Day Traders Diary

12/19/16

The stock market avoided its second consecutive decline thanks to a Monday session that was underscored by daylong strength in the top-weighted technology sector (+0.6%). The S&P 500 added 0.2% while the Nasdaq Composite (+0.4%) outperformed throughout the day.

Investor sentiment soured during late afternoon action after it was reported that nine people were killed and at least 50 were injured after an assailant drove a truck into a crowd at the Christmas market in Berlin. This followed a morning report from Ankara, where the Russian Ambassador to Turkey was assassinated by an off-duty Turkish policeman. The two developments likely contributed to afternoon profit taking.

Equity indices began the day near their flat lines, but the largest sector by weight—technology (+0.6%)—climbed shortly after the opening bell, leading the overall market higher. The advance received assistance from other groups like industrials (+0.6%), telecom services (+1.1%), and real estate (+1.0%), but technology stood out, keeping the Nasdaq in the lead. High-beta chipmakers contributed to the strength with the PHLX Semiconductor Index climbing 1.0%. ASML (ASML 110.22, +3.98) and Lam Research (LRCX 106.99, +2.54) climbed 3.8% and 2.4%, respectively, after receiving upgrades.

Other cyclical sectors were mixed relative to the broader market as industrials (+0.6%) settled higher while energy (-0.5%) and financials (+0.1%) lagged.

The industrial sector received support from transport stocks as the Dow Jones Transportation Average gained 0.7% with all but two components ending in the green. Meanwhile, energy (-0.5%) struggled amid a volatile day in crude oil. WTI crude alternated between gains and losses before ending higher by 0.3% at $52.12/bbl.

For its part, the financial sector (+0.1%) held a modest loss into the afternoon, but spiked off its low after Fed Chair Janet Yellen made upbeat comments about the U.S. labor market. The comments were made during the commencement ceremony at the University of Baltimore, and they were met with an uptick in the dollar and a brief slip in Treasuries.

The U.S. Dollar Index (103.11, +0.16) climbed 0.2% as greenback strength against the euro (1.0400) and the pound (1.2400) overshadowed a decline against the yen (117.11).

Treasuries entered the day with gains and continued their advance into the afternoon. A temporary downtick took place in reaction to Ms. Yellen's comments, but the complex returned to highs by the close with the 10-yr yield sliding six basis points to 2.53%.

Investor participation was in-line with average as more than 900 million shares changed hands at the NYSE floor.

Today's session was free of economic data and investors will not receive any economic data tomorrow.

Russell 2000 +20.8% YTD

Dow Jones Industrial Average +14.1% YTD

S&P 500 +10.7% YTD

Nasdaq Composite +9.0% YTD