Day Traders Diary

3/13/15

Triskaidekaphobia or the fear of the number 13. Friday the thirteen was not good to the markets today. The stock market finished the week on a defensive note with the S&P 500 (-0.6%) returning below its 50-day moving average (2,059). The benchmark index settled ahead of the Dow Jones Industrial Average (-0.8%), but behind the Nasdaq Composite (-0.4%).

Equity indices began the day with modest losses and spent the first two hours of action in a steady slide that involved all ten sectors. The S&P 500 hovered near its morning low into the afternoon, but was able to rally into the middle of its trading range during the final 90 minutes of the day.

Once again, the early pressure was largely due to continued greenback strength that sent the Dollar Index (100.22, +0.78) higher by 0.8% to extend its March advance to 5.1%. The unyielding strength fed concerns about the impact to earnings of multinational companies while also pressuring crude oil. The energy component fell 4.7% to $44.89/bbl and notched its low after the Baker Hughes rig count fell to 1125 (-67), registering its 14th consecutive weekly decline.

For the week, WTI crude lost 9.1% while the energy sector (-0.5%) fell 2.8%, ending the week well behind the remaining groups. Today, however, the sector finished ahead of the broader market thanks to a late rally amid speculation ExxonMobil (XOM 83.87, -0.35) may be interested in Whiting Petroleum (WLL 40.00, +1.64). Meanwhile, the materials sector (-1.0%) was the weakest performer on the cyclical side as steelmakers weighed with Market Vectors Steel ETF (SLX 30.97, -0.72) falling 2.3%.

Elsewhere, the technology sector (-0.5%) stayed ahead of the broader market thanks to relative strength among chipmakers. The PHLX Semiconductor Index gained 0.7% with NXP Semiconductor (NXPI 104.66, +6.09) jumping 6.2% after Needham initiated coverage of the stock with a 'Strong Buy' rating. As for large cap names, Intel (INTC 30.93, +0.13), Microsoft (MSFT 41.38, +0.36) and Oracle (ORCL 42.38, +0.76) finished in the green while other major tech components registered losses.

The Nasdaq settled a little ahead of the broader market thanks to those pockets of strength while biotechnology names also contributed to the outperformance. The iShares Nasdaq Biotechnology ETF (IBB 345.33, +0.50) added 0.1% after being up more than 1.0% this morning. On a related note, the health care sector (-0.2%) finished ahead of the remaining groups.

Treasuries ended flat after showing intraday gains with the 10-yr yield settling at 2.12%.

Today's participation was a bit light with fewer than 790 million shares changing hands at the NYSE floor.

Economic data included PPI and Michigan Sentiment:

Producer prices declined 0.5% in February after declining 0.8% in January while the Briefing.com Consensus expected an increase of 0.3% 

The drop in producer prices was a shock. Most analysts expected a rise in energy prices would offset any weaknesses from other sectors, but that did not happen 

Energy prices were flat in February after declining 10.3% in January

Food prices declined 1.6% in February after declining 1.1% in January, which was the third consecutive monthly decline in food prices. Most of the drop resulted from a 17.1% decline in fresh and dry vegetable prices

Excluding food and energy, core PPI also declined 0.5% in February after declining 0.1% in January while the consensus expected an increase of 0.1%

The University of Michigan Consumer Sentiment Index dropped to 91.2 in the preliminary March reading from 95.4 while the Briefing.com consensus expected an increase to 95.8 

Slightly higher gasoline prices and a volatile equity market offset continued strengthening in the labor market

On Monday, the Empire Manufacturing report for March will be released at 8:30 ET while February Industrial Production and Capacity Utilization will be announced at 9:15 ET. The day's data will be topped off with the 10:00 ET release of NAHB Housing Market Index for March.

Nasdaq Composite +2.9% YTD

Russell 2000 +2.3% YTD

S&P 500 -0.3% YTD

Dow Jones Industrial Average -0.4% YTD

Week in Review: Dollar Strength in Focus