Day Traders Diary

3/17/20

The major averages rebounding from the worst day in more than three decades as Wall Street cheers a possible White House plan that could inject $1 trillion into the U.S. economy to cushion the blow of the coronavirus.

The Dow Jones Industrial Average closed 1,048.79 points higher, or 5.2%, at 21,237. It briefly dipped below 20,000 for the first time since February 2017 before rebounding. The S&P 500 was up 6% at 2,529 while the Nasdaq Composite gained 6.2% to end the day at 7,334.

The Trump administration is weighing a fiscal stimulus package of more than $1 trillion that includes direct payments to Americans, according to a source familiar with the matter. Earlier, Treasury Secretary Steven Mnuchin told reporters the government is considering directly sending checks to Americans in the next two weeks. "Americans need cash now," he said.

Mnuchin added corporations will be able to defer tax payments of up to $10 million while individuals could defer up to $1 million in payments to the Internal Revenue Service. Mnuchin also said President Donald Trump authorized the deferral of $300 billion in IRS payments. Sources also told CNBC that U.S. regulators are considering changes to loosen bank liquidity.

Treasury yields jumped, with the 10-year U.S. rate breaking back above 1%. Yields move inversely to prices. The Federal Reserve announced measures to help companies struggling to get short-term funding amid the outbreak. The market has been hampered by a lack of demand for paper issued, and Wall Street has been looking for central bank intervention along the lines of what happened during the financial crisis.

Amazon shares jumped 7% after an analyst at Bank of America noted the e-commerce giant will benefit from the global "in-home shift" due to the coronavirus. Netflix climbed 7% as well while Apple closed 4.3% higher.

Biotech giant Regeneron, meanwhile, said Tuesday morning that it's aiming to have doses of a potential drug for COVID-19 ready to start human clinical trials by early summer. The announcement, which represents a marked acceleration in the company's drug timeline, sparked a 11.5% rally in the company's equity.

More than 5,700 cases have been confirmed in the U.S. along with more than 90 deaths, according to data from Johns Hopkins University. President Donald Trump also said the crisis could stretch into August, adding the administration may look at locking down "certain areas."

The Dow and S&P 500 had on Monday their biggest one-day losses since 1987, falling 12.9% and 12%, respectively. It was also the Dow's third-worst day ever. The Nasdaq Composite had its biggest one-day plunge ever, tumbling 12.3%.