Day Traders Diary


The stock market finished a choppy week on cautiously optimistic note. The S&P 500 added 0.2% despite spending the bulk of the session in the red. The benchmark index narrowed its week-to-date loss to 0.1%, while the Russell 2000 (+0.9%) trimmed its weekly decline to 1.8%. For its part, the Dow Jones Industrial Average (+0.2%) managed to eke out a slim gain of 0.4% for the week, finishing at a new closing record high at 16,583.34.
Generally speaking, small caps faced the brunt of the selling that took place this week, while some of the money rotated into blue chip listings, allowing indices like the Dow and S&P 500 to stay ahead of their counterparts. Today's session proved to be a bit of a departure from that trend as small caps rebounded, while blue chips struggled to keep pace with their high-beta counterparts.
The S&P 500 spent the first three hours of action stringing together a rebound from its early low. At first, the index was pressured by the four top-weighted sectors, but those groups later separated, leaving the financial sector (-0.1%) among the laggards, while consumer discretionary (+0.6%), health care (+0.6%), and technology (+0.2%) fueled the market-wide bounce.
In particular, the biotech industry was volatile as the iShares Nasdaq Biotechnology ETF (IBB 226.44, +3.09) bounced between its 20- (226.18) and 200-day moving averages (223.16), but ultimately settled closer to its 20-day average with a gain of 1.4%.
Elsewhere, gains in high-beta technology and discretionary components like Facebook (FB 57.24, +0.48), Netflix (NFLX 328.55, +6.89), LinkedIn (LNKD 148.69, +3.62), and (PCLN 1135.91, +27.91) gave a boost to the overall risk sentiment. However, there were still some soft spots among the recent high flyers as Rocket Fuel (FUEL 21.83, -5.98) rocketed lower by 21.5% after its cautious guidance and revenue miss overshadowed its earnings beat.
Unlike momentum names, heavily-weighted tech components were relatively weak. That underperformance was evidenced by the largest member of the tech sectorApple (AAPL 585.54, -2.45)which fell 0.4% amid reports the company will acquire Beats Electronics for about $3 billion. In addition, the stock was downgraded to 'Buy' from 'Strong Buy' at ISI Group.
On the downside, this year's leading sectorutilities (-1.4%)spent the session in a steady retreat that trimmed its year-to-date gain to 10.9%. Meanwhile, the second-best sector of the yearenergy (-0.2%)was the second-weakest performer today, narrowing its 2014 advance to 5.2%.
Treasuries surrendered their overnight gains ahead of the open and spent the remainder of the session anchored to their flat lines. The 10-yr yield ended at 2.62%.
Today's participation was below average as less than 640 million shares changed hands at the NYSE.
Economic data was limited to the Wholesale Inventories report for March and the March Jobs Openings and Labor Turnover Survey:
Wholesale inventories increased 1.1% in March after increasing an upwardly revised 0.7% (from 0.5%) in February, while the consensus expected an increase of 1.0%. The BEA assumed that wholesale inventories increased 1.1% in March in the advance estimate of first quarter GDP. The upward revision to February, however, was not built into its model and will result in a positive contribution toward growth in the second estimate.
The Job Openings and Labor Turnover Survey for March indicated job openings decreased to 4.014 million from 4.173 million.
On Monday, the Treasury Budget for April will be released at 14:00 ET. Also of note, Ukraine's regions of Donetsk and Lugansk remain scheduled for independence referendums on Sunday.

S&P 500 +1.6% YTD
Dow Jones Industrial Average +0.04% YTD
Nasdaq Composite -2.6% YTD
Russell 2000 -4.6% YTD

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