Day Traders Diary

10/6/20

The major averages sold off sharply following comments from President Donald Trump instructing White House officials to halt negotiations on further coronavirus stimulus. The Dow Jones Industrial Average closed down 375 points or 1.3%. Earlier in the day, the 30-stock average was up more than 200 points. The S&P 500 closed down 47 points or 1.4% while the Nasdaq Composite slid 1.57% or 177 points.

Shares of Boeing dropped 6.8% to lead the Dow lower. Amazon slid 3.1% while Facebook, Netflix, Alphabet, Microsoft and Apple all declined more than 2%.

Airlines were also under pressure as the industry was hinging on additional aid to avoid more layoffs. United Airlines and Delta were down 3.7% and 2.9%, respectively. American slid 4.5% and Southwest pulled back by 2.4%.

Earlier in the day, Federal Reserve Chairman Jerome Powell once again called for additional fiscal aid, saying it is necessary for the economic recovery to continue.

Stocks soared on Monday as investors grew more optimistic about President Donald Trump's health and the possibility of additional economic relief. Both the Nasdaq and S&P 500 had their biggest one-day gain since Sept. 9. The Dow posted its best daily performance since July 14. On Tuesday, the White House said Trump reported no symptoms after his first night out of the hospital.

Still, the major averages are coming off their first monthly decline since March as concern around the pandemic and uncertainty over the Nov. 3 presidential election dimmed market sentiment.

Investors returned to the Treasury market where longer-dated yields had been on the rise on stimulus hopes. The 2-yr yield increased one basis point to 0.15%, while the 10-yr yield declined two basis points to 0.74% after touching 0.79% at its intraday high. The U.S. Dollar Index increased 0.2% to 93.70.