Day Traders Diary


The major averages registered broad gains at the open, but only the Dow Jones Industrial Average (+0.8%) and S&P 500 (+0.4%) were able to end in positive territory while the Nasdaq (-0.2%) and Russell 2000 (-0.4%) posted modest losses.
The Dow finished at a fresh record high of 15,746.63 as 27 of 30 components registered gains. Of those 27, twelve added at least 1.0%. Microsoft (MSFT 38.18, +1.54) was the top index performer, climbing 4.2% amid reports Ford (F 16.91, -0.18) Chief Executive Officer Alan Mullaly remains on the list of candidates hoping to replace outgoing CEO Steve Ballmer.
While Microsoft's gain had a limited impact on the price-weighted Dow, the stock provided support to the technology sector (+0.8%), which ended ahead of the remaining cyclical groups. Although the tech sector has a tendency to trade in-line with the Nasdaq, that was not the case today. The Nasdaq ended modestly lower as biotechnology and momentum names lagged.
Companies specializing in biotechnology registered broad losses as the iShares Nasdaq Biotechnology ETF (IBB 201.07, -6.04) tumbled 2.9%, widening its fourth quarter loss to 4.1%. Meanwhile, momentum names like Facebook (FB 49.12, -0.98), (PCLN 1058.04, -24.19), and Yelp (YELP 66.61, -4.52) took a cue from Tesla's (TSLA 151.16, -25.65) weakness. The electric car maker plunged 14.5% in reaction to its cautious guidance and Q3 deliveries that were essentially in-line with Street expectations. Despite today's loss, Tesla remains higher by 346% this year.
Elsewhere, the discretionary sector (-0.2%) spent the bulk of the session in the red as apparel retailers weighed after Abercrombie & Fitch (ANF 33.13, -5.18) issued below-consensus revenue guidance.
Also of note, the financial sector (+0.3%) continued its recent underperformance. Despite today's modest advance, the sector is unchanged this week versus a 0.5% gain in the S&P. In addition, the sector's recent weakness has trimmed its quarter-to-date gain to 3.4%, which puts the group behind the remaining nine sectors in Q4 standings.
Three of four countercyclical groups (consumer staples, telecom services, and utilities) posted solid gains between 1.0% and 1.3% while health care shed 0.3% as biotech pressured the sector.
Treasuries settled near their highs, erasing a portion of yesterday's loss. The benchmark 10-yr yield slipped three basis points to 2.65%.
Participation was on the light side as only 704 million shares changed hands on the floor of the New York Stock Exchange.
In today's economic data, the Conference Board's Index of Leading Indicators increased 0.7% for a second consecutive month in September. The consensus expected the index to increase 0.6%. The index will likely suffer a sizable pullback in October. Initial claims, which added 0.26 percentage points to the increase in the leading indicators, will contribute negatively in October as glitches from California and biases from the government shutdown drove claims to their highest level in several months.
The weekly MBA Mortgage Index fell 7.0% to follow last week's increase of 6.4%. 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.