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Leigh Baldwin & Co.

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Day Traders Diary

12/13/12


The major averages began the day on a mixed note before selling pressure pushed the key indices to their respective lows. This morning, House Speaker John Boehner addressed the media in Washington. During his remarks, the speaker suggested President Obama is not serious about cutting spending, and the White House is willing to go over the fiscal cliff. Mr. Boehner's remarks had little impact on the markets, which continued pushing to fresh lows. However, a late-afternoon headline indicated Speaker Boehner and President Obama will meet in person at 17:00 ET. The report lifted the S&P 500 off its worst level of the day, but the benchmark index still finished with a loss of 0.6%.

The energy sector underperformed, and the SPDR Energy Select Sector ETF (XLE 71.49, -0.67) lost 0.9%. Looking at notable decliners, Nabors Industries (NBR 13.85, -0.68) fell 4.7% after Jefferies downgraded the stock to 'Underperform' from 'Hold.'

Anadarko Petroleum (APC 74.75, -0.79) slid 1.1% despite Jefferies making positive comments about the company. The remarks followed the closing arguments in the court case brought against APC by chemical producer Tronox (TROX 15.58, -0.47).

Elsewhere in energy, coal stocks were mixed. CONSOL Energy (CNX 33.81, -0.44) shed 1.3% while Walter Energy (WLT 36.26, +0.39) advanced 1.1%.

Technology stocks lagged notably and Apple (AAPL 529.69, -9.31) slipped 1.7%. Semiconductor manufacturers also weighed as the PHLX Semiconductor index settled lower by 1.1%. Among individual producers, Cirrus Logic (CRUS 27.41, -1.71) was the biggest laggard, down 5.9%.

Consumer staples outperformed the remaining S&P 500 sectors. Boston Beer (SAM 131.94, +17.71) surged 15.5% after the brewer raised its 2012 earnings expectations as well as the 2013 depletion projections. Following the update, the company sees 2012 earnings between $4.30 and $4.60, while the Capital IQ consensus estimate expects earnings at $4.24 per share.

Elsewhere, B&G Foods (BGS 29.53, +1.06) rose by 3.7% following an upgrade to 'Outperform' from 'Sector Perform' at RBC Capital Markets.

Also of note, CVS Caremark (CVS 48.50, +0.96) added 2.0% after raising its dividend by 38% to $0.22 per share. In addition, the company guided full-year earnings above consensus estimates.

Recent strength in defense stocks has lifted the PHLX Defense Sector Index to an all-time high. After reaching fresh highs on Wednesday, the index has been under pressure. Today, the defense index slid 1.0% and 15 of 17 components declined. Aircraft manufacturers Lockheed Martin (LMT 89.99, -1.82) and Embraer (ERJ 25.10, -0.71) were the two weakest performers, down 2.0% and 2.8%, respectively. Earlier, the New York Times reported the Canadian government will reconsider its planned purchase of F-35 fighter jets from Lockheed Martin due to high costs.

In notable news, Best Buy (BBY 14.12, +1.94) spiked 15.9% after CNBC reported company founder Richard Schulze is expected to submit a bid worth between $5 and $6 billion in his attempt to take the company private by week's end. Also of note, Chief Financial Officer Sharon McCollam bought over 100,000 shares on December 10, 2012.

The market received several economic reports today, and the data points were largely in-line with expectations. The latest weekly initial jobless claims count totaled 343,000, which was lower than the 375,000 that had been expected by the Briefing.com consensus. The tally was also below the revised prior week count of 372,000. As for continuing claims, they fell to 3.198 million from 3.221 million.

November retail sales rose by 0.3%, which was slightly worse than the 0.4% increase that had been broadly expected. The prior month's reading pointed to a decrease of 0.3%. Excluding autos, retail sales were unchanged, which was in-line with the Briefing.com consensus.

Overall producer prices declined during November by 0.8%, which was cooler than the 0.5% decrease that had been widely forecast. Core producer prices rose by 0.1%, which was in-line with the Briefing.com consensus.

During October, inventories rose by 0.4%, which was in-line with the Briefing.com consensus. Today's reading follows the prior month's increase of 0.7%.

Tomorrow morning, November CPI and core CPI will be reported at 8:30 ET. Lastly, November industrial production and capacity utilization will be announced at 9:15 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.