Day Traders Diary

4/18/16

The stock market ended the Monday affair on a higher note as the major averages recovered from some early oil-fueled selling. Today's move higher was buttressed by the outperformance of the heavily-weighted health care (+0.9%), consumer discretionary (+0.9%), and financial (+0.7%) sectors. The S&P 500 (+0.7%) ended its day ahead of the Dow Jones Industrial Average (+0.6%) and the Nasdaq Composite (+0.4%).

Today's session began on a lower note as investors ruminated over the inability of OPEC and non-OPEC members to come together and agree on a supply cap. Accordingly, oil slid overnight as crude for May delivery dropped to $37.61 while June delivery fell to $39.00. However, oil prices rebounded off these levels as news of an oil and gas worker strike in Kuwait boosted the energy component. To be fair though, it's likely that today's trade also featured a fair amount of short-covering. May delivery crude ended at $39.78/bbl (-1.2%) while the June contract finished at $41.17/bbl (-1.4%).

The energy sector (+1.6%) trimmed an opening 1.6% decline and passed heavily-weighted health care (+0.9%), consumer discretionary (+0.9%), and financials (+0.7%) on the leaderboard. As a result, the major averages spent the bulk of the afternoon trading near or establishing new intraday highs. On that note, the Dow Jones climbed above the 18,000 level for the first time in 2016.

In commodity-sensitive energy (+1.6%), ConocoPhillips (COP 45.00, +1.30) and Marathon Oil (MRO 13.36, +0.35) helped lead among independent oil and gas names. Meanwhile, Williams Companies (WMB 16.68, -0.87) declined 5.0% as concerns over the ability to close its merger with Energy Transfer Equity (ETE 9.87, +0.90) mounted. Elsewhere, refining names underperformed the broader sector.

The biotechnology sub-group outperformed in the health care space (+0.9%). Biotechnology moved higher with Regeneron Pharmaceuticals (REGN 422.38, +15.65) as the stock extended its April rally to 17.2%, compared to a gain of 4.2% in the broader sector. Meanwhile, the iShares Nasdaq Biotechnology ETF (IBB 284.97, +4.36) has moved higher by 9.3% over that period of time. Separately, Dow components UnitedHealth (UNH 127.81, +0.48) and Johnson & Johnson (JNJ 110.93, +0.75) gained a respective 0.4% and 0.7% ahead of their earnings releases before tomorrow's open.

In the consumer discretionary space (+0.9%), auto names displayed relative strength as Ford (F 13.25, +0.31) and General Motor (GM 31.31, +0.75) benefited from some positive commentary from Barron's. Meanwhile, Disney (DIS 101.48, +2.89) climbed 2.9% after receiving an upgrade to "Buy" from "Hold" at Pivotal Research Group. On the flipside, Netflix (NFLX 108.40, -3.11) surrendered 2.8% ahead of this evening's earnings report.  

Conversely, utilities (+0.3%), industrials (+0.3%), technology (+0.4%), and materials (+0.5%) rounded out the board. The technology sector (+0.2%) ended its day with a slim uptick as Dow component Apple (AAPL 107.48, -2.37) weighed. The tech giant was the worst performer in the price-weighted index. Elsewhere, IBM (IBM 152.53, +0.81) gained 0.5% ahead of its first quarter earnings release.

The U.S. Dollar Index (94.49, -0.20) ended above its session lows as the euro gained 0.2% against the greenback (1.1311). Meanwhile, the dollar/yen pair finished flat at 108.78.

The Treasury complex finished off its low as the yield on the 10-yr note climbed two basis points to 1.77%.

Today's participation was below the recent average as fewer than 830 million shares changed hands on the NYSE floor.

Today's economic data was limited to the NAHB Housing Market Index for April:

The NAHB Housing Market Index for April came in at 58 from an unrevised 58 in March while the Briefing.com consensus expected the reading to come in at 59.0.

Tomorrow's economic data will include March Building Permits (Briefing.com consensus 1200k) and Housing Starts (Briefing.com consensus 1170k), which will both cross the wires at 8:30 ET.

Dow Jones +3.3% YTD

S&P 500 +2.5% YTD

Russell 2000 +0.3% YTD

Nasdaq Composite -1.0% YTD