Day Traders Diary

7/18/12

The stock market showed continued resilience yesterday, recouping early losses to finish with a 0.7% gain. Stocks initially showed some disappointment around Fed Chairman Bernanke's prepared remarks, which didn't offer any new hints toward additional Quantitative Easing, but the market began to rebound mid-way through the Fed Chairman's testimony. It is notable that the recovery in markets yesterday coincided with Bernanke's acknowledgment of a greater risk for deflation, which could be seen as a justification for more QE. This morning, futures are giving back some of yesterday's gains, with a 0.3% decline at current levels.

The flow of earnings releases has picked up since yesterday's close. Intel (INTC 25.25, -0.11) is slightly lower in the pre-market after reporting above-consensus earnings, guiding Q3 revenue in-line and lowering its FY12 guidance range, citing a challenging macroeconomic environment. Yahoo! (YHOO 15.55, -0.05) is little changed following a penny beat on EPS on roughly in-line revenue, which followed yesterday's announcement its new CEO. This morning, Bank of America (BAC 8.05, +0.13) is higher by 2% after reporting better than expected earnings on revenues that came in light of consensus. BAC cited higher mortgage banking income, along with a solid contribution from the wealth management and corporate and commercial banking businesses. Additionally, EMC (EMC 24.20, +1.48) and VMware (VMW 85.50, +5.31) are trading higher by 6% and 7%, respectively, after announcing management changes between the two companies along with Q2 guidance.

In non-earnings news, VIVUS (VVUS 31.26, +4.80) is up 18% after receiving FDA approval for its obesity drug Qsymia. As part of the approval of Qsymia, VIVUS is committed to conduct post-marketing studies. Arena Pharmaceuticals (ARNA 10.15, -0.90) is lower by 7%, as Qsymia will compete directly with Arena's recently approved obesity drug, Belviq.

Foreign markets were mixed overnight. European averages are showing modest gains at their mid-day, with Germany's DAX and the UK's FTSE both up 0.1%. In Asia, Japan's Nikkei lost 0.3% and Hong Kong's Hang Seng fell 1.1%, while China's Shanghai added 0.4%.

Later this morning Housing Starts and Building Permits data will be released at 8:30 ET.

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