Day Traders Diary


The major averages ended Thursday on a modestly lower note, but they were able to climb off their opening lows. The S&P 500 shed 0.1% after spending the day in a 12-point range.

Equity indices struggled in the early going after an overnight report from the Financial Times indicated that Greek officials have asked the International Monetary Fund to reschedule debt repayments that will be due in May. The report was denied by Greek Finance Minister Yanis Varoufakis, but European investors displayed caution, which contributed to the lower start in the U.S.

However, a batch of better than expected earnings offset the Greece-related news. The S&P 500 ranged near its low during the opening hour and climbed into the afternoon. The index spent about an hour in the green, but slipped back into the red before the close.

Only three sectors registered gains, but most of the decliners finished not far below their flat lines. The utilities (-0.6%) sector was the weakest performer, but that had little impact on the market since the sector makes up just 3.0% of the S&P 500.

Elsewhere among countercyclical groups, the consumer staples sector (+0.4%) spent the day atop the leaderboard thanks to better than expected earnings and upbeat guidance from Philip Morris (PM 84.96, +6.83).

Moving to the cyclical side, the consumer discretionary sector (+0.2%) outperformed with help from the shares of Netflix (NFLX 562.05, +86.59), which surged 18.2% to a new record high after the company beat bottom line estimates. The big spike in Netflix overshadowed losses among homebuilders brought on by a disappointing Housing Starts report. The iShares Dow Jones US Home Construction ETF (ITB 27.91, -0.53) lost 1.9%.

Similar to the discretionary sector, financials (+0.1%) held a slim gain throughout the day after two major components reported earnings. Citigroup (C 54.02, +0.81) gained 1.5% in reaction to its bottom-line beat while Dow component Goldman Sachs (GS 200.21, -0.89) shed 0.4% despite beating estimates and boosting its quarterly dividend to $0.65/share.

On the downside, the technology sector (-0.3%) could not make it out of the red as chipmakers weighed after SanDisk (SNDK 67.97, -3.15) missed earnings expectations and guided below consensus while Taiwan Semiconductor (TSM 23.24, -0.27) beat on the bottom line beat, but issued cautious revenue guidance for Q2. The two lost 4.4% and 1.2%, respectively while the PHLX Semiconductor Index fell 0.5%.

Treasuries spent some time on either side of their flat lines before ending just above the unchanged level. The 10-yr yield slipped one basis point to 1.89%.

Today's participation was in-line with recent averages as roughly 740 million shares changed hands at the NYSE floor.

Economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:
  • The initial claims level increased to 294,000 for the week ending April 11 from an upwardly revised 282,000 (from 281,000) while the consensus expected a decline to 280,000 
    • Despite the increase, the four-week moving average was virtually unchanged at 283,000, a level last seen in 2000 
    • Continuing claims fell to 2.268 million from an upwardly revised 2.308 million (from 2.304 million) while the consensus expected an increase to 2.325 million 
  • Housing starts increased 2.0% in March to 926,000 from an upwardly revised 908,000 (from 897,000) in February while the consensus expected an increase to 1.045 million 
    • In February, housing starts dropped 15.3%, which was blamed on adverse weather, meaning starts should have rebounded in the hardest hit areas of the country 
      • The Northeast did return to January levels, as expected, but the rebound in the Midwest was poor and remained well below previous trends 
      • Furthermore, starts in the unaffected West (-19.3%) and South (-3.5%) fell to levels not seen since the first half of 2014, suggesting economic reasons and not weather bear responsibility for the lackluster start to the year 
  • The Philadelphia Fed's Business Outlook Survey increased to 7.5 in April from 5.0 in March while the consensus expected an increase to 7.2 
Tomorrow, March CPI ( consensus 0.3%) will be reported at 8:30 ET while March Leading Indicators (expected 0.3%) and the preliminary reading of the Michigan Sentiment Index for April (expected 94.0) will be released at 10:00 ET.
  • Russell 2000 +5.8% YTD 
  • Nasdaq Composite +5.7% YTD 
  • S&P 500 +2.2% YTD 
  • Dow Jones Industrial Average +1.6% YTD


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