Day Traders Diary

11/27/12

Equities opened the session on a lower note. The Greek financing agreement between the International Monetary Fund and the Eurozone finance ministers did little to inspire investor confidence. Instead, market participants remain focused on the U.S. as they wait for any hints of progress in the budget debate. After marking a session low in the 1400 area, the S&P 500 is adding 0.1% at midday.

The utilities sector appears to be poised for a rebound after enduring a rough month. Yesterday, utility stocks gained 1.3% on the strength of electricity providers after Deutsche Bank upgraded Exelon (EXC 29.95, +0.63). Today, the story appears to be repeating as the sector heads higher after ISI Group upgraded Exelon to 'buy' from 'neutral.' EXC is adding 2.1% and other electricity providers are registering gains as well. NV Energy (NVE 18.33, +0.27), UNS Energy (UNS 41.16, +0.62), and PPL (PPL 28.77, +0.33) are all up near 1.2%.

Technology stocks are performing largely in-line with the broader market and Apple (AAPL 588.70, -0.83), which has been in focus recently, trades lower by 0.1%.

Additionally, Seagate (STX 26.21, -1.13) is down 4.2%. The weakness comes after company insiders exercised their options and sold stock. The news is seen as negative for the Seagate as the company was seen as a potential takeover target. Stock sales by insiders suggest that a deal is far from being completed. Western Digital (WDC 35.01, -0.80) is off by 2.2% in sympathy.

Also of note, Corning (GLW 12.24, +0.89) is surging 7.8% after the company updated its forecast to reflect better-than-expected fourth quarter LCD volume.

The consumer staples sector is outperforming the broader market and the SPDR Consumer Staples Select Sector ETF (XLP 35.53, +0.12) is advancing 0.4%. Among food producers, ConAgra (CAG 29.59, +1.30) is rising by 4.6% after announcing plans to acquire Ralcorp (RAH 88.80, +18.57) for $90 per share, representing a 28.2% premium to RAH's Monday closing price.

Elsewhere, Monster Beverage (MNST 51.95, +6.09) is advancing 13.0%. Earlier, a letter sent from the Federal Drug Administration to Illinois Senator Dick Durbin indicated the regulatory body is conducting an investigation into the potential danger of Monster products as well as the possible need for increased regulation. However, the FDA said it does not see a problem with taurine and guarana, which are the two main additives in energy drinks.

Lastly, cigarette producers are extending their recent strength. Universal (UVV 49.64, +0.36) is adding 0.7% and Reynolds American (RAI 43.20, +0.27) is firmer by 0.6%.

In today's economic news, the September Case-Shiller 20-city Home Price Index rose by 3.0%, while a 3.1% increase had been expected by the Briefing.com consensus. This followed the previous month's increase of 2.0%.

The latest consumer confidence reading for November came in at 73.7, while economists polled by Briefing.com expected a reading of 73.0. Today's figure follows last month's reading of 72.2.

Separately, the September Housing Price Index from the FHFA increased by 1.1%, which follows a 0.7% increase observed during the prior month.

Durable goods orders were unchanged in October, which was better than the 0.4% decrease that had been expected among economists polled by Briefing.com. This follows the downwardly revised prior month increase of 9.2%. Excluding transportation related items, durable goods orders increased in October by 1.5%, which was better than the 0.4% decrease that had been broadly anticipated. Prior month's reading was revised down to reflect an increase of 1.7%.

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.