Day Traders Diary

4/21/20

The major averages fell sharply once again on Tuesday as oil prices continued their unprecedented wipeout, further denting market sentiment and dampening the global economic outlook. The Dow Jones Industrial Average slid 630 points, or more than 2.6%. Tuesday's losses brought the Dow's two-day decline to more than 1,200 points. The S&P 500 dropped 2.7% while the Nasdaq Composite fell 3.5%.

Traders were focused on the strange happenings with oil futures once again, which raised concern about deep losses for the energy industry hitting the U.S. economy even further. The June contract for West Texas Intermediate settled down 43.4% at $11.57 per barrel.

President Donald Trump tweeted that he instructed the Energy and Treasury departments to "formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future."

Not helping sentiment were shares of IBM, which slipped 3% after the company reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus. Salesforce and Oracle both fell more than 4% after IBM said its software and global business segments suffered from strong headwinds in the last two weeks of March due to the virus. Coca-Cola and Travelers finished mixed following their earnings reports while Netflix is up afterhours following much better than expected subscriber numbers.  

Separately, news that Congressional leaders and the Trump administration reached a stimulus bill agreement, which reportedly includes $310 billion in small business funding, was encouraging but not market moving. The Senate and House will still need to vote on the bill.

In the U.S. Treasury market, longer-dated tenors continued to exhibit strength in a safety trade. The 2-yr yield declined one basis point to 0.20%, and the 10-yr yield declined six basis points to 0.57%. The U.S. Dollar Index increased 0.2% to 100.17.