Day Traders Diary

12/2/15

The major averages trade in mixed fashion at midday with the Dow (-0.2%) and S&P 500 (-0.3%) showing modest losses while the Nasdaq Composite (+0.2%) outperforms.

Equity indices spent the initial 90 minutes of the day near their flat lines, but the S&P 500 has been pressured to a new low due to significant weakness in the energy sector (-2.4%). The growth-sensitive group saw late-morning volatility in reaction to some conflicting headlines about the OPEC meeting, which will take place in Vienna on Friday. Similarly, crude oil has endured heavy selling as the energy component trades lower by 3.6% at $40.35/bbl at this juncture.

Dollar strength has likely contributed to today's weakness in crude, considering the Dollar Index (100.33, +0.53) is higher by 0.5% after inching above its high from March 13 (100.39) in recent action. That move occurred after the recent release of Fed Chair Janet Yellen's speech, which was viewed as a sign that the Fed is ready to raise rates at the December policy meeting.

Meanwhile, Treasuries have marched lower throughout the day, hitting their lows not long ago with the 10-yr yield up five basis points at 2.19%.

Eight sectors hold midday losses while technology (+0.4%) and telecom services (+0.1%) hover in the green. The top-weighted tech sector has held its ground since the start thanks to a 7.5% surge in the shares of Qualcomm (QCOM 52.98, +3.68) after the company licensed its 3G and 4G technology to Xiaomi.

Unlike technology, the remaining cyclical sectors trade in the red, but their losses have been held in check for the time being. For instance, the industrial sector (-0.3%) has kept pace with the broader market even though transport stocks lag, evidenced by a 0.9% decline in the Dow Jones Transportation Average.

Economic data released this morning included ADP Employment and Q3 Productivity/Unit Labor Cost Data:

The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 217,000 in November while the Briefing.com consensus expected a reading of 185,000

The October reading was revised up to 196,000 from 182,000

Third quarter productivity was revised up to 2.2% (Briefing.com consensus 2.2%) from 1.6% in the preliminary estimate while unit labor costs were revised up to 1.8% (Briefing.com consensus 1.2%) from 1.4% in the preliminary estimate

The change in productivity flowed from a 1.8% increase in output and a 0.3% decrease in hours worked. That was the first decline in hours worked since the third quarter of 2009

The change in unit labor costs reflected a 4.0% increase in hourly compensation and a 2.2% increase in productivity

The Federal Reserve will release its December Beige Book at 14:00 ET.