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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

7/29/15

The stock market registered its second consecutive advance on Wednesday with the S&P 500 climbing 0.7% to extend its weekly gain to 1.4%. The benchmark index overtook its 100- (2,095) and 50-day moving averages (2,100) during morning action while the tech-heavy Nasdaq (+0.4%) struggled to keep pace with the broader market.

Equity indices began the day with slight gains after China's Shanghai Composite spiked 3.4% overnight, which improved risk tolerance among global investors. The Dow and S&P 500 rallied throughout the session while the Nasdaq hovered near its opening levels into the afternoon before setting new highs ahead of the close.

The tech-heavy index was pressured by biotechnology as iShares Nasdaq Biotechnology ETF (IBB 377.43, -5.41) lost 1.4% despite better than expected earnings from Gilead Sciences (GILD 115.71, +2.64). Shares of GILD spiked 2.3% while the broader health care sector (+0.2%) settled among the laggards. Similar to biotechnology, high-beta chipmakers lagged, but the PHLX Semiconductor Index was able to end the day higher by 0.1%. On the earnings front, Twitter (TWTR 31.24, -5.30) sank 14.5% after the company's bottom-line beat was overshadowed by cautious commentary regarding user growth outlook.

Although the technology sector (+0.7%) struggled in the early going, the top-weighted sector closed the gap during afternoon action, ending in-line with the broader market. Similarly, the materials sector (+0.7%) settled near the S&P 500 while the other four cyclical sectors displayed relative strength.

Most notably, the industrial sector spiked 1.2% with transport stocks fueling the move after C.H. Robinson (CHRW 69.85, +3.12) beat bottom-line estimates on light revenue. The stock surged 4.7% while the broader Dow Jones Transportation Average jumped 1.7% to extend this week's gain to 4.3%.

Elsewhere, the energy sector (+1.3%) settled ahead of industrials thanks to an intraday rally in crude oil that sent the energy component higher by 1.7% to $48.77/bbl. Also of note, Anadarko Petroleum (APC 76.28, +3.43) soared 4.7% after beating earnings expectations.

Today's advance in equities was accompanied by selling in the Treasury market that sent the 10-yr yield higher by three basis points to 2.28%. Treasuries spiked off their intraday lows after the latest policy statement from the FOMC called for more improvement in the labor market before raising rates. On a related note, the Dollar Index (97.16, +0.40) dipped immediately after the minutes crossed the wires, but rallied during the late afternoon at the expense of the euro (-0.8%), which slipped to 1.0980.

For the second day in a row, participation was ahead of average with more than 850 million shares changing hands at the NYSE floor.

Economic data released this morning was limited to the MBA Mortgage Index and Pending Home Sales:
  • The weekly MBA Mortgage Index rose 0.8% to follow last week's 0.1% uptick 
  • Pending home sales for June fell 1.8% while the Briefing.com consensus expected an increase of 1.0% 
Tomorrow, weekly Initial Claims (Briefing.com consensus 272,000) and the advance reading of Q2 GDP (consensus 2.5%) will be released at 8:30 ET.
  • Nasdaq Composite +7.9% YTD 
  • S&P 500 +2.4% YTD 
  • Russell 2000 +2.0% YTD 
  • Dow Jones Industrial Average -0.4% 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.