Day Traders Diary

5/18/15

The stock market kicked off the new trading week on an upbeat note. The Nasdaq Composite led the way, climbing 0.6%, while the Dow Jones Industrial Average (+0.1%) and S&P 500 (+0.3%) underperformed, but still registered new record closing highs at 18,298.88 and 2,129.20, respectively.

The first session of the week featured a range-bound opening hour that was followed by a steady advance. Heavily-weighted financials (+0.5%) and health care (+0.5%) displayed relative strength from the start while another influential group—technology (+0.4%)—climbed ahead of the market during the early afternoon.

The afternoon strength in the tech sector was partially due to gains among chipmakers. The PHLX Semiconductor Index advanced 1.0% with Altera (ALTR 46.93, +2.51) climbing 5.7% amid reports the company is once again discussing a potential deal with Intel (INTC 33.40, +0.41). Meanwhile, large cap tech names traded in mixed fashion, but that was masked by Apple's (AAPL 130.19, +1.42) 1.1% gain after activist investor Carl Icahn sent a letter to Apple Chief Executive Officer Tim Cook, pushing for a larger buyback, and saying Apple is worth $240/share at this time.

Elsewhere, the consumer discretionary sector (+0.4%) also outperformed with retailers contributing to the strength after ANN (ANN 46.40, +7.69) agreed to be acquired by Ascena Retail Group (ASNA 14.07, -0.14) for $47.00/share, representing a 21.4% premium to Friday's closing price.

In other M&A news, Endo Health (ENDP 80.77, -4.58) fell 5.4% after announcing the acquisition of Par Pharmaceutical for $8.05 billion. For its part, the health care sector (+0.5%) ended among the leaders with biotechnology making a contribution. The iShares Nasdaq Biotechnology ETF (IBB 360.30, +4.69) advanced 1.3%, helping the Nasdaq climb ahead of the benchmark index.

On the downside, consumer staples (-0.3%) and materials (-0.4%) spent the entire session in the red while the energy sector (-0.1%) recovered the bulk of its loss ahead of the close. The growth-sensitive group traded alongside crude oil, which showed intraday weakness, but returned to unchanged ($59.69/bbl) shortly after the end of the pit session.

It is worth noting that crude oil showed resilience even though the Dollar Index (94.20, +1.06) advanced 1.1% for the day. On a related note, Treasuries spent the session in a steady retreat, pushing the 10-yr yield higher by eight basis points to 2.22%.

Today's participation was well below average with fewer than 700 million shares changing hands at the NYSE floor.

Economic data was limited to the NAHB Housing Market Index for May, which fell to 54 from 56 while the Briefing.com consensus expected an increase to 57.

Tomorrow, April Housing Starts (Briefing.com consensus 1.019 million) and Building Permits (consensus 1.065 million) will be released at 8:30 ET.

Nasdaq Composite +7.2% YTD

Russell 2000 +4.4% YTD

S&P 500 +3.4% YTD

Dow Jones Industrial Average +2.7% YTD