Day Traders Diary


The stock market had the rug pulled out from under it as the Christmas Eve session headed for the close. The S&P 500 ended flat after surrendering a five-point gain while the Nasdaq Composite (+0.2%) outperformed.

Equity indices started with slim gains and inched higher into the afternoon amid light volume, before a wave of selling interest knocked the indices from their highs. Only 340 million shares changed hands at the NYSE floor, which was a far cry from the average full session total of about 826 million.

Only three sectors finished in the green while energy (-0.8%) played the role of Grinch. The growth-sensitive group could not make it into positive territory as crude oil weighed. The energy component fell 3.6% to $55.08/bbl with a larger than expected inventory build contributing to the weakness.

The benchmark index was kept from following the energy sector into the red by the relative strength in the heavily-weighted health care space (+0.7%). The countercyclical group erased a portion of yesterday's decline and narrowed its week-to-date loss to 2.7% with biotechnology powering the move. The iShares Nasdaq Biotechnology ETF (IBB 299.80, +5.12) spiked 1.7% and reclaimed its 50-day moving average after settling below that level yesterday. Furthermore, the high-beta group was partially responsible for the outperformance of the Nasdaq.

The tech-heavy index owed some of its strength to chipmakers as the PHLX Semiconductor Index added 0.2%. For its part, the broader technology sector (-0.1%) ended just behind the market amid mixed performance in top-weighted listings. Apple (AAPL 112.01, -0.53), Google (GOOGL 536.93, -1.84), and Microsoft (MSFT 48.14, -0.31) lost between 0.3% and 0.6% while Cisco Systems (CSCO 28.30, +0.05), Oracle (ORCL 46.16, +0.15) and Qualcomm (QCOM 74.66, +0.06) posted gains between 0.1% and 0.3%.

Elsewhere among cyclical sectors, industrials (+0.1%) eked out a slim gain while consumer discretionary (-0.2%) and financials (-0.2%) lagged.

On the countercyclical side, the consumer staples sector ended lower by 0.2% while the utilities sector (+1.8%) ended in the lead.

Treasuries climbed into the green as the session neared the end with the 10-yr yield slipping one basis point to 2.26%.

Economic data was limited to initial claims and the MBA Mortgage Index:
"Weekly initial claims fell to 280,000 from an unrevised 289,000 while the consensus expected an increase to 290,000 "Layoff activities have stabilized and claims are holding firmly below 300,000, which is a level that is normally associated with an economy at, or near, full employment
"Continuing claims increased to 2.403 million from an upwardly revised 2.378 million for the week ending December 6 while the consensus expected a decline to 2.358 million

"The weekly MBA Mortgage Index increased 0.9% to follow last week's 3.3% decline
Bond and equity markets will be closed tomorrow, but they will reopen for a full session on Friday. With Christmas Day on the horizon, we at would like to send along warm holiday wishes to all our readers and their families.
"Nasdaq Composite +14.3% YTD
"S&P 500 +12.6% YTD
"Dow Jones Industrial Average +8.8% YTD
"Russell 2000 +3.6% YTD

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