Day Traders Diary


The major averages settled on their best levels of the session despite showing some early weakness. The S&P 500 rose 0.4% while the Nasdaq outperformed with an advance of 0.7%.
Stocks began the session in the red as cautious action in Europe contributed to the lower open. Although European indices hovered near their lows as the U.S. session got underway, they were quick to climb off their lows right alongside U.S. equities.
The tech-heavy Nasdaq paced the rebound as top-weighted index components like Google (GOOG 1032.47, +20.69), Microsoft (MSFT 38.16, +0.80), and Qualcomm (QCOM 70.03, +1.52) provided significant support. In addition, Cisco Systems (CSCO 24.00, +0.27) added 1.1% ahead of its after-hours quarterly report.
Momentum names also underpinned the Nasdaq after suffering group-wide weakness last week. Facebook (FB 48.71, +2.11), LinkedIn (LNKD 220.65, +11.37), and (PCLN 1124.20, +24.71) gained between 2.3% and 5.4%. Tesla (TSLA 138.70, +0.90) also displayed intraday strength, but surrendered the bulk of its gain into the close amid reports of fire department activity at the company's factory in California.
Outside of technology, the discretionary sector (+1.6%) was the only other outperformer among cyclical sectors. Apparel retailers climbed throughout the session after Macy's (M 50.68, +4.35) beat on earnings and revenue. Macy's jumped 9.4% while the broader SPDR S&P Retail ETF (XRT 87.31, +1.13) advanced 1.3%.
Homebuilders also provided a measure of support to discretionary shares as the iShares Dow Jones US Home Construction ETF (ITB 22.13, +0.30) settled higher by 1.4%.
Also of note, the financial sector ended in-line with the broader market despite underperforming in early action. The sector climbed into positive territory in conjunction with the S&P, and followed the benchmark index into the close.
With regard to countercyclical sectors, only consumer staples (+0.9%) finished ahead of the broader market while health care (+0.5%), telecom services (-0.2%), and utilities (+0.3%) lagged.
Treasuries finished near their highs with the 10-yr yield down four basis points at 2.74%.
Today's participation was on the light side as less than 700 million shares changed hands on the floor of the New York Stock Exchange.
The weekly MBA Mortgage Index fell 1.8% to follow last week's decline of 2.8%.
The Treasury Budget deficit fell to $91.6 billion in October from $120.0 billion in October 2012. Since the data are not seasonally adjusted, the October budget deficit cannot be compared to the surplus in September. The CBO, which typically releases its budget estimate a few days before the Treasury releases the actual numbers, did not release an advance projection for the October data. While the government shutdown likely had an effect on the decline in the October budget deficit, the Treasury Department did not issue a statement explaining what exactly the effects were.
Tomorrow, weekly initial claims, September trade balance, and preliminary Q3 productivity will all be reported at 8:30 ET. In addition, Janet Yellen's confirmation hearing will begin tomorrow with an appearance in front of the Senate Banking Committee.

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