Stocks end Mixed; Financials Higher, Energy Lower (AAPL, BAC, C, CVX, DIS, FSLR, KO, MPC, PEP, SWN, URBN)

Published on Wednesday, 11 January 2012 17:58 Written by Christopher Lynn

New York, January 11^th (TradersHuddle.com) – Stocks closed narrowly mixed after paring earlier losses, following an upside move in banks. Worries over the euro zone weighed on the session, with the euro trading below the $1.27 level against the Dollar after Fitch ratings warned the ECB over a possible collapse of the currency if its not revamps is sovereign bond buying program.

The Dow Jones Industrial Average fell 13.02 points, or 0.1%. The S&P 500 index added less than 1 point, or 0.40%, while the NASDAQ climbed 8.26 points, or 0.31%.

The market started with modest losses, as participants digested the S&P 500 closing at a 5-month high and as the euro weakened some earlier in the day amid a contraction in the German economy in the last quarter and amid jitters over euro zone countries funding needs, with key Italian and Spanish bond auctions later in the week.

In Europe, equity markets closed lower after Fitch Ratings said that the ECB should ramp up its euro zone debt-buying program to prevent a “cataclysmic” collapse of the euro. The comments coupled with German 4^th quarter GDP showing a contraction of 0.25%, spurred a moved towards safe haven assets and a move away from the euro, which traded below the $1.27 level against the Dollar.

In the S&P 500 sectors it was a mix bag, with financials, materials, and technology posting the biggest gains, while energy, consumer staples, and utilities posted the biggest declines. The Financial SPDR ETF (NYSE:XLF) continued with its upswing since the start of the year by adding more than 1% in the session, extending its year to date gain to 6.6%. Despite the jitters in the euro zone, participants have been embracing the sector and banking shares, looking past the crisis in Europe and focusing on the prospects of better economic growth in the U.S. and stabilization and perhaps a slight improvement in the housing market, as labor figures begin to improve.

Bank of America (NYSE:BAC), which was the top loser last year in the Dow, has surged back after hitting a low of $4.92 in December. Shares rallied 3.62% to $6.87, posting the biggest gain in the blue chip index; year to date BofA has jumped 23.6%, as in today’s session it got closer to the $7 mark.

Rival Citigroup (NYSE:C) also saw a strong bid, jumping 4.23% to $31.27, posting one of the biggest gains in the sector. Citi extended its year to date gain to 18.9%. The lender is schedule to report is quarterly results next Tuesday, with analysts on average expecting a profit of $0.76 per share on revenues of $18.78 billion.

Meanwhile, energy shares fell as a group pressured by the weakness of the energy complex. Crude oil prices closed with a 1.2% loss at $100.96 per barrel, while natural gas prices suffered a 5.8% drop to close at $2.77 per MMBtu. A combination a weak euro, a bearish inventory report, and the unusually warm weather has been impacting energy demand.

Southwestern Energy (NYSE:SWN), the Houston based independent energy company, was the worst performer in the sector, with shares tumbling 7.97% to $29.92. The stock received additional pressure after it was downgraded to a Neutral from Outperform at Robert W. Baird.

Chevron (NYSE:CVX), the second largest U.S. energy producer, was also under pressure with shares losing 1.2% to $107.77, posting one of the biggest percentage declines in the Dow Jones Industrial Average.

On the flip side in the sector, refiners and coal producers were outperformers. Marathon Petroleum (NYSE:MPC) jumped 3.33% to $32.89 despite warnings that it expects to report a small loss in the quarter compared with consensus for EPS of $1 and last quarter EPS of $0.64. The company blamed the rapid increase of WTI oil during the quarter.

And Alpha Natural Resources (NYSE:ANR), the steam and metallurgical coal producer, rallied more than 4% to post the biggest gain in the sector,

In the consumer staples space, Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP) weighed on the performance of the sector, with both stocks getting downgraded to a Neutral from Buy at UBS. Coca-Cola fell 1.85% to $68.06, posting the second biggest decline in the blue chip index, after UBS also cut its target price to $70 from $73. PepsiCo ended the session nearly 1% lower at $65.01.

Also in the consumer space, Walt Disney (NYSE:DIS) pressured the Dow, posting its biggest decline. Shares of the world’s largest media company tumbled 2.35% to $38.70. Yesterday, Barclays downgraded the stock to Equal Weight, as it believes risk/reward profile is not as attractive.

Weighing the most in the S&P 500, were shares of Urban Outfitters (NASDAQ:URBN). The owner and operator of Urban Outfitters and Anthropologie retail chains plunged to the bottom of the S&P 500, with shares tumbling 18.63% to $23.93, after the company announced the resignation of its CEO and both Citi and Robert W. Baird downgraded the stock. Citi cut its rating to a Sell, while Robert W. Baird cut its rating to Neutral.

In tech land, Apple (NASDAQ:AAPL), ended near the flat line, sliding 0.16% to $422.55 after trading in a tight range of $419.31 to $422.85. An Eastman Kodak suit, alleging that the tech giant infringed in 4 patents related with digital images and announcements from Dell that it will enter the consumer tablet market with a device late in 2012 and Lenovo that it its planning to enter the lucrative U.S. smartphone market also this year weighed on shares. Apple has gained 4.33% year to date and posted a new all-time high of $427.75, as analysts have raised their estimates to what they believe will be a record quarter for Apple on both the top and bottom lines.

Also in the sector, and posting the second biggest percentage gain in the S&P 500 was First Solar (NASDAQ:FSLR). The largest maker of thin film solar modules in the world surged 7.82% to $41.80, extending its year to date jump to 23.8%. Solar stocks rallied in the day, despite lower crude oil prices, as Deutsche Bank said that a surprisingly quarter in Germany and robust demand in Italy and the United States could benefit the sector. The firm said that its checks indicate inventories across the supply chain are at record levels, which could spur a restocking rush. First Solar shares plummeted last year on concern over oversupply and falling prices. The stock has been rallying this year from oversold levels also amid M&A or takeover rumors.