Day Traders Diary

5/4/20

The major averages stage a turn around to finish in the greens thanks to advances in the biggest U.S. technology stocks. The Dow Jones Industrial Average finished up 26 points at 23,749 after being down as much as 360 points. The S&P 500 rose 0.4%, or 12 points, to 2,842. The Nasdaq Composite climbed 1.2%, or 105 points, to 8,710, supported by strong gains in big tech stocks. Microsoft and Netflix jumped 2.4% and 3.0%, respectively, while Apple and Facebook both rose 1.4%.

The continued strength in tech outweighed losses in airline shares, following Warren Buffett's comments over the weekend that his Berkshire Hathaway dumped the entirety of its stakes in the sector because of the coronavirus outbreak.

Airline shares were among the biggest losers in the S&P 500, with Delta, United, American Airlines all dropping more than 5%. Plane maker Boeing also fell 1.4%.

While Buffett was optimistic over the long term about the outlook for America, the move shows his concern that the pandemic has changed certain industries permanently and could be a sign that other investors are too optimistic about the economy returning to normal quickly.

Disney fell more than 2% following a downgrade at MoffettNathanson. The firm said the economic hit to the entertainment giant will last longer than expected, with theme parks in particular facing a multi-year recovery.

More states are looking toward reopening nonessential businesses and easing stay-at-home orders as the new coronavirus cases slowed down over the weeks. California governor Gavin Newsom said Monday some businesses can reopen "as early as the end of this week."

However, this easing comes as data from the World Health Organization showed the U.S. had its deadliest 24 hours of the outbreak between Thursday and Friday.

Tyson Foods was a notable earnings laggard after the company missed top and bottom-line estimates.

U.S. Treasuries posted small gains to begin the week, pushing yields slightly lower. The 2-yr yield declined three basis points to 0.17%, and the 10-yr yield declined one basis point to 0.64%. The U.S. Dollar Index increased 0.5% to 99.54. WTI crude increased 3.0%, or $0.60, to $20.37/bbl.