Day Traders Diary

10/8/20

The major averages trimmed their initial gains after comments from House Speaker Nancy Pelosi dampened sentiment around a potential smaller coronavirus aid package. The Dow Jones Industrial Average finished up 122 points or 0.4%. The S&P 500 rose 27 points or 0.8% while the Nasdaq Composite rose 56 points or 0.5%.

Pelosi, D-Calif., told reporters there will not be a stand-alone stimulus bill for airlines — something President Donald Trump had pushed for the day before —  without a bigger aid package. United Airlines was down 0.3% and American Airlines slid 0.5%.

Earlier in the day, stocks were up after President Donald Trump said that the administration and Democrats were "starting to have some very productive talks." His comments came after he urged lawmakers to push through coronavirus aid for airlines, sparking a massive market rally on Wednesday. (Click here for the latest news on the coronavirus.)

The Dow had its best day since mid July on Wednesday, rallying more than 1%. The S&P 500 and Nasdaq were also up more than 1% during the previous session.

Investors also digested the latest U.S. weekly jobless claims data on Thursday, which showed an additional 840,000 Americans filed for unemployment benefits for the first time. Economists polled by Dow Jones expected first-time claims for unemployment insurance to total 825,000 for the week ending Oct. 3.

The major averages are higher for October after clawing back losses suffered in September, the market's first negative month since March. Still, a host of risks remain in the market, including rising Covid-19 cases around the world, as well as a slowdown in the rate of the economic recovery.

In other positive developments, crude prices rose 3% while Regeneron rose 1.4% requested emergency use authorization for its COVID-19 antibody therapy. Boeing rose 2.1% after reported talks with Alaska Airlines about a potential 737 Max order.

Separately, Morgan Stanley said it will acquire Eaton Vance for approximately $7 billion, or $56.50 per share, in cash and stock.

U.S. Treasuries edged higher in a steady advance despite the gains in equities, which meant yields moved lower. The 2-yr yield decline two basis points to 0.13%, and the 10-yr yield declined two basis points to 0.77%. The U.S. Dollar Index finished little changed at 93.59.