Day Traders Diary

10/16/12

Equities opened the session on a higher note after reports indicated Spain may be willing to ask for access to precautionary credit. The reports were followed by comments out of Germany which suggested the country's officials believe additional hurdles remain in Spain's way. Separate reports indicated the old continent's other troubled sovereign, Greece, is far from reaching an agreement with the Troika on its next bailout tranche. The European news did little to curb optimism as buyers lifted the major averages to midday session highs, which were maintained into the close. As a result the S&P 500 registered a gain of 1.0%.

Citigroup (C 37.25, +0.59) advanced 1.6% after announcing Chief Executive Officer, Vikram Pandit, and President and Chief Operating Officer, John Havens, have resigned. The resignations are effective immediately and the company's board has elected Michael Corbat as the new CEO.

Goldman Sachs (GS 123.22, -1.28) slipped 1.0% despite cruising past its earnings and revenue estimates. The financial giant exceeded Capital IQ earnings expectations by $0.58 and reported revenues nearly $1 billion ahead of Capital IQ estimates. In addition, the investment bank increased its dividend to $0.50 from $0.48.

PNC (PNC 60.40, -2.53) fell 4.0% despite beating on earnings and revenues.

Meanwhile, American Express (AXP 58.63, +1.04) outperformed and closed with a gain of 1.8%.

European financials showed considerable strength after earlier reports indicated Spain may ask for precautionary credit. Even though German officials have since come out to cool the speculation, European banks have maintained their gains. Deutsche Bank (DB 45.02, +1.97) rose by 4.6% while Banco Bilbao Vizcaya Argentaria (BBVA 8.24, +0.51) jumped 6.6%.

The materials sector led the broader market. Within the space, steel producers showed notable gains. Cliffs Natural Resources (CLF 44.07, +2.93) and Olympic Steel (ZEUS 18.77, +1.07) advanced 7.1% and 6.1%, respectively.

Packaging stocks also showed strength. Packaging Corp (PKG 36.26, +0.66) rose by 1.9% after reporting mixed earnings. The company reported a slight earnings miss, while its revenues were in-line with Capital IQ estimates. In addition, the management issued upside fourth quarter guidance. Peers Owens-Illinois (OI 20.61, +0.45) and Greif (GEF 44.04, +0.87) registered gains of 2.2% and 2.0%, respectively.

Also of note, provider of construction materials Texas Industries (TXI 44.47, +3.28) surged 8.0% after Sidoti upgraded the stock to 'buy.'

The Dow Jones Transportation Average outperformed the broader market and settled higher by 1.1%.

Railroads Kansas City Southern (KSU 77.35, +2.65) and Union Pacific (UNP 123.40, +2.47) saw respective gains of 3.6% and 2.0%. Freight carriers were also on the rise. Expeditors International of Washington (EXPD 35.25, +0.25) and CH Robinson (CHRW 60.90, +0.54) both added near 0.8%.

Meanwhile, Overseas Shipholding Group (OSG 3.76, -1.41) was the worst performer among transportation stocks. The shipper sank 27.3% to extend its recent weakness. There did not appear to be any news related to the company and today's selling follows the stock's Friday decline of 13.6%.

In consumer stocks, Coca-Cola (KO 37.90, -0.23) slid 0.6% after the beverage giant reported in-line earnings and revenues.

Avon Products (AVP 17.14, -0.13) slipped 0.8% after the Food and Drug Administration disclosed a letter which warns the cosmetics producer about the marketing of some of its products.

WD-40 Company (WDFC 47.66, -3.39) fell 6.6% after missing on both earnings and revenues . In addition, the company lowered its full-year 2013 earnings and revenue guidance below consensus.

In economic news, the August net long-term TIC flows report indicated a $91.4 billion inflow of foreign capital into U.S. denominated assets. This follows the prior month's reading of $67.0 billion.

Industrial production increased during September by 0.4%, which was better than the 0.3% increase that had been widely expected. The reading follows the unrevised 1.2% decrease experienced in the prior month. Capacity utilization hit 78.3%, which was in-line with the Briefing.com consensus, and up from the unrevised prior month reading of 78.2%.

September consumer prices increased by 0.6% which was slightly better than the Briefing.com consensus of a 0.5% increase. Today's reading follows prior month's 0.6% increase. In addition, core prices rose by 0.1% which was slightly cooler than the generally expected increase of 0.2%.

The NAHB Housing Market Index for October registered a reading of 41. That was up from the prior month's reading of 40, and slightly worse than the reading of 42 that had been expected among economists polled by Briefing.com.

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.