Day Traders Diary


The stock market endured a shaky session on Tuesday, but the key indices managed to recover a portion of their losses by the close. The S&P 500 settled in the middle of its trading range, surrendering 0.7%, while the Nasdaq Composite (-0.1%) outperformed throughout the day.


Equity indices began the day under heavy pressure after the overnight session featured some disappointing economic data from China. Specifically, the country's November trade surplus narrowed to $54.10 billion from $61.64 billion (expected surplus of $63.30 billion) as exports fell 6.8% year-over-year (consensus -5.0%; previous -6.9%) and imports declined 8.7% (expected -12.6%; last -18.8%).


The smaller than expected trade surplus re-invited the same global growth concerns that have been plaguing the market throughout the year. Accordingly, commodities retreated with crude oil falling more than 2.0% before pulling back. The energy component made a brief appearance in the green, but could not avoid a lower close, slipping 0.3% to $37.51/bbl after marking a session low near $36.64/bbl.


The rebound in crude helped alleviate some of the pressure in the stock market, but the S&P 500 could not return above its 200-day moving average (2,064), which served as resistance.


Nine of ten sectors ended in the red while health care (+0.2%) eked out a slim gain thanks to relative strength in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 330.59, +6.31) rallied 2.0%, which helped the Nasdaq end the day near its flat line.


Similarly, the technology sector (-0.2%) contributed to the relative strength in the Nasdaq, but the top-weighted sector could not stay out of the red as high-beta chipmaker names weighed. To that point, the PHLX Semiconductor Index fell 0.9%.


Unlike technology, most of the remaining cyclical sectors ended among the laggards with energy (-1.5%) widening this week's decline to 5.1% while the industrial sector (-1.6%) was pressured by transport stocks. The Dow Jones Transportation Average tumbled 2.8% with Southwest Air (LUV 45.04, -4.47) diving 9.0% after the company lowered its Q4 on unit revenue guidance.


Treasuries notched their highs during the opening retreat in the stock market, but the 10-yr note slipped into the red in the late afternoon, pushing its yield up one basis point to 2.23%.


Today's participation was a bit above average as more than 945 million shares changed hands at the NYSE floor.


Economic data was limited to the October Job Openings and Labor Turnover Survey, which showed that job openings decreased to 5.383 million from a revised reading of 5.534 million (from 5.526 million).


Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index and the October Wholesale Inventories report ( consensus 0.1%), which will be released at 10:00 ET.


Nasdaq Composite +7.7% YTD

S&P 500 +0.2% YTD

Dow Jones Industrial Average -1.4% YTD

Russell 2000 -3.6% YTD

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