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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

8/5/13

The S&P 500 ended today's quiet session modestly lower with eight of ten sectors settling in the red.

Stocks slipped out of the gate after better-than-expected economic data from China and Great Britain was unable to spark an early bid. In China, the Non-Manufacturing PMI rose to 54.1 from 53.9 while Great Britain's Services PMI posted its best reading since 2006, rising to 60.2 from 56.9.

Equities climbed off their early lows before receiving an additional push following the release of the ISM Non-Manufacturing Index, which posted its best reading since February 2011. The index jumped to 56.0 from 52.2 as business activity and production levels spiked to 60.4 in July from 51.7 in June. Just like the manufacturing report, the jump in production came from a strong gain in new orders (57.7 from 50.8).

Although today's data provided stocks with a boost, the S&P never made it into the green as comments from Dallas Fed President Richard Fisher knocked the key indices off their highs. Mr. Fisher said the Fed's bond buying program may lay the groundwork for misallocation of resources and fuel future inflation. In addition, he said the market could expect a slowdown in asset purchases later in the year if the economy continues to "improve along the lines envisioned by the Committee."

These remarks caused the S&P to return to the middle of its range while the tech-heavy Nasdaq briefly slipped into the red before regaining its flat line during afternoon action. On a related note, the technology sector tacked on 0.2% as the largest sector component, Apple (AAPL 469.45, +6.91), rose 1.5% after an International Trade Commission ban on certain devices made by the company was overturned.

Outside of technology, only the consumer staples sector (+0.1%) managed to eke out an advance. Tyson Foods (TSN 29.69, +1.18) jumped 4.1% after beating on earnings and revenue.

While the outperformance of technology boosted the Nasdaq, the S&P was kept from turning positive as energy, industrials, and discretionary shares weighed.

The energy space shed 0.3% as crude oil endured a volatile session. The energy component was down as much as 1.1% at the open before trimming its loss to 0.4% at $106.49 per barrel.

Elsewhere, industrials lagged amid weakness in transportation companies. The Dow Jones Transportation Average lost 0.8% as 18 of 20 components ended in the red.

Lastly, broad weakness among home builders pressured the discretionary sector. The iShares Dow Jones US Home Construction ETF (ITB 22.38, -0.33) lost 1.5%.

Similar to stocks, Treasuries spent the entire session near their lows. The benchmark 10-yr yield added four basis points to end at 2.65%.

As mentioned earlier, today's volume was well below average as only 533 million shares changed hands on the floor of the New York Stock Exchange. This represented the third lowest total of the year.

Tomorrow, the June trade balance will be reported at 8:30 ET. The U.S. Treasury will auction $32 billion in 3-yr notes. 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.