Day Traders Diary

7/22/15

The stock market ended the midweek session on a lower note with the Nasdaq Composite pacing today's retreat. The tech-heavy index lost 0.7% while the Dow (-0.4%) and S&P 500 (-0.2%) settled closer to their flat lines.

Equities faced selling pressure at the open as investors reacted to earnings from a few large companies. Most notably, Apple (AAPL 125.14, -5.61) surrendered 4.3% after below-consensus iPhone sales growth and cautious guidance for Q4 overshadowed a bottom-line beat. The largest stock by market cap kept the technology sector (-1.7%) pressured throughout the day while four other sectors registered losses.

To be fair, the tech sector was also weighed down by a 3.7% decline in Microsoft (MSFT 45.51, -1.77) after the company reported a loss, which resulted from $8.4 billion in charges related to the phone unit acquisition from Nokia. Furthermore, high-beta chipmakers also struggled with the PHLX Semiconductor Index falling 2.5% amid losses in all 30 components. Linear Technology (LLTC 40.40, -2.72) had the worst showing, ending lower by 6.3% in reaction to disappointing results and below-consensus guidance.

Elsewhere among cyclical sectors, industrials (-0.5%) retreated with Dow component Caterpillar (CAT 79.76, -2.46) dropping 3.0% ahead of its earnings report. Meanwhile, another Dow member—Boeing (BA 146.47, +1.47)—advanced 1.0% after beating estimates and guiding in-line with analyst expectations.

Similar to industrials, the energy sector (-0.7%) ended among the laggards with Baker Hughes (BHI 58.25, -2.39) tumbling 3.9% amid reports Halliburton's (HAL 41.54, -0.32) acquisition of BHI is facing an antitrust probe. On a related note, crude oil settled lower by 3.2% at $49.25/bbl.

On the upside, the financial sector (+0.7%) rallied into the afternoon while the consumer discretionary space (+0.4%) was boosted by a 7.7% surge in Chipotle (CMG 725.82, +52.75) after the company reported a one-cent beat on below-consensus revenue. Homebuilders also contributed to the strength in the discretionary space, evidenced by a 2.1% increase in iShares Dow Jones US Home Construction ETF (ITB 27.99, +0.58) following a better than expected Existing Home Sales report for June.

Also of note, most countercyclical sectors outperformed with health care (+0.2%), consumer staples (+0.2%), and utilities (+0.5%) ending ahead of the broader market while the telecom services sector (-1.0%) lagged.

Treasuries advanced during morning action, but an afternoon retreat narrowed the gain in the 10-yr note to just two ticks with its yield slipping one basis point to 2.32%.

Today's participation was ahead of recent averages as more than 820 million shares changed hands at the NYSE floor.

Economic data included FHFA Housing Price Index, Existing Home Sales, and the MBA Mortgage Index:

The FHFA Housing Price Index rose 0.4% in May after increasing 0.4% in April

Existing Home Sales for June increased 3.2% from May to an annualized rate of 5.49 million units while the Briefing.com consensus expected a reading of 5.40 million

The weekly MBA Mortgage Index ticked up 0.1% to follow last week's 1.9% decline

Tomorrow, weekly Initial Claims will be released at 8:30 ET (Briefing.com consensus 279K) while June Leading Indicators (consensus 0.2%) will be reported at 10:00 ET.

Nasdaq Composite +9.2% YTD

Russell 2000 +4.4% YTD

S&P 500 +2.7% YTD

Dow Jones Industrial Average +0.2% YTD