Day Traders Diary


Stocks ended modestly higher as the S&P 500 climbed 0.2%, and the Dow added 0.4% to register its 19th consecutive Tuesday of gains.

The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology outperformed.

The iShares Nasdaq Biotechnology ETF (IBB 181.54, +1.78) advanced 1.0%, and prevented the Nasdaq from falling too far behind the other two indices as technology displayed relative weakness.

The technology sector spent the bulk of the day in negative territory as major components failed to partake in the broader market advance. Apple (AAPL 439.66, -3.27) shed 0.7% after the company faced Senate Subcommittee questioning regarding its tax practices while Microsoft (MSFT 34.85, -0.23) lost 0.7% after unveiling its newest gaming console.

Although the majority of the first quarter reporting season is in the rearview mirror, retail earnings continued to trickle in. The SPDR S&P Retail ETF (XRT 78.68, +0.57) settled higher by 0.7% after Saks (SKS 13.67, +1.39) and TJX (TJX 51.73, +0.38) exceeded their top-line estimates while AutoZone (AZO 427.84, +18.79) and Home Depot (HD 78.71, +1.95) beat on earnings and revenue.

Dow component Home Depot climbed to a new record high following its earnings beat, but the report did not help homebuilders as the SPDR S&P Homebuilders ETF (XHB 32.06, -0.07) slipped 0.2%.

While most retailers outperformed, those specializing in electronics lagged. Best Buy (BBY 25.64, -1.17) and HHGregg (HGG 13.75, -1.86) ended in the red after both reported below-consensus revenues.

Elsewhere, the financial sector displayed strength from the start. The sector ended with a gain of 0.3% while JPMorgan Chase (JPM 53.02, +0.73) rose 1.4% after shareholders voted overwhelmingly against separating the roles of Chief Executive Officer and Chairman, meaning Jamie Dimon will retain both titles.

Despite the gains in the broader market, the CBOE Volatility Index (VIX 13.33, +0.31) settled in the black as well, suggesting protection received an intraday bid.

Today's volume was slightly below average as 687 million shares changed hands on the floor of the New York Stock Exchange.

After recent weeks produced fresh speculation surrounding the Federal Reserve's readiness to begin tapering its quantitative easing program, investors will look for more cues from Fed Chairman Ben Bernanke when he testifies before Congress at 10:00 ET tomorrow.

With regards to economic data, the weekly MBA Mortgage Index is set to be reported at 7:00 ET while existing home sales for April will be announced at 10:00 ET. The day will be topped off with the 14:00 ET release of Federal Reserve's minutes from its May 1 meeting.

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