Day Traders Diary



    The U.S. equity market opened the week on a positive note, sending both the S&P 500 (+0.2%) and the Dow (+0.3%) to new all-time highs. The tech-heavy Nasdaq (+0.1%) touched a new intraday high on Monday, but failed to carve out a new record close following a technology sell off in the late afternoon. Small caps outperformed, pushing the Russell 2000 higher by 0.7%.

    After climbing to a new record high at the start of Monday's session, the stock market began trending sideways, protecting its modest opening gain. The heavily-weighted financial sector (+1.0%) underpinned the broader market during this time and continued to exert a positive influence through the closing bell.

    However, the top-weighted technology sector (unch) took control of the broader market in the afternoon following the sector's sharp drop into negative territory.

    Without a catalyst, the tech sector exchanged a gain of 0.3% for a loss of 0.3% in less than an hour with mega-cap names like Apple (AAPL 158.67, -1.21), Facebook (FB 170.01, -1.63), Alphabet (GOOGL 929.75, -5.54), and Microsoft (MSFT 75.16, -0.15) leading the retreat. Likewise, the S&P 500 slipped to its lowest mark of the day, fully retracing its gain of 0.3%.

    However, the tech group managed to bounce back a bit in the late afternoon to finish just a tick below its unchanged mark. Chipmakers helped keep the sector's loss in check, putting together yet another positive performance. The PHLX Semiconductor Index climbed 1.2% to settle in the green for the sixth-consecutive session.

    NVIDIA (NVDA 187.55, +7.44) led the semiconductor rally--climbing 4.1% to a new all-time high--after Bank of America/Merrill Lynch raised its target price to $210 from $185 on Monday morning.

    In total, six sectors finished Monday's session in the green--financials (+1.0%), industrials (+0.6%), materials (+0.6%), telecom services (+0.5%), energy (+0.4%), and consumer staples (unch)--while five settled in the red--technology (unch), health care (-0.1%), consumer discretionary (-0.4%), real estate (-0.5%), and utilities (-1.0%).

    The industrial sector benefited from the positive performances of several influential Dow components, including Boeing (BA 253.08, +4.08) and Caterpillar (CAT 123.83, +2.46), which climbed 1.6% and 2.0%, respectively. UBS upgraded CAT shares to 'Buy' from 'Neutral' on Monday morning.

    As for Boeing, it rallied alongside aerospace and defense peer Northrop Grumman (NOC 275.97, +8.94), which climbed 3.4% after announcing its intent to acquire Orbital ATK (OA 132.25, +22.21) for $7.8 billion, or $134.50 per share, in cash. Including the assumption of debt, the total cost will be $9.2 billion.

    In the bond market, Treasuries sold off in a curve-steepening trade. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.23% while the 2-yr yield advanced just one basis point to 1.39%. Meanwhile, the U.S. Dollar Index (91.81, +0.16) climbed 0.2%.

    Reviewing Monday's economic data, which was limited to the September NAHB Housing Market Index:

    • The NAHB Housing Market Index for September declined to 64 ( consensus 67) from a revised reading of 67 (from 68) in August.

    On Tuesday, investors will receive three economic reports--August Housing Starts ( consensus 1.17 million), August Import/Export Prices, and the Current Account Balance for the second quarter ( consensus -$115.1 billion). All three pieces of economic data will be released at 8:30 ET.

    Also of note, the Federal Open Market Committee (FOMC) will kick off a two-day meeting on Tuesday morning. It's latest policy directive will cross the wires on Wednesday afternoon.


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.