Day Traders Diary

3/5/20

The major averages plunged again erasing most of the steep gains yesterday as markets remained highly volatile in the face of the spreading coronavirus. The Dow Jones Industrial Average finished down 969 points, or 3.5%, at 26,121 after falling as much as 1,150. The S&P 500 dropped 3.3%, or 106 points while the Nasdaq Composite fell 3.1%, or 279 to 8,738. All 11 S&P sectors finished the day in the red. Stocks turned sharply lower as the 10-year Treasury yield fell to an all-time low below 0.9%.

Fears about the coronavirus disrupting the global economy continued to grip Wall Street as countries around the world extended quarantines and travel restrictions. California declared a state of emergency after a coronavirus-related death and 53 confirmed cases in the state. The number of infections in New York also doubled overnight to 22 as the state ramps up its testing.

That angst fueled investor demand for safer assets like U.S. Treasuries and gold. The tumbling yields kept pressure on bank stocks, which led the major indexes lower. JPMorgan and Bank of America both dropped about 5%.

Airline stocks also took a huge beating, leading the declines in the Dow Jones Transportation Average, which dipped into bear market territory Thursday. United Airlines cratered 13.4%, while American Airlines tanked 13.2%, suffering its worst day since 2016.

Other travel-related stocks endured another ugly day with cruise operators like Royal Caribbean, Carnival and Norwegian Cruise Line Holdings down 13% or more. These three names are now down about 50% from this year's highs.

Retailer Kroger jumped 8% escaped today's carnage, spiking to a level not seen in more than two years after an earnings beat.

The CBOE Volatility Index jumped almost eight points today but stopped shy of reaching its intraday high from Monday and still of last Friday's highs.

Gold spiked almost 2.0% to trade within $20 of its high from February 24  to $1691.70/ozt.