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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

10/15/12

Equities got off to a slow start as the major averages spent the first 90 minutes near their respective unchanged levels. Today's economic data was mixed, and did little to move the markets. After early indecision, the three indices rose to their session highs, and maintained those levels into the afternoon. The S&P 500 saw brief afternoon weakness before late-day buying lifted the index to a gain of 0.8%.

Financial stocks showed strength after Citigroup (C 36.66, +1.91) beat its earnings expectations by $0.07 and reported revenue of $19.4 billion. The shares of the financial giant settled higher by 5.5%, and outperformed the remaining majors. Bank of America (BAC 9.44, +0.32), Goldman Sachs (GS 124.50, +4.30), and Morgan Stanley (MS 17.75, +0.44) also outperformed the sector. The three financials added between 2.5% and 3.6%. Note that Goldman Sachs will report its third quarter earnings before tomorrow's opening bell.

Meanwhile, American Express (AXP 57.59, -0.30) and Wells Fargo (WFC 33.90, -0.35) missed out on the rally, and registered respective losses of 0.5% and 1.0%.

Health care stocks led the broader market. Within the space, drug manufacturers saw the most notable gains. Eli Lilly (LLY 52.53, +2.08) added 4.1% after Leerink Swann upgraded the stock to 'outperform' from 'market perform.'

Abbott Labs (ABT 72.05, +2.77) advanced 4.0% after the company released encouraging results from the Phase 2b study of its interferon-free investigational regimen for the treatment of hepatitis C.

Meanwhile, Bristol-Myers Squibb (BMY 33.93, +0.84) gained 2.5%.

On the downside, Amedisys (AMED 12.08, -1.25) sank 9.4% after announcing a new health services agreement with insurer Humana (HUM 74.73, -0.09). Per the updated agreement, Amedisys will generate revenue levels of approximately half of the prior amount earned from Humana.

Telecom stocks were the biggest laggard of the session. The sector underperformance stemmed from weakness demonstrated by an industry leader. AT&T (T 35.21, -0.42) slid 1.2% after SoftBank confirmed its plans to invest $20.1 billion in Sprint Nextel (S 5.69, -0.04). The investment is expected to create tougher competition for both AT&T and Verizon (VZ 44.50, -0.12). In addition Sprint is expected to acquire Clearwire (CLWR 2.69, +0.37).

The Dow Jones Transportation Average trailed the broader market, and settled higher by 0.4%. Within the bellwether group, railroads were mixed. Kansas City Southern (KSU 74.70, -0.45) and Union Pacific (UNP 120.93, -0.12) shed between 0.1% and 0.6% Meanwhile, CSX (CSX 21.45, +0.14) added 0.7% despite being downgraded to 'peer perform' from 'outperform' by Wolfe Trahan. Note that CSX will report its third quarter earnings after tomorrow's market close.

September retail sales rose by 1.1%, which was better than the 0.7% increase that had been broadly expected. The prior month's reading was revised up to show an increase of 1.2%. Excluding autos, retail sales rose by 1.1%, which was ahead of the Briefing.com consensus call for a rise of 0.6%.

Separately, the Empire Manufacturing Survey for October registered a reading of -6.2, which was up from the prior month's reading of -10.4. Economists polled by Briefing.com had expected, on average, that the Survey would rise to -2.8.

Lastly, during August, inventories rose by 0.6% which was slightly above the 0.5% that had been expected. This follows prior month's reading of 0.8%.

Tomorrow, September CPI and core CPI will be reported at 8:30 ET. August net long-term TIC flows will be released at 9:00 ET, while September industrial production and capacity utilization will be announced at 9:15 ET. Lastly, the October NAHB Housing Market Index will hit the wires at 10:00 ET.

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.