Day Traders Diary

11/17/15

The stock market finished the day on a flat note after enjoying an opening rally that briefly placed the S&P 500 (-0.1%) above its 200-day moving average (2,064). The benchmark index was up around 0.7% during late morning action, but steady afternoon selling ensured a lower finish.

The second-half retreat accelerated after police officials in Hanover, Germany confirmed that a credible bomb threat forced the cancellation of a soccer match between Germany and the Netherlands. Press reports suggested that an emergency vehicle loaded with explosives was found at the soccer stadium, but this was refuted by the German Interior Minister just before the market closed for the day.

Treasuries notched their highs in reaction to the news, but to be fair, they spent the day in a steady climb off their lows that were set around 10:30 ET. The 10-yr note ended the day with a modest gain, pressuring its yield two basis points to 2.26% after testing the 2.31% level during morning action.

Six sectors ended the day with losses while health care (+0.4%) ended in the lead thanks to daylong strength in biotechnology. To that point, the iShares Nasdaq Biotechnology ETF (IBB 329.14, +4.25) gained 1.3%, helping keep the Nasdaq Composite ahead of the broader market. However, that was a small victory considering the Nasdaq returned to its flat line as large cap tech sector (unch) components struggled, overshadowing a good showing from the chipmaker space where the PHLX Semiconductor Index gained 0.6%.

Similar to technology, most cyclical sectors ended the day with modest losses while energy (-1.1%) underperformed notably. The growth-sensitive sector struggled from the start after surging more than 3.0% on Monday. As for today, the sector retreated while crude oil lost 2.4%, ending the pit session at $40.74/bbl.

Although the energy sector posted a notable loss, the group still ended ahead of the utilities sector, which lagged throughout the day, settling lower by 1.8%. Elsewhere among countercyclical groups, the consumer staples sector ended flat, masking a 3.5% spike in the shares of Wal-Mart (WMT 59.92, +2.05) after the retail giant reported a one-cent beat. Meanwhile, another retailer—Home Depot (HD 126.18, +5.34)—also had a solid showing, spiking 4.4%, in reaction to better than expected results, but the consumer discretionary sector was limited to a slim gain of 0.2%.

In other earnings of note, Dick's Sporting Goods (DKS 36.96, -3.85) tumbled 9.4% after missing estimates and lowering its guidance. The report cast a pall over apparel retailers with the likes of Under Armour (UA 84.99, -5.01), Finish Line (FINL 15.52, -0.40), and Lululemon (LULU 44.09, -1.15) falling between 2.5% and 5.6%.

Today's session generated above-average activity with more than a billion shares changing hands at the NYSE floor.

Economic data included CPI, Industrial Production, and NAHB Housing Market Index:

The October Consumer Price Index was right in-line with expectations. Both total CPI and core CPI, which excludes food and energy, increased 0.2%.

Total CPI is up 0.2% year-over-year on an unadjusted basis while core CPI is up 1.9%, which is steady with the year-over-year change seen in September

October Industrial Production declined 0.2% on top of an unrevised 0.2% decline in September while the Briefing.com consensus estimate called for a 0.1% increase

Total industrial production is up 0.3% year-over-year

The October weakness was driven entirely by the mining and utilities groups, which saw output decline 1.5% and 2.5%, respectively, while manufacturing output increased 0.4%, which was the biggest gain since a 1.0% jump in July and the first increase in the last three months

The NAHB Housing Market Index for November fell to 62 from an upwardly revised 65 (from 64) while the Briefing.com consensus expected the reading to come in at 64.5

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while October Housing Starts (Briefing.com consensus 1.173 million) and Building Permits (consensus 1.137 million) will be reported at 8:30 ET. Also of note, the Federal Reserve will release the minutes from its October meeting at 14:00 ET.

Nasdaq Composite +5.3% YTD

S&P 500 -0.4% YTD

Dow Jones Industrial Average -1.9% YTD

Russell 2000 -4.2% YTD