Day Traders Diary


Despite staging an afternoon rally, the S&P 500 was unable to log its first gain of 2014. The benchmark index registered its third consecutive loss, shedding 0.3% as six of ten sectors finished in the red.
Equities began the day on a modestly higher note, but the early gains evaporated during the opening hour as the broader market followed the Nasdaq Composite into the red. The tech-heavy index was hit with widespread selling pressure that weighed on many top components and biotechnology. Both Apple (AAPL 543.93, +2.95) and eBay (EBAY 51.78, -1.48) received downgrades, but Apple was able to stage an intraday reversal after dipping below its 50-day moving average. For its part, eBay settled lower by 2.8%.
Furthermore, biotechnology also pressured the Nasdaq after Goldman Sachs downgraded Celgene (CELG 162.62, -7.19) to 'Sell.' The stock tumbled 4.2% while the broader iShares Nasdaq Biotechnology ETF (IBB 223.82, -2.21) lost 1.0%.
Even though the tech-heavy Nasdaq paced the early weakness, the technology sector ended in-line with the broader market. Other cyclical groups were mixed with respect to the broader market as energy (+0.1%) and financials (+0.1%) outperformed while consumer discretionary (-0.6%), industrials (-0.6%) and materials (-0.6%) lagged.
Notably, the financial sector spent the entire session in the green as Bank of America (BAC 16.66, +0.25) posted its third consecutive gain. The stock jumped 1.5% to extend its 2014 price return to 7.0%.
On the downside, the industrial sector finished near its lows as transports weighed. The Dow Jones Transportation Average lost 1.3% as 19 of its 20 components ended lower. Delta Air Lines (DAL 29.29, +0.06) was the lone advancer, adding 0.2%.
Similar to cyclical groups, countercyclical sectors ended in mixed fashion. Telecom services (+0.5%) and utilities (+0.1%) outperformed while consumer staples (-0.4%) and health care (-0.4%) lagged.
Once again, participation was on the light side as only 656 million shares changed hands on the floor of the New York Stock Exchange.
Treasuries rallied throughout the trading day, sending the 10-yr yield lower by four basis points to 2.96%.
Today's economic data was limited to a pair of reports:
The ISM Non-manufacturing Index for December fell to 53.0 from 53.9 while the consensus expected the index to increase to 54.6. Business activities and production levels decelerated slightly as the respective index fell to 55.2 from November's 55.5.
November factory orders rose 1.8% after falling an upwardly revised -0.5% (from -0.9%). The consensus expected orders to increase 1.7%. As the advance report already hinted at, nearly the entire gain in factory orders resulted from strong demand for durable goods orders. Durable goods orders rose 3.4%, which was down slightly from the 3.5% gain reported in the advance report. Excluding transportation, durable goods orders rose a solid 1.2%.
Tomorrow's economic data will be limited to the November trade balance, which will be reported at 8:30 ET.

DJIA -0.9% YTD
S&P 500 -1.2% YTD
Russell 2000 -1.4% YTD
Nasdaq -1.5% YTD

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