Day Traders Diary
1/30/14The major averages finished the Thursday session near their highs as the volatile week continued. The Nasdaq surged 1.8% while the S&P 500 gained 1.1% as all ten sectors ended in the green. As a result of the advance, the S&P 500 will enter Friday's session with a slim week-to-date gain of 0.2% while the Nasdaq remains lower by 0.1% for the week.
Stocks jumped out of the gate and continued climbing steadily into the early afternoon. The S&P 500 notched a session high of 1798.77 just before 13:00 ET, and spent the rest of the trading day near that level. The upbeat start to the session was aided by overnight gains in index futures which rallied while the Japanese yen weakened. The futures market received an additional boost an hour before the cash open when it was reported that fourth quarter GDP rose 3.2%, per the advance estimate.
The Nasdaq Composite spent the entire session in the lead with the likes of Amazon.com (AMZN 403.01, +18.81), Google (GOOG 1135.39, +28.47), Facebook (FB 61.08, +7.55), and Qualcomm (QCOM 73.26, +2.14) providing support. Amazon.com and Google rallied ahead of their earnings while Facebook and Qualcomm posted respective gains of 14.1% and 3.0% after reporting better-than-expected results.
Biotechnology also factored into the outperformance of the Nasdaq as the iShares Nasdaq Biotechnology ETF (IBB 249.96, +7.16) rose 3.0%. In turn, this underpinned the health care space (+1.8%), which ended in the lead.
Similar to health care, other heavily-weighted sectors like consumer discretionary (+1.7%), financials (+1.3%), and technology (+1.5%) ended ahead of the broader market.
Elsewhere, the energy sector (+0.2%) finished behind the remaining groups as Dow component ExxonMobil (XOM 93.99, -1.12) lagged after missing on earnings.
Speaking of the Dow (+0.7%), the price-weighted index was unable to keep pace with the broader market as 3M (MMM 128.05, -2.20) and Boeing (BA 126.53, -3.25) weighed. 3M lost 1.7% after reporting in-line earnings on below-consensus revenue while Boeing fell 2.5% after cautious guidance overshadowed its earnings beat.
Treasuries ended near the middle of their range with the 10-yr yield up two basis points at 2.70%.
Trading volume was below average as 641 million shares changed hands at the NYSE.
Today's economic data included initial claims, fourth quarter GDP, and the pending home sales report for December.
Most notably, GDP increased 3.2% in the fourth quarter, according to the advance estimate. That was down from a 4.1% gain in the third quarter but slightly above the Briefing.com consensus estimate of a 3.0% increase. Despite the above-consensus reading, the report was actually a disappointment. Real final sales, which our model was tracking to be near a 4.0% gain, only increased 2.8%. That was the largest increase since a 3.4% gain in Q1 2012, but it was within the same trends that we have been seeing for the past couple of years. Contrary to the headline numbers, there has been no real acceleration in growth over the last few quarters.
Weekly initial claims unexpectedly spiked to 348,000 from an upwardly revised 329,000 (from 326,000) while the Briefing.com consensus expected the claims level to fall to 325,000.
Pending home sales for December tumbled 8.7%, which was worse than the 0.2% decrease forecast by the Briefing.com consensus. The reading followed last month's revised decrease of 0.3% (from +0.2%).
Tomorrow, December Personal Income, Personal Spending, Core PCE Prices, and the fourth quarter Employment Cost Index will all be released at 8:30 ET while the final reading of the University of Michigan Consumer Survey for January will be reported at 9:55 ET.
Nasdaq Composite -1.3% YTD
Russell 2000 -2.0% YTD
S&P 500 -2.9% YTD
Dow Jones Industrial Average -4.4% YTD 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.