Day Traders Diary

1/9/14

The major averages ended today's choppy session on a mixed note. The S&P 500 added less than a point while the Dow Jones Industrial Average (-0.1%) and Nasdaq (-0.2%) posted modest losses.
Equities displayed early strength, but sellers were quick to knock the indices off their opening highs. The Nasdaq outperformed out of the gate, but ultimately led the broader market into the red. Despite the late-morning weakness, the S&P 500 was able to find support at Wednesday's low where dip buyers stepped up and helped the index return to its flat line.
Individual sectors ended with an even split as five groups posted gains while the other five ended lower.
The early weakness took place as consumer discretionary (-0.1%) and technology (-0.6%) sectors slumped. The discretionary space was able to recover nearly all of its losses by the close but retailers were less fortunate. The SPDR S&P Retail ETF (XRT 85.81, -0.68) lost 0.8% after Bed Bath & Beyond (BBBY 69.75, -9.93) and Family Dollar (FDO 64.97, -1.37) reported disappointing earnings. One retailer, Macy's (M 55.80, +3.96), stood out with a 7.6% gain after boosting its guidance and announcing plans to close five stores and lay off 2,500 employees.
Elsewhere, the technology sector was pressured by several top components as Apple (AAPL 536.52, -6.94), Cisco Systems (CSCO 22.09, -0.20), and Google (GOOG 1130.24, -10.99) lost between 0.9% and 1.3%.
Other cyclical sectors were mixed as energy (-0.4%) and materials (-0.4%) lagged while financials (+0.3%) and industrials (+0.4%) outperformed. Notably, the industrial sector was underpinned by airlines after United Continental (UAL 43.80, +2.78) reported a 4.1% increase in December traffic. The stock spiked 6.8% while the broader Dow Jones Transportation Average advanced 1.0%.
Over on the countercyclical side, consumer staples (+0.4%), health care (+0.7%), and utilities (+0.6%) outperformed while telecom services (-1.9%) endured another rough session. The rate-sensitive sector widened its January loss to 3.8%.
Speaking of rates, they ended on their lows. The benchmark 10-yr yield fell three basis points to 2.97%.
Participation was on the light side as only 683 million shares changed hands on the floor of the New York Stock Exchange.
Today's economic data was limited to just two reports.
The weekly initial claims level fell to 330,000 from an upwardly revised 345,000 (from 339,000) while the Briefing.com consensus expected the claims level to fall to 338,000. The Labor Department stressed that the post-holiday period tends to be volatile as businesses dismiss their temporary work staff. Once the volatility is gone, we expect the initial claims level to stabilize at roughly its current level of 330,000. Normal volatility, however, could last another week or two. No states were estimated and the drop in claims was not attributed to the winter storm activity that began at the end of last week. Any effects of the storm will likely occur over the next week or two.
The December Challenger Job Cuts report pointed to a 6.0% decline in planned job cuts.
Tomorrow's data will also focus on jobs with December nonfarm payrolls set to be reported at 8:30 ET. Separately, the November Wholesale Inventories report will be released at 10:00 ET.

Russell 2000 -0.4% YTD
Nasdaq -0.5% YTD
S&P 500 -0.6% YTD
DJIA -0.8% YTD

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