Day Traders Diary
10/1/12Today's session began with an extension of the bullish sentiment observed in overseas action. Following a higher open, U.S. equities got an additional boost from the ISM Index which was reported at 51.5 against the expectations of a 49.7 reading. After rallying to session highs, the Dow held the bulk of its gains, while the S&P 500 and Nasdaq spent the remainder of the session in a slow retreat towards the unchanged line. As a result, the Dow climbed 0.6%, the S&P 500 added 0.3%, and the Nasdaq slipped 0.1%.
The financial sector was one of the day's top performers. The SPDR Financial Select Sector ETF (XLF 15.66, +0.07) advanced 0.5% as major names within the sector all showed gains. Goldman Sachs (GS 116.86, +3.18) ended higher by 2.8%, while Bank of America (BAC 8.96, +0.13) added 1.5%. Meanwhile, Citigroup (C 32.75, +0.03) finished flat after its shares were downgraded from 'buy' to 'neutral' at Sterne Agee.
European financials also rallied. Credit Suisse (CS 21.67, +0.52) advanced 2.5%, while Barclays (BCS 14.14, +0.27) and Deutsche Bank (DB 40.21, +0.56) registered gains near 1.7% each.
Despite the outperformance of financials, those names specializing in real estate investment trusts were relatively weaker. The iShares Dow Jones US Real Estate ETF (IYR 63.92, -0.46) slipped 0.7%. Among individual names, Prologis (PLD 34.58, -0.45), Vornado (VNO 80.29, -0.76), and Weingarten (WRI 27.66, -0.45) all fell between 0.9% and 1.6%.
The health care space also displayed relative strength as a handful of stocks moved on analyst comments. Healthcare Services Group (HCSG 23.81, +0.95) gained 4.2% after UBS initiated coverage of the stock with a 'buy' rating. Meanwhile, Allscripts (MDRX 12.84, +0.42) advanced 3.4% following an upgrade from 'neutral' to 'outperform' at Cowen. In addition, Allscripts was also upgraded by ISI Group.
Blyth (BTH 26.77, +0.78) added 3.0% after announcing that it bought back 283,300 shares between September 26-28.
Tenet Healthcare (THC 6.48, +0.21) rose by 3.4% after unveiling a four-point plan to drive shareholder value creation. A $500 million authorization to repurchase common stock in open market transactions was one of the key points of the plan. In addition, effective October 11, 2012, a reverse stock split will occur. As a result of the reverse split, one new Tenet share will be issued in exchange for every four existing shares.
The Dow Jones Transportation Average trailed the broader market. The bellwether group added 0.1% as trucking and shipping stocks weighed on the complex. Overseas Shipholding Group (OSG 6.49, -0.11) and Matson (MATX 20.16, -0.75) lost 1.7% and 3.6%, respectively.
All five airlines listed in the transportation average showed relative outperformance. Alaska Air (ALK 35.17, +0.11) added 0.3% while Delta (DAL 9.47, +0.31), JetBlue (JBLU 4.86, +0.07), Southwest (LUV 8.86, +0.09), and United Continental (UAL 19.79, +0.29) posted gains between 1.0% and 3.4%.
Chinese internet stocks were broadly weaker today. Baidu (BIDU 112.77, -4.12) shed 3.5% after its shares were downgraded from 'buy' to 'hold' at Jefferies. In addition, the price target was lowered from $135 to $125. Peers, Sohu.com (SOHU 41.33, -0.76) and Qihoo (QIHU 21.81, -0.24) slipped 1.8% and 1.1%, respectively. Meanwhile, Youku (YOKU 18.70, +0.31) rose by 1.7% as it outperformed its peers.
August construction spending fell 0.6% month-over-month, against the expected increase of 0.4%.
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