Day Traders Diary
The major averages closed mixed again with the Dow Jones Industrial Average outperforming as investors pile into economic comeback plays after Senate approval of a new Covid stimulus package.
The blue-chip benchmark gained 306 points, or 1%, to 31,802 after jumping 650 points to hit an intraday record high. The S&P 500 erased a 1% gain to close 0.5% lower at 3,821, dragged down by tech. The Nasdaq Composite slid 2.4% in volatile trading to 12,609.16 as Apple dropped 4.2% and Tesla fell 5.8%. Alphabet and Netflix both slipped more than 4%.
The Senate passed a $1.9 trillion economic relief and stimulus bill on Saturday, paving the way for extensions to unemployment benefits, another round of stimulus checks and aid to state and local governments. The Democrat-controlled House is expected to pass the bill later this week. President Joe Biden is expected to sign it into law before unemployment aid programs expire on March 14.
Meanwhile, the Centers for Disease Control and Prevention said Monday people who've been fully vaccinated against Covid-19 can meet safely indoors without masks, further boosting reopening hopes. The positive news boosted stocks banking on a strong economic recovery.
Disney shares added more than 6% after California eased Covid rules, paving the way for Disneyland to reopen on a limited basis in April. American Airlines jumped nearly 5%, while United Airlines popped 7%. Target rose 2.5%.
Tech stocks remained the biggest losers on Monday, continuing the trend for the last few weeks. High-growth stocks, which were among the best performers last year, are particularly vulnerable as higher rates reduce the value of future cash flows.
Apple has fallen nearly 15% in the past month, while Tesla has dropped 34% in that period. Pandemic bets Zoom Video and Peloton have tumbled 24% and 30% over the past month.
Sentiment got a boost earlier Monday after hedge fund manager David Tepper said the recent sharp rise in rates is likely over and it's hard to be bearish on stocks right now.
The benchmark 10-year yield has risen sharply in recent weeks in anticipation of more stimulus on top of a booming economic recovery. The 10-year Treasury yield rose 4 basis points to 1.6% Monday. The benchmark rate started the calendar year below the 1% mark.
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