Initial Jobless Claims rose to 428,000 in the latest week getting further away from the 350,000 recessionary threshold. CPI rose 0.4% in August and is up 3.8% year over year. The NY Fed Empire manufacturing survey fell to -8.82 in September with the employment component shedding jobs at -5.43. Industrial Production rose 0.2% in August with Capacity Utilization at 77.4%. The Philly Fed Index remains weak at -17.5 in September. The Dow Jones Industrial Average continued to rally for the fourth consecutive session trading above 11,400 on news of central bank support for European banks. The NASDAQ continued to outperform trading above 2600 for the first time since August 31st.
Asian stocks rebounded on Thursday with the Nikkei 225 gaining 1.76% to 8,669 and the Hang Seng higher by 0.71% to 19,182. European stocks rallied as the ECB and other central banks provided dollar liquidity. The FTSE 100 rebounded 2.11% to 5,338. The DAX surged by 3.15% to 5,508. The CAC 40 jumped 3.27% to 3046. The yield on the 10-Year US Treasury rose from 1.977 percent to 2.118. Freddie Mac reported that the 30-Year fixed rate mortgage is at a record low rate of 4.09%. Gold traded down from $1829.7 the Troy ounce to $1775.0, as a potential double top forms on the daily chart. Crude oil traded up from $88.01 per barrel to $90.15, remaining under the 50- day simple moving average at $90.55. The euro versus the US dollar rebounded from 1.3706 to 1.3934 on Federal Reserve and ECB intervention to support the euro.
Energy
A report released Wednesday said BP (BP) managers were acutely aware of cost overruns that contributed to poor decisions that “added incremental risk, and may have contributed to the ultimate failure” of the Macondo well last year. Trina Solar (TSL) is begun with a Buy at Auriga, which starts Suntech Power (STP) and Yingli Green Energy (YGE) with Sells on each. Arch Coal (ACI) and Peabody Enjergy (BTU) are both hoisted to Buy from Hold at Deutsche Bank. James River Coal (JRCC) is lowered to Hold from Buy at Deutsche Bank. Energy Transfer (ETP) is taken to Equal Weight from Overweight by Barclays with a new target of $49. In afternoon trading: Shares of Frontline (FRO) are up about 6%. Shares of Sandridge Energy (SD) are up about 5.1%. Shares of Kodiak Oil & Gas (KOG) are up about 5%.
Energy Select Sector SPDR (XLE) was trading at $67.51 at 4:00 PM on Thursday, up 1.99% on the day – down 1.09% year-to-date.
Materials
Arcelor Mittal (MT) is moved to Buy from Hold at Citigroup. Scotts Miracle-Gro (SMG) gets cut to Neutral from Buy at Bank of America-Merrill. In afternoon trading: Shares of Boise (BZ) are up about 10.5%. Shares of Silvercorp Metals (SVM) are up about 8.8%. Shares of Carpenter Technology (CRS) are up about 6.4%. Shares of Kronos Worldwide (KRO) are up about 6.1%. Shares of Ferro (FOE) are up about 5.5%. Shares of Zagg (ZAGG) are down about 6.6%.
The Materials Select Sector SPDR (XLB) was trading at $34.59 at 4:00 PM on Thursday, up 1.71% on the day – down 9.95% year-to-date.
Industrials
Union Pacific (UNP) is upgraded to Buy from Neutral at UBS. KAR Auction Services (KAR) is reduced to Underperform from Buy at Bank of America-Merrill Lynch. In afternoon trading: Shares of American Semiconductor (AMSC) are down about 13.1%. Shares of YRC Worldwide (YRCW) are down about 10.7%. Shares of SatCom Technology (SATC) are down about 6.8%. Shares of SmartHeat (HEAT) are up about 6.9%. Shares of Tata Motors (TTM) are up about 6.5%.
The Industrial Select Sector SPDR (XLI) was trading at $31.98 at 4:00 PM on Thursday, up 2.03% on the day – down 8.30% year-to-date.
Consumer Discretionary
Netflix (NFLX) lowered its Q3 U.S. subscriber growth forecast to 21.8M streaming and 14.2M DVD, from a previous (July 25) 22M and 15M. Cablevision (CVC) inked a deal with Time Warner (TWX) to allow subscribers to stream content to mobile devices. The deal comes as cable providers look to fend off Netflix (NFLX) and its ilk. Highly-touted IPOs that are underwater include Pandora (P), Boingo (WIFI) and Renren (RENN), while LinkedIn (LNKD), Dunkin’ Brands (DNKN) and Zillow (Z) are among those bucking the trend. Deutsche Bank has new Sells on Wal-Mart (WMT) – $48 price objective, Safeway (SWY) – $15 price objective, J.C. Penney (JCP) – $22 price objective, and Saks (SKS) – $8 price objective. DB has new Buys on Costco Wholesale (COST) – $89 price objective, Dollar Tree (DLTR) – $81 price objective, Macy’s (M) – $34 price objective, Nordstrom (JWN) – $55 price objective, Kroger (KR) – $28 price objective, and Whole Foods Market (WFM) – $75 price objective. DB has new Holds on Family Dollar Stores (FDO) – $53 price objective, Target (TGT) – $50 price objective, and The Fresh Market (TFM) – $33 price objective. Genuine Parts (GPV) gets downgraded to Underperform from Buy at Bank of America-Merrill, which also moves AutoNation (AN) to Underperform from Neutral and Goodyear Tire (GT) to Neutral from Buy. In afternoon trading: Shares of Netflix are down about 18.7%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $37.48 at 4:00 PM on Thursday, up 1.68% on the day – up 0.19% year-to-date.
Consumer Staples
PepsiCo (PEP) unveiled management changes Wednesday as it struggles to keep up with Coca-Cola (KO) and keep discontent investors in check. Deutsche Bank has new Sells on Wal-Mart (WMT) – $48 price objective, Safeway (SWY) – $15 price objective, J.C. Penney (JCP) – $22 price objective, and Saks (SKS) – $8 price objective. DB has new Buys on Costco Wholesale (COST) – $89 price objective, Dollar Tree (DLTR) – $81 price objective, Macy’s (M) – $34 price objective, Nordstrom (JWN) – $55 price objective, Kroger (KR) – $28 price objective, and Whole Foods Market (WFM) – $75 price objective. DB has new Holds on Family Dollar Stores (FDO) – $53 price objective, Target (TGT) – $50 price objective, and The Fresh Market (TFM) – $33 price objective. British American Tobacco (BTI) gets an Outperform-from-Neutral boost at Credit Suisse. Colgate-Palmolive (CL) is lifted to Buy from Neutral at Bank of America-Merrill Lynch. Estee Lauder (EL) is moved to Buy from Neutral by Bank of America-Merrill. Goldman Sachs lifted J.M. Smucker (SJM) to Buy from Neutral, and added the company to its Conviction Buy List. Dole Food (DOLE) is upgraded to Overweight from Neutral at JP Morgan. Procter & Gamble (PG) is lowered to Neutral from Buy at Bank of America-Merrill Lynch. ConAgra (CAG) is now Neutral from Buy at Goldman. Origin Agritech (SEED) gets moved to Market Perform from Outperform at Rodman & Renshaw. In afternoon trading: Shares of Central European Distribution (CEDC) are up about 9.5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.86 at 4:00 PM on Thursday, up 1.18% on the day – up 5.29% year-to-date.
Healthcare
Complete Genomics (GNOM) is assigned an Outperform by Mizuho. Onyx Pharmaceuticals (ONXX) is now Buy from Neutral with a $40 target at Goldman. In afternoon trading: Shares of HCA Holdings (HCA) are up about 11.6%. Shares of Arena Pharmaceuticals (ARNA) are up about 8.3%. Shares of Savient Pharmaceuticals (SVNT) are up about 7.5%. Shares of Alexion Pharmaceuticals (ALXN) are up about 5.9%. Shares of Vivus (VVUS) are up about 5.7%.
The Health Care Select Sector SPDR (XLV) was trading at $33.02 at 4:00 PM on Thursday, up 0.92% on the day – up 4.83% year-to-date.
Financials
UBS’s (UBS) expected CHF500M Q3 profit looks poised to turn into a CHF1B-plus loss after the bank announced this morning a rogue trader racked up about $2B in trading losses. The SEC is in advanced talks with Citigroup (C) to settle allegations (read: a $200M fine) that the bank held short positions against a $1B mortgage-bond CDO it sold in 2007. SEC is also negotiating a much smaller fine ($5M) with Credit Suisse (CS), the CDO’s collateral manager. Another probe is examining whether Mizuho (MFG) misled investors in mortage-bond deals. Goldman Sachs starts People’s United Financial (PBCT) with a Sell, has a new Neutral on Valley National Bancorp (VLY), and begins Signature Bank (SBNY) at a Buy. Nomura upgrades Barclays (BCS) and HSBC (HBC) to Buy from Neutral. Nomura downgrades Credit Agricole and Lloyds Banking Group (LYG) to Neutral from Buy, and slashes Societe Generale to Reduce from Buy. MSCI Inc (MSCI) is downgraded to Equal Weight from Overweight at Morgan Stanley. In afternoon trading: Shares of The PMI Group (PMI) are up about 19.5%. Shares of UBS are down about 10.7%.
The Financial Select Sector SPDR (XLF) was trading at $12.92 at 4:00 PM on Thursday, up 2.54% on the day – down 19.00% year-to-date.
Information Technology
Ad executives say Yahoo (YHOO), Microsoft (MSFT) and AOL Inc. (AOL) are in the midst of forming a web ad alliance in an effort to take on Google (GOOG). Sources say Facebook won’t IPO until late 2012 in order to keep employees focused on product development and not exits. Highly-touted IPOs that are underwater include Pandora (P), Boingo (WIFI) and Renren (RENN), while LinkedIn (LNKD), Dunkin’ Brands (DNKN) and Zillow (Z) are among those bucking the trend. NCR Corp (NCR) is a new Outperform and $23 target price at Oppenheimer. LinkedIn (LNKD) is launched as a Hold at Argus. In afternoon trading: Shares of Perfect World (PWRD) are down about 18.75% after announcing the company now expects Q3 revenue of $109.8M (versus its previous forecast of $118.3M). Shares of Aixtron (AIXG) are down about 16% after the company reduced its full year revenue guidance, citing increasing short-term market uncertainty.
The Technology Select Sector SPDR (XLK) was trading at $24.80 at 4:00 PM on Thursday, up 1.60% on the day – down 1.55% year-to-date.
Telecommunications Services
Struggling carrier Clearwire (CLWR) announced a partnership with China Mobile (CHL) for developing hardware supporting TD-LTE 4G technology. TD-LTE offers higher potential download capacity than the FDD-LTE solutions supported by Verizon (VZ) and AT&T (T), and can also be deployed in cheaper spectrum. Highly-touted IPOs that are underwater include Pandora (P), Boingo (WIFI) and Renren (RENN), while LinkedIn (LNKD), Dunkin’ Brands (DNKN) and Zillow (Z) are among those bucking the trend. In afternoon trading: Shares of TerreStar (TSTRQ) are down about 10.75%.
The NASDAQ Telecommunications Index (IXTC) was trading at $197.63 at 4:00 PM on Thursday, up 1.24% on the day – down 12.31% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Duke Energy (DUK) are up about 1.7%. Shares of Genon Energy (GEN) are relatively unchanged. Shares of AES Corp (AES) are up about 2.5%. Shares of CenterPoint Energy (CNP) are up about 0.75%. Shares of Southern (SO) are up about 0.8%. Shares of NiSource (NI) are up about 1.7%. Shares of Exelon (EXC) are up about 2.1%. Shares of CMS Energy (CMS) are up about 2.1%.
The Utilities Select Sector SPDR (XLU) was trading at $33.94 at 4:00 PM on Thursday, up 1.25% on the day – up 8.30% year-to-date.
STOCKS: BP, TSL, STP, YGE, ACI, BTU, JRCC, ETP, FRO, SD, KOG, MT, SMG, BZ, SVM, CRS, KRO, FOE, ZAGG, UNP, KAR, AMSC, YRCW, SATC, HEAT, TTM, NFLX, CVC, TWX, P, WIFI, RENN, LNKD, DNKN, Z, WMT, SWY, JCP, SKS, COST, DLTR, M, JWN, KR, WFM, FDO, TGT, TFM, GPV, AN, GT, PEP, KO, BTI, CL, EL, SJM, DOLE, PG, CAG, SEED, CEDC, GNOM, ONXX, HCA, ARNA, SVNT, ALXN, VVUS, UBS, C, CS, MFG, PBCT, VLY, SBNY, BCS, HBC, LYG, MSCI, PMI, YHOO, MSFT, AOL, GOOG, NCR, LNKD, PWRD, AIXG, CLWR, CHL, VZ, T, TSTRQ, DUK, GEN, AES, CNP, SO, NI, EXC, CMS
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