Day Traders Diary

4/27/15

The stock market began the week with a pullback from record levels, but not before setting fresh intraday record highs during the opening minutes of action. The S&P 500 (-0.4%) registered its first decline in four sessions while the Nasdaq Composite (-0.6%) underperformed.

Equity indices displayed modest gains in the early going to follow a relatively quiet weekend. It is worth noting that China's Shanghai Composite soared 3.0% after MNI reported the People's Bank of China is looking into purchasing local government bonds. Meanwhile, European markets began the day under pressure, but finished with solid gains amid optimism that followed reports Greece has reshuffled its negotiating team.

As for U.S. stocks, the S&P 500 held an eight-point gain at the start with cyclical sectors underpinning the early strength; however, biotechnology lagged from the early going and pressured the health care sector (-1.8%) to the bottom of the leaderboard. For its part, the iShares Nasdaq Biotechnology ETF (IBB 348.55, -15.15) lost 4.2% and contributed to the underperformance of the Nasdaq.

Biotechnology weighed on S&P 500 and the Nasdaq while the Dow (-0.2%) was able to end a little ahead since the price-weighted index does not contain any biotech listings. That being said, the largest Dow component by weight—Goldman Sachs (GS 196.52, -1.47)—lost 0.7% while the financial sector (-0.3%) settled a step ahead of the S&P 500.

Similar to financials, four of the remaining five cyclical groups settled ahead of the broader market while the consumer discretionary sector (-0.9%) underperformed. On the flip side, materials (+0.9%) and technology (+0.4%) spent the day in positive territory.

The materials sector enjoyed broad support, including a 4.6% spike in Dow component DuPont (DD 74.81, +3.29) after Institutional Shareholder Services recommended Nelson Peltz for the company's board of directors. Steelmakers and miners also rallied with Market Vectors Gold Miners ETF (GDX 19.76, +0.40) and Market Vectors Steel ETF (SLX 35.79, +0.29) gaining 2.1% and 0.8%, respectively.

Elsewhere, the technology sector (+0.4%) kept the market from sliding deeper into negative territory thanks to solid gains among large cap components. Most notably, Apple (AAPL 132.65, +2.37) climbed 1.8% ahead of its quarterly report while chipmakers held up relatively well with the PHLX Semiconductor Index adding 0.3%. The modest uptick in the chip index masked an 8.4% plunge in the shares of Applied Materials (AMAT 19.97, -1.83) brought on by news that the company terminated its combination agreement with Tokyo Electron due to regulatory concerns.

Treasuries retreated throughout the morning, but reversed course to erase the bulk of their losses. The 10-yr yield ticked up a basis point to 1.92%.

Today's participation was ahead of recent averages with more than 780 million shares changing hands at the NYSE floor.

Tomorrow, the Case-Shiller 20-city Index for February will be reported at 9:00 ET (Briefing.com consensus 4.7%) while the April Consumer Confidence report will cross the wires at 10:00 ET (expected 102.2).

Nasdaq Composite +6.9% YTD

Russell 2000 +4.1% YTD

S&P 500 +2.4% YTD

Dow Jones Industrial Average +1.2% YTD