Day Traders Diary

9/11/15

 The stock market finished the abbreviated trading week on a higher note. The S&P 500 added 0.5%, extending its weekly gain to 2.1% while the Nasdaq Composite (+0.5%) outperformed slightly, adding 3.0% for the week.

Broadly speaking, the Friday session was very quiet and did not feature any major macroeconomic or company-specific developments. Instead, stocks began the day under modest pressure as noteworthy weakness in the energy sector (-0.8%) fueled the opening retreat. The energy sector settled not far above its low while the remaining groups fared much better and helped the market erase its early loss.

Staying in the energy sector, the cyclical group represented the lone decliner of the week, losing 0.7% since last Friday. Crude oil contributed to underperformance in the sector as the energy component settled lower by 2.8% at $44.63/bbl after briefly dipping below $44.20/bbl in the morning. For the week, WTI crude surrendered 3.1% with today's decline following cautious comments from Goldman Sachs. Specifically, the investment bank cut its 2015 price forecast to $48.10/bbl from $52.00/bbl and lowered the 2016 outlook to $45.00/bbl from $57.00/bbl.

Elsewhere, the other commodity-related sector—materials (-0.2%)—also settled in the red while other groups posted gains. Notably, consumer discretionary (+0.7%), technology (+0.6%), and health care (+0.7%) gathered steam as the market climbed off its session low.

Thanks to today's gain, the technology sector gained 3.1% for the week, which was good enough for the sector to end ahead of its peers. The influential sector followed Apple's (AAPL 114.02, +1.45) lead as the stock jumped 1.3% on Friday and 4.4% for the week.

The relative strength in technology helped the Nasdaq stay ahead of the broader market through the week, but the tech-heavy index also received a measure of support from health care, and specifically, biotechnology. To that point, the health care sector (+0.7%) finished among today's leaders, extending its weekly gain to 2.8%. As for biotechnology, the high-beta group enjoyed a strong week, evidenced by the iShares Nasdaq Biotechnology ETF (IBB 354.74, +4.02), which climbed 1.2% on Friday to end the week higher by 5.2%.

The afternoon recovery in stocks had little impact on Treasuries as the 10-yr note remained near its high with the benchmark yield ending the day lower by four basis points at 2.18%.

Today's participation was below recent averages as roughly 810 million shares changed hands at the NYSE floor.

Economic data included PPI, Michigan Sentiment, and Treasury Budget:

Producer prices were flat in August after increasing 0.2% in July while the Briefing.com consensus expected a decline of 0.1%

Energy prices declined 3.3% in August, which was the largest downturn since a 10.1% drop in January, after falling 0.6% in July

Food prices increased 0.3% in August after declining 0.1% in July with the aftermath of the bird flu epidemic continuing to wreak havoc on the egg supply, driving egg prices up 32.2%

Excluding food and energy, core PPI increased 0.3% for a third consecutive month in August while the consensus expected an increase of 0.1%

The University of Michigan Consumer Sentiment Index dropped to 85.7 in the preliminary September reading from 91.9 in August while the Briefing.com consensus expected a drop to 91.5

The Current Conditions Index fell to 100.3 in September from 105.1 in August while the Expectations Index declined to 76.4 from 83.4

The overall decline in the Consumer Sentiment Index can be traced to the pullback in stock prices that began at the end of August while other measures that typically impact confidence levels --gasoline prices and employment conditions—continued to improve over the past few weeks

The Treasury Budget statement for August showed a deficit of $64.40 billion while the Briefing.com consensus expected a deficit of $62.00 billion

The Treasury data are not seasonally adjusted so the August deficit cannot be compared to the $149.20 billion deficit recorded in July Investors will not receive any economic data on Monday.

Nasdaq Composite +1.8% YTD

Russell 2000 -3.7% YTD

S&P 500 -4.8% YTD

Dow Jones Industrial Average -7.8% YTD