Day Traders Diary

10/25/19

The major averages rose on Friday as investors cheered strong quarterly earnings from Intel along with apparent progress on the U.S.-China trade front. The Dow Jones Industrial Average closed up 152 points or 0.6% at 26,958. The S&P 500 climbed 0.4% to 3,022 briefly trading above its record closing high. The broad index also came within inches of its intraday all-time high. The Nasdaq Composite advanced 0.7% to 8,243. The tech sector closed at a record high, rising more than 1% on Friday.

Intel shares jumped 8.1% after the chipmaker's results topped analyst expectations. Intel also issued better-than-expected guidance for the fourth quarter. Visa and Verizon closed higher as well following earnings.To the downside, Amazon closed down a percent following disappointing third-quarter results. Weak guidance for the holiday season is also putting pressure on the stock. Anheuser-Busch InBev and V.F. Corp are also lower following earnings.

More than 38% of S&P 500 companies posted quarter earnings for the third quarter thus far, according to FactSet. Of those companies, 78% have beaten analyst expectations.

The averages were boosted by comments that the US and China are nearing finalization of some parts of trade deal.

The trade update presumably benefited other cyclical sectors like materials up a percent, energy up 0.8%, and industrials up 0.6%.

It also reduced demand for U.S. Treasuries, which sent yields higher in a trade that undercut the performances of the rate-sensitive real estate (-1.3%) and utilities (-1.1%) sectors. The 2-yr yield rose five basis points to 1.63%, and the 10-yr yield rose four basis points to 1.80%. The U.S. Dollar Index increased 0.3% to 97.83. WTI crude increased 0.4%, or $0.21, to $56.44/bbl.