Day Traders Diary


The S&P 500 settled higher by 0.4% to snap its streak of four consecutive losses. Small caps outperformed as the Russell 2000 rose 1.5% after registering five declines in a row.

Unaffected by another round of losses across emerging markets, stocks climbed at the open, but gains were limited as the S&P could not retake its 50-day moving average. The benchmark index made a brief midday appearance above the key level before spending the entire afternoon just below it.

A retreat in Treasury yields contributed to the relative strength of equities as the benchmark 10-yr yield fell seven basis points to 2.82%.

The pullback in yields helped rate-sensitive sectors such as telecom services (+0.5%), utilities (+0.8%), and home builders. The iShares Dow Jones US Home Construction ETF (ITB 21.32, +0.64) added 3.1% as most major builders gained between 2.0% and 4.0% apiece.

The relative strength of home builders provided a measure of support to the discretionary sector, which ended atop the leaderboard. In addition, retailers rallied after Best Buy (BBY 34.80, +4.07), Home Depot (HD 74.29, -0.92), TJX Companies (TJX 54.24, +3.49), and Urban Outfitters (URBN 43.19, +3.27) all reported solid results. Meanwhile, J.C. Penney (JCP 14.01, +0.79) advanced 6.0% despite missing on earnings and revenue while Dick's Sporting Goods (DKS 46.64, -3.95) sank 7.8% following its disappointing report. The broader SPDR S&P Retail ETF (XRT 80.14, +1.21) rose 1.5%.

While most cyclical sectors displayed strength, industrials and technology underperformed. The industrial space ended flat as the underperformance of Deere (DE 83.25, -1.27) and Dow component General Electric (GE 23.72, -0.13) overshadowed the relative strength of transportation companies. The Dow Jones Transportation Average settled higher by 0.9% as 18 of 20 components posted gains.

Elsewhere, the tech sector was pressured by its top component, Apple (AAPL 501.07, -6.67), which lost 1.3%.

Today's trading volume was well below average as less than 640 million shares changed hands on the floor of the New York Stock Exchange.

There was no economic data reported today, but tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET and July existing home sales will be reported at 10:00 ET. Lastly, the Federal Open Market Committee will release the minutes from its July meeting at 14:00 ET.

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