Day Traders Diary

12/22/16

The stock market recorded its second consecutive loss on Thursday, but once again, investor participation was on the light side as some participants decided to sit out the pre-holiday session. The S&P 500 shed 0.2% while the Nasdaq (-0.4%) underperformed. Small caps faced a bit more selling, sending the Russell 2000 lower by 0.9%.

Equity indices were confined to negative territory for the duration of the session with influential sectors responsible for the weakness. The consumer discretionary space (-1.0%) spent the day at the bottom of the leaderboard with Bed Bath & Beyond (BBBY 41.38, -4.18) falling 9.2% after weak results and guidance. Retailers in general had a rough day, sending the SPDR S&P Retail ETF (XRT 44.74, -1.62) lower by 3.5%.

Three other large sectors like financials (-0.3%), technology (-0.3%), and industrials (-0.2%) also spent the day in negative territory. The top-weighted technology space narrowed its weekly gain to 0.5% as losses in large cap components offset gains in chipmakers. The PHLX Semiconductor Index rose 0.5% with Micron (MU 23.19, +2.61) surging 12.7% after beating bottom-line estimates. Staying on the earnings front, software company Red Hat (RHT 68.71, -11.08) reported disappointing billings and revenue, which outweighed above-consensus earnings, sparking a 13.9% dive in the stock.

Only one cyclical sector—energy (+0.5%)—ended in the green, taking a lead from crude oil, which climbed 0.8% to $52.97/bbl. The commodity-sensitive sector will enter Friday with a 0.1% decline for the week.

The countercyclical side had a better showing as telecom services (+1.0%), utilities (+0.3%), and health care (+0.2%) registered gains while consumer staples (-0.1%) and real estate (-0.1%) recorded slim losses.

Treasuries ended the day on a mostly lower note with the 10-yr yield rising one basis point to 2.55%.

Intraday investor participation was below average, but a volume surge into the close lifted the NYSE floor total above yesterday's level of 850 million to more than 875 million.

Economic data included initial claims, the third estimate of Q3 GDP, Durable Orders, FHFA Housing Price Index, Leading Indicators, Personal Income, Personal Spending, and core PCE Prices:

Initial claims for the week ending December 17 increased 21,000 to 275,000 (Briefing.com consensus 256,000)

Continuing claims for the week ending December 10 rose 15,000 to 2.036 million

Q3 GDP was revised up to 3.5% (Briefing.com consensus 3.3%) from 3.2%. The GDP Deflator was left unchanged at 1.4%

Real final sales, which exclude the change in inventories, increased 3.0% versus 2.7% in the second estimate

Durable orders declined 4.6% (Briefing.com consensus -4.5%), with a 73.5% decline in orders for nondefense aircraft and parts acting as the major drag

Excluding transportation, durable orders were up 0.5% (Briefing.com consensus +0.2%)

The FHFA Housing Price Index for October rose 0.4% to follow a 0.6% increase in September

Personal income was little changed in November (Briefing.com consensus 0.3%) after increasing a downwardly revised 0.5% (from 0.6%) in October

Personal spending increased 0.2% (Briefing.com consensus 0.4%) following an upwardly revised 0.4% increase (from 0.3%) in October

The PCE Price Index and the core PCE Price Index, which excludes food and energy, were both unchanged

The Conference Board's Leading Economic Index was unchanged in November (Briefing.com consensus +0.1%) following an unrevised 0.1% increase for October.

Tomorrow's economic data will be limited to the 10:00 ET release of November New Home Sales (Briefing.com consensus 573,000) and the final reading of the Michigan Sentiment Index for December (Briefing.com consensus 98.2).

Russell 2000 +20.1% YTD

Dow Jones Industrial Average +14.3% YTD

S&P 500 +10.6% YTD

Nasdaq Composite +8.8% YTD