Day Traders Diary

9/21/20

The major averages fell sharply on Monday as fears about the potential worsening of the coronavirus pandemic, as well as uncertainty on further U.S. fiscal stimulus, rattled traders. The Dow Jones Industrial Average dropped 510 points, or 1.8%. The S&P 500 lost 38 points or 1.1% while the Nasdaq Composite fell just 14 point or 0.13%.

Monday's decline put the Dow on pace for its worst day since Sept. 3. The S&P 500 was headed for its biggest one-day sell-off since Sept. 10. These declines added to what has been a downbeat month on Wall Street. The S&P 500 is down more than 6% in September and the Dow has lost 4.9%. The Nasdaq Composite has tumbled 9.1% month to date and has reentered correction territory. The tech-heavy composite is now down more than 11% from its all-time high set on Sept. 2. The S&P 500, meanwhile, fell back towards the flatline for 2020.

Concerns over another wave of coronavirus cases came as the U.K. reportedly considers another national lockdown to stop an increase in infections. Top U.K. government scientists said that, without further action, the country's infection rate could reach 50,000 per day. The country's benchmark FTSE 100 dropped more than 3% on the fear. Here in the U.S., stocks that would be hit hardest from another lockdown declined. Shares of Carnival fell by 6.4%. Southwest Airlines and Delta Air Lines fell 5.6% and 8.7%, respectively.

In Washington, negotiations for a new coronavirus stimulus bill could become more complicated after the passing of Supreme Court Justice Ruth Bader Ginsburg, which could lead to a bitter nomination process ahead of the election. President Donald Trump said he would nominate someone this week to take Ginsburg's seat. Republicans and Democrats have been in a stalemate since July after provisions from the previous stimulus bill expired.

Technology shares, which led the broader market off its coronavirus lows and into record territory, have been hit hard so far in September, struggling once again. Facebook and Amazon each dropped more than 1%. Alphabet slid 1.6%.

U.S. Treasuries finished higher on the longer-end of the curve. The 2-yr yield increased one basis point to 0.14%, while the 10-yr yield declined two basis points to 0.67%. The U.S. Dollar Index rose 0.7% to 93.56. WTI crude futures fell 3.9%, or $1.63, to $39.69/bbl.