Day Traders Diary

10/26/20

The major averages sold off sharply as coronavirus infections jumped while negotiations for a fiscal stimulus package before the election stalled once again.

The Dow Jones Industrial Average closed 650 points lower, or 2.3%, at 27,685. The S&P 500 slid 1.9% to 3,400 while the Nasdaq Composite dipped 1.6% to 11,358. Monday's decline erased the monthly gains for the Dow Industrials. It was the Dow's biggest one-day drop since Sept. 3 and its first close below 28,000 since Oct. 6. The Dow briefly fell as much as 965.41 points, or 3.4%.

The decline came as data compiled by Johns Hopkins University showed daily coronavirus cases in the U.S. have risen by an average of 68,767 over the past seven days, a record. On Sunday alone, more than 60,000 cases were reported. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July.

House Speaker Nancy Pelosi, D-Calif., said she noted that a fiscal  deal must be reached "as soon as possible," but added that "we cannot accept the Administration's refusal to crush the virus, honor our heroes or put money in the pockets of the American people."

Stocks with the most to lose from rising cases and a stalled stimulus plan led the decline Monday. Royal Caribbean shares fell 9.7% and were the biggest laggards in the S&P 500. Delta fell 6.1%. Norwegian Cruise Line closed 8.5% lower and United Airlines slid 7%. American Airlines pulled back by 6.4%.

SAP, one of the biggest software companies in Europe, saw its shares plunge more than 20% after warning that businesses are holding back from spending; it also cut its earnings and revenue estimates for 2020. Oracle and Microsoft followed SAP lower, sliding 4% and 2.8%, respectively.

This week marks the last week of October and the final trading period before Nov. 3. Former Vice President Joe Biden maintains a sizable lead over President Donald Trump in national polls, although the gap has narrowed slightly as of late.