Day Traders Diary


Equities stumbled out of the gate before the September Chicago PMI added to the risk-off sentiment. The survey revealed a contractionary reading of 49.7, while expectations called for the number to be closer to 52.9. After marking session lows, equities remained near the bottom of the range until the results of Spain's bank stress test were announced. The reported EUR59.3 billion capital shortfall was within the expected range which brought on a round of buyers who took the key averages to their session highs. The brief rally was short lived as the major indices followed it with a return to their opening levels. As a result, the S&P 500 finished lower by 0.5%.

Industrial stocks outperformed slightly. Electrical equipment manufacturer AZZ (AZZ 37.98, +3.22) jumped 9.3% after beating on earnings and revenues. In addition, the company issued upside full-year guidance and announced the acquisition of Canadian Galvcast Manufacturing.

Pentair (PNR 44.82, +1.44) advanced 3.3% after authorizing an initial stock repurchase program in the amount of $400 million. The program was first announced in March 2012 and will commence immediately.

Farm equipment stocks were generally higher following this morning's Department of Agriculture crop report which showed a notable decline in grain inventory. Deere (DE 82.47, +0.37) and AGCO (AGCO 47.47, +0.55) added between 0.5% and 1.2% each. The PowerShares DB Agriculture ETF (DBA 29.41, +0.44) saw notable outperformance as it gained 1.5%.

The bellwether Dow Jones Transportation Average has been a notable underperformer on the quarter, and it trailed the broader market again today. Overseas Shipholding Group (OSG 6.60, -0.45) was a notable laggard within the group as shares of the shipping company fell 6.4%. Railroads remained weak as CSX (CSX 20.75, -0.36) and Kansas City Southern (KSU 75.78, -1.18) both lost near 1.5%.

Financial stocks showed intraday strength, but ended up mostly in-line with the broader market. The SPDR Financials Select Sector ETF (XLF 15.59, -0.05) shed 0.3%.

Bank of America (BAC 8.83, -0.14) slid 1.6% after announcing that it has reached a $2.43 billion settlement in Merrill Lynch acquisition-related class action litigation. Due to the litigation expense, Bank of America sees a third quarter charge of $0.28.

American Express (AXP 56.86, +0.29) added 0.5% and was the only major name which ended higher on the day.

The University of Michigan's final Consumer Sentiment Survey for September fell to 78.3 from the 79.2 which was posted in the preliminary Survey. Economists had expected the reading to be revised down to 79.0.

Personal income increased in August by 0.1%, which was below the expected increase of 0.2%. Personal spending increased by 0.5%, which was in-line with expectations. Core personal consumption expenditures were higher by 0.1%, which was also in-line with expectations.

On Monday, the ISM Index and construction spending data will be released at 10:00 ET.

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