Day Traders Diary


Equities climbed steadily throughout the day, and the S&P 500 ended higher by 1.4%.

For the most part, today's session served as a rebound from yesterday's broad-based selling. All ten economic sectors settled in the black, and nine groups ended with gains of at least 1.0%.

The materials sector, which lost nearly 4.0% yesterday, led today's rally as the SPDR Materials Select Sector ETF (XLB 37.99, +0.68) rose 1.8%. Gold miners saw intraday strength, but afternoon weakness in the underlying metal caused the group to slide into the red. Meanwhile, steelmakers acted in support of the sector as the Market Vectors Steel ETF (SLX 40.86, +0.63) rose 1.6%.

While the economically-sensitive materials space ended atop the leaderboard, the defensively-geared consumer staples were not far behind. Staple stocks received some support from Coca-Cola (KO 42.37, +2.28) after the beverage giant narrowly beat the Capital IQ earnings estimate.

The intraday performance of the leaders suggests a defensive trade played some part in today's action. After notching its highs during the opening minutes, the materials sector spent the remainder of the session near those levels. Meanwhile, consumer staples climbed throughout the day before settling on their highs.

A defensive bid also buoyed the health care sector where Johnson & Johnson (JNJ 83.44, +1.73) gained 2.1% after beating on earnings.

With the first quarter earnings season set to heat up in the coming days, Goldman Sachs (GS 144.10, -2.36) was among the handful of companies which reported earnings today. Although Goldman beat on earnings and revenue, its stock shed 1.6% as investors were unimpressed with the quality of the earnings beat. Meanwhile, the broader SPDR Financial Select Sector ETF (XLF 18.36, +0.28) advanced 1.6%.

Yesterday's selling caused significant weakness in homebuilders as well as the Dow Jones Transportation Average. Although the two groups were able to register gains, they remain in the red for the week.

Today's volume was slightly above average as 736 million shares changed hands on the floor of the New York Stock Exchange.

Looking back at the economic data, the number of housing starts increased 7.0% in March from an upwardly revised 968,000 (from 917,000) in February to 1.036 million. That was the first time housing starts exceeded 1.00 million units since 2008. The consensus pegged the number of new housing starts at 930,000. However, the underlying trends were more mixed than the headline implied as multifamily construction, which tends to be highly volatile, made up the entire March gain. Those starts increased by nearly 100,000 from 318,000 in February to an unsustainable 417,000. As a result, multifamily construction is likely to retreat next month.

Industrial production increased 0.4% in March following an upwardly revised 1.1% gain (from 0.7%) in February. The consensus expected production levels to increase 0.3%.

The entire gain in production was due to a 5.3% increase in utilities usage. Colder-than-normal temperatures throughout March drove up heating demand.

Consumer prices fell 0.2% in March after increasing 0.7% in February. The consensus expected prices to decrease 0.1%.

Excluding food and energy, core prices increased 0.1% after rising 0.2% in February. The consensus expected core prices to increase by 0.2% for a second consecutive month.

Only two items of note can be found on tomorrow's economic calendar. The weekly MBA Mortgage Index will be reported at 7:00 ET while the Federal Reserve will release its April Beige Book at 14:00 ET. On the earnings front, Bank of America (BAC 12.28, +0.30) and Mattel (MAT 42.98, -0.04) will report their quarterly results ahead of the opening bell. 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.