Day Traders Diary


 The Nasdaq (+0.6%) kept on rolling in the midweek session, cruising to its ninth-consecutive victory--which marks its longest winning streak in two years--and a new all-time high. The S&P 500 (+0.5%), the Dow (+0.3%), and the Russell 2000 (+1.0%) also notched new record closes, finishing at their best marks of the day.

Today's win was a team effort with all 11 of the S&P 500's sectors finishing in positive territory. The industrial sector (+0.2%) was the weakest performer while the energy group (+1.4%) was the strongest.

The energy space was underpinned by a positive performance from crude oil, which climbed 1.5% to $47.31/bbl on the heels of a better than expected EIA inventory report. According to the Department of Energy, U.S. crude stockpiles declined by 4.7 million barrels last week while the consensus expected a draw of just 3.5 million barrels.

Elsewhere, the influential health care sector (+0.8%) exhibited strength throughout the session with Vertex Pharmaceuticals (VRTX 159.69, +27.53) leading the charge. VRTX shares spiked 20.8% to a fresh all-time high after the biotech company announced positive clinical trial results for three of its newest Cystic-Fibrosis drugs. Unsurprisingly, the iShares Nasdaq Biotechnology ETF (IBB 319.63, +4.49) finished comfortably ahead of the broader market, climbing 1.4%.

The top-weighted technology sector (+0.6%) advanced for the ninth session in a row, but struggled to keep ahead of the broader market. IBM (IBM 147.53, -6.47) weighed on the group, dropping 4.2%, after reporting a decline in revenue for the 21st quarter in a row. Meanwhile, chipmakers finished modestly ahead of the benchmark index, evidenced by the 0.9% increase in the PHLX Semiconductor Index.

As for the laggards, financials struggled to stay afloat despite relatively upbeat earnings reports from Morgan Stanley (MS 46.62, +1.48) and US Bancorp (USB 52.08, +0.45). MS shares jumped 3.3% after the company reported better than expected earnings and revenues while USB shares added 0.9% after the company beat bottom-line estimates. Still, no matter how small the margin of victory, the financial group (+0.2%) managed to put an end to its three-session losing streak.

Like financials, the industrial group finished at the back of the pack. Transports weighed, sending the Dow Jones Transportation Average lower by 0.6%, with CSX (CSX 51.87, -2.77) and United Continental (UAL 74.24, -4.66) pacing the retreat. Both companies beat earnings per share estimates, with CSX also reporting better than expected revenues, but slipped on relatively unimpressive third-quarter guidance. CSX shares dropped 5.1% while UAL shares slipped a bit further, losing 5.9%.

In the bond market, U.S. sovereign debt finished relatively flat as participants hesitated to alter their positioning ahead of policy statements from two major central banks--the Bank of Japan and the European Central Bank. The BoJ will release its policy decision overnight while the ECB will release its decision tomorrow morning. The benchmark 10-yr yield climbed one basis point to 2.27%.

Reviewing Wednesday's economic data, which was limited to June Housing Starts and the weekly MBA Mortgage Applications Index:

Housing starts increased to a seasonally adjusted annualized rate of 1.215 million units in June ( consensus 1.160 million), up from a revised 1.122 million units in May (from 1.092 million). Building permits increased to a seasonally adjusted 1.254 million in June ( consensus 1.196 million), up from an unrevised 1.168 million in May.

The key takeaway from the report is that there was solid growth in both single-family starts (+6.3%) and permits for single-family homes (+4.1%), both of which are important given the supply constraints in the housing market that have crimped affordability for many prospective home buyers.

The weekly MBA Mortgage Applications Index rose 6.3% to follow last week's 7.4% decrease.

On Thursday, investors will receive several economic reports, including the July Philadelphia Fed Index ( consensus 22.0) at 8:30 ET, the weekly Initial Claims Report ( consensus 245K) also at 8:30 ET, and the June Leading Indicators Index ( consensus 0.4%) at 10:00 ET.


Nasdaq Composite +18.6% YTD

S&P 500 +10.5% YTD

Dow Jones Industrial Average +9.5% YTD

Russell 2000 +6.2% YTD

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.