Day Traders Diary


Equities finished the Thursday session on a mixed note as the Dow Jones Industrial Average (-0.4%) and S&P 500 (-0.1%) settled in the red while the Nasdaq posted a slight gain of 0.1%.
The stock market began the day on the defensive after two influential sectors, consumer discretionary (-0.5%) and financials (-0.6%), were hit with a one-two punch of selling interest. The early weakness knocked the S&P 500 back to Wednesday's opening levels, but the index did not stay near its session low for long as the outperformance of consumer staples (+0.01%), energy (+0.1%), and health care (+0.2%) helped it climb back to its opening level.
Retailers were in focus once again this morning after Best Buy (BBY 26.83, -10.74) lowered its guidance due to disappointing holiday sales. The stock, which surged 236.5% in 2013, plunged 28.6% while the broader SPDR S&P Retail ETF (XRT 83.35, -0.67) lost 0.8%, widening its January decline to 5.4%.
Elsewhere, the financial sector sold off even after BB&T (BBT 38.73, -0.05), BlackRock (BLK 317.78, +5.03), Goldman Sachs (GS 175.17, -3.58), and PNC (PNC 80.93, +2.09) reported above-consensus results. Another large sector member, Citigroup (C 52.60, -2.39), fell 4.4% after missing on earnings and revenue.
Also of note, the industrial sector (-0.5%) lagged as transports retreated after rail operator CSX (CSX 27.24, -1.99) fell short of its earnings estimates. Shares of CSX tumbled 6.8% while the Dow Jones Transportation Average lost 0.6%.
The remaining three cyclical sectorsenergy (+0.1%), materials (+0.1%), and technology (-0.1%)ended little changed.
Over on the countercyclical side, all four sectorsconsumer staples (+0.01%), health care (+0.2%), telecom services (+0.4%) and utilities (+0.7%)finished ahead of the S&P 500.
Notably, biotechnology contributed to the outperformance of health case and the Nasdaq Composite as the iShares Nasdaq Biotechnology ETF (IBB 246.38, +3.24) gained 1.3%.
Treasuries ended on their highs with the 10-yr yield down five basis points at 2.84%.
Trading volume was well below average as only 641 million shares (versus 200-day average of 716 million) changed hands at the NYSE floor.
Investors received several economic data points today:
Weekly initial claims fell to 326,000 from a downwardly revised 328,000 (from 330,000) while the consensus expected the claims level to increase to 333,000. Since the end of November, the initial claims data have been plagued with biases from poor seasonal adjustments. According to the Department of Labor, those problems have now ended, and the data are giving an accurate read of current labor market trends. The continuing claims level increased to 3.030 million from a downwardly revised 2.856 million (from 2.865 million).
December consumer prices increased an in-line 0.3% after a flat November reading. The move in consumer prices was primarily the result of an upward swing in energy prices. After two months of declines, energy prices rose 2.1%. The gain contributed to a 3.1% increase in gasoline prices. Food prices increased 0.1% for a second consecutive month. Excluding food and energy, core CPI increased 0.1%, down from a 0.2% increase in November. The consensus expected core CPI to increase 0.2%.
The January NAHB Housing Market Index fell to 56 from 58. Today's report was below the reading of 57 expected by the consensus.
The January Philadelphia Fed Survey rose to 9.4 from 6.4 while economists polled by expected a reading of 8.0.
Tomorrow, December Housing Starts and Building Permits will be released at 8:30 ET while December Industrial Production and Capacity Utilization will be reported at 9:15 ET. The day's data will be topped off with the 9:55 ET release of the preliminary University of Michigan Sentiment survey for January.

Nasdaq +1.0% YTD
Russell 2000 +0.9% YTD
S&P 500 -0.1% YTD
DJIA -1.0% YTD

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