Day Traders Diary


The stock market ended Tuesday on a lower note after the major averages failed to hold their slim intraday gains. The S&P 500 settled lower by 0.7% while the Nasdaq Composite (-0.9%) underperformed.


Overall, today's affair was relatively quiet with trading volume surpassing yesterday's total by a relatively slim margin. To that point, fewer than 850 million shares changed hands at the NYSE floor.


Equity indices faced some selling pressure after China's September trade balance ($60.34 billion; expected $46.79 billion) showed a 20.4% decline in imports (expected -15.0%), which was the 11th consecutive drop in that category, stirring up concerns about China's demand for goods and services from its neighbors. Accordingly, most Asian markets posted losses on Tuesday and the defensive sentiment infiltrated the European session.


However, once the opening bell rang on Wall Street, stocks spent the first two hours of the day in a steady climb off their opening lows. That rally lifted the major averages above their flat lines, but the key indices could not build on their slim gains, instead sliding back to their lows during the afternoon.


All ten sectors finished the day in negative territory with industrials (-1.0%) occupying the bottom of the leaderboard throughout the day. Transport stocks were largely responsible for the underperformance, evidenced by a 2.2% dive in the Dow Jones Transportation Average. Only one index component settled in the green while Ryder Systems (R 68.63, -7.02) and JetBlue Airways (JBLU 24.75, -2.11) paced the decline with respective losses of 9.3% and 7.9%. Shares of Ryder slumped after the company lowered its guidance while JetBlue was downgraded at JP Morgan.


Staying on the cyclical side, financials (-0.7%) and energy (-0.9%) settled near the broader market while the technology sector (-0.3%) outperformed throughout the day with Apple (AAPL 111.79, +0.19) and Alphabet (GOOGL 683.17, +6.74) climbing 0.2% and 1.0%, respectively, while SAP (SAP 72.30, +3.85) spiked 5.6% in reaction to better than expected results. Also of note, Twitter (TWTR 29.05, +0.30) rose 1.1% after increasing its revenue guidance and announcing plans to reduce its global workforce by up to 8.0%.


Over on the countercyclical side, the health care sector (-1.2%) ended among the laggards due to an afternoon retreat in biotechnology. To that point, the iShares Nasdaq Biotechnology ETF (IBB 298.76, -9.78) lost 3.2%. Elsewhere in the health care space, Johnson & Johnson (JNJ 95.45, -0.54) fell 0.6% after reporting a bottom-line beat on below-consensus revenue.


Treasuries ended the day near their overnight highs with the 10-yr yield down four basis points at 2.05%.


The Treasury Budget for September ( consensus $95.00 billion) was originally on today's economic schedule, but the report did not cross the wires during the expected release time.


Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while September PPI ( consensus -0.3%) and Retail Sales (consensus 0.2%) will both be reported at 8:30 ET. Also of note, August Business Inventories will be reported at 10:00 ET (expected 0.1%) while the October Beige Book will cross the wires at 14:00 ET.


Nasdaq Composite +1.3% YTD

S&P 500 -2.7% YTD

Dow Jones Industrial Average -4.2% YTD

Russell 2000 -4.6% YTD

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