Equities Update: Solid Monthly Gains

|
 |  Includes: AKS, DIA, NUE, QQQ, SPY, STLD, UNH, X, XLI
by: Midnight Trader

4:28 PM, Nov 30, 2009 --

  • NYSE up 22.3 (0.3%) to 7,092.36.
  • DJIA up 34.9 (0.3%) to 10,345.
  • S&P 500 up 4 (0.4%) to 1,096.
  • Nasdaq up 6 (0.3%) to 2,145.


GLOBAL SENTIMENT

  • Hang Seng up 3.95%
  • Nikkei up 2.91%
  • FTSE down 1.05%


UPSIDE MOVERS

(+) X added to Goldman Sachs Conviction Buy list in note that's generally upbeat on steel companies.

(+) AMZN says November is best sales month yet for Kindle.

(+) MON gets favorable nod from Barron's article focused on long-term outlook.

(+) PEP is featured in Barron's with price target of 70s next year.

(+) SYY is featured in Barron's with price target of 40 in coming years.

(+) CLRT gets exclusive license to commercialize cancer biomarker.

(+) NVAX completes phase 2 study enrollment for flu vaccine in older adults.

DOWNSIDE MOVERS

(-) LLY gets FDA approval for Cymbalta for maintenance treatment of generalized anxiety disorder.

(-) DPTR exploring strategic alternatives.

(-) HBC upgraded.

(-) UNH backs 2009, 2010 guidance.

(-) BIDU downgraded.

(-) ING continues decline after pricing rights issue last week.

(-) LVS falling as Sands China down 10% in Hong Kong IPO.

MARKET DIRECTION

Stocks turned higher inside the final half hour of trading as a late update soothed worries about Dubai debt. Reports said Dubai World has announced plans to restructure $26 billion in debt. Financials led the rebound.

The major averages closed up 0.3%-0.4%. The DJIA will finish out November up more than 6%, the best monthly performance since July. The S&P 500 is up 5.7% for November, while the Nasdaq Composite gained 4.9%.

Stocks trimmed opening losses after a rise in the Chicago Purchasing Manager's November index to 56.1%, from October's 54.2%, the highest level since August 2008. Readings above 50 signal expansion. Economists has projected the Chicago index would drop to 53.0, based on the median estimate of 53 economists in a Bloomberg News survey. But a move into positive territory was only temporary.

The debt crisis of the Dubai World conglomerate remains a wild card in trading, but investors seem to believe the crisis will be contained. The United Arab Emirates offered emergency support, the first steps in easing fears of a looming debt default by the two Dubai firms. Dubai last week asked for a six-month repayment freeze on debt issued by state conglomerate Dubai World and its Nakheel construction unit.

In company news, UBS downgraded the industrial sector to "underweight" from "neutral," saying a continued weakness in demand was limiting improvement in capacity utilization rates and pricing.

UnitedHealth Group (NYSE:UNH) affirmed its previous outlook for 2009 net earnings of approximately $3.15 per share. The Street view is $3.16 per share. Looking further out, the company affirmed its 2010 financial outlook, which includes revenues of $88.5 billion to $89.5 billion and earnings of $2.90 to $3.10 per share. The Street view is $3.08 per share.

Goldman Sachs lifted its rating on U.S. steel makers to "attractive" from "neutral," citing the sector's underperformance as well as the emergence of incrementally positive data points, including bottoming U.S. steel and scrap prices, high Chinese prices, and continued low inventory, according to a report citing the note, on MarketWatch. Goldman also said a weak dollar has brought the U.S. close to being a net exporter, and it expects better industrial and auto demand in 2010.

U.S. Steel (NYSE:X) is added to its conviction buy list. Favorite sector picks are Steel Dynamics (NASDAQ:STLD), AK Steel (NYSE:AKS), and Nucor (NYSE:NUE). Goldman removed Freeport-McMoran Copper & Gold (NYSE:FCX) from its conviction buy list.

Baidu.com (NASDAQ:BIDU) slips after Bernstein reportedly cut its rating on the stock to Market Perform from Outperform.

Oil turned positive on PMI Data, rising 18 Cents to $76.13 a barrel on the New York Mercantile Exchange and has since pushed to $76.37 a barrel, up $0.32 on the January contract.

Gold is up $1.90 to $1176.10 an ounce on the December contract on the NYMEX.