Day Traders Diary

11/26/13

The S&P 500 added less than a point while the Nasdaq outperformed with a gain of 0.6%.
Stocks saw a brief dip during the opening hour, but the relative strength of the tech-heavy Nasdaq was enough to encourage the S&P 500's deliberate, day-long climb. Similar to yesterday, a final-hour sell off knocked the indices off their highs, but unlike yesterday, the S&P managed to stay out of the red.
The discretionary sector (+0.5%) led from opening bell as all-around strength underpinned the growth-sensitive group. Luxury retailers took a cue from Tiffany (TIF 88.05, +7.06), which soared 8.7% after beating on earnings and revenue. Meanwhile, apparel retailers rallied after Men's Wearhouse (MW 50.60, +3.53) offered to acquire Jos. A. Bank (JOSB 56.29, +5.69) for $55 per share.
Homebuilders also provided a measure of support to the discretionary space following a set of better-than-expected housing data. The iShares Dow Jones US Home Construction ETF (ITB 23.33, +0.75) jumped 3.3%.
Elsewhere, momentum names played a part in today's advance. While several of these listings fall under the discretionary umbrella, the entire group contributed to the outperformance of the Nasdaq. Facebook (FB 45.89, +1.07), LinkedIn (LNKD 222.93, +6.31), and Priceline.com (PCLN 1177.98, +18.81) gained between 1.6% and 2.9% while the top index component, Apple (AAPL 533.40, +9.66), rallied 1.8%. In turn, the technology sector (+0.4%) ended among the leaders.
Outside of consumer discretionary and technology, the industrial sector (+0.6%) was the only other outperformer among cyclical groups. The sector received significant support from two of its top components as Boeing (BA 134.78, +1.78) and General Electric (GE 26.78, +0.05) posted respective gains of 1.3% and 0.2% following yesterday's underperformance.
Countercyclical groups trailed throughout the session, but only utilities (-1.0%) settled with a noteworthy loss. Consumer staples, health care, and telecom services ended with losses between 0.1% and 0.4%.
Treasuries settled near their highs as the 10-yr yield ticked down two basis points to 2.71%. More notably, the 5-yr yield shed four basis points to close at 1.30%, its lowest level in nearly a month.
Intraday participation was on the light side, but volume surged during the final hour as MSCI global quarterly review contributed to the increase in activity. When the dust settled, just under 830 million shares changed hands on the floor of the NYSE.
In today's economic data, building permit issuances increased in both September and October. Permits rose from 926,000 in August to 974,000 in September and 1.034 million in October. The Briefing.com consensus expected 932,000 building permit issuances for both September and October.
The jump in October brought permits to their highest level since June 2008. Delays from the government shutdown continue to plague the residential construction data. Reports on housing starts were not submitted on time, and the Census Bureau decided to push back the starts release until December 18. At that time, September, October, and November starts will all be released.
Also of note, the September Case-Shiller 20-city Home Price Index rose 13.3% while a 13.0% increase had been expected by the Briefing.com consensus. This follows the previous month's revised increase of 12.8%.
The September Housing Price Index from the FHFA increased 0.3%, which followed an uptick of 0.4% observed during the prior month.
Separately, the November Consumer Confidence Index fell to 70.4 from an upwardly revised 72.4 (from 71.2) in October. The Briefing.com consensus pegged the index at 72.4.
Confidence in October plummeted as concerns about the economy following the government shutdown weighed heavily on the minds of consumers. With the shutdown ending, it was expected that confidence would begin to improve. Even though normal indicators of confidence -- equity prices, gasoline costs, and labor conditions -- all generally strengthened in November, doubts about economic growth, likely stemming from the poor rollout of the Affordable Care Act, lowered consumer expectations.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while weekly initial claims and October durable goods will be released at 8:30 ET. The Chicago PMI for November will cross the wires at 9:45 ET while the final reading of the Michigan Consumer Sentiment Survey will be reported at 9:55 ET. The busy day will be topped off with the 10:00 ET release of October leading indicators.

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