The market review for June 14

The American stock market on Friday, June 11, opened lower prices of most securities. Before investors put into the quote too much optimism about the future of the U.S. economy, and Friday’s positive expectations have been partially allayed by the data published macroeconomic statistics. In particular, the volume of retail sales in May fell by 1.2%, while economists have predicted his rise to 0,2%. This is the first decline in eight months and quite a negative signal indicating the skepticism of ordinary consumers as to the medium-term prospects of the market. Do not have lasted until the April forecast and the amount of stocks in warehouses: its growth rate of 0,4% instead of the expected 0.5% and was minimal in recent years. Some raise the mood of investors could publish consumer sentiment index for June, calculated by the University of Michigan. From the May level (73.6 points) rose to 75.5 points and established at a maximum of two and a half years level. The interpretation of the growth index at odds with the situation in retail. On this background during the session on 11 June the Dow Jones index made a few attempts to approach the level of Thursday, and only in the last hour of trading managed to get a “plus”, which is a big success for the “bulls” in the light of rapid growth of the preceding day.

As a result of trades on June 11 the Dow Jones index rose 38.54 points (0.38%) – up to 10,211.07 points, NASDAQ rose 24.89 points (1.12%) – up to 2243.6 points, S & P added 4.76 points (0.44%) and amounted to 1,091.6 points.

Amid disappointing sales data by major trading network of the country were among the outsiders bidding. Quotes of the largest U.S. retailer Wal-Mart Stores Inc. fell by 0,7%, The Home Depot Inc. – On 1,53%, Costco Wholesale Corp. – On 0,23%, Lowe’s Companies Inc. – On 1,51%, Gap Inc. – On 0,32%, Staples Inc. – At 0.73%. Given the fact that in the summer buying activity may continue to decline because of seasonality, promotions retailers have every chance to remain under pressure, of course, if the economy starts to show signs of active recovery, which is very doubtful.

A small downward correction in oil prices, up to a mark of $ 74.5 per barrel. sort by Brent, will be enough to divert the “minus” the paper half the oil and gas companies in the U.S.. The victims came from the sale of Exxon Mobil Corp. (-0,05%), Chevron Corp. (-0,16%), XTO Energy Inc. (-0.18%). Meanwhile, the growth could complete the day Occidental Petroleum Corp. (+1,82%), Devon Energy Corp. (0.72%) and ConocoPhillips. (0.24%). And the second group joined them and has been on for several weeks under heavy pressure the British oil giant BP Rlc., Prices of securities which soared during the day at 3.63%.

As tech companies, investors were positive on OEM: Hewlett-Packard Co. (+1,48%), International Business Machines Corp. (0.6%) and Dell Inc. (0.61%). At the same time last Friday lowered its profit forecast for the I quarter of the current fiscal year, but, as can be seen, growth is not too bothering. Significantly increased the capitalization of Motorola Inc. (3.95%): the company signed with the Canadian Research In Motion Ltd. (RIM) cross-licensing agreement, so that the lengthy court proceedings, it seems, will remain in the past. Recall, RIM Blackberry communicators produce and had a claim to Motorola in violation of several patents. Similar complaints were also received from Motorola. Quotes RIM rose only 0.66%.

At the end of the day was the American stock market still “painted” one more day of growth, and apparently tried to approach the resistance at 10260 points on an index Dow Jones. Experts are inclined to believe that the rebound up from the recent “bottom” may well be considered held and chances at the beginning of a wave reduction outweigh the chances for continued growth. The most likely scenario now appears that the Dow Jones still comes up to that mark, after which the “bears” are activated. For the speculative purchases current levels no longer interesting, and long-term investors prefer to stay outside in the summer market.

Upgrades:

• Great Plains Energy (GXP 17.14) upgraded to Buy from Neutral at Goldman
• Consolidated Edison (ED 19.65) upgraded to Neutral from Sell at Goldman
• Pulte Group (PHM 9.55) upgraded to Buy from Hold at Citigroup
• Equity One (EQY 16.68) upgraded to Neutral from Sell at UBS
• Acadia Realty Trust (AKR 18.62) upgraded to Neutral from Sell at UBS
• East West Bancorp (EWBC 15.61) upgraded to Outperform from Market Perform at Keefe Bruyette
• Kenexa (KNXA 12.56) upgraded to Buy from Neutral at Janney Montgomery Scott
• Parametric Technology (PMTC 16.17) upgraded to Buy from Neutral at Janney Montgomery Scott
• Ceragon Networks (CRNT 7.25) upgraded to Buy from Neutral at Merriman. Firm believes investors have lost focus and faith with regard to mobile backhaul, particularly in the face of the Clearwire pause (impacting DragonWave) and underperformance of Aviat Networks. India provides a small catalyst with the conclusion of the 3G and BWA auctions as well as the streamlining of the telecom importation restrictions (the China ban appears to be gone, and general product approval is now streamlining).
• Select Medical Holdings (SEM 7.13) upgraded to Outperform from Neutral at Baird; lowers tgt to $11 from $12. Firm expects the bad press to die down and the news flow to turn more positive in the coming months. They believe a few small wins can rally shares, especially as investors grow to appreciate (and focus on) the regulatory stability for LTACH providers over the near term (through 2012).
• Ocwen Finanacial (OCN 10.40) upgraded to Buy from Hold at Jefferies, based on valuation following the co’s purchase of HomeEq for $1.35 bln; maintains $13 tgt.

Downgrades:

• El Paso Electric (EE 19.65) downgraded to Sell from Neutral at Goldman

• Portland General Electric (POR 18.69) downgraded to Neutral from Buy at Goldman
• CDC Corp. (CHINA 1.92) downgraded to Neutral from Buy at Janney Montgomery Scott
• Advent Software (ADVS 46.85) downgraded to Neutral from Buy at Janney Montgomery Scott
• Akamai Technologies (AKAM 44.30) downgraded to Hold from Buy at Citigroup; maintains $44 tgt.
• Lions Gate Entertainment (LGF 6.97) downgraded to Market Perform from Outperform at BMO Capital; lowers tgt to $7 from $9
• Fuel Systems Solutions (FSYS 28.00) downgraded to Neutral from Buy at Janney Montgomery Scott; lowers tgt to $27.50 from $34.50

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