Day Traders Diary

5/18/20

The major averages surged on positive news from drug maker, Moderna on their vaccine trial stoking optimism about a potential coronavirus vaccine.

The Dow Jones Industrial Average rose 911 points higher, or 3.9% to $24,597. The S&P 500 gained 3.2% while the Nasdaq Composite advanced 2.4%. The Dow and S&P 500 both had their biggest one-day gains since April 8 while the Nasdaq posted its best rally since April 29.

Moderna shares rallied 20% after the company reported "positive" phase one results for a potential coronavirus vaccine. The company said that after two doses all 45 trial participants had developed coronavirus antibodies.

Disney closed 7.15% higher while MGM Resorts rallied 10.5%. Cruise operator Carnival gained 15.2%. Delta and United Airlines both rose more than 13%. Netflix — a stock that has benefited from people staying at home — closed 0.3% lower.

Bank stocks rose broadly. Wells Fargo jumped more than 8% while Bank of America and Citigroup both closed over 6% higher. JPMorgan Chase advanced 5.3%. The Nasdaq Composite and S&P 500 fell 1.1% and 2.2%, respectively, last week with the latter notching its worst week since March. The Dow finished the week down 2.65% for its third negative week in four and its worst week since April 3.

All 11 S&P 500 sectors finished higher, including leadership from the energy (+7.6%), industrials (+6.6%), and financials (+5.3%) sectors. Oil prices climbed 8.3%, or $2.44, to $31.82/bbl back to levels not seen since the shelter in place orders. 

Treasury yields increased as safe-haven demand waned amid today's bullish mindset. The 2-yr yield increased four basis points to 0.19%, and the 10-yr yield increased ten basis points to 0.74%. The U.S. Dollar Index declined 0.8% to 99.60.