Day Traders Diary

1/23/19

The S&P 500 gained 0.2% on Wednesday in what was an uneven day of trading. The benchmark index was up as much as 0.8% shortly after the start of trading, lost as much as 0.8% by midday, and teetered around its flat line for most of the afternoon.

The Dow Jones Industrial Average (+0.7%) and the Nasdaq Composite (+0.1%) also experienced similar price action. The Russell 2000 (-0.2%) did, too, but finished in negative territory. 

Most S&P 500 sectors finished higher with consumer staples (+1.2%) and utilities (+1.1%) outperforming. Conversely, the energy (-1.0%) and material (-0.7%) sectors underperformed the broader market and were the lone sectors ending with a loss.

Stocks had rallied at the open on some earnings beats and reassuring guidance from Dow components IBM (IBM 132.89, +10.37, +8.5%), Procter & Gamble (PG 94.84, +4.40, +4.9%), and United Technologies (UTX 117.04, +5.98, +5.4%).

With stocks recouping a good chunk of Tuesday's losses, there was some hope that the prior day's weakness was nothing more than a one-day pullback for an overbought market.

Market participants, however, would sell into strength, which resulted in a steady decline throughout the morning that left the S&P 500 below its 50-day moving average (2619). A dearth of buying interest, though, turned into a wave of buying interest soon after the S&P 500 violated its 50-day moving average. 

The 50-day moving average has proven to be an important technical support level the past two sessions, where an inflow of buyers has helped prevent selling efforts from getting too out of hand.

Sure enough, the S&P 500 ascended to its flat line in afternoon action despite the lingering concerns surrounding a U.S-China trade deal, global growth prospects, and a tense government shutdown.

In other corporate news, Comcast (CMCSA 36.89, +1.92) rose 5.5% after it beat beat top and bottom-line estimates and increased its dividend by 10% to $0.84 per share on an annualized basis for 2019.

U.S. Treasuries ended on a lower note, although the bulk of the session saw a steady climb off opening lows. The 2-yr yield increased two basis points to 2.59%, and the 10-yr yield increased three basis points to 2.76%. The U.S. Dollar Index lost 0.2% to 96.12. WTI crude lost 0.8% to $52.63/bbl.

Reviewing Wednesday's economic data, which included the FHFA Housing Price Index for November and the weekly MBA Mortgage Applications Index:

• The FHFA Housing Price Index for November increased 0.4% (Briefing.com consensus 0.3%), unchanged from October's upwardly revised increase (from 0.3%).
• The weekly MBA Mortgage Applications Index decreased 2.7% from the prior increase of 13.5% last week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the Conference Board's Leading Economic Index for December on Thursday.

• Russell 2000 +7.8% YTD
• Nasdaq Composite +5.9% YTD
• Dow Jones Industrial Average +5.4% YTD
• S&P 500 +5.3% YTD

• • Headlines provided by Briefing.com