Day Traders Diary


At midday, the S&P 500 trades higher by 0.5%. Including today's gain, the benchmark index has added over 7.0% since the start of the year.

The major averages began the holiday-shortened week with an upbeat open assisted in part by a strong German ZEW Economic Sentiment Survey. The key indices then held their levels despite a disappointing NAHB Housing Market Index, which slipped to 46 from its prior reading of 47.

Although the report had little effect on the broader market, homebuilders have faced increased selling pressure since the release crossed the wires. The iShares Dow Jones US Home Construction ETF (ITB 23.08, -0.42) is lower by 1.8%.

Elsewhere in the discretionary space, office supply store operators are outperforming after weekend reports indicated Office Depot (ODP 4.99, +0.40) and OfficeMax (OMX 12.92, +2.17) are discussing a stock-for-stock merger agreement. Additionally, Staples (SPLS 14.23, +1.28) is surging 9.9% as the company stands to benefit from more rationalized competition. The merger talks have contributing to the outperformance of the SPDR S&P Retail ETF (XRT 68.30, +0.83), which trades higher by 1.2%.

In addition to discretionary stocks, materials are trading lower. The SPDR Materials Select Sector ETF (XLB 39.24, -0.11) is off by 0.3% amid weakness in industrial metals. Aluminum, copper, and nickel are all down between 1.5% and 1.7%.

Also of note, health care providers are underperforming after Centers for Medicare & Medicaid Services proposed lower Medicare co-payments for 2014. Dow component UnitedHealth Group (UNH 56.34, -0.98) is sliding 1.7% on the news.

Over the weekend, the G20 summit in St. Petersburg did not produce much news of note. A statement released by the group stressed the importance of avoiding competitive devaluation of currencies, but did not single out any particular country.

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