Day Traders Diary

11/2/15

The stock market charged higher to begin November with the Nasdaq Composite setting the pace. The tech-heavy index surged 1.5% while the S&P 500 (+1.2%) followed right behind.

Equity indices started the trading day on an inconspicuous note after the overnight session featured some mixed economic data. In China, October Manufacturing PMI missed expectations (49.8; expected 50.0) while final Caixin PMI improved to 48.3 from 47.6, but remained below 50.0, indicating continued contraction. Asian markets ended the day on a broadly lower note, but the investor sentiment improved after European participants joined the fray and the market was treated to mostly better than expected PMI readings from regional economies. The eurozone Manufacturing PMI improved to 52.3 from 52.0 (expected 52.0), helping lift European markets off their opening lows.

Once the U.S. session got going, an opening trot higher turned into a daylong charge paced by energy and biotechnology as both groups built on their October gains. Biotech names wasted no time, rallying from the opening bell to send the iShares Nasdaq Biotechnology ETF (IBB 338.06, +12.60) higher by 3.9%. For its part, the health care sector spiked 2.1%, but the group was overtaken by the energy sector (+2.4%) during the afternoon.

The energy sector charged higher with the likes of Chevron (CVX 94.96, +4.08) and ExxonMobil (XOM 85.28, +2.54) extending their post-earnings gains even as crude oil lost 1.0%, sliding to $46.12/bbl, despite little change in the Dollar Index.

While the final standing did not suggest any underlying weakness, most sectors did not fare nearly as well as energy and health care. To be fair, financials (+1.5%) and industrials (+1.2%) also displayed relative strength, but technology (+0.9%), consumer discretionary (+0.5%), and consumer staples (+0.6%) lagged.

The consumer staples sector was pressured by beverage names while Sysco (SYY 41.04, -0.21) lost 0.5% despite reporting a one-cent beat. Over on the discretionary side, apparel retailers struggled in the morning, but largely recovered during the afternoon. On a separate note, Chipotle Mexican Grill (CMG 624.00, -16.23) fell 2.5% amid news of an E. coli scare that prompted the closure of 43 stores in Oregon and Washington.

Unlike stocks, Treasuries slipped in the morning and maintained their losses into the afternoon. The 10-yr note settled on its low with the benchmark yield rising four basis points to 2.19%.

Today's participation was roughly in-line with average as more than 845 million shares changed hands at the NYSE floor.

Economic data was limited to Construction Spending and ISM:

September construction spending jumped 0.6% to a seasonally adjusted annual rate of $1.09 billion while the Briefing.com consensus expected an increase of 0.4%

The uptick in total spending flowed from a 0.6% increase in private construction and a 0.7% increase in public construction spending

The Institute for Supply Management (ISM) reported that the October ISM Index registered a 50.1 reading versus 50.2 in September while the Briefing.com consensus expected a downtick to 50.0

This was the lowest reading since May 2013, but there was some expansionary activity below the surface with new orders increasing to 52.9 from 50.1 while the production index rose to 52.9 from 51.8

Tomorrow's economic data will be limited to the 10:00 ET release of the Factory Orders report for September (Briefing.com consensus -0.9%).

Nasdaq Composite +8.3% YTD

S&P 500 +2.2% YTD

Dow Jones Industrial Average 0.0% YTD

Russell 2000 -1.5% YTD