Day Traders Diary


The S&P 500 settled lower by 0.5% after broad-based selling persisted throughout the session.

Equities were confined to a downtrend from the open, and even the news of the first expansionary eurozone GDP reading in 18 months could not spark a bid.

Nine of ten sectors registered losses while technology posted a fractional gain of 0.01%.

The tech sector climbed into the lead early this afternoon as Apple (AAPL 498.50, +8.93) advanced 1.8% after Omega Advisors disclosed having a position in the stock. The relative strength of the largest sector component overshadowed the underperformance of chipmakers. The PHLX Semiconductor Index lost 1.6%.

While technology was able to end in the green, the materials sector shed 0.2% after spending the majority of the session in positive territory. Gold miners made a significant contribution to the sector's outperformance as the Market Vectors Gold Miners ETF (GDX 28.70, +1.51) spiked 5.6%. On a related note, gold futures climbed 1.1% to $1334.60 per troy ounce.

Outside of materials and technology, only energy (-0.4%), financials (-0.4%), and telecom services (-0.2%) ended slightly ahead of the broader market. Meanwhile, several influential sectors weighed. Health care (-0.8%), consumer staples (-0.7%), consumer discretionary (-1.1%), and industrials (-0.8%) lagged.

Notably, industrials slumped amid weakness in transportation-related companies. The Dow Jones Transportation Average fell 0.8% as 16 of 20 components ended in the red.

The discretionary sector was another significant laggard. Retailers registered losses and Macy's (M 46.33, -2.17) fell 4.5% after missing on earnings and revenue. In addition, the company lowered its full-year 2014 earnings guidance below consensus.

Home builders also contributed to the sector's underperformance. The iShares Dow Jones US Home Construction ETF (ITB 20.81, -0.46) lost 1.9% to widen its August decline to 6.6%.

Elsewhere, treasuries were trapped in a narrow range, and the benchmark 10-yr yield shed one basis point to end at 2.71%.

Below-average volume was the story once again as only 622 million shares changed hands on the floor of the New York Stock Exchange.

Today's economic news was limited to just two data points.

July PPI was unchanged (0.3% consensus) while core PPI ticked up 0.1% (0.2% consensus). The halting aspect of the report is that the lack of inflation pressure isn't really indicative of an economy that is gaining momentum. The PPI report is a data point that the Fed could view as a reason to hold off on tapering in September.

Separately, the weekly MBA Mortgage Index remained in a downtrend as today's 4.7% fall marked the twelfth decline out of the past fourteen readings.

Tomorrow, weekly initial claims, July CPI, core CPI, and August Empire Manufacturing will all be reported at 8:30 ET. June net long-term TIC flows will be released at 9:00 ET while July industrial production and capacity utilization will be reported at 9:15 ET. The busy day of data will be topped off with the 10:00 ET release of the August Philadelphia Fed Survey and the NAHB Housing Market Index.

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