Day Traders Diary


At midday, the S&P 500 is seeing little change after overcoming early weakness. The benchmark index began the session on a lower note after several Eurozone economies reported disappointing fourth quarter GDP readings.

France, Germany, Greece, and Italy all saw their economies contract during the final three months of 2012. In addition, Japan also reported a contractionary reading making it three negative quarters in a row.

The disappointing data released across Europe caused weakness in the euro with the common currency seeing notable weakness against the dollar. In turn, this is contributing to the strength of the dollar index which trades higher by 0.5% at 80.50.

Interestingly, crude oil, which is denominated in dollars, is rising as well. The energy component trades at $97.40 per barrel after notching its session high at $97.69. The rise in the price of crude is contributing to the outperformance of energy stocks. The energy sector is the top performer and the SPDR Energy Select Sector ETF (XLE 79.36, +0.68) trades higher by 0.9%.

In addition to energy stocks, consumer staples have outperformed for the duration of the session. Sector component H.J. Heinz (HNZ 72.42, +11.94) is soaring 19.7% after Warren Buffet's Berkshire Hathaway (BRK.B 98.94, +0.97) agreed to acquire the food company for $28 billion, or $72.50 per share, representing a 20% premium.

Remaining in the sector, Constellation Brands (STZ 43.58, +11.70) is jumping 36.7% after the company, along with Anheuser Busch Inbev (BUD 92.62, +4.36), announced a revised agreement for the divesture of the U.S. business of Grupo Modelo.

Some of today's biggest decliners lie in the telecom space, which trades lower by 2.3%. Century Link (CTL 32.45, -9.25) is contributing to the notable weakness after missing on earnings and cutting its dividend. In addition, the stock received six downgrades after reporting its quarterly results.

Although economic data overseas was plentiful, that was not the case here. The latest weekly initial jobless claims count totaled 341,000, which was lower than the 365,000 that had been expected by the consensus. The reading was a positive surprise but it remains unclear if today's figure was an aberration or a break from the 350,000-400,000 range observed for much of last year. Note that next week's report may see some distortions related to snowstorm Nemo.

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