Day Traders Diary

1/12/15

The stock market began the new week on the defensive with the Nasdaq (-0.8%) and S&P 500 (-0.8%) pacing the slide. The Dow (-0.5%) and Russell 2000 (-0.3%) outperformed, but the two indices also spent the bulk of the day in negative territory.

Equity indices opened the trading day with slim gains that evaporated during the first few minutes of the session. The S&P 500 slumped back below its 50-day moving average (2046) at the start and spent the rest of the day well below that level as influential sectors weighed.

Most notably, the energy sector (-2.8%) was the weakest performer with crude oil contributing to the pressure after Goldman Sachs lowered its short-term forecast for the commodity. WTI crude ended the pit session on its low, down 4.9% at $46.07/bbl.

Meanwhile, the remaining cyclical groups registered slimmer losses, but heavily-weighted financials (-0.9%) and technology (-1.3%) kept the market under pressure throughout the session.

The top-weighted tech sector spent the day in a steady retreat as components of all sizes registered losses. Large cap names like Apple (AAPL 109.25, -2.76), Google (GOOGL 497.06, -3.66), and Microsoft (MSFT 46.60, -0.59) lost between 0.7% and 2.5%, while chipmakers also lagged with the PHLX Semiconductor Index falling 2.0%.

To be fair, a small pocket of relative strength could be found among cybersecurity names after President Obama spoke about online safety, and is expected to touch on the subject once again during the State of the Union Address on January 20. Cyber-Ark Software (CYBR 38.37, +1.31) and FireEye (FEYE 35.29, +1.61) gained 3.5% and 4.8%, respectively.

Elsewhere, biotechnology names also found themselves among the outperformers, thanks in large part to Celgene (CELG 117.00, +3.33). The stock soared 2.9% after the company issued guidance for 2015 at the JP Morgan Healthcare Conference. Meanwhile, the iShares Nasdaq Biotechnology ETF (IBB 315.06, +1.74) gained 0.6% while the health care sector (-0.1%) could not stay above its flat line.

Similar to health care, countercyclical consumer staples (-0.3%) and utilities (-0.3%) outperformed while the telecom services sector (+0.6%) spent the day in the green.

Treasuries slumped overnight, but spent the day in a steady advance. The benchmark 10-yr yield fell four basis points to 1.91%.

Today's participation was roughly in-line with average as nearly 760 million shares changed hands at the NYSE floor.

Tomorrow, the Job Openings and Labor Turnover Survey will be released at 10:00 ET while the Treasury Budget for December (Briefing.com consensus $3.00 billion) will be reported at 14:00 ET.

Dow Jones Industrial Average -1.0% YTD

S&P 500 -1.5% YTD

Nasdaq Composite -1.5% YTD

Russell 2000 -2.0% YTD