Day Traders Diary


Stocks began the day on a mixed note before the release of the latest University of Michigan Consumer Sentiment Survey. The report registered a reading of 83.1 which was its best level since September 2007. Following the announcement, the major averages spiked to session highs, but the move was promptly retraced over the next thirty minutes. After returning to the flat line, the S&P 500 hovered around the unchanged level before falling to fresh session lows. At midday, the index is lower by 0.4%.

The financial sector is the biggest laggard of the day. Despite record earnings from two major names, the SPDR Financial Select Sector ETF (XLF 15.77, -0.25) is lower by 1.6%. Earlier, JPMorgan Chase (JPM 41.43, -0.66) reported earnings of $1.40 against expectations of $1.21 per share. Meanwhile, its revenues were reported at $25.15 billion which was ahead of the expected revenue of $24.27 billion. The stock traded higher in initial response to the earnings report. However, it is currently down 1.6%.

Wells Fargo (WFC 34.02, -1.15) is sliding 3.3% after reporting mixed earnings. WFC exceeded earnings expectations by one cent, while its revenues fell $200 million short of analyst estimates.

Other major financials are also showing weakness. Bank of America (BAC 9.10, -0.24) and Morgan Stanley (MS 17.31, -0.54) are down 2.6% and 3.0%, respectively.

Consumer staples are outperforming the broader market. Within the space, Dean Foods (DF 14.96, +0.31) is higher by 2.1% after Stifel Nicolaus upgraded the stock to 'buy' from 'hold' with an $18 price target.

Elsewhere in the space, Monster Beverage (MNST 56.58, +2.14) is advancing 3.9% as it rebounds from recent weakness.

After yesterday's big rally, coal stocks are broadly lower today. The weakness comes after Credit Agricole downgraded Alpha Natural Resources (ANR 7.84, -0.71), Walter Energy (WLT 35.26, -2.42), and CONSOL (CNX 34.98, -0.50) to 'sell' from 'outperform.' In addition, Nomura downgraded Peabody Energy (BTU 25.57, -0.61) to 'reduce' from 'neutral.' Lastly, Alpha Natural Resources was also downgraded at Nomura to 'neutral' from 'buy.' The four coal names are all down between 1.3% and 8.0%.

Overall producer prices rose during September by 1.1%, which was hotter than the 0.8% increase that had been widely forecast. Core producer prices were unchanged which was lower than the consensus call of a 0.2% increase.

One more data point remains on this week's economic calendar as the U.S. Treasury will report its September budget at 14:00 ET.

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