Day Traders Diary


Stocks began the day on a positive note after Alcoa (AA 9.08, -0.02) kicked off the fourth quarter earnings season with a strong top line result. With no notable economic data, the remainder of the session was largely uneventful as the key indices retreated off their respective highs, ending with just a portion of their early gains. The S&P 500 added 0.3%.

Financials lagged the broader market, and the SPDR Financial Select Sector ETF (XLF 16.94, -0.03) shed 0.2%. Bank of America (BAC 11.43, -0.55) lost 4.6%, and was a notable underperformer. This morning, Credit Suisse downgraded the stock to 'Neutral' from 'Outperform.' In addition, Bank of America is taking part in a two-day hearing on its successor liability over the Countrywide legacy assets.

Also of note, multiple reports have indicated Morgan Stanley (MS 19.62, -0.03) will cut 1,600 jobs in its institutional securities business. The expected layoffs would amount to about 6.0% of the company's workforce within the investment banking unit. Looking at other majors, Citigroup (C 42.04, -0.42) slipped 1.0% and Goldman Sachs (GS 134.32, +1.27) added 1.0%.

For-profit education names saw general weakness after Apollo Group (APOL 19.32, -1.62) reported its quarterly results. Although Apollo beat on earnings and revenue, its full-year revenue guidance was a disappointment. Following the earnings report, Morgan Stanley downgraded the stock to 'Equal-Weight' from 'Overweight.' Apollo Group sank 7.8% and peers DeVry (DV 24.00, -1.24) and Strayer Education (STRA 52.70, -4.47) both lost in excess of 4.5%.

A handful of tech companies advanced after issuing upbeat guidance. Interactive Intelligence (ININ 39.02, +6.12) surged 18.6% after the company guided its fourth quarter and full-year revenue ahead of the consensus estimate. Elsewhere, Seagate (STX 33.48, +2.09) advanced 6.6% after raising its second quarter revenue guidance above analyst estimates. Peer Western Digital (WDC 43.80, +1.82) gained 4.3%.

Also of note, Apple (AAPL 517.10, -8.21) dropped 1.6%. Last evening, the Wall Street Journal published reports which indicated the tech company may launch a lower-end iPhone during the second half of the year. Among industrials, Boeing (BA 76.76, +2.63) added 3.6% to rebound from recent weakness which followed concerns about mechanical issues with the company's new Dreamliner 787 jet. Note that earlier reports out of Japan have indicated an All Nippon Airways flight was cancelled due to an issue with the plane's braking system.

Today's economic data was limited to the MBA Mortgage index, which pointed to an 11.7% week-over-week increase in mortgage applications. This followed the prior week's decline of 10.4%.

Looking at tomorrow's economic data, weekly initial and continuing claims will be reported at 8:30 ET.

The U.S. Treasury will hold a $13 billion 30-yr reopening.

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