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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

8/21/18

The S&P 500 notched its fourth straight advance on Tuesday, adding 0.2%, and touched a new intraday record (2873.23) before pulling back in the afternoon, eventually settling 0.4% below its January 26 record close (2872.87). The benchmark index kept within a pretty narrow range, hovering between +0.2% and +0.6%.

As for the other major averages, the Dow Jones Industrial Average finished with a gain of 0.3%, and the Nasdaq Composite added 0.5%. The small-cap Russell 2000 outperformed, soaring 1.1%, to finish at a new record high (1718.05) for the first time since June 20.

Tuesday's session began on an upbeat note as investors looked ahead to renewed U.S.-China trade talks, which will kick off on Wednesday. President Trump said he doesn't believe the mid-level negotiations will lead to much of anything, but the market has been optimistic nonetheless.

The bullish bias then weakened a bit after the S&P 500 posted a new intraday record around midday. The top-weighted technology sector led the leg lower, trimming its gain notably; the group was up as much as 0.8%, but finished higher by just 0.1%. Tuesday's tech reversal added to a week's worth of struggles; tech has lost 0.7% since last Tuesday, while the S&P 500 has gained 0.8%.

News that President Trump's longtime personal lawyer, Michael Cohen, has struck a plea deal with federal prosecutors also weighed in the afternoon. The deal does not currently include cooperation with investigators, according to The New York Times, but might still have implications for the president, who worked closely with Mr. Cohen for more than a decade.

The consumer discretionary (+0.9%) and industrials (+0.8%) sectors were the top-performing groups on Tuesday, with consumer discretionary benefiting from the latest batch of corporate earnings. Retailers TJX (TJX 106.46, +4.81) and Kohl's (KSS 80.20, +1.35) jumped 4.7% and 1.7%, respectively, after reporting better-than-expected earnings and revenues. Meanwhile, homebuilder Toll Brothers (TOL 39.52, +4.79) spiked 13.8% after also beating on the top and bottom lines.

In total, seven of eleven sectors finished in the green, with most advancers adding between 0.4% and 0.7%.

On the downside, the consumer staples (-0.8%), utilities (-0.7%), and real estate (-0.9%) groups finished at the back of the pack. Within the consumer staples space, J.M. Smucker (SJM 108.20, -7.67) and Coty (COTY 11.52, -0.88) lost 6.6% and 7.1%, respectively, after issuing disappointing guidance.

Away from equities, the U.S. Dollar Index slid for a fifth straight session, dropping 0.6% to 95.16, after President Trump reiterated his displeasure with the Fed in exclusive interview with Reuters released on Monday, saying he was "not thrilled" with Fed Chair Jerome Powell for raising rates. Treasuries also moved lower, pushing the benchmark 10-yr yield two basis points higher to 2.84%.

As for economic data, investors did not receive any notable reports on Tuesday.

  • Nasdaq Composite +13.9% YTD
  • Russell 2000 +11.9% YTD
  • S&P 500 +7.1% YTD
  • Dow Jones Industrial Average +4.5% YTD

 

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    • Headlines provided by Briefing.com
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