Day Traders Diary

11/18/20

The major averages pulled back on Wednesday as the market's recent rally to new records took a breather on cautious comments from Governor Cuomo and Mayor de Blasio. The Dow Jones Industrial Average closed down 344 points or 1.16% after rising as much as 147 points at its session high. The S&P 500 dipped 41 points or 1.16% while the tech-heavy Nasdaq Composite dropped 97 points or 0.82%.

The U.S. is grappling with rising Covid-19 infections ahead of a likely tough winter. The country is recording roughly 157,000 new coronavirus cases per day, on average, as of Tuesday, according to a CNBC analysis of Johns Hopkins data. That's another new record and nearly 30% higher than infection levels a week ago.

The major averages turned sharply lower after Mayor Bill de Blasio announced New York City's public schools will move to remote learning only as the city tries to tamp down a growing number of coronavirus cases.

Some stay-at-home stocks jumped after the announcement of the shuttering of the nation's largest school system. Video conferencing company Zoom Video rallied more than 3%, while Peloton gained 1.9%.

Meanwhile, shares of major technology companies led the broader market lower. Amazon, Microsoft, Alphabet and Facebook all fell at least 0.5%.

The major averages were on pace for their second straight day of losses. The Dow and the S&P 500 both hit new record highs on Monday following positive vaccine news.

Pfizer released the final data on its vaccine candidate with BioNTech, which turned out even better than the initial data. The companies said the vaccine was 95% effective in preventing Covid-19 and fended off severe infection in the trial, adding that they plan to submit an application for emergency use authorization "within days."

Dow-member Boeing jumped as much as 4% as the Federal Aviation Administration lifted its ban on Boeing's 737 Max after a 20-month grounding following two deadly crashes. The stock last traded near the flat line.

Meanwhile, Target shares rose about 2% after the retailer's third quarter earnings topped estimates because of booming digital sales.

Stocks are still having a strong month on the back of positive developments around Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares for cyclical plays.

U.S. Treasuries finished near their flat lines in a lackluster session for bonds. The 2-yr yield and 10-yr yield increased one basis point each to 0.17% and 0.88%, respectively. The U.S. Dollar Index finished flat at 92.40. WTI crude futures gained 0.9%, or $0.37, to $41.80/bbl following a smaller-than-expected weekly inventory build.