Day Traders Diary

4/9/15

The stock market has endured a volatile start to the Thursday session. The S&P 500 (+0.1%) currently holds a modest gain, which puts the index in the top half of today's trading range.

Equity indices began the day with slim gains amid early strength in biotechnology, but the market hit a point of resistance during the opening minutes and reversed into the red. That slide was halted once the S&P 500 dipped below its 50-day moving average (2,076), which has served as support for the time being.

The benchmark index has been able to return above its flat line, but small cap stocks have not been as resilient with the Russell 2000 trading lower by 0.3%.

Individual sectors are split down the middle with energy (+1.4%) and health care (+0.5%) showing relative strength while technology (-0.1%), financials (-0.1%), and consumer discretionary (-0.2%) have struggled to keep pace.

The energy sector has outperformed since the start thanks to a rebound in crude oil following yesterday's drubbing. Currently, the energy component is higher by 1.7% at $51.27/bbl even though the Dollar Index (99.20, +0.94) has returned to levels last observed three weeks ago.

Unlike energy, most of the remaining cyclical sectors have struggled to stay out of the red, but the materials space (+0.3%) sports a modest gain; however, Alcoa (AA 13.12, -0.55) has given up 4.0% after reporting a two-cent beat on below-consensus revenue. The company said it expects aluminum demand to grow by 6.5% in 2015 after revising its 2014 global demand growth to 9.0% from 7.0%.

Moving to the countercyclical side, the health care sector (+0.4%) remains in a position of relative strength even though the biotech group has surrendered its early advance with the iShares Nasdaq Biotechnology ETF (IBB 351.80, -0.21) little changed at this juncture.

Treasuries have erased their overnight gains, sliding to new lows with the 10-yr yield higher by four basis points at 1.93%.

Economic data was limited to initial claims and wholesale inventories:

The initial claims level increased to 281,000 for the week ending April 4 from a downwardly revised 267,000 (from 268,000) for the week ending March 28 

The Briefing.com consensus expected an increase to 285,000

The four-week moving average has dropped to 282,250 from 285,250, representing the lowest level since June 2000

Wholesale inventories increased 0.3% in February after increasing an upwardly revised 0.4% (from 0.3%) in January 

The Briefing.com consensus expected an increase of 0.2%

Wholesale durable goods inventories increased 0.3% in February, down from a 0.7% increase in January § Automotive inventories, up 2.4%, offset declines in most other sectors