Factory Orders declined 0.4% in October when a rise of 0.8% was expected. The non-manufacturing ISM came in below expectations at 52.0. This measure of the services sector showed a 48.9 reading on employment which means job losses. The Dow Jones Industrial Average traded up to 12,186.53 in morning trading closing in on its October 27th high at 12,284.31. Gains were consolidated in afternoon trading. The NASDAQ opened higher trading up from 2651.27 to 2674.53 testing its 200-day simple moving average at 2672.70 with its October 27th high at 2753.37. Afternoon weakness was to 2642.
Asian stocks were modestly higher on Monday with the Nikkei 225 at 8,696 – up 0.60% and the Hang Seng at 19,180 – up 0.73%. European stocks were higher as French and German leaders discuss closer political and economic cooperation with regard to the Euroland debt issues between the 17 nations. The FTSE 100 ended the day at 5,568 – up 0.28%; the DAX ended the day at 6,106 – up 0.42%; and the CAC 40 ended the day at 3,201 – up 1.15%. The yield on the US Treasury 10-Year note rose from 2.054 percent to 2.110 then declined to 2.040. Gold traded down from $1758.8 down to $1721.1 the Troy ounce. Crude oil traded up from $101.17 per barrel to $102.44 then declined to $100.24. The euro versus the dollar rebounded from 1.3402 to 1.3485 then declined to 1.3382.
Energy
Shell (RDS.A) and Qatar Petroleum yesterday signed a heads of agreement to build a $6.4B petrochemicals plant in the Gulf country, with the latter to take an 80% stake in the project and Shell the rest. Although the S&P 500 has dropped 19% since the technology bubble burst in 2000, the benchmark index has jumped 66% when excluding adjustments for market cap, which gives equal credit to Exxon (XOM), which is worth $382.5B, and Monster (MWW), whose value is $945.6M. Cobalt International Energy (CIE) is assigned a Buy at Deutsche Bank. Transocean (RIG) and Nabors Industries (NBR) are each Outperform from Market Perform at BMO Capital. Valero Energy (VLO) is cut to Hold from Buy with a $23 target at The Benchmark Company. In afternoon trading: Shares of Frontline (FRO) are up about 14%.
Energy Select Sector SPDR (XLE) was trading at $71.29 at 4:00 PM on Monday, up 1.24% on the day – up 4.45% year-to-date.
Materials
Commercial Metals (CMC) has rejected an unsolicited $1.73B bid from Carl Icahn, saying that the $15 a share offer is opportunistic and fails to reflect CMC’s true value. Cliffs Natural Resources (CLF) is resumed as a Buy at Goldman Sachs. Alcoa (AA) gets cut to Neutral from Buy at Goldman. In afternoon trading: Shares of US Energy (USEG) are up about 7.75%. Shares of Texas Industries (TXI) are up about 6.75%. Shares of Alumina (AWC) are up about 6.5%. Shares of Titanium Metals (TIE) are up about 6.25%. Shares of Ivanhoe Metals (IVN) are up about 5.5%. Shares of AuRico Gold (AUQ) are down about 5.75%.
The Materials Select Sector SPDR (XLB) was trading at $34.40 at 4:00 PM on Monday, up 1.18% on the day – down 10.44% year-to-date.
Industrials
United Continental (UAL) is upgraded to Buy from Neutral at Ticonderoga with a price objective of $33. Kaydon (KDN) is downgraded to Hold from Buy at Keybanc. Chicago Bridge & Iron (CBI) is pulled from Goldman’s list of Conviction Buys. In afternoon trading: Shares of Broadwind Energy (BWEN) are up about 9%. Shares of Capstone Turbine (CPST) are up about 7.75%. Shares of Ultrapetrol (ULTR) are up about 7.5%. Shares of Greenbrier Companies (GBX) are up about 6.25%.
The Industrial Select Sector SPDR (XLI) was trading at $34.07 at 4:00 PM on Monday, up 1.07% on the day – down 2.29% year-to-date.
Consumer Discretionary
GM (GM) Vice Chairman Steve Girsky has admitted that Opel’s turnaround strategy has been a failure, saying that “our plan for making Opel profitable this year did not work.” General Motors (GM) is a new Neutral at Piper Jaffray. American Eagle Outfitters (AEO) is boosted to Outperform from Market Perform at BMO Capital. Time Warner Cable (TWC) is lifted to Outperform from Market Perform at Wells Fargo. Comcast (CMCSA) is upgraded to Buy from Hold at Stifel. DR Horton (DHI) is boosted to Overweight from Equal Weight at Barclays. Nike (NKE) is now Hold from Buy at McAdams Wright Ragen. Papa John’s (PZZA) is downgraded to Sell from Hold with a $32 target at Feltl & Co. Dreamworks Animation (DWA) is downgraded to Neutral from Overweight at Piper Jaffray. Cablevision (CVC) is cut to Market Perform from Outperform with Wells Fargo. In afternoon trading: Shares of Bon Ton Stores (BONT) are up about 13%. Shares of Imax (IMAX) are up about 10.75%. Shares of Gannett (GCI) are up about 9.5%.
The Consumer Discretionary Select Sector SPDR (XLY) was trading at $39.43 at 4:00 PM on Monday, up 0.92% on the day – up 5.40% year-to-date.
Consumer Staples
Dole Food (DOLE) is raised to Outperform from Market Perform at Wells Fargo. In afternoon trading: Shares of Imperial Sugar (IPSU) are down about 10.25%. Shares of Smart Balance (SMBL) are down about 5.75%. Shares of Dole Food are up about 7.75%. Shares of Medifast (MED) are up about 5.8%. Shares of Green Mountain Coffee Roasters (GMCR) are up about 4.5%.
The Consumer Staples Select Sector SPDR (XLP) was trading at $31.93 at 4:00 PM on Monday, up 0.60% on the day – up 8.94% year-to-date.
Healthcare
An investigative panel has found that Japan’s Olympus (OCPNY) hid up to $1.67B in losses from investors, but it will probably say there is no proof of a much-rumored link with Japan’s “yakuza” gangsters. Hologic (HOLX) is a new Buy and $22 target at Needham. Trius Therapeutics (TSRX) is initiated with an Outperform and $12 target Outperform at Oppenheimer. Health Management Associates (HMA) is hoisted to Outperform from Market Perform at Leerink Swann. Incyte (INCY) is now Neutral from Buy at Citigroup. In afternoon trading: Shares of Zalicus (ZLCS) are up about 20%. Shares of Affymax (AFFY) are up about 18.5%. Shares of NuVasive (NUVA) are up about 12.5%. Shares of Tenet Healthcare (THC) are up about 11.5%. Shares of Arena Pharmaceuticals (ARNA) are up about 10%.
The Health Care Select Sector SPDR (XLV) was trading at $33.57 at 4:00 PM on Monday, up slightly on the day – up 6.57% year-to-date.
Financials
MF Global (MFGLQ) had been using client cash for “several days if not weeks” before its bankruptcy rather than, as previously thought, just a few days prior, Reuters reports. Royal Bank of Canada (RY) is upgraded to Buy from Hold at Canaccord Genuity. Willis Group (WSH) is lifted to Buy from Neutral at Citigroup. Riverview Bancorp (RVSB) is reduced to Hold from Buy with at Wunderlich. In afternoon trading: Shares of MGIC Investment (MTG) are up about 9.75%. Shares of Assured Guaranty Municipal Holdings (AGO) are up about 8.75%. Shares of Lloyds Banking Group (LYG) are up about 8.5%.
The Financial Select Sector SPDR (XLF) was trading at $13.17 at 4:00 PM on Monday, up 2.01% on the day – down 17.43% year-to-date.
Information Technology
SAP (SAP) is to buy SuccessFactors (SFSF), a provider of online HR software, for $3.4B ($40 / share – 52% premium). The acquisition comes six weeks after Oracle’s (ORCL) deal to purchase cloud customer support firm RightNow (RNOW), and a month after SAP said it was forming a plan to expand its cloud offerings. TiVo Inc (TIVO) is a new Buy at UBS. Rackspace Hosting (RAX) is a new Neutral at Collins Stewart with a $43 price target. SanDisk (SNDK) is begun with a Buy at Nomura, which has a new Neutral on Micron (MU). LinkedIn (LNKD) is lifted to Equal Weight from Underweight with a $70 target price at Evercore. Take-Two (TTWO) is upgraded to Outperform from Perform at Pacific Crest. Autodesk (ADSK) is now Sell from Neutral at Goldman. Molex (MOLX) is moved to Neutral from Buy at Goldman. SuccessFactors (SFSF) is moved to Market Perform from Outperform at Morgan Keegan with a $40 price objective. In afternoon trading: Shares of SuccessFactors are up about 51%. Shares of Taleo (TLEO) are up about 23%. Shares of Zoom Tech (ZOOM) are up about 19.5%. Shares of Ariba (ARBA) are up about 13.5%.
The Technology Select Sector SPDR (XLK) was trading at $26.03 at 4:00 PM on Monday, up 1.13% on the day – up 3.33% year-to-date.
Telecommunications Services
In afternoon trading: Shares of Clearwire (CLWR) are up about 11.25%. Shares of Cincinnati Bell (CBB) are up about 8.25%. Shares of Leap Wireless (LEAP) are up about 4.5%. Shares of Towerstream (TWER) are down about 6.5%. Actives: Shares of Sprint Nextel (S) are up about 1%, while shares of AT&T (T) are up about 0.3% and shares of Verizon (VZ) are up about 0.5%. Shares of Frontier Communications (FTR) are up about 3.6%.
The NASDAQ Telecommunications Index (IXTC) was trading at $201.71 at 4:00 PM on Monday, up 0.98% on the day – down 10.50% year-to-date.
Utilities
In afternoon trading: Actives: Shares of Duke Energy (DUK) are up slightly. Shares of Genon Energy (GEN) are up about 0.6%. Shares of Ameren (AEE) are down about 2.4%. Shares of AES Corp. (AES) are up about 0.6%. Shares of PPL Corp (PPL) are up about 0.2%. Shares of Entergy (ETR) are up about 3.9%. Shares of Exelon (EXC) are up about 0.5%.
The Utilities Select Sector SPDR (XLU) was trading at $35.02 at 4:00 PM on Monday, up 0.78% on the day – up 11.74% year-to-date.
STOCKS: RDS.A, XOM, MWW, CIE, RIG, NBR, VLO, FRO, CMC, CLF, AA, USEG, TXI, AWC, TIE, IVN, AUQ, UAL, KDN, CBI, BWEN, CPST, ULTR, GBX, GM, AEO, TWC, CMCSA, DHI, NKE, PZZA, DWA, CVC, BONT, IMAX, GCI, DOLE, IPSU, SMBL, MED, GMCR, OCPNY, HOLX, TSRX, HMA, INCY, ZLCS, AFFY, NUVA, THC, ARNA, MFGLQ, RY, WSH, RVSB, MTG, AGO, LYG, SAP, SFSF, ORCL, RNOW, TIVO, RAX, SNDK, MU, LNKD, TTWO, ASDK, MOLX, TLEO, ZOOM, ARBA, CLWR, CBB, LEAP, TWER, S, T, VZ, FTR, DUK, GEN, AEE, AES, PPL, ETR, EXC
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