Day Traders Diary

3/14/16

The stock market managed to end its day on a flat note despite early and sustained weakness from the oil pit. Additionally, relative weakness from the heavyweight financial sector (-0.4%) was outweighed by strength in the influential technology (+0.1%) and the consumer discretionary (+0.4%) spaces. The Dow Jones Industrial Average (+0.1%) finished ahead of the tech-heavy Nasdaq (UNCH) and the S&P 500 (-0.1%).

Equities stumbled at the start of today's session as a downturn in oil weighed on the broader market. Today's oil trade centered on news from Iranian officials that the country will not be joining production cap efforts until its exports grow to four million barrels per day. As a result, the potential March meeting was called further into jeopardy as investors turn to April for action from OPEC and non-OPEC members. For its part, WTI crude ended its day lower by 3.8% at $37.19/bbl.

Four of ten sectors were able to finish their session above their flat lines with consumer discretionary (+0.4%), utilities (+0.1%), and technology (+0.1%) leading the pack. Meanwhile, materials (-0.7%), energy (-0.6%), financials (-0.4%) and health care (-0.4%) rounded out the board.

Oilfield service names like Schlumberger (SLB 73.44, -1.56) and Baker Hughes (BHI 43.88, -1.91) sported some of the largest losses in the energy sector. The two companies lost a respective 2.1% and 4.2% today, but remain up in March with gains of 1.4% apiece. However, the broader sector has gained 8.4% over that same period.

The financial sector slumped today, pulling back from its recent run. On that note, the sector has climbed 6.2% in March, but is still down 6.4% on the year. Today's weakness was broad based as insurance companies, money center banks, and asset management names all slipped from their recent levels.

In the consumer discretionary space (+0.4%), an unsolicited offer on Starwood Hotels (HOT 75.93, +5.51) resulted in a bid under for the lodging sub-group. A consortium of investors put forward a competing offer to the proposed Starwood and Marriott (MAR 70.93, +2.04) merger. The consortium's proposal is an all cash deal for $76 a share compared to Marriot's, which is primarily a stock offer. Elsewhere, Dow components Nike (NKE 60.81, +0.73) and McDonald's (MCD 122.90, +1.35) topped the price-weighted index.

Heavyweight names outperformed in the tech space (+0.1%) with Alphabet (GOOGL 750.24, +5.37) and Facebook (FB 109.89, +0.48) gaining a respective 0.7% and 0.4%. Conversely, data storage names like Western Digital (WDC 48.19, -1.69) and Seagate Tech (STX 35.36, -0.81) surrendered 3.4% and 2.2%, respectively. Additionally, the PHLX Semiconductor Index lost 0.4%.

The iShares Nasdaq Biotechnology ETF (IBB 261.44, -0.50) abandoned its best level (263.66) of the day and ended its day beneath its flat line. Meanwhile, Pfizer (PFE 30.10, -0.40) trimmed its loss to 1.3% after being down as much as 1.8%. The stock recovered from Pfizer's Corex cough syrup brand being banned for sale in India.

The U.S. Dollar Index (96.59, +0.41) ended its day higher as the greenback gained against the euro. The euro/dollar pair slipped from the 1.1121 level to trade lower by 0.4% (1.1099). Separately, the dollar/yen pair climbed from its low of 113.58 to trade at 113.81 (UNCH).

The Treasury complex notched session highs shortly after the open, but floated sideways from there. The yield on the 10-yr note slipped as low as 1.94%.(-5 bps) before ending its day at 1.96% (-3 bps).

Today's participation fell beneath the recent average with fewer than 835 million shares changing hands at the NYSE floor. 

There was no economic data of note released today.

Tomorrow's economic data includes February Retail Sales (Briefing.com consensus -0.1%), February PPI (Briefing.com consensus -0.2%), and March Empire Manufacturing (Briefing.com consensus -9.5) all crossing the wires at 8:30 ET. Meanwhile, Business Inventories for January (Briefing.com consensus +0.0%) and the NAHB Housing Market Index for March (Briefing.com consensus 59.0) will be released at 10:00 ET. The day's data will be capped off with the Net Long-Term TIC Flows for January at 16:00 ET.

Also tomorrow, the Fed will begin its two-day March policy meeting.

Nasdaq Composite -5.1% YTD

Russell 2000 -4.6% YTD

S&P 500 -1.2% YTD

Dow Jones -1.1% YTD