Day Traders Diary

4/25/22

The major averages staged a major reversal with the Dow Jones Industrial Average recovering from a nearly 500-point intraday loss as technology names like Microsoft rallied amid falling interest rates.The blue-chip average rose 240 points, or 0.7%, after being down as much as 488 points earlier in the session. The S&P 500 ticked up 24 points or 0.6%. The tech-heavy Nasdaq Composite gained 165 points or 1.3%.

Concerns about a global economic slowdown amid Covid outbreaks in China sent interest rates lower. The 10-year Treasury yield pulled back to the 2.8% level.

Tech shares rebounded as rates fell, providing support to the major averages. Microsoft and Google parent Alphabet, each rose more than 2%, and Facebook parent Meta added about 1% ahead of quarterly earnings reports slated later this week.

Twitter rose about 5% after the social media company announced it accepted billionaire Elon Musk's buyout deal valued at about $44 billion.

Stocks bounced after the Nasdaq Composite fell into a bear market last week. The Nasdaq is now 19.9% from its record, while the S&P 500 is back in correction territory, down 10.9% from its high.

The Dow is coming off its worst one-day performance since 2020 on Friday and four straight losing weeks. The S&P 500 and the Nasdaq fell for three consecutive weeks.

Wall Street is bracing for a stacked week of earnings, particularly reports from major technology companies. About 160 companies in the S&P 500 are expected to report earnings this week, and all eyes will be on results from mega-cap tech names, including Amazon, Apple, Alphabet, Meta Platforms and Microsoft.

Coca-Cola shares were marginally higher after the company reported better-than-expected quarterly earnings before the bell Monday.

On the downside, fears of a global slowdown sent oil prices lower. WTI crude settled 3.5% lower Monday, back below $100.

Energy shares retreated, comprising the worst-performing S&P 500 sector Monday. Chevron fell about 2% and was the second-biggest decliner on the Dow. Exxon Mobil lost more than 3%.