Day Traders Diary



The major averages ended Tuesday on a mixed note after spending the day near their flat lines. The S&P 500 added 0.2% while the Nasdaq settled lower by 0.2%.


Equity indices slipped during the opening hour after the March Retail Sales report (+0.9%; consensus +1.0%) came in below expectations. In addition to pressuring equities, the report weighed on the greenback, knocking the Dollar Index (98.81, -0.68) to a session low. The index climbed off its worst level, but still ended the day lower by 0.7%.


As for equities, the S&P 500 found support just above its 50-day moving average (2,081) and made a swift return into the green. The index received significant support from the energy sector (+1.8%), which ended well ahead of other groups. Crude oil contributed to the considerable strength, climbing 2.7% to $53.31/bbl.


Similar to energy, six other sectors finished in the green, but only two groups added more than 0.4%. Furthermore, the two outperformers—materials (+0.4%) and utilities (+0.6%)—account for less than 7.0% of the market.


Meanwhile, the top-weighted technology sector (-0.3%) spent the day in negative territory, largely due to weakness among chipmakers. The PHLX Semiconductor Index lost 1.0% ahead of earnings results from Intel (INTC 31.49, -0.24) and Linear Technology (LLTC 45.42, -0.59).


Elsewhere among cyclical groups, the financial sector (unch) spent the day near the broader market after two major components reported earnings. JPMorgan Chase (JPM 63.04, +0.97) spiked 1.6% after beating bottom-line estimates on light revenue while Wells Fargo (WFC 54.19, -0.40) lost 0.7% despite its better than expected earnings.


Similar to financials, the health care sector (+0.2%) settled near the broader market after Johnson & Johnson (JNJ 100.52, -0.03) reported a two-cent beat, but lowered its guidance, citing currency headwinds.


Also of note, industrials (-0.1%) ended little changed even though transport stocks displayed intraday weakness after Norfolk Southern (NSC 100.53, -4.34) lowered its guidance. The stock fell 4.1% while the Dow Jones Transportation Average narrowed its decline to 0.1% by the close.


Switching gears, Treasuries spiked following today's Retail Sales report, but surrendered the bulk of their gains during the session. The 10-yr note ended modestly higher with its yield down three basis points at 1.90%.


Today's trading volume was comparable to that observed in recent days with more than 675 million shares changing hands at the NYSE floor.


Economic data included retail sales, PPI, and business inventories:


Retail sales increased 0.9% in March after declining an upwardly revised 0.5% (from -0.6%) in February while the consensus expected an increase of 1.0% 

A significant portion of the increase resulted from a rebound in motor vehicle demand as sales at motor vehicle and parts dealers increased 2.7% in March after declining 2.1% in February

Excluding motor vehicle sales, retail sales increased 0.4% in March after an upward revision left sales flat (from -0.1%) in February while the consensus expected an increase of 0.7%

Producer prices increased 0.2% in March after declining 0.5% in February, representing the first increase since October 2014 while the consensus expected an increase of 0.2% 

Energy prices increased 1.5% in March after being flat in February. That was the first increase in energy prices since June 2014. Gasoline prices increased 7.2% in March and were the main contributor to the overall increase in energy costs.

Food prices declined 0.8% in March after declining 1.6% in February. These prices haven't increased on a month-over-month basis since November 2014.

Excluding food and energy, core PPI increased 0.2% in March after declining 0.5% in February while the consensus expected an increase of 0.1%

Business inventories increased 0.3% in February after being flat in January, which is what the consensus expected

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the Empire Manufacturing report for April will cross the wires at 8:30 ET ( consensus 7.3). The Industrial Production report for March will be released at 9:15 (consensus -0.3%) while the NAHB Housing Market Index for April will be reported at 10:00 ET (consensus 55). Also of note, the Federal Reserve will release its April Beige Book at 14:00 ET.


Nasdaq Composite +5.1% YTD

Russell 2000 +5.0% YTD

S&P 500 +1.8% YTD

Dow Jones Industrial Average +1.2% YTD

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