Day Traders Diary


Equity indices posted modest gains with the Nasdaq (+0.7%) setting the pace for a second consecutive day. The tech-heavy index climbed steadily throughout the session, extending its week-to-date advance to 1.3%.
The Nasdaq received support from many of its top components as Apple (AAPL 545.96, +12.56), Oracle (ORCL 35.29, +0.36), Microsoft (MSFT 37.60, +0.25), and Intel (INTC 23.90, +0.25) gained between 0.7% and 2.4%. Momentum names also contributed to the strength despite starting the session on a mixed note. However, biotechnology sat out the advance as the iShares Nasdaq Biotechnology ETF (IBB 223.33, -0.12) shed 0.1%.
The outperformance of the Nasdaq boosted the technology sector (+1.0%), which ended in the lead. Among notable earnings, Dow component Hewlett-Packard (HPQ 27.36, +2.27) surged 9.1% after beating bottom-line estimates by one cent on above-consensus revenue.
Other sectors did not display comparable strength as only three groupsconsumer discretionary (+0.3%), financials (+0.3%), and industrials (+0.4%)ended ahead of the broader market.
Discretionary shares were underpinned by retailers as the SPDR S&P Retail ETF (XRT 88.54, +0.45) climbed 0.5%.
Meanwhile, the financial space followed the lead of regional banks as the SPDR S&P Regional Banking ETF (KRE 40.02, +0.22) rose 0.6%.
For its part, the industrial sector displayed all-around strength as defense contractors and transports rallied. The PHLX Defense Index rose 0.7% while the Dow Jones Transportation Average settled higher by 0.6%.
Although most cyclical groups posted gains, energy (-0.7%) was not as fortunate. The sector ended at the bottom of the leaderboard while crude oil fell 1.5% to $92.29 per barrel.
On the countercyclical side, consumer staples (+0.1%), health care (unch), telecom services (+0.1%), and utilities (-0.3%) lagged across the board.
Treasuries ended mixed as the 10-yr yield increased three basis points to 2.74% while the 2-yr yield dipped one basis point to 0.28%.
Trading volume was well below average as only 532 million shares changed hands on the floor of the NYSE.
This morning was busy in terms of economic data. Weekly initial claims were better than expected, declining 10,000 to 316,000 ( consensus 330,000). In turn, continuing claims also beat estimates, dropping by 91,000 to 2.776 million ( consensus 2.875 million).
Seasonal adjustment problems were cited as a factor for the low level of initial claims, so once again we'll have to put an asterisk next to a number that looks encouraging at first blush. In all likelihood, the initial claims level will move higher as the seasonal adjustment problem gets corrected.
Separately, the durable orders headlines weren't all that encouraging. Total orders declined 2.0% in October (consensus -2.2%) from an upwardly revised 4.1% increase in September (from 3.8%). Excluding transportation, orders declined 0.1% (consensus 0.2%) from an upwardly revised 0.2% increase in September (from -0.1%).
The upward revisions to September's data cushioned some of the blow of the downturn in October. The report though was still disappointing in terms of what it said about business investment, which is that it is weak.
Nondefense capital goods orders, excluding aircraft, declined by 1.2% after a 1.4% decline in September. Shipments of those goods, which factor into the GDP computation, declined by 0.2% for the second straight month.
Manufacturing activity in the Chicago region remained strong. The Chicago PMI fell to 63.0 in November from 65.9 in October. That was the first time since November/December 2011 that the index stayed above 60 for two consecutive months. The consensus expected the Chicago PMI to fall to 58.0.
Lastly, the final reading of the November Michigan Consumer Sentiment Survey was revised up to 75.1 from 72.0 (consensus 73.0) while October Leading Indicators ticked up 0.2% (consensus -0.1%).
Bond and equity markets will be closed tomorrow for Thanksgiving. On Friday, the equity market will close early at 13:00 ET.

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