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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

8/26/13

Equities ended on their lows as the S&P 500 shed 0.4% while the Nasdaq settled flat.

The major averages held modest gains into the final hour of the session when comments from Secretary of State John Kerry regarding the situation in Syria contributed to broad-based selling. Mr. Kerry said additional information about the recent chemical attack is being compiled and will be made public. In addition, President Obama is expected to decide on the next step in the coming days.

The comments injected a bit of uncertainty and the CBOE Volatility Index (VIX 14.92, +0.94) jumped to a session high as downside protection received an afternoon surge in interest. However, the Treasury market did not see much of a safety bid as the complex remained confined to a narrow range. The benchmark 10-yr yield ended lower by two basis points at 2.79%.

The sharp move to session lows was exacerbated by the fact today's session saw very limited participation. With only 546 million shares changing hands on the floor of the New York Stock Exchange, today's total was the lowest since August 5.

Nine of ten sectors ended in the red with countercyclical groups leading to the downside. Consumer staples, telecom services, and utilities lost between 0.8% and 1.3% to continue their recent underperformance. As a result of today's losses, the three sectors are down between 4.0% and 5.3% this month.

The fourth countercyclical group, health care, managed to outperform its defensively-oriented peers and finish in the lead with a gain of 0.1%. The sector was underpinned by biotechnology after Amgen (AMGN 113.75, +8.15) made an offer to acquire Onyx Pharmaceuticals (ONXX 123.49, +6.53) for $125 per share, representing a 5.6% premium to Friday's closing price.

Biotechnology companies also comprise a fair share of the Nasdaq. The iShares Nasdaq Biotechnology ETF (IBB 197.10, +4.05) rose 2.1%, and the relative strength of its components contributed to the outperformance of the Nasdaq.

All cyclical sectors ended in the red. The materials space outperformed, ending flat as gold miners advanced. The Market Vectors Gold Miners ETF (GDX 30.41, +0.27) climbed 0.9% while gold futures added 0.4% to $1401.80 per troy ounce. Meanwhile, silver futures surged 2.2% to $24.27 per troy ounce.

Today's economic data was limited to the July durable orders report. Overall, the report was not very encouraging. New orders for primary metals and machinery were both flat while orders for computers and electronic products declined 3.6%. Furthermore, nondefense capital goods orders, excluding aircraft -- a proxy for business investment -- fell 3.3% after a 1.3% increase in June. The kicker in terms of third quarter GDP implications is that shipments of nondefense capital goods orders, excluding aircraft, declined 1.5%.

Tomorrow, the June Case-Shiller 20-city Index will be reported at 9:00 ET and August Consumer Confidence will be released at 10:00 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.