Day Traders Diary
9/20/12Stocks got off to a slow start after bearish data from around the world overshadowed investor optimism. Japan reported a wider-than-expected trade deficit while the French and Eurozone PMI readings were well short of expectations. Domestically, the weekly initial claims exceeded expectations. After marking session lows thirty minutes into the trading day, the major averages set off on a day-long climb towards positive territory. As a result, the S&P 500 finished flat.
Healthcare stocks were generally higher as they benefited from the day's risk-off sentiment. Within the sector, Questcor (QCOR 30.33, +3.98) closed higher by 15.1% after losing nearly 49.0% during yesterday's sell-off which was sparked by doubts as to whether insurance companies will cover Questcor's Acthar gel.
Providers of health care equipment and supplies also saw strength within the defensive sector. CryoLife (CRY 5.90, +0.14), Meridian Bioscience (VIVO 18.84, +0.38), and Masimo (MASI 24.87, +0.39) all posted gains between 1.6% and 2.4%. On the downside, Horizon Pharmaceuticals (HZNP 3.48, -1.10) slumped 24.0% after pricing a $75 million public offering of common stock and warrants at $3.50 per unit.
The Dow Jones Transportation Average ended lower by 2.8% as it trailed the broader market. The bellwether group showed considerable weakness as railroads weighed on the complex. The four railroad components of the average were firmly lower after Norfolk Southern (NSC 66.11, -6.58) cut its guidance due to slumping demand, and decreasing revenues from fuel surcharges. Norfolk Southern slid 9.1% while CSX (CSX 21.49, -1.30), Kansas City Southern (KSU 76.90, -2.22), and Union Pacific (UNP 120.95, -4.10) all fell between 2.8% and 6.0%.
Only Overseas Shipholding Group (OSG 7.16, +0.15) managed to stay positive within the transportation average while CH Robinson (CHRW 57.55, +0.15) spent the session hovering around its flat line.
Looking at the industrial sector, CLARCOR (CLC 43.75, -5.82) slumped 11.7% after delivering a disappointing quarterly report. The company missed on earnings and revenues and the conference call contributed to the negative sentiment as management issued downside fourth quarter and full-year guidance.
Apogee Enterprises (APOG 19.50, +1.88) was a notable outlier among industrial stocks. The producer of building materials advanced 10.7% after beating on earnings and revenues. Management was upbeat in its conference call as upside guidance was issued for full-year 2013.
Green Mountain Coffee Roasters (GMCR 27.84, -2.97) shed 9.6% after Starbucks (SBUX 51.19, +1.07) announced it will begin selling a single-serve brewing machine for $199.00. The Verismo will first be sold online before becoming available at Starbucks cafes next month. In addition to the $199.00 model, the company will also sell a $399.00 version which contains a larger water tank and an LCD display. Starbucks' presence in the single-serve market is expected to take a chunk out of a market previously dominated by Green Mountain's Keurig machines.
Two names made their exchange debut today. Online real estate search service, Trulia (TRLA 24.00, +1.90) surged 41.2% in its public debut. Shares of the company began trading at $22.00 after the initial public offering was priced at $17.00. Trulia's peer, Zillow (Z 46.17, +0.62) has risen over 130.0% since the company went public in July of last year. Meanwhile, Susser Petroleum (SUSP 22.91, -0.49) added 11.8% to its initial public offering price of $20.50.
The latest weekly initial jobless claims count totaled 382,000, which is higher than the 375,000 that had been expected. The tally is above the revised prior week count of 385,000. As for continuing claims, they fell to about 3.272 million from 3.304 million.
Separately, the Philadelphia Fed Survey rose to -1.9 for September. The reading shows an improvement over last month's -7.1. Economists polled by Briefing.com had expected that the Survey would improve to a -4.0 reading.
Lastly, leading indicators for August decreased by 0.1%, which is worse than the unchanged reading that had been widely expected to follow the prior month's 0.4% increase.
There are no notable releases on tomorrow's economic calendar. However, it is important to note that quadruple witching occurs tomorrow. This means that stock index futures, stock index options, stock options, and single stock futures are all set to expire.
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