459 Trade
FWRD Forward Air Corporation 61.44 -0.14 -0.23 37,627 Trade
GRPN Groupon Inc. 1.41 -0.08 -5.37 11,321,299 Trade
SD SandRidge Energy Inc. 2.08 0.01 0.24 55,016 Trade
FE FirstEnergy Corp. 48.87 -0.02 -0.04 1,481,485 Trade
HAS Hasbro Inc. 83.23 0.22 0.27 1,009,913 Trade
PGR Progressive Corporation (The) 80.09 0.09 0.11 924,997 Trade
CHKP Check Point Software Technologies Ltd. 105.08 -1.30 -1.22 861,955 Trade
KO Coca-Cola Company (The) 57.95 0.13 0.22 6,638,176 Trade
T AT&T Inc. 37.36 0.01 0.03 18,663,849 Trade
CAT Caterpillar Inc. 128.64 -0.36 -0.28 2,025,272 Trade
MTG MGIC Investment Corporation 12.74 -0.07 -0.51 1,282,154 Trade
MSFT Microsoft Corporation 170.44 2.37 1.41 32,399,860 Trade
FFIV F5 Networks Inc. 126.98 0.19 0.15 316,671 Trade
SU Suncor Energy Inc. 28.94 -0.18 -0.62 1,811,546 Trade
WMT Walmart Inc. 114.47 0.08 0.07 3,050,451 Trade
IBM International Business Machines Corporation 141.54 -0.17 -0.12 2,331,564 Trade
AAPL Apple Inc. 293.21 5.13 1.78 31,342,216 Trade
JPM JP Morgan Chase & Co. 127.35 1.09 0.86 10,144,517 Trade
DIS The Walt Disney Company 123.62 -4.57 -3.57 17,616,197 Trade
HD Home Depot Inc. (The) 237.25 -0.13 -0.05 3,536,281 Trade
XOM Exxon Mobil Corporation 53.62 -0.58 -1.07 15,297,277 Trade
BA The Boeing Company 308.49 4.35 1.43 4,080,102 Trade

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Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
GOOG

     
XOM

     
BRK.A

     
FB

     
JNJ

     
WFC

     
T

     
NFLX

     
TSLA

     
V

     
UNH

     
PG

     

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