Day Traders Diary

3/11/21

The Dow and S&P 500 hit new record highs as tech rebounds following the signing of additional fiscal stimulus gave sentiment a further boost. The S&P 500 climbed 1% to reach an all-time high, its first record since Feb. 16. The Dow Jones Industrial Average added 220 points to hit another intraday record. The Nasdaq Composite jumped 2.5% amid a rotation back into tech shares. Tesla was up 4%. Apple, Facebook and Netflix all jumped at least 2%, while Amazon, Alphabet and Microsoft shares were also higher.

Tech and growth stocks are rebounding from a swift correction triggered by rising interest rates. Higher rates make profits in far-off years seem less attractive to investors and can knock down stocks with relatively high valuations.

The Nasdaq Composite dipped into correction territory on Monday, falling more than 10% from its recent high. Now the tech-heavy benchmark is about 5% off its record high.

President Joe Biden signed a $1.9 trillion coronavirus relief package into law Thursday afternoon. The plan will send direct payments of up to $1,400 to most Americans, and will also put nearly $20 billion into Covid-19 vaccinations and $350 billion into state, local and tribal relief.

The White House said Thursday that stimulus checks could start hitting bank accounts this weekend.

The 10-year Treasury yield, which had retreated from its recent high of 1.6%, was little changed at 1.52% on Thursday.

The economic reopening, coupled with additional fiscal stimulus, accelerated the rotation into more cyclical sectors, such as energy. The S&P 500 energy sector has been the biggest winner this year, up 40% so far.

On the data front, investors cheered a slightly better-than-expected reading on weekly jobless claims. The Labor Department reported that first-time filings for unemployment insurance in the week ended March 6 totaled a seasonally adjusted 712,000, below the Dow Jones estimate of 725,000.

Chip stocks rallied Thursday after China's semiconductor trade association formed a new working group to work with their U.S. counterparts to ease recent trade tensions between the two countries. Nvidia and Broadcom jumped 4%, while Xilinx and AMD popped 6.6% and 5.3%, respectively.