Day Traders Diary


The S&P 500 added 0.1%, but was unable to regain its 100-day moving average (1,662) after flirting with that level throughout the afternoon. The tech-heavy Nasdaq underperformed throughout the session, sliding 0.5%.

Equities began the session with slim gains amid reports President Obama was set to nominate Janet Yellen as the next Chairwoman of the Federal Reserve. However, given the expected nature of the announcement, the early boost faded quickly.

The major averages appeared on their way to another losing session, but found support during late-morning trade when the Dow Jones Industrial Average tested its 200-day moving average (14,728) for the first time this year. The price-weighted Dow built the subsequent rebound on the relative strength of top-weighted names like Nike (NKE 70.89, +0.61), IBM (IBM 181.32, +2.60), and Goldman Sachs (GS 154.44, +1.39).

On a related note, the financial sector (+0.3%) finished ahead of the remaining cyclical groups while other growth-sensitive areas were a bit more mixed.

The materials space advanced 0.2% with aluminum manufacturer Alcoa (AA 8.10, +0.16) gaining 2.0% after reporting better-than-expected earnings on a 1.2% decline in revenue. Miners contributed to the sector's strength as the Market Vectors Gold Miners (GDX 23.92, +0.10) added 0.4%.

On the downside, the discretionary sector (-0.4%) lagged throughout the session as quick service restaurants displayed weakness after Yum! Brands (YUM 66.48, -4.82) reported disappointing earnings and made cautious comments about its operating environment going forward.

Elsewhere, much of the Nasdaq underperformance was the result of significant losses among biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 194.50, -4.20) lost 2.1% to extend its week-to-date loss to 8.5%. In turn, this weighed on the health care sector (-0.2%), which was the only countercyclical group ending in negative territory.

Treasuries registered modest losses with the benchmark 10-yr yield rising three basis points to 2.67%.

Trading volume was right in-line with average as 732 million shares changed hands on the floor of the NYSE.

The Minutes from the latest Federal Open Market Committee meeting reflected much of what has already been communicated to the markets by the regional Fed presidents. Once again, several participants took note of tighter financial conditions while others pointed out rising fiscal risks associated with the stalemate in Washington.

Most notably, the Minutes revealed that most FOMC participants expected the Fed to begin scaling back the pace of its asset purchases this year with purchases being concluded in the middle of 2014.

Separately, the weekly MBA Mortgage Index rose 1.3% to follow last week's downtick of 0.4%.

Tomorrow, weekly initial claims will be reported at 8:30 ET while September import/export prices and the September Treasury Budget will not be released due to the partial government shutdown. 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.