Day Traders Diary

1/30/20

The major averages rebounded to close higher after a sharp pullback to start the day due to concerns of the coronavirus. The Dow Jones Industrial Average finished up 124 points, or 0.4%. At its low of the day, the Dow was down 244 points. The S&P 500 ended the day up 0.3%. The Nasdaq Composite also gained 0.3%.

The major averages started paring losses with roughly one hour to go after the World Health Organization declared a global health emergency, but at the same time, did not recommend travel to China be restricted and said the country had the situation under control.

Airline stocks also rebounded, with American and United each closing more than 3% higher. Las Vegas Sands and Wynn Resorts, two coronavirus proxies for their gaming exposure in Macao, ended the day up more than 2% each.

Earnings continue to come in. In the tech space Microsoft shined up 2.8% on earnings. Tesla jumped 10% while Mondelez rose 7.8%. ServiceNow was up 9.2% while Coke and Eli Lilly rose over 3% on earnings.

To the downside, Facebook fell 6.1%, Thermo Fisher dropped 4.2%, DuPont was down 8.6%, UPS fell 6.7% and Verizon closed down modestly on earnings.

Stocks were down for most of the session as the death toll in China from the coronavirus hit 171, with confirmed cases of the virus surpassing 8,000. The Centers for Disease Control and Prevention later confirmed the first human-to-human transmission of the virus in the U.S., pushing the major indexes back towards their session lows.

U.S. Treasuries posted modest gains, although they did begin to lose traction toward the end of the session. The 2-yield declined three basis points to 1.39%, and the 10-yr yield declined four basis points to 1.56%. The U.S. Dollar Index declined 0.1% to 97.86. WTI crude fell 2.2%, or $1.18, to $52.18/bbl.