Day Traders Diary


The S&P 500 ended little changed while the Nasdaq advanced 0.5%.

The S&P notched its high at the open before spending the rest of the session in a steady retreat. The selling intensified during afternoon action, sending the S&P into the red as participants displayed caution ahead of tomorrow's advance second quarter GDP report and the latest policy statement from the Federal Reserve.

Energy and materials lagged from the open, and they finished behind the remaining cyclical sectors. The energy space lost 0.3% as crude oil slipped 1.3% to $103.15 per barrel. Since its July 19th high, the energy component has surrendered almost 5.5%.

Elsewhere, the materials sector opened sharply lower after the largest potash producer, Russia's OAO Uralkali, withdrew from a potash cartel. Potash (POT 31.63, -6.27) and Mosaic (MOS 43.81, -9.15) both lost near 17.0%. Despite opening lower by 1.3%, the broader sector managed to trim its loss to just 0.3%.

Although stocks endured some intraday weakness, the Nasdaq never fell into the red. The outperformance of technology combined with the relative strength of biotechnology helped the index settle in the green. The largest index component, Apple (AAPL 453.32, +5.53), advanced 1.2% with chipmakers also registering comparable gains. The PHLX Semiconductor Index climbed 1.2%.

In addition to technology, industrials and utilities spent the entire day in positive territory. Transportation-related names helped the industrial sector add 0.4% while the utilities space rose 0.3% on the back of solid earnings from NextEra Energy (NEE 86.48, +1.69) and Northeast Utilities (NU 44.57, +0.53).

Today's NYSE trading volume surpassed yesterday's total, but at 678 million shares traded, it remained below its 50-day moving average.

The Conference Board's Consumer Confidence Index weakened a bit in July, dropping from an upwardly revised 82.1 (from 81.4) in June to 80.3. The consensus pegged the index at 81.6.

The slight dip in confidence does not change the overall picture of an improving consumer base. The index likely fell back due to normal volatility after reaching a 5-year high in June. Furthermore, the University of Michigan Consumer Sentiment Index spiked to its highest level since 2007 in July, signaling that the drop in confidence was likely a non-event.

Separately, the May Case-Shiller 20-city Home Price Index rose 12.2% while a 10.5% increase had been expected by the consensus. This followed the previous month's increase of 12.1%.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET and the July ADP Employment Change will be released at 8:15 ET. Second quarter GDP will be reported at 8:30 ET and the July Chicago PMI will cross the wires at 9:45 ET. The day will be topped off with the 14:00 ET release of the latest policy statement from the Federal Open Market Committee.

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