Day Traders Diary

2/4/15

The stock market ended the Wednesday session on a lower note. The S&P 500 lost 0.4% after tumbling from its high to a new low during the final 30 minutes of action.

Equity indices endured some choppy waters after the S&P 500 spiked nearly 3.0% during the first two sessions of the week. The market appeared to be out of the woods by the start of the final hour, but the benchmark index plunged through its 50-day moving average after it was reported that the European Central Bank has lifted its waiver that allowed for the acceptance of Greek debt as collateral.

The announcement came with a caveat that the counterparty status of Greek banks remains unchanged and they may satisfy their liquidity needs through Emergency Liquidity Assistance. However, the news showed that the negotiations are likely to be tumultuous, which contrasted with the rosy picture painted over the last two days.

Despite the closing slide, a handful of influential sectors like consumer discretionary (+0.7%), technology (+0.1%), and consumer staples (+0.1%) were able to finish in the green.

The consumer discretionary space received solid support from carmakers and media names. General Motors (GM 35.83, +1.85) surged 5.4% after beating estimates and announcing plans to boost its dividend by 20.0% to $0.36. Meanwhile, Dow component Disney (DIS 101.28, +7.18) spiked 7.6% in reaction to above-consensus earnings and revenue.

Elsewhere among Dow members, the top-weighted listing—Visa (V 264.89, +5.10)—soared 2.0% and helped underpin the price-weighted index, which ended flat. Furthermore, the stock contributed to the relative strength of the technology sector. Other large sector components were mixed with Apple (AAPL 119.56, +0.91) and Microsoft (MSFT 41.83, +0.23) posting gains while Google (GOOGL 526.10, -7.20), IBM (IBM 156.96, -1.51), and Oracle (ORCL 42.42, -0.62) registered losses.

In turn, the tech sector provided a boost to the Nasdaq Composite (-0.2%), helping the index finish ahead of the broader market. The Nasdaq overcame another decline in the biotechnology group as the iShares Nasdaq Biotechnology ETF (IBB 312.55, -5.24) lost 1.7% and widened its week-to-date decline to 2.8%. Conversely, the health care sector (-1.4%) settled near the bottom of the leaderboard.

Health care was not the only influential group that struggled today. The energy sector (-1.6%) finished at the bottom of the leaderboard due to a daylong slide in crude oil. The energy component plunged 9.3% and surrendered the bulk of its February gain. As for the energy sector, the cyclical group trimmed its week-to-date gain to 4.2%.

Treasuries spiked during afternoon action, sending the 10-yr yield lower by three basis points to 1.76%.

Today's participation was well above average with more than a billion shares changing hands at the NYSE floor.

Economic data included ADP Employment, ISM Services, and the MBA Mortgage Index:

The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 213K in January while the Briefing.com consensus expected an increase of 230K 

The December reading was revised up to 253,000 from 241,000

The ISM Non-Manufacturing Index increased to 56.7 in January from a previously revised 56.5 (from 56.2) in December while the Briefing.com consensus expected the index to remain at 56.5 

Overall, the non-manufacturing sector remained strong in January, but future gains may be difficult as backlogs contracted for the second consecutive month, falling to 49.0 from 49.5

Business activities in the non-manufacturing sector strengthened in January as the related index increased to 61.5 from 58.6 in December

The weekly MBA Mortgage Index rose 1.3% to follow last week's 3.2% decline

Tomorrow, the Challenger Job Cuts report for January will be released at 7:30 ET while Initial Claims (Briefing.com consensus 290K), December Trade Deficit (consensus $38.00 billion), and Q4 Productivity and Unit Labor Costs data will all be released at 8:30 ET.

Nasdaq Composite -0.4% YTD

S&P 500 -0.8% YTD

Dow Jones Industrial Average -0.8% YTD

Russell 2000 -1.0% YTD