Day Traders Diary

10/20/15

The stock market finished Tuesday on a quiet note after spending the session inside a narrow trading range. The S&P 500 shed 0.1% while the Nasdaq Composite (-0.5%) underperformed throughout the day.

Just like yesterday, today's affair was very quiet with the S&P 500 spending the majority of the session near its flat line. The benchmark index opened with a modest loss and rallied into the green during morning action, but could not climb above its 100-day moving average (2,039), which served as resistance. The index followed that short-lived rally with a return into the red, where it settled for the day.

Six sectors ended the day with gains, but top-weighted technology (-0.3%) and health care (-1.5%) struggled, which kept the market under pressure. Notably, the technology sector could not overcome the relative weakness in the shares of IBM (IBM 140.68, -8.54) after Big Blue reported below-consensus revenue and lowered its guidance, which overshadowed a bottom-line beat.

Staying in the tech sector, chipmakers also struggled with the PHLX Semiconductor Index shedding 0.2%. Micron (MU 17.09, -2.07) was the weakest performer, sliding 10.8%, after Intel (INTC 33.44, -0.15) announced plans to increase its investment in non-volatile memory technology.

Meanwhile, the health care sector (-1.5%) spent the day behind the remaining groups due to daylong weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 305.96, -9.98) retreated into the afternoon to settle lower by 3.1%, which contributed to the weakness in the Nasdaq Composite.

On the upside, the telecom services sector (+0.8%) held the lead throughout the session thanks to a 1.2% spike in Verizon (VZ 45.24, +0.54) after the company beat earnings expectations and reaffirmed its full-year revenue growth outlook.

Similar to telecom services, financials (+0.5%) and industrials (+0.6%) ended the day with solid gains. Travelers (TRV 108.95, +2.63) spiked 2.5%, contributing to the relative strength in financials, while United Technologies (UTX 95.70, +3.65) surged 4.0%, underpinning the industrial space. Transport stocks also rallied alongside the sector with the Dow Jones Transportation Average climbing 0.6%.

Treasuries notched their lows during morning action and they remained near those levels until the close with the 10-yr yield rising five basis points to 2.07%.

Just like yesterday, investor participation was a bit below average as fewer than 800 million shares changed hands at the NYSE floor.

Economic data was limited to Housing Starts, which increased 6.5% in September to 1.207 million from an upwardly revised 1.132 million (from 1.126 million) in August while the Briefing.com consensus expected an increase to 1.150 million. That was the second time in 2015 that total new housing starts topped 1.200 million (1.211 million in June) and the first time that the level has been exceeded on two occasions in one year since 2007. New single-family home construction remained robust in September with starts increasing 0.3% to 740,000 from 738,000

Tomorrow's economic data will be limited to the weekly MBA Mortgage Index, which will be released at 7:00 ET.

Nasdaq Composite +3.1% YTD

S&P 500 -1.4% YTD

Dow Jones Industrial Average -3.4% YTD

Russell 2000 -3.5% YTD