Day Traders Diary

1/3/21

The major averages start the new year to the upside, betting the economy could overcome the latest surge in Covid cases and lifted two of their favorite stocks to significant milestones. The Dow Jones Industrial Average rose 246 points, or 0.6%, to hit a record close of 36,585. The S&P 500 also notched a record close, up 30 points or 0.6% to reach 4,796. The Nasdaq led the gains, advancing 187 points or 1.2% to hit 15,832.

Apple shares gained to become the first company ever with a $3 trillion market valuation, and Tesla shares jumped 13.5% in a single day.

Bond yields jumped to start the year with the 10-year Treasury yield topping 1.6%. That gave a lift to bank stocks, with Bank of America jumping 3.8%. Wells Fargo gained 5.7% after an upgrade from Barclays.

Tesla helped generate some of the momentum Monday, jumping after the electric vehicle company reported 308,600 deliveries in the fourth quarter, beating expectations. Along with Tesla, big automakers also saw their shares climb. Ford Motor and General Motors rose about 4.8% and 4.3%, respectively.

The S&P 500 consumer discretionary sector, which is home to TSLA and AMZN, advanced 2.8%, but it was outdone by the energy sector up 3% amid higher oil prices. The financials (+1.2%) and information technology (+1.2%) sectors followed suit, with the former keying off a big jump in longer-dated Treasury yields.

Shares of Pfizer (PFE 56.65, -2.40, -4.1%) and BioNTech (BNTX 231.85, -25.95, -10.1%) declined noticeably amid an expected decision from the FDA, which approved their COVID-19 vaccine for kids aged 12-15. The FDA also shortened the time between the second dose and booster dose to at least five months (down from six months).

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