Day Traders Diary

4/20/15

The stock market began the week on an upbeat note with the S&P 500 (+0.9%) erasing the bulk of its decline from Friday. The benchmark index reclaimed its 50-day moving average (2,086) at the start and spent the remainder of the day near its early high while the Dow Jones Industrial Average (+1.2%) and Nasdaq Composite (+1.3%) outperformed.

Global equity markets enjoyed a strong start to the week after the People's Bank of China lowered the reserve requirement ratio for all banks to 18.5% from 19.5%. The 100-basis point cut was the largest such move since November 2008 and was implemented in hopes of avoiding a slowdown in China's economic growth.

The easing news from China helped markets in Europe register broad gains with investors overlooking the latest Greece-related developments. Specifically, the Greek government has requested local governments to transfer their cash balances to the Bank of Greece as the troubled sovereign continues scrambling for funds ahead of the next IMF payment deadline. That being said, the euro slid about 0.7% to 1.0735 against the dollar while the Dollar Index (97.93, +0.41) advanced 0.4%.

All ten sectors registered solid gains with five groups adding more than 1.0%. The top-weighted technology sector (+1.8%) ended in the lead after climbing throughout the session with large cap components fueling the move. To that point, Apple (AAPL 127.60, +2.85), Google (GOOGL 544.53, +11.79), Facebook (FB 83.09, +2.31), and Microsoft (MSFT 42.90, +1.28) rallied between 2.2% and 3.1% while Dow component IBM (IBM 166.16, +5.49) jumped 3.4% ahead of its earnings report.

Speaking of earnings, investors received just a small batch of reports this morning, but the floodgates will open as the week continues. The consumer discretionary sector (+1.1%) ended among the leaders with an assist from Hasbro (HAS 74.16, +8.27), which surged 12.6% in reaction to better than expected earnings and revenue.

Elsewhere, the industrial sector (+1.1%) also displayed relative strength with transport stocks doing some heavy lifting. The Dow Jones Transportation Average spiked 1.7% with all 20 components ending in the green. Railroads stood out with CSX (CSX 34.89, +1.59) soaring 4.8% while Kansas City Southern (KSU 107.37, +2.88) jumped 2.8% ahead of tomorrow's earnings report.

Another cyclical sector—financials (+0.5%)—could not catch up to the broader market even though Morgan Stanley (MS 36.96, +0.21) reported better than expected results. Shares of MS climbed 0.6% while other major financials posted comparable gains.

Treasuries spent the day in a slow retreat from their overnight highs with the 10-yr yield rising two basis points to 1.88%.

Today's participation was on the light side with fewer than 670 million shares changing hands at the NYSE floor.

Investors did not receive any economic data today and tomorrow's session will also be free of noteworthy releases.

Nasdaq Composite +5.5% YTD

Russell 2000 +5.0% YTD

S&P 500 +2.0% YTD

Dow Jones Industrial Average +1.2% YTD