Day Traders Diary

9/22/15

The stock market endured a rough trading day on Tuesday with the S&P 500 surrendering 1.2% while the Nasdaq Composite (-1.5%) underperformed.

Equity indices spent the duration of the session in the red after gapping lower at the start. The opening stumble occurred in response to continued concerns about China's economic growth, which was manifested through weakness in commodity prices. Furthermore, European automakers struggled with Volkswagen plunging 19.8% to extend this week's loss to 34.7% after announcing the establishment of a EUR6.50 billion reserve in anticipation of costs associated with the Department of Justice probe into the company's diesel engines. European markets registered losses across the board with Germany's DAX tumbling 3.8%.

Once the opening bell rang on Wall Street, the S&P 500 surrendered more than 15 points in short order and gave up another 20 into the afternoon. The index recovered about ten points during the final hour, but all ten sectors ended the day with losses.

The materials sector (-1.8%) spent the day at the bottom of the leaderboard as losses in commodities like copper (-3.8% to $2.30/lb) and gold (-0.7% to $1124.70/ozt) kept mining stocks under pressure. Accordingly, the Market Vectors Gold Miners ETF (GDX 13.36, -0.64) lost 4.6%.

Meanwhile, another commodity-related sector—energy (-1.1%)—began the day among the laggards, but was able to climb ahead of the broader market. The rebound off session lows was aided by similar price action in crude oil as the energy component ended lower by 1.3% at $46.31/bbl after trading below $45.50/bbl in the morning.

Elsewhere among cyclical sectors, financials (-1.3%), technology (-1.6%), and industrials (-1.4%) underperformed throughout the day, which prevented an intraday rebound from taking shape. To be fair, the health care sector (-0.6%) settled ahead of the broader market, but the same could not be said for biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 335.45, -5.02) ended lower by 1.5%, widening its week-to-date loss to 6.0%.

Biotechnology's underperformance contributed to relative weakness in the Nasdaq while high-beta chipmakers also weighed, evidenced by a 2.3% decline in the PHLX Semiconductor Index.

Switching gears, Treasuries rallied into the afternoon, erasing their losses from yesterday with the 10-yr yield falling seven basis points to 2.14%.

Today's participation was ahead of recent averages as more than 900 million shares changed hands at the NYSE floor.

Economic data was limited to the FHFA Housing Price Index for July, which rose 0.6% to follow last month's 0.2% uptick.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET.

Nasdaq Composite +0.4% YTD

Russell 2000 -4.9% YTD

S&P 500 -5.6% YTD

Dow Jones Industrial Average -8.4% YTD