Day Traders Diary

2/10/2015

The stock market ended the midweek session on a flat note. The Dow and S&P 500 settled just below their unchanged levels while the Nasdaq Composite (+0.3%) outperformed throughout the session.

Today's final NYSE volume (732 million) came in below average, which has been the case since the start of the week. However, the limited participation was not all that surprising as some investors treaded lightly, trying to avoid potential whiplash associated with headlines out of Europe.

The EU finance ministers meeting took place earlier today, but hopes for a swift deal were dampened by Germany's Finance Minister Wolfgang Schaeuble who said he did not expect a resolution today, echoing comments made by Eurogroup Chief Jeroen Dijsselbloem. The Eurogroup is now expected to spend the weekend analyzing the divergences between the plan presented by Greek Finance Minister Yanis Varoufakis and the existing program.

Meanwhile, leaders from France, Germany, Russia, and Ukraine met in Minsk, and according to Ukraine's delegation, they agreed to reaffirm the cease-fire agreement that was struck at the first Minsk conference on September 5, 2014. Last year's agreement was violated shortly after being put into place, and it remains to be seen whether today's reaffirmation enjoys a longer life.

Four of ten sectors registered gains with consumer staples (+0.6%), health care (+0.1%), and technology (+0.4%) showing relative strength throughout the day.

The consumer staples sector settled in the lead thanks to support from PepsiCo (PEP 100.40, +2.41) and Mondelez (MDLZ 36.74, +0.93) after both names reported better than expected results. Meanwhile, the other countercyclical outperformer—health care—benefited from above-consensus results reported by Zoetis (ZTS 45.77, +1.86) and a few others. As for biotechnology, the high-beta group outperformed in the early going, but slumped in afternoon action with the iShares Nasdaq Biotechnology ETF (IBB 317.25, -1.01) shedding 0.3%.

The afternoon underperformance of biotechnology had little impact on the Nasdaq Composite, which received daylong support from Apple (AAPL 124.88, +2.86), which surged 2.3%. In addition, chipmakers displayed relative strength with the PHLX Semiconductor Index climbing 0.3% after ARM Holdings (ARMH 50.31, +1.54) reported in-line results.

On the downside, the energy sector (-0.7%) spent the day in negative territory as crude oil struggled. The energy component held an overnight gain, but slumped to end the pit session lower by 2.4% at $48.87/bbl. The closing price masked the fact that oil tested the $48.25/bbl level after today's storage report revealed a substantial inventory build of 4.868 million barrels.

Elsewhere, the utilities sector lost 2.4% to widen its February loss to 4.9%.

Treasuries vacillated near their flat lines before ending little changed with the 10-yr yield at 2.00%.

Economic data was limited to the MBA Mortgage Index and the Treasury Budget for January:

The weekly MBA Mortgage Index fell 9.0% to follow last week's 1.3% increase

The Treasury Budget for January revealed a $18.00 billion deficit while the Briefing.com consensus expected a deficit of $19.00 billion

Tomorrow, weekly Initial Claims (Briefing.com consensus 285K) and the Retail Sales report for January (consensus -0.4%) will be released at 8:30 ET while the December Business Inventories report (consensus 0.2%) will cross the wires at 10:00 ET.

Nasdaq Composite +1.4% YTD

S&P 500 +0.5% YTD

Dow Jones Industrial Average +0.2% YTD

Russell 2000 -0.3% YTD