Day Traders Diary

1/11/16

The stock market began the week on a flat note with the S&P 500 adding 0.1% while the tech-heavy Nasdaq (-0.1%) trailed the benchmark index. Falling oil prices in the face of global growth concerns continued to weigh on the overall sentiment, short-circuiting a rebound attempt.

Looking overseas, China's Shanghai Composite surrendered 5.3% despite reporting economic data that was largely in-line with analyst expectations. In economic data, China's December CPI increased 0.5% month-over-month (expected 0.4%), moving its year-over-year growth to an increase of 1.6%, as expected. Additionally, December's Producer Price Index fell 5.9% year-over-year versus an expectation of a 5.8% decrease. Despite the slide in Asia, investor sentiment improved once the attention shifted to Europe. However, a morning retreat in crude oil weighed on the stock market as a whole. By the end of the energy-component's pit session, WTI crude had slipped 5.3% to end at $31.41/bbl.

On the leaderboard, commodity-sensitive energy (-2.1%) and materials (-1.6%) claimed the bottom two rungs followed by health care (-1.2%), industrials (+0.1%) and financials (+0.4%). Looking at the flipside, consumer staples (+1.0%), consumer discretionary (+0.9%), telecom services (+0.8%), and technology (+0.6%) lead the pack.

The health care space underperformed the other countercyclical sectors throughout the day as drug wholesalers faced pressure. McKesson (MCK 163.55, -18.84) fell 10.3% after the company narrowed its guidance for FY 2016, citing weaker pricing on generics in the second half of the fiscal year. Fellow drug wholesalers AmerisourceBergen (ABC 94.06, -9.90) and Cardinal Health (CAH 79.27, -4.59) also declined, falling 4.0% and 5.5%, respectively. Elsewhere in the space, biotechnology demonstrated relative weakness evidenced by a 3.5% dive in the iShares Nasdaq Biotechnology ETF (IBB 291.69, -10.51).

Looking at energy, Dow components Exxon Mobil (XOM 73.69, -1.00) and Chevron (80.77, -1.36) outperformed the sector but still sustained substantial losses, with respective declines of 1.3% and 1.7%. Independent oil and gas companies were hit harder by plummeting oil prices with Anadarko Petroleum (APC 37.75, -2.81) and ConocoPhillips (COP 41.12, -2.17) sporting losses of 6.9% and 5.0%.

In Treasuries, the benchmark note moved closer to its morning low as the afternoon session progressed with the yield on the 10-yr higher by six basis points at 2.17%.

Investor participation was above average with more than a billion shares changing hands at the NYSE floor.

No economic data was released today and tomorrow's data will be limited to the November Job Opening and Labor Turnover Survey, which will be released at 10:00 ET.

Russel 2000 -8.2% YTD

Nasdaq -7.4% YTD

S&P 500 -5.9% YTD

Dow Jones Industrial Average -5.9% YTD