Day Traders Diary
Stocks moved lower on Monday, ending a week-long stretch of record finishes. The major indices kept near their flat lines throughout the morning, but tumbled to new lows in the afternoon. The S&P 500 lost 0.4%, while the Nasdaq and the Russell 2000 underperformed, losing 0.6% and 0.8%, respectively. The Dow finished ahead of its peers, but still lost 0.2%.
Earnings season took somewhat of a breather on Monday, but will pick back up Tuesday morning with releases from McDonald's (MCD 163.34, -2.96), 3M (MMM 221.55, +0.23), Caterpillar (CAT 131.68, +0.32), and United Technologies (UTX 120.89, -0.04)--in addition to many other heavyweights.
Still, there were several notable post-earnings movers on Monday, including V.F. Corp (VFC 69.95, +3.57), Seagate Tech (STX 39.35, +4.41), and Hasbro (HAS 89.75, -8.44).
V.F. Corp--which owns apparel brands like Wrangler and The North Face--and disk-drive maker Seagate Tech soared 5.4% and 12.6%, respectively, after reporting better-than-expected earnings and revenues. Conversely, toymaker Hasbro plunged 8.6% after issuing disappointing sales guidance for the holiday season, which overshadowed the company's above-consensus earnings.
Outside of earnings, industrial giant General Electric (GE 22.32, -1.51) dropped 6.3% after both Morgan Stanley and UBS downgraded GE shares on the heels of Friday's underwhelming earnings report. The S&P 500's industrial sector declined by 0.8%, settling alongside the consumer discretionary (-0.7%) and telecom services (-1.0%) groups at the bottom of the sector standings.
Within the consumer discretionary space, Under Armour (UAA 16.85, -0.63) exhibited particular weakness, losing 3.6%, after the Wall Street Journal reported that co-founder Kip Fulks is taking a sabbatical and that the sportswear manufacturer is considering exiting small sports categories such as tennis and fishing.
On a positive note, the heavily-weighted financial sector (-0.1%) held up relatively well, finishing near the top of the day's leaderboard. The countercyclical consumer staples (-0.1%) and utilities (+0.1%) sectors also put together a relatively positive showing. Following Monday's slim victory, the utilities space leads all other groups for the month of October with a month-to-date gain of 3.5%.
Elsewhere, European equities ticked higher on Monday, evidenced by the Euro Stoxx 50 index, which added 0.1%. However, Spain's IBEX (-0.8%) underperformed after Prime Minster Mariano Rajoy invoked Article 155 of Spain's constitution, which allows the central government to take control of the Catalonia region following its vote in favor of independence.
In Asia, Japan's Nikkei rose 1.1% on Monday, marking its 15th consecutive advance--and longest-ever winning streak--after the LDP/Komeito coalition kept its super majority following a national election over the weekend. As a result, Prime Minister Shinzo Abe will likely serve another three-year term.
There wasn't much movement in the U.S. Treasury market on Monday, with the benchmark 10-yr yield finishing unchanged at 2.38%. Shorter-dated issues showed relative weakness, sending the 2-yr yield one basis point higher to 1.58%. Meanwhile, the U.S. Dollar Index jumped 0.2% to 93.75.
Investors did not receive any economic data on Monday, and Tuesday's economic calendar is also blank.