Day Traders Diary

10/29/20

The major averages rebounded, clawing back some of their losses from the previous session, as shares of major tech companies advanced ahead of their quarterly earnings reports. Sentiment also got a lift from better-than-expected economic data.

The S&P 500 climbed 1.2% and the Nasdaq Composite advanced 1.6%. The Dow Jones Industrial Average closed 139 points higher, or 0.5%.

The S&P 500 climbed 1.2% to 3,310.11 and the Nasdaq Composite advanced 1.6% to 11,185.59. The Dow Jones Industrial Average closed 139.16 points higher, or 0.5%, at 26,659.11. Thursday marked the first daily gain for the Dow in five days. The S&P 500 snapped a three-day slide.

Shares of Amazon and Apple rose 1.5% and 3.7%, respectively. Alphabet closed 3.1% higher and Facebook popped nearly 5%. Six of the 11 S&P 500 sectors gained more than 1%, including tech and communication services. Netflix, meanwhile, surged more than 5% after the company announced it will raise prices for U.S. subscribers.

U.S. gross domestic product for the third quarter expanded at a 33.1% annualized pace, its fastest growth ever. The reading came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones.

Meanwhile, the number of first-time unemployment-benefits filers declined for a second straight week and hit its lowest level since March. Initial weekly U.S. jobless claims came in at 751,000 for the week ending Oct. 24, better than a Dow Jones estimate of 778,000.

Thursday's moves came a day after the market's biggest sell-off in months. Both the Dow and S&P 500 had their worst day on Wednesday since June. The Nasdaq had its biggest one-day drop since Sept. 8.

In other corporate news, Netflix rose 3% after increasing its prices for U.S. subscribers. Visa rose 2% after beating top and bottom-line estimates. Marvell fell 3% agreeing to acquire Inphi for $10 billion deal.

The positive showing in equities decreased interest in U.S. Treasuries and hedging activity. The CBOE Volatility Index fell 6.7% to 37.57. The 2-yr yield finished flat at 0.15%, while the 10-yr yield rose five basis points to 0.84%. The U.S. Dollar Index increased 0.6% to 93.92, which was one headwind for oil prices ($36.13, -1.32, -3.5%).