Day Traders Diary


The stock market finished the second quarter on a subdued note with the major averages ending near their flat lines. The Nasdaq Composite (+0.2%) outperformed throughout the session, while the S&P 500 (-0.04%) surrendered its slim gain into the close. For the quarter, the S&P 500 jumped 4.7%, while the Nasdaq advanced 5.0%.
Equity indices displayed losses at the start, but the Nasdaq and S&P 500 returned into the green after a better than expected Pending Home Sales report for June (6.1% versus 1.5% consensus) crossed the wires. Despite the early rebound, the S&P 500 ran into resistance in the 1964 area, which served as the high point for the day. Unlike the Nasdaq and S&P 500, the Dow Jones Industrial Average (-0.2%) could not make a sustained move into the green.
Five of ten sectors posted gains with this year's leaderutilitiessetting the pace. The countercyclical sector advanced 0.8%, extending its year-to-date gain to 16.4%. Unlike utilities, the remaining defensively-oriented groups ended in the red with consumer staples, health care, and telecom services down 0.04%, 0.4%, and 0.4%, respectively.
Meanwhile, the six cyclical groups also ended on a mixed note. Consumer discretionary (-0.1%), energy (unch), financials (unch), and industrials (-0.4%) lagged, while technology (+0.2%) and materials (+0.5%) held gains throughout the day.
Notably, the technology sector fueled the outperformance of the Nasdaq Composite with chipmakers ending on their highs. Micron (MU 32.95, +1.44) surged 4.6% after being added to the Focus List at Credit Suisse, while the broader PHLX Semiconductor Index rose 1.1% to secure a quarterly advance of 8.4%. In addition, the top-weighted tech componentApple (AAPL 92.93, +0.95)also did some grunt work, rallying 1.0%.
Elsewhere, the materials sector was underpinned by miners and steelmakers. The Market Vectors Steel ETF (SLX 47.72, +0.28) added 0.6%, while Market Vectors Gold Miners ETF (GDX 26.45, +0.47) spiked 1.8%.
On the downside, industrials could not climb into the green amid weakness in defense contractors (PHLX Defense Index -0.5%). Transports, however, displayed relative strength. The Dow Jones Transportation Average tacked on 0.3% to secure a quarterly advance of 8.3%.
Treasuries retreated in the morning, but the brief slip was retraced in its entirety over the course of the session. The 10-yr note added five ticks with its yield slipping two basis points to 2.52%.
Despite the narrow ranges, participation was solidly above average with nearly 800 million shares changing hands at the NYSE.
Economic data was limited to Chicago PMI for June and May Pending Home Sales:
Manufacturing activity decelerated in the Chicago region as the Chicago PMI fell to 62.6 in June from 65.5 in May. The consensus expected the index to fall to 61.0
The Chicago PMI has exceeded 60.0 for three consecutive months
Production strengthened in June as the related index increased to 70.1 from 64.4 on strong levels of backlogs
New orders growth faded in June as the related index fell to 65.1 from 70.2
Backlog levels dropped to 55.4 from 61.4
The Employment Index increased to 58.4 from 54.6
Pending home sales for May rose 6.1%, which was better than the 1.5% increase forecast by the consensus
The reading followed last month's revised increase of 0.5% (from 0.4%)
Tomorrow, the ISM Index for June ( consensus 55.8) and May Construction Spending (consensus 0.4%) will be reported at 10:00 ET, while auto and truck makers will be reporting their June sales throughout the day.

S&P 500 +6.1% YTD
Nasdaq Composite +5.5% YTD
Dow Jones Industrial Average +1.5% YTD
Russell 2000 +2.6% YTD

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.