Day Traders Diary


The stock market spent the Wednesday session inside a narrow range before ending with a modest loss. The S&P 500 shed 0.3% while the Nasdaq Composite (-0.3%) settled in line with the benchmark index after showing relative strength intraday.


Overall, the midweek affair was very quiet as the stock market bounced around its flat line while the bond market was closed for Veterans Day. The subdued activity was evidenced by below-average trading volume as fewer than 800 million shares changed hands at the NYSE floor.


Four sectors ended the day above their flat lines, but their gains were overshadowed by a significant decline in the energy sector (-1.9%) while other influential groups like health care (-0.9%), consumer discretionary (-0.5%), and financials (-0.2%) also struggled.


The energy sector marched lower throughout the day, pressured by a 2.9% drop in crude oil, which fell to $42.96/bbl, representing the lowest settlement since late August. Similar to crude, other commodities finished the day in negative territory despite modest dollar weakness that sent the Dollar Index (98.98, -0.31) lower by 0.3%. The greenback ended little changed against the euro despite morning news that indicated the European Central Bank will examine a possible extension of quantitative easing purchases to municipal bonds.


Elsewhere, the health care sector held its own in the early going, but slipped into the close with biotechnology showing comparable weakness. To that point, the iShares Nasdaq Biotechnology ETF (IBB 326.85, -5.11) lost 1.5% to end the day just above its 50-day moving average (325.61).


Also of note, the consumer discretionary sector struggled since the start with retailers largely responsible for the weakness after disappointing guidance from Macy's (M 40.44, -6.58) overshadowed better than expected earnings. Macy's tumbled 14.0% while the SPDR S&P Retail ETF (XRT 44.62, -1.03) lost 2.3%.


Unlike the discretionary sector, the consumer staples space outperformed throughout the day with Roundy's (RNDY 3.57, +1.39) surging 63.8% after agreeing to be acquired by Kroger (KR 37.03, -0.24) for $3.60/share in cash, which represents a 65.0% premium to Tuesday's closing price.


Today's economic data was limited to the weekly MBA Mortgage Index, which fell 1.3% to follow last week's 0.8% decline.


Tomorrow, weekly Initial Claims ( consensus 269,000) will be released at 8:30 ET while September Job Openings and Labor Turnover Survey and October Treasury Budget (consensus -$130.00 billion) will be reported at 10:00 ET and 14:00 ET, respectively.


Nasdaq Composite +7.0% YTD

S&P 500 +0.8% YTD

Dow Jones Industrial Average -0.7% YTD

Russell 2000 -2.1% YTD

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