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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

10/25/12

Equities began the session with a bullish bias which failed to hold past the opening minutes. After opening near session highs, the S&P 500 spent the first hour in a steady decline towards the flat line. Once that level was reached, the index spent the remainder of the day trapped in a narrow range before ending with a slim gain of 0.3%.

Technology stocks lagged the broader market. The biggest tech component, Apple (AAPL 609.53, -7.29) slipped 1.2% as investors awaited the company's third quarter earnings report scheduled for this evening. Meanwhile, Microsoft (MSFT 27.88, -0.02) showed little change after the company unveiled its Windows 8 operating system, and launched the Surface tablet at an event in New York.

Elsewhere, F5 Networks (FFIV 83.00, -10.32) fell 11.1% after reporting mixed quarterly results. The company reported fourth quarter earnings of $1.12, which was $0.06 worse than the Capital IQ consensus forecast. Meanwhile, the revenue of $362.5 million was in-line with expectations. The company provided a cloudy outlook on the next quarter as it expects earnings and revenue to fall below consensus. The disappointing earnings report was met with two analyst downgrades and four price target cuts.

Symantec (SYMC 18.54, +1.16) advanced 6.7% after beating on earnings and revenues. The security software company announced second quarter earnings of $0.45 which was $0.07 better than the Capital IQ consensus forecast. Regarding future outlook, the company issued mixed guidance as it expects in-line revenues and earnings below consensus estimates.

Zynga (ZNGA 2.39, +0.26) spiked 12.3% after beating on the top and the bottom line. The social media gaming site reported third quarter revenue of $316.6 million, which was ahead of the expected $307.53 million. In addition, the company issued downside full-year 2012 guidance and announced plans to repurchase up to $200 million of its outstanding Class A common stock. Following the earnings release, Needham upgraded the stock to 'buy' from 'hold' with a $4.00 price target.

The Dow Jones Transportation Average outperformed the broader market and ended higher by 0.6%. United Continental (UAL 19.26, -1.01) was one of the weakest performers among the select transportation stocks. Earlier, the air carrier reported third quarter earnings of $1.35 which was $0.20 worse than the Capital IQ consensus estimate. Meanwhile, the airline's revenue was in-line with expectations. Following the earnings report, United Continental lost 5.0%. Peer Delta Air Lines (DAL 9.64, -0.40) slid 4.0% after announcing plans to withdraw older jets from its fleet. In addition, the company is looking to reduce its costs by about $1 billion.

Freight carrier CH Robinson (CHRW 59.10, +1.54) was the top performer among transportation stocks. The company's shares settled higher by 2.7% as the stock rebounded from yesterday's earnings-driven decline of 5.6%.

Homebuilders were under pressure today, and the SPDR Homebuilders ETF (XHB 25.62, -0.29) settled lower by 1.1%. Yesterday, after the close, Ryland Group (RYL 34.06, +1.27) reported third quarter earnings of $0.45, which was $0.24 better than the Capital IQ consensus estimate. The company's revenue of $358.7 million also exceeded expectations. Ryland was one of few advancers among homebuilders as it registered a gain of 3.9%.

PulteGroup (PHM 17.01, -0.44) also announced its quarterly results. The homebuilder reported earnings of $0.27 which was $0.07 ahead of the Capital IQ consensus estimate. Meanwhile, the company's revenue fell short of expectations. As a result, the stock settled lower by 2.5%.

Casino stocks saw broad strength after Wynn Resorts (WYNN 120.43, +8.14) delivered strong third quarter results. The casino operator reported in-line revenue and earnings of $1.48, which was better than the Capital IQ consensus estimate. In addition, the company declared a $7.50 special dividend, and announced plans to double the quarterly dividend to $1.00 during fiscal-year 2013. Shares of Wynn surged 7.3% while peers Las Vegas Sands (LVS 46.25, +1.96) and Melco Crown Entertainment (MPEL 14.76, +0.86) saw respective gains of 4.4% and 6.2%.

The latest weekly initial jobless claims count totaled 369,000, which was lower than the 375,000 that had been expected by the Briefing.com consensus. The tally is below the revised prior week count of 392,000. As for continuing claims, they fell to 3.254 million from 3.256 million.

Separately, durable goods orders increased in September by 9.9%, which was better than the 8.0% increase that had been expected among economists polled by Briefing.com. This comes after the prior month's reading was revised to -13.1%.

Excluding transportation related items, durable goods orders increased in September by 2.0%, which was better than the 1.0% increase that had been broadly anticipated. Prior month's reading was revised from -1.6% to -2.1%.

Pending home sales for September increased by 0.3%, which was worse than the 2.4% increase that had been expected among economists polled by Briefing.com. Today's reading follows last month's 2.6% decrease.

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.