Day Traders Diary


The S&P 500 punctuated a somewhat volatile week by adding 0.6%. Though the benchmark index ended firmly in the black, the bulk of its advance took place during the initial minutes. After notching a session high in the 1518 area, the index spent the remainder of the day in a two point range. While the S&P held its levels, the Dow Jones followed its morning rally with a partial retreat which was halted near the middle of its range.

Quiet trade unfolded as snowstorm Nemo envelops the East Coast. With forecasts calling for up to a foot of snow in New York, and more than 25 inches in Boston, today's volume paced well below average. The final tally indicated less than 600 million shares changed hands on the floor of the New York Stock Exchange.

Storm preparation was also reflected in individual stocks as Briggs & Stratton (BGG 24.37, +0.57) and Generac (GNRC 40.54, +0.80) settled with respective gains of 2.4% and 2.0%. The two manufacturers of power generators saw some buying interest as the Northeast prepares for the possibility of interruptions to power delivery.

Meanwhile, the broader market was powered by the technology sector. The SPDR Technology Select Sector ETF (XLK 29.93, +0.26) ended higher by 0.9% with outperformance largely due to relative strength of top components. Apple (AAPL 474.98, +6.76), Google (GOOG 785.37, +11.42), and International Business Machines (IBM 201.68, +1.94) all climbed between 1.0% and 1.5% with Google settling at a fresh all-time high.

Remaining in the tech sector, LinkedIn (LNKD 150.48, +26.39) soared 21.3% after the company's earnings and revenue eclipsed the Capital IQ consensus estimates. Note that today's surge sent LinkedIn to a fresh all-time high of its own.

Energy stocks outperformed as well, but the strength came despite no change in the price of oil. The energy component settled at $95.79.

On the downside, utilities weighed, but lifted off their lows during the afternoon session. Sector component Entergy (ETR 64.47, -0.49) shed 0.8% after reporting its revenue below analyst estimates.

This morning, the market received two economic data points. The January trade deficit narrowed to $38.5 billion thanks in part to a $3.8 billion increase in industrial supply and material exports. This occurred as imports suffered a $4.2 billion decline in industrial supplies and materials. It should be noted the brief worker strike at the Ports of Los Angeles and Long Beach likely contributed to the lower deficit.

Elsewhere, December wholesale inventories decreased 0.1%, which was worse than the increase of 0.3% expected by the consensus. This report carries negative implications for the upcoming revision to fourth quarter GDP growth as the Bureau of Economic Analysis had estimated an inventory growth of 0.7% in the preliminary reading.

On Tuesday, the January Treasury Budget will be reported at 14:00 ET. While there is no economic data on Monday's docket, earnings reports will continue pouring in. CNA Financial (CNA 31.80, +0.08) and Loews (L 43.85, +0.11) are scheduled to report their quarterly earnings ahead of the opening bell.

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