Day Traders Diary

2/21/25

The major averages pulled back to end the weak with the Dow experiencing its worst day of the year due to growth fears and sticky inflation data. The Dow Jones Industrial Average fell 748 points or 1.69% led by weakness in UnitedHealth. The S&P 500 104 points or 1.7% while the Nasdaq Composite fell 438 points or 2.2%.

Dow component, UnitedHealth fell 7% as the Wall Street Journal reported that the insurer is under investigation by the Justice Department. The DOJ is looking into UNH's practices for recording diagnoses that can result in additional payments from the federal government for its Medicare Advantage plans. The decline put the stock on pace for its worst day since March 2020.

The tech sector rally has stalled of late. Nvidia and Palantir both fell 4% as traders shifted toward traditionally safer assets. Procter & Gamble climbed 1.8%, while General Mills and Kraft Heinz advanced more than 3% each.

In the bond market, the 10-year Treasury yield slipped 6.8 basis point to 4.43% while the 2-year Treasury yield fell 3.8 basis points to 4.22%. The University of Michigan consumer sentiment index fell to 64.7 in January, a decline of 10% and a steeper drop than expected as consumers feared  higher inflation ahead. The 5-year inflation outlook in the survey was 3.5%, the highest since 1995.

Traders are coming off a losing session in which the Dow shed 450 points led by a 6% decline in Walmart. The S&P 500 lost 0.4% and retreated from its recent all-time highs, while the Nasdaq Composite fell nearly 0.5%.

For the week, the S&P 500 slid about 1.7%, while the Dow and Nasdaq both lost 2.5%.

Gold was modestly lower today, but up 1.7% this week after rising to a new record high of $2,954.69 on Thursday. Oil was lower on the day and the week on easing Mideast tension. Bitcoin fell 1.5% as the digital currency fell back to the lower end of its trading range.