Day Traders Diary


The S&P 500 settled with a gain of 0.5% despite spending the majority of the day in negative territory.

The first session of the week began amid cautious trade resulting from news out of China where officials announced steps to curtail the rapid rise in the country's housing prices.

The news contributed to a slightly lower open for the U.S. session, which lacked any notable economic data. Similarly, earnings reaction was rather muted with only a handful of names reporting their quarterly results.

Industrials and materials lagged for the duration of the session as the news from China signaled lower demand for basic materials as well as heavy machinery. Steelmakers weighed on the materials space as the Market Vectors Steel ETF (SLX 44.11, -0.71) fell 1.6%.

In the industrial sector, machinery producer Caterpillar (CAT 89.75, -1.61) fell 1.8%, and weighed on its peers. In addition, the weekend implementation of the automatic spending cuts known as the "sequester" resulted in underperformance from defense-oriented stocks. The PHLX Defense Sector Index lost 0.5%.

The Dow Jones Transportation Average prevented the industrial sector from registering wider losses as the bellwether complex gained 1.0% amid strength from airlines. Delta Air Lines (DAL 15.65, +0.83) jumped 5.6% after the company's February unit revenue grew 5.0% year-over-year.

The technology sector underperformed amid weakness from its largest component. Apple (AAPL 420.05, -10.42) lost 2.4%, and its shares filled the gap which resulted from the company's January 2012 earnings report. In addition, several Apple suppliers traded notably lower. Cirrus Logic (CRUS 22.73, -0.66) dropped 2.8% and Broadcom (BRCM 33.45, -0.42) slid 1.2%.

Other chipmakers also contributed to the underperformance of the tech sector as the PHLX Semiconductor Index shed 0.3%.

Among tech names reacting to earnings, Stratasys (SSYS 68.82, +4.56) spiked 7.1% after beating on the bottom line and guiding its revenue midpoint above consensus.

Interestingly, despite the underperformance of higher-beta sectors, consumer discretionary stocks traded higher. Retailers outperformed the broader market and the SPDR S&P Retail ETF (XRT 67.92, +0.49) gained 0.7%.

As most cyclical sectors traded in the red for the bulk of the session, defensively-oriented stocks climbed throughout the day. The utilities sector finished as the top advancer and the SPDR Utilities Select Sector ETF (XLU 37.88, +0.38) added 1.0%.

Trading volume was below average as 692 million shares changed hands on the floor of the New York Stock Exchange.

Crude oil fell 0.7% and weighed on energy stocks. The energy component settled just over $90.00 per barrel.

Reviewing the S&P 500 performance, utilities (+1.0%), consumer discretionary (+1.0%), and financials (+0.9%) outperformed the broader market. Meanwhile, energy (-0.2%), industrial (-0.1%), materials (+0.1%), and technology (+0.2%) lagged.

In the treasury market, the 10-yr note saw steady selling throughout the day with the 10-yr yield ending higher by three basis points at 1.88%.

Tomorrow's economic data will be limited to the February ISM Services Index with the report set to cross the wires at 10:00 ET.

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