Day Traders Diary


The stock market finished the Wednesday session on a modestly lower note, but it is worth mentioning today's retreat took place after six consecutive gains. The Dow Jones Industrial Average (-0.1%) and S&P 500 (-0.2%) settled not far below their flat lines, while the Nasdaq Composite (-0.8%) lagged throughout the session.
Equity indices started the day in the red, with the Nasdaq showing early weakness as large cap tech names and biotechnology weighed. The technology sector (-0.9%) slumped amid profit-taking in listings like Apple (AAPL 524.75, -6.95), Google (GOOG 526.94, -7.87), Microsoft (MSFT 39.69, -0.30), and Intel (INTC 26.75, -0.09), while biotech names retreated following quarterly reports from three major industry players.
Amgen (AMGN 113.32, -5.98) and Biogen (BIIB 306.75, +0.55) reported below-consensus results, while Gilead Sciences (GILD 73.86, +1.00) handily beat estimates. For its part, the iShares Nasdaq Biotechnology ETF (IBB 230.99, -3.73), which includes the three components among its top five holdings, lost 1.6% and settled just above its 20-day moving average. The broader health care sector (-0.5%), meanwhile, ended among the laggards.
Similar to health care, other heavily-weighted groups like consumer discretionary (-0.5%) and technology (-0.9%) weighed on the broader market, while financials (+0.2%) outperformed modestly.
The discretionary space suffered from sector-wide losses that included a 5.2% drop in the shares of Netflix (NFLX 353.50, -19.40) that took place after (AMZN 324.58, -4.74) announced it has secured a partnership agreement with HBO. Homebuilders also weighed on the sector after the New Home Sales report for March missed estimates. The iShares Dow Jones US Home Construction ETF (ITB 23.33, -0.37) lost 1.6%.
On the upside, energy (+0.5%) and industrials (+0.4%) spent the entire session in the green. Energy rallied even as crude oil slipped 0.2% to $101.47/bbl, while the industrial sector was underpinned by above-consensus results reported by Boeing (BA 130.63, +3.08). Transports also outperformed, but the Dow Jones Transportation Average (+0.1%) retreated from its best level of the session into the close. Delta Air Lines (DAL 37.09, +2.14) was a notable standout, soaring 6.1% after beating bottom-line estimates.
With stocks ending in the red, the CBOE Volatility Index (VIX 13.32, +0.13) inched higher, but remained near the lowest levels of the year.
Treasuries posted modest gains as the 10-yr note added six ticks, sending its yield lower by three basis points to 2.69%.
Trading volume was on the light side once again with less than 650 million shares changing hands at the NYSE.
Today's economic data focused on housing:

The weekly MBA Mortgage Index fell 3.3% to follow last week's increase of 4.3%.
New home sales declined 14.5% in March from an upwardly revised 449,000 (from 440,000) in February to 384,000. The consensus expected home sales to increase to 455,000. March sales were the lowest since 373,000 new homes were sold in July 2013. Winter weather conditions, which were unduly blamed for softness across the economy, again showed little effect in the new home sector. The return to more normal temperatures, which should have boosted sales from pent up demand, resulted in the weakest demand since the middle of last year.
Tomorrow, weekly initial claims and March Durable Orders will be reported at 8:30 ET.

S&P 500 +1.5% YTD
Dow Jones Industrial Average -0.5% YTD
Nasdaq Composite -1.2% YTD
Russell 2000 -1.3% YTD

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