Day Traders Diary

2/26/20

The major averages tried to rebound but sold off into the close for a fourth straight day. The Dow Jones Industrial Average finished down 123 points or 0.5%, at 26,957. The Dow rose as much as 461 points, or 1.7%, earlier in the session. The S&P 500 fell 0.4% to 3,116 after rallying more than 1% to start off Wednesday's session. The Nasdaq Composite was up just 0.2% at 8,980 after rising as much as 2%.

The news overnight was not positive in terms of containing the spread of the coronavirus. South Korea reported 169 new cases, bringing the country's total to 1,146 infected. In Italy, infections now total 325 and cases are now being seen beyond the original epicenter in the north. China reported 406 new confirmed cases, and an additional 52 deaths.

The Cboe Volatility Index, known as the market's "fear gauge," traded at 28.4 on Wednesday, hovering near its highest level since December 2018.

Disney was the worst-performing Dow stock, trading more than 3% lower after Bob Iger stepped down from his role as CEO. Exxon Mobil and Chevron fell more than 2% each, adding to the Dow's losses. Energy, utilities and real estate were dragged the S&P 500 lower. Energy dropped nearly 3% while utilities and real estate both dipped more than 0.8%.

Toll Brothers was down 14% on earnings while Lowe's fell 4% after lowering guidance due to the coronavirus. After hours, Microsoft sold off after lowering guidance due to the coronavirus.

On the plus side, TJX Companies rose 7% reported solid quarterly results, a dividend hike and a new share buyback plan.

U.S. Treasuries were less in focus today, but the continued gains in the bond market weren't conducive for risk sentiment. The 2-yr yield declined five basis points to 1.15%, and the 10-yr yield declined two basis points to 1.31%. The U.S. Dollar Index increased 0.2% to 99.13.