Day Traders Diary
7/23/14The stock market ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire session below its flat line.
Equities started the midweek affair on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, participants turned their attention to quarterly earnings as another dose of better than expected results pushed the S&P 500 to a fresh record close at 1987.01.
The health care sector (+0.8%) surged at the open and never relinquished the lead thanks to a big earnings beat reported by Biogen Idec (BIIB 337.60, +33.93). The stock soared 11.2%, while the iShares Nasdaq Biotechnology ETF (IBB 259.34, +5.66) advanced 2.2%. Elsewhere among biotech names, Puma Biotech (PBYI 233.43, +174.40) nearly tripled in value after announcing positive trial results.
In addition to boosting the health care space, biotechnology provided a measure of support to the Nasdaq, which also drew strength from the shares of Apple (AAPL 97.19, +2.47). The top-weighted tech stock rose 2.6% after beating earnings estimates on below-consensus revenue. However, the company guided Q4 revenue below its Capital IQ consensus estimate.
Sticking to tech earnings, Microsoft (MSFT 44.87, +0.04) missed bottom-line estimates, but beat on revenue. Meanwhile, Broadcom (BRCM 38.15, -0.60) and Juniper Networks (JNPR 22.43, -2.39) retreated despite delivering above-consensus results. Notably, Broadcom and other chipmakers struggled to stay out of the red with the PHLX Semiconductor Index falling 2.3%.
The underperformance of microchip names prevented the technology sector (+0.2%) from extending its slim gain, while other cyclical sectors ended on a mixed note. Energy (+0.6%) and materials (+0.4%) finished ahead of the broader market, while financials (+0.2%) kept pace with the S&P 500. The remaining two growth-sensitive sectorsconsumer discretionary (-0.1%) and industrials (-0.4%)could not make it into the green.
The weakest sector of the dayindustrialslagged amid weakness in the shares of Boeing (BA 126.71, -3.03). The Dow component lost 2.3% despite beating earnings estimates and raising its fiscal-year 2014 earnings guidance.
Also of note, it was reported during the session that the International Monetary Fund lowered its growth forecast for the U.S. to 1.7% from 2.0% and said the Fed may need to delay its first rate hike due to the contraction that took place in the first quarter. However, the remarks had little impact on equities as the major averages held their ground. The Treasury market did not move either and the 10-yr note ended the day flat with its yield at 2.47%.
Participation was well below average with less than 570 million shares changing hands at the NYSE.
Economic data was limited to the weekly MBA Mortgage Index, which rose 2.4% to follow last week's 3.6% decline.
Tomorrow, weekly initial claims (Briefing.com consensus 308K) will be reported at 8:30 ET, while the New Home Sales report for June (consensus 475K) will cross the wires at 10:00 ET. On the earnings front, 3M (MMM 144.68, -0.44), American Airlines (AAL 43.33, +0.95), Caterpillar (CAT 108.38, -1.68), Ford Motor (F 17.78, -0.04), and General Motors (GM 37.41, -0.35) will report ahead of the opening bell.
S&P 500 +7.5% YTD
Nasdaq Composite +7.1% YTD
Dow Jones Industrial Average +3.1% YTD
Russell 2000 -0.4% 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.