March 2, 2020
Big 3 Up >4%
Major U.S. Stock Indexes Jump Over 4%
Dow Up 5%. Biggest 1 Day Point Gain Ever.
Sticking to my policy to share my Market Update when at least two major indexes fall >3% in a day kept me busy last week. It happened three times. This was unprecedented for one week. Today, though, was a sharp reversal to the upside as the major indexes all jumped over 4%. The Dow soared over 5%. Today was the largest daily point gain in the history of the Dow. So, I thought I would write a positive Market Update after last week’s three negatives.
The table below shows the 20 biggest daily point gains in history for the Dow. Today’s was the biggest yet…
One down and two to go. Today’s strong rally erased one of the three 1,000+ down days of last week. After the third big loss last week, the U.S. stock market landed in a correction territory (defined as falling >10% from a prior high). See 2.27.20 Market Update. After today’s spike higher, the Dow is out of correction mode. From the Dow’s close on February 12, it fell 14.04% through Friday’s close. With today’s 1,293 point gain, the Dow is off 9.64% from the recent high. Volatility remains high. After nearly a 4,000 point loss last week, the Dow is up more than 8% from Friday’s intraday low of 24,681.
In the past 24 hours, there have been market-moving statements from key central banks, the World Health Organization and the International Monetary Fund, among others. Investors now feel it’s likely that the Federal Reserve and major global central banks will step in to stabilize the markets and stimulate economic growth. By lowering interest rates, the Fed may be able to lessen some of the economic damage from the virus outbreak.
Volume in the Dow today was 26% higher than its 200-day moving average. But, today’s volume was less than any of last week’s big down days. More up-day volume would be more bullish. Expect more volatility. Staying defensive and selective should prove to be most effective approach to dealing with these massive market moves.
Hope this is helpful.
Thank you for your continued trust and confidence. I remain vigilant as I manage and oversee your investment account.
John