Day Traders Diary


The stock market finished the week on a lower note after equity indices spent the entire session in a steady decline from their opening highs. The Nasdaq led the retreat, falling 2.6%, while the Dow Jones Industrial Average (-1.0%) and S&P 500 (-1.3%) registered smaller losses.
Even though the major averages endured a daylong retreat, only the Nasdaq ended down for the week (-0.7%) while the Dow and S&P 500 posted respective weekly gains of 0.6% and 0.4%.
Prior to the open, the Nonfarm Payrolls report pointed to the addition of 192,000 jobs in March, while the consensus expected an increase of 195,000. After the report crossed the wires, equity futures spiked, but so did gold (+1.5% to 1303.40/ozt) and Treasuries (10-yr yield -7 bps to 2.73%), which was inconsistent with the risk-on disposition observed in equity futures. Furthermore, the dollar/yen pair spiked initially (yen weakness), but gave it all back, and then some, in short order.
The dollar/yen pair hovered near 103.90 and spiked above 104.10 in reaction to the data, before spending the remainder of the session in a retreat that mirrored the price action in the S&P 500. The Japanese yen finished the session near its high with the dollar/yen pair sliding to 103.25 by the New York close.
With cautious action in most other markets, the upbeat sentiment in the stock market dissipated quickly. The Nasdaq led the retreat as heavy selling pressure weighed on biotechnology and other momentum names.
The iShares Nasdaq Biotechnology ETF (IBB 225.30, -9.41) lost 4.0% after being unable to retake its 100-day moving average at the open (238.35). The ETF surrendered its entire 2014 gain, while the broader health care sector (-1.5%) ended behind the broader market.
Most other heavily-weighted groups did not fare much better. Consumer discretionary (-1.7%) and technology (-2.2%) lagged throughout the session, while financials (-1.2%) outperformed.
Notably, the discretionary sector was pressured by continued weakness in names like (AMZN 323.00, -10.62), Netflix (NFLX 337.31, -17.38), and (PCLN 1178.08, -59.37). Homebuilders, meanwhile, fared relatively well with the iShares Dow Jones US Home Construction ETF (ITB 24.59, -0.12) shedding 0.5%.
Elsewhere, the largest S&P 500 sector, technology, proved to be a significant drag on the major averages amid weakness in large names. Apple (AAPL 531.82, -6.97), Google (GOOG 543.14, -26.60), Microsoft (MSFT 39.87, -1.14), and Visa (V 207.70, -7.31) lost between 1.3% and 4.7% with Google seeing the largest decline of the bunch. Smaller momentum names registered even larger losses with FireEye (FEYE 50.36, -4.50), Splunk (SPLK 62.68, -3.68), and Yelp (YELP 65.76, -4.85) down between 5.6% and 8.2%. The three names extended their weekly losses to 20.7%, 12.0%, and 14.1%, respectively.
On the upside, utilities (+0.6%) posted a solid gain with lower yields giving a boost to the rate-sensitive sector.
The selloff invited above average participation as 764 million shares changed hands at the NYSE floor.
Looking closer at today's jobs report:

Overall, the employment data was fairly solid, but nothing to really get excited about. The initial claims data over the past several weeks supported payroll growth in the neighborhood of 200,000. That was exactly what happened in March.
Total nonfarm private payrolls also increased by 192,000 jobs in March, up from 188,000 in February. The consensus expected these payrolls to increase by 205,000.
Winter weather, which was blamed for prior weaknesses, again did not show up in the payroll numbers. Construction employment increased by 19,000 in March, which was only a marginal improvement over the 18,000 added in February. Had winter weather conditions really impacted the economy, construction payrolls would have spiked in March as employment recovered from winter delays.
The one area that winter weather did impact was the number of hours worked. The average workweek fell to 34.3 in February as weather conditions prevented employees from working their normal hours. As temperatures and conditions returned to normal, the average workweek jumped to 34.5.
Average hourly earnings were essentially flat in March after increasing 0.4% in February.
The unemployment rate remained at 6.7% in March while the consensus expected the rate to tick down to 6.6%.
Monday's data will be limited to the February Consumer Credit report, which will be released at 15:00 ET.

S&P 500 +0.9% YTD
Russell 2000 -0.8% YTD
Dow Jones Industrial Average -1.0% YTD
Nasdaq Composite -1.2% YTD

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