Day Traders Diary


The major averages finished today's uneventful session near their flat lines as the S&P 500 ended flat while the Nasdaq added 0.2%.

The outperformance of the Nasdaq resulted from the relative strength of the technology sector (+0.5%), which was the leading cyclical group of the session. Top component, Apple (AAPL 521.36, +12.47), advanced 2.5% in anticipation of tomorrow's press event where the company is expected to unveil a new line of tablets. The largest tech stock also drew strength from comments made by Gartner after the research firm said it expects tablet demand to remain strong into the holiday season.

Apple accounted for much of the tech sector's gain while other large components were mixed. Microsoft (MSFT 34.99, +0.03) added 0.1% while IBM (IBM 172.86, -0.92) remained under pressure following its earnings miss last Thursday.

Elsewhere, the industrial sector (+0.4%) outperformed with its top member, General Electric (GE 26.14, +0.59), making a significant contribution. General Electric rallied 2.3% after UBS raised its target for the stock to $29 and Citigroup added the stock to its US Focus List. Transports also displayed relative strength as the Dow Jones Transportation Average added 0.4%.

The discretionary sector was the last cyclical group to climb into positive territory after several components reported earnings. Hasbro (HAS 49.72, +2.48) and V.F Corp (VFC 211.23, +6.93) settled with respective gains of 5.3% and 3.4% after both delivered bottom-line beats. Toymaker Hasbro also surpassed its revenue expectations while V.F. Corp missed top-line estimates, but raised its quarterly dividend 21% to $1.05 and announced that a 4:1 stock split will take place on December 20.

Also of note, McDonald's (MCD 94.59, -0.61) lost 0.6% after the company's cautious-sounding guidance overshadowed its earnings beat. The fast food giant said it expects October comparable store sales to be flat, which is a reflection of the challenging operating environment.

Even though three influential sectors posted gains, the broader market was pressured by the underperformance of energy (-0.4%) and financials (-0.2%). In addition, three countercyclical sectorsconsumer staples (-0.3%), health care (-0.6%), and utilities (-0.2%)also weighed while telecom services (+1.2%) outperformed. AT&T (T 35.22, +0.61) climbed 1.8% after the company agreed to sell 9,700 towers to Crown Castle International (CCI 74.66, -1.30) for $4.85 billion.

Treasuries settled near their lows with the 10-yr yield up two basis points at 2.61%.

Trading volume was on the light side as 678 million shares changed hands on the floor of the NYSE.

September existing home sales hit an annualized rate of 5.29 million units, which was a bit weaker than the rate of 5.30 million units that had been generally expected by the consensus. The pace for September was down from the prior month's revised rate of 5.39 million units.

Tomorrow, the September nonfarm payrolls report, which was delayed by the partial government shutdown, will be released at 8:30 ET while August net long-term TIC flows will be reported at 9:00 ET. Separately, the August Construction Spending report will cross the wires at 10:00 ET. Among earnings of note, Delta Air Lines (DAL 24.69, -0.32), United Technologies (UTX 107.62, -0.12), and Wipro (WIT 11.56, 0.00) will report their quarterly results before the opening bell.

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