Day Traders Diary


The stock market finished the Tuesday session on a mixed note. Small caps underperformed with the Russell 2000 slipping 0.2%, while the S&P 500 shed less than a point with six sectors registering losses.
Equity indices entered today's session after enjoying a big rally that sent the S&P 500 higher by 4.2% over the past three weeks alone. That advance was predicated on the strength of small caps and transport stocks as the Russell 2000 and the Dow Jones Transportation Average entered the session with respective gains of 7.1% and 4.9% since May 20.
Fittingly, with small --cap stocks and transports showing relative weakness today, the broader market slumped out of the gate, but spent the remainder of the session in a steady climb back to unchanged.
The underperformance of the Dow Jones Transportation Average (-0.1%) caused the industrial sector (-0.2%) to end the session near the bottom of the leaderboard. Most index components finished in the red, while JetBlue Airways (JBLU 10.63, +0.17) and United Continental (UAL 47.76, +1.38) outperformed with respective gains of 1.6% and 3.0%.
Elsewhere among cyclical sectors, consumer discretionary (-0.3%), energy (-0.1%), and financials (-0.04%) ended in the red, while technology (+0.1%) and materials (+0.1%) climbed into the close.
Notably, the tech sector was underpinned by chipmakers as the PHLX Semiconductor Index advanced 0.3% with the majority of its components posting gains. Meanwhile, large caps were somewhat mixed, but Facebook (FB 65.77, +2.89) surged 4.6% after eBay (EBAY 48.25, -1.33) revealed that PayPal President David Marcus will leave the company to join FB.
Like the six cyclical sectors, defensively-oriented groups also finished mixed with respect to the S&P 500. Telecom services (-0.1%) and utilities (-0.3%) slumped during the afternoon, while consumer staples (+0.1%) and health care (+0.2%) climbed into the close. Like the health care sector, biotechnology also finished modestly higher with the iShares Nasdaq Biotechnology ETF (IBB 249.30, +1.27) adding 0.5%.
Strikingly, the weakness in equities did not have much impact on the performance of the Treasury market, which retreated into the afternoon. The 10-yr note settled just above its low (-10/32) with the 10-yr yield up three basis points at 2.64%.
Participation remained well below average with just 545 million shares changing hands at the NYSE, representing the fifth lowest total of the year.
Economic data was limited:

Wholesale inventories increased 1.1% in April on top of a 1.1% increase in March. The April growth figure was well above the consensus estimate of +0.3%. Wholesale sales jumped 1.3% on the back of a 1.6% increase in March.
The inventory-to-sales ratio held steady in April from a downwardly revised 1.18 reading for March (from 1.19).
Durable inventories increased a solid 0.9% after increasing 0.7% in March. Inventory increases were logged in all durable categories with the exception of miscellaneous durables, which declined 0.1%.
Nondurable inventories rose 1.4% after increasing 1.6% in March. That growth was driven by a 2.6% increase in drug inventories and a 1.5% increase in grocery inventories.
The Job Openings and Labor Turnover Survey for April indicated job openings increased to 4.455 million from 4.166 million.
Tomorrow, the weekly MBA Mortgage index will be released at 7:00 ET and the Treasury Budget for May will cross the wires at 14:00 ET.

S&P 500 +5.5% YTD
Nasdaq Composite +3.9% YTD
Dow Jones Industrial Average +2.2% YTD
Russell 2000 +0.8% YTD

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