Day Traders Diary

5/19/20

The major averages fell for the first time in four days giving back some of the strong gains from the previous session, amid sharp losses from retail and bank shares. The Dow Jones Industrial Average dropped 390 points, or 1.6%, to close at 24,206. The S&P 500 slid 1.1% to 2,922 while the Nasdaq Composite lost 0.5% and closed at 9,185.

The major averages were under pressure in the final hour of trading after a STAT News report raised concerns about the trial results for a potential coronavirus vaccine from Moderna. Shares of the biotechnology company dropped 10.4%.

Bank shares fell broadly on Tuesday. Wells Fargo dropped 5.8% while Bank of America and Citigroup slid more than 2.7% each. JPMorgan dropped nearly 2%. Those losses came on the back of strong gains from Monday's session.

Home Depot shares lost 3% to lead the Dow lower after the home improvement retailer said net income last quarter dropped 10.7% due to extra costs related to the pandemic. Although the retailer also said sales increased by 7% for the period. Walmart shares were down 2.1%, giving up earlier gains, despite soaring e-commerce sales in the first quarter.

All 11 S&P 500 sectors finished in negative territory, most notably the financials and energy sectors.

In Washington, Fed Chair Powell and Treasury Secretary Mnuchin testified before the Senate Banking Committee regarding the government response to COVID-19. Mr. Powell reiterated the Fed's commitment to using its full range of tools to support the economy, and Mr. Mnuchin said he's prepared to increase risk and lend more money.

U.S. Treasuries ended the session with small gains. The 2-yr yield declined one basis point to 0.18%, and the 10-yr yield declined three basis points to 0.71%. The U.S. Dollar Index declined 0.1% to 99.55. WTI crude rose another 1.5%, or $0.48, to $32.30/bbl.