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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

3/21/13


Equities finished today's session near their lows, and the S&P 500 lost 0.8%.

The major averages began the day in the red with tech stocks driving the early decline. The technology sector underperformed notably after disappointing earnings and cautious revenue guidance from Oracle (ORCL 32.30, -3.47) contributed to selling in several other large cap names. Cisco Systems (CSCO 20.84, -0.83), International Business Machines (IBM 212.26, -2.80), and SAP (SAP 80.72, -2.47) all lost between 1.3% and 3.8%.

In addition to major sector components, chipmakers underperformed as well. The 30-stock PHLX Semiconductor Index fell 1.6%.

Although the sector finished among the day's worst performers, the relative strength of its largest component, Apple (AAPL 452.73, +0.65), prevented the space from logging further losses.

While tech shares pressured the broader market from the opening bell, producers of basic materials declined steadily after France and Germany surprised the market with contractionary manufacturing and services PMI reports. The growth concerns regarding core eurozone economies weighed on the economically-sensitive sector and the SPDR Materials Select Sector ETF (XLB 39.02, -0.68) lost 1.7%.

Notably, today's biggest laggards are also the weakest performing sectors year-to-date. So far this year, the technology space has gained 3.2% while materials are up 3.8%. Meanwhile, the S&P 500 has added nearly 8.5% in 2013.

The Dow Jones Transportation Average was another group which kept the broader market firmly in the red. All 20 components of the bellwether complex settled in the red, and FedEx (FDX 96.50, -2.63) fell 2.7%. Including today's loss, the logistics company is down nearly 10.0% since it reported disappointing earnings ahead of Wednesday's open.

The market attempted an early afternoon rally, but that effort failed as news out of Cyprus provided further headwinds. At the end of the day, the situation remains fluid, but several reports have suggested the country's parliament has taken measures to merge two of its largest banks and impose capital controls in an attempt to stem significant outflows.

The continued uncertainty surrounding Cyprus, and its future in the eurozone, took a toll on financials. Goldman Sachs (GS 145.38, -4.75) was the weakest performer among the majors and the SPDR Financial Select Sector ETF (XLF 18.07, -0.22) dropped 1.2%.

Trading volume was the lowest of the week as just over 650 million shares were traded on the floor of the New York Stock Exchange.

Reviewing today's final sector performance, materials (-1.6%), technology (-1.3%), financials (-1.1%), and industrials (-0.9%) saw the biggest losses while telecom (UNCH), consumer staples (+0.3%), and utilities (-0.5%) withstood the bulk of the selling pressure.

The market received a healthy dose of economic data today. The initial claims level increased by a modest 2,000 from an upwardly revised 334,000 (from 332,000) for the week ending March 9 to 336,000 for the week ending March 16. The Briefing.com consensus expected the initial claims level to increase to 345,000.

Clearly, labor conditions have improved over the last month. For the past four weeks, the initial claims level has held firmly below 350,000. That comes after almost a year where claims had been tightly bounded between 350,000 and 400,000.

The Conference Board's Index of Leading Indicators increased 0.5% in February after increasing an upwardly revised 0.5% (from 0.2%) in January. The Briefing.com consensus expected the index to increase 0.5%.

After two months of negative readings, the Philadelphia Fed's Business Outlook turned positive in March. The index increased from -12.5 in February to 2.0 in March. The Briefing.com consensus expected the index to remain negative and increase to -3.0.

New orders rebounded after contracting in February. The orders index increased to 0.5 in March from -7.8. Unfilled orders, however, remained in a contraction. That index increased from -11.2 to -7.5.

Existing home sales increased 0.8% in February to 4.98 million from an upwardly revised 4.94 million (from 4.92 million) in January. The Briefing.com consensus expected the number of existing home sales to increase to 5.00 million.

There is no economic news scheduled to be released tomorrow. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.