Retail Sales fell by an unexpected 0.5% in June, down 0.4% ex-autos and down 0.1% ex-autos and gas. The NY Fed Empire manufacturing survey came at 7.39 in July. The Dow Jones Industrial Average traded down to 12,690.05 on Monday then rebounded to 12,779.58 then consolidated. The NASDAQ traded down to 2888.01 on Monday then rebounded to 2910.20 then consolidated.
Asian stocks were slightly higher on Monday. The Nikkei 225 did not trade and ended last week at 8,724. The Hang Seng ended the day at 19,121 – up 0.15%. European exchanges opened lower on Monday but the closes were little-changed. The FTSE 100 ended the day at 5,662 – down 0.07%. The DAX ended the day at 6,566 – up 0.13%. The CAC 40 ended the day at 3,180 – down 0.03%. The yield on the 10-Year US Treasury note traded declined from 1.491% to 1.440% closing in on the June 1st record low yield at 1.439%.
Gold traded down to $1577.2 the Troy ounce then up to $1594.6 as the 50-day and 200-day simple moving averages decline to $1590.7 and $1660.0. Crude oil traded down to $86.41 per barrel then up to $88.48. The euro versus the dollar traded declined to 1.2178 then up to 1.2289.
Enbridge Energy (EEP) has been initiated with an Outperform rating at Credit Suisse. Phillips 66 (PSX) – The recent spin-off has been initiated with an Outperform rating at Oppenheimer with a $42 price target. Anadarko Petroleum (APC) has been upgraded to Outperform from Neutral at Credit Suisse. Exxon Mobil (XOM) – The oil giant has been downgraded to Hold from Buy with a $94 price target at Deutsche Bank. Total SA (TOT) – The oil stock declined in France on a downgrade to Hole from Buy at Société Générale. Dow components – Chevron (CVX) up 0.60%, Exxon Mobil (XOM) down 0.44%.
Energy Select Sector SPDR (XLE) was trading at $66.68 at 3:30 PM on Monday, up 0.45% on the day – down 2.98% year-to-date.
BASF AG (BASFY) – The German chemical giant has been upgraded to Buy from Neutral at Nomura. Mountain Province Diamonds (MDM) has been upgraded to Outperform from Sector Perform at RBC Capital Markets. Royal DSM N.V. (RDSMY) has been upgraded to Buy from Neutral at Nomura. Alumina (AWC) has been downgraded to Sell from Neutral at Citigroup. Dow Components – Alcoa (AA) down 0.77%, DuPont (DD) up 0.16%.
The Materials Select Sector SPDR (XLB) was trading at $34.66 at 3:30 PM on Monday, down 0.23% on the day – up 3.46% year-to-date.
Dana Holding (DAN) has been initiated with a Neutral rating at Lazard. Pall Corp (PLL) has been initiated with an Underperform rating at Bank of America-Merrill Lynch. General Electric (GE) has been downgraded to Equal-Weight from Overweight at Morgan Stanley. Dow components – Boeing Co (BA) down 1.36%, Caterpillar (CAT) down 1.29%, General Electric (GE) down 1.12%, 3M Company (MMM) up 0.79%, United Technologies (UTX) up 0.56%.
The Industrial Select Sector SPDR (XLI) was trading at $34.66 at 3:30 PM on Monday, down 0.60% on the day – up 2.70% year-to-date.
NBC parent Comcast (CMCSA) has purchased Microsoft’s (MSFT) 50% stake in MSNBC.com, and has rebranded the site as NBCNews.com. The local Macau government extended the deadline for Las Vegas Sands (LVS) to complete a casino project by three years. This ruling was critical after LVS had already invested over $96 million in what is known as the “Parcel 3″ project. Priceline.com (PCLN) has been initiated with an Overweight rating at Atlantic Equities. Brinker International (EAT) – Piper Jaffray upgraded the fast food firm to Neutral from Underweight. Sirius XM Radio (SIRI) has been upgraded to Equal Weight from Underweight by Barclays. Starwood Hotels (HOT) has been upgraded to Buy from Hold at MKM Partners, with a price target raised to $65. Dow Components – Disney (DIS) down 0.42%, Home Depot down 1.10%, McDonalds (MCD) down 0.10%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $43.40 at 3:30 PM on Monday, down 0.50% on the day – up 11.23% year-to-date.
The National Association of Convenience Stores, which represents 3,700 stores has criticized the $7.25 billion settlement between the credit-card companies and merchants. At issue is that the trade group says the deal doesn’t address the key issue of how much control the industry retains. Cheesecake Factory (CAKE) has been upgraded to Neutral from Sell at Goldman Sachs. Anheuser-Busch InBev (BUD) – The brewing giant has been downgraded to Market Perform from Outperform by Sanford Bernstein. Dean Foods (DF) – The dairy giant has been downgraded to Market Perform from Outperform at BMO Capital. Panera Bread (PNRA) has been downgraded to Underweight from Overweight at Piper Jaffray. Sonic Corp. (SONC) – The quick service restaurant has been downgraded to Neutral from Overweight at Piper Jaffray. Tim Hortons (THI) has been downgraded to Sell from Neutral at Goldman. Dow components – Kraft (KFT) down 0.10%, Coca Cola (KO) down 0.57%, Procter & Gamble (PG) down 0.29%, Wal-Mart (WMT) down 0.10%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $35.18 at 3:30 PM on Monday, down 0.42% on the day – up 8.28% year-to-date.
GlaxoSmithKline (GSK) will buy Human Genome Sciences (HGSI) at $14.25 per share. Health-care equipment company Thermo Fisher Scientific (TMO) will acquire closely held One Lambda, a provider of testing equipment and software, for $925 million. Thermo expects to complete the transaction in the 4th quarter. Orexigen Therapeutics (PREX) has been resumed with an Outperform rating at Leerink Swann. Mead Johnson Nutrition (MJN) – RBC Capital downgraded MJN to Sector Perform from Outperform. Select Medical (SEM) – Bank of America-Merrill Lynch downgrades the stock to Neutral from Buy. Dow Components – Johnson & Johnson (JNJ) down 0.07%, Merck (MRK) flat, Pfizer (PFE) up 0.82%.
The Health Care Select Sector SPDR (XLV) was trading at $38.21 at 3:30 PM on Monday, up 0.21% on the day – up 10.15% year-to-date.
The Justice Department is building criminal cases against several banks including Barclays (BCS) over their role in manipulating Libor rates. Barclays’ traders involved in the scandal could be charged in the US by September. New York and Connecticut report that they have been conducting their own investigations for six months. Citigroup (C) will seek permission to raise its dividend by the end of the year, which would be its first dividend hike since the crisis. HSBC (HBS) has accelerated their talks with the Justice Department and appears to be nearing a settlement to resolve a criminal probe regarding money laundering. Dow Components – American Express (AXP) up 1.19%, Bank of America (BAC) up 0.13%, JP Morgan Chase (JPM) down 2.25%, Travelers (TRV) down 0.57%.
The Financial Select Sector SPDR (XLF) was trading at $14.68 at 3:30 PM on Monday, down 0.20% on the day – up 12.92% year-to-date.
Nokia (NOK) slashed the price of its flagship Lumia 900 phone in half, after just three months after its introduction. It’s not clear whether Nokia or partner AT&T (T) will take a bigger hit. Nokia has been under scrutiny after the lackluster Lumia rollout. NBC parent Comcast (CMCSA) has purchased Microsoft’s (MSFT) 50% stake in MSNBC.com, and has rebranded the site as NBCNews.com. Qualcomm (QCOM) – Société Générale upgraded the tech firm to Hold from Sell. SanDisk (SNDK) has been downgraded to Neutral from Buy with a new lower price target at $32 at Robert W. Baird. Texas Instruments (TXN) has been downgraded to Underperform from Perform with a $24.50 price target at FBR Capital. Dow Components – Cisco Systems (CSCO) down 0.95%, Hewlett-Packard (HPQ) down 0.60%, IBM (IBM) down 0.35%, Intel Corp (INTC) down 0.38%, Microsoft (MSFT) up 0.48%.
The Technology Select Sector SPDR (XLK) was trading at $28.29 at 3:30 PM on Monday, up 0.07% on the day – up 11.16% year-to-date.
Nokia (NOK) slashed the price of its flagship Lumia 900 phone in half, after just three months after its introduction. It’s not clear whether Nokia or partner AT&T (TT) will take a bigger hit. Nokia has been under scrutiny after the lackluster Lumia rollout. Qualcomm (QCOM) – Société Générale upgraded the tech firm to Hold from Sell. Dow Components – AT&T Inc up 0.16%, Verizon (VZ) up 0.20%.
The NASDAQ Telecommunications Index (IXTC) was trading at $177.16 at 3:30 PM on Monday, down 0.46% on the day – down 10.04% year-to-date.
Dominion Resources (D) down 0.17%, Edison International (EIX) down 1.40%, First Energy (FE) up 0.36%, PG&E Corp (PCG) down 0.73%, Southern Company (SO) down 0.08%.
The Utilities Select Sector SPDR (XLU) was trading at $37.31 at 3:30 PM on Monday, down 0.08% on the day – up 3.70% year-to-date.
STOCKS: CVX, XOM, EEP, PSX, APC, TOT, AA, DD, BASFY, MDM, RDSMY, BA, CAT, GE, MMM, UTX, DAN, PLL, DIS, HD, MCD, CMCSA, LVS, PCLN, EAT, SIRI, HOT, KFT, KO, PG, WMT, CAKE, BUD, DF, PNRA, SONC, THI, JNJ, MRK, PFE, GSK, HGSI, TMO, PREX, MLN, SEM, AXP, BAC, JPM, TRV, BCS, C, HBS, CSCO, HPQ, IBM, INTC, MSFT, NOK, QCOM, SNDK, TXN, T, VZ, D, EIX, FE, PCG, SO