Day Traders Diary


The stock market ended Tuesday on a defensive note despite enjoying an upbeat start to the session. The S&P 500 began the day with a 15-point gain, which morphed into a 27-point loss by the close. The benchmark index surrendered 1.4% while the Nasdaq Composite (-1.2%) settled a bit ahead.


Equity indices hit their highs shortly after the opening bell with the early move fueled by strengthening risk appetite overseas. To that point, Asian markets posted solid gains with China's Shanghai Composite jumping 2.3% amid continued speculation about government involvement in the market while Japan's Nikkei soared 7.7%, registering its largest one-day gain since October 2008, after Prime Minister Shinzo Abe pledged to lower the corporate tax rate by at least 3.3%.


The positive vibes carried into the European session, but the demand for equities began receding once the U.S. market opened. The S&P 500 spent the first 90 minutes of the day in a slow retreat from its high and hovered near its flat line into the early afternoon. The index then dipped into negative territory alongside Apple (AAPL 110.15, -2.16) as the largest stock by market cap slid to a session low in reaction to the company's underwhelming product refresh event. Shares of Apple settled lower by 1.9% while the broader technology sector (-1.3%) had a better showing than its leading component, ending just ahead of the market. Like Apple, most large cap components ended in the red, but Facebook (FB 90.44, +0.91) added 1.0%.


Staying in the tech sector, high-beta chipmakers struggled throughout the session, but despite today's 1.8% loss, the PHLX Semiconductor Index remains higher by 2.5% for the week. Meanwhile, another high-beta group—biotechnology—displayed relative weakness throughout the session. The iShares Nasdaq Biotechnology ETF (IBB 344.22, -7.55) lost 2.2%, trimming this week's gain to 2.1%. On a related note, the health care sector lost 1.6%.


Moving back to the cyclical side, the energy sector (-1.9%) struggled throughout the day as renewed weakness in oil prices took its toll on the commodity-sensitive sector. The energy space is now down 0.5% for the week while crude oil tumbled 3.9% today to $44.15/bbl.


Elsewhere, Treasuries retreated overnight, hitting their lows shortly after 9:00 ET; however, a daylong rally erased that entire loss. As a result, the 10-yr note settled on its high with the benchmark yield down one basis point at 2.18%.


Today's participation was slightly stronger than yesterday as more than 905 million shares changed hands at the NYSE floor.


Economic data was limited to the MBA Mortgage Index and JOLTS:


The weekly MBA Mortgage Index fell 6.2% to follow last week's 11.3% spike

The July Job Openings and Labor Turnover Survey showed an increase in openings to 5.753 million from 5.323 million

Tomorrow, weekly Initial Claims ( consensus 275K) and August Import/Export Prices will be reported at 8:30 ET while the Wholesale Inventories report for July (expected 0.3%) will cross the wires at 10:00 ET.


Nasdaq Composite +0.4% YTD

Russell 2000 -4.6% YTD

S&P 500 -5.7% YTD

Dow Jones Industrial Average -8.8% YTD

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