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Monthly Archives: January 2012

Telecom stocks have made a sudden swing higher

Telecom stocks have made a sudden swing higher. Collectively, they are now at their best level of the day, sporting a 0.3% gain, which makes them the best performing sector of the session. The move by telecom comes as integrated plays AT&T (T 29.26, +0.10) and Verizon (VZ 37.49, +0.28) garner support after finishing trade on Friday at weekly lows. Last week each company posted earnings that came short of the consensus.


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Market Update

Stocks are off of session lows, but weakness persists. The action has stoked volatility, such that the Volatility Index is up about 6% to almost 20. Earlier this morning the VIX managed to clear 20 for the first time in little more than a week. The average level for the VIX this month is only narrowly north of 21.


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Southwest Dallas Fed manufacturing report crushes estimates

Read here:

Manufacturing activity and general business sentiment in the southwest smashed expectations, the Dallas Federal Reserve announced this morning.

The general business index surged to 15.3, topping analyst forecasts for a 1.5 reading, and above December’s -0.3.

Those expectations were steadily rising over the past several days, with the median target for the index increasing from zero on Friday, to 0.5 earlier this morning.

“Perceptions of broader economic conditions were notably more positive in January,” the Federal Reserve said in a statement. “Nearly a quarter of manufacturers noted improvement in the level of business activity, while nine percent noted a worsening. The company outlook index also increased markedly, rising from 5 to 13.5. Both indexes reached their highest readings in 10 months.”

The new orders sub-index jumped to a six month high, at 9.5, and reversed two months of negative readings.

Labor demand also increased in January, as employees saw workweeks grow longer as hiring trends perked up in the region. Twenty-one percent of firms polled by the Fed said they took on new workers, while nine percent said they initiated layoffs.

The eleventh district includes activity in Texas, northern Louisiana, and southern New Mexico. The Dallas Fed will next release manufacturing data on Feb. 27.

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Money Flows, Heat Map, and the S&P A/D Line

Money flows

                                                          (in millions) 
Apple                          AAPL    NASD      447.85       +55.8       1.27 
Intuitive Surgical             ISRG    NASD      455.57       +36.2       6.55 
Bank Of America                BAC     NYSE        7.11       +30.2       1.95 
Oracle                         ORCL    NASD       28.15       +26.6       4.89 
Thomas & Betts                 TNB     NYSE       71.00       +20.7       1.65 
IBM                            IBM     NYSE      190.46       +18.8       1.83 
General Electric               GE      NYSE       18.76       +16.4       2.41 
Microsoft                      MSFT    NASD       29.11       +15.1       1.93 
McDonald's                     MCD     NYSE       98.12       +12.4       1.73 
Netflix                        NFLX    NASD      126.85       +11.8       1.11 
Temple-Inland                  TIN     NYSE       31.87       +11.6       5.17 
Hewlett-Packard                HPQ     NYSE       27.69       +11.2       2.48 
Chevron                        CVX     NYSE      102.39       +11.0       1.39 
Morgan Stanley                 MS      NYSE       18.59       +10.1       1.56 
Procter & Gamble               PG      NYSE       63.34        +9.8       1.51 
Merck                          MRK     NYSE       38.37        +9.8       2.23 
Qualcomm                       QCOM    NASD       57.44        +9.4       1.66 
Johnson & Johnson              JNJ     NYSE       65.43        +8.5       1.95 
JPMorgan Chase                 JPM     NYSE       36.57        +8.4       1.53 
iShrs Russell 2000 Growth      IWO     ARCA       90.35        +8.2       4.08 

                                                          (in millions) 
iShrs Russell 2000             IWM     ARCA       78.85      -129.8       0.21 
Google                         GOOG    NASD      575.35       -32.6       0.68 
Taiwan Semi Mfg                TSM     NYSE       13.85       -24.6       0.06 
ExxonMobil                     XOM     NYSE       84.85       -18.8       0.55 
Celgene                        CELG    NASD       71.87       -16.5       0.39 
Citigroup                      C       NYSE       30.44       -16.2       0.61 
Intel                          INTC    NASD       26.31       -15.2       0.54 
AT&T                           T       NYSE       29.06       -13.7       0.49 
Time Warner                    TWX     NYSE       36.93       -13.7       0.22 
SPDR S&P BRIC 40               BIK     ARCA       24.49       -12.2       0.00 
Charles Schwab                 SCHW    NYSE       11.38       -11.8       0.10 
Baidu                          BIDU    NASD      128.31       -10.7       0.84 
Abbott Labs                    ABT     NYSE       54.37       -10.5       0.49 
PwrShrs QQQ Tr Series 1        QQQ     NASD       59.83       -10.1       0.68 
Select Sector SPDR-Energy      XLE     ARCA       70.39       -10.0       0.50 
Altria Group Inc               MO      NYSE       28.32        -9.9       0.34 
EMC Corp                       EMC     NYSE       25.67        -9.8       0.46 
Halliburton                    HAL     NYSE       36.20        -8.5       0.57 
Freeport McMoran               FCX     NYSE       45.34        -8.4       0.69 
Sina                           SINA    NASD       69.17        -7.9       0.84

Heat map

A/D Line

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52 Week Highs and Lows


New Highs 13 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
BlackRockMuni                 BLE         15.73                6,017 
BlkRk MuniVest                MVF         10.96               19,103 
Cheniere Energy               LNG         12.90            1,927,777 
Eaton Vance Mun Bd Fd         EIM         13.25               19,772 
Eatn Vnc NY Muni              NYH         14.39                1,623 
Invesco VK Adv Mun II         VKI         13.30               10,006 
Invesco VKSelSect             VKL         13.12                4,355 
NuveenCA 3                    NZH         13.80                9,664 
Nuveen Div Adv                NZF         15.06               45,892 
Nuveen CA                     NKL         16.75                9,022 
Nuveen Maryland               NFM         14.76                1,750 
Nuveen MI Div Adv             NZW         14.11                  200 
Saga Commun                   SGA         41.45                  392 

New Lows 0 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------


New Highs 75 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
Advance Auto Parts            AAP         76.97              125,168 
AllianceBrnstn NtlMun         AFB         15.60               17,851 
Amer Muni Income Ptf          XAA         15.18                  897 
Assd Banc-Corp.8.00%Pfd       ABWpB       25.54                1,800 
BlRk Cr Alloc Inco Tr IV      BTZ         12.92               24,137 
Blackrock Invest              BKN         16.26                7,552 
BlackRock Long-Term Muni      BTA         12.46               10,044 
BlkRk Muni Inter Dur          MUI         16.37               12,223 
BlkRk MuniAssets Fd           MUA         13.04                5,000 
BlackRock  Muni Bnd           BIE         16.44                4,537 
BlackRock Municipal Trust     BFK         15.02               13,128 
BlkRk MuniHldgs CA Qlty       MUC         15.36               11,738 
BlkRk MuniHldgs II            MUH         16.54                6,241 
BlkRk MuniHldgs               MHD         17.95                5,703 
BlkRk MuniHldgs Inv           MFL         15.09               18,672 
BlRk MuHldg NY Qlty           MHN         15.53               12,946 
BlkRk MuniVest II             MVT         16.50                7,112 
BlkRk MuniYld CA Quality      MCA         15.13               18,991 
BlkRk MuniYield               MYD         15.33               52,683 
BlkRk MuniYld NJ Fd           MYJ         15.84                5,917 
BlRk Muyld NJ Qlty            MJI         15.97                3,323 
BlkRk MuniYld Quality         MQY         16.33               10,382 
BlkRk MuniYld Ins Qlty        MFT         14.79                3,498 
BlkRk Cr Alloc Tr I           PSW         9.64                 4,944 
Blackrock Strategic Muni      BSD         14.37                  309 
Citizens Fdg Tr I 7.50%       CTZpA       25.65                  100 
Cutwater Select Incm Fd       CSI         19.30                1,921 
DWS Muni Inco                 KTF         14.07               12,963 
Dreyfus Strategic Munis       LEO         9.23                19,523 
DTF Tax-Free                  DTF         16.72                6,100 
Duke Realty pfL               DREpL       25.01                1,427 
Fed Premier Intemediate       FPT         15.03                4,252 
First Tr Strat High Fd II     FHY         16.30                8,974 
Guidewire Software            GWRE        18.44               31,426 
Healthspring                  HS          54.98               77,666 
Hubbell A                     HUB/A       74.00                3,691 
Hubbell B                     HUB/B       74.44              102,941 
Invesco CA Mun Secs           ICS         15.30                3,502 
Invesco VnKmCAInc             VCV         13.75                8,356 
Invesco Van Kampen Mun Tr     VKQ         14.76               18,538 
Invesco VK PAValMun           VPV         14.54               17,031 
Inv Vn Km Inv Grd             VGM         15.48               13,010 
Invesco VnKmNY                VTN         15.81                2,585 
Invesco VK Tr Val Mun         VIM         14.41                3,242 
MFS Hi Inc Muni               CXE         5.52                29,531 
Maiden Hldg NA 8.25% 2041     MHNA        25.67                1,400 
Mangd Durtn InvGr Mun Fd      MZF         15.40               10,012 
Nuveen CA Div Fnd             NAC         14.84               11,779 
Nuveen CA Investment          NQC         15.59                3,312 
Nuveen CA Muni Mkt            NCO         15.35                3,728 
Nuveen CA Performance         NCP         15.38                4,910 
Nuveen CA Quality Income      NUC         16.00               10,276 
Nuveen California Select      NVC         15.99               12,997 
Nuveen Insured CA Muni 2      NCL         16.02                6,705 
Nuveen Invest Qual Muni       NQM         16.09               12,014 
Nuveen Mich Premium Inc       NMP         14.71                1,371 
Nuveen Mun Opportunity Fd     NIO         15.05               17,425 
Nuveen Muni Value Fund        NUV         10.08               11,407 
Nuveen NJ Premium Income      NNJ         15.70                2,789 
Nuveen NY Select Quality      NVN         16.05                6,177 
Nuveen Ohio Qual Income       NUO         17.35                1,425 
Nuveen Pa Premium Inc 2       NPY         14.39                4,992 
Nuveen Premium Inco Muni      NPI         14.74               17,320 
Nuveen Prem Inco Muni 2       NPM         15.26               58,724 
Nuveen Prem Inco Muni 4       NPT         13.94               11,149 
Nuveen Quality Income         NQU         15.30               26,230 
Nuveen Select Quality         NQS         15.77               60,126 
Nuveen Sel 3                  NXR         14.60                2,277 
Pep Boys                      PBY         15.00            6,978,553 
PIMCO Muni Inc III            PMX         12.30               32,090 
PimcoNY Fd                    PYN         10.39                  903 
Rentech Nitrogen Ptrs LP.     RNF         23.05               25,702 
Sturm Ruger                   RGR         40.25               32,334 
Thomas & Betts                TNB         71.31            4,088,707 
Wstrn Asset Muni Ptnrs Fd     MNP         16.00                3,338 

New Lows 6 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
Cellcom Israel                CEL         14.20               99,545 
Inergy LP                     NRGY        17.01            1,110,814 
Portugal Telecom              PT          5.09               160,100 
Quad/Graphics                 QUAD        11.25              108,011 
Ralcorp Holdings Inc. Wi      RAHw        74.76                2,400 
TelItalia ADS A               TI/A        8.36                 5,695

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Irish Minister: hard to stay in EU if treaty changes rejected

Kindly refer to my 2012 predictions, a.k.a. “future history.”

Irish people are going to be very pissed they agreed to do things the right and noble way. Probably furious enough to blow a hole in European fiscal union…

DUBLIN (Reuters) – It would be difficult for Ireland to remain in the euro zone if its voters rejected a proposed new fiscal treaty, its European Affairs minister said on Monday, raising the stakes in a political battle over whether to put the plan to a referendum.

European leaders are expected to agree to tighten budget rules on Monday, seeking to regain market confidence in the public finances of the 17 countries sharing the euro after three, including Ireland, had to seek international bailouts in a crisis that now threatens major economies such as Italy.

Irish citizens have twice rejected changes to EU treaties before voting through amended versions.

“It would be a very sad day if we somehow decided to opt out of that (new treaty) and allowed the other 16 members of the euro zone to progress and try to find a solution without us,” junior minister Lucinda Creighton told state broadcaster RTE.

“I think it would make it almost impossible for us to continue as part of the currency union because being part of a currency union means you have to abide by the rules,” Creighton said.

The government has rubbished opposition suggestions that Ireland should leave the euro zone rather than continue to endure savage spending cuts, saying an exit would have catastrophic consequences for the economy.

Ministers have indicated they would prefer to avoid a referendum on the treaty fearing it would be rejected in a backlash against austerity.

Creighton said the government was happy with the treaty in its current draft.

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Amylin Pharmaceuticals Inc. (AMLN) and Alkermes Inc. (ALKS) : The drugmakers succeeded in their third attempt to gain U.S. clearance for Bydureon, a once-weekly version of Amylin’s diabetes shot. The Food and Drug Administration approved the drug for adults with Type 2 diabetes.

Amylin surged 12 percent to $13.62, and Alkermes rose 15 percent to $22.

Cliffs Natural Resources Inc. (CLF) retreated 1.1 percent to $72.25. The iron-ore miner may rise to as high as $115 per share within the next year as it increases production overseas to meet growing demand for infrastructure, Barron’s reported.

Coach Inc. (COH) : The retailer may rise to as high as $80 per share in the next year as demand for luxury handbags and accessories increases, Barron’s reported, citing Omar Saad, analyst at International Strategy & Investment Group.

Delta Air Lines Inc. (DAL) : The carrier is weighing whether to make an offer for US Airways Group Inc. (LCC) , the smallest full-service domestic carrier. US Airways confirmed earlier this month it’s evaluating a possible merger with American Airlines parent AMR Corp. (AAMRQ US) in bankruptcy. TPG Capital and Delta also are evaluating possible bids for American, people with knowledge of the matter have said.

US Airways advanced 5.3 percent to $8.61.

El Paso Corp. (EP) : The company is in advanced talks to sell its oil-exploration unit to a group led by private equity firm Apollo Global Management LLC (APO) (APO US) for about $7 billion, the Wall Street Journal reported, citing unidentified people.

Jarden Corp. (JAH) : The maker of Mr. Coffee brewers may stall after a 22 percent rally since last summer and the suspension of its dividend to focus on share buybacks, Barron’s reported, without citing anyone.

Momenta Pharmaceuticals Inc. (MNTA) rose 3.4 percent to $15.70. The owner of patents on the blood-thinner Lovenox will replace HealthSpring Inc. (HS) in the Standard & Poor’s SmallCap 600 Index after the close of trading on Jan. 31. The change is being made because Cigna Corp. (CI) is acquiring HealthSpring in a deal expected to be completed today.

Omnicom Group Inc. (OMC) slipped 2.9 percent to $45.15. The owner of advertising agencies was lowered to “market perform” from “outperform” by Daniel Salmon, an equity analyst at BMO Capital Markets, with a 12-month price estimate of $49.

PharMerica Corp. (PMC) fell 13 percent to $12.50. U.S. regulators sued Omnicare Inc. (OCR) to block its $440.8 million takeover of the drug-supply company, a deal they said would increase prices for elderly nursing-home residents covered by Medicare.

Research In Motion Ltd. (RIM) : The BlackBerry maker has held talks with competitors about licensing its new software, Chief Executive Officer Thorsten Heins said. Handset and PC makers approached RIMM about the licensing, the CEO said, without identifying them.

Thomas & Betts Corp. (TNB US) surged 22 percent to $70.90. ABB Ltd. agreed to buy the designer and maker of electrical components for $3.9 billion to expand its North American distribution network and boost sales of low-voltage gear. ABB offered $72 for each share of Thomas & Betts, 24 percent more than the close on Jan. 27.

U.S. Steel Corp. (X) declined 2.6 percent to $29.11. The steel company plans to sell U.S. SteelSerbia d.o.o. to Serbia for a nominal purchase price and to take a non-cash charge of $400 million to $450 million in the first quarter.

Wendy’s Co. (WEN) (WEN US) fell 2.1 percent to $5.10. The restaurant chain said earnings before income, taxes, depreciation and amortization in 2012 will be no more than $345 million, excluding some items, compared with the average analyst estimate of $353.1 million.

Yum! Brands Inc. (YUM) (YUM US): The owner of Pizza Hut and Taco Bell is focusing on faster-growing markets including China and India for revenue expansion while selling U.S. stores to franchises, Barron’s reported, citing an interview with Chief Executive Officer David Novak.

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Upgrades and Downgrades This Morning


Advanced Auto Parts Inc. (NYSE: AAP) Raised to Buy at Goldman Sachs.
AutoZone, Inc. (NYSE: AZO) Raised to Buy at Goldman Sachs.
Bank of America Corporation (NYSE: BAC) Cut to Neutral at Goldman Sachs.
Citigroup , Inc. (NYSE: C) Raised to Buy at Goldman Sachs.
HollyFrontier Corporation (NYSE: HFC) Cut to Neutral with $27 target at Citigroup.
ImmunoGen Inc. (NASDAQ: IMGN) Reiterated Buy with $17 target at Canaccord Genuity.
JAKKS Pacific (NASDAQ: JAKK) Cut to Underperform as Bear of the Day at Zacks.
J.P. Morgan Chase & Co. (NYSE: JPM) Maintained Buy but removed from Conviction Buy List at Goldman Sachs.
Kellogg Co. (NYSE: K) Cut to Neutral at JPMorgan.
Key Energy Services (NYSE: KEG) Maintained Buy but raised estimates ($19 target) at Canaccord Genuity.
Methanex Corporation (NASDAQ: MEOH) named as Value stock of the day at Zacks.
Monster Beverage Corporation (NASDAQ: MNST) Cut to Neutral at SunTrust.
Morgan Stanley (NYSE: MS)  Raised to Conviction Buy list at Goldman Sachs.
Mylan, Inc. (NASDAQ: MYL) Raised to Outperform as Bull of the Day at Zacks.
Staples Inc. (NASDAQ: SPLS) Cut to Sell at Goldman Sachs.
Time Warner Inc. (NYSE: TWX) Cut to Equal-Weight at Barclays.
Whole Foods Market. Inc. (NASDAQ: WFM) Maintained Buy but removed from Conviction BUy List at Goldman Sachs.

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Gapping Up and Down This Morning

Gapping up

AMLN +15.9%,  ALKS +4.7% , HNP +1.9%,  TNB +22.4% , MNTA +3.6%,  LCC +7.3%, GTXI +14.2%,  REGN +1.7% ,

Gapping down

BNVI -38.5%, CTIC -16.5%, PMC -9.1%, DB -4.1%, BCS -2.8%, BAC -2.5%, SLV -2.3%, HBC -1.7%, CLNE -1.5%, GOLD -1.4%, GLD -1.1%, C -1%, SPLS -1.2% ,

MT -4.4%, GFI -2.5%, AG -2.1%, ABX -1.8%, SLV -1.5%, HMY -1.4%, GOLD -1.4%, GLD -1.1%, DB -4.8%, ING -3.9%, BCS -3.2%, UBS -2.1%, HBC -2.1%, JPM -1.2%,

SIFY -3.2%, PHG -2.5%,

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