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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

12/10/12

Equities were little changed during today's session. With no economic data to digest, investors expressed caution after Italy's Prime Minister Mario Monti announced plans to submit his resignation upon the successful approval of the country's budget. However, afternoon reports from the Financial Times indicated Italy's centrist parties are urging Mr. Monti to run on their ticket in next year's election. Domestically, trade was confined to a narrow range and volume was well below-average. As a result, the S&P 500 finished flat.

The technology sector outperformed the broader market despite relative weakness in Apple (AAPL 529.82, -3.42). The largest tech component was down near 2.0% during the opening minutes, but reclaimed a portion of its losses and settled lower by 0.6%.

Seagate (STX 28.91, +0.57) and Western Digital (WDC 38.45, +0.85) saw respective gains of 2.0% and 2.3%. The two hard drive makers were on the rise once again after both gained more than 10.0% last week.

Computer assembler Hewlett-Packard (HPQ 14.16, +0.35) rose by 2.6% following earlier rumors which suggested activist investor Carl Icahn was building a stake in the company.

In M&A news, Intermec (IN 9.82, +1.84) surged 23.1% after being acquired by Honeywell (HON 61.86, -0.11) for $10 per share. The transaction price represents a 27.7% premium to Intermec's Friday closing price.

Consumer discretionary stocks underperformed the broader market despite the strength in shares of McDonald's (MCD 89.41, +0.93). The fast food giant gained 1.1% after reporting a 2.4% increase in global comparable store sales.

Elsewhere in the discretionary space, Priceline (PCLN 625.96, -33.14) slid 5.0% after Deutsche Bank downgraded the stock to 'Hold' from 'Buy.' Peer Expedia (EXPE 57.71, -2.17) shed 3.6% after the company announced a special dividend of $0.52 per share.

Gap (GPS 30.89, -0.92) lost 2.9% after Wedbush observed increased promotional activity at Old Navy. An increase in the number of promotions run by the company was viewed as a warning regarding the company's sales. The cautious sentiment was reflected in shares of other apparel retailers as Aeropostale (ARO 13.40, -0.36), Under Armour (UA 50.13, -2.03), and Urban Outfitters (URBN 37.00, -0.37) all lost between 1.0% and 4.0%.

On the upside, Abercrombie & Fitch (ANF 47.31, +0.92) advanced 2.0% after Robert W. Baird upgraded the stock to 'Outperform' from 'Neutral.'

The Dow Jones Transportation Average settled higher by 1.1% and all 20 components advanced. Trucking stocks saw relative strength as CH Robinson (CHRW 61.94, +1.34) finished higher by 2.2%. Meanwhile, Con-way (CNW 28.22, +0.64) added 2.3%.

Elsewhere, package delivery services advanced as the group is expected to benefit from increased package volumes during the holiday season. Expeditors International of Washington (EXPD 38.22, +0.64), FedEx (FDX 90.53, +1.17), and UPS (UPS 73.68, +0.51) all gained between 0.7% and 2.5%. Last week, FedEx said it expects a record 19 million packages to move through its network today.

Tomorrow's economic data will be limited to the October trade balance and wholesale inventories. The two data points are scheduled to be released at 8:30 ET and 10:00 ET, respectively.

The U.S. Treasury will auction off $32 billion in 3-yr notes.


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