Day Traders Diary


The stock market finished the Thursday session on a lower note with small caps leading the weakness. The Russell 2000 (-1.0%) and Nasdaq (-0.9%) posted comparable losses while the Dow Jones Industrial Average (unch) and S&P 500 (-0.1%) finished little changed after climbing off their lows during the last hour of action.
Equity indices began the day with modest gains, but were quick to slip into the red, where they remained for the rest of the session. Of the major averages, the Nasdaq faced the most aggressive selling due to the daylong weakness in biotechnology and an afternoon slump in the technology sector (-0.6%).
Biotechnology spent the entire session in a steady retreat that pressured the iShares Nasdaq Biotechnology ETF (IBB 234.71, -6.89) back below its 100-day moving average (238.12). The biotech ETF lost 2.9% while the broader health care sector lost 0.3%.
For its part, the technology sector was among the early relative strength leaders before turning into a laggard during the early afternoon. It is worth mentioning the early strength was bolstered by a big gain in Google (GOOG 569.74, +2.74), which underwent a 2:1 split. The stock was up more than 3.0% in the morning before surrendering most of its gain over the course of the session. Most other large tech names finished in the red while Intel (INTC 26.41, +0.52) held a solid gain throughout the day.
Elsewhere, the discretionary sector (-0.5%) was another notable laggard after finishing among the leaders on Monday and Tuesday. Large components like (AMZN 333.62, -8.34), (PCLN 1237.45, -29.21), and Netflix (NFLX 354.69, -8.19) fell between 2.3% and 2.4% while homebuilders held up relatively well. The iShares Dow Jones US Home Construction ETF (ITB 24.71, 0.00) ended flat.
On the upside, the energy sector (+0.6%) held a solid gain throughout the session while crude oil advanced 0.7% to $100.29/bbl.
Meanwhile, the other commodity-linked sector, materials (+0.1%) posted a modest gain, thanks to a boost from Monsanto (MON 117.04, +2.62), which gained 2.3% after being upgraded to 'Overweight' from 'Neutral' at JP Morgan.
Treasuries ended near the middle of their range with the benchmark 10-yr yield falling two basis points to 2.79%.
Participation was below average with 647 million shares changing hands at the NYSE.
Today's economic data included three reports:
The weekly initial claims level increased to 326,000 from a revised 310,000 (from 311,000). The consensus expected the initial claims level to increase to 320,000. After several months between 330,000 and 340,000, initial claims have broken those bounds and are now trending between 315,000 and 330,000. This range is more typical of a 200,000 monthly increase in nonfarm payrolls. We would not be surprised, given the strength of the claims data in March, if payrolls top 200,000 for the first time since November 2013.
The U.S. trade deficit increased to $42.30 billion in February from a slightly upwardly revised $39.30 billion (from $39.10 billion) in January. That was the largest deficit since reaching $43.40 billion in September 2013. The consensus pegged the trade deficit at $39.30 billion. The goods deficit rose to $61.70 billion in February from $59.50 in January, an increase of $2.20 billion. The services surplus fell $800 million to $19.40 billion in February from $20.20 billion.
The ISM Non-Manufacturing Index increased to 53.1 in March from 51.6 in February while the consensus expected an increase to 53.5. The increase in the headline index was mostly the result of a recovery in employment. The Employment Index, which contracted in February, increased to 53.6 in March from 47.5.
Tomorrow's data will focus on jobs with March Nonfarm Payrolls ( consensus 195K), Private Payrolls (consensus 205K), Unemployment Rate (consensus 6.6%), Hourly Earnings (consensus +0.2%), and Average Workweek (consensus 34.4) all set to cross the wires at 8:30 ET.

S&P 500 +2.2% YTD
Russell 2000 +1.6% YTD
Nasdaq Composite +1.5% YTD
Dow Jones Industrial Average -0.02% YTD

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