Day Traders Diary

12/1/15

 The stock market began December on an upbeat note with the S&P 500 climbing 1.1% while the Nasdaq Composite (+0.9%) settled just behind.

All in all, the Tuesday session was very quiet as the S&P 500 marked its high during the opening hour and inched above that level during afternoon action. The index briefly slipped from the morning high after today's economic data showed that the ISM Index (48.6; Briefing.com consensus 50.4) registered its first contractionary reading (below 50) in 36 months.

The disappointing report was met with a spike in Treasuries that sent the 10-yr note to a fresh high. The benchmark instrument settled on its best level of the day, pressuring its yield six basis points to 2.15%.

All ten sectors posted gains with heavily-weighted groups like health care (+1.7%), technology (+1.1%), consumer discretionary (+1.0%), and financials (+1.3%) ending in the lead.

Interestingly, the health care sector settled well ahead of the broader market as strength in hospital names like Tenet Healthcare (THC 34.93, +1.74) and Universal Health Services (UHS 125.30, +3.78) masked relative weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 336.16, +1.79) added 0.5% after being down nearly 1.0% at the start of the trading day.

Elsewhere among influential groups, technology (+1.1%) settled in-line with the broader market, overshadowing a 0.8% decline in the shares of Apple (AAPL 117.34, -0.96), which slipped to a one-week low. Meanwhile, high-beta chipmakers outperformed throughout the day, sending the PHLX Semiconductor Index higher by 1.4%.

Staying on the cyclical side, the industrial sector (+0.6%) held a modest gain throughout the day as relative strength in transport stocks overshadowed losses among heavy machinery names. The Dow Jones Transportation Average gained 1.3% while Caterpillar (CAT 71.56, -1.09) and Joy Global (JOY 13.33, -2.02) posted respective losses of 1.5% and 13.2% after Joy Global was downgraded to 'Underperform' from 'Neutral' at Bank of America/Merrill Lynch.

Today's advance took place amid trading volume that was close to average as 845 million shares changed hands at the NYSE floor.

Economic data was limited to Construction Spending and ISM Index:

Construction spending increased 1.0% month-over-month in October while the Briefing.com consensus expected an increase of 0.7%

Construction spending is up a solid 13.1% year-over-year, which is the sixth straight month of double-digit growth

The strength in October was fueled by a 0.8% increase in private construction spending and a 1.4% increase in public construction

The ISM Index for November indicated a decline to 48.6 from 50.1 while the Briefing.com consensus expected an uptick to 50.4

This was the first below-50 reading in 36 months, indicating contraction in activities

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November ADP Employment Change (Briefing.com consensus 185,000) will be reported at 8:15 ET. Q3 Productivity (consensus 2.2%) and Unit Labor Cost data (expected 1.2%) will be released at 8:30 ET and the Federal Reserve's December beige book will cross the wires at 14:00 ET.

Nasdaq Composite +8.9% YTD

S&P 500 +2.1% YTD

Dow Jones Industrial Average +0.4% YTD

Russell 2000 +0.2%