Day Traders Diary

5/1/15

The stock market ended a defensive week on an upbeat note. The S&P 500 gained 1.1% to narrow its weekly decline to 0.4% while the Nasdaq (+1.3%) outperformed slightly today, but lost 1.7% since last Friday.

The final session of the week was very quiet with the bulk of the action taking place at the open when the S&P 500 spiked above its 50-day moving average (2,090). The benchmark index spent the bulk of the day near its morning high, but punched through that level during afternoon action to complete a full retracement of Thursday's decline.

Nine of ten sectors posted gains with materials (+1.7%) ending the day and the week (+2.0%) ahead of the remaining sectors. Today, the growth-sensitive group received support from Monsanto (MON 118.42, +4.46) as the stock spiked 3.9% after Bloomberg reported the company has approached Syngenta (SYT 77.95, +10.91) about a potential takeover. Steelmakers also contributed to the sector's strength with Market Vectors Steel ETF (SLX 35.74, +0.49) climbing 1.4%.

Meanwhile, the other commodity-related sector—energy—spent the bulk of the session in the red, but turned positive during the afternoon. The sector added 0.3% today and finished the week with a 1.1% gain. Crude oil weighed on the sector in the early going, but the energy component narrowed its loss to 0.8% by the close to settle at $59.15/bbl. WTI crude recovered a portion of its decline after the latest Baker Hughes Rig Count showed that the pace of decline in active oil and gas rigs slowed to 27 from 31 observed last week.

However, crude oil could not return into the green as an uptick in the greenback weighed on the dollar-denominated commodity. To that point, the Dollar Index (95.15, +0.55) added 0.6% and registered its first advance in eight days after the previous seven sessions saw the index slide 3.6%.

Outside of energy, the financial sector (+0.8%) was the only other cyclical group that ended the day behind the broader market. Meanwhile, the top-weighted technology sector (+1.5%) outperformed even as LinkedIn (LNKD 205.21, -46.92) plunged 18.6% after its cautious guidance overshadowed a one-cent beat. However, LinkedIn's weakness was offset by most large cap names with the likes of Apple (AAPL 128.95, +3.80), Oracle (ORCL 44.37, +0.75), and Intel (INTC 33.42, +0.87) gaining between 1.7% and 3.0%.

Over on the countercyclical side, only the health care sector (+1.3%) finished the day ahead of the S&P 500 with help from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 344.00, +10.34) spiked 3.1% after Gilead Sciences (GILD 105.03, +4.52) reported better than expected results.

Treasuries retreated throughout the day, sending the 10-yr yield higher by eight basis points to 2.11%.

Today's participation was below recent averages with roughly 720 million shares changing hands at the NYSE floor.

Economic data included Construction Spending, ISM Index, and Michigan Sentiment:

Construction spending declined 0.6% in March after increasing an upwardly revised 0.1% (from -0.1%) in February while the Briefing.com consensus expected an increase of 0.4% 

Private construction spending increased 0.3% in March after declining 0.3% in February

Despite a rebound in the new housing starts, private residential construction declined 1.6% in March after increasing 0.2% in February

The ISM Manufacturing Index was unchanged and remained at 51.5 in April while the Briefing.com Consensus expected an increase to 51.9 

Even though the overall index did not strengthen as the consensus expected, the key production and order readings showed improvement 

The Production Index increased to 56.0 in April from 53.8 in March

The New Orders Index increased to 53.5 from 51.8

The University of Michigan Consumer Sentiment Index was unrevised in the final April reading after sentiment rose from 93.0 in March to 95.9 in April while the Briefing.com consensus expected a revision up to 96.0 

Unlike the Conference Board's Consumer Confidence Index, which declined in April, relatively higher gasoline prices and volatility in the equity markets had no adverse effects on the Consumer Sentiment Index

Monday's data will be limited to the 10:00 ET release of the Factory Orders report for March (Briefing.com consensus 2.1%).

Nasdaq Composite +5.7% YTD

S&P 500 +2.4% YTD

Russell 2000 +1.9% YTD

Dow Jones Industrial Average +1.1% YTD

Week in Review: Backing Off Record Highs