Day Traders Diary

8/10/15

The stock market began the trading week on a sharply higher note with the S&P 500 spiking 1.3% while the Dow (+1.4%) and Nasdaq (+1.2%) bookended the benchmark index.

Equity indices surged out of the gate after the overnight session featured a 4.9% spike in China's Shanghai Composite after below-consensus trade data from China was viewed as an argument in favor of more policy easing. The overnight strength carried over to the European session as regional indices rallied amid reports suggesting Greek officials and eurozone negotiators are nearing a final agreement on a third bailout package for Greece.

Once the opening bell rang on Wall Street, U.S. stocks perked up with the S&P 500 charging above its 50-day (2,096) and 100-day (2,098) moving averages. The benchmark index overtook both those levels during the opening hour, and inched to new highs during afternoon action with nine sectors ending in the green.

Cyclical sectors paced the opening rally and they continued showing relative strength into the afternoon. The industrial sector (+1.9%) was the early leader, thanks to a 19.1% surge in Precision Castparts (PCP 230.93, +37.05) after the company agreed to be acquired by Berkshire Hathaway (BRK.B 143.39, -0.16) for $235/share.

Meanwhile, another cyclical sector—energy (+3.1%)—took the lead during late morning action thanks to an intraday spike in crude oil. The energy component jumped 2.5% to $44.95/bbl with the move partially supported by dollar weakness as the Dollar Index (97.17, -0.40) fell 0.4%.

Elsewhere among cyclical groups, the top-weighted technology sector (+1.6%) settled among the leaders with chipmakers showing notable strength. The PHLX Semiconductor Index soared 2.5% with all but one component ending in the green.

Moving to the countercyclical side, the telecom services sector (+1.8%) settled ahead of the broader market while consumer staples (+0.4%), health care (+0.8%), and utilities (-0.4%) underperformed.

The utilities sector struggled throughout the day as higher Treasury yields made rate-sensitive utility stocks less appealing. The 10-yr note settled just above its low with the benchmark yield higher by seven basis points at 2.24%.

Today's participation was roughly in-line with average as 800 million shares changed hands at the NYSE floor.

Investors did not receive any economic data today, but tomorrow, preliminary Q2 productivity (Briefing.com consensus 1.4%) and unit labor cost (consensus -0.1%) data will be released at 8:30 ET while June Wholesale Inventories will be reported at 10:00 ET.

Nasdaq Composite +7.7% YTD

S&P 500 +2.2% YTD

Russell 2000 +1.4% YTD

Dow Jones Industrial Average -1.2% YTD