The Consumer Price Index rose 0.3% in September and was up 3.9% year over year. Housing Starts rose 15.0% in September to an annual rate of 658,000 with Building Permits down 5.0% at an annual rate of 594,000. Single Family Home Starts rose 1.7% to 425,000. The Fed’s Beige Book showed that economic activity continued to expand in September and early October. Most districts also described hiring as restrained and that the outlook for business conditions was weak. The Dow Jones Industrial Average traded down to 11,554.28 Wednesday morning then up to 11,633.70, but then declined below 11,480 following the Fed’s Beige Book. The NASDAQ traded down to 2630.02 as Apple (AAPL) shares opened below $400 a share. After a rebound to 2651.88 the NASDAQ fell below 2605 after the Beige Book.
Asian stocks rebounded on Wednesday. The Nikkei 225 gained 0.35% to 8,773 with the Hang Seng rebounding by 1.29% to 18,309. European stocks rebounded despite the Moody’s downgrade of Spanish government debt. The FTSE 100 gained 0.51% to 5,438 with the DAX up 0.49% to 5,906 and the CAC 40 up 0.52% to 3,157. The US Treasury 10-Year yield rose from 2.150 to 2.225 on Wednesday morning then declined to 2.132 in afternoon trading. Gold traded down from $1666.9 the Troy ounce to $1641.1 on Wednesday. Crude oil traded up from $87.93 per barrel to $89.51 on Wednesday then declined to $85.93 in afternoon trading staying well above its 50-day simple moving average at $85.17. The euro versus the dollar traded up from 1.3728 to 1.3868 on Wednesday then consolidated.
Energy
Williams (WMB) has decided to spin off its exploration-and-production business as a public company owned by Williams shareholders rather than float it in an IPO. Anadarko Petroleum (APC) is assigned an Overweight at Morgan Stanley. Sterne Agee has Buys on Alpha Natural Resources (ANR), Consol Energy (CNX), James River (JRCC), and Peabody Energy (BTU). It assigns new Neutrals on Arch Coal (ACI) and Patriot Coal (PCX), while Walter Energy (WLT) is an Underperform. Atwood Oceanics (ATW) is downgraded to Underweight from Overweight at Morgan Stanley, which reduces Rowan Cos (RDC) to Underweight from Equal Weight. CGGVeritas (CGV) is moved to Equal Weight from Overweight at Morgan Stanley. Range Resources (RRC) is reduced to Sell from Hold at Canaccord Genuity. In afternoon trading: Shares of Uranium Resources (URRE) are up about 13.25%. Shares of Frontline (FRO) are up about 8.25%. Shares of Cal Dive International (DVR) are up about 8.25%.
Energy Select Sector SPDR (XLE) was trading at $66.79 at 4:00 PM on Wednesday, down 1.04% on the day – down 2.14% year-to-date.
Materials
Rockwood (ROC) reported Q3 EPS of $1.06 (in-line), while missing revenue by $28M. Crown Holdings (CCK) beat estimates by 2 cents with revenue in-line with estimates. Wells Fago starts Market Performs on AK Steel (AKS), Steel Dynamics (STLD) and United States Steel (X). It has a new Outperform on Nucor (NUE). Sterne Agee has Buys on Alpha Natural Resources (ANR), Consol Energy (CNX), James River (JRCC), and Peabody Energy (BTU). It assigns new Neutrals on Arch Coal (ACI) and Patriot Coal (PCX), while Walter Energy (WLT) is an Underperform. Akzo Nobel N.V. (AKZOY) is reduced to Hold from Buy at the Royal Bank of Scotland. In afternoon trading: Shares of Agnico-Eagle Mines (AEM) are down about 19%. Shares of Jaguar Mining (JAG) are down about 18.75%.
The Materials Select Sector SPDR (XLB) was trading at $32.21 at 4:00 PM on Wednesday, down 2.89% on the day – down 16.14% year-to-date.
Industrials
United Technologies (UTX) beat estimates by 3 cents and revenue by $250M, and gave a 2011 profit outlook at high end of their previous range. Textron (TXT) beat estimates by 14 cents, but missed revenue by $40M, and raised FY11 EPS outlook to $1.05-1.15 from an earlier $0.90-1.00. Sensata Technologies (ST) reported Q3 EPS of $0.50 (in-line), while missing revenue by $1.5M, and sees Q4 EPS of $0.46-0.50 and revenue of $460-480M. Hawaiian Airlines (HA) beat earnings estimates by 14 cents on Q3 revenue of $456M. CSX Corp. (CSX) revenue was in-line with estimates, but EPS fell a penny short. United Rentals (URI) beat estimates by 19 cents and revenue by $109M. Waste Connections (WCN) beat estimates by 2 cents and revenue by $5M. UniFirst (UNF) is upgraded to Outperform from Neutral at brokers Robert W. Baird with a target price of $60. In afternoon trading: Shares of Knoll (KNL) are down about 11%. Shares of United Rentals are up about 8.75%.
The Industrial Select Sector SPDR (XLI) was trading at $31.78 at 4:00 PM on Wednesday, down 1.21% on the day – down 8.86% year-to-date.
Consumer Discretionary
Ford (F) workers have ratified a new four-year labor contract that the automaker agreed with the UAW. Apollo Group (APOL) beat estimates by 8 cents and beat revenue by $20M, and sees FY12 revenue of $4.1-4.3B. Sonic’s (SONC) reported EPS of $0.20 on revenue of $151M (versus estimates of $0.22 on $153M). Citigroup begins Buys on Vera Bradley Inc (VRA), Steven Madden Ltd. (SHOO), and Fossil (FOSL). Sotheby’s (BID) is a new Neutral at Citigroup. Chipotle Mexican Grill (CMG) is a new Neutral at UBS. Zale (ZLC) is now Buy from Neutral at Bank of America-Merrill Lynch. Las Vegas Sands (LVS) is added to the Key Call List at UBS. Ross Stores (RST) and TJX Cos (TJX) are both hoisted to Buy from Hold at ISI Group. American Public Education (APEI) is now Neutral from Buy at Sterne Agee. In afternoon trading: Shares of Coldwater Creek (CWTR) are down about 19%. Shares of Zale (ZLC) are up about 11.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $38.07 at 4:00 PM on Wednesday, down 1.50% on the day – up 1.76% year-to-date.
Consumer Staples
CVS Caremark (CVS) is begun with a Buy at Mizuho, which has a new Neutral on Walgreen (WAG). Coca-Cola (KO) is upgraded to Overweight from Neutral at HSBC Securities. Whole Foods (WFM) gets boosted to Buy from Hold at Jefferies. In afternoon trading: Shares of Green Mountain Coffee Roasters (GMCR) are down about 12.5%. Shares of Supervalu (SVU) are down about 6.25%. Shares of Calavo Growers (CVGW) are up about 7.5%. Actives: Shares of Wal-Mart (WMT) are up about 0.6%. Shares of Safeway (SWY) are up about 1.1%. Shares of Procter & Gamble (PG) are down about a half of a percent. Shares of Altria Group (MO) are down about 0.9%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $30.80 at 4:00 PM on Wednesday, down 0.29% on the day – up 5.08% year-to-date.
Healthcare
Abbott Laboratories (ABT) beat estimates by a penny and revenue by $170M, and sees FY11 EPS of $3.10-3.12. St. Jude Medical (STJ) beat estimates by 2 cents and revenue by $10M. Auxilium Pharmaceuticals (AUXL) is upgraded to Buy from Neutral at Collins Stewart with a target price at $23. Hospira (HSP) is downgraded to Hold from Buy at Capstone. In afternoon trading: Shares of Gentiva Health Services (GTIV) are down about 13%. Shares of Tengion (TNGN) are up about 11.75%. Shares of Human Genome Sciences (HGSI) are up about 9.5%. Shares of Intuitive Surgical (ISRG) are up about 9.25%.
The Health Care Select Sector SPDR (XLV) was trading at $32.49 at 4:00 PM on Wednesday, down 0.18% on the day – up 3.14% year-to-date.
Financials
EU regulators have seized documents from several major banks as part of an investigation into how Euribor rates are set. The banks concerned are not yet known, but past reports have named Barclays (BCS), UBS (UBS), Deutsche Bank (DB), Lloyds (LYG), Citigroup (C), JPMorgan (JPM), and Bank of America (BAC). Northern Trust (NTRS) reported Q3 EPS of $0.70 (in-line), while beating revenue by $9.7M. Comerica (CMA) missed estimates by 4 cents. U.S. Bancorp (USB) beat estimates by 2 cents and revenue by $90M. Morgan Stanley (MS) beat estimates by 82 cents and revenue by $2.5B. Travellers (TRV) missed estimates by 15 cents, but beat revenue by $830M. BlackRock (BLK) beat estimates by 13 cents, but missed revenue by $60M. PNC Financial Services (PNC) beat estimates by 5 cents, but missed revenue by $30M. Knight Capital Group (KCG) beat estimates by 11 cents and revenue by $39.4M. Bank of New York Mellon (BK) beat estimates by a penny, but missed revenue by $30M. Fulton Financial (FULT) beat estimates by a penny, but missed revenue by $4M. Goldman Sachs (GS) gets downgraded to Outperform from Buy at Credit Agricole. In afternoon trading: Shares of Comerica (CMA) are down about 11.25%.
The Financial Select Sector SPDR (XLF) was trading at $12.59 at 4:00 PM on Wednesday, down 1.60% on the day – down 21.10% year-to-date.
Information Technology
Apple (AAPL) missed EPS estimates by 23 cents and revenue by $1.15B. FQ4 results: Shipments of 17.1M iPhones (versus 22M consensus), 11.1M iPads (versus 10M consensus), 4.89M Macs (versus 4.5M consensus) and 6.62M iPods (versus 6.9M consensus). Apple forecasts FQ1 revenue of $37B and EPS of $9.30 (versus consensus of $36.63B and $8.96). Laptop demand in emerging markets and continued strong corporate spending helped Intel (INTC) to shrug off worries about the softening PC market and post Q3 results that topped expectations. EPS rose 17% to $0.65 / share and revenue surged 28% to a record $14.2B. Yahoo (YHOO) reported Q3 EPS before items of $0.21, which beat estimates. However, sales, excluding revenue passed on to partner sites, fell 4.6% to $1.07B, extending what AP described as the “financial mediocrity” that led to Carol Bartz’s firing as CEO. In contrast, Google’s (GOOG) net revenue jumped 37%. Alcatel-Lucent (ALU) intends to sell its Genesys unit, which provides customer-service software, to P-E group Permira for $1.5B, although it will keep the rest of its Enterprise business after initially considering selling it. Samsung (SSNLF) and Google (GOOG) have introduced their Galaxy Nexus device, which includes facial recognition for unlocking the device. Research In Motion (RIMM) again disappointed analysts by unveiling what it called its “next generation platform” for BlackBerry smartphones and tablet, but was little more than a rebranding. FSI International (FSII) reported EPS of $0.05 (below estimates of $0.07), but sales came in at $30M (beating expectations for $28M). Linear Technology (LLTC) missed estimates by 3 cents and revenue by $3M, and expects FQ2 revenue to decline 9%-13% sequentially, compared with forecasts for 2% growth. Powerwave Technologies (PWAV) warns Q3 revenue will be in a range of $75M-$79M (far below a consensus of $168.4M). Juniper’s (JNPR) expects Q4 revenue of $1.16B-$1.22B and EPS of $0.32-$0.36 (largely below a consensus of $1.23B and $0.36). Cree (CREE) missed estimates by a penny with revenue in-line with estimates. LinkedIn (LNKD) is initiated with a Neutral at Lazard. Citrix Systems (CTXS) is now Buy from Hold with an $85 price objective at Needham. Alcatel-Lucent (ALU) is downgraded to Underperform at Jefferies. Juniper Networks (JNPR) is cut to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of Powerwave are down about 43.5%. Shares of Checkpoint Systems (CKP) are down about 21.5%. Shares of ON Semiconductor (ONNN) are down about 15.75%. Shares of Demand Media (DMD) are down about 13%. Shares of Cree are down about 12%. Shares of Alcatel-Lucent are down about 11.5%. Shares of Infinera (INFN) are down about 10.5%.
The Technology Select Sector SPDR (XLK) was trading at $25.32 at 4:00 PM on Wednesday, down 1.94% on the day – up 0.52% year-to-date.
Telecommunications Services
In afternoon trading: Shares of TerreStar (TSTRQ) are down about 30.5%. Shares of Level 3 Communications (LVLT) are down about 5.25%. Actives: Shares of Sprint Nextel (S) are down about 3.5%, while shares of AT&T (T) and Verizon (VZ) are down about a half of a percent. Shares of Frontier Communications (FTR) are down about a half of a percent. Shares of Clearwire (CLWR) are down about 1.4%. Shares of Vodafone (VOD) are down about 0.9%.
The NASDAQ Telecommunications Index (IXTC) was trading at $193.26 at 4:00 PM on Wednesday, down 2.52% on the day – down 14.25% year-to-date.
Utilities
AmeriGas Partners (APU) is downgraded to Sell from Neutral at Citigroup. In afternoon trading: Shares of Dynegy (DYN) are down about 5.9%. Actives: Shares of Duke Energy (DUK) are up about a half of a percent. Shares of AES Corp. (AES) are up about 0.9%. Shares of NiSource (NI) are down about 0.8%. Shares of Genon Energy (GEN) are down about 1.8%. Shares of CenterPoint Energy (CNP) are down about 0.4%. Shares of Southern Co. (SO) are up slightly.
The Utilities Select Sector SPDR (XLU) was trading at $34.11 at 4:00 PM on Wednesday, up slightly on the day – up 8.84% year-to-date.
STOCKS: WMB, APC, ANR, CNX, JRCC, BTU, ACI, PCX, WLT, ATW, RDC, CGV, RRC, URRE, FRO, DVR, ROC, CCK, AKS, STLD, X, NUE, AKZOY, AEM, JAG, UTX, TXT, ST, HA, CSX, URI, WCN, UNF, KNL, F, APOL, SONC, VRA, SHOO, FOSL, BID, CMG, ZLC, LVS, RST, TJX, APEI, CWTR, ZLC, CVS, WAG, KO, WFM, GMCR, SVU, CVGW, WMT, SWY, PG, MO, ABT, STJ, AUXL, HSP, GTIV, TNGN, HGSI, ISRG, BCS, UBS, DB, LYG, C, JPM, BAC, NTRS, CMA, USB, MS, TRV, BLK, PNC, KCG, BK, FULT, GS, AAPL, INTC, YHOO, GOOG, ALU, SSNLF, RIMM, FSII, LLTC, PWAV, JNPR, CREE, LNKD, CTXS, ALU, CKP, ONNN, DMD, INFN, TSTRQ, LVLT, S, T, VZ, FTR, CLWR, VOD, APU, DYN, DUK, AES, NI, GEN, CNP, SO
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