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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

4/1/13

The major averages ended near their lows, and the S&P 500 lost 0.5%.

With European markets shuttered for Easter Monday, equities saw little change at the start of today's session. However, that changed quickly once the March ISM Index was reported below expectations. The Index was reported at 51.3, which was its lowest reading since December, and it sent the major averages to their lows with cyclical sectors pacing the decline.

In addition to the disappointing ISM report, weaker-than-expected manufacturing PMI readings out of China and a cautious Tankan Survey reported in Japan put growth concerns back on the minds of investors.

Those concerns were reflected by the weakness of industrials and materials. The two growth-oriented sectors finished as the weakest performers with industrials registering the widest decline.

The SPDR Industrial Select Sector ETF (XLI 41.25, -0.51) fell 1.2%. Transportation-related stocks did their part in pressuring the space as the Dow Jones Transportation Average ended lower by 1.5%.

All 20 stocks comprising the Transportation Average settled in the red, and truckers were among the weakest performers. Ryder System (R 58.67, -1.08) and Landstar (LSTR 55.71, -1.38) saw respective losses of 1.8% and 2.4%.

Elsewhere, producers of basic materials saw an extension of their recent softness. The SPDR Materials Select Sector ETF (XLB 38.84, -0.34) ended lower by 0.9%, which trimmed its year-to-date gain to 3.2%. Note that the materials sector has been the worst performing group so far in 2013.

On a related note, copper continued showing weakness with its price sliding 0.9% to $3.372 per pound. The metal, widely considered to be a global economic bellwether, ended today's session at levels last seen in August of last year.

The technology sector also ended among today's biggest declines. Large cap tech names saw mixed performance but the largest sector component, Apple (AAPL 428.91, -13.75), fell 3.1%. Also of note, high-beta chipmakers lagged notably and the PHLX Semiconductor Index dropped 2.0%.

On the upside, defensive sectors saw slimmer losses than the broader market with telecom services ending in positive territory due to the relative strength of AT&T (T 37.25, +0.56).

With equities ending near their lows, the CBOE Volatility Index (VIX 13.62, +0.92) settled near its highest level of the day. The near-term volatility climbed over 7.0%, suggesting downside protection received some buying interest during today's session.

Looking back at the final sector performance, industrials (-1.1%), technology (-1.0%), materials (-1.0%) and consumer discretionary (-0.8%) all trailed behind the broader market. Meanwhile, telecom (+0.8%), health care (+0.2%), and consumer staples (UNCH) outperformed.

Today's volume represented the third lowest total of the year as 575 million shares changed hands on the floor of the New York Stock Exchange.

Reviewing today's economic data, construction spending rose 1.1% in February after falling 2.1% in January. The Briefing.com consensus expected construction spending to rise 0.9%. Private construction spending increased 1.3% after declining 3.1% in January. Public spending increased 0.9%, up from a 0.2% gain in January.

The ISM Manufacturing Index dropped to 51.3 in March from 54.2 in February (Briefing.com consensus 54.0). That was the first drop since November, and should not have been too surprising given the mixed March regional manufacturing surveys. New order levels softened as the related index fell from 57.8 in February to 51.4 in March. In addition, order backlogs also weakened, from 55.0 to 51.0.

In tomorrow's economic data, February factory orders will be reported at 10:00 ET and automakers will be reporting their March sales throughout the day.
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.