Day Traders Diary

5/20/20

The major averages rebounded sharply from yesterday's sell off, building on the week's gains, as traders increased bets of an economic recovery with more states, in fact all 50 states, easing stay-at-home orders. The Dow Jones Industrial Average closed up 369 points or 1.5%, at 24,575. The S&P 500 advanced 1.7% to 2,971, its highest closing level since March 6. The Nasdaq Composite outperformed, rallying 2.1% to 9,375.

Wednesday's advance put the major averages up more than 3% for the week. It also put the Nasdaq up 4.5% for 2020, adding to the index's lead over the Dow and S&P 500 year to date. The tech-heavy index closed Wednesday's session less than 5% from its February record.

Facebook shares rallied more than 6% to reach a record high. Amazon also hit an all-time high, closing higher by 2%. Shares of MGM Resorts, United Airlines and Live Nation Entertainment all rose more than 5%. Those companies have all taken a beating this year amid the global economic shutdown.

The major averages fell off their session highs Wednesday after the Senate passed a bill that would increase oversight of Chinese companies. The bill would also ban some Chinese companies from listing on U.S. exchanges. U.S.-listed shares of Alibaba, Baidu and JD.com all fell from their highs amid the news.

Shares of Target and Lowe's struggled throughout the session despite beating top and bottom-line estimates. Analog Devices rose 7% on earnings, lifting the semiconductor space.

Separately, the FOMC Minutes from the April meeting revealed that policymakers discussed targeting yields on shorter tenors and considered changes to how forward guidance is expressed. The 2-yr yield declined two basis points to 0.16%, and the 10-yr yield declined three basis points to 0.68%. The U.S. Dollar Index declined 0.2% to 99.14.