by Wolf Richter, Wolf Street:
Indexes backed off sharply into the close. Dow gave up 800 points of its 1,600-point spike. Nasdaq -1.5%. Oil soared. Gold & silver dropped. 10-Year Treasury went rogue.
Upon the announcement this morning of some tidbits on a preliminary study of an experimental Covid-19 vaccine, all heck broke loose in the financial markets, with investors piling into in various things and fleeing other things, and wholesale-abandoning certain things, amid reports of outages at online brokers Charles Schwab, Fidelity, Robinhood, TD Ameritrade, Vanguard, and others, where traders couldn’t log into their apps, and couldn’t make the trade of their lifetime.
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And that might have saved them some money, because after the surge in the morning, stocks gave up much of it, and the Nasdaq ended up 1.5% in the red.
The Dow Jones Industrial Average spiked 1,600 points in the morning out of the gate, to 29,933. But then it zigzagged lower and in the last 20 minutes swooned 400 points, ending the day up 834 points, or 2.95%, having given up nearly 800 points from the morning spike.
The S&P 500 Index spiked 137 points to 3,646 before giving up over two-thirds of it, and ending the day at 3,550, up a mere 1.2%.
The Nasdaq, which contains many of the Pandemic winners, never got the hang of the spike in the morning, dropped into the red, and ended the day down 1.5%. Notably, among the Pandemic winners:
There was enormous bloodletting in certain corners of the pharma and biotech space among the Covid-19 “vaccine stocks,” Covid-19-treatment stocks, and cancer treatment stocks, including:
Biogen got its shares knocked down 28.2% today, after trading had been halted all day Friday, due to an FDA panel smack-down Friday evening of the Alzheimer’s drug Biogen was trying to revive after writing it off last year. This follows a 44% spike on Wednesday. Today’s plunge put the shares back where they’d first been in November 2013, with Wednesday’s spike and today’s plunge forming an epic double-WTF chart.
After Pfizer announced the Covid-vaccine news, its shares [PFE] jumped 15% out the gate and then gave up half of those gains and closed the day up 7.7%, at $39.20.
There were big gains in numerous sectors, including travel, entertainment, restaurants, mall REITs, retailers, energy, and so on. Just some examples:
The price of crude oil soared, with WTI up over 10% at one point, hitting $41 – because instantly everyone in the business world would start flying across the globe and commuting to the office once again – before backing off.
Energy stocks jumped in lockstep. For example, Exxon Mobil [XOM] + 12.7%, Chevron [CVX] + 11.6%, and Texas shale-oil driller Concho Resources [CXO]: + 14.5%.
Long-term Treasury securities went rogue. Prices dropped and yields spiked. The 10-year Treasury yield spiked by 26 basis points, from 0.70% to 0.96% at the close, the highest close since the turmoil in March. As long-term Treasury prices dropped, long-term Treasury bond funds and ETFs dropped along with them. For example, the SPDR Portfolio Long Term Treasury ETF [SPTL] fell 2.0% today.