Day Traders Diary

3/23/17

The stock market had a decent rebound try going for much of Thursday's session, but it fell to the wayside in the afternoon after reports that the House vote on the American Health Care Act, which was scheduled for tonight, will be delayed. The S&P 500 and the Nasdaq settled lower by 0.1% while the Dow closed flat.

The financial sector (+0.2%) led the stock market to modest gains when it appeared that GOP leadership and the House Freedom Caucus might reach a deal to push the AHCA through the House. However, the major averages retreated back to their flat lines after the House Freedom Caucus failed to reach an agreement on the proposed legislation. Equities then pushed into negative territory on news that the vote would be delayed.

The pick up in selling interest was due in large part to the angst the delayed vote created about the fate of tax reform. Administration officials and Congressional leaders have said health care reform needs to get tackled first before moving on to tax reform.

With investors in wait-and-see mode, almost all sectors settled within 0.4% of their respective flat lines. The lightly-weighted real estate sector (+0.7%) finished at the top of the leaderboard while several sectors--energy (-0.4%), technology (-0.3%), and health care (-0.4%)--contended for the bottom spot.

The technology sector struggled throughout the session with Alphabet (GOOGL 839.65, -10.15) suffering as brands continued to freeze their marketing campaigns with the company after The Times reported that ads were appearing next to extremist videos on YouTube.

On the earnings front, retailers cheered PVH's (PVH 98.55, +7.70) latest earnings report. The company, which owns brands like Van Heusen, Tommy Hilfiger, and Calvin Klein, jumped 8.5% after reporting better than expected earnings and issuing upbeat guidance. The SPDR S&P Retail ETF (XRT 41.21, +0.31) also settled higher, climbing 0.8%.

In the Treasury market, U.S. sovereign debt finished flat with the benchmark 10-yr yield closing unchanged at 2.41%.

On the data front, investors received February New Home Sales and the weekly Initial Claims report:

New Home Sales in February hit an annualized rate of 592,000, which was above the revised January rate of 558,000 (from 555,000), and more than the 560,000 that was expected by the Briefing.com consensus.

The key takeaway from the report is that new home sales activity was robust, driven by increased demand for lower-priced homes as high prices and rising mortgage rates have created affordability constraints at higher price points for prospective homebuyers.

The latest weekly initial jobless claims count totaled 258,000 while the Briefing.com consensus expected a reading of 239,000. Today's tally was above the revised prior week count of 243,000 (from 241,000). As for continuing claims, they declined to 2.000 million from the revised count of 2.039 million (from 2.030 million).

The key takeaway from the report is that it could soften March nonfarm payroll growth expectations a bit since it covered the week in which the survey for the Employment Situation Report was conducted.

Friday's lone economic report, February Durable Orders (Briefing.com consensus +1.3%), will cross the wires at 8:30 ET.

Nasdaq Composite +8.1% YTD

S&P 500 +4.8% YTD

Dow Jones Industrial Average +4.5% YTD

Russell 2000 -0.3% YTD