Day Traders Diary

11/12/15

The stock market could not avoid its second consecutive retreat on Thursday with the S&P 500 (-1.4%) falling below its 200-day moving average (2,064). The benchmark index retreated throughout the session while the Nasdaq Composite (-1.2%) settled a step ahead.

Equity indices faced selling pressure from the get-go with the early weakness following a cautious session in Europe where markets in France, Germany, and Spain lost between 1.2% and 2.3%. Things did not improve by the start of the New York Session, which led to opening losses in nine of ten sectors.

Most notably, the energy sector (-2.4%) struggled from the start and the significant underperformance in the growth-sensitive group set the tone for a down day. The sector widened this week's decline to 5.4% while crude oil fell 2.7% to $41.78/bbl.

Similar to energy, the materials sector (-2.0%) finished at the bottom of the leaderboard while other groups posted slimmer losses. For instance, the top-weighted technology sector (-0.9%) outperformed throughout the session, which prevented a bigger decline from unfolding.

Elsewhere on the cyclical side, the consumer discretionary space (-1.0%) settled ahead of the broader market thanks to gains in select apparel retailers after Kohl's (KSS 45.82, +2.66) reported better than expected results. Shares of KSS spiked 6.2% while the SPDR S&P Retail ETF (XRT 44.05, -0.57) could not stay out of the red, falling 1.3%.

Moving to the countercyclical side, the utilities sector (-1.2%) held a slim gain at the start, but could not hold its ground into the afternoon. The rate-sensitive group settled just ahead of the S&P 500 while consumer staples (-1.4%) and health care (-1.8%) registered wider losses. Biotechnology contributed to the underperformance in health care with the iShares Nasdaq Biotechnology ETF (IBB 320.11, -6.74) dropping below its 50-day moving average (325.10). The high-beta ETF fell 2.1%, extending this week's decline to 3.1%.

Unlike stocks, Treasuries spent the day in the green, forcing the 10-yr yield lower by a basis point to 2.32%.

Today's participation was essentially in line with recent averages as 850 million shares changed hands at the NYSE floor.

Economic data included Initial Claims, JOLTS, and the Treasury Budget:

Weekly initial claims were unchanged from the prior week at 276,000 (Briefing.com consensus 269,000) while continuing claims for the week ending October 31 rose by 5,000 to 2.174 million (Briefing.com consensus 2.155 mln) from an upwardly revised 2.169 million (from 2.163 million)

Initial claims have ranged primarily between 250,000 and 300,000 since July 2014, so there was nothing out of the ordinary about the latest claims report, which wasn't influenced by any special factors

The four-week moving average for initial claims increased by 5,000 to 267,750, which is near levels seen in April 2000

The September Job Openings and Labor Turnover Survey showed that job openings increased to 5.526 million from 5.377 million

The Treasury Budget statement for October showed a deficit of $136.00 billion (Briefing.com consensus -$130.00 billion)

The Treasury data are not seasonally adjusted so the October deficit cannot be compared to the $91.10 billion surplus recorded in September

Tomorrow, October PPI (Briefing.com consensus 0.1%) and October Retail Sales (consensus 0.3%) will be reported at 8:30 ET while September Business Inventories (expected 0.0%) and the preliminary reading of the Michigan Sentiment Index for November (consensus 92.0) will be released at 10:00 ET.

Nasdaq Composite +5.7% YTD

S&P 500 -0.6% YTD

Dow Jones Industrial Average -2.1% YTD

Russell 2000 -4.0% YTD