Day Traders Diary


  • The major averages finished an upbeat week on a mixed note with the Nasdaq Composite (+0.9%) posting a solid gain while the Dow (-0.2%) and S&P 500 (+0.1%) underperformed throughout the day. For the week, the Nasdaq spiked 4.3% while the Dow and S&P 500 climbed 1.8% and 2.4%, respectively.

    Equity indices diverged at the start with the Nasdaq Composite receiving a boost from Google (GOOGL 699.62, +97.84) after the index heavyweight reported better than expected earnings. The stock soared 16.3% to a new record high, lifting the Nasdaq Composite to a fresh record close of its own (5,210.14). Furthermore, Google underpinned the technology sector (+1.8%) which was the only group that spent the entire day in positive territory.

    Meanwhile, many other technology components struggled with high-beta chipmakers showing relative weakness throughout the day. The PHLX Semiconductor Index was down as much as 1.0%, but narrowed its loss to 0.2% by the close. For the week, the chipmaker index added 1.2% while the technology sector spiked 5.3%.

    Elsewhere among cyclical sectors, consumer discretionary (-0.2%) and financials (-0.2%) lagged throughout the day, which kept the S&P 500 below its flat line into the afternoon. Similarly, the energy sector (-1.1%) spent the day behind other groups as crude oil marked a new low for the week ($50.16/bbl) before erasing its loss by the pit close to end at $50.88/bbl.

    Staying on the growth-sensitive side, the industrial sector (unch) slipped behind the S&P 500 during afternoon action after several sector components reported earnings. Transport stocks outperformed with Kansas City Southern (KSU 98.60, +6.05) spiking 6.5% after reporting a one-cent beat while JB Hunt (JBHT 85.69, -0.10) shed 0.1% after reporting a two-cent miss. For its part, the broader Dow Jones Transportation Average gained 0.7% to extend its weekly advance to 1.1%.

    Moving to large cap industrial components, General Electric (GE 27.24, +0.20) and Honeywell (HON 105.54, +1.97) registered respective gains of 0.7% and 1.9% after the former reported in-line results while the latter beat estimates; however, their strength could not offset losses among the likes of Boeing (BA 146.84, -1.65), Caterpillar (CAT 83.16, -0.60), and Deere (DE 96.96, -0.37).

    Things did not look much better on the countercyclical side where the utilities sector lost 1.1% while consumer staples (-0.1%), health care (-0.2%), and telecom services (-0.3%) registered slimmer losses.

    Treasuries held modest gains throughout the day, ending near the middle of their trading ranges with the 10-yr yield lower by a basis point at 2.34%.

    Today's participation was ahead of average as options expiration led to increased activity with more than 850 million shares changing hands at the NYSE floor.

    Economic data included CPI, Housing Starts/Building Permits, and Michigan Sentiment:

    The CPI increased 0.3% in June after a 0.4% increase in May while the consensus expected an increase of 0.3% 

    As expected, energy costs continued their upward move with prices rising 1.7% in June after a 4.3% increase in May 

    Gasoline prices made up the bulk of the increase, rising 3.4% in June after a 10.4% increase in May

    Excluding food and energy, core CPI increased 0.2% in June after a 0.1% increase in May while the consensus expected an increase of 0.2%

    Housing starts increased 9.8% in June from an upwardly revised 1.069 million (from 1.036 million) in May to 1.174 million while the consensus expected an increase to 1.120 million 

    At first glance, the jump in starts looks impressive, but the entire increase came from the volatile multifamily construction sector 

    Multifamily construction increased 29.4% to 489,000 in June from 378,000 in May, which was the highest level since 501,000 units were started in April 1988

    The University of Michigan's Consumer Sentiment Index declined to 93.3 in the preliminary July reading from 96.5 in June while the consensus expected a decrease to 96.1 

    Consumer sentiment typically follows trends in gasoline costs, stock market movements, employment, and media reports 

    In this case, dire economic reports about Greece and the eurozone and some volatility in the equity market likely offset recent improvements in gasoline prices and employment conditions

    Investors will not receive any economic data on Monday or Tuesday.


    Nasdaq Composite +9.9% YTD

    Russell 2000 +5.2% YTD

    S&P 500 +3.2% YTD

    Dow Jones Industrial Average +1.5% YTD

    Week in Review: Nasdaq Sets New Record High

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