Day Traders Diary

2/291/6

The stock market ended its first session of the week and the last session of February under selling pressure as the heavyweight health care (-1.6%) and financial (-1.1%) spaces weighed on the broader market. Today's trade saw a brief departure from equities trading in tandem with oil, along with investors eyeing weaker than expected economic data at home and overseas. Meanwhile, a safe haven bid in the last hour of trade highlighted concerns ahead of a data-heavy week. The S&P 500 (-0.8%) ended its day behind both the Dow Jones Industrial Average (-0.7%) and the Nasdaq Composite (-0.7%). For the month, the S&P 500 shed 0.4% while the Nasdaq lost 1.1% and the Dow gained 0.3%.

The influential health care sector (-1.6%) underperformed throughout today's session as weakness from large-cap constituents as well as biotechnology dropped the group to the bottom of the leaderboard. The iShares Nasdaq Biotechnology ETF (IBB 254.09, -7.40) ended its session lower by 2.8%. For the month of February, the sub-group plummeted 4.9% while the broader sector ended lower by 0.7% over the same period. Elsewhere in the space, Valeant Pharmaceuticals (VRX 65.80, -14.85) tumbled 18.4% after CNBC reported that the SEC is investigating the company. Additionally, the company postponed its earnings release and call.

The economically-sensitive financial group (-1.1%) recovered from some early weakness and managed to trade in-line with the broader market for part of the afternoon, but lost traction as money center banks and investment brokerages weighed. On that note, Wells Fargo (WFC 46.92, -1.15) tumbled 2.4%. Conversely, Berkshire Hathaway (BRK.B 134.17, +2.25) climbed 1.7% after reporting better than expected operating earnings in Q4. The financial sector ended February lower by 3.2%, bringing its year-to-date decline to 11.9%.

The broader market received an early boost from a rally in crude oil, but was unable to maintain that momentum once the commodity's pit session ended. Even the commodity-sensitive energy (-1.2%) and materials (-0.6%) were unable to finish in the green after being up by as much as 0.6% and 1.2%, respectively. For its part, WTI crude ended its day higher by 3.3% at $33.82/bbl, finishing the month little changed.

In the energy group (-1.2%), independent oil and gas names posted some of the largest declines of the day with EOG Resources (EOG 64.74, -2.76) falling 3.8%. Separately, the space was hurt by a 4.5% decline in natural gas, which ended at $1.71/mmbtu.

Countercyclical utilities (+0.2%) outperformed today and consumer staples (-0.4%) followed on the leaderboard.

The Treasury complex was bid higher as equities slipped to their worst levels of the day. For its part, the yield on 10-yr note ended its session lower by three basis points at 1.74%.

On the currency front, the U.S. Dollar Index (98.16, +0.01) surrendered most of its gain as the greenback weakened against the yen. The dollar/yen pair ended lower by 1.1% at 112.80.

Today's participation was within the recent average with more than 1.266 billion shares changing hands at the NYSE floor.

Today's economic data included Chicago PMI for February and Pending Home Sales for January:

The Chicago Purchasing Managers Index registered a 47.6 reading for February. That was below the Briefing.com consensus estimate of 52.0 and well below the prior month's reading of 55.6. A number below 50 denotes contraction.

The last six readings for this index dating back to September have been 47.8, 52.6, 47.7, 42.9, 55.6, and 47.6, respectively, so what the February report reveals is that the strength in January was likely little more than a brief snapback in activity from a depressed base of readings in more recent months.

The downturn in February saw four of the five barometer components decline versus January: New Orders (from 58.8 to 51.7), Production (from 62.5 from 44.0), Employment (from 48.9 to 45.2) and Prices Paid (from 43.7 to 41.1).

The employment index, which saw its fifth straight monthly reading below 50.0, is at its lowest level since November 2009.

The Prices Paid Index, meanwhile, is at its lowest level since July 2009 with falling oil and commodity prices playing a part there.

Pending home sales for January ticked lower by 2.5% while the Briefing.com consensus expected an increase of 0.7%. Meanwhile the December reading was revised to 0.9% from 0.1%

Separately, New York Fed President and FOMC voting member William Dudley will speak at 23:30 ET.

Tomorrow's economic data will include Construction Spending for January (Briefing.com consensus +0.5%) and the ISM Index for February (Briefing.com consensus 49.0), which will both cross the wires at 10:00 ET.

Russel 2000 -9.0% YTD

Nasdaq -9.0% YTD

S&P 500 -5.5% YTD

Dow Jones -5.2% YTD