Day Traders Diary

2/4/20

The major averages rebounded, building on solid gains from the previous session as the market recovers from a steep sell-off that was sparked by worries over the coronavirus. The Dow Jones Industrial Average closed up 409 points higher, or 1.4%. The S&P 500 gained 1.5% while the Nasdaq Composite advanced 2.1% to a record.

Stocks that have been hit by fears of the coronavirus slowing the economy bounced on Tuesday. Apple jumped 3.3%. Nvidia and Micron rose more than 2.5% each. Companies directly impacted by the coronavirus, including Carnival, which confirmed on Monday that a former cruise-line passenger tested positive for the virus, rose. Carnival added 1.9%. American and United were both up by more than 5%.

Tesla, meanwhile, powered the Nasdaq with a surge of more than 13% that lifted the stock above $900 for the first time. That rally follows Tesla's best day in six years. Billionaire investor Ron Baron, a longtime Tesla bull, said Tuesday that Tesla could see revenues of $1 trillion in 10 years. Tesla, however, gave back a chunk of its gains in the final minutes of trading. At its high of the day, Tesla had surged more than 24%.

Microsoft and Caterpillar both rose around 3% to contribute to the gains. Google was a dog down 2.6% following earnings.

In M&A news, eBay rose 8% after The Wall Street Journal reported that Intercontinental Exchange offered to acquire the company in a deal that would value it at more than $30 billion.

WTI crude gave up a 2.9% intraday gain and fell deeper into bear market territory with a loss of 0.9%, or $0.44, to $49.61/bbl. Prices remained hampered by poor sentiment and lowered expectations for oil demand.

The 2-yr yield rose six basis points to 1.41%, and the 10-yr yield rose eight basis points to 1.60%. The U.S. Dollar Index advanced 0.1% to 97.94. Gold futures fell 1.7% to $1555.70/ozt.