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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

7/8/14

The major averages registered their second consecutive decline that sent the S&P 500 lower by 0.7% with nine sectors ending in the red. Like yesterday, small-cap stocks underperformed with the Russell 2000 and Nasdaq Composite posting respective losses of 1.2% and 1.4%.
In some ways, today's session resembled yesterday's affair as stocks began the trading day on a cautious note amid weakness in European equities. Yesterday, a disappointing Industrial Production report from Germany contributed to the cautious posture, while today's losses followed the largest monthly decline in UK's Industrial Production (-0.7%) since January 2013.
With participants receiving another warning sign about the strength of economic growth in the eurozone, the stage was set for another day of profit taking.
The technology sector resisted some of the selling pressure yesterday, but the top-weighted S&P 500 sector lost 1.0% today. The influential sector suffered from losses among components of all sizes, including a 0.6% drop in the shares of Apple (AAPL 95.32, -0.62) after the top-weighted tech stock spiked 2.1% on Monday.
Social media names slumped notably with the likes of Facebook (FB 62.76, -2.53), LinkedIn (LNKD 158.67, -10.58), and Twitter (TWTR 37.41, -2.82) posting losses between 3.9% and 7.0%.
Things looked a bit better among chipmakers as the PHLX Semiconductor Index trimmed its loss to 0.5% after being down as much as 1.0% at the halfway point of the session. Similarly, biotechnology also inched up off its midday low, but the iShares Nasdaq Biotechnology ETF (IBB 253.63, -5.46) still lost 2.1%, which weighed on the health care sector (-0.9%).
On the upside, the utilities sector (+0.6%), which struggled last week, spent the entire session in the green to boost its week-to-date gain to 1.0%.
Utilities notwithstanding, consumer staples (-0.2%), energy (-0.2%), and materials (-0.3%) settled ahead of the broader market, but could not climb into the green. In the materials space, Alcoa (AA 14.85, +0.11) bucked the trend, adding 0.6% ahead of its after-hours earnings report.
Today's weakness in equities translated into strength for the bond market, sending the 10-yr note higher by 15 ticks. For its part, the benchmark yield fell five basis points to 2.56%.
Participation was a bit below average with just under 670 million shares changing hands at the NYSE.
Economic data was limited to the Jobs Openings and Labor Turnover Survey and the Consumer Credit report:
The Job Openings and Labor Turnover Survey for May indicated job openings increased to 4.635 million from 4.464 million
Consumer credit increased by $19.60 billion in May after increasing a downwardly revised $26.10 billion (from $21.80 billion) in April. The Briefing.com consensus expected consumer credit to increase by $16.10 billion
Consumer credit typically goes through large monthly revisions, but any future revision is unlikely to alter the current trend of double-digit credit growth
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while the minutes from the June FOMC meeting will cross the wires at 14:00 ET.

S&P 500 +6.2% YTD
Nasdaq Composite +5.1% YTD
Dow Jones Industrial Average +2.0% YTD
Russell 2000 +0.7% 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.