It is strange to see auto suppliers gapping up and such... such a staid business, but in 'student body left' trading as long as the market is happy (almost) all stocks are the same stock to the computers.  On days like today when countless stocks gapped up, it was difficult to discern that there actually was a catalyst other than everything must be bought, but the sector was upgraded by Morgan Stanley; including fund holding BorgWarner (BWA).  TRW Auto (TRW) which was another name in the group I considered also was upgraded, and both have bounced smartly lately and look much better technically  now.

Via Marketwatch:

  • The auto industry view was raised to attractive at Morgan Stanley on Tuesday, including buy recommendations on Johnson Controls  (JCI), BorgWarner (BWA), and TRW Automotive (TRW).  
  • The investment bank boosted annual earnings expectations by about 25% for 2010 to 2012, leading to higher sustainable margins for the sector. With better-than-expected profits in recent quarters, Morgan Stanley says the auto suppliers have made structural improvements that outweigh recent sell-offs over news from Europe.

Long BorgWarner in fund; no personal position