Day Traders Diary

12/22/20

The major averages closed mixed as the S&P 500 fell for a third straight session on Tuesday even after Congress approved a long-delayed coronavirus relief package. The S&P 500 declined 7 points to 3,687. The Dow Jones Industrial Average slipped 200 points, or 0.7%, to 30,015. The Nasdaq Composite eked out a 0.5% gain to close at 12,807, supported by a 2.9% jump in Apple shares amid investor enthusiasm around its reported foray into self-driving vehicles.

Equity investors could be taking chips off the table after registering solid gains in 2020. With less than two weeks left, the S&P 500 is up more than 14% for the year, while the 30-stock Dow has gained over5%. The Nasdaq Composite has soared 42.7% this year as traders stuck with their tech darlings during the pandemic.

Congressional leaders attached $900 billion in pandemic aid to a $1.4 trillion measure to fund the government through Sept. 30. President Donald Trump is expected to sign it into law in the coming days, weeks before he will leave office. Treasury Secretary Steven Mnuchin told CNBC on Monday that Americans could receive their stimulus checks in a matter of days.

Travel-related stocks came under pressure once again amid lingering concerns about a new variant of Covid-19 in the U.K. Many European countries implemented travel restrictions on visitors from the U.K., and New York Gov. Andrew Cuomo called for the United States to take similar steps.

American Airlines dropped 3.9% and United fell 2.5%. Carnival fell nearly 6%, while Royal Caribbean dipped nearly 3%. Norwegian Cruise Line slid 6.9%

However, many experts, including those from the World Health Organization, said that the coronavirus vaccines from Pfizer and Moderna would likely be effective against the new variant and that Covid was mutating at a slower pace than the seasonal flu.

On the data front, the final reading on third-quarter gross domestic product came to a growth of 33.4% on an annualized basis, compared to 33.1% expected. Meanwhile, U.S. consumer confidence fell for the second straight month in December and missed expectations.

In other news, Walmart fell to a six-week low after the Department of Justice sued the retail giant over its role in the opioid crisis.

Longer-dated Treasuries recorded modest gains while the 2-yr ended flat. The 10-yr yield fell two basis points to 0.92%.