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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

11/20/12

The major averages opened the session on a negative note after Moody's cut the sovereign rating of France to 'Aa1' from 'Aaa.' The S&P 500 followed the lower open with a steady climb towards its flat line. After making several attempts at breaking through the unchanged mark, the benchmark index is registering marginal gains.

Consumer discretionary stocks are some of the top gainers. The sector is outperforming due to strength in homebuilders which are seeing gains after October housing starts of 894,000 exceeded expectations. PulteGroup (PHM 16.78, +0.88) and Standard Pacific (SPF 6.80, +0.35) are both adding near 5.5%.

Suppliers of building materials lead the industrial sector as they too benefit from today's housing starts data. Masco (MAS 16.09, +0.65) and NCI Building Systems (NCS 11.61, +0.40) are both advancing near 4.0% while Quanex Building Products (NX 20.09, +0.29) is adding 1.5%.

The technology sector is the weakest performer of the day as it trades lower by 0.6% and weighs on the broader market. Among tech bellwethers, Apple (AAPL 560.73, -5.00) is shedding 0.9% after yesterday's rally resulted in a 7.2% gain. Elsewhere, Intel (INTC 19.51, -0.73) is sliding 3.7%.

Looking at tech earnings, Hewlett-Packard (HPQ 11.80, -1.50) is slumping 11.2% after reporting mixed results. During the fourth quarter, the computer assembler earned $1.16, which was $0.01 ahead of the Capital IQ consensus estimate. However, the company's revenue missed expectations after declining 6.7% year-over-year, to $29.96 billion. In addition to the results, investors were drawn to another point of interest in the quarterly report. The report included an $8.8 billion charge related to serious accounting improprieties and misrepresentations by Autonomy Corporation before it came under Hewlett-Packard's control. Following the earnings release, ISI Group downgraded HPQ to 'neutral' from 'buy.'

Elsewhere, Agilent Technologies (A 36.87, -0.64) beat on earnings and reported in-line revenue. The stock trades lower by 1.7% after the company issued cautious guidance as it sees first quarter earnings and revenue below analyst expectations.

Also of note, SanDisk (SNDK 38.97, -0.32) is down 0.8% after reports suggested the company may face antitrust claims over some of its drives.

Yesterday, three quick service restaurant operators reported their earnings. Krispy Kreme Doughnuts (KKD 9.20, +1.66) is spiking 22.0% after beating on earnings and revenue. During the third quarter, the company earned $0.12, which was $0.04 ahead of the Capital IQ consensus estimate. In addition, the revenue of $107.1 million also beat expectations. The earnings report also contained upbeat guidance as the company sees its full-year 2013 and 2014 earnings ahead of analyst expectations.

Meanwhile, Bob Evans (BOBE 34.82, -1.52) is down 4.2% after missing on both the top and bottom lines. In the earnings release, the company also indicated it is exploring strategic alternatives for its Mimi's Cafe business segment.

Lastly, Jack in the Box (JACK 26.03, -0.23) is slipping 0.9% after missing on earnings.


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