Day Traders Diary


The major averages registered their first advance of the week on Friday with the Nasdaq Composite (+0.6%) ending ahead of the S&P 500 (+0.2%). Despite today's modest uptick, the two indices ended with respective losses of 2.7% and 2.2% for the week.


Overall, the final session of the week was fairly quiet with equity indices bouncing around narrow ranges. The S&P 500 spent the day in a ten-point channel with the bulk of the action occurring near its 100-day moving average (2,058). The benchmark index settled below that level on Thursday, but managed to reclaim that mark today.


Six of ten sectors registered gains with most countercyclical groups showing relative strength. The telecom services sector was an exception, ending flat, while consumer staples (+0.6%), utilities (+0.5%), and health care (+0.7%) posted gains.


Most notably, the third largest sector by weight—health care—was underpinned by biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 347.46, +6.65) surged 2.0%, but still ended the week lower by 5.2%. Today, however, the industry group did some heavy lifting and contributed to the outperformance of the Nasdaq even as large cap technology names struggled.


The technology sector (+0.2%) started in-line with the market, but slumped from its opening high in a move that coincided with Apple (AAPL 123.25, -0.99) turning negative. The stock settled lower by 0.8%, but managed to hold its 50-day moving average (122.67). Meanwhile, high-beta chipmakers traded in mixed fashion until the final hour when it was reported that Intel (INTC 32.00, +1.92) is in talks to acquire Altera (ALTR 44.41, +9.83). The two names soared 6.4% and 28.5%, respectively and the news set a fire under the entire chipmaker space with the PHLX Semiconductor Index surging 2.8%. It is worth noting that the late surge lifted the entire sector into positive territory. 


Elsewhere among cyclical sectors, energy (-0.7%) and financials (-0.1%) lagged while consumer discretionary (+0.5%) and industrials (+0.4%) outperformed.


The energy sector ended the day at the bottom of the barrel, but still finished the week ahead of the remaining cyclical sectors (-0.7%). Crude oil factored into today's weakness as the energy component fell 5.0% to $48.87/bbl and continued its retreat during electronic trading. Despite the plunge, WTI crude gained 4.9% for the week.


Also of note, the financial sector (-0.1%) finished with a slim loss today, but ended the week behind the remaining nine sectors with a 3.0% loss.


On the flip side, the consumer discretionary sector (+0.5%) ended ahead of other cyclical groups with help from homebuilders and retailers. The iShares Dow Jones US Home Construction ETF (ITB 27.79, +0.46) gained 1.7% while SPDR S&P Retail ETF (XRT 100.24, +0.82) advanced 0.8%.


Treasuries spent the day in a steady climb from their overnight lows with the 10-yr yield slipping four basis points to 1.96%.


Today's participation was below average with roughly 725 million shares changing hands at the NYSE floor.


Economic data was limited to Q4 GDP and Michigan Sentiment:


GDP growth in Q4 2014 was unrevised in the third estimate and remained at 2.2% after increasing 5.0% in Q3. The consensus expected a revision to 2.4% 

Real final sales saw a slight upward revision to 2.3% from 2.1%, but nothing in the data altered the notion that economic growth trends slowed down significantly in the fourth quarter

The University of Michigan Consumer Sentiment Index was revised up to 93.0 in the March final reading from a preliminary reading of 91.2 while the consensus expected a revision up to 92.0

On Monday, February Personal Income, Personal Spending, and core PCE Prices will be released at 8:30 ET while the Pending Home Sales report for February will cross the wires at 10:00 ET.


Nasdaq Composite +3.3% YTD

Russell 2000 +2.9% YTD

S&P 500 +0.1% YTD

Dow Jones Industrial Average -0.6% YTD

Week in Review: Stocks Pull Back


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