Equities Stock Sector Coverage: Market Slows, Big Oil Rises

Sector Recap |

stock market sectorsAfter a downward shock a week ago as Standards & Poors downgraded the outlook for U.S. debt, stocks surged for the remainder of the week with the Dow Jones Industrial Average up 164 points to 12,506, a new year to date high. The NASDAQ gained 55 points to 2820 still shy of its February 18th high at 2840.51. The U.S. Treasury 10-Year yield was little changed last week at 3.394 percent, and traded down in yield to 3.36 on Monday as a modest flight to quality continues.

Gold closed at another all time closing high at $1505.9 the Troy ounce on Friday and set a new all time intraday high on Monday at $1519.2. Crude oil tacked on $2.76 per barrel to $112.26 last week and traded as high as $113.48 on Monday before fading to $111.08 and closing just above $112.00. The euro set a new 2011 high at 1.4647 last week. The euro traded above 1.46 again on Monday, but faded to 1.4528 intraday.

The Dow did not sustain gains above 12,506 on Monday and traded as low as 12,446, whereas the NASDAQ sustained gains above 2800. New Home Sales rose by 11.1% in March to an annual rate of 300,000. The inventory of new homes for sale fell to 183,000 the lowest since August 1967. The average price of a new home declined 4.9% year over year.

Energy

A 288-page Coast Guard investigation of the Deepwater Horizon rig accident (under Marine Casualty Reports) found Transocean (RIG) at fault on numerous accounts including maintenance, training, management and safety code violations. Oil companies are primed to enjoy soaring profits after a first quarter where crude averaged $100 a barrel, 20% higher than a year ago. Exxon Mobil Corp. (XOM), Chevron (CVX) and ConocoPhillips (COP) all stand to gain from rising prices. Linn Energy (LINE) gets lifted to Outperform from Market Perform with Wells Fargo. Valero Energy (VLO) is cut to Hold from Buy at Citigroup.

The Energy Select Sector SPDR (XLE) was trading at $78.57 at 4:00 PM on Monday, down 0.52% on the day – up 15.12% year-to-date.

Materials

Mercer International (MERC) is moved to Outperform from Market Perform by BMO Capital. Nucor (NUE) is now Underperform from Sector Perform at CIBC World Markets. In afternoon trading: Shares of Molycorp (MCP) are up about 6.6%. Shares of China Shen Zhou Mining (SHZ) are up about 6%. Shares of Rare Element (REE) are up about 6%.

The Materials Select Sector SPDR (XLB) traded at $40.14 at 4:00 PM on Monday, down 0.77% on the day – up 4.50% year-to-date.

Industrials

A 15-year-old lapse at an assembly line in one Boeing (BA) factory has been revealed as the most likely cause of the fuselage rupture that occurred on a Southwest Airlines (LUV) 737 earlier this month. An EF4 tornado tore through Lambert-St. Louis International Airport on Friday, causing devastation to buildings, houses and aircraft. American Airlines (AMR) and Southwest (LUV) both plan on operating on Monday after halting flights this weekend, and the airport should be back to full capacity by the middle of the week. BE Aerospace (BEAV) beat estimates by 3 cents and revenue by $30M. General Electric (GE) is upgraded to Buy from Neutral at Sterne Agee, which sets a $25 target price.

The Industrial Select Sector SPDR (XLI) traded at $37.52 at 4:00 PM on Monday, down 0.29% on the day – up 7.60% year-to-date.

Consumer Discretionary

Due to the quake in Japan: Toyota (TM) will slip to third in production behind General Motors (GM) and Volkswagen (VLKAY.PK) after missing out on production of 400,000 vehicles through mid-April. Honda (HMC) and Toyota have both made statements saying production will recover by the end of 2011. Winners in this scenario include South Korean automakers, including Hyundai (HYMLF.PK) and Kia (KIMTF.PK). Johnson Controls (JCI) beat estimates by a penny and revenue by $1.07B. V.F. Corp (VFC) is now Outperform from Neutral at Cowen & Company. Marriott (MAR) is moved to Outperform from Market Perform at FBR Capital. Life Time Fitness (LTM) is lowered to Hold from Buy at ThinkEquity. In afternoon trading: Shares of American Apparel (APP) are up about 20.2%.

The Consumer Discretionary Select Sector SPDR (XLY) traded at $39.87 at 4:00 PM on Monday, down slightly on the day – up 6.58% year-to-date.

Consumer Staples

In afternoon trading: Shares of Central European Distribution (CEDC) are up about 17.3%. Actives: Shares of Kimberley-Clark (KMB) are down about 3.3%. Shares of Procter & Gamble (PG) are relatively unchanged. Shares of Altria Group (MO) are up about 0.2%. Shares of Kraft Foods (KFT) are down about 0.9%. Shares of General Mills (GIS) are up about 1%.

The Consumer Staples Select Sector SPDR (XLP) traded at $30.82 at 4:00 PM on Monday, down 0.26% on the day – up 5.15% year-to-date.

Healthcare

WuXi PharmaTech (WX) is initiated with an Outperform by brokers William Blair. Johnson & Johnson (JNJ) is upgraded to Outperform from Market Perform with Wells Fargo after last week’s impressive earnings. AmSurg (AMSG) is increased to Buy from Hold at Jefferies with a new target of $32. Alexion Pharma (ALXN) is reduced to Hold at from Buy at Needham after earnings. In afternoon trading: Shares of Pacira Pharmaceuticals (PCRX) are up about 6.25%. Shares of Cerus (CERS) are up about 5.8%.

The Health Care Select Sector SPDR (XLV) traded at $34.29 at 4:00 PM on Monday, up slightly on the day – up 8.86% year-to-date.

Financials

The New York Stock Exchange (NYX) released a report that sees savings of about $583 million in its $9.8 billion merger deal with Deutsche Boerse (DBOEY.PK), up about a third from initial estimates; rejecting higher-valued offers from Nasdaq OMX (NDAQ) and ICE (ICE). Legg Mason (LM) is lifted to Neutral from Sell at Ticonderoga. Primerica (PRI) is raised to Outperform from Market Perform at Keefe Bruyette. SunTrust Banks (STI) is taken to Perform from Underperform at Oppenheimer. BB&T Corp (BBT) gets upgraded to Neutral from Sell at Goldman. BB&T Corp (BBT) is cut to Perform from Outperform at Oppenheimer. SLM Corp (SLM) is cut to Market Perform from Outperform at Keefe Bruyette with a price objective of $17.

The Financial Select Sector SPDR (XLF) traded at $16.08 at 4:00 PM on Monday, down slightly on the day – up 0.82% year-to-date.

Information Technology

Nintendo (NTDOY.PK) profits dropped 66% year-on-year from ¥226.6 billion to ¥77.6 billion ($946 million). A strong yen and drop in sales contributed to the decline. The earthquake did not directly impact revenues, but Nintendo indicated that consumer spending would most likely be softer as a result. Monster Worldwide (MWW) and Dice Holdings (DHX) are each now Neutral from Sell at UBS. Polycom (PLCM) is taken to Outperform from Market Perform with a $72 target at BMO Capital. Super Micro Computer (SMCI) is boosted to Buy from Hold at ThinkEquity. Travelzoo (TZOO) is taken to Buy from Hold at The Benchmark Company. Brocade (BRCD) gets boosted to Outperform from Neutral by brokerage Robert W. Baird. Brooks Automation (BRKS) is cut to Hold from Buy at Brigantine. In afternoon trading: Shares of Polycom are up about 12.25%. Shares of Sohu.com (SOHU) are up about 10.5% after beating estimates by 4 cents and revenue by $6M. Shares of Avid Technology (AVID) are down about 11.25%.

The Technology Select Sector SPDR (XLK) traded at $26.37 at 4:00 PM on Monday, up slightly on the day – up 4.68% year-to-date.

Telecommunications Services

In afternoon trading: Shares of tw telecom (TWTC) are up about 4.4%. Actives: Shares of Sprint Nextel (S) are down about 0.3%. Shares of Level 3 Communications (LVLT) are relatively unchanged. Shares of AT&T (T) are down about 0.5%. Shares of Verizon (VZ) are up about 0.4%.

The NASDAQ Telecommunications Index (IXTC) traded at $226.85 at 4:00 PM on Monday, up 0.43% on the day – up 0.66% year-to-date.

Utilities

In afternoon trading: Actives: Shares of Dynegy (DYN) are up about 4.4%. Shares of AES (AES) are down about 0.9%. Shares of Duke Energy (DUK) are down slightly. Shares of DPL (DPL) are up about 0.3%. Shares of PPL (PPL) are up about 0.25%.

The Utilities Select Sector SPDR (XLU) traded at $32.28 at 4:00 PM on Monday, up slightly on the day – up 3.00% year-to-date.

STOCKS: RIG, COM, CVX, COP, LINE, VLO, MERC, NUE, MCP, SHZ, REE, BA, LUV, AMR, BEAV, GE, TM, GM, VLKAY, HYMLF, KIMTF, JCI, VFC, MAR, LTM, APP, CEDC, KMB, PG, MO, KFT, GIS, WX, JNJ, AMSG, ALXN, PCRX, CERS, NYX, DBOEY, NDAQ, LM, PRI, STI, BBT, SLM, NTDOY, MWW, DHX, PLCM, SMCI, TZOO, BRCD, BRKS, SOHU, AVID, TWTC, S, LVLT, T, VZ, DYN, AES, DUK, DPL, PPL

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Companies

Symbol Name Price Change % Volume
ONP Orient Paper Inc. NEW 1.28 -0.02 -1.54 59,930

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