Day Traders Diary

2/18/20

The major averages pulled back as the Dow Jones Industrial Average fell for a third consecutive day, declining 165 points. The S&P 500 dipped 0.3% to end the day at 3,370. The Nasdaq Composite, however, eked out a small gain to post a record closing high at 9,732.

Apple cautioned it does not expect to meet its quarterly revenue forecast, citing slowed production and weakened demand in China as a result of the coronavirus outbreak. The most valuable company in the U.S. initially said it expected to report net sales between $63 billion to $67 billion in its fiscal second quarter. Apple also finished the session well off its lows of the day, closing 1.8% lower.

Apple's warning sent shares of some suppliers lower. Skyworks Solutions slid 1.9% while Xilinx and Qorvo dropped 1% and 2.6%, respectively.

China's National Health Commission on Tuesday reported an additional 98 deaths nationwide, with 1,886 new cases of the coronavirus. As of Feb. 17, the commission said there had been a total of 72,346 confirmed cases and 1,868 deaths.

Microsoft and Amazon which have a combined market cap of nearly $2.5 trillion, helped offset the weakness in Apple with 1% gains of their own. Both stocks extended their yearly gains to 18.7% and 16.6%, respectively, while Apple trimmed its yearly gain to 8.6%.

Walmart also outperformed despite missing profit estimates. Tesla resumed its parabolic advance after its price target was raised at Bernstein and Morgan Stanley, although both targets were well below TSLA's closing price.

Netflix rose 1.9% and reached a its highest level since July 2018.

The 2-yr yield declined two basis points to 1.40%, and the 10-yr yield declined three basis points to 1.56%. The U.S. Dollar Index rose 0.4% to 99.43. WTI crude inched up 0.1% (+$0.05) to $52.10/bbl, recouping its intraday losses.