Day Traders Diary


The stock market registered its second consecutive decline on Thursday with the S&P 500 (-0.3%) sliding below its 50-day simple moving average (2,107). The benchmark index held a modest gain through the morning, but relative weakness among several influential sectors pulled the S&P 500 into negative territory during afternoon action.

Stocks began the day with slim gains, but retreated from their opening levels during the initial hour amid reports today's Eurogroup meeting was suspended to give the Greek delegation time to submit a better proposal to the creditors. The market dipped from its opening levels in reaction, but was able to briefly extend to a fresh session high with the health care (+0.5%) sector driving the move after the Supreme Court upheld federal subsidies to the Affordable Care Act. Hospital names benefited from the news with the likes of Tenet Healthcare (THC 56.21, +6.13), HCA (HCA 90.72, +7.35), and Universal Health (UHS 140.82, +10.14) spiking between 7.8% and 12.2%.

Staying in the health care sector, insurer Humana (HUM 197.37, +13.14) spiked during the afternoon and ended higher by 7.1% after Bloomberg reported the company received a takeover offer from Aetna (AET 132.60, +5.09).

Unlike health care, most of the remaining influential sectors struggled while the consumer discretionary space (-0.1%) settled just below its flat line, but ahead of other cyclical groups. Media names like Comcast (CMCSA 60.88, +0.52) and Time Warner (TWX 88.20, +1.10) posted gains close to 1.0% apiece while homebuilders also finished ahead of the broader market with iShares Dow Jones US Home Construction ETF (ITB 27.96, +0.04) adding 0.1%.

Elsewhere, the financial sector (-0.7%) underperformed today, and the growth-sensitive group is now down 0.5% for the week versus a 0.4% week-to-date decline for the S&P 500. Similar to financials, energy (-1.0%) and industrials (-0.8%) lagged throughout the day.

The energy sector struggled amid commodity weakness as crude oil fell 0.8% to $59.73/bbl. Today's decline widened the energy sector's June loss to 2.7%, which puts the group only ahead of the utilities sector (-0.7%). The rate-sensitive sector has given up 6.0% month-to-date.

For its part, the industrial sector endured losses among large cap names like General Electric (GE 27.04, -0.22) and Caterpillar (CAT 86.72, -1.45). That being said, transport stocks did not fare much better with the Dow Jones Transportation Average (-0.9%) extending this week's decline to 2.1%. The bellwether complex notched a fresh low for the month near levels that have not been seen since late October.

Also of note, the top-weighted technology sector (-0.3%) ended in-line with the broader market, but that masked modest strength among chipmakers. The PHLX Semiconductor Index shed 0.1%, but ARM Holdings (ARMH 53.86, +1.09) rallied 2.1% to a two-month high. On the flip side, Cree (CREE 27.51, -3.05) plunged 10.0% after issuing below-consensus guidance and announcing plans to restructure its LED business.

Treasuries spent the day in negative territory, but they cut their losses in half during afternoon action with the 10-yr yield ending higher by two basis points at 2.40%.

Today's participation represented the largest amount of activity since Friday as more than 750 million shares changed hands at the NYSE floor.

Economic data included Initial Claims and Personal Income/Spending data:
  • The initial claims level increased to 271,000 for the week ending June 20 from an upwardly revised 268,000 (from 267,000) while the consensus expected an increase to 271,000 
    • Over the last four weeks, the initial claims level has averaged 274,000, which is slightly above the 15-year lows reached in May, but still points toward strong employment trends 
  • Personal income increased 0.5% for a second consecutive month in May while the consensus expected an increase of 0.4% 
    • The personal savings rate dropped to 5.1% in May from 5.4% in April 
    • Personal spending increased 0.9% in May after an upwardly revised 0.1% (from 0.0%) in April while the consensus expected an increase of 0.7% 
    • Core PCE Prices rose 0.1%, as expected by the consensus 
Tomorrow, the final reading of the Michigan Sentiment Survey for June will be released at 10:00 ET ( consensus 94.6).
  • Nasdaq Composite +7.9% YTD 
  • Russell 2000 +6.5% YTD 
  • S&P 500 +2.1% YTD 
  • Dow Jones Industrial Average +0.4% YTD

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