Day Traders Diary


The S&P 500 added 0.6% to extend its weekly gain to 0.8%. The Nasdaq outperformed with an advance of 0.8%, but finished the week with a loss of 0.4%.
Stocks climbed amid morning reports indicating a new proposal has been put forth by Republicans that would end the government shutdown and avoid a Treasury default. However, the subsequent White House meeting failed to produce a concrete agreement and Senator Orrin Hatch, who took part in the meeting, said the president expressed some concern over the duration of the proposed debt limit extension. Senator Hatch also said President Obama articulated the need for new revenues to be part of a long-term deficit reduction. In the end, the two sides did not appear to be much closer to an agreement as the shutdown is set to enter its third week.
Even though a solution to the deadlock has yet to be found, equities cheered the mere presence of some form of discussion. All ten sectors registered gains with energy (+1.0%) ending in the lead. The sector posted a solid gain even as crude oil fell 1.0% to $101.92 per barrel.
Meanwhile, the other commodity-related sectormaterials--underperformed as miners weighed. The Market Vectors Gold Miners ETF (GDX 23.05, -0.50) fell 2.1% while gold futures tumbled 2.1% to $1269.80 per troy ounce. Most of the decline in gold took place about an hour before the opening bell with the yellow metal falling more than $20 in under two minutes.
Elsewhere among cyclical sectors, discretionary shares (+0.8%) finished ahead of the broader market with homebuilders contributing to the strength. The iShares Dow Jones US Home Construction ETF (ITB 21.91, +0.37) advanced 1.7% as all major builders rallied.
Also of note, the financial sector (+0.6%) ended in-line with the S&P after JPMorgan Chase (JPM 52.51, -0.01) and Wells Fargo (WFC 41.43, -0.01) reported their quarterly results. JPMorgan Chase beat on earnings and revenue while Wells Fargo reported a bottom-line beat on below-consensus revenue.
Treasuries ended unchanged with the benchmark 10-yr yield at 2.69%.
Trading volume was on the light side as 634 million shares changed hands on the floor of the New York Stock Exchange.
Looking back at today's economic data, the University of Michigan Consumer Sentiment Index dropped to 75.2 in the preliminary October reading from 77.5 in September. The consensus expected the index to fall to 74.5.
The drop in the index was most likely due to negative feedback from the government shutdown and the debate over the debt ceiling. If the government reopens soon and the debt ceiling is not breached, consumer sentiment is likely return to its September levels by the end of the month. 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.