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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

12/3/14

The stock market ended the midweek session on an upbeat note with the Russell 2000 (+1.0%) pacing the advance for the second day in a row. Meanwhile, the S&P 500 posted a more modest gain of 0.4% with seven sectors ending in the green.

Similar to yesterday, equities were essentially left to their own devices amid a lack of market-moving news. Cyclical sectors were responsible for the bulk of the advance as all six growth-sensitive groups ended in the green while health care (+0.2%) was the lone gainer on the countercyclical side.

The materials sector (+1.4%) settled in the lead after showing relative strength throughout the session. The group benefitted from strength among steelmakers and miners with Market Vectors Steel ETF (SLX 39.15, +0.90) and Market Vectors Gold Miners ETF (GDX 19.60, +0.40) climbing 2.4% and 2.1%, respectively.

Meanwhile, another commodity-related sectorenergy (+1.2%)settled just behind materials, which represented the third consecutive day of relative strength for the recently-battered sector. Today's advance occurred amid a 0.5% gain in crude oil ($67.30/bbl) and helped the sector extend its week-to-date gain to 3.2%.

Elsewhere, the industrial sector (+1.3%) was the only other group to add more than 1.0%. The top-weighted sector componentGeneral Electric (GE 26.38, +0.33)spiked 1.3% while transport stocks also displayed relative strength. The Dow Jones Transportation Average settled higher by 0.8% with Alaska Air (ALK 56.76, +1.51) setting the pace.

Also of note, the technology sector (+0.5%) underperformed in the morning, but powered to new highs during the final hour. The sector was underpinned by chipmakers and its strength helped the S&P 500 to a new high just ahead of the close. As for chipmakers, the group rallied broadly after Microchip Technology (MCHP 46.59, +1.94) said it is confident the small correction experienced in the third quarter is now in the past. The stock spiked 4.3% while the PHLX Semiconductor Index jumped 2.0%.

Over on the countercyclical side, consumer staples (-0.8%), telecom services (-0.8%), and utilities (-0.3%) ended in the red while health care (+0.2%) turned positive in the early afternoon. Biotechnology contributed to the rebound with the iShares Nasdaq Biotechnology ETF (IBB 308.25, +1.38) climbing 0.5%.

Treasuries spent the bulk of the session near their flat lines before ending close to highs. The 10-yr yield slipped one basis point to 2.28%.

Participation was a bit below average with just over 755 million shares changing hands at the NYSE floor.

Economic data included ADP Employment Change, Q3 Labor Productivity Data, ISM Services, and the MBA Mortgage Index:

The ADP report revealed that employment in the nonfarm private business sector rose 208K in November, which was below the increase of 225K expected by the Briefing.com consensus.
Q3 nonfarm business productivity was revised up to 2.3% from an originally reported 2.0% gain while the Briefing.com consensus expected a revision to 2.4%
Unit labor costs were revised down and now show a 1.0% decline in the third quarter after initially showing a small 0.3% increase. The consensus expected a flat reading.
This was the second consecutive quarterly decline
The ISM Services Index for November rose to 59.3 from 57.1 while the Briefing.com consensus expected an uptick to 57.5
The weekly MBA Mortgage Index fell 7.3% to follow last week's 4.3% decline
Tomorrow's data will be limited to the Challenger Job Cuts report for November, which will be released at 7:30 ET while weekly Initial Claims will cross at 8:30 ET (Briefing.com consensus 295K).

Nasdaq Composite +14.3% YTD
S&P 500 +12.2% YTD
Dow Jones Industrial Average +8.1% YTD
Russell 2000 +1.4% 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.