Day Traders Diary

9/2/15

The stock market snapped its two-day skid on Wednesday with the Nasdaq Composite leading the advance. The tech-heavy index climbed 2.5% while the Dow (+1.8%) and S&P 500 (+1.8%) registered slimmer gains.

Although the market ended the midweek session on a higher note, the advance did not feature the characteristics of a sharp bounce. Instead, stocks traded in sideways fashion before spiking to new highs during the final 30 minutes of the day. Despite today's higher close, the S&P 500 remains lower by 2.0% for the week with all ten sectors showing week-to-date losses.

Today, however, nine sectors posted gains while the utilities space (UNCH) underperformed amid higher Treasury yields. To that point, the 10-yr note slumped in the morning, briefly retraced its loss during the session, and fell back to lows into the close. As a result, the 10-yr yield increased three basis points to 2.19%.

On the upside, the top-weighted technology sector (+2.6%) outperformed throughout the session, which kept the market afloat during the morning pullback that saw the S&P 500 trade within five points of its flat line. Large cap tech names like Apple (AAPL 112.34, +4.62), Facebook (FB 89.89, +2.66), Google (GOOGL 644.91, +15.35), and Microsoft (MSFT 43.36, +1.54) gained between 2.4% and 4.3% while high-beta chipmakers also fared better than the market with the PHLX Semiconductor Index climbing 2.3%.

Elsewhere among influential sectors, health care settled in-line with the market while biotechnology outperformed, contributing to the relative strength in the Nasdaq as iShares Nasdaq Biotechnology ETF (IBB 346.23, +12.89) spiked 3.9%.

Also of note, the heavily-weighted financial sector (+1.5%) began the day among the leaders, but the group slipped behind the broader market during intraday action after finishing yesterday's session well behind the market.

With the exception of the final 30 minutes of the day, the Wednesday action in equities was fairly subdued, but the same could not be said for crude oil as the energy component remained volatile, ending the pit session higher by 1.9% at $46.25/bbl after testing the $43.22/bbl area. WTI crude slumped to lows after the latest inventory report showed a larger than expected build while news that Senate has enough votes to back the Iran nuclear deal also contributed to the brief weakness in oil.

Today's trading volume was well above average, staying true to recent trends. With that in mind, more than a billion shares changed hands at the NYSE floor.

Economic data included, ADP Employment Change, Q2 Productivity/Unit Labor Cost data, Factory Orders, and MBA Mortgage Index:

The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 190K in Augus while the Briefing.com consensus expected an increase of 201K

The July reading was revised down to 177,000 from 185,000

Productivity data for the second quarter showed an increase of 3.3% (Briefing.com consensus 2.8%), which was better than the 1.3% increase that had been reported in the preliminary reading

Unit labor costs for the second quarter were revised lower to reflect a decrease of 1.4% (Briefing.com consensus -0.9%) after they had reportedly increased 0.5% in the preliminary reading

Factory orders increased 0.4% in July after increasing an upwardly revised 2.2% (from 1.8%) in June while the Briefing.com consensus expected an increase of 0.9%

The relative softness in the factory orders data was the result of declining oil prices weighing down sales at petroleum refineries as refinery orders fell 7.9% in July after increasing 0.8% in June

The weekly MBA Mortgage Index spiked 11.3% to follow last week's 0.2% uptick

Tomorrow, the Challenger Job Cuts report for August will be released at 7:30 ET while weekly Initial Claims (Briefing.com consensus 273,000) and July Trade Balance (consensus -$42.70 billion) will both be released at 8:30 ET. The day's data will be topped off with the 10:00 ET release of the ISM Services Index for August (consensus 58.4).

Nasdaq Composite +0.3% YTD

S&P 500 -5.3% YTD

Russell 2000 -4.8% YTD

Dow Jones Industrial Average -8.3% YTD