Traders on the floor of the New York Stock Exchange.
Source: The New York Stock Exchange
U.S. equities moved lower in overnight trading on Thursday as Wall Street’s volatile week continues.
Dow futures fell by about 40 points. S&P 500 futures fell 0.2% and Nasdaq 100 futures lost 0.15%.
On Dow Thursday, the Dow Jones Industrial Average rose 300 points, thanks to gains in Disney, Intel and American Express. The S&P 500 climbed by almost 1%. Thursday’s rally follows the worst sell-off in the Dow and S&P in three months on Wednesday. The Nasdaq Composite closed 0.50% on Thursday.
Thursday’s rise was a reversal of the recent weakening in equities fueled by market volatility, spurred by speculative trading by retail investors. Several e-brokers have taken steps to curb the deliberate purchase of heavily abbreviated names, giving investors a breather for the remarkable, though seemingly synthetic, moves in names like GameStop.
Shares of the brick-and-mortar retailer and AMC Entertainment, however, expanded on Thursday after Robinhood said it would allow limited purchases of some of the limited bonds on Friday.
Investors are worried that if GameStop continues to rise, it could impose larger losses on hedge funds, which in turn could cause ripples in the market as these funds are forced to sell other securities to raise cash. At the same time, there are concerns that the GameStop mania is a sign of a bigger bubble in the market and that its unraveling could also cause turmoil and hit small investors hard.
“From a regulatory perspective, we’ve seen a phenomenon that allows us to infuse retail investors into new trading mechanisms,” James McDonald of Hercules Investments said on CNBC’s “Fast Money.” “We saw this during the Dotcom launch and it led to the introduction of practices that are limited to day trading rules. There are going to be restrictions on the extent to which I can give instructions or recommendations, the rules will be applied and then the brokers applied. will follow. “
Strong corporate earnings continued to rise after the clock on Thursday. Payment giants Visa, Mondelez, Western Digital and Skyworks Solutions all rose in expanded trading after reporting better-than-expected gains and sales for their quarterly results.
Caterpillar, Chevron, Eli Lilly and Honeywell report their earnings Friday before the clock.
As for the vaccine, biotechnology firm Novavax said on Thursday that the coronavirus vaccine is more than 89% effective in protecting against Covid-19 in its Phase Three clinical trial conducted in the United Kingdom.
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