Day Traders Diary

4/30/20

The major averages pulled back to end a wild, but positive month of April. The Dow Jones Industrial Average closed down 288 points or 1.2%, at 24,345. The S&P 500 slid 0.9% to 2,912. The Nasdaq Composite fell 0.3% to 8,889.

The S&P 500 posted its third-largest monthly gain since World War II, surging 12.7% in April. It was also its biggest one-month gain since 1987. The Dow had its fourth-largest post-war monthly rally with an 11.1% gain. The Dow also had its best month in 33 years.  The Nasdaq surged 15.5% in April, its biggest monthly gain since June 2000.

April's rally is a mirror image to the market action in March. Last month, the S&P 500 plunged 12.5% while the Dow lost over 13%. The gains in April marked just the fifth time in history the S&P 500 experienced 10% monthly moves in opposite directions during back-to-back months.

The Labor Department said another 3.84 million Americans filed for unemployment benefits last week, bringing the six-week total to more than 30 million. U.S. consumer spending also dropped 7.5% in March on a year-over-year basis. The sharp rise in jobless claims and the precipitous drop in consumer spending come as businesses are forced to shut down and consumers stay home amid the coronavirus pandemic.

Stocks were also under pressure Thursday after the European Central Bank refrained from increasing its emergency asset purchase program. Bank stocks were among the biggest laggards on Wall Street. Bank of America slid nearly 3% while Citigroup fell 3.4%. JPMorgan Chase slid 2.2%.

Separately, central banks remained committed to supporting the financial system. The Fed expanded the scope and eligibility for its Main Street Lending Program, and the ECB said it will conduct net asset purchases under its EUR750 billion pandemic emergency purchase program through at least the end of the year.

U.S. Treasuries ended the session near their flat lines. The 2-yr yield and the 10-yr yield declined one basis point each to 0.18% and 0.62%, respectively. The U.S. Dollar Index declined 0.6% to 99.01. WTI crude rose another 22.8%, or $3.45, to $18.58/bbl.