Day Traders Diary

3/20/20

The major averages attempted to rally on Friday, but failed, concluding one of the most volatile weeks on Wall Street ever as investors grapple with mounting fears over the coronavirus' economic blow.

The Dow Jones Industrial Average closed down 913 points or more than 4%, at 19,173 after rallying more than 400 points earlier in the day. The S&P 500 slid 4.3% to 2,304. The Nasdaq Composite closed 3.8% lower at 6,879 after jumping more than 2%.

The Dow dropped more than 17% for the week, its biggest one-week fall since October 2008, when it slid 18.2%. The S&P 500 lost more than 13% week to date after dropping another 11.5% last week. The Nasdaq fell 12.6%. Both the S&P 500 and Nasdaq also had their worst weekly performances since the financial crisis in 2008. The 30-stock Dow is now 35.2% below its all-time high level from February, while the S&P 500 is 32.1% below its high.

A number of factors weighed down the market on Friday, including a stay-at-home order for New York State, a swift reversal in crude prices and a strengthening dollar. The rollover in oil, which has lost half its value in a month, is having a ripple effect, leading investors to sell assets in other markets. Oil gave back a strong gain to settle sharply lower.

Sources told CNBC that Ronin Capital, a clearing firm at the CME Group, was unable to meet its capital requirements. The news also weighed on stocks in the final two hours of trading because it was yet another sign of the pressure being put on some firms amid the sharp downturn in markets.

Shares of 3M dragged the Dow lower, falling more than 9% along with Disney. The S&P 500 tech sector rolled over to close more than 4% lower as Microsoft fell 3.8%. Qualcomm, meanwhile, slid 6.3%.

Investors got whiplash this week amid the massive daily swings in both directions. The S&P 500 concluded on Thursday a record streak of eight trading days with a closing change of at least 4%. The Cboe Volatility Index (VIX), Wall Street's preferred fear gauge, closed above 80 earlier in the week, topping its financial crisis peak.

The Dow is down more than 24% for March and is currently on pace for its biggest one-month fall since September 1931. The S&P 500 has dropped 22% month to date and is headed for its worst monthly performance since May 1940.

U.S. Treasuries gained buying interest amid the selling in equities and actions taken by the Fed. The 2-yr yield declined three basis points to 0.37%, and the 10-yr yield declined 18 basis points to 0.94%. The U.S. Dollar Index finished flat at 102.72.