Day Traders Diary


The stock market ended the midweek session on an upbeat note after climbing throughout the day. The S&P 500 gained 0.5% while the Russell 2000 (+0.7%) spent the day in the lead. 


Equity indices rallied out of the gate, all but ignoring news that China's GDP growth (+7.0% year-over-year) has slowed to a six-year low. The news was followed by a small uptick in the greenback, but the Dollar Index (98.36, -0.37) surrendered its overnight advance, posting its second consecutive decline.


In turn, the dollar weakness provided a measure of support to crude oil, helping the energy component jump 5.6% to $56.25/bbl. Understandably, the big spike in oil boosted the energy sector (+2.3%), placing the cyclical group in the lead. Thanks to the gain, the energy space is now up 6.8% since the end of March.


Meanwhile, the remaining cyclical groups settled a bit closer to the broader market. Technology (+0.9%) endured a slight struggle early, but the sector ended among the leaders with help from chipmakers after Linear Technology (LLTC 46.17, +0.75) reported better than expected results and Intel (INTC 32.83, +1.34) delivered an in-line report. The two names spiked 1.6% and 4.3%, respectively, while the PHLX Semiconductor Index gained 1.6%.


Staying on the earnings theme, Bank of America (BAC 15.64, -0.18) lost 1.1% after missing bottom-line estimates, but the financial sector (+0.4%) still finished near the broader market.


Also of note, industrials (+0.1%) displayed early strength, but the sector finished among the laggards following an intraday pullback in transport stocks. Delta Air Lines (DAL 44.20, +1.12) surged 2.6% after reporting a one-cent beat while CSX (CSX 32.86, -0.35) lost 1.1% after its own one-cent beat and lowered guidance. For its part, the Dow Jones Transportation Average narrowed its gain to 0.1% by the close.


Moving to the countercyclical side, the consumer staples sector (-0.3%) spent the bulk of the session in negative territory while the remaining defensively-oriented groups posted gains. The health care sector (+0.3%) endured an intraday pullback in large insurer names like Aetna (AET 106.08, -1.80), Cigna (CI 130.22, -2.68), and UnitedHealth (UNH 117.32, -2.60), but biotech names outperformed with the iShares Nasdaq Biotechnology ETF (IBB 360.94, +3.73) climbing 1.0%.


Treasuries ended the day with slim gains, pressuring the 10-yr yield to 1.89% (-1 bp).


Today's participation was ahead of recent averages with more than 850 million shares changing hands at the NYSE floor.


Economic data included Industrial Production, Empire Manufacturing, MBA Mortgage Index, and NAHB Housing Market Index:


Industrial production declined 0.6% in March after increasing an unrevised 0.1% in February while the consensus expected a decline of 0.3% 

Over the entire first quarter, industrial production declined 1.0%, which was the first quarterly decline since the Great Recession ended

Nearly the entire decline resulted from warmer temperatures, which reduced utilities usage by 5.9% after extreme cold boosted production by 5.7% in February. Mining production (-0.7%) also contributed to the pullback as relatively low oil prices continue to constrain the industry

The Empire Manufacturing Survey for April registered a reading of -1.2, which was below the prior month's reading of 6.9 

The consensus expected an improvement to 7.3

The weekly MBA Mortgage Index fell 2.3% to follow last week's 0.4% uptick

The NAHB Housing Market Index for April rose to 56 from a revised 52 (from 53) while the consensus expected an increase to 55

Tomorrow, weekly Initial Claims ( consensus 280K) and March Housing Starts (consensus 1.045 million) will be released at 8:30 ET while the Philadelphia Fed Survey for April will be reported at 10:00 ET (expected 7.2).


Nasdaq Composite +5.8% YTD

Russell 2000 +5.8% YTD

S&P 500 +2.3% YTD

Dow Jones Industrial Average +1.6% 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.