Day Traders Diary
The major averages close modestly lower after giving up a massive rally from earlier in the day, as Wall Street assessed the latest news on the coronavirus outbreak.
The Dow Jones Industrial Average closed 26 points lower, or 0.1%, at 22,653. The 30-stock average rose as much as 937.25 points, or 4.1%, at its session high. The S&P 500 ended the day 0.2% lower at 2,659.41 after jumping more than 3%. The Nasdaq Composite fell 0.3% to 7,887.26 following a 3% rally. Tuesday's roll-over follows a massive rally in the previous session, in which the Dow had its third-biggest point gain on record.
Some investors believed stock prices were getting ahead of the reality where coronavirus shutdowns are likely to weigh on the economy significantly beyond the second quarter. The major averages have rallied about 20% from their March 23 lows. In the U.S., the number of new cases appears to have fallen in recent days from their recent peak. On Tuesday, New York Gov. Andrew Cuomo reported the state's biggest one-day jump in deaths, but also said hospitalizations are slowing. Italy and Spain, two of the hardest-hit countries, are also seeing new cases fall off.
In Asia, South Korea reported less than 50 new cases of infection for the second day running. China also posted no new deaths as of April 6 for the first time since January when it started publishing daily updates. The two Asian countries were among those which saw spikes in infection rates earlier in the outbreak, with the first cases being reported out of China.
Still, the cases in the U.S., the world's most affected country, topped 386,000 with at least 10,000 deaths, according to data from Johns Hopkins University.
Stocks are still in bear-market territory with the S&P 500 about 20% off its record high. Many on Wall Street believe stocks haven't fully priced in the potential corporate earnings collapse as the coronavirus outbreak has virtually shut down the global economy.
Regarding additional stimulus, House Speaker Nancy Pelosi told Democratic lawmakers that she wants the next spending package to be at least $1 trillion. Meanwhile, Senate Majority Leader, Mitch McConnell, said that he expects the increase to the small business loan program to be approved on Thursday.
Treasuries retreated during the first half of the session but narrowed their losses as the day went on. The 10-yr yield ended higher by six basis points at 0.74%.
The U.S. Dollar Index fell 0.8% to 99.88, returning to levels from Thursday.
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