Day Traders Diary


The stock market spun its wheels through the bulk of the Thursday affair, but a final-hour charge helped the S&P 500 end little changed while the Nasdaq Composite (-0.4%) underperformed throughout the session.


Equities followed Wednesday's roller-coaster ride with a range-bound Thursday session that saw weakness in heavily-weighted cyclical sectors while health care (+0.5%) surrendered the bulk of its gain into the close; however, the market maintained its range through the afternoon as technology (-0.3%) cut its opening loss in half while energy (+0.5%) and consumer discretionary (+0.3%) outperformed.


Most notably, the technology sector (-0.4%) struggled from the start and the bulk of its weakness could be found in the semiconductor group where NXP Semiconductor (NXPI 73.00, -17.92) plunged 19.7% after below-consensus revenue and concerns about the company's inventories overshadowed a bottom-line beat and an expanded share buyback. Also of note, STMicroelectronics (STM 6.79, -0.42) fell 5.8% after issuing disappointing guidance and denying interest in Fairchild Semiconductor (FCS 16.56, -0.99). Meanwhile, the PHLX Semiconductor Index dove 3.0% after ending yesterday's session above its 200-day moving average (673.21).


Staying in the tech space, GoPro (GPRO 25.62, -4.59) sank 15.2% to a fresh all-time low in reaction to an uninspiring guidance while Cirrus Logic (CRUS 30.33, -1.29) dropped 4.1% despite beating estimates and issuing better than expected revenue guidance.


Similar to technology, growth-sensitive financials (-0.3%) and industrials (-0.1%) underperformed while consumer discretionary (+0.3%) outperformed with help from media names. Charter Communications (CHTR 193.33, +9.23) was a standout performer, spiking 5.0%, in reaction to solid results.


Also of note, the energy sector (+0.5%) displayed relative strength throughout the day while crude oil oscillated near its flat line to end little changed near $46.00/bbl. Earnings contributed to increased activity in the sector with ConocoPhillips (COP 53.62, +0.28), Marathon Petroleum (MPC 51.24, +1.40), Tesoro (TSO 108.99, +3.71), and Suncor Energy (SU 29.48, +1.01) jumping between 0.5% and 3.6% after beating estimates. On the downside, Royal Dutch Shell (RDS.A 52.56, -0.46) fell 0.9% after missing earnings estimates on better than expected revenue.


In addition to energy, the health care sector (+0.5%) provided a measure of support throughout the day. That being said, the sector backed away from its high during afternoon action amid a turnaround in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 328.55, -3.24) ended lower by 1.0%, masking a 6.0% surge in Allergan (AGN 304.38, +17.18) after the company confirmed it has been approached by Pfizer (PFE 34.77, -0.68) about a potential merger.


Unlike stocks, Treasuries slid throughout the session with the 10-yr yield rising eight basis points to 2.17%.


Today's participation was right in line with average as roughly 850 million shares changed hands at the NYSE floor.


Economic data included GDP, Initial Claims, and Pending Home Sales:


GDP increased 1.5% in the third quarter, down from a 3.9% gain in Q2 2015 while the consensus an increase of 1.6%

Even though the headline growth level was on the lighter side, the overall economy looked pretty healthy in the third quarter with the drag resulting from a substantial pullback in inventory growth; however, that was a normal reaction following two consecutive quarterly gains

Excluding inventories, real final sales rose 3.0%, which was in-line with normal potential growth patterns

The weekly initial claims level increased to 260,000 from an unrevised 259,000 while the consensus expected an increase to 264,000

The four-week moving average fell below 260,000 for the first time since 1973

The continuing claims level declined to 2.144 mln from an upwardly revised 2.181 mln (from 2.170 mln) while the consensus expected an increase to 2.185 mln

Pending home sales for September fell 2.3% while the consensus expected an increase of 0.6%.

Tomorrow, September Personal Income ( consensus 0.2%), Personal Spending (expected 0.2%), core PCE Prices (consensus 0.1%), and Q3 Employment Cost Index (consensus 0.5%) will all be reported at 8:30 ET while October Chicago PMI (consensus 49.0) and the final reading of the Michigan Sentiment Index for October (expected 92.6) will be released at 9:45 ET and 10:00 ET, respectively.


Nasdaq Composite +7.1% YTD

S&P 500 +1.5% YTD

Dow Jones Industrial Average -0.4% YTD

Russell 2000 -3.2% YTD

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