Day Traders Diary


The major averages rebounded today following the worst trading day in eight months. The comeback rally gained steam steadily through the session as a bounce in Treasury yields soothed some concerns that a Covid resurgence would slow down the economic recovery. As the 10-year yield climbed back above 1.20%.

The Dow Jones Industrial Average rose 549.95 points, or 1.6%, to 34,511.99, following its 725 point-decline Monday. It was the biggest jump for the Dow in more than a month. The S&P 500 climbed 1.52% to 4,323.06 and the Nasdaq Composite added 1.57% to 14,498.88. The small-cap benchmark Russell 2000 index saw the biggest rebound with a 3% gain.

Many of the stocks that were hit the hardest on Monday, on concerns about Covid-19′s delta variant, regained their losses Tuesday. Airlines and cruise companies led the rebound. American Airlines and Delta Air Lines, which lost 4% in the sell-off, added 8% and 5%, respectively, on Tuesday. Royal Caribbean gained more than 7%, after falling 4% on Monday.

Bank shares bounced back too as bond yields climbed higher. JPMorgan shares rose 1.8% and Bank of America gained 2%. Regional banks led the financials sector, with Zions Bancorp and Regions Financial gaining 5% and 4%, respectively. Regional banks tend to trade closely along with the 10-year yield.

Energy and industrial stocks — two of the hardest hit groups from Monday — also snapped back. Exxon Mobil rose more than 1%, General Electric jumped 5% and Honeywell gained 4%.

Apple shares climbed steadily throughout the session to a 2.6% gain, erasing Monday losses.

Wall Street's sharp sell-off Monday saw the blue-chip Dow tumble 2.1% to post its worst day since October 28 of last year. The S&P 500 fell 1.6% and the Nasdaq Composite dropped about 1.1%.

With Tuesday's rebound, the S&P 500 sits 1.6% below its record hit last week. During Monday's losses, the equity benchmark traded below its 50-day moving average at one point. However, the index managed to close above that key technical level Monday, an optimistic sign for traders that foreshadowed Tuesday's rebound.

CNBC's Jim Cramer said the sell-off Monday pushed out some of the speculators taking too much risk in stocks this year and it would end soon.

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