Day Traders Diary
The U.S. equity market ticked higher on Monday, with all three major indices rewriting the record highs they posted on Friday. The Nasdaq and the S&P 500 added 0.3% and 0.1%, respectively, while the Dow (unch) eked out a narrow victory. The major indices traded within a pretty narrow range from start to finish.
Energy stocks led Monday's advance as the price of crude oil rallied to its highest level since July 2015; WTI crude futures finished higher by 3.0% at $57.29/bbl. The price increase followed a weekend purge in Saudi Arabia, in which Crown Prince Mohammed bin Salman imprisoned dozens of princes, ministers, and ex-ministers on allegations of corruption. The S&P 500's energy sector finished at the top of the day's sector standings with a gain of 2.2%.
The consumer discretionary sector (+0.7%) also finished comfortably ahead of the broader market. Within the group, 21st Century Fox (FOXA 27.45, +2.48) and Walt Disney (DIS 100.64, +2.00) jumped 9.9% and 2.0%, respectively, following a CNBC report that the two companies have discussed a deal in recent weeks that would result in Disney owning most of 21st Century Fox. Meanwhile, Michael Kors (KORS 54.62, +7.00) surged 14.7% after reporting better-than-expected earnings and revenues.
Conversely, telecoms within the S&P 500 struggled on Monday, losing 2.4%, after Sprint (S 5.90, -0.77) and T-Mobile US (TMUS 55.54, -3.37) announced that they failed to reach a merger agreement; the two companies lost 11.5% and 5.7%, respectively. However, Charter Communications (CHTR 348.40, +12.97) jumped 3.9% following reports that Softbank--the parent company of Sprint--is now willing to re-explore acquisition talks with the company.
The consumer staples sector (-1.1%) also underperformed amid broad weakness. Within the group, pharmacy retailer CVS Health (CVS 66.80, -2.45) and food distributor Sysco (SYY 54.17, -2.49) dropped 3.5% and 4.4%, respectively, despite reporting above-consensus earnings.
In other corporate news, Broadcom (AVGO 277.52, +3.89) submitted a $70 per share takeover offer for Qualcomm (QCOM 62.52, +0.71), which, if completed, would mark the largest technology acquisition in history. However, CNBC reported that Qualcomm is expected to reject Broadcom's offer. The two chipmakers finished with respective gains of 1.4% and 1.2%.
Elsewhere, U.S. Treasuries finished mostly higher, with the yield on the benchmark 10-yr Treasury note slipping two basis points to 2.32%. However, the 2-yr Treasury note bucked the trend, sending its yield one basis point higher to 1.62%. Meanwhile, the U.S. Dollar Index slid 0.2% to 94.63.
Also of note, New York Fed President William Dudley announced his decision to retire in mid-2018. Mr. Dudley has headed the New York Fed since 2009.
Investors did not receive any economic data on Monday, but they will receive three reports on Tuesday--the NFIB Small Business Optimism Index at 7:00 ET, the September Job Openings and Labor Turnover Survey (JOLTS) at 10:00 ET, and September Consumer Credit (Briefing.com consensus $18.3 billion) at 15:00 ET.