Day Traders Diary


The major averages ended the Friday session on a higher note thanks to a final-hour rally that sent the indices to session highs. The S&P 500 added 0.2%, narrowing its weekly loss to 0.1%, while the Nasdaq Composite settled higher by 0.4% to bring its weekly advance to 0.7%.

In general, equity indices respected narrow ranges until the last hour of action with the S&P 500 confined to a five-point range. The subdued activity was also reflected by below-average intraday trading volume, which received a big boost at the close from rebalancing of the Russell indices. Thanks to the final surge, almost 1.5 billion shares changed hands at the NYSE.

Only three sectorsenergy, health care, and materialsended in the red with materials (-0.4%) registering the largest decline. The smallest cyclical sector by weight (just 3.5% of the S&P 500) slumped out of the gate amid noteworthy weakness in the shares of DuPont (DD 65.44, -2.26). The Dow component tumbled 3.3% after lowering its Q1 and full-year guidance. Steelmakers also weighed with Market Vectors Steel ETF (SLX 47.44, -0.35) sliding 0.7%.

Meanwhile, the other commodity-related sectorenergy (-0.1%)also pressured the broader market, but erased the bulk of its loss in the late afternoon to end the week higher by 4.9%. For its part, crude oil settled little changed at $105.76/bbl.

Also of note, the health care sector (-0.2%) lagged throughout the session amid weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 256.73, +0.35) was down as much as 0.9% intraday, but settled on its high.

The underperformance of the biotech space did not stop the Nasdaq from outpacing the benchmark index. Large cap components contributed to the outperformance with Apple (AAPL 91.98, +1.08) and Microsoft (MSFT 42.25, +0.53) advancing close to 1.2% apiece. High-beta chipmakers struggled to keep up as the PHLX Semiconductor Index added 0.2%.

In addition to technology, three other influential sectorsconsumer discretionary (+0.3%), financials (+0.2%), and industrials (+0.3%)contributed to the afternoon spike to highs. Apparel retailers underpinned the discretionary space after Finish Line (FINL 29.56, +0.41) and Nike (NKE 77.68, +0.82) reported better than expected results.

Treasuries ended little changed with the 10-yr yield at 2.53%.

Economic data was limited to the Michigan Consumer Sentiment survey for June, which increased to 82.5 in its final reading for June. That was up from a preliminary report of 81.2 and up from 81.9 in May. The consensus expected the Index to increase to 81.7. The preliminary June report initially showed a decline in confidence. That didn't jive with the big improvements in equity prices and employment conditions. However, the final reading brought the Consumer Sentiment Index in-line with the Conference Board's Consumer Confidence Index, which increased to 85.2 in June from 82.2 in May.

On Monday, the Chicago PMI report for June ( consensus 61.0) will be released at 9:45 ET and the Pending Home Sales report for May (consensus +1.5%) will cross the wires at 10:00 ET.

S&P 500 +6.1% YTD
Nasdaq Composite +5.3% YTD
Dow Jones Industrial Average +5.3% YTD
Russell 2000 +2.2% YTD

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