The Dow Jones Industrial Average traded to a new 2011 high above 12,765 Thursday afternoon. The NASDAQ lagged and did not trade above its Wednesday’s high at 2870.80 until the final half hour of trading. The Dow Transports traded above 5500 closing in on its May 2008 high at 5536.57.
U.S. stocks rallied throughout Fed Chief Bernanke’s first ever news conference Wednesday afternoon. The Dow Industrial Average tacked on 96 points to 12,691 up 9.6% year to date. The NASDAQ added 22 points to 2870 up 8.2% year to date with this close above the high of October 2007. Asian stocks were mixed overnight but the Nikkei 225 rallied 1.6% to 9850. The yield on the 10-Year US Treasury note closed Wednesday at 3.351 percent and traded down to 3.298 this morning following weaker than expected economic data. Initial Jobless Claims spiked higher to 429,000 last week, significantly above the 350,000 recessionary threshold. Advanced Real GDP for the first quarter 2011 came in at 1.8% below 2.0% as projected by Bernanke at yesterday’s press conference.
Continuing the Fed’s easy money policies resulted in additional commodity speculation as Gold traded to a new all time high at $1538.8 the Troy ounce. Crude oil traded to a new multi-year high at $113.97 a barrel. The euro traded to a new year to date high at 1.4879.
Energy
Higher oil prices, growth in upstream production and continued cost-cutting helped Shell’s (RDS.A) Q1 net profit soar 60% to $1.42/share as revenues jumped to $114.84B from $88.03B. Patterson-UTI Energy (PTEN) beat estimates by 2 cents and revenue by $16M. International Coal Group (ICO) beat estimates by a penny, but missed revenue by $9M. Whiting Petroleum (WLL) missed estimates by 5 cents, but beat revenue by $21M. Exxon Mobil (XOM) reported EPS of $2.14 (beating estimates). Chevron (CVX) is initiated with a Buy at Jefferies. Transocean (RIG) is taken to Strong Buy from Reduce at brokers Duncan-Williams with a target of $93. Hess (HES) is lifted to Outperform from Neutral at Credit Suisse. Patterson-UTI (PTEN) is lifted to Neutral from Sell at Goldman Sachs. Nordic American Tanker (NAT) is downgraded to Neutral from Buy, while General Maritime (GMR) and Teekay Tankers (TNK) are downgraded to Sell from Neutral at Goldman Sachs. ConocoPhillips (COP) is downgraded to Hold from Buy at Deutsche Bank with a new target of $85. In afternoon trading: Shares of Carbo Ceramics (CRR) are up about 15.5%.
The Energy Select Sector SPDR (XLE) was trading at $79.30 at 4:00 PM on Thursday, down slightly on the day – up 16.19% year-to-date.
Materials
Berkshire Hathaway (BRK.A) said yesterday that former executive David Sokol broke the company’s insider-trader laws and misled the firm about his stake in Lubrizol (LZ), which Berkshire is buying for $9B after Sokol recommended the deal to Warren Buffett. Ball (BLL) beat estimates by 10 cents and revenue by $120M. Dow Chemical (DOW) beat estimates by 15 cents and revenue by $710M. International Paper (IP) beat estimates by 19 cents and revenue by $20M. Potash (POT) beat estimates by 4 cents and revenue by $190M. Owens-Illinois (OI) beat estimates by 2 cents with revenue in-line with estimates. Barrick Gold (ABX) is upgraded to Buy from Hold at Stifel Nicolaus.
The Materials Select Sector SPDR (XLB) traded at $40.71 at 4:00 PM on Thursday, down slightly on the day – up 5.99% year-to-date.
Industrials
Iron Mountain (IRM) missed estimates by a penny, but beat revenue by $8M. Tyco International (TYC) beat estimates by 5 cents with revenue in-line with estimates. Norfolk Southern (NSC) beat estimates by 10 cents and revenue by $1B. ABB Ltd (ABB) is increased to Outperform from Neutral at Credit Suisse. Norfolk Southern (NSC) is now Buy from Neutral with a $76 price objective at Sterne Agee. Stericycle (SRCL) is now Neutral from Outperform at Robert W. Baird. In afternoon trading: Shares of Oshkosh (OSK) are down about 8.5%. Shares of Norfolk Southern are up about 8.5%.
The Industrial Select Sector SPDR (XLI) traded at $38.54 at 4:00 PM on Thursday, up 0.34% on the day – up 10.52% year-to-date.
Consumer Discretionary
Panasonic (PC) will cut 17,000 jobs over the next two years, or 5% of its workforce, adding to the 18,000 it has already axed over the past year. Host Hotels & Resorts, Inc. (HST) missed estimates by a penny and revenue by $32M. Starwood Hotels (HOT) beat estimates by 5 cents and revenue by $20M. Time Warner Cable (TWC) missed estimates by 4 cents, but beat revenue by $40M. Service International (SCI) beat estimates by a penny and revenue by $12M. Starbucks (SBUX) reported FQ2 EPS of $0.34 (in-line) and revenue of $2.8B (in-line). Guess? (GES) gets upgraded to Buy from Hold at Citigroup. Live Nation (LYV) is increased to Buy from Hold with a $13 target price at Stifel Nicolaus. Urban Outfitters (URBN) is downgraded to Market Perform from Outperform at William Blair. Children’s Place (PLCE) is moved to Neutral from Overweight at JP Morgan. In afternoon trading: Shares of Starbucks’ are down only about 1% after the coffee retailer said rising dairy and fuel prices would hit earnings more than it previously thought; full-year guidance of $1.46-1.48 a share was short of consensus of $1.49. Shares of OfficeMax (OMX) are down about 19%.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $40.58 at 4:00 PM on Thursday, up 0.40% on the day – up 8.47% year-to-date.
Consumer Staples
PepsiCo’s (PEP) Q1 net profit fell to $0.74 a share from $0.89 a year earlier, hurt by higher costs, although revenue increased to $11.94B from $9.37B. Bunge (BG) beat estimates by 18 cents and revenue by $100M. Colgate-Palmolive Company (CL) reported Q1 EPS of $1.16 (in-line), while beating revenue by $80M. Procter & Gamble (PG) missed estimates by a penny. In afternoon trading: Shares of Revlon (REV) are up about 6.5%. Shares of Yuhe International (YUII) are down about 6.8%. Shares of United Natural Foods (UNFI) are down about 5.5%.
The Consumer Staples Select Sector SPDR (XLP) traded at $31.43 at 4:00 PM on Thursday, up 0.64% on the day – up 7.23% year-to-date.
Healthcare
Aetna (AET) beat estimates by 46 cents, but missed revenue by $40M. Medco Health Solutions (MHS) beat estimates by 3 cents, but missed revenue by $50M. Community Health Systems (CYH) reported Q1 EPS of $0.67 (versus $0.79) with revenue in-line with estimates. Nektar Therapeutics (NKTR) missed estimates by 6 cents and revenue by $6M. Qiagen (QGEN) reported Q1 EPS of $0.21 (in-line) while missing revenue by $5M. Talecris Biotherapeutics Holdings (TLCR) beat estimates by 3 cents, but missed revenue by $3M. Varian Medical Systems (VAR) beat estimates by a penny and revenue by $9M. Salix Pharma (SLXP) is begun with an Outperform at William Blair. Metabolix (MBLX) is moved to Underweight from Neutral at Piper Jaffray. Praxair (PX) is reduced to Neutral from Overweight at Pipper Jaffray. In afternoon trading: Shares of Gen-Probe (GPRO) are up about 13.75%.
The Health Care Select Sector SPDR (XLV) traded at $35.26 at 4:00 PM on Thursday, up 0.51% on the day – up 11.94% year-to-date.
Financials
NYSE-Euronext (NYX) faces investors at its AGM today after reporting improved profits in its Q1 earnings – but most of the focus is likely to be on its potential mergers. Major shareholder Legg Mason (LM) joined fellow NYSE investor T. Rowe Price Group (TROW) in urging NYSE to explore an $11.3B bid led by Nasdaq-OMX (NDAQ), which is higher than the $10.2B package from Deutsche Boerse (DBOEY.PK). Berkshire Hathaway (BRK.A) said yesterday that former executive David Sokol broke the company’s insider-trader laws and misled the firm about his stake in Lubrizol (LZ), which Berkshire is buying for $9B after Sokol recommended the deal to Warren Buffett. AFLAC (AFL) beat estimates by 11 cents. Allstate (ALL) beat estimates by 25 cents with revenue in-line with estimates. Brandywine Realty Trust (BDN) beat estimates by a penny and revenue by $7M. Developers Diversified Realty (DDR) beat estimated by 3 cents and revenue by $1M. Duke Realty (DRE) reported Q1 EPS of $0.28 (in-line) while beating revenue by $156M. Equity Residential (EQR) reported Q1 EPS of $0.56 (in-line) while beating revenue by $2M. Lincoln National (LNC) beat estimates by 16 cents.
The Financial Select Sector SPDR (XLF) traded at $16.41 at 4:00 PM on Thursday, up 0.80% on the day – up 2.88% year-to-date.
Information Technology
Akamai Technologies (AKAM) beat estimates by a penny and revenue by $4M. Arris Group (ARRS) missed estimates by a penny and revenue by $3M. Baidu.com (BIDU) beat estimates by 2 cents and revenue by $5M. Cadence (CDNS) beat estimates by a penny and revenue by $6M. Citrix Systems (CTXS) beat estimates by 8 cents and revenue by $16M. eBay (EBAY) beat estimates by a penny with revenue in-line with estimates. Equinix (EQIX) beat estimates by 33 cents and revenue by $8M. Flextronics International (FLEX) missed estimates by a penny and revenue by $400M. Fortinet (FTNT) beat estimates by 3 cents and revenue by $6M. InterDigital Communications (IDCC) beat estimates by 2 cents and revenue by $3M. Intersil (ISIL) reported Q1 EPS of $0.11 (in-line) while beating revenue by $2M. LSI Logic (LSI) reported Q1 EPS of $0.10 (in-line) while beating revenue by $6M. Novellus Systems (NVLS) beat estimates by a penny and revenue by $3M. Parametric (PMTC) beat estimates by a penny and revenue by $3M. TriQuint Semiconductor (TQNT) reported Q1 EPS of $0.15 (in-line) while beating revenue by $3M. Xilinx (XLNX) beat estimates by 7 cents and revenue by $10M. Baidu.com (BIDU) is begun with a Buy at Brean Murray with a target of $170. eBay (EBAY) is upgraded to Buy from Hold at Stifel Nicolaus with a $42 target. LM Ericsson (ERIC) is lifted to Neutral from Underweight at JP Morgan after yesterday’s stock surge. Evergreen Solar (ESLR) is downgraded to Sell from Hold with Wunderlich. Teradyne (TER) is taken to Neutral from Overweight at Piper Jaffray with a new target of $18. In afternoon trading: Shares of Evergreen Solar are down about 32% after reporting that slower-than-expected sales could force the company to have to raise cash. Shares of Akamai Technologies are down about 15%. Shares of Teradyne are down about 14%. Shares of Arris Group are down about 10.5%. Shares of Fortinet are up about 14.5%.
The Technology Select Sector SPDR (XLK) traded at $26.76 at 4:00 PM on Thursday, up slightly on the day – up 6.23% year-to-date.
Telecommunications Services
NII (NIHD) missed estimates by 4 cents, but beat revenue by $40M. Crown Castle (CCI) beat estimates by 4 cents and revenue by $14M. In afternoon trading: Shares of Sprint Nextel (S) are up about 5.75%. Shares of SureWest (SURW) are down about 4.4%. Shares of TATA Communications (TCL) are down about 4%. Shares of Clearwire (CLWR) are down about 4.2%.
The NASDAQ Telecommunications Index (IXTC) traded at $230.61 at 4:00 PM on Thursday, down slightly on the day – up 2.33% year-to-date.
Utilities
Electric company Exelon (EXC) will buy rival Constellation Energy Group (CEG) for $7.9B in stock, a 12.5% premium. The combo will become the number one competitive energy products and services supplier by load, and the number two residential electricity and gas distribution company. In afternoon trading: Actives: Shares of Constellation Energy Group are up about 5.8%. Shares of Exelon are up about 1.7%. Shares of AES (AES) are up about 1%. Shares of PPL (PPL) are relatively unchanged.
The Utilities Select Sector SPDR (XLU) traded at $33.09 at 4:00 PM on Thursday, up 0.88% on the day – up 5.58% year-to-date.
STOCKS: RDS.A, PTEN, ICO, WLL, XOM, CVX, RIG, HES, NAT, GMR, TNK, COP, CRR, BRK.A, LZ, BLL, DOW, IP, POT, OI, ABX, IRM, TYC, NSC, ABB, SRCL, OSK, PC, HST, HOT, TWC, SCI, SBUX, GES, LYV, URBN, PLCE, OMX, POP, BG, CL, PG, REV, YUII, UNFI, AET, MHS, CYH, NKTR, QGEN, TLCR, VAR, SLXP, MBLX, PX, GPRO, NYX, LM, TROW, NDAQ, DBOEY, AFL, ALL, BDN, DDR, DRE, EQR, LNC, AKAM, ARRS, BIDU, CDNS, CTXS, EBAY, EQIX, FLEX, FTNT, IDCC, ISIL, LSI, NVLS, PMTC, TQNT, XLNX, ERIC, ESLR, TER, NIHD, CCI, S, SURW, TCL, CLWR, EXC, CEG, AES, PPL
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