Day Traders Diary


Equities ended today's session on a modestly higher note as the Nasdaq rose 0.7% and the S&P 500 added 0.3%. The Dow Jones Industrial Average, for its part, tacked on 0.1%.

The major averages spent the day climbing off their lows after it was revealed that manufacturing activity in the Chicago region in April contracted for the first time since September 2009, falling from 52.4 in March to 49.0. The consensus expected the Chicago PMI to decline to 52.0.

After hitting a relative peak of 60.9 in January, production levels have dropped swiftly over the past few months, breaking through the contraction threshold in April. The production index dropped to 49.9 from 51.8 in March.

Technology stocks paced the late-morning rebound as the sector displayed strength amid reports indicating Apple's (AAPL 442.78, +12.66) $17 billion debt offering received significant investor interest. The largest tech company advanced 2.8% on the news, and its gains helped the Nasdaq outperform the other indices.

Although the tech sector finished higher by 1.2%, other cyclical groups did not register comparable gains. Further, today's second-best performer was the defensively-oriented telecom space as rumors regarding Verizon Communications' (VZ 53.91, +0.45) attempt to acquire Vodafone's (VOD 30.59, 0.00) stake in Verizon Wireless returned to the forefront.

On the downside, the health care sector was the weakest performer after Dow component Pfizer (PFE 29.07, -1.36) fell 4.5% after missing on earnings and revenue.

Homebuilders were also among today's notable laggards. DR Horton (DHI 26.08, -0.44) and PulteGroup (PHM 20.99, -0.22) both lost near 1.5% while the broader iShares Dow Jones US Home Construction ETF (ITB 24.26, -0.17) shed 0.7%. In addition, a JPMorgan Chase downgrade of PulteGroup contributed to the underperformance of the homebuilder.

Looking back at the day's remaining economic data, the Conference Board's Consumer Confidence Index increased from 59.7 in March to 68.1 in April. That move recovered the entire loss that occurred in March. The consensus expected the index to increase to 61.0.

The sudden surge in confidence was primarily driven by solid increases in the stock market and slightly lower gasoline prices. Minor improvements in employment levels also likely contributed positively to confidence.

The Employment Cost Index increased 0.3% in the first quarter of 2013, down from a downwardly revised 0.4% (from 0.5%) in the final quarter of 2012. The consensus expected employment costs to increase 0.5%.

A busy day of economic reporting is in store for tomorrow with the weekly MBA Mortgage Index set to be released at 7:00 ET. April ADP Employment Change will be reported at 8:15 ET while March construction spending and April ISM Index will both be announced at 10:00 ET. Finally, the Federal Reserve Open Market Committee will announce its interest rate decision and release its policy statement at 14:15 ET. 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.