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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

12/14/12

Equities spent the day in the red as weakness in shares of Apple (AAPL 509.79, -19.89) weighed on the markets throughout the session. The S&P 500 held near its opening levels until the final hour when selling pressure pushed the benchmark index to a loss of 0.4%.

The technology sector was the biggest laggard due to underperformance from Apple and its suppliers. Earlier, UBS lowered its price target for AAPL to $700 from $780 due to an expected decline in iPhone and iPad shipments. The largest tech company settled lower by 3.8% on the day the iPhone 5 began selling in China.

Looking at notable Apple suppliers, Avago Technologies (AVGO 31.13, -2.56), Cirrus Logic (CRUS 25.58, -1.82), Skyworks Solutions (SWKS 19.80, -1.25), and Jabil Circuit (JBL 17.51, -1.02) all lost between 3.7% and 7.6%.

Elsewhere in technology, Adobe Systems (ADBE 37.56, +2.03) advanced 5.7% after beating on earnings and revenue. During the fourth quarter, the software company earned $0.61, which was $0.05 better than the Capital IQ consensus estimate. Meanwhile, the company's revenue of $1.15 billion also exceeded expectations. The software developer topped off the report with guidance, which was on the lower end of analyst estimates. Following the earnings report, JMP Securities upgraded Adobe to 'Market Outperform' from 'Market Underperform' with a $42 price target. On the other hand, Janney Montgomery Scott downgraded ADBE to 'Neutral' from 'Buy.'

The materials sector outperformed the broader market, and steel suppliers contributed to the strength. Last night, the Chinese HSBC manufacturing PMI survey revealed the second expansionary reading in a row. The data signals a possible rebound in Chinese growth, which would be beneficial to steelmakers. Among the major producers, Cliffs Natural Resources (CLF 33.96, +1.67), Nucor (NUE 42.28, +1.09), and Reliance Steel (RS 59.25, +1.31) all gained between 2.2% and 5.2%.

Energy stocks slipped 0.5% despite crude oil adding over 1.0%. Schlumberger Limited (SLB 68.91, -3.65) slid 5.0% following this morning's profit warning. The company said that it is experiencing continued contractual delays and higher-than-usual seasonal slowdowns in activity.

In notable analyst rating changes, Exxon Mobil (XOM 88.08, -0.50) shed 0.6% after Goldman Sachs downgraded the company to 'Neutral' from 'Buy.' Elsewhere, BP (BP 41.39, -0.08) finished lower by 0.2% after Credit Suisse downgraded the energy producer to 'Neutral' from 'Outperform.' On the upside, Marathon Oil (MRO 30.82, +0.63) advanced 2.1% after Goldman Sachs upgraded MRO to 'Buy' from 'Neutral.'

European markets entered the weekend on a mixed note. The United Kingdom's FTSE shed 0.1%, France's CAC ended flat, and Germany's DAX added 0.2%.

In the United Kingdom, Prudential lost 2.0%, and was the weakest performer. The insurer was pressured after the top industry regulator said European insurers and pension funds will face headwinds due to low interest rates. On the upside, miners outperformed and Polymetal International gained 2.3%.

In France, utility stocks were among the biggest laggards. Electricity provider GDF Suez lost 0.3% and water supplier Veolia Environnement slid 1.1%. On the upside, provider of communications solutions Alcatel-Lucent (ALU 1.24, +0.14) gained 7.0% after securing EUR1.6 billion in financing from Credit Suisse and Goldman Sachs. It should be noted that digital security provider Gemalto will replace Alcatel-Lucent in the CAC on December 24.

Germany's DAX was supported by carmakers. Daimler gained 2.6% after its European market share increased to 5.7% from 5.2%. The uptick was due to strong sales by its Mercedes unit. Meanwhile, Deutsche Bank was the weakest performer. The financial giant lost 1.6% after a German court found the company partially liable for the collapse of the Leo Kirch media group.

In today's economic data, November consumer prices decreased by 0.3%, which was below the Briefing.com consensus. Today's reading follows the 0.2% increase recorded during the prior month. In addition, core prices rose by 0.1% which was in-line with expectations.

Industrial production increased during November by 1.1%, which was better than the 0.1% increase that had been expected by the Briefing.com consensus. The reading follows the revised 0.7% decrease recorded during the prior month. Capacity utilization hit 78.4%, which was better than the 77.9% expected by the Briefing.com consensus, and up from the revised prior month reading of 77.7%.

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.